MICH. HOPE FOR BROADBAND BILLS BY CHRISTMAS DASHED BY STATE SENATE

State Sen. Mat Dunaskiss (R-Lake Orion), technology panel’s chmn., said lawmakers wanted more time to consider ramifications of Engler’s broadband bills and wouldn’t be ready to tackle legislation until early next year, with passage not likely before mid-March. Engler said he could live with delay as long as legislature remained in general agreement on need to accelerate deployment of broadband facilities for advanced services such as high-speed Internet access. He said he was “satisfied with the assurances” from Senate leaders that his bills would pass that house by end of Jan. and be in House in Feb. He said he “just didn’t want this to get set aside and then it’s spring and you've lost a year.”

Two key bills caught in delay include SB-880 to create one-stop state authority within PSC that would preempt municipalities’ management of telecom carriers’ access to local public rights-of-way, set access terms and collect statewide 7 cents-per-foot fee for right to install broadband facilities. Other bill is SB-881 to create Mich. Community Communications Development Authority within state Treasury Dept. to promote broadband development by acquiring, leasing, constructing, operating and maintaining communications infrastructure for provision of broadband services.

Delay also gave critics more time to oppose or change pending bills. Mich. Telecom Industry Assn., which represents incumbent telcos, praised delay. MTIA Pres. Scott Stevenson said Engler’s legislation wasn’t necessary because local phone companies already were expanding broadband services throughout state. With 2002 being last year in office for Engler and most of Senate’s senior GOP leadership because of term limits, broadband development proponents see it as vital to get legislation passed before political campaign season starts in earnest.

Meantime, broadband proponent Mich. Economic Development Corp. (MEDC) released new study that geographically maps extent of current broadband infrastructure. MEDC said maps demonstrated existence of state digital divide with dearth of broadband facilities in rural and “economically challenged” urban areas statewide. Mapping project conducted by Ohio Supercomputer Center used information in 40 different federal databases to plot physical broadband infrastructure in Mich. MEDC said maps showed DSL to be nonexistent in northern third of lower Mich. and entire Upper Peninsula, with “high-speed backbone support infrastructure” in rest of state concentrated in more affluent portions of major metro areas such as Detroit and Grand Rapids.

MEDC said maps showed DSL availability was “limited and below national averages” while cable modem access was about at national average. Study said pace of broadband facility growth had been slow. MEDC said Mich. overall would have C minus grade for broadband infrastructure but “shouldn’t settle for a C minus. Our state is a leader in economic development and must be a leader in high-speed availability to continue that high standing.” MEDC last week also released economic impact study showing state stood to lose $440 billion in additional state economic output and 497,000 additional jobs by 2011 unless it took active part in speeding broadband deployment through economic incentives and removal of legal barriers.

But speakers at Lansing conference last week on future of telecom in Mich. said policymakers needed to promote telecom competition if they wanted ubiquitous and affordable broadband service. Conference was sponsored by coalition of Mich. academic, consulting and business user groups, but no one from an incumbent telco spoke to event’s 75 attendees. Conference speakers said Mich. phone customers paid among highest local rates in nation while getting some of worst service because of dearth of competition. One speaker estimated 15% cut in local rates across board would save customers $250 million annually. Speakers noted that Ameritech and other dominant incumbents had been slow to roll out broadband because of technical difficulties and smaller profit margins than narrowband services. They agreed that real answer to increasing quality and scope of services while keeping prices reasonable was competition.

Conference speakers said federal and state regulators must be serious about enforcing current procompetition laws or break up dominant incumbents into separate retail and wholesale business units. They said Mich. policymakers could simply wait and hope for technology cure that would allow competitors to ignore incumbent telcos’ “last mile” networks and reach customers directly with their broadband and narrowband services, but that could take decade or more while Mich. slipped behind other more progressive states.