This temptation must be avoided today. Regulation has inadvertently created a thriving competitive marketplace in lucrative high-end business and data services that includes a merry band of players who did little to invest, extend, or otherwise improve the underlying facilities necessary to run a telecommunications network. Congress directed the Federal Communications Commission to make it economically unattractive to build telecommunications facilities. Without new facilities, owned independently of the former monopolist Bell companies, new CLEC entrants are forever required to turn to government for ever more invasive regulatory control over existing facilities. As one example, Mr. Glassman recommends a government break-up of the incumbent telephone companies.
Radical surgery is a dangerous procedure at any time.
However, the odds are stacked higher against consumers and a free market because this proposal requires that the network itself would continue in perpetuity as a regulated monopoly. Mr. Glassman is right to worry about sluggish expansion of new networks and the glacial spread of market-saving competition. But he has the linkage between expansion and government policy reversed. New networks are not built because a company makes a promise during the multi-tiered extortion process we call merger review. Rather, competition emerges when government officials are taken out of the decision-making process.