For decades, deregulation opponents predicted the devastating effect that divestiture and deregulation would have and yet, the market place has once again proved that competition inevitably accrues to the consumers’ benefit—in a big way and a recently released study by Microeconomic Consulting and Research Associates, Inc. (MiCRA) concurs.
With cable lines accessible to almost 99% of all U.S. households, and as a result of deregulation, cable companies are competing aggressively with telecom companies for voice service. And they are winning telephone business from tens of millions of residential and small business customers.
In response to this increased competition, the traditional telephone companies, concerned about the rapid evaporation of significant chunks of their market share, responded by adjusting rate structures, offering new competitive pricing packages, and launching into video service themselves by investing in new broadband infrastructure. Consumers have taken advantage of these new pricing and product opportunities in droves.
But that’s not all. Technological advances have contributed new entrants into the market in the form of Voice over Internet Protocol, or VoIP, for customers who provide their own broadband connection and a cutting-edge option known as Over the Top, or OTP VoIP.
This kind of competition was Congress’s intent in the Telecom Act of 1996. Too bad it’s taken a decade to happen because of regulatory stubbornness.
Cable providing voice service into the residential and small business markets, the emergence of OTP VoIP, telephone providing video services and the traditional telephone companies’ competitive response—it all adds up to American consumers saving over $100 billion over the next five years.