Deregulation creates telecom free-for-all:

January 1, 2007

Lawmakers last spring made it easier for AT&T, Verizon and big phone companies to get into the video business now ruled by cable TV operators.

By summer, video providers were able to obtain a single, statewide video franchise instead of having to negotiate agreements with each municipality they serve.

Opponents said reform was all about helping AT&T, the state's largest phone provider and one of the most powerful lobbying and campaign contributors. AT&T didn't want to have to negotiate individual franchises city-by-city for its new video service.

"So why are we helping [telephone firms] who could buy our industry three times over?" protested an executive of the Indiana Cable Communications Association, during legislative debate this year.

AT&T hasn't said when it will roll out its video offerings in Indiana, but it already has the foundation in place after spending years wiring the state with highcapacity, fiber-optic cable.

Cable TV companies already offer the "triple play" that AT&T doesn't-video, along with phone and high-speed Internet-via the venerable coaxial cable.

But prices for cable have soared over the last decade, giving plenty of fodder to deregulation proponents who argued that only more competition would restrain pricing and expand offerings.

Phone companies also argued that their traditional phone service offerings are being eroded by competition from cable TV and from wireless phone providers. That's even though many traditional phone companies own wireless firms-AT&T owns Cingular, for example.

As part of Indiana's telecom reform, the Indiana Utility Regulatory Commission will relinquish its ability to regulate basic phone service starting in 2009, so long as phone companies pledge to extend high-speed Internet offerings within their territories.

But groups such as Hoosiers for Affordable Telephone Service and Citizens Action Coalition said deregulation could increase the cost of basic phone service for those who can least afford it.

Deregulation already strips the power of municipalities to enforce customer service standards of companies that terminate their local franchises in favor of a statewide video franchise. Though the IURC can grant statewide franchises, it was not explicitly given authority to resolve customer complaints.
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