Tuesday, August 29, 2006

Telecom Competition (Opinion)

The Wall Street Journal (subscription):
How much competition is there in U.S. telecommunications? So much that even California regulators have finally noticed. Last week the state's Public Utilities Commission voted 5-0 to lift decades-old price controls on land-line phone companies.

The move was instigated by Rachelle Chong, who was appointed to the Commission in January by Governor Arnold Schwarzenegger. According to a Los Angeles Times report, this is the first time in 18 years that California has altered its rate structure. Think about all that has happened in telecom in the past two decades, from the proliferation of wireless devices to Internet telephony, and you get some idea of how far past due these changes were.

Other states, including Texas, Florida, Indiana, Colorado and Massachusetts, have eased their anti-competitive price controls in recent years, but the decision to do so by the nation's largest state is still significant. "The California Public Utility Commission is used by Commissions in other states as a standard," says Barry Aarons, who follows telecom at the Institute for Policy Innovation. "They reason, 'If California is willing to do this, we shouldn't be scared to do it ourselves.'"