Labor got on well with monopoly.
But now, if experience is any guide,
expect a stiff fight for benefits, jobs, and wages.
At this very moment, utility chief executive officers (CEOs) are planning for the future.
The Iowa Utilities Board (IUB) has set rates and terms for unbundled interconnection services that U S WEST Communications, Inc., a local exchange carrier (LEC), must provide to other carriers seeking to provide competitive local service. The IUB ruled that U S WEST must use the Total Service Long Run Incremental Cost method to set prices for the use of its facilities. It also ruled that the LEC may include "an appropriate markup" in the rates as well as a contribution to shared and common costs of the local loop.
The New York Public Service Commission (PSC) has issued a framework of goals and strategies for restructuring the electric industry in the state. The PSC directs all electric utilities in the state that have not yet initiated restructuring to file plans that will open the retail generation and energy-service markets to competition for all customer classes.
Market Structure (em PoolCo Model. The PSC adopted a "flexible retail PoolCo" model to ensure an orderly transition to retail competition.
Deregulation, competition, and marketplace practices have been spreading slowly across the communications business for decades. In their wake, they have left lower prices, faster innovation, and more services, jobs, profits, and productivity.
Among the proposals for still further change, one of the most shocking is the idea that radio rights should be bought and sold on the open market, just like land or any other commodity.
First it deregulated generation.
Then distribution (no more exclusive franchise).
Only now is New Zealand turning
to the wholesale market.
A decade ago New Zealand's economy was suffering from prolonged stagnation. The country relied too much on the public sector.
Consumers
Labor Unions
ManagementDeregulation isn't just for utilities anymore.
This year, PUBLIC UTILITIES FORTNIGHTLY'S
annual Electric Executive's Forum recognizes
the growing constituency of the electric
utility industry.
So the Federal Energy Regulatory Commission (FERC) won't break up the electric utility industry. But it may happen anyway (em if not at the FERC's direction, then perhaps under pressure from state regulators who, some say, are threatening to link stranded-cost recovery to vertical disaggregation.
What would a breakup mean for bonds and bondholders?
As we reported last month ("New Corporate Structures Place Bondholders at Risk," May 1, 1996, p.
Deregulation places the cost, safety, and reliability of the U.S. electric utility industry at risk. So says the Utility Workers Union of America, AFL-CIO, which represents 50,000 workers at 74 utilities. A UWUA position paper warns that competition could cause shortages and high prices: "This is the standard business cycle.... There is no reason to believe that the laws of supply and demand have been repealed." The paper proposes 11 tenets for restructuring:
s Provide competition for all.
s Respect state control.
If there is anything more abhorrent than wife-beating and drug abuse, surely it must be monopoly. Monopoly is un-American: To the economist it represents the very state of original sin. To the courts it ranks with conspiracy. Monopoly promises economic waste, throttled production, obscene profits, and naked power (em all rolled into one. Consider what used to be called the "public utilities." In that sphere, regulated monopoly flourished for many years.
A century ago, Congress conveyed valuable public property to certain entrepreneurs to serve the public interest. In exchange, these entrepreneurs agreed to carry the nation's principal means of communication at fair cost and, of course, serve the national defense.
In 1850, with a commitment to move the mail at fixed rates and freely transport federal troops hither and yon, a swath of public land was granted to the Illinois Central to connect Chicago with Mobile.