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Thursday, January 05, 2006

Ind. Law - State-wide telecommunications deregulation the focus of many stories today

"Telecom rules under scrutiny: Renewed effort to change regulation adds cable to mix" is the headline to a story in the Indianapolis Star Business section by Michele McNeil and J.K. Wall. Some quotes:

How much Hoosiers pay for local phone service, cable television and high-speed Internet access could be shaped by lawmakers who are pledging to reform Indiana's 20-year-old telecommunications law.

By 2009, state regulators no longer would be in charge of setting prices and service quality for telephone companies under sweeping deregulation legislation unveiled at the Statehouse on Wednesday, the first day of the 2006 session.

The proposal is Senate Bill 245. More, from the sidebar:
Here are highlights of Senate Bill 245 as outlined by telephone companies and consumer groups:

• Would free telephone companies from most state regulation starting in 2009.

• Between now and 2009, telephone companies could raise their rates by $1 per month if they pass the following test: They must provide high-speed broadband to 50 percent of their customers.

• The Indiana Utility Regulatory Commission would collect and distribute information about service quality.

• Property tax breaks would be available for companies that expand broadband access.

• Local governments no longer would control cable television franchise agreements; the Indiana Utility Regulatory Commission would do it.

• Municipalities like cities and towns couldn't use taxpayer money to build their own broadband networks if there are private companies willing to do it.

Niki Kelly of the Fort Wayne Journal Gazette has this story headlined "Bill could overhaul phone, cable service." Some quotes:
The comprehensive 78-page bill focuses on a handful of major areas. It first deregulates basic phone service in 2009. In the meantime it allows phone companies to increase fees slightly if they provide broadband access to at least 50 percent of their customer base in each phone exchange.

Next, the legislation creates statewide franchising authority for video programming. Currently cable providers negotiate franchise agreements with individual communities, and this would cut out that layer of negotiating, theoretically making it easier for other entities to enter the field and offer the service.

The bill also encourages infrastructure investment by the private sector by creating local property tax abatements. In addition, it discourages municipal ownership of broadband networks.

“It can be done with taxpayer dollars but we view that as a last resort rather than a first,” said Hershman, who also said nationally 50 percent of municipally owned broadband networks fail to break even.

A last major component of the bill would allow the IURC to collect and distribute information on service quality of a particular company so consumers can make better choices.

From an Evansville Courier& Press story by Jennifer Whitson:
The bill would:

Allow phone companies to raise prices if they offer broadband services to at least half of the customers in a given exchange. Then by 2009, phone service, including rates, would be completely deregulated.

Exempt cable companies from negotiating local deals to provide video services. Instead a statewide deal would be negotiated and companies would just have to apply to the state to enter new markets.

Place controls on local units of government that want to build a publicly funded broadband network. Under it, cities would have to first publish their intent to set up a broadband system and allow any private companies to provide the service instead.

Lesley Stedman Weidenbener has a lengthy story in the Louisville Courier Journal, including:
The bill's lead author, Sen. Brant Hershman, R-Monticello, said the law would provide consumers with greater choice and greater price competition while modernizing state law.

"Indiana's telecommunications laws were last updated in 1985 when a Blackberry was just a fruit and Google was just a very large number," Hershman said. "It's time to modify our laws so that the free market can drive down prices for consumers."

But consumer advocates say the bill is bad for customers and unnecessary because state regulators have been adjusting their rules to accommodate changes in the telecommunications industry.

"The idea of the legislation is to deregulate the local phone market so they can jack rates up and get the revenue and provide services under cost so they can run out the competition," said Grant Smith, executive director of the Citizens Action Coalition.

The bill would strip the Indiana Utility Regulatory Commission of nearly all its authority to oversee local phone service in 2009. It would leave the agency with the power to enforce only the most basic rules, such as those that prevent companies from signing a customer up for service without their permission.

The proposal comes just a month after the commission decided unanimously that competition in the state had not developed enough to eliminate oversight of the companies and let the market take over.

Under Hershman's bill, most telecommunications-related consumer-protection services would be transferred from the regulatory commission and the Indiana Utility Consumer Counselor to the attorney general's office. * * *

Similar legislation has died in previous legislative sessions, typically in the Senate where President Pro Tem Robert Garton, R-Columbus, has been reluctant to deregulate the industry. The regulatory commission's former chairman, Bill McCarty, also actively opposed such sweeping proposals.

But McCarty is gone, and it's not clear whether new chairman David Lott Hardy will be as active at the legislature. Yesterday, commission spokeswoman Mary Beth Fisher said the bill "begins an important debate."

And Garton's strong desire to expand high-speed Internet service to smaller towns and rural areas of the state seems to have tempered his opposition to deregulation.

Posted by Marcia Oddi on January 5, 2006 07:40 AM
Posted to Indiana Government | Indiana Law