RBOC Victory

The Bush Administration has handed the Regional Bell Operating Companies a huge victory with its decision to reverse Clinton-era telecom policy regarding local/long distance land-line telephony. Today, the Wall Street Journal Editorial Page puts the best face on this decision, basically arguing that the RBOCs need pricing power.

The spectacular collapse of telecom (roughly one trillion dollars in global market cap has evaporated) required some kind of action to stabilize the sector. All things considered, shoring up the RBOCs is probably the safest policy path to a reconfigured and rationalized telecom market. The decision is bad news for WorldCom and ATT and various local resellers. It's good news for text messaging services and Internet telephony companies.

In fact, I would bet that this decision leads to a revival of interest and investment in Internet telephony. Not that anyone at AOL is paying attention.