Giving Phone Users a Choice
People who can do without more choices are going to view competition for their local telephone service as a mixed blessing. But there’s a plus to having a choice. Long-distance service was deregulated in 1982, igniting competition that forced prices down. A call from Los Angeles to New York often is cheaper than a call to San Francisco. Why? Because local phone service remains a monopoly.
That was supposed to change after 1996, when Congress passed a telecommunications act intended to break the monopolies’ hold. A small number of states have competition. But Californians are still waiting for lower rates and better service, largely because SBC Pacific Bell, the state’s dominant local phone company, has used its monopoly to keep rivals out. In fact, regional monopolies across the country are waging fierce courtroom battles to stop deregulation in its tracks. The delaying tactics, unfortunately, are working.
The state Public Utilities Commission did manage to take a long-overdue step May 16 to force the market open by reducing the fees SBC PacBell may charge competitors. Competitors must use SBC PacBell’s existing lines and switches because building new systems is prohibitively expensive. Think of Metrolink operating passenger trains on Burlington Northern Santa Fe tracks.
But, a week later, a federal appeals court in Washington ordered the Federal Communications Commission to reconsider how much access the regional monopolies must provide to potential competitors.
Once the path to access is smoothed, other barriers loom. Deregulation could stress computerized processes and billing systems as large numbers of customers begin switching providers and bitter telecom rivals are forced to work together. But the weight of history is with telephone deregulation.
After the federal regulations have passed judicial muster, it will be up to the PUC to ensure that abusive sales tactics--such as lumping costly options packages into basic service--don’t creep into the market, consumers are switched quickly to chosen providers and bills are accurate. After that, consumers will have to do their homework to find bargains, just as they do with long-distance.