Will Consumers' Money Be Saved by the Bells?

On the surface, it looks like a big win for the telecom giants at the expense of the little guy: In what could be the final blow against the 1984 AT&T breakup, on Wednesday the FCC cleared the way for Bell Atlantic to become the first Baby Bell to offer long distance services. The move was decried by many of the consumer advocates who futilely fought against the Telecommunication Act of 1996, which paved the way for Baby Bells to provide long distance so long as they open their markets to competition. Earlier this year, when AT&T sought to get into the New York local market, Bell Atlantic opened its copper phone lines and basically said, "Let the games begin." But America is not revisiting the days of monolithic telecoms' inhibiting consumer choice. Indeed, most industry analysts predict that the move will be a boon to consumers.

Americans are fed up with 10-page phone bills listing service providers they don't remember contracting with, which have become the norm since 1984. Because of the 1996 act, major telecoms, including AT&T, Bell Atlantic and MCI/Sprint, will eventually be able to package Internet, cable TV, cellular, long distance and local services. That means one bill for all five services; consumers will also be allowed to choose the package that fits them. Further, telecom analysts say that the long distance market is in need of some new blood to fuel competition in the wake of the MCI-Sprint merger. Eventually there may be only a handful of major firms offering all these services, but from a consumer choice standpoint we're clearly better off than we were in the days of Ma Bell.