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Reason Foundation

Michigan Passes Franchise Reform

Steven Titch
December 12, 2006, 2:21pm

Michigan Monday became the 10th state to allow new cable TV entrants to apply for a statewide franchise to offer service anywhere in the state, and the 12th overall to initiate some level of video franchise reform. The bill now goes to Gov. Jennifer Granholm, who has said she intends to sign it. The new law creates a universal statewide franchise fee 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 a choice in cable companies for more Michigan residents that much sooner. In states where franchise reform has passed, including Texas, Indiana, Virginia and California, consumers already are enjoying lower prices, more choices, and the benefits of new technology, including fiber-optic lines to the home and integrated cable and Internet services. Fears of red-lining and "cherry-picking" have also proved unfounded. Telephone companies are deploying services throughout all demographic brackets. In some cities, such as Ft. Wayne, Ind., lower-income neighborhoods are being wired for competitive cable service before the wealthier sections – mainly because there is greater demand for economical cable and Internet services that the former regulated cable monopoly regime failed to deliver. 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. They correctly recognized network neutrality is a disastrous Internet regulatory plan that would shift the costs of managing bandwidth-hogging services from the big applications providers that profit from them, and instead roll those costs into every consumer's Internet bill. For more on the issue in Michigan, check out Mackinac Center analyst Diane Katz's October op-ed here.


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