The state Legislature today passed House Bill 6456, creating a statewide cable franchise system which, according to the Michigan Townships Association (MTA), could have serious impacts on municipalities and consumers in Michigan. The bill passed despite efforts by local governments and others to amend it.

David Bertram, MTA legislative liaison, said the bill is flawed in many ways. “The legislation passed today is wrong for Michigan communities and for cable customers,” he said. “First, consumer protection is out the window. Instead of cable subscribers being able to go to their township board or village or city council for cable problems, they now will have to take their complaints to the Public Service Commission.” The lack of local accountability will likely make it much more difficult for consumers to have their issues resolved, he added.

Furthermore, the legislation allows current cable companies to break current municipal franchising contracts for no reason, even when not faced with competition in the community. In fact, it's this provision which makes Michigan's cable legislation different than similar agreements in other states. The bill also greatly hinders the ability of local governments to manage and maintain their rights-of-way, and could substantially reduce revenues to a number of communities.

The biggest losers, however, will be subscribers in rural or low-density areas. Cable companies will no longer be bound by build-out language designed to ensure that rural residents receive the same services enjoyed by their urban counterparts. “Under this legislation, current subscribers in these areas stand to lose service guarantees and will most certainly not see upgraded services in the months and years ahead,” Bertram noted. “Upgrades and new investment will be made in those few communities or parts of communities with high populations that can afford the bundled offerings of phone, cable and Internet services.”

MTA has been joined in opposing the legislation by the Michigan Municipal League, as well as Internet companies such as Google, Yahoo! and eBay.