Can long-distance stay cheap? Still no answer

The proposed MCI/Sprint merger could connect you to higher phone bills. The FCC hopes competition will pick up, but so far the line is still busy.
 

By Tom Woodruff

Cheap long-distance phone rates could be in danger of extinction.

At least that's what critics fear with the proposed merger of MCI WorldCom (WCOM, ) and Sprint , coming on the heels of several other telecommunication mergers. And the critics are taking their fears to Capitol Hill, where it appears they've got a sympathetic ear, starting with the head of the Federal Communications Commission, who's expressed skepticism over a combined Sprint/MCI.

When Congress passed the 1996 Telecommunications Act, it was trumpeted as the beginning of increased competition, with long-distance providers offering local service, while the Baby Bells started going toe-to-toe with AT&T and the gang. Similarly, the 1992 Cable Television Consumer Protection and Competition Act was going to drive down cable company rates as more companies started competing.

It hasn't worked out that way.

Local competition? Not yet
Local phone bills have become so complicated, costly and lengthy that SBC Communications' (SBC,) Southern New England Telephone started sending out its local phone bills last month in oversized envelopes because the information was so copious. There are now only four Baby Bells instead of eight. Meanwhile, the cable companies has become more concentrated and rates have risen.

And local competition hasn't happened yet. Baby Bell companies have fought the introduction in the courts, even as they reduced their number by 50%. The surviving Bells are SBC-Ameritech, Bell Atlantic (BEL,), BellSouth (BLS) and U S West.