- The Washington Times - Thursday, February 10, 2000

The revolution envisioned by a landmark telecommunications law that held the promise of more choices and lower prices for consumers remains a work in progress, with some Americans not yet enjoying the fruits of greater competition and falling costs.

"My cable bill is outrageous. The rate has steadily increased with no changes in service or quality," wrote Debbie Williams of Aloha, Ore., this summer to a consumer group in Washington. Bob Palinchak of Cordova, Tenn., griped that an array of monthly charges has caused his phone bill to increase even when he makes few calls.

Since the passage of the 1996 Telecommunications Act, cable rates have risen three times faster than inflation and the regional Bell companies still claim 96 percent of local phone revenue.

But there are some signs of change: The number of Internet users has tripled and wireless prices have plummeted in the past four years.

"The big picture is that the whole telecommunications and information sectors of our economy are just booming," Federal Communications Commission Chairman William Kennard said. "We've really never seen anything like this in the history of communications in the world where you have so much investment so quickly, a myriad of new services being provided to consumers."

The law, signed by President Clinton four years ago, freed cable and local and long-distance phone companies to enter each others' businesses.

House Commerce Committee Chairman Thomas J. Bliley Jr., Virginia Republican, one of the bill's co-authors, said consumers are beginning to see choices in markets once controlled by monopolies.

"I would have liked to have seen it go quicker," Mr. Bliley said. But "it's coming."

Fledgling businesses have spent billions of dollars to offer local phone and data services to compete with the Baby Bells. AT&T; has invested heavily in its ambitious plan to use cable lines to deliver local phone service, while MCI WorldCom and Sprint say their merger would enable them to reach local customers through fixed wireless systems.

But the Bell companies and GTE still have the lion's share of the local market.

"This is hardly full-fledged realistic competition," said Adam Thierer, a fellow in economic policy at Heritage Foundation, a conservative think tank in Washington.

Regulators point to the success of wireless service in giving consumers more options. Almost all Americans now have a choice of three or more wireless providers, according to the FCC, and prices have declined steadily.

A plethora of new long-distance plans boasting rates as low as 5 cents a minute have helped drop the price of state-to-state calls more than 2 percent between the time before the act was passed and December 1999.

But consumer groups, in a scathing letter to Mr. Clinton, said most Americans are not benefiting from falling rates because of an extra $4 billion a year in assorted charges now tagged on to their monthly phone bills. They also warned that an unprecedented wave of communications mega-mergers set off by the law has reduced consumer options.

New competition could come as the Bell companies aggressively seek permission to offer long-distance in their territory. In one of the biggest milestones since the act's passage, Bell Atlantic received FCC approval in December to provide its local customers in New York with long-distance service.

The U.S. Telecom Association, which represents local phone companies, says the time is ripe for the FCC to remove regulatory hurdles keeping its members out of voice and data long-distance service.

"All customers suffer as a result," said Roy Neel, president of the group.

And consumers are still waiting to see lower cable TV rates. Lawmakers and others hope that legislation passed last year allowing direct broadcast satellite companies to beam local channels to their customers will help bolster competition.

That could help drive down cable TV prices which have increased nearly 27 percent between the time right before the law was enacted until December 1999.

"Cable TV is one of the biggest black eyes for the 1996 act," said Gene Kimmelman, co-director of the Washington office of Consumers Union.

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