• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Daniels Hails Telecom Vote More Competition Among Phone, Cable and Internet Providers Predicted

Posted on: Friday, 3 March 2006, 00:00 CST

By DEANNA MARTIN, Associated Press writer

Indiana consumers can expect to see new investments in broadband technology soon, followed by lower prices for cable and other services, Gov. Mitch Daniels and other supporters of a telecommunications deregulation bill said Wednesday.

The General Assembly on Tuesday approved the bill, which frees telephone companies from state regulations and changes the way the cable industry works. Daniels said he will sign the bill into law.

"It's not simply an improvement, it's the best such bill in the nation," Daniels said Wednesday.

"You're going to see, I predict, great benefits to consumers both in phone services and especially in entertainment services."

Daniels and other supporters say the bill will spur high-speed Internet development in Indiana by eliminating the regulations that have kept phone companies out of the broadband market. They claim more competition among phone, cable and Internet providers would keep prices low while expanding voice, video and Internet choices for consumers.

Opponents of the legislation say consumers will be stuck with higher prices for basic phone service. Some worry that phone companies will take the profits from higher rates and invest them in more lucrative markets in hopes of gaining an edge on the competition.

Grant Smith, executive director of the Citizens Action Coalition of Indiana, said the bill might help large telecommunications companies but harms consumers.

"People are going to see rate increases when it comes to basic telephone service," Smith said Wednesday. "There's nothing in it for consumers."

If the bill becomes law, the state would award video programming contracts through a single agency so that cable companies and other video service providers would not have to negotiate separate agreements with each local government they serve.

Daniels said some states that have deregulated the telecommunications industry have seen cable prices drop by 20 percent or more in some areas. He said he expected to see changes soon.

"In other states, it's been both quick and very dramatic," he said.

Sen. Brandt Hershman, R-Wheatfield, said consumers can expect to see infrastructure investments announced soon. After physical improvements are made, competition will increase among cable, telephone and other service providers, which will lead to lower rates, he said.

Consumer protections

"This very much reflects Indiana putting out the welcome mat for telecom investment," Hershman said.

Hershman said 14 states have deregulated the industry to some extent, but Rep. Mike Murphy said Indiana's bill offers protections some other states do not have.

"This bill has the most significant consumer protections that I've seen across the country," said Murphy, R-Indianapolis. "You get the benefits of telecom reform, the statewide video franchising and the significant consumer protections, which I think all Hoosiers should be proud of."

Indiana would be only the second state, joining Texas, with statewide video franchising. Daniels said that could make the state a unique opportunity for investment.

John Koppin, president of the Indiana Telecommunications Association, said the bill would lead to both competition and investment. The Digital Policy Institute at Ball State University estimates that full broadband deployment in the state could bring 20,000 jobs and save cable subscribers up to 30 percent annually.

* * *

WHAT THE BILL WOULD DO

Gov. Mitch Daniels plans to sign into law a telecommunication deregulation bill that the General Assembly approved this week. The bill would:

e Deregulate basic, residential phone service by 2009, allowing telephone companies to set their own rates. Currently, the Indiana Utility Regulatory Commission limits those phone rates.

e Award video programming contracts through a single statewide agency. Currently, local governments work out individual agreements with cable companies and other video service providers.

e Allow telephone companies to raise monthly rates by $1 each year until the companies are deregulated in 2009. For example, if a customer paid $10 a month for basic telephone service one year, his monthly bill could increase to $11 each month the next year, $12 each month the second year and $13 each month the third year. However, companies must offer broadband service to at least 50 percent of the households in a local telephone exchange area within 18 months of their first rate increase.

e Prohibit phone companies from charging customers for local phone calls by the minute.

e Create a state program to help residents who cannot afford their basic local phone service.

Source: Evansville Courier & Press

More News in this Category