MICH. SENATE PASSES KEY BROADBAND BILLS

Bills that Senate sent to Mich. House were: (1) SB-880, which would preempt local authority over rights of way (ROW) for telecom use and establish state ROW fee in lieu of local telecom ROW fees. (2) SB-881, which would create Mich. Communications Development Authority to provide loans and grants for broadband deployment projects in underserved areas. (3) SB-999, which would give telecom carriers state business tax credits for state ROW fees they would pay on broadband facilities in lieu of carriers passing those ROW fees along to their customers.

Senate amended main bill (SB-880) to reduce state ROW fee for companies providing high-speed Internet access. Original bill set fee at flat 5 cents per linear foot. Amended bill sets fee for telecom carriers at 2 cents for first year and 5 cents thereafter, with discount for shared lines. That would be in place of all current local telecom franchise or ROW fees. For SBC/Ameritech, which currently pays no local franchise fees, bill would mean $24 million cost increase. Cable companies would pay 1 cent per foot in all years, plus any preexisting local cable franchise fees. But cable companies could claim credit against state ROW fee for broadband facility investments. Money state collected from ROW fees would be distributed back to municipalities under formula based on linear feet of telecom/cable facilities within their borders. Only 7 senators voted against main bill, saying broadband proposal would end up costing consumers more money and state should let market forces determine where high-speed Internet access was available.

Meanwhile, Technology Policy Group at Ohio State U.’s Supercomputer Center, which recently conducted Mich. dial-up speed study for Mich. Economic Development Corp., said similar study conducted in Ohio in 2001 showed actual dial-up performance generally is inadequate for electronic commerce applications. That was same conclusion as was drawn for Mich. after that study found actual average Mich. speed performance of 56 kbps modems was about half what modems were capable of, and no place in Mich. was getting full-speed dial-up access.

Ohio study, done for state’s Ecom-Ohio development group, looked at actual modem throughput speeds in state’s 8 largest metro areas. On average, Ohio study found 2/3 of connection attempts operated at speeds below 33 kbps while 1/3 ran at about 45 kbps. There were isolated exceptions. In Akron 330 area code, for instance, tests produced connection speeds above 49 kbps on 80% of connection attempts, close to practical dial-up speed limit of 53 Kbps.

Unlike Mich., where results were fairly uniform across connection attempts, Ohio dial-up speeds varied widely depending on which ISP within metro area was accessed and what time of day call was placed. Generally, far-out parts of metro areas in southeastern and northeastern Ohio fared worst in modem speed trials.

Technology Policy Group Dir. Pari Sabety said her group also was conducting dial-up speed trials for state economic development groups in Ill., Ind., Ky., Md., Pa., Wis. Md. testing has been completed and Md. Technology Development Corp. plans to release results in March as part of overall report on status of online access in Md. Sabety said preliminary results from all these tests indicate pattern where handful of places see dial-up access operating at close to maximum speed, but vast majority of dial-up users get nowhere near full modem speed. She said age of telephone infrastructure seems to play major role, with oldest facilities producing lowest speeds.

Dial-up results are important, Sabety said, because 80% of business establishments and 90% of households still rely on dial-up connections for Internet access even though majority of phone customers supposedly have available either cable modem or digital subscriber line services. She said many customers have problems with performance or cost of current high-speed access options. She said there are “killer apps” out there for electronic commerce that can’t effectively be used over slow dial-up connections.

Technology Policy Group’s studies look only at performance and don’t address costs to upgrade existing facilities for faster throughput. “The industry tells us it would cost a fortune to provide everyone with full- performance dial-up connections but only slightly more to go all the way to broadband,” Sabety said. “They liken it to spending a fortune to upgrade from a Model T to a Model A, when for a few percent more you can upgrade all the way to a Lexus.”