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from: Spinal Column

Changes in new cable law proposed

Kirk Pinho
August 01, 2007 - A two-bill legislative package designed to simplify the state's new cable television franchising agreement procedure has been introduced in the Michigan Senate.

Senate Bill (SB) 636 and SB 637 were introduced by Sen. Buzz Thomas, III (D-Detroit) and have been referred to the Senate Energy Policy and Public Utilities Committee, where they await a hearing.

Both bills were co-sponsored by state Sen. Deb Cherry (D-Waterford), who didn't return messages seeking comment prior to press time.

Staff in Thomas' Lansing office didn't return calls seeking comment prior to press time.

SB 636 would remove a provision from the Metropolitan Extension Telecommunication Rights-of-Way Oversight (METRO) Act requiring that the amount of public, educational, and governmental (PEG) program funding be "determined by a community need assessment."

Franchise fees are typically a percentage of the cable provider's annual gross receipts in a community that are reapportioned back to that community each year. PEG programming fees are a set percentage of gross annual receipts in the community which are also paid back to the community to buy equipment and produce public, educational and governmental programming.

SB 636 would amend the law to state that a provider would have to pay a PEG fee equal to one of the following:

• If a provider was operating under a franchise agreement on Jan. 1, 2007, the provider would be responsible for paying the fee as determined by the existing franchise agreement until the agreement expires;

• An amount established by the franchising entity not to exceed 2 percent of the provider's annual gross revenues in the community;

• If there is no existing franchise agreement on or after Jan. 1, the provider that enters into or possesses a uniform franchise agreement would pay an amount as established by the franchising entity not to exceed 2 percent of annual gross revenues; or

• An amount agreed to by the franchising entity and the video service provider.

SB 637 would require, in event of a customer dispute with the service provider, that the customer first seek redress through the service provider's complaint resolution process. Each service provider would be required to include the dispute resolution process on its web site. A complaint could only be filed with the commission if the customer first attempted to resolve the dispute through the provider's dispute resolution process. If that process doesn't resolve the dispute, the individual would be able to file a complaint with the Michigan Public Service Commission (PSC).

Initially, only an informal resolution and mediation processes would take place. If those avenues fail, a formal complaint could be filed and hearings could ensue.

Scott Stevenson, president of the Telecommunications Association of Michigan, said the organization is still looking over the bills and has yet to form an opinion on them.

The METRO Act, which was approved by the Legislature during the lame duck session following the 2006 General Election, institutes a statewide format for cable service providers to use in negotiating franchise agreements with local governments.

The Michigan Public Service Commission is designated as the government entity responsible for providing the uniform franchising form to the parties, though the commission can't regulate the cable television service providers as public utilities.

Under the new law, a local unit of government must allow a video service provider to install, construct, and maintain a communications network within a public right-of-way and allow "open, comparable, non-discriminatory, and competitively neutral access to the public right-of-way." The law also states a local government can't impose any fee or franchise requirement other than those set in the bill's provisions.