HB-6456, As Passed House, November 14, 2006

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 6456

 

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to provide for uniform video service local franchises;

 

to promote competition in providing video services in this state;

 

to ensure local control of rights-of-way; to provide for fees

 

payable to local units of government; to provide for local

 

programming; to prescribe the powers and duties of certain state

 

and local agencies and officials; and to provide for penalties.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. (1) This act shall be known and may be cited as the

 

"uniform video services local franchise act".

 

     (2) As used in this act:

 

     (a) "Cable operator" means that term as defined in 47 USC

 

522(5).

 

     (b) "Cable service" means that term as defined in 47 USC

 

522(6).


 

     (c) "Cable system" means that term as defined in 47 USC

 

522(7).

 

     (d) "Commission" means the Michigan public service commission.

 

     (e) "Franchising entity" means the local unit of government in

 

which a provider offers video services through a franchise

 

agreement.

 

     (f) "Household" means a house, an apartment, a mobile home, or

 

any other structure or part of a structure intended for residential

 

occupancy as separate living quarters.

 

     (g) "Incumbent video provider" means a cable operator serving

 

cable subscribers or a telecommunication provider providing video

 

services through the provider's existing telephone exchange

 

boundaries in a particular franchise area within a local unit of

 

government on the effective date of this act.

 

     (h) "IPTV" means internet protocol television.

 

     (i) "Local unit of government" means a city, village, or

 

township.

 

     (j) "Low-income household" means a household with an average

 

annual household income of less than $35,000.00 as determined by

 

the most recent decennial census.

 

     (k) "Open video system" or "OVS" means that term as defined in

 

47 USC 573.

 

     (l) "Person" means an individual, corporation, association,

 

partnership, governmental entity, or any other legal entity.

 

     (m) "Public rights-of-way" means the area on, below, or above

 

a public roadway, highway, street, public sidewalk, alley,

 

waterway, or utility easements dedicated for compatible uses.


 

     (n) "Uniform video service local franchise agreement" or

 

"franchise agreement" means the franchise agreement required under

 

this act to be the operating agreement between each franchising

 

entity and video provider in this state.

 

     (o) "Video programming" means that term as defined in 47 USC

 

522(20).

 

     (p) "Video service" means video programming, cable services,

 

IPTV, or OVS provided through facilities located at least in part

 

in the public rights-of-way without regard to delivery technology,

 

including internet protocol technology. This definition does not

 

include any video programming provided by a commercial mobile

 

service provider defined in 47 USC 332(d) or provided solely as

 

part of, and via, a service that enables users to access content,

 

information, electronic mail, or other services offered over the

 

public internet.

 

     (q) "Video service provider" or "provider" means a person

 

authorized under this act to provide video service.

 

     (r) "Video service provider fee" means the amount paid by a

 

video service provider or incumbent video provider under section 6.

 

     Sec. 2. (1) No later than 30 days from the effective date of

 

this act, the commission shall issue an order establishing the

 

standardized form for the uniform video service local franchise

 

agreement to be used by each franchising entity in this state.

 

     (2) Except as otherwise provided by this act, a person shall

 

not provide video services in any local unit of government without

 

first obtaining a uniform video service local franchise as provided

 

under section 3.


 

     (3) The uniform video service local franchise agreement

 

created under subsection (1) shall include all of the following

 

provisions:

 

     (a) The name of the provider.

 

     (b) The address and telephone number of the provider's

 

principal place of business.

 

     (c) The name of the provider's principal executive officers

 

and any persons authorized to represent the provider before the

 

franchising entity and the commission.

 

     (d) If the provider is not an incumbent video provider, the

 

date on which the provider expects to provide video services in the

 

area identified under subdivision (e).

 

     (e) An exact description of the video service area footprint

 

to be served, as identified by a geographic information system

 

digital boundary meeting or exceeding national map accuracy

 

standards. For providers with 1,000,000 or more access lines in

 

this state using telecommunication facilities to provide video

 

services, the footprint shall be identified in terms of entire wire

 

centers or exchanges. An incumbent video provider satisfies this

 

requirement by allowing a franchising entity to seek right-of-way

 

related information comparable to that required by a permit under

 

the metropolitan extension telecommunications rights-of-way

 

oversight act, 2002 PA 48, MCL 484.3101 to 484.3120, as set forth

 

in its last cable franchise or consent agreement from the

 

franchising entity entered before the effective date of this act.

