Sunday May 20, 2012

State Video Franchise Law In Review

Politics

In December 2006, PA480 was passed and signed into law.  This law took the negotiation of a video franchise away from local municipalities and allowed video service providers to go directly to the State of Michigan for their franchise to provide services throughout Michigan.

On the surface, this sounds innocuous enough and even maybe a more streamlined way of doing business.  However, two glaring problems come to light immediately, if one knows anything about local franchise agreements.  First of all, local municipals are no longer responsible to its residents for complaint of video service providers.  These complaints now must be sent to the Michigan Public Service Commission.  Where cities and townships in the past were able to help a resident through the complaint process, and actually be able to reprimand the service provider, the customer is now on their own to deal with the state bureaucracy to handle complaints.  The second immediate problem under the state video franchise is that there are no video service penetration requirements of local communities.  Prior to January 2007, when the new law went into effect, local municipalities could require video service providers a certain percentage of penetration within 3 year; after 5 years; and a 90% penetration rate by 10 years.

 The biggest loser in the new law were the Public, Education and Government (PEG) access centers.  Since the new law stripped local municipalities of any authority over video service providers, in some cases PEG access studios were abandoned by the video service providers.  For the most part, cable companies continued to treat PEG access centers with the same value they placed on their local content as they did prior to the law.

The greatest discrepancy of treatment came from the new video service provider in the Michigan market, AT&T.  Where cable companies provide PEG access channels as a fully functional channel that can be recorded by a DVR or TiVo, AT&T provides PEG programming as a computer application.  This application has a three-step menu.  On channel 99, a person would first select the city they wanted to watch.  After that menu page loaded, they would then enter the communities PEG channel they wanted to watch.  Once that menu page loaded, they would need to select PLAY or OK for the program to begin playing in a full screen mode.  This whole process to watch, say the Battle Creek City Commission meeting or High School Sports, take approximately 40 – 45 seconds.  If a person wanted to record the City Commission meeting to watch at a future date, they wouldn’t be able to.  What would record on the AT&T DVR would be Channel 99 with all of the cities listed, not the commission meeting 2 levels further down the menu application.

            Another major discrimination accreted by AT&T on PEG access centers is the ongoing fees for delivery of the center’s channels.  AT&T requires that the PEG center’s channels be sent to them in an Internet Protocol address over a T1 line, which they will charge $500 per line or channel.  This would be an extra $18,000 that most nonprofit, government or school run PEG access centers don’t have the ability to pay.  Cable companies do not charge for the delivery of PEG access channels and they accept them over fiber optic lines in a Standard Definition Television signal.  These signals are then placed on their own fully functional channel.

            This is not the only large, financial burden AT&T places on the shoulders of PEG access centers.  A PEG center must also purchase an encoder specifically designed with AT&T’s specifications (which makes the equipment obsolete for any future use if the specs change), costing anywhere from $5,000 per channel to $18,000 for multiple channels.

            One other problem for PEG access centers with the AT&T’s Uverse video service is that AT&T will not provide the center with a return video feed, so the center can monitor their channels.  The cable companies provide this as a complimentary service.  If the PEG center can’t see and hear their channels on a video service providers system, the center doesn’t know if their signal is good or not.

            On June 14 and September 13, 2011, the Senate Energy & Technology Committee, Chaired by Sen. Mike Nofs, held hearings to determine how PA480 has been going for the past 4½ years and whether any changes need to be made.

            Much discussion was offered by PEG access centers around the state, along with some municipalities regarding the mistreatment of PEG access channels on AT&T’s Uverse service.  The Senate Energy & Technology Committee said that they were going to evaluate the comments from both hearings and writing amendments to the current law.  An anticipated date given for a hearing on these potential amendments was early – mid October.

            More to come!

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