The Great Phone Company Debate
Antitrust laws have served to protect the public from exploitation by monopolies. While these laws haven’t worked perfectly, it’s frightening to imagine what economic life would be like without them.
Consider the consequences if antitrust laws did not require the regulation of monopolies like the phone company. Is there one person in America--not working for a phone company--who believes you wouldn’t be paying a lot more for that service if regulation were not damping down prices? The history of the American telephone business is rich with violations, sometimes long undetected, of the public trust. In 1982, when the courts oversaw the splitting up of the gigantic AT&T; domestic monopoly into seven Baby Bells, the country heaved a collective sigh of relief. Now these seven spiritual heirs to a legendary American monopoly are in a unique position to capitalize on their local monopolies and enter the electronic information business.
That would be legitimate if phone companies were pure private-sector companies like everybody else, if they did not enjoy the advantages of monopoly power and government-guaranteed levels of rate income and if they did not have the capability of using their phone-bill cash flow to subsidize forays into electronic information. Precisely all those ifs had prompted Judge Harold Greene--the same jurist who broke up AT&T--to; rule against letting the Baby Bells into the information business. But recently, when the Bush Administration flip-flopped and sided with the Baby Bells, an appeals court compelled Greene to change his ruling.
The result is a huge dust-up, now in Congress, to prevent phone companies from exploiting their monopolies and driving others out of the business of phone stock quotes, sports scores, news headlines and so on. That campaign is spearheaded by some prominent consumer groups and the newspaper industry. The Times, of course, could be hurt financially if a powerful competitor monopolized the electronic information business. So it’s quite true that this paper has a direct stake in the outcome. But it is also fair to say that this issue--removing antitrust protection from this arena--is one of overarching import. Indeed, to advance public understanding, The Times is publishing a pro-con debate on its Op-Ed Page today--a piece by a ranking phone company executive and an opposing view by Rep. Tom Lantos.
If you have no fear of monopolies and believe antitrust laws are unnecessary, then Judge Greene is wrong, the newspaper industry is wrong and the phone companies are right. But if you instinctively feel the other way, you should consider writing your congressional representative and making your voice heard. Someday your living room could be a universe of electronic information. No monopoly should be in a position to control that precious environment.