 

     (f) A requirement that the provider pay the video service

 

provider fees required under section 6.


 

     (g) A requirement that the provider file in a timely manner

 

with the federal communications commission all forms required by

 

that agency in advance of offering video service in this state.

 

     (h) A requirement that the provider agrees to comply with all

 

valid and enforceable federal and state statutes and regulations.

 

     (i) A requirement that the provider agrees to comply with all

 

valid and enforceable local regulations regarding the use and

 

occupation of public rights-of-way in the delivery of the video

 

service, including the police powers of the franchising entity.

 

     (j) A requirement that the provider comply with all federal

 

communications commission requirements involving the distribution

 

and notification of emergency messages over the emergency alert

 

system applicable to cable operators.

 

     (k) A requirement that the provider comply with the public,

 

education, and government programming requirements of section 4.

 

     (l) A requirement that the provider comply with all customer

 

service rules of the federal communications commission under 47 CFR

 

76.309(c) applicable to cable operators and applicable provisions

 

of the Michigan consumers protection act, 1976 PA 331, MCL 445.901

 

to 445.922.

 

     (m) A requirement that the provider comply with the consumer

 

privacy requirements of 47 USC 551 applicable to cable operators.

 

     (n) A requirement that the provider comply with in-home wiring

 

and consumer premises wiring rules of the federal communications

 

commission applicable to cable operators.

 

     (o) A requirement that an incumbent video provider comply with

 

the terms which provide insurance for right-of-way related


 

activities that are contained in its last cable franchise or

 

consent agreement from the franchising entity entered before the

 

effective date of this act.

 

     (p) A grant of authority by the franchising entity to provide

 

video service in the video service area footprint as described

 

under subdivision (e).

 

     (q) A grant of authority by the franchising entity to use and

 

occupy the public rights-of-way in the delivery of the video

 

service, subject to the laws of this state and the police powers of

 

the franchising entity.

 

     (r) A requirement that the parties to the agreement are

 

subject to the provisions of this act.

 

     (s) The penalties provided for under section 14.

 

     Sec. 3. (1) Before offering video services within the

 

boundaries of a local unit of government the video provider shall

 

enter into or possess a franchise agreement with the local unit of

 

government as required by this act.

 

     (2) A franchising entity shall notify the provider as to

 

whether the submitted franchise agreement is complete as required

 

by this act within 15 business days after the date that the

 

franchise agreement is filed. If the franchise agreement is not

 

complete, the franchising entity shall state in its notice the

 

reasons the franchise agreement is incomplete.

 

     (3) A franchising entity shall have 30 days after the

 

submission date of a complete franchise agreement to approve the

 

agreement. If the franchising entity does not notify the provider

 

regarding the completeness of the franchise agreement or approve


 

the franchise agreement within the time periods required under this

 

subsection, the franchise agreement shall be considered complete

 

and the franchise agreement approved.

 

     (4) The uniform video service local franchise agreement issued

 

by a franchising entity or an existing franchise of an incumbent

 

video service provider is fully transferable to any successor in

 

interest to the provider to which it is initially granted. A notice

 

of transfer shall be filed with the franchising entity within 15

 

days of the completion of the transfer.

 

     (5) The uniform video service local franchise agreement issued

 

by a franchising entity may be terminated or the video service area

 

footprint may be modified, except as provided under section 9, by

 

the provider by submitting notice to the franchising entity.

 

     (6) If any of the information contained in the franchise

 

agreement changes, the provider shall timely notify the franchising

 

entity.

 

     (7) The uniform video service local franchise shall be for a

 

period of 10 years from the date it is issued. Before the

 

expiration of the initial franchise agreement or any subsequent

 

renewals, the provider may apply for an additional 10-year renewal

 

under this section.

 

     (8) A franchising entity shall not require a video service

 

provider to obtain a separate franchise or otherwise impose any fee

 

or franchise requirement except as provided under this act. For

 

purposes of this subsection, a franchise requirement includes, but

 

is not limited to, a provision regulating rates charged by video

 

service providers, requiring the video service providers to satisfy


 

any build-out requirements, or a requirement for the deployment of

 

any facilities or equipment.

