Tele-Revolution: Telephone Competition At The Speed Of Light, A History of the Creation of a Competitive Local Telephone Industry, 1984-2000

by Richard G. Tomlinson's

The Author Responds

In his review of my book, “TELE-REVOLUTION… telephone Competition at the Speed of Light, A History of the Creation of a Competitive Local Telephone Industry, 1984-2000,” Albert Halprin takes issue with the number of companies and people who are referenced. It is difficult to conceive how one would write the history of an industry without naming its major companies and leading players. I am not apologetic about having acknowledged the roles of specific individuals and companies. As stated in the book’s prologue, their importance is all too quickly lost to a homogenized, mechanistic view of history.

The collective memory embraces an image of smoothly flowing history that seemingly could not have been resisted, diverted nor avoided. Discrete actions of individuals no longer seem so momentous. It becomes difficult to imagine how events might have evolved in any way other than how the actually transpired.

For those who were participants in the (telecommunications) revolution, it will always be quite different. They retain the knowledge of the sense of anxiety and of the reality of the threat of failure and defeat that accompanied those days. Rather than being fore-ordained, eventual outcomes seem more fragile and quixotic and more the product of isolated and sometimes arbitrary decisions and actions by individuals.

I suspect that inside-the-Beltway some people will never accept the view that it was the cumulative weight of actions of many disparate and largely unconnected individuals across the country who created the conditions and the impetus for change and the demand for policy expressions that ultimately coalesced in the Telecom Act of 1996 and in the related legislative, regulatory and market adjustments. For them I recommend Reed Hundt’s recent memoir, “You Say You Want a Revolution.” They should find more comforting Hundt’s centralized planning view that he and Al Gore were the ultimate progenitors and inspiration for movement toward competitive telecommunications.

The plan of my book is basically chronological and follows the formation and growth of the competitive local telecommunications industry. That growth is characterized by the parameter, collective industry revenue, but with the top ten or so companies differentiated and profiled to give a sense of industry structure and variety. Upon this framework, key personalities and events are highlighted both to provide deeper understanding and to illuminate the human drama behind the cold statistics of the industry’s development. That this necessarily sometimes interrupts a strict chronological flow with overlapping events seemed to discomfort the review.

I reject the review’s assertion that the history is written with an anti-incumbent bias. Many of the quotes from CLEC executives are, of course, strongly partisan but I have striven to maintain an even-handed treatment and to draw fact-based observations. Readers must judge for themselves whether this intent was fulfilled.

The most startling comment from the reviewer is his objection to the author’s statement that local telephone service was generally believed at the time of the breakup of the Bell System to constitute a natural monopoly. While some academics and regulators (e.g. FCC Chairman Al Sikes) argued the case, these few visionaries were treated as “prophets without honor in their own land” and disbelief in the feasibility of local service competition was the prevailing view throughout the 1980s. Certainly in 1984 there was no technology available to provide an economic physical alternative to the local copper loop to the home. Resale of the incumbent facilities, which had bootstrapped long distance competition, was of questionable viability for entry into local service, as subsequent events demonstrated. My experience was that prior to 1989-90, any assertion that it might be possible to install and operate a class 5 switch in direct competition with an incumbent LEC was greeted with incredulity even within the competitive industry.

The review’s point that my book does not cover many of the important developments following the passage of the Telecom Act of 1996 is well taken. Adequate treatment of the significant post-Act events will require many books and I hope to make additional contributions, particularly in tracing the impact of new technology as it drives multi-dimensional change. My main point in projecting the story of the competitive industry into the post-Act period in the current book was to illuminate how the competitive instincts and technology enablers, honed in the struggles of the earlier years, produced formation of new competitive entities of formidable scale, largely by continuation of the competitive industry. The second, and more unexpected, was the dispersal of talent out of these entities into a new wave of entrepreneurial start-ups. As is often the case, the Beltway crowd came tardy to the dance and had to respond to events that had already overrun them. They currently seem surprised, perplexed and disconcerted by the consolidation phase, which is almost over, and have yet to notice the more important dispersal phase, which is well underway.

While it is early for a historical assessment, it does appear that this entrepreneurial renaissance will be an enduring fact of life, at least with regard to telecommunications and Internet businesses. Whether or not all of this movement leads to totally ubiquitous competitive local telecom markets and ultimately achieves all the societal goals intended by advocates is unknown. However, a new culture has arisen in which creative individuals frequently strike out on their own and the competitive industry has evolved into an engine of constant churn and rebirth. It is difficult to imagine that this restless sea of entrepreneurship will leave any market untouched. Perhaps the final leg of the route to universally competitive local service will, in the end, look more like Brownian motion that centralized planning.

 

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