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Letter


An Open Letter to the Michigan State Senate: Taxpayers Want TV Choice, But Beware Net Neutrality

December 8, 2006

Dear Senator:

On behalf of the more than 11,000 Michigan members of the National Taxpayers Union, I urge you to bring much-needed competition to the video services marketplace and reject so-called "net neutrality" schemes that would regulate the internet.

Uniform local video franchising, as provided for in House Bill 6456, would modernize a process that currently requires providers to negotiate different agreements with dozens of local governments across Michigan. The process is time- and resource-consuming, for both the providers themselves and the municipalities. Rather than investing in deployment of broadband networks, companies can become mired in costly negotiations. The existing franchising model is clearly a barrier to competition, consumer choice, and technological advancement.

We strongly believe that reform will result in better services, lower prices, and superior quality for Michigan consumers. In Texas, where legislators passed statewide video franchising rules last year, the incumbent cable company dropped its prices 25 percent within weeks of new competitors entering the market. In Michigan, Lawrence Technological University estimated that competitive market reform could result in a savings of $600 million for video consumers.

However, Senators must beware any attempts to insert net neutrality provisions into the bill. Such provisions seek to allow the government to mandate certain speeds for content, preventing Internet providers from prioritizing transactions. NTU and its members strongly believe that competition in a free market, not government bureaucrats, should determine how the internet functions.

Regulating the Internet today is no different than if Congress passed laws aimed at limiting the horsepower, engine design, and cost of Henry Ford's Model A at the turn of the century out of concern that future car manufacturers might be unfairly impacted by Ford's work. Regulations like that wouldn't have made sense then -- they certainly don't make sense now.

While uniform local video franchising would open up the cable market to competition and lower prices for Michigan consumers, net neutrality regulations would confine the incredibly free market that has fostered the Internet's explosion. We look forward to your support of House Bill 6456 without any damaging net neutrality restrictions.

Sincerely,

Andrew Moylan
Government Affairs Manager,
National Taxpayers Union