 

     Sec. 4. (1) A video service provider shall designate a

 

sufficient amount of capacity on its network to provide for the

 

same number of public, education, and government access channels

 

that are in actual use on the incumbent video provider system on

 

the effective date of this act.

 

     (2) Any public, education, or government channel provided

 

under this section that is not utilized by the franchising entity

 

for at least 8 hours per day for 3 consecutive months may no longer

 

be made available to the franchising entity and may be programmed

 

at the provider's discretion. At such time as the franchising

 

entity can certify a schedule for at least 8 hours of daily

 

programming for a period of 3 consecutive months, the provider

 

shall restore the previously reallocated channel.

 

     (3) The franchising entity shall ensure that all

 

transmissions, content, or programming to be retransmitted by a

 

video service provider is provided in a manner or form that is

 

capable of being accepted and retransmitted by a provider, without

 

requirement for additional alteration or change in the content by

 

the provider, over the particular network of the provider, which is

 

compatible with the technology or protocol utilized by the provider

 

to deliver services.

 

     (4) A video service provider may request that an incumbent

 

video provider interconnect with its video system for the sole

 

purpose of providing access to video programming that is being

 

provided over public, education, and government channels for a


 

franchising entity that is served by both providers. Where

 

technically feasible, interconnection shall be allowed under an

 

agreement of the parties. The video service provider and incumbent

 

video provider shall negotiate in good faith and may not

 

unreasonably withhold interconnection. Interconnection may be

 

accomplished by any reasonable method as agreed to by the

 

providers. The requesting video service provider shall pay the

 

construction, operation, maintenance, and other costs arising out

 

of the interconnection, including the reasonable costs incurred by

 

the incumbent provider.

 

     (5) The person producing the broadcasts is solely responsible

 

for all content provided over designated public, education, or

 

government channels. A video service provider shall not exercise

 

any editorial control over any programming on any channel designed

 

for public, education, or government use or on any other channel

 

required by law.

 

     (6) A video service provider is not subject to any civil or

 

criminal liability for any program carried on any channel

 

designated for public, education, or government use or on any other

 

channel.

 

     (7) Except as otherwise provided in subsection (8), a provider

 

shall provide subscribers access to the signals of the local

 

broadcast television station licensed by the federal communications

 

commission to serve those subscribers over the air. This section

 

does not apply to a low power station unless the station is a

 

qualified low power station as defined under 47 USC 534(h)(2). A

 

provider is required to only carry digital broadcast signals to the


 

extent that a broadcast television station has the right under

 

federal law or regulation to demand carriage of the digital

 

broadcast signals by a cable operator on a cable system.

 

     (8) To facilitate access by subscribers of a video service

 

provider to the signals of local broadcast stations under this

 

section, a station either shall be granted mandatory carriage or

 

may request retransmission consent with the provider.

 

     (9) A provider shall transmit, without degradation, the

 

signals a local broadcast station delivers to the provider. A

 

provider is not required to provide a television station valuable

 

consideration in exchange for carriage.

 

     (10) A provider shall not do either of the following:

 

     (a) Discriminate among or between broadcast stations and

 

programming providers with respect to transmission of their

 

signals, taking into account any consideration afforded the

 

provider by the programming provider or broadcast station. In no

 

event shall the signal quality as retransmitted by the provider be

 

required to be superior to the signal quality of the broadcast

 

stations as received by the provider from the broadcast television

 

station.

 

     (b) Delete, change, or alter a copyright identification

 

transmitted as part of a broadcast station's signal.

 

     (11) A provider shall not be required to utilize the same or

 

similar reception technology as the broadcast stations or

 

programming providers.

 

     (12) A public, education, or government channel shall only be

 

used for noncommercial purposes.


 

     (13) Subsections (7) to (11) apply only to a video service

 

provider that delivers video programming in a video service area

 

where the provider is not regulated as a cable operator under

 

federal law.

 

     Sec. 5. (1) As of the effective date of this act, no existing

 

franchise agreement with a franchising entity shall be renewed or

 

extended upon the expiration date of the agreement.

