Competition for local phone service PSC decision: Marylanders could benefit from lower prices, innovative offerings.

November 07, 1996

THE TELECOMMUNICATIONS revolution has brought consumers competition and chaos, new choices and new charges. The first major tremor was felt in long-distance service, where unrelenting competing ads confuse many customers, but the result has been lower rates for most people.

Now the controversy is over opening up local service competition, to crack the monopoly of the Baby Bells (like Bell Atlantic) and allow other companies to compete. In one of the first such cases in the nation, Maryland's Public Service Commission is to rule by tomorrow on prices that competitors will pay Bell Atlantic to lease parts of its local service network (in order to resell services to homes and businesses).

Initially, the most important PSC decision will be the wholesale price for Bell Atlantic's full range of services. Resellers, such as AT&T, MCI and Sprint will initially rely on buying at discount from Bell Atlantic (rather than building their own networks and facilities) and then marketing a full package to individual customers.

The Maryland commission is also expected to set temporary prices for individual ("unbundled") services of Bell Atlantic, allowing competitors to lease some parts and provide others themselves. Those interim prices are subject to findings of future cost studies.

For consumers to see lower prices and innovative services from this new local competition, the wholesale prices set by the PSC must provide for fair competition between the current monopoly provider and new entrants to the market. That also means establishing wholesale prices that can benefit the limited-use residential consumer, and not just the high-volume business customer.

After terms of competition in the local telephone business are set, rates for long-distance services are to be reviewed nationally, which could lead to further savings for consumers.

Simplicity, availability and competitive pricing are what Marylanders want from telephone service providers. We expect the Public Service Commission to act on those desires in rendering this important price arbitration decision.

Pub Date: 11/07/96

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