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Helena ordinance would charge telecom companies looking to expand

The City-County Building in downtown Helena.

The City-County Building in downtown Helena.

Amid growing interest from telecommunications companies to expand, Helena is adapting with a city ordinance for processing their applications.

Last week, the city commission approved first passage of an ordinance to charge fees for cable and telecom franchises to cover the cost of reviewing their applications. Helena has received inquiries in the last six months about companies possibly expanding telecom service, including installing fiber optics, according to commission documents.

“Currently we have exhausted what we have available for this type of technical review, and we are at the first quarter of the year, so no, we do not have sufficient resources for it,” City Manager Rachel Harlow-Schalk said to the commission.

The ordinance came about a month after the commission considered and tabled a similar emergency ordinance. Harlow-Schalk said the pace of inquiries had slowed down and the city proposed a regular ordinance instead.

City Attorney Thomas Jodoin said in an email his office recommended the emergency ordinance was not immediately necessary.

The regular ordinance would require an application fee plus reimbursing the city for processing and outside consulting costs. A separate resolution would set a preliminary fee amount of over $2,500 based on staff time required, Harlow-Schalk said, adding that the city is reviewing all its fees.

The fee would cover review costs but not be enough to expand city staff for this work, Harlow-Schalk said.

The city hires River Oak Communications as outside consultants, according to Jodoin. The Colorado-based company redirected an interview request to the city.

Historically, Helena has had only one cable provider and negotiated franchises, right of way and installations every “handful of years,” according to commission documents, but things have changed.

The city has received about five inquiries and telecom company TDS has applied for a cable franchise, according to Harlow-Schalk. She said in her opinion the interest in expansion is mainly due to anticipated investments from the federal infrastructure bill.

“We’ve heard many times that it’s hard to create competition, and it’s exciting to see competition with companies interested in investing in the community,” Harlow-Schalk said.

Commission documents said the fees might reduce competition and become an obstacle for companies entering Helena's market. Harlow-Schalk said there’s always the opportunity to waive requirements, but there’s no reason to suspect fees would be an obstacle.

TDS volunteered to pay the city for the consulting costs of its application, about $5,500, according to Jodoin. He told commissioners the company would not agree to match its end date with the existing Spectrum agreement, which expires in 2027. That means an agreement with TDS made this year would extend to 2031, he said.

City Commissioner Andres Haladay said it would be nice to get a better understanding with outside consulting. He said seeking parity between contracts seemed to reinforce the status quo.

“It always felt like we were going into a knife fight with a couple of out of date legal books whenever we negotiated these contracts,” Haladay said. “Other cities request multiple lines to schools, to the civic center so we can broadcast programming for the community. How do we do that if we’re always looking back at the preexisting contracts, which will then always be the same?”

TDS serves more than 280,000 cable customers nationwide, according to its website. The company has started construction for service in Billings but does not currently have service in Montana, Joshua Worrell with TDS said.

The Wisconsin-based company said it had reached a franchise agreement with Helena that was going before the city commission but did not respond to a subsequent interview request in time for this story.

The city was sued by, and countersued, Treasure State Internet & Telegraph earlier this year related to the company’s micro-trenching projects, with a trial scheduled for summer 2022, the Independent Record reported. Harlow-Schalk said the company played no role in the ordinance and she could not comment on a legal matter.

Commission documents said the ordinance would have a second reading at a hearing on Oct. 18.

Editor’s note: This story was revised Oct. 19, 2021, to correct the status and type of TDS service in Montana.

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