INDEPENDENCE — Telecommunications companies who provide data services in Independence will now be affected by a 7 percent franchise fee on gross revenue, or $500, whichever is greater.
The resolution was passed by the Independence City Council at the Feb. 14 meeting by a 3-3 vote, with Mayor John McArdle breaking the tie.
Two of the “no” votes were because councilors Mike Hicks and Marilyn Morton were absent. Absent seats count as no votes on the Independence council. The third “no” came from Councilor Ken Day, who is the council liaison and board member of Monmouth Independence Networks, and also served on the Minet finance committee.
Minet is one of the companies who provides data services, and will be affected by the 7 percent franchise fee.
Franchise fees are charged by cities to utility, cable and telecommunications companies for using the public rights-of-way. The city has established franchise fee contracts with public utilities — water, sewer, wastewater, power — phone and cable companies, but had not had a franchise fee set up for data companies until Feb. 14’s resolution passed.
Day said that Minet is already paying 5 percent for cable service, and said he didn’t want to see the population of Independence “hit by more.”
“Rather than raising the rates of cable and of data and phone, can we spread it out so it’s 2 percent, 2 percent and 1 percent, rather than 5 percent, 7 percent and 7 percent,” he said.
City Manager David Clyne said that not everyone receives all services, so the city would not be compensated properly for use of the public’s rights-of-way. Also, he noted that the franchise fees should be consistent regardless of the company.
“Not every provider is the same,” he said. “You’re going to create some real legal issues if you divvy up for some and not others. You’ll incentivize. You’re creating a situation that is unmanageable for customers and providers.”
Clyne added that the new revenue from data franchise fees collected from Minet could subsidize unpaid debt from the company, easing some strain on the water fund.
“Let’s reduce our reliance on the water fund and increase our reliance on the users,” Clyne said.
“If we could do that, it would eliminate one of the complaints of residents who don’t use Minet,” Day said.
The city of Independence collected nearly $629,000 in franchise fees last year, finance manager Gloria Butsch said. That money is added to the general fund.