Summary
1. The notion that a “three-headed form” of Ma Bell has come back is at least somewhat of an exaggeration. 2. The amount of “post-divestiture competition” is understated in the piece. 3. The so-called “new competitive hope” is either pretty much here today or is close to becoming a reality.
Analysis
What would you rather have – seven RBOC clones in 1984 that are operating according to the standard, Bell-head philosophy – or three service providers each with a distinct identity that are increasingly looking to compete in wireline outside of their traditional territories? AT&T wants to become a much larger global force, that will probably get itself into diversified types of businesses; Verizon deisres to be more of a lean and mean machine that focuses on broadband services; and Qwest has turned into the original definition of an independent telco.
With some notable and limited exceptions, regulatory involvement is going to stifle competition every time. The irony is that with more of a free market, the RBOCs would have most likely looked for new partners to make them more successful – and there probably would have been more competitive carriers around now.
Still a “[o]ne LEC/one cableco” provides a tremendous change over the original Ma Bell model. With the previously stated beginnings of inroads into each other’s Bell territories, there will also be increasingly large independents that will be encroaching on the legacy properties of the RBOCs. And it is only a matter of time before the “cablecos themselves…[are] competing with each other in the same markets.”
The weakest portion of the article is on the long-distance sector. In going from by far the highest cost voice service to way down the lowest, competition did its job. But AT&T and MCI were not really “forced…to find an exit strategy.” They had become dominant forces as data communications players in the enterprise space – and that is precisely why the ex-SBC and Verizon wanted them.
In terms of the future potential sources of competition in the source piece – they are here now or will be soon. In wireless, the consumer still has the choice of four major competitors (Sprint not currently being a powerful entity was almost all self-inflicted). While over-the-top VoIP providers have struggled, they are still around. In addition, “cloud-based and Web-delivered voice and data services” are on the brink of becoming important additions to the competitive landscape.
