Mich. Senate OKs Broadband-Bill Package

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Michigan's Senate has approved a cluster of bills that should prompt the development of broadband services by centralizing rights-of-way clearances and setting statewide fees.

The changes should reduce the regulatory costs for operators that deploy new telephony and data services by limiting a municipality's power to set high rights-of-way fees and making such fees deductible from the franchise fees operators currently pay.

The bills should also prevent additional right-of-way charges assessed when providers add new products, according to the Michigan Cable Telecommunications Association.

Michigan's larger operators include AT&T Broadband, Charter Communications Inc., Comcast Corp. and WideOpenWest LLC.

The bills are on the fast track thanks to encouragement from pro-broadband Gov. John Engler, a Republican, who is irked by research showing that only one in 20 Michigan homes has a high-speed data line.

Michigan ranks last in telecommunications investment per capita, according to the governor's office.

Instead of paying a franchise fee of 5 percent of revenues — plus rights-of-way fees set between 5 cents to 25 cents per linear foot of plant — cable operators would pay 1 cent per linear foot to use public rights of way. Those ROW fees would be deducted from franchise fees.

The Senate approved three bills in the governor's broadband package on Feb. 15.

Senate Bill 880 cedes control of rights of way from local to state officials. It's designed to make fees more predictable and to prevent cities from setting high ROW charges.

The power to set rights-of-way rates would go to a new state agency, the Michigan Communications Development Authority, which also would disperse loans and grants to promote construction and deployment of broadband services.

SBC COULD GET CHARGED

Originally, SB 880 set a statewide rate of 5 cents per linear foot for the use of public rights of way.

The final version sets the rate at 2 cents a foot for telephone companies in the first year. It will rise to 5 cents for the duration of the connection.

Cable operators will pay 1 cent per foot, which they can claim as a credit against franchise fees.

SBC Communications Inc.'s Ameritech unit, the dominant local phone company, currently pays no local fees. The new scheme would make the Baby Bell accountable for an estimated $24 million a year if local governments decide to charge ROW fees.

That's significantly more than cities generate from cable-modem franchise fees — about $4.5 million per year, the MCTA estimated.

Because of that potential new revenue source, local governments would choose to charge a local ROW fee, MCTA spokesman Chris Horak predicted.

That should benefit cable operators, because any monies spent on ROW fees would be deducted from local franchise levies.

The bills are presently in House committees. Supporters are pushing for passage before the legislative session ends March 21.

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