Many news outlets carried yesterday’s story of a merger between the wireless telephone service of Bell South and SBC. The two companies are best known for local telephone service. Bell South’s service is in the southeast and SBC’s service is across portions of the Midwest and Southwest. Combined, the new wireless telephone venture would be the second largest in the country and would be able to offer service to approximately 70 percent of the population. The leading wireless carrier – Verizon – can offer service to approximately 90 percent of the population.
Why is this news important to consumers? Well, for starters, there are choices in the marketplace for telephone service. After decades of government subsidy programs, 94 percent of American households are connected to traditional wireline telephone service. Wireless services now reach nearly all of these consumers without the aid of subsidies and there is competition in most of these markets.
The power of consumers to substitute – to choose a comparable service or provider – one telephone carrier for another is strong protection for high quality service and low prices. It is possible to receive a variety of telecommunications services. Everything from wireless, local and long-distance telephone service, broadcast, cable and satellite television, and varying speeds of Internet service are on the market. Where one or more of these products and services are not available, most often it is the result of an outdated regulation that discourages the deployment of new services and technologies.
The substitution of one type of service for another is old news for consumers. It is too bad that regulators are not up to speed. Until outdated regulations and unnecessary taxes are eliminated, unnecessary barriers will continue to stand in the way of competition.