An uncertain future

Competition is clearly in the eye of the beholder. When the FCC ended August by giving AT&T and Verizon the right to merge their local and long-distance companies, it seemed almost anticlimactic to many of us. Basically, these two companies now can combine organizations to more cost-effectively sell to consumers what they already are selling to consumers: local and long-distance voice service.

For most of those who sell consumer voice services, including cable, pure-play voice over IP and the few competitive carriers that remain, there has never been any distinction between local and long-distance voice. In most of the rest of the world, our local access and transport area boundaries, established at the time of the original AT&T breakup, seem strange and arbitrary.

But some consumer advocates and others who consider themselves regulatory watchdogs warn that this breaking down of barriers gives AT&T and Verizon the right to run roughshod over the rights of consumers. They foresee a cozy duopoly — telco and cable — with little incentive to compete on price for basic voice services.

AT&T and Verizon did agree to offer special fare plans for low-volume users — a concession that is temporary. Even so, the two Democratic commissioners bemoaned the lack of any formal mechanism going forward to monitor how well the big carriers live up to their promises not to engage in gouging where they can get away with it.

Certainly these two big operators can benefit from the FCC's latest relaxation of regulations without sticking it to anyone. The internal efficiencies they can accomplish will reduce their costs of doing business at a time when that is important to everyone in the industry.

But there is little else certain right now in the competition for the consumer buck, and there is reason to believe that the competitive picture the FCC is painting today will be very different in a few years.

As I note in our cover story, beginning on page 24, there is still a great deal of flux in the competitive realm. Some of the dominant trends of a couple of years ago have fallen flat or are currently stumbling. Meanwhile, some new video and wireless opportunities seem poised to truly disrupt the status quo.

That status quo itself is changing, as Contributing Editor Joan Engebretson notes on page 18, as cable and telco both add wireless to their service bundles and try to figure out how to market these new packages.

One of the things that makes the telecom industry fun to cover is that the more things stay the same, the more they change. And that isn't changing any time soon.