More Telephone Competition

October 05, 1992

The consumer revolution that struck long-distance telephone service in the wake of the breakup of the old Bell system has now reached local users as well. By giving small telephone companies -- as unfamiliar to consumers as MCI or Sprint were 10 years ago -- access to regional Bell central offices, the Federal Communications Commission has opened a range of choices for local customers.

The order gives small packagers of telephone services the right to plug directly into the central computers that control local access. This means they will be able to compete with the local Bell companies -- such as our Chesapeake & Potomac -- on a much more even footing. The result should be increased competition and lower charges.

Regulation is catching up with technology. New developments in electronic equipment and increased capacity of fiber optic transmission lines open possibilities for telecommunications in businesses and homes. The Bell companies are trying to exploit these openings by extending new services through telephone lines. As a result of the FCC action, other companies can also get into the game. And the game is considerably more lucrative than the already competitive long distance business has become. Local service adds up to some $90 billion a year, compared with $55 billion for long distance.

Some specialized companies are already at work, such as Metropolitan Fiber Systems here, serving businesses that transmit large amounts of data. Rather than pay C&P line charges, Metropolitan Fiber will be able to connect directly with the central office. That is expected to bring costs down dramatically -- and rates with them. Someday homes can expect to have a choice between retaining C&P service, much as many customers still use AT&T for long distance, or a new competitor.

The FCC decision is just one of several being weighed as the remnants of the old Bell empire struggle to keep their dominant position in telephone service while expanding into the new avenues of information delivery opened by new technology. As they look elsewhere, potential competitors like cable systems are setting their sights on the Bells' traditional markets. The jockeying usually works out to the consumer's advantage.

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