Municipalities in Illinois cannot charge fees to companies laying utility wire under public land.
Circuit Court Judge James Eder ruled earlier this month that the southern Illinois city of Altamont was breaking state law when it tried to impose a $1,500 fee on Metro Communications for laying Internet wire under the city’s public rights-of-way.
Internet connectivity levels are a hot-button issue in rural areas of Illinois, as the disparity between urban areas makes some newer technology all but unusable. According to the Federal Communications Commission, 39 percent of rural Americans (23 million people) lack access to 25 Mbps/3 Mbps.
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City Clerk Sarah Stephen said the administrative cost and up to $50-per-hour engineering fees shouldn't be shouldered by the city's 2,300 residents. "The taxpayers should not have to absorb engineering fees to protect them from a company that's going to come here and charge subscriber fees where they're gonna make money," Stephen said.
But the city does make money off of the underground lines. State law allows Altamont, and any other city below 5,000 residents, to tax the companies that own the wires up to 6 percent (Altamont levies a 3 percent tax) on what the wires earn the business. Metro lawyer Jane Watson told the court that Altamont had made up to $29,000 in recent years.
A Metro Communications official told the court that it has not come across any similar licensing fees in other Illinois cities. Stephen said the Altamont ordinance that was ruled illegal was drafted by the Illinois Municipal League (IML), an organization representing over 1,000 communities in Illinois. IML officials would not respond to requests for comment.
According to the Illinois Telecommunications Municipal Infrastructure Maintenance Fee Act, "No new franchise fees or other charges for the use of a public right-of-way, including charges for the recovery of reasonable costs of regulating the use of public rights-of-way, shall be imposed upon ...telecommunications retailers by ordinance, resolution or contract…”