The Federal Communications Commission’s (FCC) Build America Agenda rests on a simple premise: Stop making it so hard to build. Federal and state policymakers have spent years reducing permitting delays, resolving pole-attachment disputes, and easing access to public rights-of-way—the public corridors used for infrastructure such as roads, utility poles, and fiber lines. These obstacles slow infrastructure deployment and raise its cost. Yet even as the federal government removes regulatory barriers, local governments often march briskly in the opposite direction.
That is the story unfolding in Maple Grove, Minnesota. The city has told a fiber provider that it cannot use public rights-of-way until it signs a cable television franchise, the local authorization traditionally required to operate a cable system. Never mind that the company provides broadband over fiber, not cable television.
The city’s demand is almost certainly unlawful. By imposing these requirements to raise revenue, Maple Grove is undercutting federal policy and making it harder for residents to obtain high-speed broadband.
Broadband Economics: Pay Now, Maybe Earn Later
Broadband requires heavy upfront investment. Before a single customer signs up, a provider must pay for trenching, boring, conduit installation, pole make-ready work, and access to public rights-of-way. “Make-ready” work includes the changes needed to accommodate new equipment on existing utility poles. The provider finances all of this before earning a dollar of revenue. Hardware accounts for only part of the bill. Connecting each home with fiber costs about $700 to $2,700, depending on population density and terrain.
Most broadband investment is sunk, meaning the provider cannot recover it if the project fails. Once a company buries fiber, it cannot pull up the cable and redeploy it somewhere more profitable. Nor can it recover the labor and regulatory expenses incurred during installation. The provider therefore commits an enormous fixed cost in return for future subscription revenue that is never guaranteed. As competition among cable, fiber, fixed wireless, and satellite providers has intensified, that revenue has become less certain than ever. If a project falls short of its projected take rate—the share of potential customers who subscribe—the provider has few ways to recover its investment.
That risk leads providers to build where they have the best chance of earning a return and to hesitate elsewhere. Economies of scale favor dense, higher-income areas, where providers can spread large fixed costs across many paying subscribers. Rural and lower-income communities offer thinner margins and greater uncertainty.
Broadband also creates benefits that providers cannot capture through subscription revenue. Better connections can improve education, health care, employment, and local commerce, yet providers do not receive payment for all those gains. The private return may therefore fall short of the broader social return, leaving worthwhile projects unbuilt. Projects closest to breaking even become especially sensitive to any added cost.
Reducing deployment barriers therefore matters. In theory, a provider would compare its material and labor costs with its expected revenue, then build wherever demand justified the investment. In practice, deployment requires permits, pole-attachment negotiations, zoning approvals, and right-of-way agreements. These expenses often rival or exceed the cost of the hardware.
Delay adds another cost. Months or years of uncertain regulatory review tie up capital, complicate crew scheduling, and increase the risk of projects already operating on thin margins. Every additional expense can turn a borderline project into one that never gets built.
Some of these costs reflect the actual burden a provider places on public rights-of-way. Governments may legitimately recover the cost of managing streets and coordinating construction for such buildouts. Charges that exceed those costs function as a tax on deployment, deterring investment without providing any corresponding public benefit.
Congress addressed this problem in Section 253 of the Telecommunications Act of 1996, which bars state and local requirements that effectively prohibit providers from offering service. The FCC has interpreted Section 253 to limit right-of-way charges to amounts roughly tied to a government’s actual costs. Enforcement remains uneven, however, and some localities still treat rights-of-way as revenue sources rather than public resources requiring careful management. As traditional franchise revenue declines, local authorities go looking for replacements. Projects closest to breaking even tend to die first.
If It’s Fiber, Franchise It Anyway
Policymakers have done considerable work to streamline permitting and accelerate broadband deployment. Maple Grove has found a new way to impede that effort. The Minnesota city now requires broadband providers to obtain a cable franchise before receiving right-of-way permits—even if they provide no cable service.
Gateway is a fiber broadband provider with a Minnesota certificate authorizing it to operate as a telecommunications carrier. It sells internet access, not cable television. Maple Grove has decided that distinction does not matter.
