Lake Elmo officials briefed on broadband franchising option that would require citywide build-out

Mike Bradley, an attorney in Woodbury who represents cable and telecommunications commissions, told Lake Elmo elected officials and commissioners that franchising broadband providers can give cities leverage to require citywide build-outs, customer-service points and public benefits similar to cable franchises.

Bradley said Woodbury recently negotiated what he described as the state’s first broadband franchise and that the model can be structured to require build-out across an entire municipality. "We negotiated the state's first franchise," he said. He described typical franchise provisions as including five-year build-out schedules and public-benefit commitments such as fiber to government buildings.

The presentation prompted questions from councilors about who installs infrastructure, whether new franchises would create duplicate lines and how fees would affect consumers. Bradley described two commercial models: open-access wholesalers that build fiber and lease capacity to retail providers, and vertically integrated companies that both build and provide services. "It would give the broadband company the right to build out the entire city," he said.

Council members asked whether federal rules cap franchise fees. Bradley said cable franchise fees are capped at 5% by federal law but that "with broadband, there is no federal regulation of broadband" and no technical cap; Woodbury and the South Washington County commission settled on 5% to limit resident sticker shock. He cautioned that Comcast and similar incumbent operators typically do not rent their fiber capacity, meaning new franchisees often build separate infrastructure.

Bradley also discussed legal and insurance risks. He said a 2025 court decision and later case law (discussed as limiting agency deference) have influenced how broadband is classified under federal and state law, but uncertainty remains. He said the city and its cable commission could face litigation if the classification or statutory landscape changes; Lake Elmo would be covered by the League of Minnesota Cities Insurance Trust for defense costs but could face deductible exposure.

Bradley concluded by recommending that the council provide guidance to city management and the city’s cable commission about whether to treat broadband as a cable communication system and pursue franchising. He said no immediate formal vote was required but that the council could direct staff to continue due diligence and return with more specific recommendations.