Diminishing Competition in the Telecommunications Industry:
Is it Time for a Policy Review?
Published: November 29, 2005

Fewer than twenty five years after the Consent Decree, we are returning to a telecommunications marketplace dominated by an ever shrinking number of major players. These players, and the Baby Bells in particular, control an ever greater share of the telecommunications marketplace, both local and long distance, and the smaller players, who stimulated much of the growth and innovation in the industry over the past several decades-and most significantly since the 1996 Telecom Act implementing local competition-are being forced out of the market.

The Consent Decree was the byproduct of decades of competitive abuse by AT&T. The message of the Consent Decree was that the public interest is best served by an open telecommunications marketplace featuring free competition between a wide range of diverse players in both the local and long distance arenas. Can today's regulators be allowed to portray themselves as free market activists while they stand by and allow an ever-increasing share of the market to be controlled by a privileged few?

Clearly, the Baby Bells have benefited substantially from favorable regulatory policies and limited antitrust oversight in recent years. Many believe that the ultimate victim of these regulatory policies and limited antitrust oversight will be the consumer, who will have fewer competitive choices, will see fewer product innovations and will pay higher prices.

Is it "deja vu all over again" with the new concentration of power in the Baby Bells? Is it time to take a careful look at the competitive landscape and to rein in the Baby Bells? Have we learned nothing from history?