The Telecom Industry's Changing Landscape

NEAL CONAN, host:

From NPR News in Washington D.C., I'm Neal Conan, and this is TALK OF THE NATION. Ma Bell back to the future. This week, AT&T announced plans to buy BellSouth for $67 billion dollars. Telecom consultant Scott Cleland.

Mr. SCOTT CLELAND (Telecom consultant): It'll make AT&T the largest communications provider, with a tremendous amount of scale, tremendous amount of efficiency. It'll probably be the low-cost provider, and it'll be able to achieve some amazing synergies from this that shareholders will certainly like.

CONAN: What the deal means to the industry, for consumers, and what it says about the telecommunications industry today. Plus, South Africa's Kwaito superstar poet, actor, and musician, Zola, joins us to perform and to talk about his music, his country, and his mission. It's TALK OF THE NATION, after the news.

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CONAN: This is TALK OF THE NATION. I'm Neal Conan, in Washington. AT&T was already a telecom giant before news came over this weekend of its proposed merger with the BellSouth Corporation. If the $67 billion dollar deal goes through, Ma Bell will become the largest provider of telephone service in the U.S., going back to the top position it long held before a court order broke up the monopoly more than twenty years ago. But while it may sound like the company once known as American Telephone and Telegraph is being put back together again, the new AT&T would be a very different company operating in a vastly different telecom landscape. The planned mega-merger follows other telecom deals. SBC bought the old AT&T back in January 2005, in part for its famous brand name. Verizon took over MCI a few months later. Sprint and Nextel merged two years ago. But the big shift in the industry is that phone companies don't necessarily see the other phone companies as their main competitors. The real rivals include wireless, cable, and internet phone providers. And when the dust settles, what does it all mean for consumers?

Later in the program, the man who made the music in Tsotsi, the year's Oscar winner for the best foreign language film, Zola, joins us. But first we'll try to guide you through the AT&T-BellSouth merger and the digital landscape of the telecommunications industry. If you have questions about the deal and what it means, our number here in Washington is 800-989-8255, that's 800-989-TALK, email, talk@npr.org. Joining us from his office in New York to help guide us through the twists and turns of this story is Mike Santoli, senior editor at Barrons Magazine. Nice to have you back on the program.

Mr. MIKE SANTOLI (Senior Editor, Barrons Magazine): I'm glad to be here, thank you.

CONAN: So, what's this deal really about?

Mr. SANTOLI: Well, it's really about the fact that there's sort of a free-for- all in competition when it comes to all kinds of communications, personal and business. As you mentioned, cable companies are trying to provide the same kind of package of services as phone companies, which means internet access, wireless phone, landline phones, as well as video, in the form of cable programming or satellite programming. So, essentially, it's everybody attempting to be that one source of communications to the outside world for everyone. So, they feel like they need the scale, they need the number of customer contacts that this type of a merger would provide. And really, it's part of a theme, as you also mentioned, that goes back some years, where the once broken up regional Bell companies and the long distance companies have kind of, in stages, re-aggregated themselves. You know, SBC itself, which bought AT&T, was an amalgamation of at least three former baby Bells, Pacific Bell, SBC, Ameritech. So, this has been going on a while, but it seemed to gain this certain urgency recently.

CONAN: And all of these different companies, as they look to the future, as I understand it, you know, those old AT&T services, the old Ma Bell services, local and long distance telephone services, they aren't that profitable anymore.

Mr. SANTOLI: Not at all. And in fact, that's really what's become the source of all that urgency I mentioned, which is that, you're really, they're really losing business on the local core phone line and long distance business. The prices paid by consumers for long distance and local service is down some 40 percent in ten years, so obviously, they're really not the sources of profits they used to be. One of the things behind this BellSouth-AT&T proposed deal is that those two companies jointly control Cingular, the wireless company, and they want to unify control of Cingular and thereby also offer bundles of wireless, plus wire line service, plus all those other things I mentioned. So absolutely, they're in a race to replace the lost profits and revenue that they're basically suffering on the local and long distance side.

CONAN: And one of the economies of scale that the company says it would achieve would involve, I guess, about 40 percent of the economies of scale, they say, is the loss of about 10,000 jobs.

Mr. SOLANI: Yes, absolutely. You know, it's interesting in the sense that the telecom stocks, Wall Street has started to look slightly more favorably on these companies, very recently, I'm talking in the last few months, and that's in part because they've raised their estimates of how much money they can save by those other mergers that happened, the purchase of AT&T, and Verizon's purchase of MCI. So clearly, people think this is a kind of stable to declining long-term business in terms of the core phone business, and they need to either grow, at the same time they need to effectively take out lots of costs, because it is a very high fixed-cost business, as you can imagine.

