Competition needed in phone service

February 04, 1999|By Jeff Blum

A LANDMARK federal telecommunications law passed in 1996 promised many benefits for consumers, including more companies competing for their business.

But the promises of that law have not been fulfilled as the road to competition has been blocked by the Baby Bells, those regional phone companies formed in the breakup of AT&T's Bell System.

As a result, Marylanders must still place virtually all their local calls through one company, Bell Atlantic Corp., which has 95 percent of the business market and nearly all of the residential market for local phone service, according to Maryland's Office of People's Counsel.

The Consumer Federation of America estimates that consumers are being denied $10 billion in savings each year that vigorous local phone service competition fails to develop.

Easy access

In November, in a move intended to spur local telephone competition in Maryland, the Public Service Commission (PSC) ordered Bell Atlantic to give competing phone companies easier access to the company's local telephone network.

Siding with the long-distance companies, the PSC directed Bell Atlantic to provide wires, switches and other elements of its local telephone network to its rivals in customized bundles. Bell Atlantic said it will take the matter to court.

New York market

In New York, Bell Atlantic has agreed to an extensive list of services, pricing and policies to further efforts to open local markets to competition. But the company is not even close to making that sort of commitment in Maryland.

The Maryland PSC needs to push Bell Atlantic hard to open its local markets to rivals.

Maryland consumers should be able to contact various phone companies and shop for the best price and service options for local phone service. Once consumers make a choice, they should be able to freely switch phone companies without interruptions or termination fees.

To get there, however, Bell Atlantic first has to open its markets, rather than engage in its current practice of regulatory foot-dragging.

State regulators have some leverage to get Bell Atlantic to open its markets. When Bell Atlantic took over NYNEX, for example, it agreed to merger conditions that set dates and performance goals for opening local markets. So far, however, such performance standards have not been met.

When Congress passed the telecommunications bill, it granted the Baby Bell monopolies the opportunity to offer long-distance service in their regions of operation only after they opened up their local markets to competition. This bargain, overseen by state regulators and the FCC, aimed to ensure competition and consumer savings in both local and long-distance service. The PSC needs to uphold that bargain and protect Maryland's consumers.

Jeff Blum is president of Maryland Citizen Action, an independent state consumer watchdog group.

Pub Date: 2/04/99

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