) A requirement
that the provider comply with all customer service rules of the federal communications
commission under 47 CFR 76.309(c) applicable to cable operators and applicable provisions of the Michigan consumers
protection act, 1976 PA 331, MCL 445.901 to 445.922.
(m) A requirement that the provider comply with the consumer privacy requirements of 47 USC 551 applicable to
cable operators.
(n) A requirement that the provider comply with in-home wiring and consumer premises wiring rules of the federal
communications commission applicable to cable operators.
(o) A requirement that an incumbent video provider comply with the terms which provide insurance for right-of-way
related activities that are contained in its last cable franchise or consent agreement from the franchising
entity entered
before the effective date of this act.
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(p) A grant of authority by the franchising entity to provide video service in the video service area footprint
as
described under subdivision (e).
(q) A grant of authority by the franchising entity to use and occupy the public rights-of-way in the delivery
of the
video service, subject to the laws of this state and the police powers of the franchising entity.
(r) A requirement that the parties to the agreement are subject to the provisions of this act.
(s) The penalties provided for under section 14.
Sec. 3. (1) Before offering video services within the boundaries of a local unit of government the video provider
shall
enter into or possess a franchise agreement with the local unit of government as required by this act.
(2) A franchising entity shall notify the provider as to whether the submitted franchise agreement is complete
as
required by this act within 15 business days after the date that the franchise agreement is filed. If the franchise
agreement is not complete, the franchising entity shall state in its notice the reasons the franchise agreement
is
incomplete.
(3) A franchising entity shall have 30 days after the submission date of a complete franchise agreement to approve
the agreement. If the franchising entity does not notify the provider regarding the completeness of the franchise
agreement or approve the franchise agreement within the time periods required under this subsection, the franchise
agreement shall be considered complete and the franchise agreement approved.
(4) The uniform video service local franchise agreement issued by a franchising entity or an existing franchise
of an
incumbent video service provider is fully transferable to any successor in interest to the provider to which
it is initially
granted. A notice of transfer shall be filed with the franchising entity within 15 days of the completion of
the transfer.
(5) The uniform video service local franchise agreement issued by a franchising entity may be terminated or
the
video service area footprint may be modified, except as provided under section 9, by the provider by submitting
notice
to the franchising entity.
(6) If any of the information contained in the franchise agreement changes, the provider shall timely notify
the
franchising entity.
(7) The uniform video service local franchise shall be for a period of 10 years from the date it is issued.
Before the
expiration of the initial franchise agreement or any subsequent renewals, the provider may apply for an additional
10-year renewal under this section.
(8) As a condition to obtaining or holding a franchise, a franchising entity shall not require a video service
provider
to obtain any other franchise, assess any other fee or charge, or impose any other franchise requirement than
is allowed
under this act. For purposes of this subsection, a franchise requirement includes, but is not limited to, a
provision
regulating rates charged by video service providers, requiring the video service providers to satisfy any build-out
requirements, or a requirement for the deployment of any facilities or equipment.
Sec. 4. (1) A video service provider shall designate a sufficient amount of capacity on its network to provide
for the
same number of public, education, and government access channels that are in actual use on the incumbent video
provider system on the effective date of this act or as provided under subsection (14).
(2) Any public, education, or government channel provided under this section that is not utilized by the franchising
entity for at least 8 hours per day for 3 consecutive months may no longer be made available to the franchising
entity
and may be programmed at the provider’s discretion. At such time as the franchising entity can certify
a schedule for
at least 8 hours of daily programming for a period of 3 consecutive months, the provider shall restore the previously
reallocated channel.
(3) The franchising entity shall ensure that all transmissions, content, or programming to be retransmitted
by a
video service provider is provided in a manner or form that is capable of being accepted and retransmitted by
a
provider, without requirement for additional alteration or change in the content by the provider, over the particular
network of the provider, which is compatible with the technology or protocol utilized by the provider to deliver
services.
