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In the few days since the start of the 2006 Indiana legislative session Senate Bill (SB) 245 has stirred up state executives and legislators, providers of phone, internet and television services, and media activists from many parts of the state. The bill seems to have something for everyone, although many grassroots organizations see the consumer as losing more than he/she is getting. Likely a successor to 2005's defeated bill to prohibit municipalities from offering broadband, it promises benefits to almost everyone.
SB245 was introduced in the Senate on January 9 and sent to the Homeland Security, Utilities and Public Policy Committee where testimony was heard on January 10. The hearing venue was the Senate chambers, which provided more room for the crowd of proponents and opponents who filled all the vacant seats and lined the walls during the three-and-a-half hours of presentations and testimony. Senator Hershman, sponsor of the bill, provided some background and a PowerPoint presentation-- "Deregulating Telecommunications in Indiana: Case for, Benefits of, and Elements of Reform Legislation." The Senator heralded SB245 as bringing the " dawn of a new day " that will "unleash the powers of the free market economy" in Indiana. He attributed loss of Hoosier jobs to outdated telecommunication regulations, causing this reporter to recall hearing personal stories from former media employees who saw their jobs disappear as a result of media consolidation following relaxation of media ownership rules in 1996 Telecom Act , when media giants with hundreds of radio and tv stations stopped producing local programs and switched to merely distributing generic shows to multiple outlets. Senator Hershman repeatedly referred to Voice Over Internet Protocol (VOIP) phone service as "free"--a claim that causes one to wonder how VOIP companies such as Skype and Vonage obtain revenue. After the senator's presentation, he was asked by Senator Craycraft to clarify the bill's limitation on cost increases for basic local landline phone service of $1 per month once per year until 2009, when no limitations would apply. (This issue surfaced again during the testimony of June Lyle from AARP, when she characterized these increases as representing a total 25% increase for seniors with only basic phone service and no limits on price increases thereafter.) Two amendments were added to the bill by voice vote: one (amendment #3) defining the term "broadband" and one (amendment #2) excluding "pole attachments" from the bill, clarifying some other definitions, and keeping some rate authority under the Indiana Utility Regulatory Commission (IURC). Following Senator Hershman's presentation Neil Pickett from the Governor's office read a statement from Mitch Daniels supporting the bill. After that Senator Wyss, Committee Chair, invited opponents of the bill to speak within a one-hour total time limit. Opponents included Mayor Ted Ellis of Bluffton, representing the Indiana Association of Cities and Towns, and Joe Smith representing Mayor Scott King of Gary. Mayor Tom Jones of Linton described how his city provides internet service to its residents and to some small towns nearby who have sufficient subscribers to make this economically feasible. Mayor Jones' experience indicates that municipalities should not be prohibited from providing internet service. Additional testimony came from spokesmen for industry associations, including Tom Oakes, Executive Director of the Indiana Cable Telecommunications Association. He challenged those who said that there are barriers to entry in the video market due to difficulty negotiating local franchises and he asserted that that cable companies in Indiana provide access (and high speed internet access) fairly because they are required to lay cable everywhere within the "footprint" of their franchise area, whereas "this bill has the potential to turn back broadband deployment" in Indiana. Chris Savage, also from the association, testified from a technical perspective, predicting that the bill as written contained so many conflicts with Federal Communications Commission (FCC) rules that if the bill became law Indiana would be in litigation for a long time to come. Mark Apple of Comcast testified that telecom and cable companies have been investing millions in Indiana since 1996 and we shouldn't be trying "to fix a system that isn't broken." Some opponents identified parts of the bill that concerned them and suggested if those parts could be amended the bill might be acceptable. Various speakers expressed concern about the future of public access, education and government (PEG) TV channels, which are mentioned in the bill without assignment of responsibilities for their support unless an existing cable franchisee chooses to continue its support or unless the IURC requires some provider to support them. The bill is unclear about its application in the case of Indianapolis, which currently has only educational and government channels but no public access TV. Representatives from an ad-hoc coalition of organizations, Hoosiers for Affordable Telephone Service (HATS), were present, including Citizens Action Coalition (CAC) of Indiana, Indiana Media Action Coalition (IMAC), Common Cause, Public Access Indianapolis (PAI), and the Alliance for Community Media. Because citizens' organizations were given approximately 20 minutes to speak, only AARP and CAC had time to testify. Proponents of the bill were then invited to speak. The first to do so was Tom Giovanetti, from the Institute for Policy Innovation, a free-market think-tank in Dallas. He presented an emotional and often provocative comparison of his view of the innovative benefits of the new Texas telecom law compared to Indiana's currently lagging telecom environment. Others who testified for the bill included Randall Thompson, FreedomWorks of Indiana, Cameron Carter, President and CEO of TechPoint, an association of companies seeking to improve Indiana's technology marketplace, Melanie Barney, director of Indianapolis OASIS, a national organization for older adults, and Gale Given, President of Verizon’s Great Lakes Region. Other organizations whose representatives asked to speak in favor of the bill included AT&T, TDS Telecom, the Indianapolis Chamber of Commerce, the Indiana Exchange Carrier Association and the Indiana Manufacturers Association, but time constraints prevented most of them from testifying. At the end of the day, the committee approved SB245 by a vote of 8 - 2. The bill must advance out of the full Senate by February 2, and it could come to a vote there as early as mid-January. Additional Information: Indiana Telecom Bills Threaten Franchise Fees, PEG Channels, Telephone Rates and Muni Broadband Indiana House Committee Approves Telecom Bill |
