SBC, AT&T say Bell breakup doesn't work

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The key word is regulation.

Ma Bell was a regulated monopoly. States and the Federal government gave them permissions and approved their rates. Eventually the system failed because Ma Bell attempted to take control of the new technologies. Settlement or Court decision, the result would have been the same. The company forgot where their advantages came from, tried to think of itself as an ordinary company.

Communication companies are creatures of government, and the main battles are fought within government agencies. Remember the very recent case in which the Bells protested the special rates they were being required to gove competitors because of the tyranny of the telephone poles? Who won that case?

Any good result from the breakup could have come from regulatory agencies. The issue was whether the Bell System was to be strong enough to restrain competition. They were not alowed to be.

What the breakup did was to throw more power to the States. But the Baby Bells covered many States, playing one against another, and many of the Federal controls were rendered moot.

So the Feds got their competition. And the Baby Bells did well with the States, reasonably with the Federal government, and eventually bought the major suppliers of new technologies.

When you look at the landscape of competition, and see how little there is, you'd have to be discouraged about the results of the breakup. Ma Bell could have done little better staying in control.

Posted by: Anton Philidor   Posted on: 02/22/05 You are currently: a Guest | Members login | Terms of Use

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