BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com
INDIANAPOLIS | Newspapers ads. Television commercials. News conferences. And grass-roots organizing.
Sounds like a political campaign, right?
Well, sort of. There is plenty of talk of "reform." But this really is more of a turf war.
Telephone and cable television companies are competing for greater control over what has become an integrated telecommunications marketplace. The now-ubiquitous cell phone has some consumers casting away their land lines. And cable TV has emerged as a viable alternative route to cyberspace.
Now, the telephone giants, led by Verizon and AT&T (formerly SBC) are asking state legislatures to level the playing field. And in Indiana, they've found an attentive audience.
While vastly overshadowed by the governor's $3.85 billion plan to lease the Indiana Toll Road, both chambers of the General Assembly have approved measures that would deregulate traditional phone service and give the state, not individual cities, the power to negotiate local cable TV franchises.
It's a debate playing out in several other states and Congress. Consumer groups say deregulation is merely a rate hike waiting to happen. But Indiana lawmakers largely have endorsed the concept.
"Perhaps the single most important step government can take for our economic future is to ensure the best possible infrastructure, the strongest possible framework, to support the businesses of tomorrow," Republican Gov. Mitch Daniels said last month in his State of the State address.
"In a wired world, infrastructure no longer means just roads, rail lines or waterways, but also the invisible fibers and frequencies over which today's most vital and valuable commerce is transacted.
"It is time to modernize a telecommunications regulatory system set up for the age of monopolies and copper wire to unleash this century's most dynamic, diverse and competitive technologies."
Not everyone views deregulation in such a flattering light. More than half of Indiana AARP members strongly oppose the effort, according to a survey released last week.
"Any legislator who votes for these anticonsumer bills has voted to raise their constituents' rates for basic local service and throw service quality out the window," said Grant Smith, executive director of the Citizens Action Coalition of Indiana.
The deregulation effort would remove the Indiana Utility Regulatory Commission's authority to regulate residential phone service beginning in 2009.
The phone companies would set their own rates. But they argue increased competition will stave off higher phone bills.
A similar deregulation effort stalled last year, despite some $1.1 million SBC Indiana spent to lobby state lawmakers. SBC since has acquired AT&T and taken its name.
Before that marriage, the two competitors waged an all-out war in Illinois. SBC won the 2003 battle as legislation it authored whisked through the General Assembly and was signed by Gov. Rod Blagojevich in less than a week. But a federal judge threw out that law, sending the debate back to the Legislature.
In the present Indiana campaign, both sides have inundated the Indianapolis market with television and newspaper ads reminiscent of an election campaign.
Consumer advocates suggest companies will lose interest in basic service, instead pushing more profitable high-end packages that group together phone, cable and Internet service.
The phone companies, meanwhile, want to enter the cable TV market. They argue that less regulation will mean more investment in infrastructure, a promise that has attracted the support of organized labor.
Cable companies have sought the support of local officials, arguing cities will lose out if franchising negotiations are transferred to the state. Texas already has moved to statewide cable franchising.
And phone companies, led by Verizon, are asking Congress for federal franchising. That would spare them the immense undertaking of selling new video services town to town. Some lawmakers say Indiana needs to act before Congress if the state wants to retain any say in the matter.