A look back Telecom Act fails to live up to first-year expectations

The Telecommunications Reform Act of 1996 promised more competition, consumer choice and lower prices in local, long-distance, wireless, cable TV and other services. A year later, those promises remain largely unrealized, albeit with a few notable pockets of progress.

As promised when Congress adopted the ballyhooed legislation, Ameritech is leading the pack for long-distance entry. The Michigan Public Service Commission ruled last week that the telco met a 14-point checklist showing that its local market is open to competition-the first state to issue such a certification. The Federal Communications Commission has the final say.

MCI celebrated last week's anniversary by announcing plans to expand its local telephone service to six new markets this year: Washington; Dallas and Houston/San Antonio, Texas; Cincinnati; and Fort Lauderdale, Fla. The interexchange carrier will also expand service in the Seattle, Baltimore and New York City areas and will offer residential service on a resale business in Illinois and New York. MCI plans to spend $700 million on its local switched networks in 1997, according to President and Chief Operating Officer Timothy Price.

Despite the latest developments, federal and state governments are struggling to deregulate an industry filled with entrenched interests.

"There's a lot of ambitious overpromising in the Telecommunications Act," said Scott Cleland, managing director of the Schwab Washington Research Group. "Bringing competition will take a lot longer than people expected. This is a regulated, artificial marketplace.

Grand expectations followed President Clinton's signing of the act on Feb. 8, 1996. As the first major overhaul of communications law in 62 years, the act sought to deregulate the telecom industry by allowing various players-local telcos, long-distance carriers, wireless companies, cable TV operators and more-to compete on each other's turf.

In the $200 billion telephony market, the main goal was to break the Bell regional holding companies' long-standing monopolies on local service by letting long-distance, cable TV and wireless sellers into the game. Conversely, the already-competitive long-distance arena would become more so as Independents such as GTE Corp. and the RHCs added their own offerings.

"The promise of competition has been delayed, but I think it'll happen," said Rep. W.J. "Billy" Tauzin, R-La., chairman of the House Telecommunications subcommittee. "You've got to have about a