As a co-author of the House telecommunications bill, I feel qualified to comment on the article "This Is a Free Market?" [Business, Jan. 19]. The gist of the article went something like: "Here it's been nearly a full year since enactment of the telecommunications bill, and yet the process of issuing new regulations, deploying new technologies, launching new industries and realigning corporations has yet to result in lower residential phone bills." Well, I'll be.

The act was signed into law last February. It has not been fully implemented, much less given time to work. One pivotal set of rules promulgated under the act regarding pricing for telephone service interconnection has been stayed in court. Another critical rulemaking on universal service isn't even due until later this year.

The Telecommunications Act is a deregulatory piece of legislation. It does not mandate lower prices or increased competition. Rather, it removes the legal barriers to telecommunications competition in the sound belief that the free market will lead to increased consumer choice and lower prices. That takes time, and the clock doesn't start ticking until the new regulations are in place. It is simply premature to declare the success or failure of the Telecommunications Act.

Open competition means that there will be some dislocations and miscalculations in newly created markets. To be sure, there are those who would prefer the old way of sheltered monopolies and intense government regulation. In the final analysis, however, the competitive model promises efficiencies and innovations that protected industries would never undertake.

MICHAEL G. OXLEY
U.S. Representative (R-Ohio)
Washington

"Right by half" is how I would describe the article that declared that the promise of the Telecommunications Act of 1996 remains unfulfilled.

Yes, progress toward opening local telecommunications markets has been slow, largely because of the recalcitrance of the regional Bell companies, which, perhaps understandably, are unwilling to release their monopoly stranglehold on the local telephone market. But the article's discussion of pricing trends in the long-distance industry missed the mark by a country mile.

The price of an average long-distance call has dropped by about 70 percent since 1984. And in 1996 long-distance prices, measured in terms of total long-distance revenue divided by total minutes of long-distance calling, declined 3.4 percent -- before taking the 3 percent inflation rate into account. That compares with a 7.7 percent increase in cable television rates.

Much of the decline in long-distance prices is because of the innovative promotions and special offers spawned by more than 15 years of long-distance competition.

In their discussion of long-distance pricing, Post reporters Mike Mills and Paul Farhi ignored the significant effect of calling plans, promotions and special offers by citing price figures compiled by the Bureau of Labor Statistics (BLS). Those figures reflect price changes only in basic long-distance rates. The Federal Communications Commission, in its reports on trends in telephone service, has recognized that the BLS numbers tell only a small part of the long-distance story because they ignore these special discounts.

Statistics aside, there is no doubt that the fastest way to cut long-dis\tance prices even further would be to eliminate the inflated fees that the Bell companies and other local monopolies demand for connecting long-distance calls to their local networks. In a study released last December, the FCC said that these so-called "access charges" continue to represent more than 40 percent of the cost of a long-distance call. The actual cost of making those connections is somewhere in the neighborhood of 5 percent of the long-distance dollar.

The Telecommunications Act represented a victory for American consumers. And it will lead to lower prices, more choice and better service, especially after federal and state regulators complete the job of opening the local telephone markets to real competition. But that will not happen until the local telephone companies decide it's time to give up monopoly's ghost.

TIMOTHY F. PRICE
President and CEO
MCI Communications Corp.
Washington