How Tauzin Can Keep His Word And Stop Telecom "Remonopolization"

James K. Glassman | February 20, 2001

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Tauzin answered that voice long-distance remained an incentive. Really? Has he looked at the stock prices of long-distance companies lately? The competition is fierce, and voice is dropping sharply as a proportion of total long-distance service.

He also said that the 1996 act was intended to deal with voice, not data, since broadband was in its infancy. Really? Then, why not call it the "Voice Act of 1996." The truth is that nothing in the law excludes broadband from the interconnection requirement. And, even if the act did not foresee broadband, then the advent of data simply provides an even stronger incentive for the Bells to open up.

I also raised the issue of "remonopolization" – the original seven Bells plus GTE, eight companies holding local monopolies, are now down to just four. This was the last thing Congress wanted when it passed the Telecom Act of 1996. Legislators expected more competition, not less.

Tauzin, in his response, was sympathetic. He had quoted earlier from an article I wrote on remonopolization and that appeared on the op-ed pages of the Dec. 27 Washington Times, "For Whom the Bells Toll: Death of Telecom Competition." And he said now that he would "insist that remonopolization does not happen" – though it seems that H.R. 2420 would enhance the power of the four firms (and, who knows, maybe they will soon be down to two or three?).

Just read the statement on his site about his "Internet Freedom" legislation: "H.R. 2420 frees the Regional Bell Operating Companies (RBOCs) to 'build out' and offer high speed Internet data and backbone hub services on a level playing field in competition with cable companies and current backbone providers. Do the cable and backbone companies want that to happen? Of course not! It's competition."

Tauzin, though well-meaning, has it exactly backwards. His bill, which has scores of co-sponsors, including the top Democrat on the Commerce Committee, would freeze local monopolies in place and allow the Bells to leverage their hold on the last mile into dominance in broadband as well.

As the discussion ended last Monday, I had the impression that Tauzin, a thoughtful guy, was beginning to have doubts about his own approach. I hope so. As I said in the Cannon Caucus Room, the authors of the Telecom Act had a great idea. The reason it is not working is that the act simply hasn't been enforced. Why reject it without trying it?