Michigan
New era arrives for cable customers

State moves to widen competition

December 13, 2006

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BY CHRIS CHRISTOFF, DAWSON BELL and ZACHARY GORCHOW

FREE PRESS STAFF WRITERS

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Consumers: Proponents say competition and reduced regulatory costs will result in lower rates for cable subscribers and better service. Critics say consumers won't be guaranteed service because the new providers may focus service on lucrative neighborhoods, leaving poorer neighborhoods without access.

Michigan's economy: AT&T has promised to invest $620 million in Michigan and hire 2,000 workers, including at least 1,200 in 2007, mainly to bring fiber-optic lines to more areas.

Local cable-access stations: Some critics say public-, educational- and government-access channels might not have a place in AT&T's lineup, but the bill passed Tuesday requires such a company to offer the same number of public-access channels as existed before the change.

LANSING -- Consumers can prepare for a new world of cable television, phone and Internet services as legislation to open up telecommunications to more competition in Michigan speeds toward enactment.

The change is expected to spur huge investment in money and jobs to extend fiber-optic lines that will carry service at warp speed.

Lawmakers approved new rules Tuesday that eventually will end contracts for TV service between local communities and cable companies, and place all cable providers under statewide rules.

Those agreements have allowed cable companies to offer customers three main services -- TV, phone and Internet -- while telecommunications companies like AT&T and Verizon have been effectively barred from offering cable TV in communities.

Liz Boyd, a spokeswoman for Gov. Jennifer Granholm, said the governor would sign the bill because "it's good for consumers and good for Michigan jobs."

A statewide franchise system got heavy backing from AT&T, which hopes to become a big provider of video services to compete with traditional cable companies like Comcast.

AT&T shook up the debate two weeks ago when it announced that if the legislation were passed, the company would invest $620 million in Michigan to upgrade its broadband services, creating some 2,000 jobs over three years, including 1,200 next year.

AT&T Michigan President Gail Torreano said Tuesday the company would live up to that promise. She said competition would mean lower prices and better service for customers.

Supporters argued that local monopolies have pushed up cable TV rates with fewer choices for consumers. The only alternative for customers who want channels not available from antenna has been satellite television.

"An open, competitive marketplace puts the consumer in the driver's seat," Torreano said. "This bill will drive investment. This bill opens up the marketplace."

Torreano said expanding broadband networks would make Internet-based television available to more customers and predicted the service would grow quickly. She would not discuss other services that might be offered to customers as a result of a more open market. Technology in the telecommunications industry is changing so rapidly that it's difficult to know what kinds of services will be available in a few years.

Dearborn Heights Mayor Dan Paletko called the legislation a windfall for AT&T. He expects the company to target high-income areas with temporary low prices to eventually rout incumbent cable providers and establish its own monopoly.

Besides the franchise fees that local governments receive from cable companies, governments required them to offer service to everyone within that community within a certain time period. Those requirements would end, Paletko said.

"I expect that the ultimate thing will be less competition," he said.

Cable TV companies did not oppose the legislation.

State Sen. Buzz Thomas, D-Detroit, said the state's current regulatory system was fragmentary and outdated, stifling innovation and investment.

"I don't share the belief that the sky is falling should this bill pass," Thomas said.

The cable franchise changes won praise from Detroit Regional Chamber Chief Executive Officer Richard Blouse Jr., who said they would encourage more investment in Michigan as the video industry expands.

The changes would help many smaller companies gain access to offer video. The largest among them are CenturyTel and TDS Telecom.

Some critics warned that statewide franchising would leave some consumers in outlying areas without cable TV or other services that are required under franchise agreements between cable companies and cities and townships.

Others fear that open competition will mean that Internet providers would charge Web site operators to have access to customers. Google, the dominant search engine company, opposed the legislation, fearing it might not be made available on AT&T's Internet service.

Blocking Web sites such as Google from customers is technically possible but not likely, said Scott Stevenson, president of the Telecommunication Association of Michigan, a trade group. He said it would be foolish for Internet providers to keep their customers from popular Web sites.

Torreano said charges for companies like Google would be justified. She said Google reaps huge profits through the benefits of high-speed Internet services that are upgraded and paid for by telecommunications companies like AT&T.

The legislation has no requirements that Internet functions such as Google must be allowed without a charge.

"Those who use should pay," Torreano said. "You and I should not subsidize huge corporations like Google."

Contact DAWSON BELL at 313-222-6604 or dbell@freepress.com.

Who are some critics? Sounds funny. Either way i like the idea. It'll force comcast to draw up longer contracts(like the 3 for 33 each now being a one year contract) at lower prices. Something I wanted to see a long time ago. that "get yada yada for the first 3 months" garbage wasn't cutting it.

Fiber optic is sweet, weve had it here for about five years now. Since we got it weve had about the fastest internet Ive heard of for non-commercial service in the states. 10Mb down and 1Mb up right now.

