TODAY'S ISSUE: Telecommunication Deregulation: What Happened?
ELLIOTT BRACK: Hotel Facilities, Setting, Help Make Rockies' Trip Great
McLEMORE'S CARTOON:A tyke asks logical question
NEWS: Council Disaster Shelter, Thomas Museum, and Canadian Trip
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TODAY'S QUOTE: What Happens to Man In Strange Country

"When men arrive in a strange country, fear gathers on them from every object."

-- Explorer and cartographer David Thompson, on January 13, 1811, at Athabasca Pass between British Columbia and Alberta.

"The decision to build a shelter for Alvin Wilbanks and staff for use in the event of a disaster has, by far, got to be one of the most arrogant moves the Gwinnett County School System has ever made."

-- Jim Dumond, Buford

TODAY'S ISSUE
What happened to telecommunications deregulation?
By Steve Pociask
Norcross
Special to GwinnettForum.com

(Editor's Note: Steve Pociask is president of TeleNomic Research. He is a freelance public policy analyst and an adjunct scholar with the Georgia Public Policy Foundation.-eeb)

SEPT. 19, 2003 -- Bankruptcies and layoffs have become commonplace in the information technology sector, particularly for telecommunications service providers and equipment manufacturers. The apparent downturn comes despite the promise of deregulation and increased competition that were to bring significant consumer benefits.

At one time it appeared that competition might slowly replace regulation. Starting with the divestiture of AT&T, competition emerged with the entry of long distance, wireless and cable TV providers, which invested in network infrastructure and vended their services to the public. Regulators adopted simple price adjustment formulae for local telephone services as a means to automate rate changes, thereby eliminating costly and time-consuming regulatory proceedings, as well as allowing incentives for efficient investment. The Internet was commercialized with little regulatory surveillance, and the Telecommunications Act of 1996 provided a path toward eliminating entry barriers into the local and long distance telephone markets.

It appeared the market was headed toward regulating itself through inter-industry rivalry. Today, customers are unaware if the call they receive traversed over a fiber, coaxial cable, copper or wireless network. Instant messaging, emails containing voice attachments, voice-over-Internet telephony and high-speed Internet services are making the old telephone network look passé.

However, instead of regulators letting market forces continue the progress, they entrenched themselves far beyond extraction. Those regulators, once called upon to protect the public from the evils of monopolies, have become monopolist themselves - with the power to control market entry, set industry prices and redistribute revenue between telephone services providers - all in the name of the public interest. In terms of gross outlays, the FCC's budget (http://www.telenomic.com/PDFs/Budget.pdf chart) has tripled since 1994, and far outstripped the growth of inflation. The regulator's budget reflects obsessive intervention, not sensible deregulation.

A major area where the compulsion to regulate is evident is the regulatory rules for local competition. Purporting to spur competition, regulatory rules permit new telephone companies to lease the incumbent telephone companies' network facilities at wholesale prices far below costs. These rules encourage entry of firms that avoid building alternative networks and depend on subsidized networks' facilities. The few entrants that built alternative networks are now abandoning these networks (See chart: http://www.telenomic.com/PDFs/Rent.pdf) for subsidized leased facilities. Because regulated wholesale prices are set far below costs in many states, incumbent telephone companies have also cut their investments. With neither incumbent nor new entrant investing, equipment manufacturers have closed plants and industry employment has fallen by half a million jobs. In short, the once dynamic industry, poised for deregulation, has become paralyzed and, most ironically, increasingly reliant upon regulators for help.

Have artificially low wholesale prices for telecommunications services helped or harmed consumers? While many federal agencies are required to estimate the costs and benefits of the regulations they manage, the FCC has no such obligation However, according to a new study released jointly by the Competitive Enterprise Institute and the New Millennium Research Council, regulatory rules that set wholesale rates far below costs have ended up costing Americans substantially more than what would be the case in the absence of such regulations. While these rules purported to encourage competition, they have usurped market forces and crippled the industry, and by correlation, the economy.

The telecommunications and computer industries have been long recognized as the major catalyst for economic growth. According to the Department of Commerce estimates, these industries have accounted for nearly all of the productivity growth in the economy. However, the industry and economy will meander aimlessly until regulatory rules are changed, the industry is deregulated and the monopoly power of regulators is curtailed.

ELLIOTT BRACK
Great hotels make Canadian Rockies trip more memorable
By Elliott Brack
editor and publisher
GwinnettForum.com

SEPT. 19, 2003 -- The view was magnificent, looking out on Lake Louise in the Canadian Rockies, Canada's second most visited site (after Niagara Falls.) From our seventh floor junior suite at the Chateau Lake Louise, you looked out first on the lake, shimmering in the early morning light coming in from behind the hotel. Steep mountains ringed the lake.

In the distance, about two miles away, the lake stopped, and the far mountains rose abruptly, soaring upward at a 45-degree angle. High above, glacial ice gleamed almost pink in the rising morning sun.

"Come look at this!" my wife said excitedly, as I awoke and groggily went to the window. "Isn't it beautiful!"

It was. The previous morning I had arisen first about that same time and photographed it, catching the scene in the early morning sunlight. And this morning I had planned to sleep a little later. So much for sleeping late.

With the chateau the only hotel on Lake Louise, tourists flock to it by the busload, causing the hotel to limit access. Most tourists get off the bus, walk a short distance to the lake, look at it, turn, and smile, have their picture struck, and re-board their buses. Many are there less than five minutes.

The Chateau is operated by Fairmont Hotels, which has been bought by the Canadian Pacific Railroad. It also owns the sumptuous Banff Springs Hotel and the exquisite Lodge at the Jasper National Park, some 175 miles northward. (Banff is about 30 miles south of Lake Louise.) All three accommodations are pricey, with the service first class. Surprisingly, the cost of food is reasonable, and remember, you are even dealing at the lower Canadian prices!

Earlier on our Canadian Rockies' trip, we had stayed at the Lodge at Jasper. Instead of a high-rise hotel, the Lodge consists of small multiple-unit cabins spaced around a lake, with spacious rooms and suites. The food was beautifully and tastefully prepared, with a Sunday brunch particularly tasty, the fare being diverse with distinctive local items.

The Lodge's setting is also gorgeous, though not as spectacular as Lake Louise. Still mountains rise all around, and messages abound to watch out for wild animals. Three elk, two with enormous racks, were munching the grass as we left the grounds on a Sunday for church in the town, about four miles away.

When in Banff, we couldn't get into the enormous and stately Fairmont's Banff Springs Hotel-it was full---but chose instead a great hotel right in the middle of the town. Rates in the Rockies can be high, especially in "season," though lower budget facilities are usually available. Our Banff hotel room looked out onto the main street, with view of mountains surrounding the town.

Banff and Jasper, two towns within national parks in the Canadian Rockies, both were born from the railroad coming to those western portions of Alberta. The Canadian Pacific came first, building magnificent hotels to attract tourists in Banff and Lake Louise. Another railroad, the Canadian National, developed on a more northern route, and founded the town of Jasper.

Once mere warmer-weather destinations, all three hotels now operate 12 months, with outdoor activities taking precedence. Yet at one time, before winter activities were emphasized, the railroads were considering closing the Lake Louise hotel. Now today at the Chateau; a new tower rises adjacent to the main tower, upgrading and enlarging facilities. It will be open next summer, and will be the last addition the park authorities will allow the Chateau.

Our recent trip was great---thanks in part by staying at great hotels.

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