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New America Foundation in Computer World on Telecom Deregulation

Consumer Groups Oppose Telecom Deregulation Requests
November 13, 2007

Eight public-interest and consumer groups have asked the Federal Communications Commission to reject requests by two large telecommunication providers to close off their copper voice and data networks to competitors in 10 U.S. cities.

The groups, including the Consumer Federation of America, Public Knowledge and the New America Foundation, sent a letter to the FCC Tuesday, saying attempts by Verizon Communications Inc. and Qwest Communications International Inc. to end wholesale price controls on their copper networks would result in "significant rate increases." The two companies are among several telecommunications carriers that have filed so-called forbearance petitions with the FCC over the past two years.

But there's not enough competition to justify the deregulation, the public-interest and consumer groups argued in their letter. Qwest and Verizon now have few broadband or voice competitors, they said.

The letter refers to a study, paid for by competitors of the two telecommunications giants, saying the average cost of household phone service in the six cities covered by the Verizon request would rise by $114 a year.

"Granting these forbearance petitions is likely to eliminate competitive voice and broadband services to the mass market of residential and small business customers," the groups said in the letter. "We urge you to reject these petitions and adhere to the current ... policy that has been shown to promote lower prices and greater investment in broadband services." ...

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