Indiana Senate approves Bill to thwart municipal broadband

The flegling ORVC commumivations started this summer by the City of Rising Sun and teh Rising Sun Municipal utilities could see an early demise if the state legislature has its way. The new and improved version of last year’s anti-municipal broadband legislation, HB 1148, is SB 245 which the Indiana Senate on approved on Tuesday. It was a a 40-6 vote. This law would remove state regulations from the phone industry over the next three years and eventually allow phone companies to set their own rates. In exchange, the companies must supposedly provide greater broadband access for customers in their service areas.This year’s bill includes much of the same type of language as last year, however, SB 245 now includes telecommunications deregulation language and statewide video franchising. This bill is on the fast track and the Governor’s office supports the proposed legislation.

"Indiana must free telecommunications from unnecessary price regulation and micromanagement of their business operations," said Neil Pickett, a Daniels aide who spoke at the hearing. "This year is indeed the time to act. It is time to thrust Indiana into the lead and pass legislation that other states view as a model to emulate."

Consumer advocates warned that Senate Bill 245 will mean higher prices for customers, especially in poor and rural areas, and urged lawmakers either to kill it or to make significant changes. Also SB 245 hamper the efforts of cities to develop their own broadband systems and thwarts their efforts to joint venture with the private sector.
The portion of the SB 245 addressing municipal broadband systems can be found in—

SECTION 57. IC 8-1-35 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Chapter 35. Provision of Broadband Internet Services by Local Units.

The South Bend Tribune has an excellent editorial on the subject.

Much of SB 245's content is warmed over from a bill that was defeated last year by the General Assembly. To it has been added elements of another bill that also was defeated last year -- the one aimed at preventing municipalities from supporting non-profit broadband development in their communities.

Supporters of the municipal-involvement portion of Senate Bill 245 claim now, as they did last year, that they merely have the public's interest at heart, that they believe local governments shouldn't get involved in broadband in order to protect consumers from potentially bad investments.

We also question the wisdom of removing from municipalities the authority to license cable and cable competitors for a community and placing that responsibility solely in the hands of the Indiana Utility Regulatory Commission in Indianapolis.

The IURC does not always appreciate the needs of local communities -- certainly not as well as locally elected council members and commissioners do. (A case in point is the IURC's failure to limit natural gas deposits to the equivalent of one month's worth of service.

It would be a mistake for lawmakers who are pressed by the demands of a short session to enact legislation that could have serious long-term consequences for Indiana consumers.

Better that the General Assembly should reject SB 245 now. Let telecommunications deregulation advocates bring these complex issues back again next year, if they wish, when lawmakers will have more time to consider them.