Friday, June 18, 2004 - The Progress & Freedom Foundation Blog

The Ornery Contrarian

Well, maybe I'm just a bit down to be back in town after being away at the DC Circuit Judicial Conference for a few days listening to the likes of Douglas North, Francis Fukuyama, Tyler Cowan, David Landes, and others discuss the great issues of the day, not to mention Dana Gioia, the chair of the National Endowment for the Arts, read from his poetry. But it is a bit discouraging to come back to the slew of press stories reporting how all the Bells--with the "encouragement" of the Administration--have duly submitted letters to the FCC pledging not to raise rates for UNEs until the end of the year, and how the FCC has duly publicized these letters that all of the Bells just happened to submit en masse . (Verizon pledged to hold the line for five months.)

In his post below, Ray takes another good hard shot at the UNE regime. He explains why, in his view, the UNE regime, as currently implemented and managed, has been so detrimental. "UNE-P competition was all about manipulating wholesale rates to induce entry under already distorted retail rate price points," he says. And he keeps referring to those "low wholesale rates" as a deterrent to new investment and inter-platform competition.

Okay, you know I agree with Ray's analysis. And, I agree, as I have already said, that the Bush Administration deserves a big pat on the back for not seeking review of the DC Circuit's decision. And I guess, at one level, I understand what might politely be referred to as the "politics of the situation" or the "this year is an election year" syndrome. But, at another level, if the Bells have pledged no rate UN increases for the remainder of the year, it almost makes you wonder what all the fuss and frenzy was about.

Well, I really do understand what all the fuss was about. Some progress has been made in moving down the road to a less regulatory environment that will ultimately benefit consumers, and perhaps I shouldn't be too ornery about the nicities of the dance done to get there. But let's be honest here. Won't it be nice if we ever get to a world--certainly a few years away at best--in which the government doesn't have enough leverage to orchestrate a show of "voluntary" price freeze pledges for newly deregulated services that ought to be the object of truly voluntary commercial negotiations?

posted by Randolph May @ 9:41 PM | General