Cable Franchising Control Issue


    GRAND RAPIDS — A further loss of local control was on the minds of Grand Valley Metro Council members recently, as township and city officials expressed concern that two new attacks on their ability to manage their municipalities are being organized at the federal and state levels.

    Recent telecommunications legislation from the U.S. House of Representatives would remove much of the current authority a local municipality has in awarding and governing cable franchises.

    “Municipal attorneys with expertise in telecommunications issues have concluded that this latest draft bill is remarkably harmful to municipal interests in cable franchising, telecommunications and control of rights-of-way,” said Don Stypula, executive director of the Metro Council.

    “The bill is backed by phone companies wishing to ease their entry into the cable-type business, and in doing so, to replace existing cable and telephone regulation with very limited regulation, generally by the Federal Communications Commission,” he added.

    John Pestle, Patrick Miles and Tim Lundgren, all of Varnum, Riddering, Schmidt and Howlett, were the attorneys Stypula referred to. They provided the Metro Council with a four-page analysis of the House bill that was introduced last month.

    Highlights of their findings include:

    • The FCC, not municipalities, would award cable franchises.
    • Cable franchise fees would be reduced, as not all cable revenue would be in the fee equation, and funding for government, school and public channels would be eliminated.
    • Phone companies awarded a cable franchise wouldn’t be required to extend service throughout a municipality.
    • Municipal control of rights-of-way for phone companies would be reduced.

    City Manager Kurt Kimball told the Business Journal that cable franchise fees are worth about $1 million annually to Grand Rapids

    In addition to the House bill, the FCC issued a notice of proposed rulemaking last month that contains many of the same changes found in the legislation. The notice also implies that local governments have blocked cable competition, and that such action has forced consumers to pay higher prices for cable television.

    “It is the commission’s responsibility to remove unreasonable roadblocks to competition. Through the proceeding we commence today, we seek to ensure that local authorities are not thwarting competition by unreasonably refusing to award additional competitive franchises,” said FCC Chairman Kevin Martin of the notice.

    Stypula said hearings on the federal legislation would be held from January through April, but are by invitation only. He told board members that he would try to get invited to one.

    On another front, three House Republicans in Lansing are proposing a three-bill package that would loosen local control on local building code ordinances. The package would change how ordinances are administrated, how notifications of violations are made, how codes can be enforced, and how much fines for violations can be.

    “We need to put a fork into this as fast as we can,” said Richard Root, mayor of Kentwood

    Root added that real estate agents and homebuilders are backing the bills.

    “We need to talk about home rule,” said Root, “and how we run our municipalities.”    

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