roundtable: Re: "Huber's fantasy world about telecommunications and the FCC"
roundtable: Re: "Huber's fantasy world about telecommunications and the FCC"
Re: "Huber's fantasy world about telecommunications and the FCC"
W. Curtiss Priest (BMSLIB@mitvma.mit.edu)
Mon, 12 Jun 95 14:04:55 EDT
Message-Id: <9506121806.AA20554@a.cni.org>
Date: Mon, 12 Jun 95 14:04:55 EDT
From: "W. Curtiss Priest" <BMSLIB@mitvma.mit.edu>
To: Telecommunications Policy Roundtable <ROUNDTABLE@CNI.ORG>
Subject: Re: "Huber's fantasy world about telecommunications and the FCC"
Hoewing's view, Curt
Curtiss Priest
<bmslib@mitvma.mit.edu>
----------------------------Original message----------------------------
Date: Mon, 12 Jun 1995 11:29:26 -0500
From: Link Hoewing <hoewing@ba.com>
To: Multiple recipients of list <telecomreg@relay.doit.wisc.edu>
Subject: Re: "Huber's fantasy world about telecommunications and the FCC"
In the early stages of competition, markets do often cause customer
confusion. Often, this stage settles into a phase in which people become
more aware and better able to make choices. The companies themselves
become aware that their customers are becoming confused and change their
offerings. Note the recent emphasis by both MCI and AT&T on simple,
guaranteed savings. They recognize that customer confusion is beginning
to be very harmful.
In that sense, the market works. However, please note that competition
always demand something of consumers. After all, how "unconfusing" is
the computer market? Yet, few would say that there have not been major
benefits of competition from this market.
Regulation does help maket things more "settled" but it also imposes
uniformity, reduces choices, and stifles creativity. There are tradeoffs
in all of these areas but on balance the net benefits from vigorous
competition are significant. The problem is, in part, that long distance
is not yet vigorously competitive.
Link Hoewing
Bell Atlantic | Internet: hoewing@ba.com
On Wed, 31 May 1995, W. Curtiss Priest wrote:
>
> Conservative Group urges replacing FCC with less powerful agency
>
> June 1, 1995
> CITS Observations on attached article:
> W. Curtiss Priest
>
> The year 1934 was a long time ago. Anyone with substantial knowledge
> of what telecommunications was like prior to the Communications Act
> would be about ninety years old, today.
>
> There are those of us who appreciate the need for a commission of
> national scope that is sophisticated enough to deal with complex
> issues and does not require the burden of petitioning a state or
> national court to redress communication imbalances and the
> "public interest."
>
> Can we really believe Pete Huber when he says we can "expect and rely on
> competitive forces to take care of irate" consumer interests?
>
> Yet Huber clearly believes the market will do this. I've met this
> type of person. They are of the same mentality as those who said
> we didn't need laws to protect coal-miners from black lung disease
> and laws to protect the elderly from slippery bathtubs!
>
> They live in their own myopic world and from that myopic vision
> they would destroy the years of work that went into passing
> telecommunications laws.
>
> Let me bring this home. To take advantage of MCI's 50% savings
> on long distance calls, I now have to push buttons everytime I
> want to make a call. And sometimes I make calls on the wrong line,
> increasing my local charges. And weekly I get checks from AT&T
> to change my service, and I spend hours calling Sprint and MCI
> to get "matching deals" to save $20 or so. The latest wrinkle is
> that I now have a coupon from MCI that grows in value by $5 for
> every month I don't switch from their service.
>
> This is the result of competition -- confusion and unwanted choices.
> Is long distance service a "natural monopoly"? You bet it is --
> watch how AT&T's market share has been slowly increasing, year-by-year!
>
> I estimate it will be about 6-8 years before we will have to
> re-regulate long distance phone rates. We economists call it
> economies of scale. The bigger you are, the cheaper you can perform
> the service!
>
> Did the interim period of deregulation help? Perhaps. That will be
> a good one for the historians to figure out.
>
> But this is today, and there are many of us who see there are
> not only economies of scale, but "economies of scope." This means
> it is cheaper to be both producer of media and distributor of media.
> And now we are at the door of "cross-ownership" issues.
>
> And, let us not forget, that Microsoft has gained substantial market
> share by having "proprietary" operating systems like Windows.
>
> And at the last minute the interoperability language in H.R. 1555
> was gutted, surely, by someone on the Commerce committee responding
> to Microsoft's glee to have proprietary systems so they could get
> even bigger. And so that little guys can't provide competing
> pieces of the oncoming mega-telecommunications complex that
> Microsoft and AT&T are devising.
>
> Peter -- go back to Samuelson and look up "economies of scale
> and scope." Read about natural monopolies. Then come back
> and tell me this "story" again.
>
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> ****************************Advertisement********************************
> Conservative Group urges replacing FCC with less powerful agency
> ASSOCIATED PRESS
>
> WASHINGTON - The agency that regu-
> lates Americans' access to television, tele-
> phones and other communications services
> should be replaced by one with sharply re-
> duced powers, a conservative group with ties
> to House Speaker Newt Gingrich urges.
>
> Under a plan unveiled yesterday by the
> Progress and Freedom Foundation, most of
> the Federal Communications Commission's
> duties would be left to federal courts and state
> regulators.
>
> - The agency replacing the FCC would have
> one main responsibility: to collect technical in-
> formation to help federal courts resolve dis-
> putes among companies over airwaves inter-
> ference, said Jay Keyworth, chairman of the
> Washington-based foundation.
>
> The foundation paid for the development
> and production of Gingrich's televised college
> course and has received donations from cable
> and telephone companies.
>
> Among the FCC's duties are licensing TV
> and radio broadcasters, overseeing long-dis-
> tance services and regulating cable rates.
>
> And under the 19:34 law that gave birth to
> the modern FCC, Congress empowered the in-
> dependent agency to protect and to serve the
> "public interest."
>
> Because of this, people who think they have
> paid too much for long-distance or cable ser-
> vice can complain to the FCC. Those who be-
> lieve a local broadcaster neglects a community
> can raise concerns with the commission.
>
> Under the Progress and Freedom Founda-
> tion's plan, people or companies would take
> their problems to district courts, state regula-
> tors or to the Justice Department.
>
> The new agency would not get involved in
> consumers' affairs.
>
> The foundation would "expect and rely on
> competitive forces to take care of irate" con-
> sumers, said Peter Huber, a lawyer involved in
> the foundation's project.
>
> FCC Chairman Reed Hundt is a big advo-
> cate of competition, but wary about it being
> the sole protector of the public.
>
> "It is absolutely wrong to say there is no
> public interest stake in the communications
> revolution and saying that the private sector
> can handle it all," Hundt said.
>
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>
>
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