The US congress has rarely made Wall Street investment bankers as happy as it did when it passed the telecommunications bill on February 8. A competitive free-for-all in long-distance and local telephone services, as well as in the cable, broadcast and radio industries, has been unleashed by the legislation. That means a lip-smacking fee bonanza for investment bankers.
Until this liberalization, the seven Baby Bell local telephone companies, created after AT&T's break-up in 1984, were excluded from the $60 billion-plus long-distance market and from local markets outside their designated regions. Conversely, long-distance service providers such as AT&T, MCI and Sprint were barred from the $100 billion local phone market and had to pay the Bells access fees to offer their customers long-distance services.
Now the barriers are down and no telecoms market is off limits to any company. Bells can offer long-distance services outside their home regions immediately on cellular networks and by purchasing them at a discount from long-distance providers and onselling them with a mark-up to their customers. They will also be able to offer long-distance calls on networks within their own regions once they have satisfied the authorities that these have been opened to competition.