It all started with AT&T controlling everything in the Local and Long Distance market. It became known as "Ma Bell"

Later the telephone carriers were broken up into 7 major 'baby bells'. (Ameritech, Southwestern Bell, Pacific Bell, Atlantic Bell, and a few others).

Then in February of 1996, a law was passed to deregulate each of the local phone companies, to inspire competition, and lower prices.

So what has become of this action?

Fact is, it has been over 6 years and the local telephone carriers still dominate a majority of the marketplace. Prices of local phone services have not decreased.
Why?

There are several reasons behind this. First, the local carriers made it increasing difficult for other companies to integrate with their networks, and have even been fined billions of dollars by the FCC for 'anti-competitive' practices.

Secondly, consumers have not become 'comfortable' with making a change to something they have never had the choice of doing before. Even though they pay more, many consumers still somehow feel that the local phone company would provide the most reliable service offering.
Much of this has resulted in problems arising in 'switching' companies, making lack of connectivity, and poor billing. All a result from the limitations the local Bell carriers placed on the competitors.

In the last few years, the local Bell carriers have been prevented by the FCC in being able to offer Long Distance service - as a result of their anti-competitive practices. Therefore, they have made numerous changes to allow ease of competitors into the marketplace.

Remember when there wasn't a choice for Long Distance? At that point the industry average rate for a long distance minute was .25 cents and above. Now, with over 2000 companies offering long distance, rates have decreased and can be found as low as .03 cents per minute. The consequence, however, resulted in major telemarketing and direct mail campaigns with companies fighting for your long distance business.

Hopefully, lower prices and increased competition with occur with local phone service as well. Local phone competitors will have increased ease into the marketplace, better integration, and be able to offer lower pricing to consumers.

Here are some links for additional information on local phone alternatives.

Federal Communications Commission

Michigan Competive Telephone Association

Michigan Public Service Commission

Nationwide Local Phone companies presently liscensed to offer service.

1) Talk America * recommended
2) MCI
3) Ztel
4) ATT

Other Offerings
5) Bullseye (select markets)
6) Vonage (uses broadband Internet connection - select markets)
7) Vartec (select markets)

Recently, one of the largest telephone companies, Vartec, has purchased Excel Communications and began to offer nationwide Local service in select areas. As this becomes readilly available in the near future, it will certainly have a dramatic impact on the marketplace, and the way we aquire our phone service.

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