Michigan Passes Telecom Reform, Giving Consumers Reason to Smile

Published December 12, 2006

(Chicago, Illinois – December 13, 2006) On Wednesday, December 13, both houses of the Michigan state legislature passed a key piece of telecommunications reform legislation, H.B. 6456, creating a universal statewide franchise fee for service providers.

The following statement is from Steven Titch, senior fellow for telecom and information technology at The Heartland Institute. Titch can be reached for further comment at 281/571-4322 or via email at [email protected].

“Michigan’s new law creates a universal statewide franchise process so that cable and video service providers no longer have to enter into time-consuming negotiations for separate franchising contracts with every local unit of government. That means Michigan residents will have a choice in cable companies that much sooner.

“In states where franchise reform has passed, including California, Indiana, Texas, and Virginia, consumers already enjoy lower prices, more choices, and new technologies like fiber-optic lines to the home and integrated cable and Internet services.

“Fears of red-lining and ‘cherry-picking’ have proved unfounded. Telephone companies deploy services throughout all demographic brackets. In some cities, such as Ft. Wayne, Indiana, lower-income neighborhoods are being wired for competitive video service before wealthier neighborhoods. This is mainly because high franchise fees discouraged incumbents as well as new entrants from meeting the demand for economical cable and Internet services in lower-income neighborhoods.

“Michigan legislators should also be congratulated for passing the bill without the so-called ‘network neutrality’ provisions demanded by Google and other major content providers. Legislators correctly recognized network neutrality as a disastrous Internet regulatory scheme that would shift the costs of managing bandwidth-hogging services from the big applications providers profiting from them to everyone who pays for Internet service.

“With the passage of video franchise reform, Michigan joins a national trend, becoming the eleventh state to acknowledge the price and service benefits derived from competition and a level playing field among service providers.”

Steven Titch is The Heartland Institute’s senior fellow for telecom and information technology and managing editor of its monthly publication, IT&T News. He can be reached at 281/571-4322 or via email at [email protected]. For more information about The Heartland Institute call Michael Van Winkle at 312/377-4000 or email [email protected].