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Michigan bill would prevent public networks

House Bill 5099 would prohibit counties and cities from putting any public funds into a government-owned or -managed network. The tight restrictions would replace Michigan’s current municipal-network limitations. So-called “municipal networks,” which are built or managed with local government involvement, are seen as a way to create competition and jumpstart broadband access in areas where commercial telecommunications companies have not stepped in to provide adequate service.A law already exists mandating safeguards against bad municipal financial decision-making.“There are statutory restrictions, competitive bidding with an industry bias built in, mildly onerous separate accounting and projection requirements, industry-biased geographic limitations and artificial time delays,” says Michael J. Watza, head of the governmental litigation and affairs practice at the Kitch Drutchas Wagner Valitutti & Sherbrook law firm.The bill does allow local governments to contract with private companies to provide internet access. Michigan is one of 21 states that limit or ban publicly owned networks. Michigan’s existing law dates to 2001. It requires cities to get council approval, issue a request for proposals to the private sector, and wait 61 days for responses. If fewer than three “qualified” internet service providers respond, the city can take on the project—but only after it prepares and presents to council a cost-benefit analysis that predicts costs and number of subscribers, and posts this publicly for 30 days.Assuming cities decide to move forward and no ISP responds, there must be a public hearing to authorize construction, and then a CPA must review the document. Cities must pay for all of these tasks.

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