America, Twice Wired
THE administration is taking advantage of the spring recess to signal its concerns about the telecommunications bills likely to emerge from Congress.
The goal -- which we share with Congress and the administration -- is competition for local, as well as long-distance, telephone service.
Local service was once considered a natural monopoly because of the need to run wires into people's houses and offices. But the expansion of cable television -- cable is available to 90 percent of American households, and 60 percent actually subscribe -- means that the country is already twice wired. The ''natural'' part of the monopoly turns out to be not wiring but the phone company's switching capacity.
So, the reasoning goes, if the ''Baby Bells'' are forced to share access to their switching capacity as AT&T has been forced to share access to local phone systems with other long-distance carriers, most places would have two (presumably competitive) providers of local phone service. Conversely, phone companies could enter the cable television business.
And once the local companies had surrendered their monopoly, they would be allowed into the lucrative long-distance market. This is the outcome all parties are looking for.
But some important questions have to be considered:
*Will cable television rates go up unreasonably? Pending legislation would permit rate increases tied to ''average'' rates as determined by a formula too reflective of the uncompetitive rates in monopoly communities. It would be better to have a formula based on rates in areas with real competition.
*Will it be too easy for cable and phone companies to merge and thus squelch competition?
*As local phone companies surrender their local-service monopolies, who will determine that service in a given area is competitive enough to warrant letting the ''Baby Bells'' into long-distance service? Under the bill that is to come to the Senate floor next month, the Federal Communications Commission would make that determination, using a ''checklist'' approach. But the Justice Department's Antitrust Division is much better equipped to make a thorough hands-on assessment of the competitiveness issues in these cases, and should be given the job.