CONAN: What kinds of jobs are those that would be lost? Are they, you know, the guys who maintain the lines, or are they managers?

Mr. SOLANI: I'm guessing it's going to be right across the board. I mean, when you basically merge two large companies, you obviously have two corporate bureaucracies that are to some degree redundant. So clearly, you're not going to need two corporate headquarters, you're not going to need two full accounting and finance staffs. So, that's one source of things. I'm sure also they want to get economy scale on the customer service side, because clearly they run tremendous data call centers and they want to rationalize that too. So my guess is those would be two of the core areas where they'd try to get those savings.

CONAN: Initially at least, Wall Street did not seem terribly impressed. AT&T's shares fell yesterday.

Mr. SOLANI: Yes, they did, although very typically the acquiring company's shares do fall because in fact, AT&T is paying, proposing to pay a premium to what BellSouth was worth right before they announced the deal. At this point, it doesn't seem as if there's a whole lot of concern about the deal. Of course there are some issues to get through with regulatory reviews and such. But I do think that in general, Wall Street endorses the logic of the deal, basically because of that joint ownership of Cingular and the other reasons I mentioned.

CONAN: Let's get some callers on the line.

Mr. SOLANI: Sure.

CONAN: Our number, if you'd like to join us, is 800-989-8255, 800-989-TALK. Our email address is talk@npr.org. And, let's go to Mike. And Mike's on the line with us from San Diego. Mike, are you there? I guess Mike is not there. Let's go instead to Chip, and Chip's with us from Tulsa, Oklahoma.

CHIP (Caller): Yeah, hi. Thanks a lot, I really enjoy your show every day.

CONAN: Thank you.

CHIP: I was, I actually worked for MCI and Worldcom right before the, when Worldcom, right before they declared bankruptcy. And now I work for a car company and MCI is our phone vendor. And I've also worked in the wireless industry for Cingular, and what I've noticed is, when there was a bunch of different companies, you had 700 choices for long distance service. And depending on how you did it, you get very well get huge, huge bills, because of the fact that there's only a couple of networks. With AT&T, you're going to end up with a one-stop shop, which in theory is really good. But what I would be concerned with is if there's only one game in town then that game gets to pick the price of admission. And that would be the one downside I would see to, you know, because that was the entire reason behind the deregulation in the first place, was to get rid of the monopoly of the Bell.

CONAN: Yeah, and Mike Santoli, you mentioned the long distance and local telephone costs are going down to consumers. Isn't that in part because there's more competition?

Mr. SANTOLI: Definitely because there's more competition, but you know, what I would point to is that what a company like AT&T and now with BellSouth wants to do is provide you with a bundled service for a flat monthly fee. So, essentially, what they want to do is say, give us $100 dollars a month, and essentially we're going to give you, at least initially, more or less unlimited usage of our networks in whatever form you want to use it. Now, I would also add a caveat though, because down the road, these companies are starting to talk about, when they're providing internet service for charging intensive users of the internet access and internet network, intensive broadband users, kind of a more ala carte charge. So, that's something they want to do, it's not clear they can do it just now. But I would say initially, the competition remains intense, simply because you can go on the internet and get, you know, internet phone service for an extremely cheap rate, essentially a once monthly fee. So there remains competition, even if the number of what we would call telecom companies is going down.

CONAN: Chip, I heard you trying to get in there.

CHIP: Well, yeah, just, you know, you mean, AT&T wants to sell a bundle package, but AT&T doesn't have the infrastructure to sell a bundle package. They're going to have to get the ISP through a different network. I mean, they've got LD, but they don't have the local service. They're going to have to get that dial tone delivered to the house through whatever small company happens to be in that area, it's regional, I mean it...

Mr. SANTOLI: Oh, yes, absolutely, if it's not in their footprint, their territory, they are going to have to do that, or they're going to have to sell you internet phone service instead. But yes, it's clearly the case that they want to enlarge their geography simply because they need to touch more customers, or they feel they need to touch more customers.

CONAN: Chip, thanks for the call.

CHIP: Thank you.

CONAN: And let's ask Mike Santoli one final question, and that is that this deal does have to be approved by regulators, all of these other mergers and acquisitions that we've described, they've all gone ahead?

