HIGHTOWER: Phone Deregulation Creates Monopolization

From Hightower's "Department of I-Told-You-So" comes a report that the highly-touted Telecommunications Deregulation Act of 1996 ain't working.Here's a recent headline on the front page of USA Today: "Telecom Deals Signal Deregulation's Failure." The deals they're talking about are all the mega mergers taking place among long-distance phone companies, local phone companies, television networks, cable operators and other telecom powerhouses.Those in Washington who pushed this 1996 Act promised that deregulation would unleash a war of head-butting competition among these giants -- competition that would lower rates and prices to us customers. But as one consumer champion told USA Today in disgust: "They're making love, not war."I hate to say it, but . . . I told you so. These huge outfits never intended to spend money competing when they knew that instead they could merge, conglomerate and monopolize. Take Ma Bell. In 1984, AT&T was broken up into one long-distance phone company and seven separate "Baby Bells" to provide local service. After passage of the '96 dereg law, though, the Baby Bells are merging with each other, and two of them already are re-merging into AT&T!With this merger deal, the majority of America's long distance calls and a fourth of our local calls will be back under one company. It's the rebirth of Ma Bell. Only this time, Ma will be unregulated -- and she can really reach-out and touch us. Thanks to the new Act, we consumers will be faced with a phone monopoly with no regulation of its rates and no oversight of its service.Indeed, if you've checked your phone bill lately, you know that the rate decreases promised by congress have -- Big Surprise! -- instead become rate increases.And this is only the beginning of the ripoff.Source:"Telecom deals signal deregulation's failure" by Tom Lowry. USA Today: May 29, 1997. "AT&T contemplating huge merger with SBC" by Mike Mills. Washington Post: May 28, 1997.Contact us directly at: hightower@essential.org


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