When I opened my Washington Post this morning, right on cue, I found Gene Kimmelman's statement decrying the merger because "it would inevitably push prices higher."
But then came this quote from the Consumers Union official: "This will end the era of falling long distance and cell phone prices, leaving consumers paying inflated charges due to lack of competition." You can imagine I nearly choked on my cheerios. This may be a misquote. Look for a "correction" in tommorrow's Post. Because, if not, this is big news: Gene Kimmelman acknowledging that we have been in an "era of falling" prices. That average prices per unit of service have been falling is probably not news to the average consumer. But it is news that Gene acknowledges the era of falling prices because he and other "consumer" groups have predicted that the sky would fall--that is, prices would rise--with every telco and cable company merger that has been proposed since 1996. In November 1998, Consumers Union predicted that if the FCC allowed the proposed SBC/Ameritech merger to be consumated, "cellular competition will be eliminated." In a July 1998 press release Consumers'Union stated that, if GTE and Bell Atlantic were allowed to merge, "the average consumer will be left dealing with a bigger monopoly, no effective choices for telephone services and the inflated prices that usually follow." And so on.
It is not suprising to see that Consumers Union was quick to claim that the proposed SBC/BellSouth merger would leave consumers "paying inflated charges". Gene just reflexively hit "Control PIC" on his word processing program for that one. But, again, it is suprising --and welcome--to see the acknowledgement that prices have been falling, despite the stream of previous predictions from Consumers Union that they would inevitably rise.
Blair Levin, one of the most respected communications industry analysts around, and someone with first-hand experience in a top level senior position at the FCC in the mid-90s as FCC Chairman Reed Hundt's right hand man, has in right in today's Post when he says the merger must be viewed "in the light of a very different marketplace, with more competition, more substitution and more ways of reaching consumers."
Marketplaces do change, and consumers are certainly benefitting from the increased competition in the communications marketplace, notwithstanding the predictable predictions from certain "consumer" groups.