Mr. SANTOLI: Yes, they have, and right now, even today I'm seeing on the wire, some folks in Congress talking about very close scrutiny of the deal. My sense, and I think Wall Street's sense, is that the deal does get done, ultimately. Simply because we are not talking about, you know, essentially pairing ourselves down to two big phone companies with basically, the new AT&T and Verizon, plus a much smaller Qwest. We're basically having a larger competitor to the entire cable industry and satellite industry. So, I do think the deal will get done, but it will have to jump through some regulatory hoops without a doubt.

CONAN: Mike Santoli, thanks very much.

Mr. SANTOLI: Thank you.

CONAN: Mike Santoli, Senior Editor at Barron's Magazine, with us from his office in New York. And joining us now from the studios of member station KQED, in San Francisco, is Charles Golvin, principal analyst who covers the wireless industry at Forester Research, which is an independent technology consulting company, based in Cambridge, Massachusetts. Nice to have you on the program today.

Mr. CHARLES GOLVIN (Senior Analyst, Forrester Research): Pleasure to be here, Neal.

CONAN: As you look at the telecom marketplace of today compared to 20 years ago, what we just heard from Mike Santoli, that the phone companies are in competition with satellite companies, and cable companies, this is strange.

Mr. GOLVIN: It is definitely different from many years ago, for those of us who grew up with Ma Bell. But it's not just the cable companies, it's also the wireless carries. So, if you look at households in the U.S. today, about seven percent of those who tell us they have a wireless phone also tell us they don't have a land line at all, simply that's their primary communications method. So the carriers, I think, like Mike said, what their after is, they want your whole wallet. They want everything that you spend on communications and entertainment, and they want to be the entire pipe that delivers that to you.

CONAN: So, an integrated service that provides everything from television to wireless telephone service?

Mr. GOLVIN: That's right. And that's the way, they really sell it as a bundle today, where all they do is take their existing products and stick them together into one package, and offer you the convenience of a single bill, and as they sometimes say, one neck to choke, you know, one customer service contact. But there isn't a whole lot of true integration, I would say. Really, it's just each of these services stacked up together, but going forward, owning the entire network, both wireless and wire line, means that they'll start to move toward truly integrated services. So, a lot of communication options, things that you can't do today because the networks really aren't integrated, they will be able to do tomorrow.

CONAN: Mm-hmm. And some of these services that they're going to include, I was reading today that one handset that you could use outside as a mobile phone and when you walked indoors, it would connect through your computer.

Mr. GOLVIN: That's right, through your, if you had a home wireless and a broadband connection, then it will use the WiFi technology that, you know, that's popular in Starbucks and a lot of other locations, to route those calls over the internet and then seamlessly hand off the call to the wireless network as you walk outside the door.

CONAN: And all for the low, low price of, well, whatever it is they decide to charge. We'll have more about that when we come back from a break. We're talking about the changing landscape of the telecommunication industry and what it means for all of us, our consumers. We'll take your calls at 800-989-8255, e-mails at TALK@NPR.org. I'm Neal Conan, back after the break. It's THE TALK OF THE NATION, from NPR News.

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CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington. Telecommunications is one of the most rapidly changing industries in the world today, new technologies, new competitors, all trying to do the same thing, to serve the needs of the consumer. From the consumers point of view though, especially those of us who grew up with black telephones connected by wires to the wall, it can all be pretty confusing. Today we're taking a tour through who's who in this new world and try to answer your questions. Our tour guide is Charles Golvin, a principal analyst at Forester Research.

Give us a call 800-989-8255, whatever device you're using, or send us an e-mail James with us from, where are you, James, Ponchatoula, Louisiana?

JAMES (Caller): Yes, sir.

CONAN: Go ahead please.

JAMES: Yeah, I wanted to ask a question about what do they think this is going to do for the infrastructure of the telecom business? Do they think it's going to significantly grow our wiring, fiber, all that good stuff?

CONAN: Okay, Charles Golvin.

Mr. GOLVIN: Well, I think we are going to see increased growth in the fiber that gets put into the ground in order to deliver even higher, higher broadband speeds then we have today. I think, as many people know, where the U.S. is far behind other countries in the world, in terms of the actual speed of broadband that consumers can get. Both AT&T and BellSouth have similar plans as far as the technology and architecture that they'll use to enable those higher speeds. It's really a question of timing and budget commitment, about how fast that happens and in what kinds of markets. Today we're at the very early stages with a couple of markets live with fiber all the way to the homes, so you can get maybe a 15 megabit, that's about ten times faster than the typical DSL line, today...

