Path: utzoo!telecom-request Date: Fri, 3 May 91 18:35 PDT From: John Higdon Newsgroups: comp.dcom.telecom Subject: Hollings and the RBOCs Reply-To: John Higdon Message-ID: Organization: Green Hills and Cows Sender: Telecom@eecs.nwu.edu Approved: Telecom@eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu X-Telecom-Digest: Volume 11, Issue 334, Message 1 of 11 Lines: 87 If this is not reaching for justification, I do not know what is: [quoted from today's AT&T's Newsbriefs] BELL DEBATE -- ... In 1990, Congress [passed] the Americans with Disabilities Act. The law provides that telephone companies ensure that people ... who use TDD devices have the same access to the telephone network that others do [but] it ignored the needs of people who do not use TDDs. That's why legislation sponsored by Sen. Ernest Hollings (D-S.C.) to allow the seven [RBOC]s ... to enter research and manufacturing, is so important. ... Lifting the [MFJ] restrictions would give the Bells ... incentives to invest in their networks and would spur development of new products such as "prescriptive hearing service," that would tune an individual's telephone line to accommodate hearing loss. ... [Frank Bowe, college professor], Viewpoints NY, p. 119, New York Newsday, 5/2. [end quote] Does anyone imagine that CPE vendors and manufacturers cannot come up with equalization for a phone line and provide devices for the hard of hearing? What a lame reason for supporting Hollings LEC giveaway. Ernest Hollings' bill allows the RBOCs to manufacture telephone equipment in direct competition to the current marketplace suppliers. All of the concerns about cross subsidization aside, the time has come for the RBOCs to face the reality that if it is competition they want, it is competition they will get. There is no stretch of fairness that dictates that LECs can compete in the equipment business while others are barred from competing in the dial tone business. The RBOCs have had a soft, cushy, cash cow long enough. But rather than use the obscene profits from this guaranteed money-making business to reduce costs to the public, RBOCs such as Pac*Bell want to parlay this wealth into vast empires. Using creative accounting techniques, it is little trouble to siphon off money from the regulated side of the operation to fund vulturistic practices on the non-regulated side (and convince brain dead PUCs that regulated rates need to be increased in the process). NYNEX not so long ago showed us how easy this is to do. After carefully considering the various arguments pro and con from many on this forum, as well as others, I have become convinced that competition will in the short term and possibly in the long term result in the massive screwing of the average and even not-so-average telephone user. The beneficiaries of LEC competition will be those who can bypass anyway. Those who cannot bypass (you and me) would be stuck with subsidizing a futile attempt by the regulated LECs to hang on to the major customers. My alternative suggestion is to restructure the MFJ so as to forbid any entity that owns a regulated LEC (or group of LECs) from engaging in any other related business. It is hard to shed crocodile tears for Pacific Telesis, who prints full page ads crying about how it is prohibited from offering all sorts of space age services, when it is operating a regulated monopoly that is quaranteed to make a specific rate of return. No gambles, no risks, just recession-proof, easy money. If this isn't enough for the current operators of local telephone networks, then maybe they should sell to yet to be created corporations that would be happy to run such a focused enterprise. If Pacific Telesis wants so badly to compete in the equipment and information services markets, then perhaps it could sell Pacific Bell to a group of investors whose purpose would be to run the best regulated monopoly it could. What is wrong with that, you say? The whole point of Pacific Telesis becoming involved in the equipment and other markets would be to use its advantage in owning the local network. Take away that advantage and you would find that this burning desire to manufacture and provide other services would suddenly dissipate. No amount of accounting safeguards can prevent deleterious cross subsidization. And Mr. Hollings' bill contains not even a pretense of provisions to protect the consumer. If this bill becomes law we will be on the road to a return to those thrilling days of yesteryear. But instead of Ma Bell, we will have all of the Mothers Bell. What they may lack in regulatory clout will be made up for with financial might. It may be time to break up the breakup. John Higdon | P. O. Box 7648 | +1 408 723 1395 john@zygot.ati.com | San Jose, CA 95150 | M o o !