Facts are facts

It's interesting to me that in Europe, a market in which there is already substantial competition, the head of the European Union's media commission is pushing for more. Meanwhile in the U.S., incumbent service providers are fighting to limit access, or at least make it more expensive, to competitors.

Viviane Reding, media commissioner for the EU, wants to create a pan-European regulatory body and give national authorities the right to force former monopoly carriers to divide their network and service businesses as a last resort to promote competition.

That's an idea that has been bouncing around this country for more than two decades with little acceptance. Instead, our regulators seem to be moving in the other direction. The FCC is granting forbearance petitions that allow incumbents to raise prices on and limit access to their broadband facilities.

The major incumbents argue that there is substantial competition and choice today — even though much of that choice for businesses depends on being able to buy a connection from an incumbent for the last 100 feet into a building.

We are already seeing, however, the results of the earliest forbearance action. In March 2006, the FCC failed to act on Verizon's initial forbearance petition for its wholesale fiber facilities in the required time, essentially allowing that petition to become law. Competitors such as Allied Telecom are already seeing much longer lead times and higher prices for the fiber facilities they need to reach their customers. (See story on page 34.)

Incumbent telcos are using cable's penetration into the residential voice market to bolster their argument that consumers have a choice, and on this front they are correct. But a consumer choice and a business choice are not the same thing.

Not surprisingly, the cable industry is taking a different view. A Comcast-commissioned study by MiCRA, a Washington, D.C.-based research firm, found that consumers could be saving an average $12 a month on their phone bills by switching to cable voice over IP. If the FCC wants to save consumers money, it argued, commissioners should force the telcos to interconnect with cable to give those providers access to more phone lines.

Of course, if you apply that logic to cable networks, they would be forced to allow other ISPs to deliver lower-cost Internet access service over their cable networks as well, wouldn't they?

No incumbent is going to willingly open its network at reasonable prices to competitors — it's counterintuitive. Its job is to do what it takes to make money for shareholders, not to worry about the state of competition and whether customers have choices. That's why regulators must continue to regulate.

Someone in Europe gets it. Too bad much of Washington doesn't seem to.