By Melissa McGuire
Monday, February 5, 2007
Ludington Daily News
http://www.ludingtondailynews.com/news.php?story_id=34830

Legislation passed in Michigan that went into effect Jan. 1 allows the local cable competition to expand, but that could mean bad news for some local governments if the larger cable companies decide to expand into the area.

AT&T Inc. has promised to invest $620 million and hire 2,000 new workers in Michigan, but that also means a loss of over $4,000 a year for smaller municipalities and $36,000 for larger municipalities like the City of Ludington.

“We get revenue from Charter for all of the residents in the city who have cable,” Scottville City Manager Amy Hansen said.

The total revenue in jeopardy for Scottville is $4,500.

“That is a loss of our general fund balance,” Hansen said.

Hansen said added competition could hurt Charter because someone else is in the cable game and could lower the rates, but she also said that once AT&T — or another company — moves to town and realizes how much they can charge, rates will not be all that low.

“I think that this may make people get the Dish Network or DirecTV or whatever else they offer for a dish,” Hansen said.

Hamlin Township Supervisor Nancy Sniegowski said the township made $4,177 in 2004-05 and $4,700 in 2003-04 from residents using the local cable company.

“The cable company pays a certain amount to the township per mile of lines they lay down,” Sniegowski said. “If another company comes in, they don’t have to pay those fees.”

Before the legislation was passed in Lansing, Hamlin Township passed a resolution to agree with the Michigan Township Association’s stand on the legislation, noting the possible negative ramifications of the legislation to the local governments.

John Shay, Ludington city manager, said the city expressed interest in the legislation through the Michigan Municipal League.

“The big issue is that through Charter, they have an agreement to uphold a certain level of community service,” Shay said. “A company like AT&T or Verizon would not have to offer that same agreement.”

Shay also said Charter has an agreement that cable would be offered to at least everyone within the city limits. A bigger company like AT&T wouldn’t have to.

Part of the concern about the company is Ludington’s public access Channel 22, according to Shay.

“Charter has an agreement to keep the public, education and government channels, but those other ones don’t,” Shay said.

Rep. David Palsrok, R-Manistee, was one of many legislators who voted in favor of the legislation and said he thinks it will be good for the state.

“There is only one option for cable locally,” Palsrok said. “I had a lot of people asking me for a choice when it comes to video services.”

He said that while this legislation was difficult to do because all of the local governments would be affected differently, the state tried to come up with an agreement as harmless as possible.

“In the end, it is an overall good policy change for Michigan,” Palsrok said.

State regulators created a standardized form on Tuesday that would be used for new statewide cable TV franchise agreements, the first step meant to open up Michigan to more cable competition.

Local municipalities are currently waiting to see if the new legislation will indeed impact them and if it will have a negative effect. Currently, the area has not been approached by a competing company.

— The Associated Press contributed to this report.