This week probably marked the beginning of the end of an eight-year battle between the old Baby Bell local telephone monopolies and many of their would-be competitors for local telephone service. A federal appeals court recently struck down a set of 1996 Telecom Act rules that had been forcing the Bells to sell wireline access to local service competitiors at government-regulated rates.
The Bells, regarding local services as their proprietary golden goose, successfully sued to gain control over such access and pricing. The story isn’t completely over, but the FCC and Bush Administration have both passed on appealing to the Supreme Court. The CLECs (Competitive Local Exchange Carriers), including AT&T and a large number of upstart companies, will undoubtably file an appeal of their own, but the current conventional wisdom holds that their odds of success are slim.
Personally, I’ve got mixed feelings about this whole affair. On the one hand, as a good conservative, I’m wary of the government artificially setting the price for anything. On the other, as a telephone customer and free-marketeer, I utterly despise the local Bell monopolies, my “own” version, BellSouth, in particular. The Bells’ whining about being over-regulated always ignores the fact that their networks and wiring have been subsidized by governments at all levels for over a century. Their claim to “own the lines” rings hollow (pun certainly intended) when you look at all the fees and bogus tack-ons they’re allowed to pad their profit margins with at the expense of customers with no alternatives.
Either way, the law is the law, and the Bells now legally have the right to run their competition out of business–or so they may delude themselves. Like many other twentieth-century dinosaurs, the Bells are fighting a battle over territory that becomes less and less desireable with each passing day. So the Bells own traditional local wireline service. How much longer will it be before the reaction to that fact is, “So what?”
Cellular phones, broadband (both wired and wireless) and internet telephony are all poised to make the Bells’ monopoly status a moot point. If your home is within range of a cell tower and cable modem service, it’s entirely possible to cut the Bells off at the cord, right now (I would add DSL service to that list, but in most places, the Bells control those lines and won’t allow you to have “dry-wire” DSL service from any provider without also paying for a Bell wired voice line).
I cut BellSouth off myself, back in January. When my then-fiancee and I merged our cellular service, I added on a third line for $10 a month. Using number portability, I had my home telephone number switched to that new cell account, and with a $40 CellSocket base station, was able to use all my existing home telephones through that account. We can still receive and make calls from any phone in the house, with our old phone number, but BellSouth doesn’t see a dime from any of them. My local phone bill went from nearly $30, with no services like call waiting, caller ID, or voice mail, to $10, with every service known to man included for free–plus free long distance.
I like this very much. No doubt BellSouth is somewhat less happy about the situation, as they’re losing numbers off their network in droves. Boo-freakin’-hoo for a corporation whose idea of “customer service” has been, “we’re the phone company, so you’ll take what you get and like it” for decades.
With Vonage and similar VOIP services up and running, and any number of new wireless technologies in the ramp-up stages, there’s no reason why thousands, if not millions of others will also be telling the Bells to get bent. Couldn’t happen to a nicer bunch of guys, as far as I’m concerned.