(4) A video service provider may request that an incumbent video provider interconnect with its video system
for
the sole purpose of providing access to video programming that is being provided over public, education, and
government channels for a franchising entity that is served by both providers. Where technically feasible,
interconnection shall be allowed under an agreement of the parties. The video service provider and incumbent
video
provider shall negotiate in good faith and may not unreasonably withhold interconnection. Interconnection may
be
accomplished by any reasonable method as agreed to by the providers. The requesting video service provider shall
pay
the construction, operation, maintenance, and other costs arising out of the interconnection, including the
reasonable
costs incurred by the incumbent provider.
(5) The person producing the broadcasts is solely responsible for all content provided over designated public,
education, or government channels. A video service provider shall not exercise any editorial control over any
programming on any channel designed for public, education, or government use.
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(6) A video service provider is not subject to any civil or criminal liability for any program carried on any
channel
designated for public, education, or government use.
(7) Except as otherwise provided in subsection (8), a provider shall provide subscribers access to the signals
of the
local broadcast television station licensed by the federal communications commission to serve those subscribers
over the
air. This section does not apply to a low-power station unless the station is a qualified low-power station
as defined
under 47 USC 534(h)(2). A provider is required to only carry digital broadcast signals to the extent that a
broadcast
television station has the right under federal law or regulation to demand carriage of the digital broadcast
signals by a
cable operator on a cable system.
(8) To facilitate access by subscribers of a video service provider to the signals of local broadcast stations
under this
section, a station either shall be granted mandatory carriage or may request retransmission consent with the
provider.
(9) A provider shall transmit, without degradation, the signals a local broadcast station delivers to the provider.
A provider is not required to provide a television station valuable consideration in exchange for carriage.
(10) A provider shall not do either of the following:
(a) Discriminate among or between broadcast stations and programming providers with respect to transmission
of
their signals, taking into account any consideration afforded the provider by the programming provider or broadcast
station. In no event shall the signal quality as retransmitted by the provider be required to be superior to
the signal
quality of the broadcast stations as received by the provider from the broadcast television station.
(b) Delete, change, or alter a copyright identification transmitted as part of a broadcast station’s signal.
(11) A provider shall not be required to utilize the same or similar reception technology as the broadcast stations
or
programming providers.
(12) A public, education, or government channel shall only be used for noncommercial purposes.
(13) Subsections (7) to (11) apply only to a video service provider that delivers video programming in a video
service
area where the provider is not regulated as a cable operator under federal law.
(14) If a franchising entity seeks to utilize capacity designated under subsection (1) or an agreement under
section 13
to provide access to video programming over 1 or more public, governmental, and education channels, the franchising
entity shall give the provider a written request specifying the number of channels in actual use on the incumbent
video
provider’s system or specified in the agreement entered into under section 13. The video service provider
shall have
90 days to begin providing access as requested by the franchising entity.
Sec. 5. (1) As of the effective date of this act, no existing franchise agreement with a franchising entity
shall be
renewed or extended upon the expiration date of the agreement.
(2) The incumbent video provider, at its option, may continue to provide video services to the franchising entity
by
electing to do 1 of the following:
(a) Terminate the existing franchise agreement before the expiration date of the agreement and enter into a
new
franchise under a uniform video service local franchise agreement.
(b) Continue under the existing franchise agreement amended to include only those provisions required under
a
uniform video service local franchise.
(c) Continue to operate under the terms of an expired franchise until a uniform video service local franchise
agreement takes effect. An incumbent video provider has 120 days after the effective date of this act to file
for a uniform
video service local franchise agreement.
(3) On the effective date of this act, any provisions of an existing franchise that are inconsistent with or
in addition
to the provisions of a uniform video service local franchise agreement are unreasonable and unenforceable by
the
franchising entity.
(4) If a franchising entity authorizes 2 or more video service providers through an existing franchise, a uniform
video
service local franchise agreement, or an agreement under section 13, the franchising entity shall not enforce
any term,
condition, or requirement of any franchise agreement that is more burdensome than the terms, conditions, or
requirements contained in another franchise agreement.
Sec. 6. (1) A video service provider shall calculate and pay an annual video service provider fee to the franchising
entity. The fee shall be 1 of the following:
(a) If there is an existing franchise agreement, an amount equal to the percentage of gross revenues paid to
the
franchising entity by the incumbent video provider with the largest number of subscribers in the franchising
entity.
