Cable fees cause controversy

Your Money Matters

Five plus one. That’s how city officials are proposing new fees for cable television service in Sioux Falls.

There are two fees the city would like to collect from cable providers, which would then be passed on to customers.

The first is a Franchise Fee. That’s currently a 2.5 percent charge you see on your bill. That would double to five percent. 

The second is a new one percent fee for something called a Capital Grant.

The proposition goes like this: Franchise Fees collected from cable companies would go into the city’s general fund, for things like road work and infrastructure.

A capital grant Fee of one percent would go to CityLink; a city-owned and operated TV station.

“If we’re buying cameras or building our studio, or TV. Or any type of equipment. We’d be able to use that community grant for that,” said Reisdorfer.

Jason Reisdorfer is the City of Sioux Falls Director of Innovation and Technology.

He says after recent legislation, cities can no longer charge providers for internet service. Meaning, in June the city will be losing that 6.5 percent income from internet providers.

Reisdorfer says it made sense to try to make up the lost income with this new, cable fee.

“We think the net amount will probably show a decrease in people’s bill. So even though this is an increased fee, the sales tax will off-set a lot of that. Or more. Depending on people’s service,” said Reisdorfer.

After the fee proposal in front of the city council this week, not everyone is on-board. Councilwoman Theresa Stehly says response from her community has not been positive.

“I put it on Facebook and wow. It’s been very powerful. The response from constituents across the board has been they don’t want to see any more fees added to their Midco bill,” said Stehly.

Stehly says the council needs more answers about the Franchise Fee for the general fund, but she definitely does not support an increase in prices to pay for the office of Innovation and Technology. 

“We’re already giving his department an extra $2 million to renovate and actually instigate office space on the top floor of that administration building. So I think it’s a case where we need to pull back a little bit and make sure we re-evaluate anything before we add extra fees onto these users,” said Stehly.

This proposal does need city council approval to move forward. The council will have the first reading on this on June 4.

They hope to roll out the new fees by January 1, 2020 if it passes.

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