Are franchise fees a way of collecting revenue without calling them taxes or are they fair reimbursement for the cost of managing a public right of way?

If you're in a municipality that charges a franchise fee for the use of the right-of-way, check your utility bill. If you look closely, you may see that this fee is being passed on directly to the consumer. In many cases, state and local laws allow municipalities to charge utility companies for the use of the public right of way. While some communities only charge a one-time application or inspection fee, others charge by a percentage of utility revenues or profit. These fees are often passed on to consumers through their monthly bill.

There are different schools of thought on what and how much should be charged. Some argue that electricity, gas, phone, water, and sewer are essential public services and should be allowed to occupy right of way free of charge. Others believe that fees should be charged for non-essential, for-profit companies that sell cable TV, data, phone, and internet services.

Many people claim that rent charges are passed on directly to the consumer in the form of a hidden tax. Does this circumvent the budget process by raising taxes without bringing the issue to the public for their approval? Or is it a fair reimbursement for the use of valuable land? Whatever your opinion, it's likely that franchise fees will continue to be a source of revenue for municipalities and as a cost of doing business for utilities. Either way, the
consumer pays.