(b) At the expiration of an existing franchise agreement or if there is no existing franchise agreement, an
amount
equal to the percentage of gross revenues as established by the franchising entity not to exceed 5% and shall
be
applicable to all providers.
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(2) The fee due under subsection (1) shall be due on a quarterly basis and paid within 45 days after the close
of the
quarter. Each payment shall include a statement explaining the basis for the calculation of the fee.
(3) The franchising entity shall not demand any additional fees or charges from a provider and shall not demand
the
use of any other calculation method other than allowed under this act.
(4) For purposes of this section, “gross revenues” means all consideration of any kind or nature,
including, without
limitation, cash, credits, property, and in-kind contributions received by the provider from subscribers for
the provision
of video service by the video service provider within the jurisdiction of the franchising entity. Gross revenues
shall
include all of the following:
(a) All charges and fees paid by subscribers for the provision of video service, including equipment rental,
late fees,
insufficient funds fees, fees attributable to video service when sold individually or as part of a package or
bundle, or
functionally integrated, with services other than video service.
(b) Any franchise fee imposed on the provider that is passed on to subscribers.
(c) Compensation received by the provider for promotion or exhibition of any products or services over the video
service.
(d) Revenue received by the provider as compensation for carriage of video programming on that provider’s
video
service.
(e) All revenue derived from compensation arrangements for advertising attributable to the local franchise area.
(f) Any advertising commissions paid to an affiliated third party for video service advertising.
(5) Gross revenues do not include any of the following:
(a) Any revenue not actually received, even if billed, such as bad debt net of any recoveries of bad debt.
(b) Refunds, rebates, credits, or discounts to subscribers or a municipality to the extent not already offset
by
subdivision (a) and to the extent the refund, rebate, credit, or discount is attributable to the video service.
(c) Any revenues received by the provider or its affiliates from the provision of services or capabilities other
than
video service, including telecommunications services, information services, and services, capabilities, and
applications
that may be sold as part of a package or bundle, or functionally integrated, with video service.
(d) Any revenues received by the provider or its affiliates for the provision of directory or internet advertising,
including yellow pages, white pages, banner advertisement, and electronic publishing.
(e) Any amounts attributable to the provision of video service to customers at no charge, including the provision
of
such service to public institutions without charge.
(f) Any tax, fee, or assessment of general applicability imposed on the customer or the transaction by a federal,
state,
or local government or any other governmental entity, collected by the provider, and required to be remitted
to the
taxing entity, including sales and use taxes.
(g) Any forgone revenue from the provision of video service at no charge to any person, except that any forgone
revenue exchanged for trades, barters, services, or other items of value shall be included in gross revenue.
(h) Sales of capital assets or surplus equipment.
(i) Reimbursement by programmers of marketing costs actually incurred by the provider for the introduction of
new
programming.
(j) The sale of video service for resale to the extent the purchaser certifies in writing that it will resell
the service
and pay a franchise fee with respect to the service.
(6) In the case of a video service that is bundled or integrated functionally with other services, capabilities,
or
applications, the portion of the video provider’s revenue attributable to the other services, capabilities,
or applications
shall be included in gross revenue unless the provider can reasonably identify the division or exclusion of
the revenue
from its books and records that are kept in the regular course of business.
(7) Revenue of an affiliate shall be included in the calculation of gross revenues to the extent the treatment
of the
revenue as revenue of the affiliate has the effect of evading the payment of franchise fees which would otherwise
be
paid for video service.
(8) In addition to the fee required under subsection (1), a video service provider shall pay to the franchising
entity
as support for the cost of public, education, and government access facilities and services an annual fee equal
to 1 of the
following:
(a) If there is an existing franchise on the effective date of this act, the fee paid to the franchising entity
by the
incumbent video provider with the largest number of cable service subscribers in the franchising entity as determined
by the existing franchise agreement.
(b) At the expiration of the existing franchise agreement, the amount required under subdivision (a) not to
exceed
2% of gross revenues.
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(c) If there is no existing franchise agreement, a percentage of gross revenues as established by the franchising
entity not to exceed 2% to be determined by a community need assessment.
