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Press Release

    Tech Bytes - Tid Bits in Tech News: Local Telephone Competition

    03/03/2000

    It is awfully hard to make good policy decisions if an issue is incomprehensible. Consider the following lead from this morning's news in the telecommunications industry: "A new study by the Strategis Group predicts that the "local telecom market value would grow to $160 billion by 2004, with CLECs capturing more than $27 billion of revenue (17%)."

    Legislators need to hear in plain English from constituents about how outdated telecommunications rules and regulations affect everyday life. Terms like "CLECs" and the findings of a new study are the language of "experts" - the very same type of experts that regulate the telecommunications marketplace.

    At CSE, we are constantly reminding policymakers that competition brings better quality, lower prices as well as more and faster innovation. This is true for every market, from soap to shoes and from airplane tickets to telecommunications. Rather than rely on expert regulators from the government, the telecommunications marketplace is ready for consumers to take charge.

    In the telecommunications marketplace, competition requires more than just an another firm in the marketplace. True competition requires that every player in the marketplace be allowed to do more for consumers. While some firms will specialize in a single product or a few products or services, others will provide a full range. The end result is more choices for consumers.

    As a bit of history, in 1984 a federal judge broke up an entrenched and government-protected monopoly commonly referred to as Ma Bell. At that time, the government protection racket for equipment manufacturing and long distance telephone service was eliminated. The result for consumers has been an explosion of new telecommunications devices and equipment while the price for long distance service has dropped dramatically.

    At the same time, local telephone service was relegated to monopoly status, dooming consumers to regulated rates and subsidies instead of market prices, inferior and oftentimes infuriating customer service, and limited or no choice for an alternative provider.

    The policy goals for CSE activists on local telephone competition are straightforward.

    · We promote competition through deregulation. The time has long passed for government regulators to determine the type and price of services available to consumers.

    · Outdated rules and regulations must be modernized if not eliminated.

    · There are two layers of marketplace where competition must be allowed to flourish. The first is for services. The evidence speaks for itself. Consumers can select alternatives for their communications needs from new competitive wireline telephone providers as well as traditional Bell companies. Importantly, in most areas, cellular and digital wireless, and satellite services are also available.

    · The second equally important layer of the market to see competition is at the level of the network. In plain English, it doesn't matter if the network is made of wires or cables or satellites or fiber optics; competitive networks expand consumer choices and allow further competition to develop better than government regulated networks.

    The booming digital economy promises that the already large market to move information around our economy will continue to grow. This information - from pagers, satellite television, cable programming, e-mail, telephone and facsimile "calls", and even the old-fashioned teletype - comes in many forms.

    While there is evidence of competition among the various types of information and methods of moving it from one place to another, federal and state laws and regulations stand in the way of investments in the network infrastructure necessary to carry this information.

    It's time to send the policymakers a message that they can understand.

    Get out of the way!