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Alabama City OKs Franchising Agreements for Local ISPs

Under the terms of a newly approved franchising policy in Hanceville, Ala., Internet service providers that use city right of way will pay 5 percent of their annual gross income to the city for maintenance.

(TNS) — Hanceville, Ala., is tapping a municipal revenue stream that may have lain dormant since the advent of landline-based Internet in the city: Franchising agreements with local fiber Internet providers whose physical infrastructure uses city rights-of-way.

At its recent regular meeting, the Hanceville City Council adopted a new fiber Internet franchise ordinance that requires area providers to remit five percent of their gross annual receipts to the city. Deployed widely in municipalities nationwide, the franchise fee is intended to compensate cities and towns for maintaining public rights-of-way in exchange for utility companies' use of the land to carry wire-based Internet signals to customers.

As such, the franchise agreement does not apply to satellite and other over-the-air Internet services that require no in-town infrastructure. Currently, three providers offer Internet service in Hanceville that falls under the terms of the ordinance; those include Spectrum, AT&T, and Sprout.

City officials did not have available information to estimate how much annual revenue the new five percent franchise fee might bring. The ordinance specifies an initial franchise agreement term that spans ten years, with automatic subsequent renewals every five years thereafter, unless either party — whether the city or the internet company — ceases providing service.

It will be left to each provider whether to absorb the five percent increase or to pass it along to Hanceville customers, either as a line item on future Internet bills or via higher monthly service fees.

In other business at its Jan. 26 regular meeting, the council:

  • Accepted and agreed to all terms of a $273,000 grant from the U.S. Department of Homeland Security to reimburse the city for the purchase of mobile command and communications equipment to be used by the Hanceville Police Department.
  • Recognized the Hanceville Civitan Club for its active role in funding local scholarships, as well as programs and activities for schools and the wider community, in conjunction with designating the first week of February as Civitan International Clergy Appreciation Week.
  • Approved the surplus of four police vehicles, as well as the purchase of four vehicles to replace them.
  • Approved the surplus of miscellaneous fire equipment and office equipment, not including vehicles, deemed to be old, obsolete, redundant, broken, or otherwise no longer needed by the city.
  • Tabled a measure to consider a proposed ordinance introducing a new T-1 residential zoning category for tiny homes inside the Hanceville City limits, pending further council deliberation.

©2023 The Cullman Times, Distributed by Tribune Content Agency, LLC.