(d) An amount agreed to by the franchising entity and the video service provider.
(9) The fee required under subsection (8) shall be applicable to all providers.
(10) The fee due under subsection (8) shall be due on a quarterly basis and paid within 45 days after the close
of the
quarter. Each payment shall include a statement explaining the basis for the calculation of the fee.
(11) A video service provider is entitled to a credit applied toward the fees due under subsection (1) for all
funds
allocated to the franchising entity from annual maintenance fees paid by the provider for use of public rights-of-way,
minus any property tax credit allowed under section 8 of the metropolitan extension telecommunications rights-of-way
oversight act, 2002 PA 48, MCL 484.3108. The credits shall be applied on a monthly pro rata basis beginning
in the first
month of each calendar year in which the franchising entity receives its allocation of funds. The credit allowed
under
this subsection shall be calculated by multiplying the number of linear feet occupied by the provider in the
public
rights-of-way of the franchising entity by the lesser of 5 cents or the amount assessed under the metropolitan
extension
telecommunications rights-of-way oversight act, 2002 PA 48, MCL 484.3101 to 484.3120. A video service provider
is not
eligible for a credit under this subsection unless the provider has taken all property tax credits allowed under
the
metropolitan extension telecommunications rights-of-way oversight act, 2002 PA 48, MCL 484.3101 to 484.3120.
(12) All determinations and computations made under this section shall be pursuant to generally accepted accounting
principles.
(13) The commission within 30 days after the enactment into law of any appropriation to it shall ascertain the
amount
of the appropriation attributable to the actual costs to the commission in exercising its duties under this
act and shall
be assessed against each video service provider doing business in this state. Each provider shall pay a portion
of the
total assessment in the same proportion that its number of subscribers for the preceding calendar year bears
to the total
number of video service subscribers in the state. The first assessment made under this act shall be based on
the
commission’s estimated number of subscribers for each provider in the year that the appropriation is made.
The total
assessment under this subsection shall not exceed $1,000,000.00 annually. This subsection does not apply after
December 31, 2009.
Sec. 7. (1) No more than every 24 months, a franchising entity may perform reasonable audits of the video service
provider’s calculation of the fees paid under section 6 to the franchising entity during the preceding
24-month period
only. All records reasonably necessary for the audits shall be made available by the provider at the location
where the
records are kept in the ordinary course of business. The franchising entity and the video service provider shall
each be
responsible for their respective costs of the audit. Any additional amount due verified by the franchising entity
shall be
paid by the provider within 30 days of the franchising entity’s submission of an invoice for the sum.
If the sum exceeds
5% of the total fees which the audit determines should have been paid for the 24-month period, the provider
shall pay
the franchising entity’s reasonable costs of the audit.
(2) Any claims by a franchising entity that fees have not been paid as required under section 6, and any claims
for
refunds or other corrections to the remittance of the provider, shall be made within 3 years from the date the
compensation is remitted.
(3) Any video service provider may identify and collect as a separate line item on the regular monthly bill
of each
subscriber an amount equal to the percentage established under section 6(1) applied against the amount of the
subscriber’s monthly bill.
(4) A video service provider may identify and collect as a separate line item on the regular monthly bill of
each
subscriber an amount equal to the percentage established under section 6(8) applied against the amount of the
subscriber’s monthly bill.
Sec. 8. (1) A franchising entity shall allow a video service provider to install, construct, and maintain a
video service
or communications network within a public right-of-way and shall provide the provider with open, comparable,
nondiscriminatory, and competitively neutral access to the public right-of-way.
(2) A franchising entity may not discriminate against a video service provider to provide video service for
any of the
following:
(a) The authorization or placement of a video service or communications network in public rights-of-way.
(b) Access to a building owned by a governmental entity.
(c) A municipal utility pole attachment.
(3) A franchising entity may impose on a video service provider a permit fee only to the extent it imposes such
a fee
on incumbent video providers, and any fee shall not exceed the actual, direct costs incurred by the franchising
entity
for issuing the relevant permit. A fee under this section shall not be levied if the video service provider
already has paid
a permit fee of any kind in connection with the same activity that would otherwise be covered by the permit
fee under
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this section or is otherwise authorized by law or contract to place the facilities used by the video service
provider in the
public rights-of-way or for general revenue purposes.
