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Thursday, April 14, 2005

Ind. Law - Huge telecom bill could deploy broadband, deregulate basic telephone service

Rick Yencer has a lengthy story today in the Muncie Star-Press about the now "huge Senate Bill 381." Some quotes:

Broadband development and telecommunication deregulation have been joined in the huge Senate Bill 381 that passed out of the Indiana House on Monday and is headed to a conference committee for review. That was after House Bill 1518 which would have deregulated telecommunications died when House Democrats walked out last month.

The 74-22 vote reflected strong support for a statewide broadband system and preventing the Indiana Utility Regulatory Commission from regulating broadband and information services and eventually ending the commission's oversight of pricing and terms of basic telecommunications service.

However, consumer groups and the telecommunications industry have concerns about the final version of the bill.

"I don't think it is going to stay in its current version," said Sen. David Ford, R-Hartford City, chairman of the Senate Economic Development and Technology Committee. "We have plenty of time to negotiate that."

Ford, who could be conference committee chairman on the bill, has been a proponent of broadband deployment and proposed state funding of broadband, especially in rural areas of the state. Ford authored the original SB 381 that also called for state funding of broadband system in underserved areas.

Tim Oakes, executive director of the Indiana Cable Telecommunications Association, along with other cable providers expressed opposition to a state-funded broadband infrastructure.

"We are confident that any final version will remove state funded competition against the private sector, be pro-deregulatory and assistant in the access of broadband for Hoosiers who have absolutely no access now," said Oakes.

Rep. Tom Saunders, R-New Castle, voted against the bill, saying, "I just do not believe the state needs to be in the telecommunications business."

Saunders was also concerned that too many issues, ranging from deregulating basic telephone service to the need to extend broadband to rural communities, confused many of the issues.

"There is just too much in there to vote for," said Saunders, who expected some issues to taken out in conference.

Consumer groups like Citizens Action Coalition said the measure was spoiled by efforts to include legislation to deregulate telephone service backed by industry giants like SBC and Verizon.

"Broadband is vital to our state's economy, but deregulated, rising telephone rates for incumbent monopolies like SBC will hurt Hoosier consumers and our economy," said Grant Smith, CAC's executive director.

The CAC and other consumer groups also think it's important that the IURC remain as a referee between giant telephone companies and smaller providers since SBC and Verizon are expanding broadband and wireless services.

Rep. Jack Lutz, R-Anderson, a co-author of the telecommunication deregulation legislation, did not think ultimately deregulating basic telephone service by the end of the decade would raise prices.

Michehe McNeil of the Indianapolis Star has a story headlined "Deregulation of telecoms is uncertain: Senate bill originally focused on broadband now flash point." Some quotes:
With less than three weeks to go in the legislative session, consumer groups, lawmakers and telephone companies are still at odds over who should control the price of local phone service -- the state or market forces.

Traditional telephone companies, which have been under the thumb of state regulators, say deregulating their industry is about leveling the playing field, competing with other communications companies and bringing more jobs to Indiana.

Consumer groups say it's about bigger phone bills and bigger corporate profits at the expense of Hoosiers.

"It's about being able to afford basic phone service," said Nancy Griffin, director of AARP Indiana, which has more than 800,000 members in the state. "That's crucial for a lot of our older members."

But there's growing sentiment in the legislature that the communications world is changing rapidly while Indiana's laws are not. And that theme will guide lawmakers as they try to reach a compromise on telecom deregulation by April 29, when the legislative session must end. If a compromise is reached, the House and Senate will have to vote on the final version. * * *

Competition for data and phone business is fierce among cell phone companies and cable providers. Even electric companies are getting in the communications busi-ness, where they are largely unregulated and are chipping away at the customer bases of traditional phone companies.

Other states are acknowledging this trend. In the last month, Idaho and Iowa have approved telecom deregulation legislation that would let companies gradually set their own prices in those states.

Here, the Indiana Utility Regulatory Commission regulates prices and service quality for the traditional telephone companies -- SBC, Verizon and Sprint.

But that would change under the latest version of Senate Bill 381, legislators' latest attempt at telecom deregulation. This proposal would allow traditional phone companies to set their own prices once 50 percent of households in an area have access to broadband, which allows people to have high-speed Internet service.

The lawmaker behind the new idea, Rep. Michael Murphy, R- Indianapolis, said using the broadband requirement as a trigger accomplishes two goals: ensuring that consumers have other communications options and encouraging telephone companies to deploy broadband to rural areas in exchange for the freedom to set their own prices.

Full deregulation would occur -- so long as the 50 percent broadband test is met -- by 2010. * * *

Posted by Marcia Oddi on April 14, 2005 07:27 AM
Posted to Indiana Law