CONAN: Mm-hmm.

Mr. GOLVIN: ...feed into your house, but that's going to be a long slow, slog over the next five plus years before that starts to look like, you know, broad reach across all the consumers.

CONAN: But, even a few years ago, people were laying fiber as fast as they could lay it. Is that going to continue?

Mr. GOLVIN: Well, the fiber that's being laid years ago, was really backbone fiber, it was, you know, carrying long haul traffic from city to city. And a lot of that was over-built and lying unused today. So, the challenges now around the fiber deployments are, there in urban areas, there in suburban neighborhoods. People aren't as keen to have their, you know, their streets dug up and be inconvenienced in that way, so it's a little bit harder to go through city permissions and things like that and make it happen as fast as the carriers would like, and also, you know, it's a lot of money to spend, and so they're very careful in terms of the timing of their capital expenditures in order to make sure that they can get return on that investment.

CONAN: James, thanks for the call.

JAMES: Thank you.

CONAN: Here's an email question from Linda. I can't think of better news, but what does this mean to BellSouth's customers, as BellSouth has become perhaps the worst customer service provider in the country. Many of us are hoping for improvements before we switch to voice-over IP or VoIP, I think it's called. Any speculation?

MR. GOLVIN: That's interesting because some of the data that I've seen actually rates BellSouth customer care relatively highly, so I think it's a highly personalized experience, but I think there area couple of very clear short-term benefits for BellSouth customers. One is that, for those who haven't bought DSL yet, BellSouth's pricing has been a little bit higher than Verizon and AT&T, and also BellSouth, while they recently struck a deal with Yahoo to build a richer set of services that are offered as part of that broadband connection, they've been slow to roll that out, whereas AT&T has had a longstanding relationship with Yahoo, and AT&T has been very aggressive in their pricing. So you can, if you live in AT&T district today, you can probably get DSL for, at least an introductory price of $14.95 a month. So, I think one positive up side for BellSouth customers is that their going to see cheaper broadband and a richer side of services from BellSouth.

CONAN: Let's talk now with Bart, and Bart's with us from Grand Rapids, Michigan.

BART (Caller): Thank you for taking my call.

CONAN: Sure.

BART: I've got a question. What happened to 1984? Did everyone go to sleep, or did all the politicians that deregulated and broke up the big monopoly, the AT&T, SBC? Did everyone fade by the wayside and forget about this company that dominated, was a supposedly a monopoly, and they had to break it up because of the new beckoning market? Did everyone go to sleep on this? What is the new SBC or the new AT&T? It's the same group of folks that were there before, that were streamlined, that the bankruptcy actually helped their position on? I don't get it, we're losing so many jobs, talking to people on the Hill, continuously prove their worth, when they're allowing this stuff to happen?

CONAN: I should point out, Bart, the people on the Hill didn't break up the monopoly, the courts did. But, Charles Golvin, let's hear from you.

Mr. GOLVIN: Well, it's interesting that, in truth, while this looks like it's putting AT&T back together, very much like it was in 1984, AT&T, the new AT&T company, as renamed by SBC and BellSouth, they really only compete with each other on a very small scale, and that is for business customers, customers who have business that spans multiple states in the AT&T and the BellSouth area. When it comes to consumers, you don't have a choice between BellSouth and AT&T. Okay, yes, you could buy AT&T's VoIP service, but they haven't really marketed it very heavily. They only have a few hundred thousand subscribers, they don't really compete with each other in the consumer market, and also the courts, when they broke AT&T up, they broke it up into local telephone and long distance telephone, and then we saw competition in the long distance market and we saw AT&T emptied competition in the local market by the '96 Telecom Act that really didn't have the desired effect. So, we are coming back to something that looks very similar, but in truth the telecommunications landscape has changed quite a bit because the cable operators are there now and because of the growth of wireless.

BART: Now, can I ask a question about the voice-over protocol?

CONAN: Voice-over internet protocol, yes.

BART: Yes, internet protocol. Do you feel, I know I'm looking seriously at one of the big players, I know that Comcast is doing some market research now in a couple states, they're planning for a rollout in probably the next quarter to a few more states. Why would anyone want to be involved in that? I mean can that be that big of a money maker if you're paying, say, one of the big ones is $25 a month unlimited everything even into other countries, why would you want to put that together? Wouldn't you want to go after a new market?

Mr. GOLVIN: I'm sorry, so you mean from the point of view of a company like Vonage, who's entering that market?

