Keep a Cop on the I-Way
ELEVEN years ago, the AT&T monopoly on long-distance telephone service was broken. Today, rate wars have cut prices about 60 percent in real terms, more than offsetting the annoyances of a new world of "access codes" and "competing carriers."
That was just the warm-up exercise, however. Legislation moving through Congress with the soporific-sounding title of "telecommunications deregulation" is going to change people's lives much more. It involves not only long-distance telephone service, but local phone service and television too.
Companies in each category see opportunities in the others' businesses. Cable TV operators would like a crack at phone service. Local phone companies, the Baby Bells, want to offer long-distance service. And don't leave out utilities: Their copper-wire networks may be 19th-century technology, but they're in place and could provide other services.
Both Congress and the White House essentially sing from the same hymnal on deregulation. The difference lies in the speed with which it is done - and in the details. The bill passed in the Senate June 15 and parallel legislation awaiting House action next month take an aggressive, fast-track deregulatory approach. Baby Bells would be forced to allow others to compete for your local phone service.
Cable TV price controls would be largely eliminated, on the theory that direct-satellite and other competitors are on the verge of breaking up cable TV monopolies anyway.
Huge profits and huge risks await all the competitors. That's why they are eager to know what the government will or won't do. The Senate did a good job of weighing their competing interests in crafting its bill.
Vice President Al Gore, the administration's point man on telecommunications, also intones the mantra of competition: lower prices, better quality, more choices.
But government, he argues, still has a role in protecting consumers against new monopolies, which can strangle competition just as effectively as government red tape.
The Clinton administration is eager to be a player in the telecommunications revolution. But it shares concerns with consumer groups that some aspects of the proposed legislation won't generate real competition or sufficiently protect consumers. As the House and Senate reconcile their complex bills this summer, they should keep three C's in mind: true Competition, the interests of Consumers - and Clinton's veto pen.