Sunday, September 12, 2004

Baby Bells See Rivals Taking Fewer Phones

A Reuters story surveys the Baby Bells, including our own BellSouth, and find that they are pleased to report that competition is down since an FCC ruling that promises to allow them to raise rates on new leased lines. The juicy parts:
Industry executives and analysts have said due to the rule changes, the Baby Bells could recapture most of the 17 million local lines that competitors now lease under federal rules, boosting earnings.

Toben said Verizon was having an internal debate about how many of the roughly 3.6 million residential lines leased by its competitors it might be able to eventually win back over the next several years, with some estimates running as high as 80 percent.

Morgan Stanley's Dykes said BellSouth had also seen an impact "from AT&T, with their visible withdrawal, as well as MCI with their less visible withdrawal."
To that Louisiana residents should add EATEL, a major local reseller who recently got out of the market.

The loss of competition and the return to more nearly pure monopoly control over the phone network should be of concern not only for those who will soon be paying more for phone service than they would if ATT, MCI and EATEL were continuing to compete but also to those considering the implications for future telecom, data, and video services over those lines. Competition will exist only between network owners (e.g. Cox and BellSouth) with no competitors allowed on their lines.

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