Crystal City, Va. -- State regulation of local phone pricing that has been
around for decades is no longer necessary because of competition from cable and
wireless phone companies, a top lobbyist for traditional local phone firms said
In a speech here, United States Telecom Association president Walter
McCormick told state regulators that by various metrics, local phone companies
face effective competition, obviating the need for state-set pricing rules.
"Some may dismiss the end of economic regulation as unrealistic or radical.
But it is not unrealistic if you are truly committed to the goal of a
competitive environment and if you believe technology and regulatory policy can
succeed in transitioning the telecommunications industry to full competition,"
McCormick spoke to state regulators and policy analysts at a broadband forum
here hosted by the National Association of Regulatory Utility Commissioners and
the National Exchange Carrier Association.
The states have been setting local dialtone rates for decades to protect
consumers from monopoly abuse and to ensure the penetration of telephone service
in the vast majority of homes.
"Our companies no longer operate in the cocoon of a monopoly environment,"
McCormick said, noting that 122 million cellular phones are in the hands of
Competition is coming from cable operators and others that see broadband as a
means of providing voice services with minimal regulation, he added.
"Technology is similarly transforming voice services. Who could have
predicted a decade ago that the 11th-largest voice-services provider
in the nation today would be a cable company - Cox [Communications Inc.]?"
A USTA spokesperson said McCormick was aiming his deregulation proposal at specific markets where voice competition was apparent.