US West offers ADSL connections between homes and ISPs, but it also has a subsidiary ISP business of its own. The company has made phone lines ready for ADSL, prepared the legal groundwork by filing tariffs before many state utility commissions, and even started to offer service in many locations. In some Western states, ISPs are griping that US West gives preferential treatment to its own subsidiary and uses unfair practices against competing ISPs. In Minnesota, the complaints have led state government agencies to lodge a formal complaint with the body that regulates telephone service, the Public Utilities Commission. We as consumers have good reason to care about competition on the Internet.
Innovation also tends to slow down when incumbents sense that no one is on their tail.
US West says that its current service improves competition. While the Internet providers focus on the ADSL service that matters directly to them, US West scrambles to meet challenges on a much larger scale from cable TV and satellite companies. According to Minnesota complaint, US West takes a long time to hook up competing ISPs while letting its own ISP sign up and start serving end-users. Switching from one ISP to another incurs a heavy charge. No guarantees are in place to ensure that competing ISPs get just as good service as the subsidiary.