Utility Merger

In “Beware the Power Behemoth” (Commentary, Feb. 7), Michael Shames, of Utility Consumers Action Network in San Diego, trots out the standard cliches to condemn the proposed takeover of San Diego Gas & Electric by Southern California Edison. Regulators stand helpless before big companies, he claims, and “the new mega-utility (would be) virtually uncontrollable.” We’ve heard this before.

Consumer groups were the loudest advocates of breaking up AT&T; and all-out competition in the communications industry. They claimed again and again that competition would drive down long-distance rates without producing any increase in local service rates. To anyone familiar with the industry, the claim was absurd and phone customers have so discovered.

Competition is not the Holy Grail, except for politicians who spend billions in public money while putting on their shows. Competition often produces wasteful and expensive duplication, followed by collapse; the airline industry, especially routes within California, is a current example. If consumer groups ever move from sloganeering into careful analysis, they may yet become helpful to consumers.

In general, public utilities and their regulators have good records of performance. Regulation works best, however, under monopoly conditions.

FREDERICK C. THAYER

Los Angeles

Thayer is author of “Rebuilding America: The Case for Economic Regulation” and professor emeritus at the University of Pittsburgh Graduate School of Public and International Affairs.