Imagine cable TV that can screen phone calls, connect to photo albums stored on the Internet or be programmed from a cell phone.
With the help of state legislation, a next-generation fiber-optic network that bundles Internet, video and phone service could be making its way to Michigan soon.
But that doesn't mean the service will be provided to East Lansing's student neighborhoods.
Cable franchise agreements are currently negotiated at the local level, ensuring cable service is virtually a public utility in many cities — available to just about anyone who wants it.
The proposed legislation, which is currently working its way through both the state House of Representatives and Senate, would shift cable franchising to a state system, eliminating local control.
Local governments across the state have cried foul, arguing the change would affect revenues they use for programs such as public access, and to allow cable providers to pick and choose where they offer service.
"You're changing the rules of the game," said East Lansing City Councilmember Kevin Beard.
The East Lansing City Council is scheduled to approve a resolution on Tuesday voicing support for keeping the franchise process local.
The city is expecting to bring in $320,000 in the next year from its existing franchise agreement with Comcast. That agreement, and others like it around the state, sets specific requirements for the cable provider to "build out," or expand, its network to serve the population equally.
The proposed legislation, which is being pushed by telecommunications giant AT&T, sets no such requirements.
AT&T is planning to invest $4.4 billion in expanding its network, and in a report to investors, the company said it plans to provide the next-generation service to 90 percent of "high-value" customers — people who spend more than $160 a month on cable services.
But the company expects to serve only 5 percent of low-value customers, defining "low-value" as households that spend less than $110 per month.
"They want to be able to discriminate on who they provide service to, because they can make a lot of money," said Joe Fivas, assistant director of state affairs for the Michigan Municipal League, which is organizing local governments to oppose the bills.
Those low-value customers are often senior citizens, minorities, rural or low-income residents — such as students, according to the Michigan Municipal League.
"Student areas are very difficult to service," Fivas said. "Students would inherently be left behind."
AT&T representatives say they're willing to provide service wherever there's consumer demand, despite the complaints of local governments and the cable industry.
"Cable is making that argument as a distraction because they don't want the competition," said Jon Kreger, AT&T's Michigan spokesman. "Providing more competition will give consumers better prices and choices."
Kreger called the current franchising process "cumbersome," and said if the proposed legislation isn't passed, it will be difficult to compete with entrenched cable providers who have near-monopolies.
"It would have the overall effect of just blocking other providers from getting into the market," he said.
But East Lansing doesn't have an exclusive contract with Comcast, and Beard said the city would welcome competition from other providers.
AT&T representatives argue that negotiating contracts with 22,000 local governments across the nation would slow the process of getting their product to the market.
Mike Nowlin, a spokesman for Michigan's cable industry, said about 175 local governments have already offered AT&T "just sign on the dotted line" contracts, offers the company has walked away from.
"They could be up and running and competing in a number of days," Nowlin said.
Nowlin said the existing franchising process normally works quickly and smoothly.
Comcast's agreement with East Lansing, however, was supposed to be renegotiated in 2002, but the contract still hasn't been finalized.
Bob Darrow can be reached at darrowro@msu.edu.
