How T-Mobile’s USI Deal Affects Local Broadband Policies

Summary

In light of Ohio Telecom Ass'n v. FCC,, Minnesota cities should reexamine its franchising authority over broadband-only providers under local and state law.

Background

T-Mobile has reportedly moved to acquire Minneapolis-based U.S. Internet (USI), a regional fiber and wireless internet provider with a strong presence in the Twin Cities. According to customer notices, USI subscribers will transition to T-Mobile “on or after September 2” pending regulatory approval. T-Mobile has not publicly disclosed deal terms. The acquisition is part of its broader strategy to expand into fiber broadband markets in the Twin Cities and nationwide.

Local Authority After Ohio Telecom Ass’n v. FCC

Cities in Minnesota must now scrutinize permit applicants. Earlier this year, the U.S. Court of Appeals ruled that broadband internet access service providers are not telecommunications service providers under federal law. See Ohio Telecom v. FCC (In re MCP No. 185), 124 F.4th 993 (6th Cir. 2025). Broadband-only providers are providers that offer broadband internet access and other broadband edge services like voice over internet protocol. Since such providers are not telecommunications providers under federal law, cities must now decide their classification under state law. Cities need to review their city charter authority and/or statutory authority. They will determine the appropriate authorization cities may require of broadband-only providers.

For some Minnesota communities, the acquisition of USI is an opportunity to reassess the authorization of broadband-only providers. They should consider whether these broadband-only providers must obtain a broadband franchise as opposed to permits.

Why Local Governments Should Consider Broadband Franchises

As we have explained before, broadband franchises are the future and the benefits of franchising far outweigh mere permitting. Traditionally, cable operators must obtain franchises from local governments to use public rights-of-way. This requirement is under federal and state law. Broadband-only providers, however, have often operated without such agreements, particularly when they are not offering traditional cable television service.

The reported T-Mobile/USI transaction underscores why Minnesota local governments should revisit this framework:

2. Leveling the Playing Field: Cable operators like Comcast must obtain a franchise. They must pay franchise fees and comply with public interest obligations. If T-Mobile acquires USI, it will be using similar fiber optic cable communications infrastructure for internet access service. Cities in Minnesota should consider whether franchise requirements apply.
3. Local Accountability: A franchise provides a direct relationship between the provider and the city. This can be critical for ensuring service obligations, complaint resolution, and community reinvestment.
4. Revenue for Public Benefit: Franchises generate revenue for fair consideration for the use of the public rights-of-way. This revenue can support local community media and digital opportunity initiatives. It can fund affordable broadband programs and infrastructure improvements.
5. Precedent for Future Providers: Cities establish clear broadband franchising requirements now. This sets expectations for other national or regional providers. These providers may seek to enter Minnesota markets.

Next Steps for Cities

Minnesota local governments should:

• Review Current City Code to assess whether it covers broadband-only providers.
• Evaluate Franchising Authority under a city charter (if applicable) and state law. Also how broadband is now considered under federal law following Ohio Telecom Ass’n. If applicable, extend franchise requirements to entities like T-Mobile.
• Engage with T-Mobile Early to discuss local concerns, service commitments, and possible franchise obligations.
• Collaborate Regionally through organizations such as local cable communications commissions, the League of Minnesota Cities, MACTA, or regional broadband coalitions to establish consistent policy approaches.

Conclusion

The T-Mobile/USI transaction highlights how rapidly the broadband marketplace is evolving. It is critical for local governments to assert their role in managing public rights-of-way. They must also protect community interests. Minnesota cities can explore broadband franchising requirements. This exploration can help ensure that providers like T-Mobile remain accountable to the communities they serve.

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Bradley Werner, LLC

Michael Bradley and Nancy Werner are nationally recognized and respected local government attorneys. Our firm is dedicated to representing local governments on broadband, cable, telecommunications, utilities, and right-of-way management issues. We have decades of experience representing municipalities on communications and utilities matters.