To no one's surprise, the Federal Communications Commission unanimously agreed yesterday that competition in the telephone industry has proved to be a good idea.
After a six-year study of the 23-year-old gradual deregulation of the industry, the FCC said that the Bell System's challengers and the government efforts to allow marketplace factors to erode the telephone industry monopoly have benefitted the general public.
"I think the general direction toward relying on the competitive environment and withdrawing from detailed government supervision of telephoned services as desirable and here to stay," FCC Chairman Charles Ferris said in an interview yesterday.
In ending its study of the effects of competition, the commission concluded that the "record is clear that no immediate adverse harm has been demonstrated."
The FCC said that competition is "giving consumers both lower prices and innovative products and services."
Specifically, the commission cited competition in the sales of the telephones used by the general public, the growth of private-line telephone service, the use of innovative pricing practices for local service, and the separation of revenues and expenses by intrastate and interstate companies as examples of the industry's successful adaption to competition.
Pic Wagner, a spokesman for American Telephone & Telegraph Co., said the report was a "reaffirmation" of the FCC's direction. "We recognize we face competition in just about all aspects of our business and we will continue to provide the services consumers want and need," Wagner said.
On the variety of telephones the general public can now purchase, the most widely recognized area of new competition, the FCC said the ability of new companies to enter the market "has hastened innovation with no appreciable deleterious effect upon anyone."
Further, the commission said the growth of that segment of the industry "is further evidence that there were unmet customer needs prior to the introduction of customer-provided equipment."
Ferris said the report demonstrates that commission resources can be used in more productive ways than trying to regulate all facets of telephone service.
"To double check and play phantom accountant to every telecommunications company we regulate is an extraordinarily difficult task," Ferris said. "The basic notions of the free enterprise system can provide the checks and balances to determine whether consumers are paying a desirable price for what they're getting."
The report could provide impetus to two other FCC efforts to deregulate segments of the communications marketplace.
If both inquiries, one involving basic telephone service and the other primarily dealing with private-line carriers, conclude with the adoption of a pro-competition scheme, virtually no segment of the telephone industry will still be subject to strict federal regulation.