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Baby Bells Should Walk The Talk



Monopolists are forever promising that they really want competition--under the right circumstances. The Baby Bells professed allegiance to competition while helping to formulate the new deregulatory rules in the landmark Telecommunications Act of 1996. But here they are, just months later, putting up roadblocks to competition wherever they can (page 94).

The Federal Communications Commission tried to jump-start local phone competition by permitting new competitors to buy all or part of the Bells existing services at low prices. The FCC wants these prices to reflect the rates that would prevail in a truly competitive marketplace. One of the Bells and some other local companies quickly asked a court to freeze these rules. Many locals then asked the court to knock out the rules permanently. Some Bells are going further by calling the FCC's new rules a "taking" of private property under the Fifth Amendment, as if monopoly control of a market is a kind of constitutional right. Attacking government deregulation by exploiting the "takings clause" commonly used against government regulation takes considerable arrogance.

Despite this legal delay, competition is coming. The Bells should be cutting their costs and solidifying their ties to customers instead of playing rear-guard legal games to preserve their monopolies.

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