Communications Act: Effect Tough to Call Firms Scramble as Deregulation Phases In

Article excerpt

Will the brave new world of communications offer one-stop shopping or a free-for-all in the $400 billion market for local telephone, long-distance, wireless and cable services?

The answer is both.

The Communications Act of 1996 opens the way for telephone, long-distance, cable and wireless communications companies to get into one another's businesses as never before, either fighting it out service by service or assembling their own and other companies' services to sell as a package.

Will phone and cable bills go up, down or sideways? The answer, for a while, is sideways.

The bill phases in deregulation of cable rates, which can still rise to cover a cable system's increased costs. Phone bills probably won't be deregulated fully until consumers have a choice of local telephone providers. Industry officials said competition will force bills down in the long run, but consumer advocates doubt that everyone's bill will go down for every service.

In the not-too-distant future, Sprint, Southwestern Bell Telephone Co., AT&T and the local cable company could be offering to consolidate St. Louisans' communications services in one monthly bill.

Sprint has a leg up on offering a package deal in cities like St. Louis. Sprint, the long-distance company based in Kansas City, is building a network to offer wireless service in St. Louis and more than 20 other cities later this year. Its partners in the wireless venture include Tele-Communications Inc., which provides cable service in St. Louis, St. Charles and many other local communities.

Cellular telephone customers may see the first package deals. Southwestern Bell and Ameritech will be able to sell long-distance service to cellular customers as soon as President Bill Clinton signs the new act into law. They'll also be able to sell long-distance service in areas where they don't already provide local telephone service.

Ameritech said it could offer long-distance service in Illinois in as little as nine months. Seven companies already are licensed to provide local telephone service in Chicago, and two have signed up to resell Ameritech's service. If state and federal regulators agree that Ameritech has enough competitors, it could be set free to sell long-distance service in Illinois by Christmas, or maybe even by Halloween.

Not everyone likes the new law.

Illinois Commerce Commission Chairman Dan Miller said it pre-empts the state's authority in many areas and "stopped cold our efforts to open up local competition." Miller said the Federal Communications Commission lacks the staff or the motivation to be sure that markets are fully competitive before local telephone companies get to offer long-distance service.

Illinois is several years ahead of Missouri, which currently forbids local telephone competition. …