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Editorial Letter
Qwest has not opened its services to local competitors and so we don't have
local phone service competition. They are also withholding millions is
fees from the City of Portland, triggering a budget shortfall and a cut in
services. This editorial from the January 24, 2002 New York Times says the rest.
January 24, 2002
Fair Local Phone Rates
The New York Public Service Commission helped
jump-start competition for local phone service yesterday when it ordered Verizon
to further discount the wholesale rate at which it leases its lines to competing
companies trying to enter the New York market. The move is not only beneficial
to state consumers; it could be of vital importance to the nation's overall
economy.
In recent years, healthy competition has revolutionized the market for many
telecommunications products, from long distance to cellphone services. Local
service, however, remains a near-monopoly, firmly in the hands of the Baby
Bells, including Verizon, that were created by the breakup of AT&T in 1984
and control the "last mile" of wire into consumers' homes and offices.
Nationwide, competitors to the Baby Bells provide local service to less than 10
percent of all phone lines, and only 5 percent of all residential lines.
It was not supposed to end up that way. One of the goals of the landmark 1996
Telecommunications Act was to unleash the same competitive forces on the
$110 billion market for local phone service that had previously transformed the
long-distance market. The Baby Bells were meant to lease parts of their
networks to competitors for a "reasonable and just" wholesale rate. In
return, the legislation allowed the Baby Bells to enter the long-distance
market.
The danger now is that the bargain at the heart of the law will be betrayed
‹ that the Baby Bells will be able to provide long-distance service without
honoring their obligation to open their home markets to real competition.
Last month, however, proponents of competition finally had reason to cheer. The
U.S. Court of Appeals for the District of Columbia asked the Federal
Communications Commission to reconsider its decision to allow SBC, a local phone
company, to provide long-distance service in Oklahoma and Kansas. The court
found that SBC was not keeping its side of the bargain imposed by the
Telecommunications Act, since the wholesale prices it charged new entrants in
the local market were too high to allow effective competition. |