Iowa Gov. Chet Culver signed a bill, which will go into effect immediately, transferring franchising authority from local governments to a state agency.
The utilities division of the Department of Commerce will now issue franchises. A competitive provider must notify the communities it intends to serve. At that time, an incumbent operator with an active local franchise can decide whether to seek a state franchise, too. The state agency will have 15 days to award the franchises, which will be for a term of 10 years.
Competitive providers will have to pick up a portion of the basic maintenance of current, noncommercial institutional networks. But municipalities will have to take over that cost after 10 years.
The bill should forestall future consumer lawsuits challenging the deposit of franchise fees in city general funds. The legislation specifically states that the amount of the franchise fee does not represent the cost of regulation and may be used in the general funds.