Nineteen states have either loosened regulation on their local
incumbent telephone company or are considering doing so this year.
That's 38 percent of the states, not counting a handful of other
states - including Oklahoma - that are still studying the matter.
While the arguments for and against pricing deregulation are much
the same from state to state, each government's method of growing a
more competitive telecommunications market varies greatly.
Bob Nelson, telecom committee chairman for the National
Association of Regulatory Utility Commissioners, called the current
trend toward deregulation an odd turn of events, which may be driven
by several factors. Federal court decisions and discussions in
Congress about rewriting 1996's Telecom Act have pointed the way
toward deregulation, for one thing. And regulators on both the state
and federal level are aware that as technology develops, old methods
of regulation are quickly becoming outdated.
Plus, added Nelson, the incumbent telephone companies often have
strong lobbying power, and have helped author most of the
deregulation legislation currently making its way through state
The nation's major incumbent telephone companies - often referred
to as the Baby Bells since they came about due to the federal
government's breakup of AT&T in 1984 - each offer the same arguments
as to why their pricing ability should be loosened from regulation.
Michael Dunne, a spokesman for Qwest Communications, said
deregulation would help the company respond quickly in the
marketplace. Utah-based Qwest, like SBC locally, was once part of
the Bell Telephone.
We need the ability to lower prices on certain products, packages
and services quickly, just as our competitors have, said Dunne. We
need the ability to offer incentives to specific customers, just as
our competitors have. We need the ability to offer service
guarantees, win-back promotions and valuable packages of services,
just as our competitors have. Our customers deserve, and are
entitled to, the same benefits that the customers of our competitors
In Oklahoma, because SBC's pricing on certain services is public
knowledge, competitors are aware of SBC's pricing strategies well in
advance and are able to set their pricing just below SBC's, said
Oklahoma Corporation Commissioner Denise Bode.
On the other hand, opponents of deregulation say the incumbent
companies still hold sway over the overwhelming majority of service
lines, and would behave as monopolies if they were loosened from
Five states - Idaho, Iowa, North Dakota, Pennsylvania and Utah -
have already enacted legislation to free the incumbent local
exchange carrier, or ILEC, from regulation, to varying degrees.
Idaho's new law, signed by the governor March 29, would
deregulate the ILEC's pricing ability after a three-year transition
period, which may be extended by up to two years if regulators
determine such an extension would be in the public interest. During
the transition rates are capped, but may be increased $1.75 per
month, per line.
Iowa's proposal, signed into law March 15, deregulates pricing
for all services other than basic telephone service on July 1. …