State Senate, NWI lawmakers approve telecom overhaul

INDIANAPOLIS | A dramatic overhaul of the state's phone and cable television regulations passed the Indiana Senate Tuesday, with support from Northwest Indiana lawmakers.

Consumer advocates, including the Citizens Action Coalition of Indiana, argue that Senate Bill 245 is really a massive telephone rate increase advanced under the guise of deregulation.

Supporters, including AT&T, formerly SBC, contend that less state regulation will foster competition, bringing with it lower rates, more technology options and new jobs.

"I think it was the one issue of the jobs that most caught my attention," said Sen. Earline Rogers, D-Gary.

Rogers served on a telecommunications study committee this summer, hearing testimony about more than a dozen other states that recently updated their phone and cable television laws. Changing Indiana's regulations could create 20,000 jobs, she said.

The legislation would, by 2009, remove most of the Indiana Utility Regulatory Commission's authority to regulate phone service, which supporters say is necessary to help traditional phone providers compete with wireless service and pour money into the expansion of broadband Internet service.

Individual cities no longer would negotiate local cable television franchises, with that duty shifting to the state.

The legislation also includes safeguards that proponents say would ensure that seniors and low-income residents still can get basic phone service for about $11 a month. If a company ensures that at least half the customers in a service area (219 area code, for instance) have access to broadband service, it could increase the basic rate by $1 a year until 2009.

After that, rates would not be capped at all.

The measure's sponsor, Sen. Brandt Hershman, R-Wheatfield, said a move to the free market would help draw employers.

"The No. 1 issue for companies locating in the U.S. today, is availability of telecommunications services," he said. Indiana, Hershman said, currently ranks 34th among the states in broadband availability.

The few opponents who spoke Tuesday argued the legislation could foster monopolies.

"It only works if there truly is a competitive field in which the consumer can play," said Sen. Timothy Lanane, D-Anderson.

"In this bill, we basically take the IURC and chuck them out the window and say, 'We know better.' "

Even some supporters said they still have questions about overarching legislation.

"We just don't know what the impact will be on our constituents. I know that there's been a lot of concern about an increase in rates and the possibility of that, but I feel it's really important to get this going, get this issue behind us and let the industry develop as it should," said Sen. Sue Landske, R-Cedar Lake.

"It's very complicated and I have to admit that there are some aspects that I don't understand, so we'll see what happens."

Senate Bill 245 passed 40-6 and now moves the House, where lawmakers are considering a similar measure.