Telecom Tax Would Stop Broadband, Wireless Investment in Michigan Communities

Projects in Dexter, throughout Michigan jeopardized by bill favoring AT&T, Verizon over local companies

LANSING, Mich. (Dec. 8, 2009) - Legislation passed by the state House will render investment in new broadband services in Michigan communities economically infeasible, the Michigan Internet & Telecommunications Alliance cautioned today. The legislation would ensure that antiquated regulations give favored status to out-of-state corporations, such as New York-based Verizon Communications Inc. and Dallas-based AT&T Inc., at the expense of Michigan-based service providers.

House Bill 4257 creates a new tax on local telecommunication providers. It also gives AT&T, Verizon and other incumbent telephone companies an unfair advantage in the rates they pay local, Michigan-based providers for the use of their networks to complete telephone calls and Internet connections.

“House Bill 4257 dooms our plans to build out a state-of-the-art wireless Internet network to provide telephone and high-speed telecommunications Internet services for Dexter, underserved rural communities in Southeast Michigan and surrounding communities,” said Joe Mattausch, founder of Adrian-based TC3 Net. “The legislation requires us to pay unconscionable fees to out-of-state incumbent providers like AT&T and Verizon, causing higher prices for our customers and eviscerating our ability to invest in new broadband facilities in the Michigan communities we serve.”

The Michigan Internet & Telecommunications Alliance is urging lawmakers to oppose this effort. The Senate Energy Policy & Public Utilities Committee is scheduled to have a hearing on the bill at 2 p.m. today in the Senate hearing room, on the ground floor of Boji Tower.

“HB 4257 reaches into the pockets of Michigan residents, businesses, and service providers and hands that money to large out-of-state telephone companies,” said John Truscott, spokesman for the Michigan Internet & Telecommunications Alliance. “Michigan residents and firms should contact their state senators, urging them to oppose legislation that favors out-of-state telecom companies at Michigan’s expense.”

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