In March 2026, the city amended its code to require every “Broadband Service Provider” to obtain a cable communications system franchise from the Northwest Suburbs Cable Communications Commission (NSCCC). The NSCCC is a joint-powers cable authority shared by several suburbs. Under the amended code, Maple Grove will not act on a provider’s right-of-way applications until the provider completes the franchising process. When Gateway applied for permits to continue construction, the city deferred them. A company that had routinely obtained permits in four to six weeks suddenly could not obtain one at all.
Obtaining a cable franchise is no small undertaking. Gateway would have to build throughout 100% of the city, subject only to a temporary waiver. It would also face municipal rate regulation, post a performance bond and letter of credit, provide public benefits in addition to paying a franchise fee on gross revenue, and accept stringent remedies for even immaterial violations.
Gateway would also have to comply with the FCC’s Part 76, subpart K technical standards. Those standards govern cable television systems, and Gateway’s fiber broadband network was not built to meet them. Maple Grove is conditioning access to public rights-of-way on an agreement designed for a service Gateway neither provides nor, in some respects, can physically provide.
Why would a city do this? The NSCCC depends on cable franchise fees, and that revenue is collapsing. Its 2025 strategic plan reports that cable fees supply roughly 95% of its revenue and will decline by about 10% each year. The plan warns that the NSCCC faces “an existential financial crisis” and will “run out of money in mid-2028 unless we act.”
The plan concludes that “new revenue sources are necessary to replace cable fees.” It identifies “new broadband fees” as the “most impactful” option. The NSCCC has lobbied the Minnesota Legislature to authorize those fees, although the plan concedes that “success is not certain.”
Maple Grove made the ordinance’s purpose equally plain. Its Request for Council Action links the measure directly to “declining cable franchise revenue and its impact on [NSCCC] operation” and directs city staff to require broadband providers to sign franchise agreements. The document says nothing about coordinating construction, protecting pavement, or preventing conflicts among users of public rights-of-way. The ordinance addresses a budget shortfall by extending the cable-franchise regime to broadband.
This is rent extraction: using government control over a necessary resource to collect payments unrelated to the costs that a company imposes. Cord-cutting has eroded the revenue that supports the NSCCC’s community-media operations. Rather than reduce its spending or persuade the Legislature to authorize a new fee, the NSCCC and Maple Grove are using their control over right-of-way permits to turn a broadband entrant into a replacement source of revenue.
The resulting franchise fee would not compensate Maple Grove for Gateway’s use of public property. It would repurpose charges created for cable television to replenish a declining fund. Because Maple Grove controls the permits, it can halt Gateway’s entire buildout in the meantime. Gateway bears the immediate cost, but the company’s prospective customers lose service—or wait longer for it.
Maple Grove Can’t Have It Both Ways
Gateway has petitioned the FCC to declare Maple Grove’s new code unlawful and preempted, meaning displaced by federal law. Maple Grove’s legal theory has three steps.
First, the city reads Minnesota’s cable statute, Chapter 238, to require a franchise from any “cable communications system” that occupies a public right-of-way. It interprets that term to cover more than cable television, including broadband networks that use other technologies.
Second, Maple Grove classifies broadband as a Title I “information service” rather than a Title II “telecommunications service.” Title I services face lighter federal regulation, while Title II governs telecommunications carriers. The city argues that Gateway’s state certificate therefore does not make it a “telecommunications right-of-way user” entitled to access without a cable franchise. Third, Maple Grove contends that the FCC lacks authority to preempt a state-law franchise requirement because broadband falls under Title I.
Federal law does not, however, leave the matter to the city. The Communications Act forecloses Maple Grove’s demand for two independent reasons.
Section 253(a) bars any state or local requirement that “prohibit[s] or ha[s] the effect of prohibiting” an entity from providing telecommunications service. Gateway holds a certificate authorizing it to provide telecommunications services, including point-to-point connections. It has also filed a tariff with the Minnesota Public Utilities Commission that sets out the rates, terms, and conditions for its regulated services. A tariff is a public filing that governs how a carrier offers those services.
