HB 6456, As Passed Senate

HB-6456, As Passed Senate, December 12, 2006

SENATE 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).

House Bill No. 6456 as amended December 12, 2006

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

<< >>.

(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.

House Bill No. 6456 as amended December 12, 2006

(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.

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 federal, state, and local 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) As a condition to obtaining or holding a franchise, a

franchising entity shall not require a video service provider to

obtain any other franchise, assess any other fee or charge, or

impose any other franchise requirement than is allowed 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 or as provided under subsection

(14).

(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.

(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.

(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.

(14) If a franchising entity seeks to utilize capacity

designated under subsection (1) or an agreement under section 13 to

provide access to video programming over 1 or more public,

governmental, and education channels, the franchising entity shall

give the provider a written request specifying the number of

channels in actual use on the incumbent video provider's system or

specified in the agreement entered into under section 13. The video

service provider shall have 90 days to begin providing access as

requested by the franchising entity.

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.

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.

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.

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) In addition to the fee required under subsection (1), a

video service provider shall pay to the franchising entity as

support for the cost of public, education, and government access

House Bill No. 6456 as amended December 12, 2006

facilities <<and services>> 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 2% of gross

revenues.

of gross revenues as established by the franchising entity not to

exceed 2% 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 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 allowed 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 the lesser of 5 cents or

the amount assessed under the metropolitan extension

telecommunications right-of-way oversight act, 2002 PA 48, MCL

484.3101 to 484.3120. A video service provider is not eligible for

a credit under this subsection unless the provider has taken all

property tax credits allowed under the metropolitan extension

telecommunications right-of-way oversight act, 2002 PA 48, MCL

484.3101 to 484.3120.

(12) All determinations and computations made under this

section shall be pursuant to generally accepted accounting

principles.

(13) The commission within 30 days after the enactment into

law of any appropriation to it shall ascertain the amount of the

appropriation attributable to the actual costs to the commission in

exercising its duties under this act and shall be assessed against

each video service provider doing business in this state. Each

provider shall pay a portion of the total assessment in the same

proportion that its number of subscribers for the preceding

calendar year bears to the total number of video service

subscribers in the state. The first assessment made under this act

shall be based on the commission's estimated number of subscribers

for each provider in the year that the appropriation is made. The

total assessment under this subsection shall not exceed

$1,000,000.00 annually. This subsection does not apply after

December 31, 2009.

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 as a

separate line item on the regular monthly bill of each subscriber

an amount equal to the percentage established under section 6(1)

applied against the amount of the subscriber's monthly bill.

(4) A video service provider may identify and collect as a

separate line item on the regular monthly bill of each subscriber

an amount equal to the percentage established under section 6(8)

applied against the amount of the subscriber's monthly bill.

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 owned by a governmental entity.

(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

(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.

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) A video service provider shall not do in

connection with the providing of video services to its subscribers

and the commission may enforce compliance with any of the following

to the extent that the activities are not covered by section

2(3)(l):

(a) Make a statement or representation, including the omission

of material information, regarding the rates, terms, or conditions

of providing video service that is false, misleading, or deceptive.

As used in this subdivision, "material information" includes, but

is not limited to, all applicable fees, taxes, and charges that

will be billed to the subscriber, regardless of whether the fees,

taxes, or charges are authorized by state or federal law.

(b) Charge a customer for a subscribed service for which the

customer did not make an initial affirmative order. Failure to

refuse an offered or proposed subscribed service is not an

affirmative order for the service.

for service provided after the effective date the service was

canceled.

(d) Cause a probability of confusion or a misunderstanding as

to the legal rights, obligations, or remedies of a party to a

transaction by making a false, deceptive, or misleading statement

or by failing to inform the customer of a material fact, the

omission of which is deceptive or misleading.

(e) Represent or imply that the subject of a transaction will

be provided promptly, or at a specified time, or within a

reasonable time, if the provider knows or has reason to know that

it will not be so provided.

(f) Cause coercion and duress as a result of the time and

nature of a sales presentation.

(2) 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.

(3) The commission shall submit to the legislature no later

than June 1, 2007 a proposed process to be added to this act that

would allow the commission to review disputes which are not

resolved under subsection (2), disputes between a provider and a

franchising entity, and disputes between providers.

(4) 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

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. A video

service provider shall submit to the commission any information

requested by the commission necessary for the preparation of the

annual report required under this subsection. The obligation of a

video service provider under this subsection is limited to the

submission of information generated or gathered in the normal

course of business.

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.

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.

Enacting section 1. This act takes effect January 1, 2007.