Just days after a letter mailed by NEMR Telecommunications to its Memphis customers created quite a stir on social media, just three residents turned out for the Memphis City Council meeting to ask questions about the recent city code adjustment that established right of way (ROW) fees for the area phone, internet and cable service provider.
In the correspondence, NEMR informed its Memphis customers that the city had enacted the ordinance July 11th which could result in up to $3,000 in fees each month for the company whose fiber optics lines are housed on the utility right of way throughout the city. The company also informed its customers in the City of Memphis that those fees would be passed on directly to them.
Peggy Kirkpatrick addressed the council regarding the letter and questioned why the fees were being charged.
Alderman Jobe Justice offered an analogy of a public building being used by a business that was making sales each day from its free storefront.
“When it comes time for a new roof, don’t you think it is fair to ask the company that has been making money in that facility each day, to at least take some responsibility for its upkeep,” he said.
City Manager Allen Creek indicated that a number of sewer issues have been identified over the years that are believed to be traced back to the fiber installation performed on behalf of the phone company several years ago.
Council members indicated that the right of way fees are targeted to fund repairs and upgrades to the city’s infrastructure as it relates to the use of the utility easements.
Katie Harris asked if the funds would be solely used for those purposes and if they would be maintained in separate accounts for auditing and review purposes.
The council members stated the expenditures related to the right of way and related infrastructure would be documented to allow the use of the ROW revenue to be reviewed.
According to Michele Gillespie, CEO of NEMR Telecom, roughly 700 of its 4,800 cooperative members are Memphis residents that will be impacted by the new fees.
“NEMR Telecom strives to give our cooperative customers state of the art technology,” she said. “NEMR purchased Memphis, Unionville and Queen City from GTE in 1996 under Modern Telecommunications. In 2003, NEMR merged Modern Telecommunications into the cooperative so those customers could begin to earn capital credits. In 2007/2008, NEMR began their 1st fiber to the home construction in Memphis at a cost of over $6,000,000. NEMR is almost completed with the fiber to the home in all of our 14 exchanges. Why is this important? Health care, education and economic development all benefit from fiber.”
Gillespie noted that she and the governing board of the cooperative feel the fees are excessive.
“The board of directors unanimously approved to recoup the City of Memphis right of way fees from the City of Memphis NEMR customers on August 19, 2019,” she stated. ” The final amount charged to the customers will be dependent on what the City of Memphis charges NEMR and the number of City of Memphis customers each month.”
One concern raised during the city council meeting, which did not have any NEMR representatives present, was the equality of only passing on the costs to city residents. The council questioned if fiber passing through the city right of ways went on to serve customers outside of city limits.
In a phone interview, Gillespie addressed the concern, stating, “The fiber in Memphis ROW primarily serves the residents of the City of Memphis. NEMR uses county, state and private easements also. NEMR does not pay any right of way fees outside the community. NEMR has agreements with several carriers to transport calls, internet and video services to and from its service area.”
Representatives of the phone cooperative have been invited to meet with the city council in the coming week to address concerns about the right of way fees.