Kansas committee hears bill to include broadband revenue in city franchise fees

The House Committee on Energy, Utilities and Telecommunications heard testimony on House Bill 25-86, which would amend the definition of "gross receipts" in KSA 12-2001 so that revenues from broadband Internet access services are included when cities calculate the 5% franchise fee charged to providers.

Proponents from cable companies said the change would modernize an antiquated statute and close what they described as a loophole that lets some providers use the telecom statute to access the public right of way without paying comparable fees. "So today, what we're asking for in the bill is that if you're a phone provider, you pay franchise fee on phone. If you're a broadband provider, you pay broad franchise fees on your broadband revenue," said Megan Battenberg, director of government affairs for Cox Communications.

Battenberg told the committee that cable providers already pay a 5% franchise fee under the statewide video statute and that Kansas cable franchise receipts amount to nearly $7,000,000 annually. Dayton Murti of Charter Communications (Spectrum) said Charter pays 5% on cable services and that HB 25-86 is intended to ensure similarly situated right-of-way users pay comparable fees; Murti said Charter remits roughly $3,000,000 in franchise fees in Kansas and is open to negotiations on text.

Opponents representing broadband and telecom firms urged caution. Darren Miller of AT&T said the underlying statutes were written for circuit-switched telephone technology and argued Kansas should draft a new, modern statute rather than retrofitting 12-2001 for broadband. "The Internet Tax Freedom Act says you can't tax Internet access," Miller said in warning about federal limits on taxing broadband. Ethan Caplan of IdeaTek and representatives of the Communications Coalition of Kansas also argued the bill could act as a new broadband tax and could discourage deployment while grant-funded buildouts continue.

Several witnesses and municipal representatives urged collaborative work to resolve gaps. John Goodyear, general counsel for the League of Kansas Municipalities, spoke neutrally and said cities seek to be made whole for right-of-way maintenance costs but acknowledged the statute and its cross-references are complex and need careful drafting.

The bill text includes a stated effective date of July 1, 2026, if enacted. Committee members pressed witnesses on who ultimately bears the cost (providers typically pass franchise fees to customers), how federal mixed-use rules affect duplicate charging, and technical drafting questions in subsection j of the bill that staff suggested might unintentionally change substantive law.

No formal committee action or vote on HB 25-86 was recorded at the hearing. Multiple members and conferees signaled willingness to meet over the summer to work on comprehensive statutory language; the committee closed the hearing and noted additional hearings on other bills are scheduled.

Key details and next steps: proponents say the bill closes a broadband-revenue exclusion in KSA 12-2001; opponents recommend a new statute and warned about federal limits and deployment impacts; staff highlighted a specific subsection (j) the committee may want to revert or more carefully edit. The committee adjourned without taking a vote on HB 25-86.