Taking Sides in Long-Distance Battle
My God, it’s deja vu all over again! Another natural monopoly wants to operate as “free enterprise†and set its own rates on an indispensable service [Line Drawn in Battle Over Long-Distance,†Dec. 23].
And it is to be up to the PUC to grant or deny approval! The gang that gave us electricity at double its former price now wants to do the same thing with our telephone service.
Jack Morrow
Long Beach
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You hit the nail on the head to identify SBC Pacific Bell as a near-monopoly player in supplying local telephone service.
However, I was amused to read that PacBell has a “stranglehold on just about every telecommunications service.â€
What are your examples? Pay phones? Very few still belong to PacBell! Phone books? I receive them constantly from various sources, whether I like it or not.
Corporate phone systems? PacBell has been a minority player in these products since 1984, having lost most of the market share for end-user equipment long ago. (Better products are widespread now.)
411 directory assistance? That’s still run by PacBell and Verizon, but numerous other inexpensive directory services proliferate on CD-ROMs and Web sites.
DSL Internet access? Lots of competitors jumped in, offered unrealistic discounts and went belly-up. Most of the surviving Internet providers still choose to lease lines from SBC PacBell rather than build their own.
Of the examples you give, local phone service is about the only thing still largely controlled by PacBell, the biggest supplier. Two reasons: One, local phone service requires a physical infrastructure that is costly to operate, without much profit. (The profit comes from the add-on services.) The other reason, as you mentioned, is the size of the investment: PacBell (and most other local phone companies) built their networks over the last 75 years and nobody can afford to duplicate those systems.
It’s true that competitors should be given access to PacBell facilities at a reasonable wholesale cost, but when they see the real cost, it becomes apparent that there’s not much profit in local phone service. The real profit is in long-distance, and the folks at AT&T; and MCI know it.
Greg Golden
Van Nuys
