To: Michigan Legislators & Staff
From: Progressive States Network
Re: Oppose HB 6456
Assuring that our communities have the technology infrastructure to grow Michigan's economy and educate its children is one of the key challenges of the coming decade. Unfortunately, the proposed HB 6456, while based on some laudable goals, has too limited a commitment to universal build-out of services in the state, ignores key issues involving deployment of broadband Internet services such as Net Neutrality, and lacks an adequate regulatory structure to assure protection of consumers into the future. We are also worried that potential community experiments in providing innovative Internet services locally may be undermined both through the elimination of municipal funding and local franchise agreements.
For that reason, we urge you to broaden debate on the proposed HB 6456 and hold off any vote until the 2007 session when there is adequate time to create a more equitable and forward-looking telecommunications policy that deals with these crucial issues:
HB 6456 has too limited a buildout requirement: One of the most disheartening aspects of the bill is that by 2017, the end of the bill's ten-year franchise lifespan, there is no assurance that more than 50% of households will be served by those granted these statewide franchises. This will just institutionalize the digital divide with no plan on how to deliver a full range of services to all households. Companies will be able to cherry-pick the most profitable areas within the state without having to serve all consumers, a recipe for continuing monopolies in many regions. Without the assurance of universal build2out by the telephone companies and competition in all communities, there is nothing in the bill to stop discriminatory pricing of services between areas where there is competition and areas where providers have a monopoly. The state Senate should take the time to develop guidelines and timelines to assure buildout to ALL residents who live within communities of reasonable density and a plan to assure access to those in inaccessible rural areas.
HB 6456 largely ignores how broadband Internet is reshaping the video environment and key issues like Net Neutrality: Given the emergence of YouTube and other Internet-based video services, the bill is oddly fixated on past regulatory issues involving telephone versus cable companies, but does not discuss build-out requirements for high-speed broadband Internet access to deliver these emerging video options. There is little in the bill to prevent the creation of a massive digital divide in the state between households receiving a limited set of video channels and households offered higher-speed Internet access and the cornucopia of video services that are emerging online And while HB 6456 creates "must-carry" provisions for broadcast television, there is no parallel discussion about assuring net neutrality and non-discrimination in access to Internet-based video sources for those using high-speed Internet services. If HB 6456 is supposed to create ten-year statewide franchise agreements, the state Senate should postpone debate until it has a bill that actually includes the regulatory issues that will matter most in the next decade.
HB 6456 has an inadequate regulatory structure: The bill eliminates the ability of local communities to negotiate fair treatment of consumers through local franchise agreements, yet fails to give the Michigan Public Service Commission adequate powers or funding to protect consumers and the public interest. Since the PSC will not be allowed to regulate video franchisers as public utilities even where no competition appears, the bill as written could lead to unregulated monopolies in some localities exempt from local franchise agreements and from most statewide regulation. And the exemption of cost studies, customer usage data and other vital data from Freedom of Information Act disclosure requirements means the public would lack crucial information for debating reasonable regulation in the future. There needs to be more debate and hearings on creating a regulatory structure that address both these and the Internet access issues discussed above.
HB 6456 will undermine municipal innovation in providing Internet services: The Michigan Municipal League has estimated that local governments may lose between $25 million and $35 million in in-kind services as part of franchise agreements. While there could be gains in efficiency from a stream-lined statewide franchise process, there are also obvious losses for communities no longer able to leverage local franchise agreements to enhance I-Net and other assets to expand local Internet access. Unless HB 6456 is redesigned to guarantee universal Internet access for everyone in the state by some date certain, it is a dubious idea to undermine local innovation in exchange for the present inadequate bill. More debate and amendments are needed to assure that a state bill is worth the losses at the local level.
We are at a critical time in the shaping of the video and Internet options available to households and it is critical that any bill enacted adequately address the issues consumers and policymakers will face in the NEXT decade, not just react to cable versus television franchise arguments of the past. We need a real plan to achieve universal access to new technology for everyone-- rich and poor households as well as urban and rural communities - and HB 6456 in its present form is not an adequate vehicle for that goal.
We would like to work with the state legislature in improving the bill in the 2007 session, but we ask that the state Senate take the first step of tabling any vote on the bill until there has been adequate time for hearings and debate on all these issues.
Copyright 2006 Progressive States Network.