The 1996 law has at least forced regulators to mend their protectionist ways, even if it has not eliminated regulation altogether. Part of the old regulatory bargain had been to keep all long-distance rates high, but competition is already beginning to undermine this bargain. This competition will not be stifled by a few large mergers. Consumer long-distance rates have fallen to an average of about 15 cents a minute regardless of distance or time of day. They will continue to fall, perhaps to the five-cent range.
Business rates are far lower.
Consumers could benefit more quickly if federal and state regulators would allow the local Bell telephone companies to compete in this market also. But few households will see two or more local carriers stringing wires to their neighborhoods very soon. It is unprofitable to do this because state regulators continue to require that the old-line local telephone companies keep the price of local residential service below its cost until they lose most of their business customers and thus their ability to continue this madness. Blocking the mergers of the titans will not make such entry less risky or more likely. The best hope for competition in all local markets lies with further deregulation.