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Can long-distance stay cheap? pt.2
The
one bright spot was
long distance phone rates, which have fallen since 1996,
largely because of competition between Sprint, MCI WorldCom and AT&T (as
well as a host of smaller, niche
long-distance carriers). And there was hope
for cheaper local rates, as the Supreme Court recently upheld the power of
the FCC to rule over
local phone competition.
"We are
standing at the threshold of a new century, a century that promises to be as
revolutionary in the technology that affects our daily lives and the future
of our country as the inventions that so profoundly shaped the past 100
years," Kennard said. "As we enter this digital future, we must create a
competitive market in which innovation is fostered and the technologies
that are reshaping our world can continue to be improved." Kennard and the FCC seem willing to let mergers
happen, hoping that competition won't be lost. |
|
Arguments that don't
fly
The
FCC apparently did not buy the arguments of
consumer groups. In August, Consumers Union, the Consumer Federation of
America and the Media Access Project filed requests before the FCC and the
Justice Department's Antitrust Division to block the AT&T/MediaOne
merger deal. The groups also sent a letter to the FTC arguing that the "AT&T/MediaOne deal involves such massive
concentration of ownership . . that failure to assert antitrust principles
to stop this merger will result in inflated cable and broadband Internet
service rates for consumers and thwart the development of vibrant
competition in these markets."
The result from all this is that regulators have endorsed the concept of a
small number of large telecommunications companies that can provide all
broadband services.
While this could lead to you getting just one (large) bill for your
local
phone,
long-distance phone, cable or
wireless TV,
wireless phone and Internet access, whether the price you pay for these services will go up
because of the mergers is an open question.
Kennard and the FCC are betting that, as with
long-distance phone service,
only a few strong companies are needed for the competition necessary to keep
prices down. What has yet to be determined is if the FCC thinks an
independent Sprint -- or some vestige of it -- needs to be one of those
competitors.
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Long Distance Phone Article Page #2