ITA & TELECOM REFORM

 

In December 2005, the Indiana Telecommunications Association (ITA) was eager to see telecom reform legislation passed that would bring Indiana into the 21st century. Existing regulations had not been updated since 1985, long before most Hoosiers were using wireless phones or accessing the Internet.

Since the mid-1980s, the competitive landscape and telecom services evolved in ways that few could accurately forecast. Largely unregulated technologies, such as wireless and broadband, were thriving and providing consumers new communications options at good values.

Today, the number of wireless subscribers in Indiana has grown from 350,000 to more than 3.5 million. And wireless usage continues to expand at a breakneck pace as wireless subscribers now outnumber landlines in Indiana. Similarly, broadband usage has expanded. According to Federal Communication Commission data, from July 1 to December 31 of 2006, nearly 400,000 new high-speed access lines were installed in Indiana, a 33 percent increase from the previous six-month period.

By comparison, the home phone (landline) market continued to operate under significant regulation in 2005, even though large cable providers had entered the market and provided consumers new voice and broadband options. And the cable companies continued to have a stranglehold on the television business.

The goals of the telecom and video reform bill were to lighten regulation for home phone service and usher in a new era of television choice via statewide video franchising.

The telecom and video reform bill, House Bill 1279, received strong bi-partisan support and was signed into law by Gov. Mitch Daniels on March 14, 2006. Prior to this legislation, 102 rural communities had limited choice for high-speed Internet, 33 of which had no affordable access to high-speed Internet at all. Since the bill’s passage, the consumers in these communities now have more options for broadband service.

Indiana became the second state to adopt a statewide franchising system, putting it at the forefront of the movement for sweeping telecom legislative change. In the same legislation, Indiana also added its name to the first half of states to adopt regulatory reform nationwide. The nature of Indiana’s reform – deregulation of “basic” landline service – has catapulted the state to the forefront in regulatory change.

Nearly $500 million in telecom investments have been announced throughout Indiana since the passage of the bill, and to date more than 2,000 jobs have been created.

 


TELECOM REFORM LEGISLATION

  • House Bill 1279, which deregulated the telecom industry and enabled telecom companies to compete with cable providers, received overwhelming bi-partisan support and was signed into law by Governor Daniels on March 14, 2006.
  • Indiana Telecommunications Association (ITA) and its 40 members supported the bill.

Investment statistics

  • Nearly $500 million total investment since the passage of HEA 1279.Including $112 million invested by small telcos
  • Prior to HEA 1279, 102 communities had limited choice for high-speed Internet, 33 of which had no affordable access. Since the bill’s passage, the consumers in these communities now have more options for broadband service.
  • From July 1 to December 31, 2006, nearly 400,000 new high-speed technology lines were installed in Indiana, a 33 percent increase from the previous six-month period.
  • As of December 31, 2006, Indiana had 1.5 million high-speed technology lines, a 98 percent increase over 2005.
  • 2,000 new jobs created, many of which are good paying union jobs.
  • Indiana as a leader in telecom reform
  • More than 20 states have followed Indiana’s lead and passed telecom reform measures. Indiana was the first state to ensure that incumbent cable systems were allowed to take fair advantage of the state’s new franchise terms upon competitive entry.

Competition

  • HEA 1279 has encouraged new high-speed Internet and video competition between cable providers and telecom providers.
  • The Indiana Utility Regulatory Commission has granted 35 video franchises, including 10 to traditional phone companies, allowing telecom companies to compete for video delivery services.
  • Competition stands to lower the price of communication services. The FCC and GAO predict that in areas of competition, consumers can expect to see a 15 percent to 20 percent decrease in the cost of these services.