 

     (2) The incumbent video provider, at its option, may continue

 

to provide video services to the franchising entity by electing to

 

do 1 of the following:

 

     (a) Terminate the existing franchise agreement before the

 

expiration date of the agreement and enter into a new franchise

 

under a uniform video service local franchise agreement.

 

     (b) Continue under the existing franchise agreement amended to

 

include only those provisions required under a uniform video

 

service local franchise.

 

     (c) Continue to operate under the terms of an expired

 

franchise until a uniform video service local franchise agreement

 

takes effect. An incumbent video provider has 120 days after the

 

effective date of this act to file for a uniform video service

 

local franchise agreement.

 

     (3) On the effective date of this act, any provisions of an

 

existing franchise that are inconsistent with or in addition to the

 

provisions of a uniform video service local franchise agreement are

 

unreasonable and unenforceable by the franchising entity.

 

     (4) If a franchising entity authorizes 2 or more video service

 

providers through an existing franchise, a uniform video service


 

local franchise agreement, or an agreement under section 13, the

 

franchising entity shall not enforce any term, condition, or

 

requirement of any franchise agreement that is more burdensome than

 

the terms, conditions, or requirements contained in another

 

franchise agreement.

 

     Sec. 6. (1) A video service provider shall calculate and pay

 

an annual video service provider fee to the franchising entity. The

 

fee shall be 1 of the following:

 

     (a) If there is an existing franchise agreement, an amount

 

equal to the percentage of gross revenues paid to the franchising

 

entity by the incumbent video provider with the largest number of

 

subscribers in the franchising entity.

 

     (b) At the expiration of an existing franchise agreement or if

 

there is no existing franchise agreement, an amount equal to the

 

percentage of gross revenues as established by the franchising

 

entity not to exceed 5% and shall be applicable to all providers.

 

     (2) The fee due under subsection (1) shall be due on a

 

quarterly basis and paid within 45 days after the close of the

 

quarter. Each payment shall include a statement explaining the

 

basis for the calculation of the fee.

 

     (3) The franchising entity shall not demand any additional

 

fees or charges from a provider and shall not demand the use of any

 

other calculation method other than allowed under this act.

 

     (4) For purposes of this section, "gross revenues" means all

 

consideration of any kind or nature, including, without limitation,

 

cash, credits, property, and in-kind contributions received by the

 

provider from subscribers for the provision of video service by the


 

video service provider within the jurisdiction of the franchising

 

entity. Gross revenues shall include all of the following:

 

     (a) All charges and fees paid by subscribers for the provision

 

of video service, including equipment rental, late fees,

 

insufficient funds fees, fees attributable to video service when

 

sold individually or as part of a package or bundle, or

 

functionally integrated, with services other than video service.

 

     (b) Any franchise fee imposed on the provider that is passed

 

on to subscribers.

 

     (c) Compensation received by the provider for promotion or

 

exhibition of any products or services over the video service.

 

     (d) Revenue received by the provider as compensation for

 

carriage of video programming on that provider's video service.

 

     (e) All revenue derived from compensation arrangements for

 

advertising attributable to the local franchise area.

 

     (f) Any advertising commissions paid to an affiliated third

 

party for video service advertising.

 

     (5) Gross revenues do not include any of the following:

 

     (a) Any revenue not actually received, even if billed, such as

 

bad debt net of any recoveries of bad debt.

 

     (b) Refunds, rebates, credits, or discounts to subscribers or

 

a municipality to the extent not already offset by subdivision (a)

 

and to the extent the refund, rebate, credit, or discount is

 

attributable to the video service.

 

     (c) Any revenues received by the provider or its affiliates

 

from the provision of services or capabilities other than video

 

service, including telecommunications services, information


 

services, and services, capabilities, and applications that may be

 

sold as part of a package or bundle, or functionally integrated,

 

with video service.

 

     (d) Any revenues received by the provider or its affiliates

 

for the provision of directory or internet advertising, including

 

yellow pages, white pages, banner advertisement, and electronic

 

publishing.

 

     (e) Any amounts attributable to the provision of video service

 

to customers at no charge, including the provision of such service

 

to public institutions without charge.

 

     (f) Any tax, fee, or assessment of general applicability

 

imposed on the customer or the transaction by a federal, state, or

 

local government or any other governmental entity, collected by the

 

provider, and required to be remitted to the taxing entity,

 

including sales and use taxes.

