The Issues

Michigan's Public Act 480 of 2006 - The "Uniform Video Franchising" Law

The Issues

Here are links, .pdf's, etc.

Michigan Municipal League and Michigan Townships Association summary of amendments

Issue Update:

After not having enough votes to pass the cable franchise bill, the Senate Technology & Energy Committee re-referred HB 6456 to the Senate Government Operations Committee on Tuesday. The committee is chaired by Senate Majority Leader Ken Sikkema (R-Wyoming). After this unusual procedure, the new committee passed this legislation to the Senate floor yesterday. Sen. Sikkema said he met with AT&T and a select number of senators prior to the committee meeting, and committed to pass the legislation out of committee to the Senate floor. Many members of the committee said this legislation still needs improvement, specifically referring to some of the MML amendments. Sen. Sikkema said that amendments can be offered on the Senate floor, and interested parties are on their own to generate support for their amendments.

As noted above, none of the six MML amendments were added to the bill in committee. An amendment dealing with the METRO Act credit was adopted, but it did not guarantee that local communities won’t lose METRO Act revenue.

The most damaging element of this bill is the immediate termination of ALL cable franchise contracts. MML believes there is significant support among Senators to pass an amendment removing this provision from the legislation. If this amendment is successful, it will preserve all of our current funding, right-of-way regulation, local consumer protection and current build-out requirements. SUPPORT MML’S/MTA’S CONTRACT TERMINATION AMENDMENT.

Currently, HB 6456 (H-2) would allow:

The immediate termination of all local franchise contracts
An annual $47-57 million revenue reduction to local communities
Cherry-picking in local neighborhoods because there is no meaningful build-out requirement
Significant loss of right-of-way controls
Eventual loss of public access stations
Significantly reduced consumer, local resident, protections

Questions:

If you have any questions, please contact MML State & Federal Affairs Division.

The State Senate Government Operations Committee on December 6, 2006, reported out for a vote on Tuesday statewide video franchise legislation without dealing with the three of the most contentious issues -- net neutrality, build-out and abrogation of existing cable television franchises.

The Committee took up seven amendments hammered out by a working group
consisting of Senate Majority Leader Ken Sikkema (R-Wyoming), Senators Wayne Kuipers (R-Grandville), Samuel Thomas (D-Detroit) and Mark Schauer (D-Battle Creek) and representatives of Governor Jennifer Granholm.

Details of the amendments regarding the Metro Act credit, PEG channels and fees, EAS and others were not immediately available. All of the amendments will be incorporated into a substitute bill, which Sen. Sikkema said he would offer up to the entire Senate on Tuesday.

The Committee defeated an amendment offered by Sen. Nancy Cassis (R-West
Bloomfield) which would not have allowed the abrogation of existing franchises until a competitor reached 5 percent penetration in a particular community. The Michigan Municipal League was seeking a 30 percent trigger.

This is compelling testimony regarding the lack of price competition and should be placed in the hands of the Governor and Senate.

(Thursday, Nov. 2006)

Thank You Chairman Patterson and Committee Members

          I’m Caren Collins and I’m the Executive Director of the Southwestern Oakland Cable Commission (or SWOCC) representing the cities of Farmington, Farmington Hills and Novi. I’m also the vice-president of the Michigan chapter of the National Association of Telecommunications Officers and Advisors. This group represents municipal interests in the local cable franchises, and many of us also operate Public, Education and /or Government access (or PEG) facilities.

          I’d like to address some questions that were raised by committee members yesterday regarding competition and pricing. As was mentioned yesterday, there are 40-some communities in southeast Michigan that have competition right now; from Wide Open West (WOW). Ironically, it’s not the panacea that AT&T makes it out to be. For example. cities like Troy and Canton have competition, and residents pay $43.49 for Comcast and $43.49 for WOW. Westland doesn’t have competition, but they pay the same rate, $43.49 for Comcast Cable. I live in Novi, a city without competition and pay $43.95 for Bright House. That’s a one percent difference, not the 35-45 percent AT&T alleges.

          Senator Olshove’s office contacted us at Michigan NATOA yesterday morning with some questions about rates in Texas so let me address those. A state cable franchise was enacted in Texas in September 2005. 14 months later, AT&T is providing competition to approximately 3,000 subscribers in San Antonio, according to the San Antonio Express News.   3,000. That’s all. Since this summer the company has been promising service in Houston by the end of November. Well, it’s the last day in November and our colleagues at Texas NATOA tell us there is no service in Houston.

          San Antonio had competition prior to the state bill. An overbuilder, Grande entered the market in 1999. But since that time , and since the enactment of the state bill, they have seen no price drops. In fact, the incumbent operator’s (Time Warner) prices have gone up.

          The San Antonio Public Utility Department’s records show that prior to the Texas state bill, Time Warner’s limited basic (channels 1-22) rate was $12.15. After the state bill in January 06, the price increased to $12.75. And this month it’s up to $13.40. That’s 40 cents more than I would now pay for the same service in Novi, with no competition.

          AT&T’s website does not show a comparable service for comparison. The lowest-cost package they advertise is $59. Grande charges $46 and Time Warner charges $53 for similar packages in San Antonio. In Novi, I receive what is called that expanded basic package for $43.95. That’s almost $4 less than the lowest rate in Texas and $15 less than AT&T’s rate.

          Throughout the rest of Texas, it’s been business as usual. There’s been no other increase in competition and no decrease in rates. In fact, most Texas cities are reporting that rates are still going up.

          Don’t get me wrong, we all want competition, for the sake of choice. But claims that prices will fall dramatically are just not substantiated with facts.

Governor Granholm's Statement on HB 6456 and Net Neutrality

Submitted by Nirmal on Tue, 2006-12-12 20:08. Jennifer Granholm | Michigan State House | net neutrality

This is the statement on net neutrality put out by the Governor's office:

I support net neutrality and will continue to fight for it on the
state and federal level. HB 6456 creates over 2,000 jobs in Michigan, improves competition and services for Michigan residents, and it includes a number of provisions to safeguard consumers. The issue of net neutrality is far bigger than this one bill. I believe it is more desirable to pursue the protections necessary to maintain net neutrality as stand-alone legislation in the coming year rather than as an amendment to this year's legislation. I am committed to ensuring that citizens are protected from greater expense or slower service because of the entry of phone companies into the video/internet space, and I look forward to working on securing continued open access to the Internet in the year ahead.

Here is the text of the Governor's letter to Larry Page:

Dear Larry:

Thank you for all of the expertise Google has brought to Michigan on the issue of net neutrality. I have certainly appreciated our conversation on this subject. While I am pleased we were able to extend some of the consumer protection provisions in HB 6456, I believe it may be more desirable to pursue stand-alone legislation to further extent consumer protections by enacting net neutrality next year, rather than as an amendment to this year's legislation.

I strongly agree that consumers should not be charged extra for, or otherwise disadvantaged from, reaching certain sites on the internet that those providers wish to provide for free. Nor do I believe that service providers should be able to restrict access to sites that their consumers have always been able to access. I believe strong consumer protection is important for government to provide, as well as an effective tool to stimulate economic growth in Michigan and elsewhere.

In the interest of taking incremental steps towards improving competition and services for Michigan consumers, it's best that the Legislature complete work on video franchising this year. I look forward to working with Google and others next year to ensure continued open access to the internet for all Michigan residents.

Sincerely,

Jennifer M. Granholm
Governor