by not having free choice. Without competition in broadband access, there are no options for lower costs or higher speed and functionality. Without availability guarantees, the subscriber is subject to outage periods that could be significant. In effect, having a single provider forces the market to accept what that provider is willing to offer.

The Telecommunications Act of 1996 opened the doors to competition in telecommunications. This law requires incumbent phone companies (ILECs) to allow their competitors access to their infrastructure with fair fees. The telco infrastructure going to homes evolved after many years of permits, building through public property and coordination with subscribers. Duplicating that infrastructure to provide a new service is not practical and is not economically justifiable. The fundamental purpose of the law is to avoid ILECs from using the existing wiring to force subscribers to purchase all services from them, even when a competitor can offer better and more economical alternatives.

One of the best examples of the success of this law is the long distance call market. Before this law a subscriber was forced to pay the long distance rates established by their phone company and to accept the levels of service it offered, resulting in many cases in higher costs and mediocre service. Today a subscriber has the freedom to move his or her long distance calls to the provider that offers a better service or a lower price. There is no obligation to use the local phone company. There is no doubt that the low long distance call rates are a result of the competition in that market. To keep part of the market, the ILECs have had to invest to offer better service and lower their prices.

The cellular phone market is another example on the telecom industry where having more service providers has resulted in lower costs and better service. Would you believe that the current low rates and free call plans would exist if you had a single cellular service provider? It is also clear here that competition has forced providers to offer better plans at a lower price, greatly benefiting consumers.

Rev: Oct-24-02