Saturday, September 04, 2004

When Bells Win, Consumers Lose

This story from Friday's Daily Advertiser demonstrates pretty clearly the opposite sides of the street on which consumers and the regional Bell operating companies (RBOCs) live.

The decision by EATEL to curtail its marketing of services is directly related to the success of the RBOCs (like BellSouth) in overturning rulings by the FCC and state regulatory commissions which required them to sell access to elements of their phone networks to competitive local exchange carriers. It was those UNE-P rules (which stands for unbundled network element pricing) which enable EATEL and other competing carriers like AT&T, MCI and others to sell discounted phone service to consumers and businesses.

The RBOCs hated the rules because they cost them market share. Now that the rules have been overturned and the Bush administration's Justice Department decided not to appeal the decision, the RBOCs will be able to raise access charges to competing carriers. There was much speculation in communications trade journals, even before the administration decided not to appeal the UNE-P ruling, of a deal between the RBOCs and the administration. Word was that the RBOCs had assured the administration that they would hold off on those access charge increases so as not to create a publicly discernible political link between the decision not to appeal the court ruling and the ensuing price increases for consumers.

The price increases may not immediately be felt by consumers, but the disappearance of competition from the local telephone business does lay the ground work for the re-establishment of local monopoly control of services and pricing.

The flip side of the coin is that a lot of people working for companies like EATEL and others who worked on the competitive local access arena will lose their jobs, just as the 35 people mentioned in this story.

The message is clear: the Bells hanker to return to their monopoly roots, the FCC and the Bush administration are bent on letting them do that, with the result being less competition and higher costs for consumers.

Sort of like the returning to the 1970s, only with more cynicism.

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