Mich. Franchise Bill Awaits Governor’s Signature

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A bill that will simplify cable franchising in Michigan is now on Gov. Jennifer Granholm’s desk.

Unlike other states -- which eliminated local franchising in favor of statewide authorizations to serve, issued by a state agency -- the Michigan bill retains local franchising. However, the terms of the franchises are set by the state, and the terms are very limited.

For instance, providers will identify the areas they intend to serve, list the names of company executives and vow to conform to federal telecommunications laws.

Incumbents can opt to convert their local franchises into ones reflecting the state standards. Any agreements with terms beyond those in the new bill are deemed “unreasonable and unenforceable,” according to the bill’s language.

Local communities will have 15 days to review a new provider’s application for a uniform franchise. If local authorities don’t act within 30 days total, the franchise is automatically granted for a term of 10 years.

New providers must match the public, educational and government channels deployed by incumbents, and providers will support those channels with a 1% fee on their gross revenues. They must also pay a 5% franchise fee.

Within three years of launch, 25% of a new provider’s service area must serve low-income homes. Within six years of launching video, 50% of the service area of the largest providers, such as AT&T, must qualify as low-income households.

New providers can use “alternative technologies” to meet the build-out requirements, but law specifies that direct-broadcast satellite services are excluded as that alternative.

The governor is expected to sign the bill.

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