The myth: Deregulation
By 07/03/2003 00:00:00
System designed to foster competition and lower prices is not working
The Ellis County Press
ELLIS COUNTY - In a truly capitalist free market society, consumers can pick and choose between a myriad of companies for services ranging from telephone and electricity, to schooling - while at the same time paying lower prices for those services.
And that's what Texas tried to do in 1996.
The state, amid constant opposition from 'Big Government' supporters and the mainstream media outlets in Texas, opened up its telecommunications, electricity and natural gas markets to the free market.
As residents - and cities - are quickly finding out, the state's push for quasi-capitalism has done little for their pocketbooks and it has something to do with what the opposition media would not report: the market itself is deregulated, allowing numerous
companies to compete against each other. But the lines providing the services, which are controlled by a select few, are not deregulated.
Companies such as Southwestern Bell Company and Texas Utilities are paying millions in fines each year because of their unwillingness to open up the utility lines to other companies - and in their refusal, prices for their services go higher, leaving residents with no other utility choice.
The Texas Public Utilities Commission, now a branch under the mysteriously named Texas Railroad Commission, regulates companies like SBC - and has the authority to implement new utility lines. The PUC, according to its website, has postponed opening certain areas of the state to the free market temporarily while new infrastructure lines are built.
Aside from SBC and other telecom companies, electricity also remains a monopolistic enterprise.
Four major electricity, or energy providers, dominates Texas' market: TXU, Reliant Energy, First Choice Power, and Mutual Energy Company.
Certain geographic areas, such as Reliant in Houston, only have access to one company, or parts of two.
The competition in the energy market, like the telecom industry, is limited, which is why certain cities have to deal with TXU's request for a rate increase.
Because TXU is regulated by the state, and because it's this area's only major service provider, it can jack up prices on customers. However, before the rates get too high, the PUC and select cities must first approve it.
'Free markets are better because they unleash competition and push productivity and creativity,' said Plano-based FreeMarket.org President Kelly Shackleford. 'Those who serve the best are the winners, and thus the major beneficiaries are the consumers.
'No matter how hard government go-gooders try, they can not match a free market and what it can produce.'