 

     (g) Any forgone revenue from the provision of video service at

 

no charge to any person, except that any forgone revenue exchanged

 

for trades, barters, services, or other items of value shall be

 

included in gross revenue.

 

     (h) Sales of capital assets or surplus equipment.

 

     (i) Reimbursement by programmers of marketing costs actually

 

incurred by the provider for the introduction of new programming.

 

     (j) The sale of video service for resale to the extent the

 

purchaser certifies in writing that it will resell the service and

 

pay a franchise fee with respect to the service.

 

     (6) In the case of a video service that is bundled or

 

integrated functionally with other services, capabilities, or


 

applications, the portion of the video provider's revenue

 

attributable to the other services, capabilities, or applications

 

shall be included in gross revenue unless the provider can

 

reasonably identify the division or exclusion of the revenue from

 

its books and records that are kept in the regular course of

 

business.

 

     (7) Revenue of an affiliate shall be included in the

 

calculation of gross revenues to the extent the treatment of the

 

revenue as revenue of the affiliate has the effect of evading the

 

payment of franchise fees which would otherwise be paid for video

 

service.

 

     (8) A video service provider shall pay to the franchising

 

entity as support for reasonable capital cost of public, education,

 

and government access facilities an annual fee equal to 1 of the

 

following:

 

     (a) If there is an existing franchise on the effective date of

 

this act, the fee paid to the franchising entity by the incumbent

 

video provider with the largest number of cable service subscribers

 

in the franchising entity as determined by the existing franchise

 

agreement.

 

     (b) At the expiration of the existing franchise agreement, the

 

amount required under subdivision (a) not to exceed 1% of gross

 

revenues.

 

     (c) If there is no existing franchise agreement, a percentage

 

of gross revenues as established by the franchising entity not to

 

exceed 1% to be determined by a community need assessment.

 

     (d) An amount agreed to by the franchising entity and the


 

video service provider.

 

     (9) The fee required under subsection (8) shall not exceed the

 

reasonable capital cost of providing the public, education, and

 

government access facilities and shall be applicable to all

 

providers.

 

     (10) The fee due under subsection (8) shall be due on a

 

quarterly basis and paid within 45 days after the close of the

 

quarter. Each payment shall include a statement explaining the

 

basis for the calculation of the fee.

 

     (11) A video service provider is entitled to a credit applied

 

toward the fees due under subsection (1) for all funds allocated to

 

the franchising entity from annual maintenance fees paid by the

 

provider for use of public rights-of-way, minus any property tax

 

credit approved by the commission, under section 8 of the

 

metropolitan extension telecommunications rights-of-way oversight

 

act, 2002 PA 48, MCL 484.3108. The credits shall be applied on a

 

monthly pro rata basis beginning in the first month of each

 

calendar year in which the franchising entity receives its

 

allocation of funds. The credit allowed under this subsection shall

 

be calculated by multiplying the number of linear feet occupied by

 

the provider in the public rights-of-way of the franchising entity

 

by 5 cents.

 

     (12) All determinations and computations made under this

 

section shall be pursuant to generally accepted accounting

 

principles.

 

     Sec. 7. (1) No more than every 24 months, a franchising entity

 

may perform reasonable audits of the video service provider's


 

calculation of the fees paid under section 6 to the franchising

 

entity during the preceding 24-month period only. All records

 

reasonably necessary for the audits shall be made available by the

 

provider at the location where the records are kept in the ordinary

 

course of business. The franchising entity and the video service

 

provider shall each be responsible for their respective costs of

 

the audit. Any additional amount due verified by the franchising

 

entity shall be paid by the provider within 30 days of the

 

franchising entity's submission of an invoice for the sum. If the

 

sum exceeds 5% of the total fees which the audit determines should

 

have been paid for the 24-month period, the provider shall pay the

 

franchising entity's reasonable costs of the audit.

 

     (2) Any claims by a franchising entity that fees have not been

 

paid as required under section 6, and any claims for refunds or

 

other corrections to the remittance of the provider, shall be made

 

within 3 years from the date the compensation is remitted.

 

     (3) Any video service provider may identify and collect the

 

amount of the video service provider fee as a separate line item on

 

the regular bill of each subscriber.

