Leveling the playing field

One of the more unique aspects of golf is the fan involvement. Besides the stereotypical fan on the course who only speaks in hushed tones and politely cheers any movement by the pros, there is a second class developing: the nitpicker. In the past several years, the results of a number of tournaments have been altered because of minor infractions committed by players that would have gone unnoticed and/or unpunished if it weren't for a couch potato at home calling tour officials to point out the violation.

This class of viewers not only knows the rules but can't stand to see anyone-especially the best in world-flaunt them. To these people, rules are written in black and white and everyone must compete on a level playing field.

If only the current state of the telecom market were so clear. Even worse is the end result, often emanating from appellate court judges' chambers, that usually leaves more areas open to interpretation. Throw in talk about creating a level playing field, a favorite phrase of mine used by all sides but defined a dozen ways, and things get murkier.

Does making telcos sell wholesale services below cost to competitors constitute a level playing field? Does forcing telcos to sell digital subscriber line service to Internet service providers on a wholesale basis while AT&T is able to keep a closed cable network constitute a level playing field? Will regulators hastily approving AT&T's merger with MediaOne, while some of those same regulators scrutinize every minute detail of the SBC/Ameritech merger, create a level playing field?

In all cases, the answer could be no, but it may not necessarily matter.

The merger of AT&T and MediaOne likely will sail through the regulatory process, especially if elected officials become involved. Why? Because if politicians are good at one thing only, it's math, specifically how to count votes. And they know that supporting a merger that might possibly give the majority of the country a choice in local phone service looks good.

Throwing weight behind a merger of two RBOCs, where the biggest winners likely will be large corporations, doesn't have the same grass roots appeal. That hasn't stopped dozens of congressional reps from supporting the deal. Everyone needs campaign cash to run.

But does it create a level playing field? Exactly what is a level playing field and should one even exist in an industry with a monopoly history?

A year ago, long-distance companies had perfected the art of pumping out press releases decrying the state of competition in the local loop and the lack of a level playing field every time an RBOC hinted at applying for long-distance relief. Today, both sides have their machines well-oiled.

Just days after AT&T pulled what could be one of the fastest pre-emptive strikes in corporate merger history, by signing a peace agreement with Comcast over MediaOne, SBC Communications staked out its position by opposing the merger. In comments to shareholders at the company's annual meeting, SBC Communications Chairman and CEO Edward E. Whitacre Jr. "stressed that fairness for consumers and the entire industry is at stake."

This from a company so concerned with fairness and level playing fields that it spent the first 18 months after the Telecom Act was passed battling interconnection rules it now supports.

Bell Atlantic also chimed in last week by hammering AT&T for raising cable rates as much as 25% in western Pennsylvania-less than 60 days after rate deregulation became effective. Reading between the lines, though, it would appear that Bell Atlantic Chairman Ivan Seidenberg has had it with AT&T taking pot shots at the RBOC's merger with GTE and found the MediaOne deal an appropriate time to strike back.

AT&T certainly is no angel in the level playing field rhetoric game. Its poorly veiled threat to walk away from the TCI merger if it wouldn't be allowed to keep its broadband network closed may have worked when it involved only two companies. Mix in the MediaOne transaction with other partnerships and suddenly AT&T has exclusive access to one large pipe entering between 35% to 60% of all U.S. homes, depending on whose math you trust.

Is it fair? Probably not, but in an industry where every player has historical baggage, fairness and a level playing field don't always peacefully exist.