End the Telephone Tax

If you're like many consumers, you have a need for speed when you're online. You're tired of dial-up service over that old, slow copper telephone line running into your home and you want high-speed Internet access service. Well, for everyone who's been hoping for an end to the World Wide Wait, I have good news and bad news.

The good news is that the local telephone companies have finally joined the rush to offer super-fast Internet connections thanks, according to industry analysts, to pressure from the cable companies. Cable continues to offer the most popular high-speed Internet services, with close to three million cable-modem customers. But the local Bell companies also have gotten serious in the last year. In 1999, the number of customers for digital subscriber line (DSL) services, which allow fast connections over regular phone lines, grew 900 percent --from roughly 50,000 in the U.S. to 500,000. This year, some analysts predict a tripling of DSL customers to 1.5 million.

The bad news is that, judging from recent tech news coverage, DSL service is a nightmare for many customers. A recent New York Times headline proclaimed, "Night of the Living D.S.L.: Broadband Horror Stories." The article by Katie Hafner includes the story of one US WEST customer whose service went down for an entire month. While trying to resolve the problem, the customer started keeping a log of all the time he spent dealing with phone company employees. The grand total: 65 hours.

A Pacific Bell customer told the Times of her experience trying to get up and running with DSL. Not only did she have trouble getting fast access, but the phone company somehow managed to knock out her regular telephone service for five days. Luckily, she had a cell phone.

In a piece called, "DSL's Disastrous Rollout," the tech magazine Industry Standard reports on a less-than-happy Bell Atlantic customer: "David Solomon's New York Web development company has been waiting three months for Bell's DSL service. His home DSL is running, but getting it set up took many fruitless calls and one conversation with a tech-support person who admitted, 'We never return messages.'"

Larry Dignan, Editor of Ziff-Davis' Interactive Investor, recounts his trials and tribulations with Bell Atlantic's DSL in a recent column. Writes Dignan, "Now the mystery of my missing DSL service is out of control. No one in any of Bell Atlantic's units knows what to do. The company has five databases and none of them match."

What's going on here? Yes, the local Bell companies are government-created monopolies. True, they've never been known for speed and innovation, but they've always had a reputation for reliability and quality customer service. And that reputation was well-deserved. The recent news is particularly bizarre when you consider that this is exactly the moment when the Bells are seeking regulatory permission in key jurisdictions to enter the long-distance market.

Under the rules laid out in the 1996 Telecommunications Act, the local companies can get into the already competitive long-distance business, but only when state and federal regulators certify that they have opened up their local service sufficiently for competitors to come in. The regulators also want to see that the Bells are serving consumers well and generally being good corporate citizens. So why are the Bells choosing this moment to skimp on service?

I don't know the answer, but there are a few possibilities. One is that the Bells don't see a big future for DSL. Maybe they think everything will go wireless eventually, so there's no sense making a heavy investment in high-speed land line service. Another possibility involves the coming of "G Lite" and "line sharing" services. Without getting into the technical details, new services are coming that should require a lot less installation work by Bell technicians. Maybe the Bells are just muddling through what they see as a transitional period until their workload gets lighter. Still another possibility is that this market is growing very quickly and they just misjudged demand.

The final possibility is that Bell executives believe they can ignore the strictures of the 1996 Telecom Act after all, it's been four years and they have been certified in only one market, New York (and service there is abysmal, leading to fines for Bell Atlantic) and instead convince Congress to rewrite the law and allow the them into long distance without having to clear the regulatory hurdles laid out in the law. Legislation, notably a bill called H.R. 2420, has been introduced to achieve just such circumvention.

Whatever the explanation, one thing is clear: To get the broadband service and the broad choices that consumers deserve, Congress can't give up on vigorously enforcing the Telecom Act.