Updating Ohio's regulations for the telecommunications industry would foster an environment spurring job creation — much like what has happened in other states, including Indiana, says a new report by Ball State University.

The analysis of Ohio's telecom industry by researchers from Ball State's Digital Policy Institute (DPI) points out that 30,000 jobs exist in Ohio due to broadband wireless deployment and other digital services, but the state's telecommunication policies stifle competition, innovation and future capital investment.

"Ohio has taken incremental steps in recent years, including when it recently enacted video reform legislation that brought consumers new choices in the marketplace, but the state has to take a major step forward now," said Robert Yadon, professor of information and communication sciences and DPI senior research fellow. "Only those states that support a level playing field can expect to attract new outside investment capital. Ohio should move with dispatch to create an environment that attracts these limited investment dollars if it wants to grow a 21st century economy."

He said Ohio could benefit from telecom reform just as Indiana has since new legislation was passed in 2006 with important research contributions from Ball State.
Indiana's deregulation of the telecommunications industry has resulted in $516 million in capital investments and the creation of more than 2,200 jobs, reports a 2008 DPI study.

Helping to inform government as it sets public policy is part of Ball State's Emerging Media Initiative, a planned $17.7 million investment to accelerate economic benefits to Indiana with media-savvy human capital.

The Ohio state legislature is currently considering legislation that would start the process of reforming the state's dated telecommunications policies, said Jack Kleinhenz, an economics professor at Case Western Reserve University in Cleveland who contributed to DPI's report.

"While the telecom industry has changed completely in the past decade, the laws in Ohio have not," he said. "Ohio policy makers must realize that the world is different and Ohio laws need to reflect that." 

The latest DPI report found that while capital investment by Ohio telecom firms has kept abreast of the U.S. investment rate in the past, strained economic times will limit new investment dollars in the foreseeable future.

All providers have any number of choices on where to invest, and in the current recession, capital dollars for new broadband will flow only to states that are set up to attract new investment, Kleinhenz said.

The report also found:

• Ohio businesses and consumers are moving toward broadband and away from traditional wireline technology. Expanding broadband infrastructure allows for a critical mass of broadband users to develop and adopt productivity-enhancing practices.
• Encouraging a complete broadband infrastructure dovetails with Ohio's Strategic Economic Development Plan, which says that digital connectivity is a major part of developing Ohio's economy.
• Each $1 million investment in broadband technology and hardware will create an estimated 18 to 50 jobs.
• The high speed and ease of information flow as a result of broadband should reduce costs or improve the efficiency of production.

Ball State researchers played a major role in providing several state legislatures with research for telecom reform that created a legislative and regulatory environment to spur competition and assign great value to consumer choice.

"A number of states have moved to reform regulations that have become outdated due to increased competition in the telecom market and results have been positive for the states and consumers," Yadon said. "In Indiana, for example, two years after legislative reform was enacted, competition has kept consumer prices in check, new investment has occurred and consumer complaints are negligible."

The report may be found at www.bsu.edu/digitalpolicy.