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from: Technology Daily

Video Franchising Bill Moves In Michigan

By Michael Martinez

(Tuesday, November 14) Lawmakers in Michigan advanced a measure to overhaul video-franchising rules, as the state House approved a measure that would allow new entrants to the video market to bypass localities by applying for statewide video franchises.

The current rules require separate agreements with localities. By a vote of 80-21, the state House passed the measure, H.B. 6456 -- which now moves to the state Senate.The House passed the measure, H.B. 6456, by a vote of 80-21. It now moves to the state Senate.

California, Indiana, Kansas, New Jersey, North Carolina, South Carolina, Texas and Virginia all have enacted similar legislation in the past two years. Lawmakers in Louisiana also passed a franchising measure this year, but that bill was vetoed by Gov. Kathleen Blanco.

Under the Michigan proposal, video providers would have to pay franchising fees of up to 5 percent. They also could not deny service to consumers based on race or income.

The bill includes provisions requiring that market entrants make services available to at least 25 percent of the consumers in jurisdictions they enter within three years and expand coverage to 50 percent of consumers within five years.

In a statement, Republican state Rep. Mike Nofs, the author of the bill, said that the current regulatory system is outdated and that consumers have suffered as a result.

A uniform set of video franchising rules will encourage companies to invest in neighborhoods throughout the state, create jobs and boost Michigan's economic competitiveness, he contended.

"The video service industry is on the verge of massive expansion, but Michigan's outdated franchising regulations stifle that expansion, slowing job growth and limiting competition and consumer choices," Nofs said.

He added, "Studies have shown that people are frustrated by the continuing rise in costs of watching TV, and they want something done to lower their entertainment bills while expanding their viewing choices."

The measure is opposed by several organizations, including the Michigan Municipal League.

Critics claim the measure would undercut the authority of localities to manage a crucial source of revenue. On its Web site, the league charged that the measure caters to video providers at the expense of consumers.

"Most concerning is giving the unilateral ability of a cable company to terminate a franchise contract at any time, still allowing cherry-picking in neighborhoods and significant revenue impacts to local communities," according to the group.

A spokeswoman for Gov. Jennifer Granholm said Granholm has not taken a position on the legislation -- but would like the state Senate to enact the best possible bill from the standpoint of consumers.