Thrown for a Loop

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In the meantime, the Bells are doing their best to fight back in the marketplace. By leasing long-distance networks in much the same way their rivals do for local service, they will soon be able to offer long distance throughout much of the nation, a good sign, given that they have already grabbed a 30% share in certain states, such as New York and Texas. Because long distance on its own is no longer such an attractive business, the Bells are busy rolling out bundles of local, long-distance, Internet-access and wireless service — often all on one bill — to try to stem the tide of defections. Even though the Bells can't offer multinational companies much in the way of international calling, all of them — led by Verizon — are making a concerted push for U.S. Big Business customers, a sector still dominated by AT&T, MCI and Sprint.

Echoing most telecom-industry analysts, Powell has made clear that he thinks that the industry may well need another round of consolidation to get back on sound footing — whether that means SBC and BellSouth or Verizon and Qwest joining forces, the Bells snapping up their newfound competitors at AT&T and MCI, or some of the six major wireless carriers finding strength in numbers. But, as Gene Kimmelman, co-director of the Washington office of Consumers Union, points out, "If Powell goes too hard too fast, he could end up with egg all over his face, with a more monopolistic market that cries out for new regulations." And surely the last thing he wants is to leave people like Will Harpest with fewer real choices and no one to call for help.