TELECOM Digest OnLine - Sorted: Re: AT&T 'Family' Reunion: Merger Approved

Re: AT&T 'Family' Reunion: Merger Approved
30 Jan 2007 13:59:01 -0800

Some recent news motivated me to bring this issue up again.

Back on Jan 3, 12:24 pm, Fred Goldstein
<> wrote:

I had previously written:

>> 1) Wireless and cable competition. Very simply, it is not a "monopoly"
>> anymore so it should not be treated as such. (The past status doesn't
>> matter, "today" is what counts). Many people use cable and/or wireless
>> for their plain telephone service needs as well as advanced
>> communications. It appears this is growing.

Fred replied: (much snipped)

> There is a duopoly (cable/ILEC) in most areas, simply because past
> FCCs have been prescient enough to recognize that keeping the two
> industries separate was probably a good idea. It is inefficient to
> have two outside plants, but until recently, they were technologically
> distinct and thus non-overlapping.


> Of course. At least we do have duopoly in some places, rather than
> pure monopoly. But while duopoly reduces the temptation to commit the
> most egregious abuses of monopoly pricing, it can get a little cozy.

In essence, Fred argues that the successor Bell System companies still
have to this day considerable power and thus need to be regulated.

I still don't agree. In today's paper, they announced that Verizon's
local customers DECLINED. This is the first time since the Depression
that basic telephone customers were lost.

Unlike the Depression, when people simply couldn't afford a phone,
people today communicate more than ever. They're using competing
services, not Verizon. Clearly, Verizon is no longer a monopoly or
has such power in the market, otherwise, it would be continuing to add

To me, we risk screwing businesses as railroads were screwed in the
1950s and 1960s. In those days, the regulators and public saw the
railroads as monopolies and very powerful organizations. But the
railroads faced tough competition from highways and airways that the
regulators and public ignored. The power the railroads enjoyed was
long gone 50 years prior.

It's the same with the modern telephone industry. I'm sorry, but in
my opinion the overall tone of Fred's full reply to me suggests the
same mindsight -- the anti-Bell System attitude of the past.

In the railroad world, the people who still depended on railroads for
freight and passenger carriage were hurt by the carriers going
bankrupt. This was caused in part by mandated low rates and
unprofitable services. For example, Fred says the Bells don't have to
carry deadbeats, but as I read multiple state rulings and comments by
telco employees, the former Bell companies are forced to eat a lot of
writeoffs from non paying customers because they're not allowed to cut
service so easily and must provide service to bad credit risks.
Another example is introducing or discontinuing services--the former
Bell companies must spend a fortune on lawyers, writing tarrifs, and
PUC hearings while the new guys do none of that. My local library has
Bell tarrifs on file. Will I find Vonnage tarffis there? I don't
think so.

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