BART: Right. Why would SBC and AT&T want to continuously go with old technology when everyone seems to be moving in that direction?

CONAN: In the direction of new technology, yes.

BART: Exactly, and it's cheaper. Face that reality, I'm tired of a $160.00 a month multiple line...

CONAN: Okay, let's ask Charles. Give Charles a chance to answer.

Mr. GOLVIN: Well, no question that there are a lot of people who are switching to voice-over IP, whether they know it in its sort of marketed form, from a company like Vonage, or whether they're getting kind of under the covers from their cable operator, like Comcast or Time Warner, where they're simply marketed as digital voice, they don't really know that it's voice-over IP.

BART: Correct.

Mr. GOLVIN: I think the choice that consumers have to make here and that businesses have to understand is, today it's really only about price, even if you're buying service from Vonage, most people are just doing it to save money. Whereas the true promise of voice-over IP is a much richer set of services and fancy things that you can do where you incorporate video with voice, and I think as Neal mentioned, hand off calls between your home and the wireless network and all sorts of integrated services like that, and to me that's really the promise of voice-over IP, and it would be a mistake, I think, for anybody to see VOIP as purely a low-cost play, because that's only part of the story.

CONAN: Bart, thanks very much.

BART: Thank you.

CONAN: And Bart is not the only one with questions about, well, monopolies. Joining us now from his office in Silver Spring, Maryland, is Mark Cooper, Director of Research at the Consumer Federation of America. Nice to have you on the program today.

Mr. MARK COOPER (Director of Research, Consumer Federation of America): Thanks for having me.

CONAN: And I understand you do have concerns about this proposed merger as well?

Mr. COOPER: Yeah, we've got a lot of concerns and they actually drive off of many of the last couple comments. I didn't hear the whole previous segment, but, you know, yeah, it turns out we have two, the average American consumer, if they're lucky, has a choice of two full-service broadband platforms, and that's the future. A cable company and a telephone company. Wireless might or might not have gotten there, but the problem is that the Bells own the dominant wireless providers in their service territory, and Sprint Nextel, which was going to be the third platform, signed a joint venture with cable, took themselves out of the play. So, there's really only two choices and two's not enough for real competition. The Telecom Act envisioned lots of SEALACs(ph) and there were billions of dollars spent for SEALACs to better local exchange carriers.

CONAN: Right.

Mr. COOPER: People thought the Bells would compete with each other. They actually were getting ready during the Department of Justice let them merge. So, the fact that they never did is a failure. They should have. We need more than two for competition, and now we've only got two, we've got an unregulated duopoly, especially when it comes to broadband. AT&T wants to be able to discriminate against internet service providers, charge one internet provider service more money to get on the fast lane and tell the other guys they can't go there. That's the cable model. They want to pick and choose which services get the fast lane without any obligations for non-discrimination. AT&T's been leading the charge to get rid of local franchises and get rid of the build-out requirements so they'll pick and choose which neighborhoods to build out, red line the places they don't want to go to. AT&T's been leading the fight against muni wireless, which is not a full service platform, but a really good platform for basic stuff. So essentially, what we have is two former monopolists, who know how to use market power, who have abused that market power.

The cable guys certainly don't give me choice. They make me buy that whole big bundle. They won't break the bundle up, and they tie together internet service. They force me to buy their internet service provider. I have to pay for it. If I want to get a different one, I have to pay twice. So, these two guys who know how to use and abuse market power will not face enough competition. Oh, they'll jostle each other a little bit at the beginning, but they'll very quickly learn that, you know what, it's better to split the monopoly rents than to dissipate them in competition. There's no threat to them once they figure that out and the consumer, what we'll lose here, and the real big stake here, is we'll lose the vibrant internet that has been such a hotbed of innovation and consumer friendly choice if we let the Bells and the cable operators use a private carriage model, use a discriminatory model, to control which service providers get to the public.

CONAN: Yet, we keep hearing about all of these new technologies, and certainly voice over internet protocols and that sort of thing, the wireless companies, as well, that there's more competition rather than less.

Mr. COOPER: Well, but let's be clear. With voice over internet protocol, you have to have a broadband connection.

CONAN: Right.

Mr. COOPER: Which choices do you have for broadband connection? You have two choices. The cable company or the telephone company. So, that's only two choices. You guys have to pay the broadband...

CONAN: But there's more than one cable company and more than one telephone company.

