CRY FOUL

It's tough to get a fair shake in telecom these days. A federal appeals court this month overturned a lower court's dismissal of an antitrust suit aimed at all four Bells, advancing the suit that accuses the Bells of conspiring to bar competitors from entering their markets while colluding to avoid Bell-on-Bell competition.

Its timing is odd, even anachronistic, in several ways. First, the development comes so long after the shakeout of CLECs as to be irrelevant. Second, it comes just a few weeks after Qwest accused fellow Bell SBC of anticompetitive antics in a complaint to the FCC. Specifically, Qwest alleged SBC threatened to cancel contracts with carriers such as WilTel and Time Warner Telecom if they entertained acquisition offers from Qwest. In response, SBC called the complaint “a sad, desperate act by one of our competitors, who is afraid of having a vigorous competitor in [its] own backyard.” Qwest is also simultaneously trying to convince a court that Utah's multi-city public wholesale fiber network, Utopia, unfairly pits the public sector against private enterprise.

Bell antitrust suits were filed at a time when folks expected fairness from the telecom industry, but those days are long gone. In Philadelphia, the city is offering its own wireless broadband to residents. In Manassas, Va., folks are getting broadband from their electrical outlets. Meanwhile, a 4-year-old software start-up has pilfered more than a million voice lines from local phone companies. And cable operators are draining the market for residential triple-play services faster than telcos can ask, “fiber-to-the-what?” To top it all off, following a recent high-profile acquisition, telecom carriers built on more than a century of network investments will now have to split their voice revenues with a company whose core business is essentially holding vast online garage sales. Clearly any sense of fair play and propriety has melted away, and the industry is now deplorably controlled by the disorderly forces of technology and customer demand.

About the only practice we all agree is still the fairest way to compete in the business world is the hiring of lobbyists to change the law in one's favor, as we were reminded of by Google's recent investment in Washington's K Street services. Google, with its young but growing muscles, has fresh designs on the telecom space and may have learned the importance in this sector of effective lobbying by having watched Bell companies wield it to great effect over the years. The authors of the next telecom act will have an incalculably tough job ahead of them if they commit themselves to establishing fairness in such a chaotic, shape-shifting industry. It will be far easier just to count up the money and weigh it in stacks on justice's scales.