Seongcheol Kim
Home ] In This Issue ] Search the Review ] National ] Libraries ] States and Local ] Rural ] New Directions ]

Terry  Grunwald
Cary Williams
Lauren-Glenn Davitian
Seongcheol Kim
Dirk Koning
Sue Buske
Autumn Labbe-Renault
Pierre Clark
Fred I. Williams
Kara Harris


The Challenge to Local Governments: Telecommunication Policy in Michigan Seongcheol Kim is a doctoral candidate and instructor, and Thomas A. Muth is professor and chair of the Department of Telecommunication at Michigan State University in East Lansing.
Seongcheol Kim and Thomas A. Muth

These days the federal and most state governments and their respective regulatory agencies are establishing new rules, framed under the Telecommunication Act of 1996. While the Act does limit local and state regulatory authority in favor of creating market competition and innovation, it does preserve the important historical local authority to manage public rights-of-way and require fair and reasonable compensation from telecommunication providers. Under the Act, companies wishing to enter new markets and install new facilities are subject to municipal control and compensation for use of the public rights-of-way.

In the fall of 1996, the Michigan Business Roundtable and the Michigan Jobs Commission provided funding for a research project to be performed by students under the supervision of faculty from the Michigan State University Department of Telecommunication. The goal of this project, titled TELCOMATRIX/MI, was to outline processes involved in securing initial and subsequent agreements, permits, and assorted permits for and affecting telecommunication and information systems and services in selected Michigan communities. Pre-selected on the basis of typical or atypical telecommunication policy strategies, these nineteen communities included: Ann Arbor, Birmingham, Canton Township, Dearborn, Detroit, East Lansing, Farmington, Flint, Grand Rapids, Holland, Lansing, Lansing Township, Livonia, Marquette, Negaunee, Southfield, Sterling Heights, Troy, and Wyandotte.
Passage of the Act coincided with the creation, licensing and start-up of many new wireless personal communications services (PCS), authorized by the FCC through auctions, which raised $23 billion for the U.S. Treasury. Since the Act also reserves local zoning controls, new wireless providers that want to put up facilities and structures such as towers and antennas are subject to local zoning authority.

Yet, despite the important role reserved for local governments in the development of new technologies and their infrastructure, our survey of 19 local communities in Michigan* found the overwhelming majority of them ill-prepared to meet this challenge.

In conducting the study, we visited community libraries and city halls for diverse documents including copies of ordinances, budgets, permits, and franchise agreements. As needed, we met with officials who explained local telecommunication procedures. What we found was: Most communities had no single contact for telecommunication issues. This role was often distributed among several offices. Local government officials were frequently unaccustomed to the wide range of telecommunications issues and terminology.

Since cable television franchise agreements have historically fallen under local government control, all but one local government did have very specific policies in this area. On average, the contribution of the cable franchise fee to the general city fund was 0.52%, with cable providers usually contributing between 3% and 5% of their gross revenues. (The ratio for Negaunee is high, 10.57%, because the city itself owns and operates the cable system.) Bonds are required in many communities, for security, performance, and construction. Various forms of insurance are also generally required. Most cable franchises are in effect for fifteen years and need to be renewed through an application process initiated prior to the expiration of the contract. Transfers may be allowed but require community approval.

In contrast to this regulatory structure, few local governments have well-developed interactive (two-way) telecommunication policies, Ann Arbor, Lansing, and Troy being the most advanced. Seven governments do not have any written policy at all related to interactive voice, video, and data communications services. At the time of the study, there were no wireless-specific ordinances in effect in any of the nineteen local communities, though Grand Rapids and Livonia were reviewing drafts.

Three local governments themselves own, operate or lease telecommunications infrastructure (Holland and Wyandotte as well as Negaunee). Local governments do have general procedures or policies applicable to wireless telecommunication service, commonly governed under zoning regulations. Some communities are working together to rewrite policies. Protect Public Rights-of-way from Telecommunication Encroachment (PROTEC) is a coalition of Michigan communities with the common goal of protecting local governments rights to manage public rights-of-way. Four of the surveyed communities (Dearborn, Livonia, Southfield, and Troy) are members of PROTEC.

Overall, however, most local governments in Michigan do not have well-defined local telecommunication policies to cope with changing telecommunication industries and regulatory environments. Our investigation should offer useful guidance. New policies and agreements should be developed to manage rights-of-way, handle siting issues, and obtain fair and reasonable compensation from telecommunications providers. Telecommunications should be addressed in local master plans as well as in community visioning and economic development strategies. Strategic alliances among local governments, industry, and the community should be explored. It is essential that local governments continue to provide input into the development of federal regulations and new state laws as well as monitor court decisions interpreting the new act.