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<?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Richard Morrison, 202.331.2273

Washington, D.C., August 21, 2003—The Federal Communications Commission’s much-anticipated “Triennial Review” rules–expected to be released this afternoon–are likely to deregulate telco-provided broadband services at the federal level. But the rules may also hand states the power to determine the future of traditional “narrowband” local phone competition, meaning that only local markets deemed competitive will get relief from regulation.  The ruling will affect large phone companies like Bell South, Verizon, and SBC, their rivals AT&T and MCI, and a host of smaller firms that use parts or all of the local phone networks.

Representatives of some states expect the ruling to be a victory for “states rights;” however, it may also mean more uncertainty for telecom markets and investors. And state regulators may balk at following the FCC’s deregulatory lead. A study by Stephen Pociask that was recently released by the Competitive Enterprise Institute and the New Millennium Research Council clearly shows that many of the new firms expected to provide competition in local phone markets are actually abandoning their own facilities because regulators offered them a better deal to use the old monopoly network. This means fewer real choices for consumers.

For reaction when the full text and details of the FCC’s Triennial Review rules are released, contact the technology analysts of the Competitive Enterprise Institute for comment and analysis.

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government.  For more information about CEI, please visit our website at www.cei.org.