Cable TV Picture Is Fuzzier

May 15, 2006
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GRAND RAPIDS — Members of the U.S. House were reportedly set to vote recently on its version of a cable franchise bill, one that almost every local public official passionately dislikes, when the measure was abruptly pulled from the agenda because of a squabble over which committee has jurisdiction.

At the same time, Sen. Ted Stevens introduced a somewhat similar bill in the Senate that local public officials might be more partial to than the House bill.

Meanwhile, a local state senator reportedly didn’t get any gold stars from some of these same officials at a gathering held to discuss the franchising bill he introduced in Lansing.

The Grand Valley Metro Council, the city of Grand Rapids, the Michigan Municipal League and the Michigan Township Association feel the bills in the U.S. House and in the state House and Senate erode home rule. At stake in all three pieces of legislation is a potential loss of franchising fees and control over local rights-of-way, as either the federal or state government would retain the power to award cable franchises without consulting the local communities in which these firms would do business.

But the bill from Stevens, the powerful Alaskan Republican who managed to get funding for “the bridge to nowhere” in the latest transportation spending plan, lets municipalities negotiate with cable providers and collect a fee. This bill, however, sets a time limit of 30 days for cities and townships to reach an agreement with cable operators and telecoms. If there is no agreement within that timeframe, a franchise would automatically be awarded through “a standard franchise agreement form” written by the Federal Communications Commission.

A number of telecom publications reported that cable providers support the Senate bill, while local public officials are still analyzing its 135 pages.

But one question they may have about it is how much control over a system’s build-out does the FCC form give them? Another question is whether franchise applicants might drag their heels during negotiations until the 30 days run out.

Being able to negotiate an agreement with providers gives municipalities a better chance to ensure that everyone within a unit gets served by a new franchise. Local officials fear that the telecoms that want to enter the cable market will redline, or cherry pick, customers, and leave those who are unable to afford a bundled package out of the system. Current providers are concerned that the new entries will go after their best customers.

Industry estimates from these companies for cable, phone and Internet services, bundled into a single package, have ranged from $125 to $165 a month.

Redlining is also a concern that officials have with both state bills, an issue they tried to raise with State Sen. Wayne Kuipers at a meeting the Republican from Holland held in the Allendale Township Hall. Kuipers is the lead sponsor of Senate Bill 1157, a carbon copy of House Bill 5895, and officials find plenty of fault with both.

Georgetown Township Supervisor Bill Holland told members of the Metro Council that Kuipers didn’t show any interest in their concerns and said the senator came across as being “extremely cocky.”

“Nobody got him to change his mind. He left with the same attitude he came in with,” said Holland. “It was just like talking to a stone wall. He gave us no glimmer of hope that anything would change.”

Holland added that if the 47,000 households in his neck of woods knew what Kuipers was up to, the senator would have a problem in his next state election.

Metro Council Executive Director Don Stypula sent a letter to Congressmen Vern Ehlers and Peter Hoekstra asking them to support amendments that would add more local control to the House bill being fought over in the judicial and telecommunications committees.

Stypula wrote that the current House bill, which amends the 1996 Telecommunications Act, doesn’t protect the Michigan Metro Act that was enacted by then-Gov. John Engler in 2001. The law collects $25 million a year from telephone companies as compensation for the damage the firms do to streets from repair runs or installation projects.

“It would be unfortunate if a national cable franchise bill would result in a reduction in Metro Act payments to Michigan municipalities,” wrote Stypula.

A lot of money is at stake in this matter, as cities and townships in the state get about $100 million annually from cable franchise fees. Grand Rapids receives $1.4 million each year from Comcast Cable Communications, the city’s lone cable provider.    

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