FOR IMMEDIATE RELEASE
Governor Signs Historic Telecommunications Legislation
Law Will Mean Lower Prices, Increased Competition and Better Service for Hoosiers
(STATEHOUSE) Governor Mitch Daniels today made Indiana an example for other states to follow by signing House Enrolled Act 1279, the most aggressive telecommunications reform package in the nation. State Senator Brandt Hershman (R-Wheatfield), the primary author of much of the legislation, praised the governor for his action and predicted Hoosiers will see results in the near future.
“We, as a state, have no interest in remaining 34 th in the nation in broadband penetration,” Hershman said. “With this reform, we could be first in the nation and the one of the top destinations for telecommunications investment.”
The main crux of the bill creates a statewide video franchising authority that will replace hundreds of local authorities scattered across Indiana . This authority will break down the barriers that video service providers find when trying to enter into localities where there is an incumbent provider. The result will be lower prices, increased competition, and better service for Hoosiers. Since September, when Texas statewide franchising went into effect, more than 120 franchises have been granted. Indiana is the second state in the nation to build a true statewide franchising authority, and does so with lower franchise tax rates than the Texas law.
“Rather than nibbling around the edges of reform as Virginia has by retaining a cumbersome franchising process, Indiana has established a nation-leading model for streamlining entry into the video marketplace. Consumers will be the direct beneficiary of the process through greater competition and availability of the latest video technologies,” Hershman said.
Bret Swanson, a senior fellow for the Discovery Institute praised the law as the best in the country.
" Indiana crafted and approved the most modern and effective set of pro-growth, pro-broadband telecom policies we have seen,” Swanson said in an official statement. “The new law clears away decades worth of obsolete regulations and paves the way for hundreds of millions of dollars worth of new fiber optic networks. These new networks will connect Indiana businesses to the global economy and bring real broadband services to Indiana consumers for the first time."
HEA 1279 eliminates the current virtual monopoly of cable providers and give most Hoosiers a choice in video service. Last 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.
In addition to the franchising portions of the bill, HEA 1279 contains basic service telephone deregulation provisions. Deregulation is offered as an incentive for telephone companies to deploy broadband to unserved areas. 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 also contains protection for low-income Hoosiers. HB 1279 establishes the Indiana “Life Line” program, providing 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.
A number of other states have incrementally deregulated the phone industry and only one has instituted a statewide video franchising authority. The Indiana bill is the farthest reaching deregulation bill enacted so far. Hershman sees this as the beginning of a national trend.
“I expect to see legislatures across the country looking to this law as a guide,” Hershman said. “As elected officials increasingly recognize the benefits of telecom reform, they will respond by freeing the marketplace to benefit communities and consumers.”
State Senator Brandt Hershman represents District 7, which includes Jasper, White, Carroll, Tippecanoe, Clinton , and Howard counties.
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