Telcos can't kick those old, bad habits
August 4, 1998
InfoWorld via NewsEdge Corporation : Despite U.S. District Judge Harold Greene's 1984 ruling that broke up AT&T and Congress' passage of the Telecommunications Act (TCA) in 1996, the sad truth is that the telecommunications industry just can't get used to the idea of competition.
For the most part, the industry as a whole consists of executives who cut their teeth during the lazy, hazy days of regulation, when AT&T basically ran the show. As a result, most of the people in this business think the way to deal with competition is to avoid it. That explains the rash of mergers and acquisitions that are collectively circumventing the best intentions of both the TCA and Greene.
As noted in Page One coverage led by Laura Kujubu, neither the proposed GTE/Bell Atlantic merger nor the signing of an alliance between AT&T and British Telecommunications seems to bode well for customers.
Granted, the AT&T/British Telcom alliance is supposed to make it easier to set up international networks. But with WorldCom merging with MCI, the awesome clout these companies will wield worldwide cries out for a new type of global regulatory body.
On a smaller scale, it's hard to see how the GTE/Bell Atlantic merger would benefit anybody except the companies' shareholders. Regulators evaluating these deals should require plans that detail how the unions would benefit customers.
Otherwise, the telecommunications industry will circumvent the will of the people through mergers and acquisitions that leave customers with a lot more headaches and only a few more choices than they had before 1984. That's not much of a legacy after 25 years of wrangling over telecommunications policies.
So the real question is, are we prepared to sit idly by and watch the telecommunications industry re-create itself in essentially much the same image it had before 1984, or can we count on the current wave of telecommunications and Internet start-ups to use the free market to rein in the slothful, greedy behavior of the emerging telecommunications giants?
Write to me at michael_vizard@infoworld.com.
[Copyright 1998, InfoWorld]
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