Marci Wright, The Times
A Clinton County legislator’s bill that is aimed at helping the consumer could actually end up hurting those in cities like Frankfort. So say city officials here.
Mayor Don Stock, city utilities president Mike Mills and a local Internet provider believe state Sen. Brandt Hershman’s proposed telecommunications bill might leave Frankfort behind in the battle for broadband competition.
Hershman, R-Wheatfield, authored a telecommunications bill aimed at deregulating basic, residential phone service by 2009, which would allow telephone companies to set their own rates. He wants to create a level playing field so several companies can compete, invest technology in Indiana and drive down prices.
While the purpose of the bill seems innocent enough, several Frankfort officials are concerned that smaller cities, such as Frankfort, may be at a major disadvantage. The larger companies, such as SBC and Verizon, would have to find reason to use a small city like Frankfort to negotiate deals as part of its money-making competition.
“A big telecommunications business will not want to willingly come and compete for a town of 8,000 homes,” Stock said. “We won’t stand a chance with them wanting to offer great services here until this city grows into something large enough that the big companies can make money off of.
“The bill just isn’t fair to us, and it addresses the municipality’s ability to be a player in the game.”
Lower quality with a higher cost could be the outcome for Frankfort residents seeking cable services, Mills said. Without state regulation to keep the prices under control, it’s hard to tell how high the costs could skyrocket.
“This could be a nightmare,” he said. “We’ve been trying to install broadband cables throughout the city, but once this law kicks in, we will be pushed out.
“Only then, the big companies will be in control, setting their own prices for residents to pay.”
The law would even prohibit the local municipalities from partnering with a larger company. After previously making arrangements with Comcast to offer broadband, it could be proven a waste of time, Mills said.
“We’re pretty much stuck where we are,” he said. “We were trying to plan for the future by going ahead with our broadband project, but this law would limit us so much that we as the local municipalities would serve no purpose in the project anymore.”
Hershman plans to attend the legislative breakfast in Frankfort Saturday and will answer the public’s questions regarding telecommunication reform, an issue that has not been touched by Indiana legislators for nearly 20 years. The legislation already passed through the Senate Homeland Security, Utilities and Public Policy Committee last Tuesday, although Hershman is still allowed to add changes to the bill. All suggestions must be made quickly, however, since the full Senate could vote on the bill as early as next week.
Indiana currently ranks 42nd in broadband development, which transmits data, voice and video, something Hershman is trying to improve through his bill. Broadband is to today’s economy what highways and railroads were to the economy of the past, Hershman said.
“We’ve seen cable rates go up 42 percent in the last five years, and I think one of the reasons for that is the lack of effective competition,” he said.
Hershman has witnessed municipalities failing to the tune of millions of dollars in cable and phone projects and then seeking financial assistance from the state. This bill is intended to resolve that problem, he said.
“We had intentions of getting into the video franchising business, which is something we would be locked out of as well,” Stock said. “If we could get into that business, would our streets be paved in gold? No, but we could show that we are true visionaries.”
The bill provides only a short-sided attempt at deregulating phone companies, owner of Advanced Computer and Communication Systems Mark Hodges said. It provides numerous advantages to the large incumbent phone providers, he said.
“If deregulation must take place, it needs to be done carefully,” he said. “If they don’t concentrate on the issues at stake, then many people are about to lose out.”