Sec. 9. (1) A video service provider shall not deny access to service to any group of potential residential
subscribers
because of the race or income of the residents in the local area in which the group resides.
(2) It is a defense to an alleged violation of subsection (1) if the provider has met either of the following
conditions:
(a) Within 3 years of the date it began providing video service under this act, at least 25% of households with
access
to the provider’s video service are low-income households.
(b) Within 5 years of the date it began providing video service under this act and from that point forward,
at least
30% of the households with access to the provider’s video service are low-income households.
(3) If a video service provider is using telecommunication facilities to provide video services and has more
than
1,000,000 telecommunication access lines in this state, the provider shall provide access to its video service
to a number
of households equal to at least 25% of the households in the provider’s telecommunication service area
in the state
within 3 years of the date it began providing video service under this act and to a number not less than 50%
of these
households within 6 years. A video service provider is not required to meet the 50% requirement in this subsection
until
2 years after at least 30% of the households with access to the provider’s video service subscribe to
the service for
6 consecutive months.
(4) Each provider shall file an annual report with the franchising entity and the commission regarding the progress
that has been made toward compliance with subsections (2) and (3).
(5) Except for satellite service, a video service provider may satisfy the requirements of this section through
the use
of alternative technology that offers service, functionality, and content, which is demonstrably similar to
that provided
through the provider’s video service system and may include a technology that does not require the use
of any public
right-of-way. The technology utilized to comply with the requirements of this section shall include local public,
education, and government channels and messages over the emergency alert system as required under section 4.
(6) A video service provider may apply to the franchising entity, and, in the case of subsection (3), the commission,
for a waiver of or for an extension of time to meet the requirements of this section if 1 or more of the following
apply:
(a) The inability to obtain access to public and private rights-of-way under reasonable terms and conditions.
(b) Developments or buildings not being subject to competition because of existing exclusive service arrangements.
(c) Developments or buildings being inaccessible using reasonable technical solutions under commercial reasonable
terms and conditions.
(d) Natural disasters.
(e) Factors beyond the control of the provider.
(7) The franchising entity or commission may grant the waiver or extension only if the provider has made substantial
and continuous effort to meet the requirements of this section. If an extension is granted, the franchising
entity or
commission shall establish a new compliance deadline. If a waiver is granted, the franchising entity or commission
shall
specify the requirement or requirements waived.
(8) Notwithstanding any other provision of this act, a video service provider using telephone facilities to
provide
video service is not obligated to provide such service outside the provider’s existing telephone exchange
boundaries.
(9) Notwithstanding any other provision of this act, a video service provider shall not be required to comply
with,
and a franchising entity may not impose or enforce, any mandatory build-out or deployment provisions, schedules,
or
requirements except as required by this section.
Sec. 10. (1) A video service provider shall not do in connection with the providing of video services to its
subscribers
and the commission may enforce compliance with any of the following to the extent that the activities are not
covered
by section 2(3)(
):
(a) Make a statement or representation, including the omission of material information, regarding the rates,
terms,
or conditions of providing video service that is false, misleading, or deceptive. As used in this subdivision,
“material
information” includes, but is not limited to, all applicable fees, taxes, and charges that will be billed
to the subscriber,
regardless of whether the fees, taxes, or charges are authorized by state or federal law.
(b) Charge a customer for a subscribed service for which the customer did not make an initial affirmative order.
Failure to refuse an offered or proposed subscribed service is not an affirmative order for the service.
(c) If a customer has canceled a service, charge the customer for service provided after the effective date
the service
was canceled.
(d) Cause a probability of confusion or a misunderstanding as to the legal rights, obligations, or remedies
of a party
to a transaction by making a false, deceptive, or misleading statement or by failing to inform the customer
of a material
fact, the omission of which is deceptive or misleading.
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(e) Represent or imply that the subject of a transaction will be provided promptly, or at a specified time,
or within
a reasonable time, if the provider knows or has reason to know that it will not be so provided.
