Mr. Chairman, thank you for holding this hearing today. More than five years have passed since the Telecommunications Act of 1996 became law. So it’s a good time to see what progress has been made to bring true competition to telecommunications. The main goal of the Act was to bring real competition to all aspects of communications services, particularly to local telephone service. But with the regional Bells still controlling about 93% of the local phone market and rates remaining steady over the last ten years, no one can claim that the Act has been a roaring success. We’ve been waiting for local phone competition for five years, and we are still being kept on hold.

As we look back on five years of the Act, it is time to try to learn some lessons. With AT&T about to break into four companies and most of the potential competitors to the regional Bells in serious financial trouble, the biggest lesson seems to be this: Congress can’t mandate competition, and if competition doesn’t make business sense, laws like the Telecom Act won’t really work.

That doesn’t mean that we shouldn’t consider "fine-tuning" the Act so that it is a more effective tool to promote competition. For example, one major stumbling block to competition has been building access. If the owner of a big apartment or office building has a sweetheart deal with a phone company, then building residents are often prohibited from shopping around for a different phone company. As a result, the telecom competitors are denied access to a large, important pool of potential customers, and people are locked into expensive service because the building owner has a special deal. This is a recurring problem that we noticed in our recent cable hearing as well.

But despite the need for fine tuning, most Americans would probably look at the telecommunications field today and stand in awe of the innovation explosion of the last five years. From cell phones to the Internet, from e-mail to D-S-L lines, consumers can communicate with each other quicker, faster and more efficiently than ever before. Competition for long distance telephone service is vigorous, with rival providers engaged in fierce competitive battles and inexpensive rates of 5 cents a minute and lower common. Cellular telephone use continues to grow, with more than 80 million users nationwide. With prices dropping cell phones are changing from a luxury item to a true mass means of communications used for everyday needs.

That’s the good news – but local residential service is still the bread and butter of the telecommunications field. And competition to provide that service is still the holy grail. We haven’t gotten there yet. Maybe we just need more time. But with the first round of competitors dropping out of the field, maybe we need to tinker with the Act a little more. We need to ask whether the Act needs more enforcement authority – through antitrust laws or by the FCC – and we also should ask whether we need to give the Regional Bells more of an incentive to open up their networks. Finally, we need to keep a vigilant eye on another potential round of mergers where our antitrust laws and principles will play a very important role.

We look forward to hearing from today’s distinguished panel of witnesses and thank them for their willingness to testify.

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