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MARK STEIL: Rights of way usually don't attract much attention unless something goes wrong, like when construction equipment severs a phone line or a gas pipe. Redwood Falls City Administrator Jeff Weldon says everyone should be paying more attention.

JEFF WELDON: Right of way is really the lifeblood of any community.

MARK STEIL: Many of the things important to modern life owe their existence to rights of way, like natural gas for heat and cooking, phone lines for computer and telephone communication, cable TV, electricity. Weldon says, as people make more use of underground utilities, cities are paying a price. More and more companies want to dig in the right of way.

JEFF WELDON: So what that means is that you've got a bigger problem in coordination just because of the sheer number of people that are continuing to vie for a shrinking amount of space.

MARK STEIL: Weldon says he expects a land rush for right-of-way space by competing companies. That means more torn-up streets and boulevards. That's bad enough. But what makes city officials all across the state mad is too often, they say, utility companies do a poor job of repairing road and lawn damage.

Bruce Swanson of Saint Paul says he and his neighbors became upset when a phone company took too long to fill in some 5-foot holes left by a construction project. Swanson says he worried children would fall into the holes.

BRUCE SWANSON: Eventually, what happened is one of the neighbor kids did fall into one of the holes. And that really got me going. So I finally got back hold of the phone company and said, this is unacceptable. People are getting-- kids going to get hurt here. You don't want to have that happen.

MARK STEIL: That phone call brought action, and the holes were filled. Talk to any city manager, and they're likely to have a similar story. Utilities pay the cost of repairing streets and lawns. But often, the work is too slow or isn't done well enough to satisfy the city or homeowner.

The bill in the legislature addresses that issue. Jerry Knickerbocker of the Minnesota Telephone Association says it has a formal system for cities to recover damages.

JERRY KNICKERBOCKER: They would have the option of either requiring the local telephone company or the new telecommunication provider to restore the street to its actual condition prior to digging or to pay a degradation fee. That's a fee in lieu of restoration for what would be classified as diminishing the life of the street.

MARK STEIL: He says the bill also allows cities to require utilities obtain a permit before they dig. A big reason the state is considering legislation is because of last year's Federal Telecommunications Act. That law deregulates the telephone industry in stages.

City managers worried they're about to see unprecedented right-of-way demand as phone companies bury new wires to widen market reach. Some want phone companies to pay rent for every line they bury in a right of way, an annual fee separate from the charge for repairing damage. Redwood Falls City Administrator Jeff Weldon supports the idea.

JEFF WELDON: If the taxpayers in a community have to expend tax dollars to acquire a right of way, they are entitled to fair and commensurate reimbursement by the telecommunications companies who are going to be using that same right of way. And failure to do so is just a simple case of corporate welfare, where the citizens are being asked to subsidize the profits of these telecommunications companies, with no consideration given to them. We don't think that's fair.

MARK STEIL: The rent concept is where the two sides compromised in the bill before the state legislature. Cities give up their demand for rent. In exchange, utility companies accept greater right-of-way control by cities. The Minnesota Telephone Association's Jerry Knickerbocker says his industry will never accept rent.

JERRY KNICKERBOCKER: I think that idea was floated up, struck a responsive chord with many municipalities, I think especially the larger ones, where they have a lot of different telecommunication providers. Or the anticipation is that there'll be a lot of people that want to come in and provide new services, and that they ought to. Here's a wonderful opportunity. Here's a new source of revenue. And in fact, let's tax them.

MARK STEIL: Knickerbocker says the rent idea is based on a false assumption that there will be explosive growth in the number of underground phone lines. He says while it's true new companies will be entering the telephone business as deregulation takes hold, most of them will buy space on existing lines owned by other companies, rather than burying their own cables. Redwood Falls City Administrator Jeff Weldon disagrees.

JEFF WELDON: The pending changes in the law is only going to result in more of a proliferation of these-- of cable companies competing for space.

MARK STEIL: Weldon expects cities to continue to push the rent concept, possibly in next year's legislature. This is Mark Steil, Mainstreet Radio.