Will this legislation limit internet sites altogether?
That is the issue, and PBS' Bill Moyers ran a special on it awhile back.
They say it WILL limit the freedom of the internet, as companies like AT&T will be able to charge people to put a site on the net. The companies that do cn be limited in their power to deliver on the net by the fees AT&T will charge. It's going to be capitalism at work: Larger companies (Google or Yahoo) will be able to aford the fees to provide the best service, and smaller companies and others like maybe this site or bloggers, or even Vinny's Pricefire will not be able to afford the rates.
This could limit competition on the net itself, as the larger, more profitable companies could gain a competitive advantage in internet business.
I believe that AT&T is also trying to get a hand in the internet phone calling business. This could turn out to be detrimental to the internet in terms of it being a virtually "Come one, come all" enterprise. Regulation of it, based on regulation policies in other industries, could ultimately prove to significantly decrease the overall efficiency and availability of the internet.
I think AT&T has dangled jobs to Michigan (and other states), but, moe importantly, has and will continue to buy influence and line politicians pockets with more CAYSH to further regulate the net, and the REAL winner in this will be the larger companies, while the smaller guys will lose out, and ultimately, the consumer will suffer.

but can att alter or demand money through firefox browser? i'm fairly interested how far it could be taken if they even try that stretch.

So ATT and smaller companies are moving in on Comcasts monopoly and the fear is they become an even bigger monopoly in a free market?


The changes would help many smaller companies gain access to offer video. The largest among them are CenturyTel and TDS Telecom.
Seems that people on both sides are being extreme(politics of modern america seems to be like this on every subject). I think competition is healthy and that comcast is and has been getting over in michigan. If theres windfall that worries you as far as att is concerned, then make the bill more specifically defined. Oh no that wouldnt be as fun as making it an issue that could make or break the bill. [smilie=reporter.gi: America the stupid.[smilie=rip.gif]

Competition IS a helathy thing, and so is a free market. But does anyone REALLY believe there is a totally competitive free market today?
Yes, Comcast and other cable companies enjoy monopolies, and monoploies and oligopolies exist throughout our society. AT$T had, at one time, a monopoly itself until it was broken up. And I DO believe it is about a winedfall for them. That's why they are in the game, isn't it?
We have been told for many years that monopolies are necessary in some industries. Telecommunications and cable are two of them. They have told us that the initial investments are so prohibitive that a monopoly is needed to recoup that investment, or that it would not be profitable for two companies of those same industries to be located near one another.
I find it strange that, according to the article, the "cable companies did not oppose the legislation". I can only figure two reasons for that: One, that once the fiber optic is installed, they will buy access to it from AT$T, and two, they will be able to charge more themselves once they are on it, passing the cost on to consumers.
Fiber optic, once it is installed, limits your vulnerability to weather and other variables that coax and poles are susceptible to. It is also better for providing your service.
This is going to rain on the "jobs" parade a little bit, as the maintenance force needed can be reduced. And, other promises, like call centers or site management will probably not last long, as once the sytem is stable, those jobs can be farmed out to, say, India.
I always love the promise of "Lower rats for everyone!"
Right now the internet is affordable because there are NOT fees for access to it; phone calls can be made via the internet for free. Fees that can and will be charged down the road to put sites on the net will keep many people off of it, and may in fact reduce competition that way by limiting the number of companies that can stay there.
Look, the phone company is not getting into this to be a "nice guy", and I'm not against competition. This is not an extreme position. The cable companies were demonized, in typical American fashion of being the "Target of the Day" for those who want to take advantage or gain access to MORE MONEY and control.
This legislation could make AT$T a player in the monoply game again for just that reason. It gives THEM a foothold to go in and literally take the internet over.

I always love the promise of "Lower rats for everyone!"[/B]
I never love promises of Rats. No thanks man. [smilie=blaha.gif]

Seriously I still think you're being extreme. But time will tell if the bill passes.

Logically, this legislation makes sense.

In practical implementation, it'll be a big fucking mess.

Telcos have made big promises like this in the past and not delivered in the past, instead preferring to speculate on overseas markets and focus only on "high value" customers and markets. The Dearborn Heights mayor is absolutely right. Now, rather than having to pay off a lot of different localities to look the other way when they don't deliver, they now get single source bribery and the localities get stabbed by a money grab by the state. The MPSC, with very few historical exceptions, has been a total fucking tool to AT&T in all its incarnations. Now we're paving the way for it to be a total fucking tool to Comcast, too. Swell. Maybe we get fibre out of it one of these years. I'm actually more interested in the fast wireless efforts... that'll be more of a game changer than just a bigger faster firehose.

The "net neutrality" stuff has been delayed until the more favorable state legislature convenes next year, which makes sense. It probably doesn't matter what we'd do at a state level, because the Democratic U.S. Congress will get something done at a federal level and we will wrap around that to whatever extent is/isn't needed.

Well, lower rats aside, I suggest you try to find that program I referenced about this subjext by Bill moyers on PBS.
My wife has worked in telecommunications for 20 years. She's been feeding me the crap I posted, as I know very little about not just the internet, and cable TV, but about anything!

I've seen most of the Bill Moyers thing (was interrupted a lot during the broadcast I saw) -- good stuff, as usual. It's available online at:

http://www.pbs.org/moyers/moyersonamerica/net/index.html

FWIW, the reason net neutrality has now become an issue involves technology. The Internet's evolution was defined as much by its technical and funding limitations as anything. One historical limitation was that it was hard (and costly and impractical for legal structure reasons where it was possible) to impose a lot of limits above and beyond the "size" of the Internet connection. Lots of good things (email, the web, open source) and bad things (spam, DDoS) emerged from that mode, developing deep roots.

As we've evolved to slice and dice "bits" better, we've gotten to the point where a functional "fast lane" and "slow lane" becomes feasible. Businesses who drool at the $ and command+control prospects of "tiered service" are buying all the political access they can because now they can finally make it happen. Folks with an interest of keeping the Internet working the way it has been are getting into the fray as well. Any user of WTFDetroit falls into the latter category.