LANSING – After hours of negotiations amongst themselves, the Michigan House has prepared the Michigan Telecommunications Act for hours of negotiations to resolve differences between its version and that passed by the Senate last week.

Most of the discussion on the bill (HB 5237) Thursday, before it passed on a 100-6 vote, surrounded provisions limiting when and how local governments would be permitted to offer service.

The final version allowed local governments to provide telephone service if a request for bids yielded fewer than three qualified bidders. The bill had originally required a local government to accept one of the bids if more than one provider sought the contract.

The bill also allows any municipality offering service at the time the bill is enacted to continue with that service. The bill originally would have required the municipality to be serving at least 10 percent of its residents. But bill sponsor Rep. Mike Nofs (R-Battle Creek) had indicated during hearings on the bill that the provision was intended to be read broadly toward allowing existing service to continue.

“There’s a deal that by most people’s estimation will promote and enhance competition,” said House Speaker Craig DeRoche (R-Novi).

Though some customer groups still opposed the bill, Nofs said the measure provided regulatory protections for residential customers and competition to keep prices down for business.

Under the bill, all business rates would be deregulated, as would all residential services except a 100-call minimum service plan.

“This protects every senior in Michigan,” Nofs said, arguing that the Public Service Commission’s order deregulating rates in the state’s more populated areas put at risk those who wanted just basic service.

But opponents were concerned that, at least in less populated areas, it removes protections businesses now enjoy.

“I’m a great supporter of private enterprise,” said Rep. Judy Emmons (R-Sheridan), one of the four Republicans and two Democrats who opposed the bill. “My concern lies with the fact that many areas of this state are somewhat short on competition.”

Nofs said the bill protects businesses from rate hikes by ensuring that competitors have reasonable wholesale rates to move into the less populated areas.

“We gave protection to (competitive local exchange carriers) to have access to the last mile loop and also to an interconnectivity process and also wholesale rate protection,” he said. “They are servicing those people in a lot of the areas she’s talking about.”

The PSC under the measure is predominantly charged with regulating quality of service and with mediating disputes between interconnecting providers. The commission would also have the authority to stay its own orders while those orders are under appeal.

Wholesale rates for those competitors reselling the services of others would be regulated under the act, but only through the end of 2007.

The bill requires that providers offer any unregulated services individually as well as part of packages, but it removed a provision that would have required those services to be offered to customers not already receiving basic local exchange service from the provider.

For customers using voice over Internet protocol or other services that would allow them to use a single telephone number from a number of different locations, the bill would require the call to be treated as a long-distance call if the call originates outside the local calling area of the receiving provider. The provision, which would become effective January 1, 2008, is designed to ensure that a customer’s bill reflects the true cost of connecting the call.

The bill once again gets rid of the End User Carrier Line Charge, but this time allows providers the opportunity to show the PSC that the charge should be rolled into their base rates. Provisions in the 2000 act that eliminated the charge were overturned by courts.

House and Senate leaders will now need to work out which version of the act will reach the governor’s desk and which provisions it will include. Though the Senate version started out with many provisions in common with the House version, parliamentary actions before the bill was passed put in a number of provisions, particularly those dealing with wireless service, that are not expected to be included in the final act.

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