(f) Cause coercion and duress as a result of the time and nature of a sales presentation.
(2) Each video service provider shall establish a dispute resolution process for its customers. Each provider
shall
maintain a local or toll-free telephone number for customer service contact.
(3) The commission shall submit to the legislature no later than June 1, 2007 a proposed process to be added
to this
act that would allow the commission to review disputes which are not resolved under subsection (2), disputes
between
a provider and a franchising entity, and disputes between providers.
(4) Each provider shall notify its customers of the dispute resolution process created under this section.
Sec. 11. (1) Except under the terms of a mandatory protective order, trade secrets and commercial or financial
information submitted under this act to the franchising entity or commission are exempt from the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(2) If information is disclosed under a mandatory protective order, then the franchising entity or commission
may
use the information for the purpose for which it is required, but the information shall remain confidential.
(3) There is a rebuttable presumption that costs studies, customer usage data, marketing studies and plans,
and
contracts are trade secrets or commercial or financial information protected under subsection (1). The burden
of
removing the presumption under this subsection is with the party seeking to have the information disclosed.
Sec. 12. (1) The commission’s authority to administer this act is limited to the powers and duties explicitly
provided
for under this act, and the commission shall not have the authority to regulate or control a provider under
this act as a
public utility.
(2) The commission shall file a report with the governor and legislature by February 1 of each year that shall
include
information on the status of competition for video services in this state and recommendations for any needed
legislation.
A video service provider shall submit to the commission any information requested by the commission necessary
for the
preparation of the annual report required under this subsection. The obligation of a video service provider
under this
subsection is limited to the submission of information generated or gathered in the normal course of business.
Sec. 13. This act does not prohibit a local unit of government and a video service provider from entering into
a
voluntary franchise agreement that includes terms and conditions different than those required under this act,
including, but not limited to, a reduction in the franchise fee in return for the video service provider making
available
to the franchising entity services, equipment, capabilities, or other valuable consideration. This section does
not apply
unless for each provider servicing the franchise entity it is technically feasible and commercially practicable
to comply
with similar terms and conditions in the franchise agreement and it is offered to the other provider.
Sec. 14. (1) After notice and hearing, if the commission finds that a person has violated this act, the commission
shall
order remedies and penalties to protect and make whole persons who have suffered damages as a result of the
violation,
including, but not limited to, 1 or more of the following:
(a) Except as otherwise provided under subdivision (b), order the person to pay a fine for the first offense
of not less
than $1,000.00 or more than $20,000.00. For a second and any subsequent offense, the commission shall order
the person
to pay a fine of not less than $2,000.00 or more than $40,000.00.
(b) If the video service provider has less than 250,000 telecommunication access lines in this state, order
the person
to pay a fine for the first offense of not less than $200.00 or more than $500.00. For a second and any subsequent
offense,
the commission shall order the person to pay a fine of not less than $500.00 or more than $1,000.00.
(c) If the person has received a uniform video service local franchise, revoke the franchise.
(d) Issue cease and desist orders.
(2) Notwithstanding subsection (1), a fine shall not be imposed for a violation of this act if the provider
has otherwise
fully complied with this act and shows that the violation was an unintentional and bona fide error notwithstanding
the
maintenance of procedures reasonably adopted to avoid the error. Examples of a bona fide error include clerical,
calculation, computer malfunction, programming, or printing errors. An error in legal judgment with respect
to a
person’s obligations under this act is not a bona fide error. The burden of proving that a violation was
an unintentional
and bona fide error is on the provider.
(3) If the commission finds that a party’s complaint or defense filed under this section is frivolous,
the commission
shall award to the prevailing party costs, including reasonable attorney fees, against the nonprevailing party
and their
attorney.
(4) Any party of interest shall have the same rights to appeal and review an order or finding of the commission
under
this act as provided under the Michigan telecommunications act, 1991 PA 179, MCL 484.2101 to 484.2604.
Enacting section 1. This act takes effect January 1, 2007.
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This act is ordered to take immediate effect.
Clerk of the House of Representatives
Secretary of the Senate
Approved
Governor
