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Calling Competition

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Yesterday, the Bush Administration took a big step toward ending eight years of regulatory bedlam in the telecom industry by deciding to do . . . nothing.

Solicitor General Ted Olson, who represents the government before the Supreme Court, has informed the Federal Communications Commission that he will not appeal a lower court decision vacating rules that required the Baby Bells to lease their phone networks to rivals such as AT&T and MCI at reduced rates. Those “phone competition” mandates (read: price controls) have been a boon for lobbyists and lawyers, but capital investment and consumer choice have suffered.

The FCC’s pro-regulation commissioners, especially Republican Kevin Martin, could still push for an appeal, but it’s unlikely the High Court would take the case without Mr. Olson’s blessing. The White House deserves credit for standing up to Ma Bell’s brigade of lobbyists and op-ed writers and doing right by its free-market principles. Credit as well goes to FCC Chairman Michael Powell, who’s worked for three years to clear away what President Bush has called the “regulatory underbrush” hampering, among other things, faster broadband deployment. Obstacles remain in place at the state and local level — many of the federal rules were redundant — but this is a good start.

Of late and without much success, Mr. Powell and the Administration have encouraged AT&T and the Baby Bells to reach commercial agreements on wholesale phone rates. So long as a Supreme Court appeal was possible, AT&T had refused to come to the negotiating table. Now that Mr. Olson has sided with consumers over insider politics, maybe Ma Bell will pull up a chair.