City cable and telephone customers may see their monthly bills either go up or down by a few cents now that Lawrence city commissioners have given preliminary approval to change how franchise fees are charged to cable and telecommunications companies.

The franchise fees, which allow cable and telecommunication companies to place their infrastructure in the city’s right-of-way, will be changed to eliminate the franchise fee charged on cable modem services. Federal courts and the Federal Communications Commission have ruled that cities do not have the legal authority to charge franchise fees on cable modem services.

That means many customers with Internet service through Sunflower Broadband will see a reduction in their monthly Internet bill of about 50 cents, said Patrick Knorr, general manager of Sunflower Broadband.

But city officials are proposing that franchise fees for telephone service be increased to make up for an expected $120,000 shortfall the city would incur through the elimination of the cable modem fee. That means typical telephone customers could see an increase of 10 cents to 15 cents per line per month on their telephone bills to account for the fee increase, Knorr said.

The franchise agreement would cover both Sunflower Broadband — which is owned by The World Company, which publishes the Journal-World — and SBC Communications.

But SBC customers who have DSL Internet services already are not charged a franchise fee. Knorr said that was one of the reasons that Sunflower Broadband asked the city to explore the legality of the cable modem franchise fee.

“We feel the rulings by the FCC and the Ninth Circuit Court of Appeals have made it pretty clear that going forward it would be improper to continue charging those fees,” Knorr said. “We feel like the policy the city is adopting to treat all telecommunications companies in the right-of-way equally is a good one.”

Brett Sayre, a Lawrence-based spokesman for SBC, echoed Knorr’s sentiment. Such franchise fees are passed through to customers, Sayre said, so the key is to make sure such fees treat all services equally.

“We support the competitively neutral franchise fees,” Sayre said.

David Corliss, assistant city manager and director of legal services, said it appeared the city did not have much legal standing to continue charging franchise fees on cable modems.

“I’ve checked around and I’m not aware of any other municipalities that are collecting those (cable modem) fees anymore,” Corliss said.