The biggest factor in the telecom companies' all-out war for business is the Telecommunications Act of 1996. This deregulation bill was enacted to increase competition between local and long-distance telephone companies by forcing the Baby Bells to open local markets to long-distance phone companies and vice versa--not to mention giving cable companies the opportunity to offer phone service. Such an agreement means there are more companies than ever vying for your business, so the innovations and price structures they offer promise to get more and more interesting.
Unfortunately, the promise of telecommunications deregulation has been more inspiring than the actual services making their way to homebased offices' doorsteps. The reason for the delay appears to be local Baby Bells' reluctance to initiate the competitive practices required by the Telecommunications Act.
According to the act, Baby Bells must prove they are receptive to competition and pass a 14-point checklist before the federal government will let them compete for long-distance service. The Bells are dragging their feet on some issues--and some are even fighting the law--claiming there's already plenty of competition in their local marketplaces. This has prompted several consumer groups to issue a statement demanding that the Bells adhere to the Telecommunications Act.
To compete with the big boys, some of the Baby Bells are teaming up, creating a "bigger is better" mentality. For example, Bell Atlantic joined with Nynex, and SBC Communications joined with Pacific Telesis to increase their geographical service regions and fight the major long-distance providers with greater force.
Because the regional and long-distance carriers are duking it out in the courts, many of the second- and third-tier players that don't fall under the deregulatory act are rushing in to fill gaps and offer pricing structures and innovations the big guys haven't thought of.