Need Some Good Economic News: Deregulation Creates Indiana Jobs

April 7, 2008

by Robert Yadon, Ph.D.

Two years ago the Digital Policy Institute (DPI) at Ball State University issued a report entitled, "The Economic Impact of Telecom Reform in Indiana: 2006," that documented changes in the competitive landscape across voice, data and video in the United States since 1996.

The report recommended that the Indiana Legislature pass reform measures that would rapidly promote new competition among services, increase investment in new infrastructure and services, create new jobs, and benefit consumers. Subsequently, the state’s most comprehensive telecom reform bill in two decades passed with strong bi-partisan support and on March 14, 2006, was signed it into law.

Indiana thereby became the first state to ensure that cable incumbents were allowed to fairly take advantage of the state’s new franchise terms upon competitive entry, and one of the few states to encourage long-term, outside capital investment by reducing risk and uncertainty from unwarranted sunset provisions. Since then, an additional 19 states have joined with Texas and Indiana to pass new telecom reform measures, including video franchising, with over 50 percent of the U.S. population now covered by new telecom reform legislation.

Now a new study by the Digital Policy Institute entitled, "An Interim Report on the Economic Impact of Telecommunications Reform in Indiana," reviews the early progress of reform. The report finds that Indiana’s new regulatory climate has resulted in digital service reaching a combined 102 new communities as both Verizon and AT&T have invested heavily in upgrading facilities, most in under-served and rural areas of the state.

To date, over 2,200 new jobs have been created and over $516 million in new capital investment made to bring high-speed broadband and video services to Indiana. Over 35 certificates of franchise authority (CFA) have been granted to date by the IURC to nine cable firms and 11 telephone companies, including a number of rural local exchange carriers, with direct head-to-head video competition now under way in multiple areas of the state.

And this isn’t the end of the parade, it is the beginning as Indiana’s cities and towns begin to enjoy high-speed, digital access to the Internet and actively market the potential of broadband connectivity as an economic development tool. The early promises of more jobs, large capital investment in our digital infrastructure and competition in the video marketplace are now a matter of record with the potential of more gains on the horizon.

Stay tuned as Indiana capitalizes on information and broadband communication as a growth sector of the global economy.

Robert Yadon, Ph.D., an adjunct scholar of the Indiana Policy Review Foundation, is a professor of Information and Communication Sciences at Ball State University, where he is director of the Applied Research Institute and a senior fellow in the Digital Policy Institute. A version of this essay was published and distributed by the university.



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