Report finds telecommunications industry reform creating new jobs in state

Topic: College of Communication Information and Media

February 26, 2008

Indiana's efforts to deregulate the telecommunications industry within its borders have resulted in $516 million in capital investments and the creation of more than 2,200 jobs, according to a new report from Ball State University.

In its analysis of the past 18 months since Indiana reformed the telecommunications industry, Ball State's Digital Policy Institute (DPI) says that in addition to the economic benefits, the state has become a national leader in telecom reform legislation as well as broadband wireless deployment. The changes also have allowed for statewide franchising of video services.

Indiana Gov. Mitch Daniels signed the state's most comprehensive telecom industry reform bill in two decades on March 14, 2006. The law deregulated telephone companies and now allows them to set their own rates for phone services.

In addition, it encouraged competition by allowing a shift of control of cable television from local governments to the state and lowered other regulatory barriers that once discouraged competing companies from investing in cable television and broadband services.

"Going into this, we knew that deregulating the telecommunications industry in the state would quickly pay dividends," said Barry Umansky, the Ed and Virginia Ball Distinguished Professor of Telecommunications at Ball State and a DPI senior research fellow who also is communications attorney. "The reform bill is serving as a model with more than 20 other states — representing more than 50 percent of the United States' population — having approved similar reforms."

Indiana was the first state to ensure that incumbent cable systems were allowed to take fair advantage of the state's new franchise terms. It also is one of the few states to encourage long-term, outside capital investment by reducing risk and uncertainty from unwarranted provisions established by sunset laws, noted Umansky.

He and other DPI members played key roles in persuading the state legislature to pass the bill, by appearing before various legislative committees and writing guest columns for various newspapers around the state that touted the benefits of telecom reform.

The new DPI report also found that by deregulating the telecommunications industry:

  • Competition was immediately created among cable television and high-speed Internet providers, reducing prices for some cable subscribers, on average, by 15 to 20 percent in select markets.
  • Rural Indiana immediately benefited as DSL services were expanded to 102 new communities in underserved areas across the state.
  • Indiana was elevated to a national leadership position in broadband wireless deployment — aided by research provided by Ball State's Office of Wireless Research and Mapping. 

Umansky believes that in the end, the deployment of next generation broadband technology will play a major role in expanding the state's economy.

"Indiana's regulatory climate is generating increased competition and investment in all forms of digital communications," he said. "This leads to better job opportunities; jobs that will help keep our young people in Indiana and make our state a leader in the transition to the new global economy."

The study may be found online at www.bsu.edu/digitalpolicy.

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