 

     (4) A video service provider may identify and collect the

 

amount of the public, education, and government programming fee as

 

a separate line item on the regular bill of a subscriber.

 

     Sec. 8. (1) A franchising entity shall allow a video service

 

provider to install, construct, and maintain a video service or

 

communications network within a public right-of-way and shall

 

provide the provider with open, comparable, nondiscriminatory, and

 

competitively neutral access to the public right-of-way.


 

     (2) A franchising entity may not discriminate against a video

 

service provider to provide video service for any of the following:

 

     (a) The authorization or placement of a video service or

 

communications network in public rights-of-way.

 

     (b) Access to a building.

 

     (c) A municipal utility pole attachment.

 

     (3) A franchising entity may impose on a video service

 

provider a permit fee only to the extent it imposes such a fee on

 

incumbent video providers, and any fee shall not exceed the actual,

 

direct costs incurred by the franchising entity for issuing the

 

relevant permit. A fee under this section shall not be levied if

 

the video service provider already has paid a permit fee of any

 

kind in connection with the same activity that would otherwise be

 

covered by the permit fee under this section or is otherwise

 

authorized by law or contract to place the facilities used by the

 

video service provider in the public rights-of-way or for general

 

revenue purposes.

 

     Sec. 9. (1) A video service provider shall not deny access to

 

service to any group of potential residential subscribers because

 

of the race or income of the residents in the local area in which

 

the group resides.

 

     (2) It is a defense to an alleged violation of subsection (1)

 

if the provider has met either of the following conditions:

 

     (a) Within 3 years of the date it began providing video

 

service under this act, at least 25% of households with access to

 

the provider's video service are low-income households.

 

     (b) Within 5 years of the date it began providing video


 

service under this act and from that point forward, at least 30% of

 

the households with access to the provider's video service are low-

 

income households.

 

     (3) If a video services provider is using telecommunication

 

facilities to provide video services and has more than 1,000,000

 

telecommunication access lines in this state, the provider shall

 

provide access to its video service to a number of households equal

 

to at least 25% of the households in the provider's

 

telecommunication service area in the state within 3 years of the

 

date it began providing video service under this act and to a

 

number not less than 50% of these households within 6 years. A

 

video service provider is not required to meet the 50% requirement

 

in this subsection until 2 years after at least 30% of the

 

households with access to the provider's video service subscribe to

 

the service for 6 consecutive months.

 

     (4) Each provider shall file an annual report with the

 

franchising entity and the commission regarding the progress that

 

has been made toward compliance with subsections (2) and (3).

 

     (5) Except for satellite service, a video service provider may

 

satisfy the requirements of this section through the use of

 

alternative technology that offers service, functionality, and

 

content, which is demonstrably similar to that provided through the

 

provider’s video service system and may include a technology that

 

does not require the use of any public right-of-way. The technology

 

utilized to comply with the requirements of this section shall

 

include local public, education, and government channels and

 

messages over the emergency alert system as required under section


 

4.

 

     (6) A video service provider may apply to the franchising

 

entity, and, in the case of subsection (3), the commission, for a

 

waiver of or for an extension of time to meet the requirements of

 

this section if 1 or more of the following apply:

 

     (a) The inability to obtain access to public and private

 

rights-of-way under reasonable terms and conditions.

 

     (b) Developments or buildings not being subject to competition

 

because of existing exclusive service arrangements.

 

     (c) Developments or buildings being inaccessible using

 

reasonable technical solutions under commercial reasonable terms

 

and conditions.

 

     (d) Natural disasters.

 

     (e) Factors beyond the control of the provider.

 

     (7) The franchising entity or commission may grant the waiver

 

or extension only if the provider has made substantial and

 

continuous effort to meet the requirements of this section. If an

 

extension is granted, the franchising entity or commission shall

 

establish a new compliance deadline. If a waiver is granted, the

 

franchising entity or commission shall specify the requirement or

 

requirements waived.

 

     (8) Notwithstanding any other provision of this act, a video

 

service provider using telephone facilities to provide video

 

service is not obligated to provide such service outside the

 

provider's existing telephone exchange boundaries.

 

     (9) Notwithstanding any other provision of this act, a video

 

service provider shall not be required to comply with, and a


 

franchising entity may not impose or enforce, any mandatory build-

 

out or deployment provisions, schedules, or requirements except as

 

required by this section.