Requiring Gateway to obtain a franchise that it cannot secure as a condition of receiving right-of-way permits amounts to an effective prohibition. The FCC’s longstanding California Payphone standard asks whether a requirement “materially inhibits or limits the ability of any competitor … to compete in a fair and balanced legal and regulatory environment.” The FCC has made clear that Section 253(a) covers express bans and de facto moratoria, even when the government never formally labels its action a prohibition.
Maple Grove has frozen Gateway’s permits unless the company agrees to follow the FCC’s Part 76 technical standards for cable television systems. Gateway’s broadband network was not built to satisfy those standards. The city has therefore conditioned market entry on a franchise agreement that Gateway cannot execute.
Maple Grove fares no better if it applies the ordinance only to Gateway’s broadband service and argues that Title II does not protect that service. The FCC’s Mixed-Use Rule prevents cable-franchising authorities from regulating noncable services carried over a cable system. Section 624(b)(1) of the Communications Act, 47 U.S.C. § 544(b)(1), likewise bars local authorities from regulating broadband as part of a cable franchise because broadband is an information service. The FCC acted within its authority when it prohibited local governments from taxing noncable services offered over franchised systems.
Maple Grove cannot have it both ways. If broadband is a Title I information service, as the city insists when challenging Gateway’s telecommunications status, the Mixed-Use Rule and Section 544(b)(1) bar the city from franchising it or imposing franchise fees on it. If broadband qualifies as telecommunications, Section 253 bars Maple Grove from blocking right-of-way access to extract a franchise.
The city needs broadband to count as an information service for one argument and as a franchiseable cable service for the other. It cannot be both. Either way, the ordinance fails.
Winning After Winter Is Still Losing
Gateway will probably win. The Communications Act leaves little room for ambiguity, and the FCC has preempted comparable barriers before. Yet a victory before the FCC or in court may come too late to matter.
Gateway filed its preemption petition in June 2026. Comments do not close until late September, and a ruling will come sometime after that. Fiber construction in Minnesota generally runs from April through September, before winter freezes the ground—and the schedule. By the time the record closes, the 2026 construction season will be over. Crews will have moved to other projects, capital will have sat idle, and tens of thousands of residents will have lost a year of access to another broadband option.
Even a decisive victory cannot restore that lost year. Gateway will not have extended its network past those homes, and the company will absorb the cost of keeping capital tied up in a project that federal law entitled it to build all along.
The problem extends beyond Maple Grove. A franchise demand costs little to impose and takes months or years to defeat. A city may find the tactic worthwhile even when the demand is plainly unlawful because it receives the immediate benefit of delay or added revenue while the provider bears the cost. After-the-fact preemption resolves the individual dispute, but it does too little to discourage the tactic. Every community watching its cable-franchise revenue decline faces the same temptation.
The larger cost appears when providers decide where to build next. A company considering a thin-margin market must account for the risk that a city will withhold permits to support an unlawful revenue demand. The provider may win the legal dispute, but a victory one construction season later may offer little consolation.
That risk raises the provider’s hurdle rate, or the minimum return a project must promise before the company will invest. It affects investment decisions in Maple Grove and in every jurisdiction that might try the same tactic. The mere possibility of an unlawful demand can deter deployment, even if the demand would eventually lose before the FCC or a court.
A Fiber Win, Frozen Solid
None of this means the FCC should wait. Preemption is both correct and necessary. But relying on the FCC to “sort it out” case by case will not protect deployment if local governments keep finding new ways to tax broadband.
Providers need rules that keep permits moving while disputes proceed. Those rules should include firm shot clocks, which set deadlines for permit decisions, and deemed-granted remedies, which allow construction to proceed when a locality misses the deadline. Fees should also remain tied to the government’s legitimate costs, eliminating the financial reward for imposing new barriers.
Removing regulatory obstacles remains one of the least expensive and most effective tools in communications policy. Yet the remedy must arrive in time. Otherwise, providers can win every legal case and still lose to the economics of broadband deployment.
Congress already answered whether cities can do this. The task now is to make sure the answer arrives before the ground freezes.
