New choices in telephones

May 02, 1994

The unraveling of what was for decades a monolithic telephone industry continues. The heirs of Ma Bell, the old AT&T, now face competition in their local bailiwicks as well as the sharing of long-distance service imposed on them in the '80s. The decision by the Maryland Public Service Commission to permit a relative newcomer to provide businesses with local telephone services is but a harbinger of the communications revolution soon to come.

MFS Intelenet, which previously offered only long-distance services, will be a smaller competitor of Bell Atlantic-Maryland, the renamed C&P Telephone Company. And that's good news for just about everyone.

Presumably MFS will be able to provide some business customers with local service more cheaply than Bell Atlantic -- at least for a while -- by taking advantage of newer, more efficient technology. Bell Atlantic, already in the forefront of the regional Bell companies in launching itself on the information superhighway, will have even more incentive to upgrade its own facilities and services. That is the classic outcome expected of competition, and there is every reason to believe it will come to pass.

Residential telephone customers won't benefit immediately from the advent of competitive local service -- at least not yet. But they shouldn't be hurt either. One danger of allowing competition for the local telephone company is the possibility a newcomer would seek to skim off the most lucrative business, leaving the established utility with the more expensive, harder-to-serve customers. The PSC handled that in principle by requiring MFS to pay Bell Atlantic a fee that should help cover the costs of universal service, which has been subsidized by business customers.

In the long run the advent of multiple-suppliers of local service, like the competition for AT&T from companies such as MCI, will broaden choice and opportunity. Other companies may enter the market; certainly Bell Atlantic will defend its franchise by making its services more attractive to both business and residential customers. Bell Atlantic is already looking far beyond simple telephone service for its future growth, just as other communications companies are eyeing its core business as new fields for their entry.

No state has a more open approach to competition in telephone service than Maryland. By taking the lead in tearing down obsolete barriers, the PSC is keeping this state in the vanguard of the communications revolution.

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