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Newspaper Article

    House Approves Telecom Reform Bill

    BY J.K. Wall
    03/01/2006
    by J.K. Wall on 3/1/06.

    Phone prices and service will be deregulated and the state will take on oversight of cable television after the House of Representatives passed a sweeping telecommunications reform bill.

    The bill passed Tuesday by a vote of 78-18 as the House concurred with changes made to the bill last month by the Indiana Senate. The bill now goes to Gov. Mitch Daniels. He indicated in a written statement Tuesday that he will sign it.

    But the state's two largest phone companies -- AT&T and Verizon -- remained vague about any changes they plan once the law takes effect on March 28.

    The bill allows phone companies to raise rates on basic local service in exchange for extending high-speed Internet service to half their customers in each locality they serve. The bill also makes it simpler for firms to begin television service anywhere in the state.

    AT&T will launch an Internet-based television service in Indiana this year. But that has been the company's plan since before the legislature convened this year. Verizon said it will finish building a fiber-optic network in Fort Wayne, but it made no commitment on when it might offer its new television service on those lines.
    "It's difficult to predict what's going to happen," said Mike Marker, a spokesman for AT&T Indiana.

    Marker declined to describe how that service would be rolled out. But if AT&T followed the pattern it used five years ago to roll out DSL Internet service, it would begin service in Indianapolis, move to the suburbs, then to Northwest Indiana, and then hit cities such as South Bend, Evansville and Muncie.

    While phone companies were mum on specifics, both proponents and opponents of the bill made bold predictions.

    Wayne Brough said the bill will bring consumers more choices and lower prices. Brough is vice president of research at FreedomWorks, a Washington lobbying group that has advertised heavily in support of HB 1279.

    "For the consumer, choice brings more innovation, keeps prices in check, and gives you a little more control," Brough said.

    But Grant Smith, executive director of Citizens Action Coalition of Indiana, predicted an immediate jump for basic local service, from its current monthly rate of $12 to $30 or more. He expects the largest phone companies to use extra funds from that price hike to help them offer such low prices on other services to drive out competitors.

    "This is insane. Deregulating a monopoly is nuts," Smith said.

    Many changes would be delayed at AT&T and Verizon. Both companies have agreements with state utility regulators that hold the companies to specific prices and deployment of high-speed Internet service. AT&T's agreement expires in mid-2007. Verizon's expires at the end of 2007.
    By then, Rep. Mike Murphy, R-Indianapolis, the author of HB 1279, predicts the bill will have unleashed "hundreds of millions of dollars of investments and created thousands of new jobs."

    But Tim Oakes isn't so sure. The executive director of the Indiana Cable Telecommunications Association noted that cable firms invested nearly $300 million and deployed broadband Internet access to nearly 80 percent of Hoosiers in the last two years.

    "If this bill beats those numbers in the next 24 months, then maybe we were mistaken," Oakes said. "But I don't think it will."