Minnesota cities are asking the Legislature for power to slap internet providers with new fees, an idea they say will lead to more broadband in the state with the added bonus of helping to pay for basic government access programming like video of council meetings.

But the idea has caused a stir at the Capitol, where telecom groups and Republicans argue the bill — with its significant support from the Twin Cities metro area — won't actually aid rural Minnesota in bridging the digital divide at all. Instead, it would just bring in more cash to local government at the expense of broadband customers.

The tug-of-war has become contentious at times, pitting cities and their media operations against internet providers large and small and sparking debate about whether the bill's title promising equal access to broadband is false advertising.

Gov. Tim Walz's broadband office declined to weigh in as officials there plan to distribute more than $750 million in state and federal money to subsidize the construction of broadband infrastructure aimed at expanding high-speed internet options.

"The added fee on consumers' bills will tip the affordability scale in the wrong direction," said Brent Christensen, president of the Minnesota Telecom Alliance. "This legislation is contrary to everything the state of Minnesota, the Office of Broadband Development and my members are doing to see that all Minnesotans have access to quality broadband."

Local governments have long negotiated franchise agreements with cable TV providers and utility companies to use public right-of-ways for infrastructure like wires.

Those deals usually include franchise fees, and for cable providers, a second fee specifically dedicated to what is known as Public Education and Government, or PEG. That's basic public access media documenting local life and government.

The bill, which Rep. Mike Freiberg, DFL-Golden Valley and Sen. Nicole Mitchell, DFL-Woodbury sponsor, would give cities and towns the option to strike similar franchise agreements — and impose fees — on broadband providers. House Democrats are advancing the policy as part of a larger a larger package of legislation in the Commerce Finance and Policy Committee.

The tab for existing franchise agreements typically passes down to customers. Cities use the cash in many ways, not solely for government media.

Federal law limits cable franchise fees to 5% of annual gross revenue in that city, though the PEG fees are additional and uncapped. The latest version of the DFL legislation restricts broadband franchise fees to 5% of gross revenue and PEG fees to 3%.

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