Facebook Twitter



In the decade since the Regional Bell Operating Companies were banned from long-distance markets as part of the 1984 divestiture of the Bell system, a lot has changed in the telecommunications industry.

But some things never change. Like local telephone service, where the Bells are still monopolies and consumers still have no choice. When it comes to local telephone service the Bell monopolies are the only game in town for consumers.You don't have to take my word for it. Earlier this year, Federal Communications Commission Chairman Reed Hundt testified before Congress that "the local telephone network is the only network that continues to be dominated by a single provider."

The Bell's local monopolies are in stark contrast to today's long-distance industry.

Competition in the long-distance industry has provided consumers and business with unprecedented levels of choice, service and savings. The real cost of long-distance calls has dropped by almost 70 percent since 1985.

Finally, competition has spurred the nation's long-distance companies to invest billions of dollars in the information superhighway, building nationwide digital fiber optic networks that provide a wide array of better, faster and cheaper service.

What is the Bells' response to all this? To deny the existence of this competition, and to demand that Congress let them back into long distance with their local monopolies intact and their ability, and penchant, to harm competition undiminished.

Congress would be making a big mistake if it allowed the Bells into long distance without first requiring them to face real competition in their local markets.

That's because the Bells' monopoly power gives them the incentive and the capability to compete unfairly in long-distance markets. The Bells control local telephone facilities and vast amounts of information and technology not available to other companies - including customer telephone numbers, calling patterns, even the dial tone itself. They could exploit this monopoly control to harm competitors, both in the local and long-distance markets.

The Bells do this already. For 10 years, they have consistently engaged in numerous documented cases of anti-consumer and anti-competitive business practices, including everything from misallocating costs to overcharging customers.

The Consumer Federation of America recently found that the Bells had overcharged customers by $5 billion in 1992 alone. That translates into an extra $5 for every residential subscriber in the nation.

Sens. Ernest Hollings, D-S.C., John Danforth, R-Mo., and Daniel Inouye, D-Hawaii, recognize the need to protect consumers and small businesses from these kinds of monopoly abuses. Which is why they have introduced telecommunications legislation that would require the Bell monopolies to face real competition in local markets before they can enter long distance.