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from: Michigan State University

Competititon for Video Services Developing Very Slowly in Michigan

02/15/08
State News, Communications

A report released Feb. 1 by state regulators indicates slightly growing competition among providers of video services, including cable TV companies and telecommunications firms.

The report from the Michigan Public Service Commission comes just over a year after passage of a state law that set up a new franchising system for providers of video services.

In the wake of the December 2006 law, AT&T Inc. launched a new product that combines digital TV and high-speed Internet access and is designed to compete with services like cable TV.

In addition, two other providers, Arialink Telecom L.L.C. and Southwest Michigan Communications Inc., also have entered the video services market.

"This report indicates that a fledgling video services market is developing in Michigan," said MPSC Chairman Orjiakor Isiogu. "While many parts of the state still do not have a choice when it comes to a video service provider, some communities now have choices available to them -- and that's a good start. The Commission looks forward to seeing more competition take hold in 2008 and beyond."

The report includes the status of competition, information on the responsibilities of the MPSC, results of a survey of video franchise entities and cable/video service providers, currently pending legislative amendments, and the MPSC's recommendations.

Highlights of the report include the following:

* There are 39 providers offering video services in Michigan.
* In 2007, three video service providers entered the video services market in Michigan as a result of the Uniform Video Services Local Franchise Act (Public Act 480). They are AT&T Michigan, Arialink Telecom, and Southwest Michigan Communication.
* There are 2,272,152 cable/video customers in Michigan as of Dec. 31, 2007. This number does not include customers of satellite providers, which are not required to have franchise agreements with franchise entities. It is unclear how many customers in Michigan use satellite providers. The top three cable/video companies in Michigan are Comcast Cable Communications, Charter Communications and Wideopenwest Michigan (WOW).
* There are approximately 1,788 franchise agreements in place across Michigan, with 27 percent of them using the Uniform Video Service Local Franchise Agreement.
* Three formal complaints are pending before the Commission on issues between providers and franchise entities.
* Approximately 60 percent of the cable/video providers who responded to the survey said that a competitor had not entered their footprint since Public Act 480 took effect.
* Four amendments to Public Act 480 are pending in the Michigan Legislature: SB 636 and HB 5047, which relate to Public, Education & Government (PEG) channel fee language and SB 637 and HB 5048, which relate to the MPSC's proposed dispute resolution process.
*

The Commission recommends that:
o the Legislature take action on the pending amendments to the Public Act 480;
o Public Act 480 be amended to lengthen the time a franchising entity has to approve a franchise agreement from 30 days to 45 days; (Communities have found the 30-day deadline burdensome because many meet only once or twice a month.)
o the deadline for the annual report be changed from Feb. 1 of each year to April 1 of each year to allow survey respondents to provide more accurate year-end information to the MPSC; and
o Public Act 480 be amended to direct providers doing business in Michigan to provide contact information to the Commission to help with complaint resolution.

Public Act 480 took effect on Jan. 1, 2007. In 2007, the MPSC established a statewide uniform standardized form to be used by both video service providers and franchise entities. It also developed a proposed dispute resolution process that was submitted to the Michigan Legislature on May 31, 2007 and is currently pending legislative approval.

Source document : Status of Competition for Video Services in Michigan

For the full news release, see MPSC Issues First Report on Video Services Competition in Michigan, Michigan Newswire, February 12, 2008.