Last week, Close to Home ("How Much for That Dial Tone?) presented five different views on the cost and availability of telephone service in the D.C. area.
The biggest controversy appears to be the rising cost of the dial tone. The honorable state senator from Northern Virginia, Clive DuVal, stated, "Divestiture has been a catastrophe. Competition hasn't brought the rates down."
Well, Mr. Duval, welcome to the real world. Divestiture was not intended to reduce rates; it did just what the Justice Department pressed for. It opened up the telecommunications industry to all comers. "Let the marketplace decide," was the war cry. The marketplace has decided.
The once ubiquitous Bell System, of which C&P was a part, did have a goal that was successfully met -- that of universal service, telephone service affordable by all. This was possible by some rate- setting sleight of hand: long-distance calls and business service subsidized the cost of local residential telephones.
C&P, as its vice president Delano Lewis reported, has controlled costs by increasing productivity, introducing new technology, consolidating and reducing its force. As any businessman knows, you don't just take those types of drastic steps without paying a penalty; and C&P has paid dearly, trying to keep itself operating profitably while introducing the changes with an ever-decreasing force experience level.
A very important point needs to be understood: divestiture was not C&P's idea, but C&P is trying mightily to make it work. The cost of local telephone service will never again be what it was. But regardless of the dissenting opinions in last Sunday's Post, it is still one of the best buys in town.
As a non-American and long-time admirer of the Bell System, I continue to marvel at the docility with which the American consumer appears to have accepted the rising costs of service consequent to the breakup of AT&T.
At a time when the government has succeeded in reintroducing a much-needed meas stability, the telephone companies are being allowed to double or triple their charges on the grounds that such increases are necessary to cover their costs and provide an adequate return on capital. Labor and material costs are relatively stable, and interest rates have fallen, so we are presumably being asked to pay for unnecessary duplication of facilities, wasteful advertising, overstaffing and other inefficiencies. If, as we are continually being told, local service used to be subsidized by long distance, why are long-distance rates not being drastically reduced?
These are surely matters that require investigation at the national level, and cannot be sorted out by local public service commissions.