Indiana OKs Statewide Franchising Bill

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Indiana's General Assembly approved a statewide franchising bill that should ease the entry of telephone companies into the video business.

The state Senate finally approved the bill by a 78-18 vote Tuesday. If signed by Gov. Mitchell Daniels, the bill will give the Indiana Utility Regulatory Commission sole authority to issue cable franchises.

Franchise fees are preserved at the rates currently paid locally by incumbent cable operators, but the IURC may apply no new fees on new providers. The state utility regulators are also specifically prohibited from creating build-out requirements.

Incumbent cable operators will have the choice of serving out their current franchises or applying for state operating authority. Either way, the bill binds them to existing contractual construction or support of institutional networks through the end of the franchise or January 2009 if a company chooses state franchising.

Local cities maintain their authority to regulate use of local rights-of-way.

The bill should promote deployment of broadband by telephone companies. The regulation limits rate hikes to $1 every 12 months. Companies that take that hike must, within 18 months of the rate increase, make broadband services available to 50% of their local-exchange area.

Indiana would join Texas as states where video franchisees will be state-regulated. Virginia earlier this week approved an expedited, but local, video franchising policy that must be signed by its governor. State-franchising proposals are under discussion in New Jersey, Kansas, Missouri, South Carolina and California.

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