Mr. COOPER: They don't compete with each other. We've heard that, right? The cable company's never over bill. How many Americans have a choice of two cable companies? About 2 percent. How many Americans have a choice of two wire line telephone companies? Virtually zero. There's no facility space competition in this industry.

CONAN: Given that, would you expect a tougher time in Congress on this merger than we've seen in the past?

Mr. COOPER: Well, let's see. Congress doesn't approve mergers, the Department of Justice does.

CONAN: Right.

Mr. COOPER: The Department of Justice has been brain dead for 10 years. They have let every merger go through. They have decided that as long as they didn't choose to compete with each other, they could merge. And the big mistake was made way back when from Bell Atlantic - Ninex. Here were two companies sharing a huge border, ten million people along that border. Had actually thought about how they would compete with each other. They said, let's merge first. Let's see if we can get away with this. They let them get away with that.

So, the merger passed the Department of Justice antitrust officials, the FCC, they have approved every merger. The only place we can go now is in Congress, and Congress won't overturn the mergers. But will Congress restore the fundamental obligation of non-discrimination? Let's be clear. For 100 years, the telecommunications network in America was subject to the obligation to make its services available on a non-discriminatory basis. That was the policy written in the communication act of '34. Not changed in '96. The FCC administratively overturned that for highspeed internet. That was a mistake. The FCC should have never been allowed to end such a vital principle of non- discrimination.

One more point. If there were ten service providers, if there were ten platforms, which is the number that is frequently used in antitrust, and there were ten people competing for my eyeballs, my communications, well, then we might believe that a competitive market would produce a non-discriminatory communications network. But with only two, it won't happen. ATT said that they intend to discriminate against internet service providers.

CONAN: Mark Cooper, thanks very much for being with us. Thanks for your time today. Mark Cooper is Director of Research for the Consumer Federation of America and spoke to us from his office in Silver Spring, Maryland. You're listening to TALK OF THE NATION for NPR News. Let's see if we can get another caller on the line here. This is Tony. Tony is with us in San Antonio.

TONY (Caller): Hello. It's good to talk to you. My concern is that these companies are sparring with each other back and forth just to see how many people they can get on just for, you know, it's like an apartment complex. They're happy to see you at first but then once you move in, you're just another name, another face, just another person. And the thing is that, for example, Cingular Wireless and a lot these, they suck up to you. Like, they want to be your best pal and your best friend and everything and then once they've got your business, you're like, you're just another person. You go into Cingular, for example, and you, if you walk in there, and you've got tons of money to spend, you're their your best friend. But if you go in and you have questions or things don't work, they put you in the back of a very, very long line. Because you don't have money to spend. You're just another name and, you know, it's like a rich kid with, he gets a new toy, that's his favorite toy, and then he's tired of it, and now he wants something else. And that's the way companies seem to be doing with people now.

CONAN: Charles Golvin, let me ask you, some of what we heard from Mark Cooper, what we're hearing from Tony and some of the other callers, they just feel overwhelmed by these giants.

Mr: GOLVIN: Well, Neal, you know, I think that Mark made a lot of very valid points. It's important to separate, though, the question of what's often called net neutrality, where they're referring to whether the carrier can discriminate...

CONAN: Higher prices for higher speed internet?

GOLVIN: Exactly. Not just for higher speed but also for different content providers, though, you might want to pay more, have to pay more if you want something from Google as opposed to Yahoo.

CONAN: Yes.

Mr. GOLVIN: And I think that's a very, very important point and one that, I believe, is getting some attention on the Hill right now. But his other point about the competition, or the lack of competition in the duopoly market, the two players that we have, while I agree with him completely, that is the reality. And this deal between ATT and BellSouth doesn't change that whatsoever from today's situation.

CONAN: So, it's reality? There's nothing to do to change it?

Mr. GOLVIN: Well, the hope is that some other technologies, like wireless, not cellular wireless like we use it today, but what's often called fixed wireless, so, a wireless broadband signal, or broadband over your power line networks, could be different pipes that enable true competition in the broadband market. But the problem is that, if you're one of those companies who has the infrastructure, either the spectrum to deploy wireless, or the power lines, you're facing a very tough market, because these big competitors own the customers, and you're going to have to come in underneath them on price.

CONAN: Charles Golvin, thanks very much for being with us. We appreciate understanding it a little bit better.

Mr. GOLVIN: My pleasure.

CONAN: Charles Coven is a Senior Analyst who covers the wireless industry at Forester Research, an independent technology consulting firm. Transcript provided by NPR, Copyright National Public Radio.