Mich. Restarts Stalled Bill

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With the elections over, Michigan legislators will revisit a bill pending since September that would authorize state oversight of video franchises.

House Bill 6456 was put on the back burner in the run-up to Nov. 7, facing unified opposition by the Michigan Municipal League, the Michigan Coalition to Protect Public Rights-of-Way (PROTEC), members of the National Association of Telecommunications Officers and Advisors and the Alliance for Community Media.

Advocates for municipalities claim the measure — which would shift authority over franchising from local governments to the Michigan Public Service Commission — would cost localities $47 million to $57 million per year.

Cities say their local agreements call for community benefits such as institutional networks, which were built and are maintained by local cable franchisees. Cable incumbents would be allowed to opt for state licensing.

“Termination of existing franchises would eliminate all of our negotiated gains,” said Bill Irving, the Dearborn, Mich., assistant city attorney.

For example, Dearborn's schools are interconnected by fiber installed by cable providers Comcast and WideOpenWest; its City Hall is linked to the local access studio via fiber. Cities would have to pick up the cost of maintaining those links and would have no way to negotiate to extend those institutional networks, he said.

Municipal officials also object to loophole-filled buildout requirements. As currently written, the proposal would require a new provider to reach 35% of its service area within three years and 50% in five years. By the third year of operation, 25% of a provider's video territory must include low-income households, rising to 30% by the fifth year.

That's similar to the broad buildout standards in legislation approved earlier this year to enable state franchising in California. As in that state, new Michigan providers would be able to seek relief from these standards if they can prove that unreasonable terms for use of rights-of-way have blocked them from expanding their business; or if an incumbent operator has exclusive contracts with housing developments or apartment buildings.

Opponents have said the buildout language is a license for new providers to cherry-pick communities to be served.

The proposal calls for the newcomers to match the number of public, education and government channels provided by incumbents. Public, educational and government operations would be funded through a 1% fee on gross video revenues, but providers can deduct fees for the use of local rights-of-way from that PEG assessment.

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