Keeping Healthy Competition Alive : Brooks bill is aimed at avoiding monopoly in the electronic-information business
The communications business is a fast-changing industry, one being shaped and pushed by high technology. Electronic information is fast upon us, but is it fair to allow telephone companies to shut out competition by controlling access to the lines necessary to transmit data?
The simple answer is no. A House panel has wisely concluded that time is needed to provide for flourishing competition in three segments of the phone business: long-distance service, equipment manufacturing and information services. The Judiciary Committee’s economic and commercial law subcommittee passed a bill last week that would bar regional phone companies, known as “Baby Bells,” from entering the three businesses for at least several more years.
The bill, sponsored by committee chairman Jack Brooks (D-Texas) would codify the 1982 consent decree that settled the antitrust suit against American Telephone & Telegraph Co. and created the seven independent Baby Bells. The Bells were then forbidden from entering information services, long distance and manufacturing. But court decisions last year now allow them to offer information services that range from news reports to sophisticated monitoring systems for ozone depletion.
The Baby Bells, of course, are not happy with the Brooks bill, which would put on hold their aggressive move to dominate the market. The Times, of course, has a self-interest in this issue. It would--like other newspapers that offer some electronic information like sports scores or weather updates--be affected financially if the phone companies are allowed to, in effect, monopolize electronic information.
Competition is not the fear, but unfair competition is. Government- established rates of return virtually guarantee phone companies profits, much of it earned from consumers. These profits can be used to lower costs for information services, thus putting other companies, whose earnings are not guaranteed, at a competitive disadvantage.
Phone companies have a history of monopolistic practices. They could limit access to phone lines. As noted by U.S. Dist. Judge Harold Greene, who presided over the AT&T; case 10 years ago, “If regional (Baby Bells) companies were permitted both to generate information and to transmit it, they would . . . appear to be the only entities in the developed world to have this kind of stranglehold on information.”
The electronic revolution is likely to spawn an inevitable new universe of information services. The Brooks bill would prevent the Baby Bells from squeezing out competition from the start. A timetable for their expansion would allow competitors a window of opportunity to establish themselves. That’s fair.
