Kansas committee hears Cox, municipal utilities on ‘right‑of‑way parity’ for broadband fees

Megan Battenberg, director of government affairs for Cox Communications, told a legislative committee in Topeka that Kansas’ telecommunications franchise laws date from the pre‑broadband era and currently treat providers inconsistently, leaving some broadband operators to pay little or nothing for public right‑of‑way use.

Batttenberg said Cox serves nearly 120 communities across Kansas and has expanded into roughly 25 additional counties through private investment. She brought fiber samples to the committee to demonstrate the technology and the infrastructure placed in public rights of way. “We lay fiber, of course, and provide them with … multi‑gig speeds,” she said, and added that franchise rules written decades ago no longer reflect how video, voice and broadband services are delivered.

The core statutory issue, Battenberg said, is how gross receipts are defined for franchise fees. Cable video services, she said, pay a 5% franchise fee on video revenue — including subscriptions and on‑demand purchases — while broadband or VoIP services are often excluded under the current statutory definitions. “So how much do you if you’re a broadband company, how much do you have in traditional telecom revenue? 0,” she told the committee. “5% of 0 is 0.” That, she said, creates a competitive imbalance because customers of providers who do pay franchise fees effectively help cover right‑of‑way costs while customers of some new entrants do not.

Batttenberg pointed to recent regulatory activity as evidence of the gap: she said the Kansas Corporation Commission approved a fiber company for certificate‑of‑convenience status and that the company’s regulatory classification enabled it to rely on the telecommunications statute even though it did not provide voice service. She also told members a House bill (cited in the presentation as “house bill 25 86”) had been introduced in the House and that stakeholders had been unable to reach a single, clear solution during prior briefings.

From the municipal perspective, Greg Dumars of Kansas Municipal Utilities told the committee rights‑of‑way are public assets managed by local governments and that municipalities recover associated costs in different ways, including payments in lieu of taxes, direct transfers from utility funds, or traditional franchise agreements. Dumars said franchise fees can represent a meaningful share of small communities’ budgets and that declining cable franchise revenues have strained local funding: he gave one example of an average community whose cable franchise fees fell from $24,100 in 2021 to $17,000 in 2025, a decline he calculated as about 27.5% over five years.

“Right‑of‑way is a public asset that is managed and held in the public trust by the local units of government,” Dumars said. He urged that any reform be nondiscriminatory and predictable so communities can continue to recover the costs of inspections, permitting, pavement restoration, traffic control and mowing without shifting them to property or sales taxes.

Both presenters outlined policy options rather than proposing a single legislative fix. Battenberg described three general approaches discussed with stakeholders: change the gross‑receipts definition used in franchise agreements, create a broadband‑specific franchise model (she referenced a Nevada approach that sets a broadband fee), or craft a new statute to apply consistently to all providers. She emphasized principles she seeks in reform: modern statutory language, nondiscriminatory treatment, comparable fees for similar uses of the right‑of‑way, and predictable cost expectations for municipalities and providers.

Committee members asked technical and practical questions, including whether fiber capacity can be exhausted and whether cities that own utilities pay franchise fees. Battenberg and Dumars said fiber capacity is largely a function of head‑end equipment and upgrades rather than the installed fiber itself, and Dumars explained that municipally owned utilities typically do not pay a franchise fee but instead make direct transfers or PILOT (payment in lieu of taxes) payments into the general fund to cover right‑of‑way costs.

The committee did not take formal action at the session. The chair thanked the presenters and adjourned the meeting.