Statehouse Busy Signal 

There are at least

There are at least two major bills darting through the state Legislature now, but the one dealing with SBC and telecommunications is the most famous, mainly because the players have enough money to duke it out on TV. For a while, SBC has been running commercials that show all the workers who so far haven"t been laid off since the Texas-based SBC took over Ameritech in 1999. The ones where Tommy Lee Jones says, "Your phone company, a real phone company," claiming that other phone companies are just marketing people. It"s a dig at SBC"s potential competitors who would want to compete for local phone service. Across the country, local phone service is being opened to competition the way long distance was deregulated in the 1980s. The five Midwestern states of the former Ameritech are among the last in the country to open their markets. In exchange for allowing competition, under the 1996 Federal Telecommunications Act, the former Baby Bells can win approval to compete in the still lucrative long distance market. But first they have to prove to the Federal Trade Commission that they have allowed local competition to take hold in Indiana. Democrats are lukewarm to any deregulation. Organized labor provides money and, more importantly, workers to run local elections. Ken Zeller, president of Indiana AFL/CIO, was in the speaker"s office last week, making his case on behalf of SBC. Consumer advocates, who like the falling prices and added choices brought by competition, also tend to be Democrats. A bill sponsored by Ed Mahern would limit (some say eliminate) the Indiana Utility Regulatory Commission"s ability to set the wholesale price SBC charges its competitors. After a year of reviewing SBC"s books, the IURC set the rate in March. SBC says it"s too low. In fact, it"s one of the lowest rates in the country, though it is comparable to the rates in surrounding states. All sides agree SBC is losing customers, but the original local phone companies in the state still command 95 percent of the market. In the last few weeks, Tommy Lee Jones is being rebutted in a TV ad portraying SBC as a greedy, cigar-chomping Texan out to hog-tie Indiana"s consumers. The spots are funded by such corporate Davids as AT&T and AOL Time Warner. AT&T just announced it was going to offer local phone service in Indianapolis, completing the corporate cycle of life that began when it was regulated to long distance services after the breakup of the Bell system. Time Warner is SBC"s main competitor in the broadband market. In this case, SBC is all for deregulation. It wants to decide how much it can charge competitors to use its lines in this new telecom market. The competitors (some of which truly are small upstarts) say SBC can use its power to effectively kill competition. Even if the other companies run their own cables, SBC would simply jack up the cost of using the wire that connects an office building to the new trunk lines in the street. There is U.S. Supreme Court case law that says SBC can"t withhold the use of their lines to quash competition, according to the Citizens Action Coalition. If SBC wins, consumer advocates, namely the CAC and state regulators, predict competition will falter and the price of phone service will start to rise. The company is predicting lay-offs if it cannot raise its wholesale price. IURC Chairman Bill McCarty pleaded with the House Commerce committee to amend the bill to at least guarantee the company would not raise their rates and then eliminate jobs anyway. They didn"t. The AFL/CIO did not object. SBC is pulling out the stops. Company President William Daley flew into town to speak to The Indianapolis Star editorial board. Aside from Tommy Lee Jones, the company has 14 lobbyists on the payroll and more appear to be added daily. Jon O"Bannon, son of Gov. Frank O"Bannon, works for SBC and has sent lawmakers a glowing letter advocating the company"s broadband business. Aside from high powered lobbying firms like Barnes and Thornburg and Cleo Washington, the company has recently hired James Purucker, winer-diner par excellence, who has worked nimbly behind the scenes with a block of Senate Republicans in favor of pull-tab slot machines in Indianapolis and at the two horse racing tracks. The Republican majority in the Senate is torn. On the one hand, they strongly support the deregulation principles as articulated by Ronald Reagan. On the other hand, they also support the principle of large corporations giving them lots of money and buying them steak dinners at Mortons. Can"t wait to see who wins. Things to watch ï Advance America founder and Republican gubernatorial candidate Eric Miller has been on a crusade to get lawmakers to override the governor"s veto on SB 19. It would raise the limit on tax exempt land for churches from 15 acres to 150 acres. The O"Bannon administration has said that the law was so poorly written that hundreds of new acres could qualify for a tax break, raising property tax bills throughout the state. The Republican controlled Senate overrode his veto last year, anyway. Miller is trying to force Speaker of the House Pat Bauer to call down the bill for an override vote in the House this session. He has so far held his ground but he is getting significant pressure from members, even though the act would be retroactive to 2000, and communities could be forced to grant rebates. ï Consumer advocates are fighting another utility bill, one backed by the IURC and the Governor"s Office. It would give the IURC the ability to impose fines up to $15,000 and have a say in the mergers. The original bill, three years ago, was inspired by the Ameritech merger, but telephone service is no longer covered by the bill. The IURC disagrees but the CAC and the senior group AARP said the compromise bill, worked out with utilities, would raise utility rates by allowing utilities to pass along a host of costs to consumers.

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