FOR IMMEDIATE RELEASE
General Assembly Approves Telecom Reform
(STATEHOUSE) State Senator Brandt Hershman declared victory for Hoosiers today after the General Assembly gave final approval on House Bill 1279. The House approved HB 1279, which contains the same telecommunications reforms as Senate Bill 245, late Tuesday by a vote of 78-18.
“ Indiana , a state that perpetually lagged behind in telecommunications, is now a leader,” said Hershman, the bill's author. “With the passage of HB 1279, our state has become a great destination for telecom investment. Consumers and the Hoosier economy are the winners.”
The bill includes several provisions designed to give Hoosiers access to the best technology at a reasonable price. It contains two major tenants:
Statewide Video Franchising – Following the model used in Texas , HB 1279 eliminates the burden of local video franchising. The result will be a fast statewide franchising process controlled by the Indiana Utility Regulatory Commission.
“Rather than seeing 300 lawyers negotiating a local franchise deal, I'd rather see 300 linemen bringing choices to Hoosier households,” Hershman said.
The result will be more video competition and lower prices for consumers. Since September, when Texas statewide franchising went into effect, 120 franchises have been granted to competing business companies.
Under the Indiana bill, all municipalities will receive up to a 5 percent franchise fee from the video company based on their existing agreements. HB 1279 also prohibits video providers from denying access to any group of potential subscribers on the basis of income.
Telephone deregulation – HB 1279 encourages telephone companies to deploy broadband by gradually deregulating basic phone services if a broadband is made available. Companies must be able to offer high speed Internet to 50 percent of households in any given exchange before they can raise rates in that exchange. Monthly basic rates may increase by $1 per year until 2009, when those services are deregulated completely.
The bill does contain protection for low-income Hoosiers. HB 1279 establishes the Indiana “Life Line” program that provides discounted telephone rates to Hoosiers below 150 percent of the federal poverty level. This is a supplement to the federal program, which aids consumers with a household income below 135 percent of the federal poverty level. Consumers will also be protected through a ban on “local measured service,” which is the practice of charging for local phone calls by the minute.
Independent experts have raved about the benefits of telecommunications reform. A recent survey of CEOs in Site Selection Magazine showed that access to high-speed communications is the most important factor in drawing new business development to a particular state. In addition, independent think tank FreedomWorks has said HB 1279 will create 20,000 new jobs and $7 billion in investment in Indiana .
HB 1279 will eliminate the current virtual monopoly of cable providers and give most Hoosiers a choice in video service. This month, Ball State University 's Digital Policy Institute released a study saying Hoosiers could save a total of $262 million on their cable bills annually as a result of new choices.
“This is a rare opportunity to bring better prices and customer service to Hoosiers while giving a huge boost to the Indiana economy all in one vote,” Hershman said. “We were able to do that in this bill.”
Governor Mitch Daniels, who has publicly endorsed telecommunications reform, is expected to sign the bill into law when it reaches his desk.
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State Senator Brandt Hershman represents District 7, which includes Jasper, White, Carroll, Tippecanoe, Clinton , and Howard counties.
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