 

     Sec. 10. (1) Each video service provider shall establish a

 

dispute resolution process for its customers. Each provider shall

 

maintain a local or toll-free telephone number for customer service

 

contact.

 

     (2) The commission shall establish a process to review

 

disputes which are not resolved under subsection (1), disputes

 

between a provider and a franchising entity, and disputes between

 

providers.

 

     (3) Each provider shall notify its customers of the dispute

 

resolution process created under this section.

 

     Sec. 11. (1) Except under the terms of a mandatory protective

 

order, trade secrets and commercial or financial information

 

submitted under this act to the franchising entity or commission

 

are exempt from the freedom of information act, 1976 PA 442, MCL

 

15.231 to 15.246.

 

     (2) If information is disclosed under a mandatory protective

 

order, then the franchising entity or commission may use the

 

information for the purpose for which it is required, but the

 

information shall remain confidential.

 

     (3) There is a rebuttable presumption that costs studies,

 

customer usage data, marketing studies and plans, and contracts are

 

trade secrets or commercial or financial information protected

 

under subsection (1). The burden of removing the presumption under

 

this subsection is with the party seeking to have the information


House Bill No. 6456 (H-2) as amended September 21, 2006

disclosed.

 

     Sec. 12. (1) The commission's authority to administer this act

 

is limited to the powers and duties explicitly provided for under

 

this act, and the commission shall not have the authority to

 

regulate or control a provider under this act as a public utility.

 

     (2) The commission shall file a report with the governor and

 

legislature by February 1 of each year that shall include

 

information on the status of competition for video services in this

 

state and recommendations for any needed legislation.

 

     Sec. 13. This act does not prohibit a local unit of government

 

and a video service provider from entering into a voluntary

 

franchise agreement that includes terms and conditions different

 

than those required under this act, including, but not limited to,

 

a reduction in the franchise fee in return for the video service

 

provider making available to the franchising entity services,

 

equipment, capabilities, or other valuable consideration. This

 

section does not apply unless for each provider servicing the

 

franchise entity it is technically feasible and commercially

 

practicable to comply with similar terms and conditions in the

 

franchise agreement [and it is offered to] the other provider.

 

     Sec. 14. (1) After notice and hearing, if the commission finds

 

that a person has violated this act, the commission shall order

 

remedies and penalties to protect and make whole persons who have

 

suffered damages as a result of the violation, including, but not

 

limited to, 1 or more of the following:

 

     (a) Except as otherwise provided under subdivision (b), order

 

the person to pay a fine for the first offense of not less than


 

$1,000.00 or more than $20,000.00. For a second and any subsequent

 

offense, the commission shall order the person to pay a fine of not

 

less than $2,000.00 or more than $40,000.00.

 

     (b) If the video service provider has less than 250,000

 

telecommunication access lines in this state, order the person to

 

pay a fine for the first offense of not less than $200.00 or more

 

than $500.00. For a second and any subsequent offense, the

 

commission shall order the person to pay a fine of not less than

 

$500.00 or more than $1,000.00.

 

     (c) If the person has received a uniform video service local

 

franchise, revoke the franchise.

 

     (d) Issue cease and desist orders.

 

     (2) Notwithstanding subsection (1), a fine shall not be

 

imposed for a violation of this act if the provider has otherwise

 

fully complied with this act and shows that the violation was an

 

unintentional and bona fide error notwithstanding the maintenance

 

of procedures reasonably adopted to avoid the error. Examples of a

 

bona fide error include clerical, calculation, computer

 

malfunction, programming, or printing errors. An error in legal

 

judgment with respect to a person's obligations under this act is

 

not a bona fide error. The burden of proving that a violation was

 

an unintentional and bona fide error is on the provider.

 

     (3) If the commission finds that a party's complaint or

 

defense filed under this section is frivolous, the commission shall

 

award to the prevailing party costs, including reasonable attorney

 

fees, against the nonprevailing party and their attorney.

 

     (4) Any party of interest shall have the same rights to appeal


 

and review an order or finding of the commission under this act as

 

provided under the Michigan telecommunications act, 1991 PA 179,

 

MCL 484.2101 to 484.2604.