AT&T (NYSE:T, news, filings) won a victory yesterday in the deep south, they managed to convince the Alabama Senate to pass a bill ending regulation of phone services, both for home and business. Apparently, it was being filibustered by one state sentator, Bobby Singleton, but he stepped out of the chamber and they pounced and approved it 19-8. Sort of a Mr. Smith goes to Washington moment, but with a bathroom break. What does it mean? If it becomes law, landline rates will be deregulated just like wireless and voip. The argument was that since AT&T has lost 10% of its landlines in the state to those services, sufficient competition exists and landlines were at a disadvantage.
That AT&T Wireless won a good fraction of those lines from itself notwithstanding, to an extent this makes sense. Here in Beijing where I spend part of every year, landlines are already irrelevant. Even the girls they hire to stand in the elevator to push the buttons here have cell phones. Landline losses are approaching critical mass, after which regulating them as a monopoly will be somewhat pointless. Philosophically, I don’t have a problem with Alabama’s move when the time is ripe, and Alabama gets to decide for itself if that is now. Technologically, copper fixed lines are just inferior to the mobility of a cell phone and the bandwidth of fiber. Removing regulation won’t appreciably change the fact that in 10 years they will be like dialup now – used by a few (still 8% of pageviews of this website!) but forgotten by most.
On the other hand, what AT&T wants is the ability to control pricing – are we seriously supposed to believe that they are now going to lower prices to get those customers back? Right… I guess I get tired of the image of an AT&T under assault from all sides by unfair competition and regulation so burdensome they can’t keep up. This is a company that has $120B in revenue and managed to generate over $12B in profits last year, but of course will be mortally wounded if the unions don’t give up some benefits pronto. Do they give out an Oscar for best acting by an ILEC? Ah well, democracy has spoken. Now we get to see just how level the regulation-free playing field really is. Good luck Alabama. Someone pass the popcorn.
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