Public Act 48 of 2002

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• Introduced by Sen. John J. H. Schwarz (R) on November 29, 2001, to create a state telecommunication rights-of-way oversight authority with exclusive power to assess fees for access and use of public rights-of-way within all metropolitan areas for the purpose of installing telecommunication service lines, including lines for telephone, DSL, cable, Internet, broadband, etc. Telecommunications providers would be required to pay an annual fee to the authority of seven-cents per linear foot for all rights-of-way occupied by their lines and facilities. The fee would be indexed to the Detroit consumer price index, so it would rise with inflation. Providers would be authorized to pass on the fees to customers with permission of the Public Service Commission (PSC). The PSC would be required to undertake a study of ways to impose the fee on wireless communications, and recommend a method for imposing a wireless fee equivalent to 50 percent of the land-line fee. Municipalities would be preempted from charging right-of-way access fees, except for an initial $500 permit fee, or reimbursement for actual costs. Half of the amount above $70 million collected annually under the right-of-way fee would be distributed to local governments, 44 percent would go to a new Michigan Community Communications Authority, 2.5 percent to a new Telecommunications Service Improvement Fund, and the balance to the state Public Service Commission. The Improvement Fund would provide grants to telecommunications providers serving rural and low-income customers. The Michigan Community Communications Authority is created in Senate Bill 881. It would be authorized to issue bonds, and make loans, grants, and provide joint venture financing to communications developers and operators to acquire, construct, maintain, and operate infrastructure required to provide high speed Internet access. The bill is part of a package comprised of Senate Bills 879 to 881.
  • Referred to the Senate Technology and Energy Committee on November 29, 2001.
  • Substitute offered in the Senate on February 19, 2002, to replace the previous version of the bill with a version recommended by the committee which reported it. The substitute reduces the annual right-of-way fee to five-cents per linear foot beginning in 2004, with a two-cent fee until then. Cable providers that provide telecommunications services would pay a substitute fee of $0.01 per linear foot of right-of-way, or no fee if the company has already made sufficient investments in broadband. All of the revenue would go to local governments, and none to the new state authority proposed by SB 881. For rural providers with fewer customers-per-foot of line the fee would be capped at the per-customer fee paid by Ameritech, the state’s largest provider. The Senate Fiscal Agency estimates that this would be $4.18 per customer access line. Wireless providers would no longer be potentially subject to the fee, and the fee would not be indexed to inflation. The substitute tie-bars the bill to SB 999, which was amended to provide a state utility property tax credit for the fees paid by providers, so the increased costs imposed by the fee would essentially be offset by reduced payments under this state tax, rather than by higher phone and internet bills for consumers. The substitute was amended to exempt the communications networks created by certain county governments and by utilities for their own internal use from the fees, and to streamline the process by which the costs imposed by the fees would be verified for purposes of claiming the tax credit proposed by Senate Bill 999. The substitute passed by voice vote in the Senate on February 19, 2002.
• Passed 29 to 7 in the Senate on February 20, 2002, to create a state telecommunication rights-of-way oversight authority with exclusive power to assess fees for access and use of public rights-of-way within all metropolitan areas for the purpose of installing telecommunication service lines, including lines for telephone, DSL, cable, Internet, etc. Telecommunications providers would be required to pay an annual fee to the authority of five-cents per linear foot of cable right-of-way beginning in 2004, with a two-cent fee until then. Cable providers that provide telecommunications services would be eligible to pay a substitute fee of $0.01 per linear foot of right-of-way, or no fee if the company has already made sufficient investments in broadband. For rural providers with fewer customers-per-foot of line the fee would be capped at the per-customer fee paid by Ameritech, the state’s largest provider. The Senate Fiscal Agency estimates that this would be $4.18 per customer access line. All of the revenue would go to local governments. Municipalities would be preempted from charging right-of-way access fees, except for an initial $500 permit fee, or reimbursement for actual costs, and would be required to grant access permits. The substitute tie-bars the bill to SB 999, which would provide a 100% state utility property tax credit for the fees paid by providers. The bill is part of a package comprised of Senate Bills 880, 881, and 999.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on February 20, 2002, to create a state telecommunication rights-of-way oversight authority with exclusive power to assess fees for access and use of public rights-of-way within all metropolitan areas for the purpose of installing telecommunication service lines, including lines for telephone, DSL, cable, Internet, etc. Telecommunications providers would be required to pay an annual fee to the authority of five-cents per linear foot of cable right-of-way beginning in 2004, with a two-cent fee until then. Cable providers that provide telecommunications services would be eligible to pay a substitute fee of $0.01 per linear foot of right-of-way, or no fee if the company has already made sufficient investments in broadband. For rural providers with fewer customers-per-foot of line the fee would be capped at the per-customer fee paid by Ameritech, the state’s largest provider. The Senate Fiscal Agency estimates that this would be $4.18 per customer access line. All of the revenue would go to local governments. Municipalities would be preempted from charging right-of-way access fees, except for an initial $500 permit fee, or reimbursement for actual costs, and would be required to grant access permits. The substitute tie-bars the bill to SB 999, which would provide a 100% state utility property tax credit for the fees paid by providers. The bill is part of a package comprised of Senate Bills 880, 881, and 999.
  • Substitute offered in the House on March 13, 2002, to replace the Senate-passed version of the bill with a version recommended by the House Energy and Technology Committee. The substitute incorporates changes which do not affect the substance of the bill as previously described. The substitute passed by voice vote in the House on March 13, 2002.
  • Amendment offered by Rep. Bob Brown (D) on March 13, 2002, to require the annual report required from municipalities receiving funds from the right of way fees to use a simplified report format specified by the authority. The amendment passed by voice vote in the House on March 13, 2002.
  • Amendment offered by Rep. Ken Bradstreet (R) on March 13, 2002, to make a technical change to a definition contained in the bill. The amendment passed by voice vote in the House on March 13, 2002.
  • Amendment offered by Rep. Ken Bradstreet (R) on March 13, 2002, to make a technical change to a definition contained in the bill. The amendment passed by voice vote in the House on March 13, 2002.
  • Amendment offered by Rep. Ken Bradstreet (R) on March 13, 2002, to eliminate a provision erroneously referred to permits required by educational institutions which provide telecommunications services, because they are exempt from such permitting requirements. The amendment passed by voice vote in the House on March 13, 2002.
• Passed 100 to 6 in the House on March 13, 2002.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on March 13, 2002.
• Passed 29 to 7 in the Senate on March 14, 2002, to concur with the House-passed version of the bill.
  Who Voted "Yes" and Who Voted "No"
• Signed by Gov. John Engler on March 14, 2002.