The Cable Guise.

• Author: Lebeda, Guy
• Position: Competition in telecommunications - Brief Article

Positive Changes in Wake of Telecommunications Act

The Telecommunications Act of 1996 allowed competition for business telephone service for the first time. The first comprehensive rewrite of the Communications Act of 1934, its provisions changed the playing field for Internet and online services, also broadcast and cable television services.

For the business-telephone end user, the act eliminated market-entry barriers and relaxed merger rules. This opened the door for new competitors to offer "dial-tone" service to businesses.

The good news for the business consumer is that dial-tone prices have gone down dramatically while more features and types of services are available. The bad news is that with all the rapid changes in the industry, like mergers of local telephone providers and Internet companies, and the recent breakup of AT&T, it's more difficult than ever for a business to know how to choose a provider.

Robert Brown, vice president of Salt Lake City-based CCI Telephone Inc., says he believes that competition has led to better pricing and improved features, but that technology drives the changes in the telecommunications industry today. "The end user (business consumer) has to ask himself, 'What (technological) advantages does the other guy have over us?'"

Brown also says technology has changed the way his company serves its customers. "We used to be equipment salesmen, but now we are consultants for telecommunications technology, helping our customers decide what's best for them."

Bigger Is Not Always Better

Positive changes notwithstanding, "Qwest is still the 800-pound gorilla of the telecommunications market -- in that it still owns the network," says John Christoffersen, master agent for Salt Lake City's Electric Lightwave Inc., a company that competes with Qwest in selling dialtone service to businesses.

"It is the biggest provider of dial-tone service because it owns the cables. Other companies still must go through it to get dial-tone service. But now individuals are no longer forced to deal with Qwest's service and pricing."

"The theory is that a little company can react quicker. Qwest, because of its size, is...