Michigan Broadcasters Praise Franchise Reform

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The Michigan Association of Broadcasters is calling the Michigan video franchising bill that passed Dec. 12 a big victory, particularly given a provision that prevents their signal from being converted to lower resolution.

MAB has been supporting the bill, which helps telcos get into the video and broadband business by standardizing the franchise process, saying it creates another outlet for its TV station signals. But it is particularly pleased with a provision that prevents new franchisees from downgrading a broadcast signal. MAB says it is one of the first such protections of the broadcast signal in a state franchise reform bill (Texas also has the no-degradation clause.

"The bill also guarantees that providers cannot tamper with the quality of the broadcast signals," said MAB President Karole White, "which is especially important for consumers who’ve made significant investments in high definition television systems.” 

The bill states that an alternative video service provider will transmit, "without degradation, the signals a local broadcast station delivers to the provider." At the moment, the alternative is principally AT&T.

The "no degradation provision does not cover cable operators however. Essentially, the bill is written broadly enough so that whatever is not regulated already as a cable company must adhere to the no-degradation rule, including AT&T, which has argued in the past that it might not need a franchise for its planned IPTV-delivered service.

White says that MAB had considered fighting for applying the "no degradation" provision to cable incumbents, but decided the marketplace would take care of bringing cable into the tent. "If phone companies or alternative video providers are going to come in and give and provide an excellent signal because they can't degrade,that is going to force cable to do the same thing," she said.

Broadcasters are concerned about multichannel video providers converting their HDTV signals to standard DTV to put them at a competitive disadvantage to HDTV cable networks. Language in a Senate franchise reform bill that did not pass would have allowed cable operators to convert an HDTV to a DTV signal.

The bill also sets up a must-carry/retransmission consent regime for telco video service similar to that for cable operators.

White says the bill should provide an economic boost to a state still revealing from an economic downturn. AT&T has said it will pump $600 million into the economy and bring in 2,000 new jobs, says White.

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