ARMIS: Old Rules in a New Economy

Last year, AT&T submitted to the FCC a petition for forbearance from some old reporting requirements that were designed back in the days of Ma Bell and monopoly telephone service. CEI is currently preparing comments on the petition, which we believe should be approved.

Ryan Radia had an excellent post on the issue back in April. Radia points out that the reporting requirements, known as ARMIS, only apply to big telcos. But competition is increasing among phone companies and alternatives to landline phone service like wireless, VOIP, and cable telephony. The market conditions under which ARMIS was formed just do not exist any more.

The regulations cost a lot – $11 million annually to AT&T alone – and that makes phone service more expensive, distorting market prices. Moreover, the requirements are useless. The ARMIS data are used by competitors to push for further regulation of incumbent telcos. They are not used by customers. Rather, customers turn toward private, much more readable and useful, sources like J.D. Power and the University of Michigan’s American Consumer Satisfaction Index for information about telephone service quality.

Let’s hope that the FCC takes CEI’s comments seriously and that AT&T’s petition for forbearance does not receive the same treatment as Qwest’s did today.