Date   : Mon, 15 Dec 1986 22:53:25 EST
From   : "Keith F. Lynch" <KFL%MX.LCS.MIT.EDU@mit-mc.ARPA>
Subject: Re: Pending FCC ruling threat to modem users

    From: Keith Petersen <W8SDZ@SIMTEL20.ARPA>

    ... Mark Fowler, Chairman of the FCC, has been hailed by the press as
    a "fair market zealot."  The chances are very good that he views this
    proposed reregulation as the magic road to increased competition and
    fairer pricing for consumers.

  In a free market, it would not matter to users whether this
legislation was passed or not.  The legislation does not COMPELL local
phone companies to charge four dollars or more per hour for a local
phone call to a long distance data service (e.g. PC PURSUIT) it merely
ALLOWS them to do so.
  Since it doesn't cost local phone companies any more to complete a
local call to such a service than it costs them to complete any other
local call, phone companies would not lose money by not adding this
charge.  And since any local phone company which chose NOT to charge
extra for such calls would get plenty of business from users who
formerly used any local phone company which DID decide to add the
extra charge, there would certainly be local phone companies which
choose not to add this charge.  This is how the free market works.
  HOWEVER, we unfortunately do NOT have a free market in local
telephone service.  Since each user has no choice which local phone
company to use, thanks to a pernicious government-mandated monopoly,
most local phone companies probably WILL add this charge if they are
allowed to.  They know they won't lose any customers to competing
firms, since there are no competing firms allowed.
  In an ideal world, this legislation would be a good thing.  Phone
companies like any other company should be allowed to charge whatever
they wish for their services, subject only to the constraints of the
marketplace.  But in the context of the captive marketplace, this
legislation would be a very bad thing.  If phone companies are given
a monopoly, their prices have to be regulated by the government, since
they are not regulated by the free market.  Without regulation, they
would be able to charge as much as they could without people abandoning
phone service for bicycle messengers or carrier pigeons.
  Phone service ought to cost the user just a few percent more than
the cost to the phone company of providing the service.  In a free
market, it would.  In a regulated mandated monopoly, it might (how
could anyone ever tell?).  But given an unregulated mandated monopoly,
i.e. the worst of both worlds, the local phone companies will sell
their services for slightly less than the cost to the user of doing
completely without phone service.
  If Mark Fowler is indeed an advocate of the free market system, this
is how it should be explained to him.

     Write to:

     Honorable Mark Fowler
     Chairman of the Federal Communications Commission
     Washington D.C. 20554

     Refer to Computer Inquiry III in your letters. ...

     And hurry!  I have heard this matter will be going before the FCC for a
     vote in the latter part of January or early part of February.  Time is
     running out.

  I completely agree.  Write today!

  Please reply to me, I am not on most of these lists.
                                                               ...Keith