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from: MultiChannel News

Ball State Study Sees Positive Effects From Indiana Telecom Bill
Finding Disputed by Cable Incumbents

By Linda Haugsted -- Multichannel News, 2/25/2008 1:20:00 PM

Ball State University has released a white paper stating that Indiana’s 2006 telecommunications reform bill has advanced the deployment of video and broadband services in the state, a finding disputed by cable incumbents in the state.

The 106-page report, dated Feb. 15 on the website of the Digital Policy Institute, concludes that HEA 1279 was good for the state and goes on to detail the expansion of digital-subscriber line, high-speed data lines and video service deployed since the bill was signed. But Tim Oakes, executive director of the Indiana Cable Telecommunications Association, notes that the deployments referred to in the report were announced by providers such as AT&T Inc. and Verizon Communications Inc. before the bill was passed.

“To say the bill caused (these investments) is flat-out wrong,” he said.

The top points of the report:

* DSL is available in 102 more communities since the passage of the bill.
* 1.5 million high speed lines were in place by the end of 2006, a 72% increase over 2005.
* $516 million was invested by telecommunications companies in 18 months in the state.

The report notes that U-verse is now available “in parts" of Anderson, Bloomington, Indianapolis, Kokomo and Muncie, while FiOS video services have been deployed in Ft. Wayne, New Haven and Hunterstown.

Rate reduction is often the chief argument for deregulatory bills, and the summary cites the belief, based on FCC and General Accounting Office reports, that where competition exists, prices can drop 15 to 20%. The summary states that in one case, cable bills reportedly dropped from $90.60 to $65.65. The body of the report attributes those figures to “testimonials by Comcast customers when U-verse enters the market.” But the main report also states that “rising prices continue to be a problem for all consumers.” Incumbent cable operators respond to competition when “measurable market penetration" occurs. That hasn’t happened yet, the report states.

Reports compliled by local officials in other states where franchising has been assigned to the state, such as Texas, Michigan and North Carolina, have concluded that published cable rates have not decreased due to the approval of state franchising bills. Special rates, offered as retention lures, may offer short term benefits, they have noted, but over the long term, rates continue to rise by all providers.