Friday, September 13, 2002

Phony issue

I don't expect people at the American Prospect to draw sound conclusions, but I didn't expect them to be this far off base. Of long-distance telephone service, Robert Kuttner writes:
The old regulated system had its problems, but it was reliable, simple, and you didn't have to resort to bargaining every time you tried to fathom your phone bill. Long-distance prices dropped at a rapid rate without competition thanks to technology and regulation.

At times we railed at Ma Bell, but she looks pretty good compared with some of her children.
Has this guy ever paid a phone bill himself? I remember all too well how high long distance rates used to be, and how high my phone bills ran because I've rarely managed to live close to family and friends. Nowadays I spend about a third as much for my wireless phone with free long distance and many other services than I used to pay for long distance alone. Part of that is due to technological advance, but LD rates didn't start falling until companies started bidding aggressively against one another, hoping they could slip it to you on another part of the bill. As it is, for bills of less than about $20 per month, it's hard for an LD telco to make any money.

Would regulation help? Sure - it would help bureaucrats and the phone companies. That's because of a well-known phenomenon known as regulatory capture. We'd still have to deal with huge companies, but the govt would be working on their interests.

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