Telecommunications & Insurance

By: Richard M. Golick

Administrative & Regulatory Practice Area

State regulators have a tough job: ensuring a thriving business environment for those companies which conduct business in our state, while simultaneously ensuring that the consumer is protected. It can be a difficult balancing act, but it can be done, and Georgia is a good example.

In the area of telecommunications, Georgia led the nation in telecommunications deregulation when the state-level deregulation act was passed. Congress responded with federal legislation in 1996, and the challenge now for regulators is just as described above: ensuring a level business playing field in which both traditional local (such as BellSouth) carriers as well as traditional long distance (such as

MCI/WorldCom) carriers compete in the other's domain. The result: more choices for the consumer, and as a further result, lower prices. Taken in historical perspective, the changes which have already occurred are staggering. It wasn't too long ago that long distance charges were something which worried the average phone customer. Now, with companies offering rate plans consisting of long distance charges of ten cents per minute (and much lower in some cases), extended long distance calls are no longer a luxury reserved for those of means. It is only a matter of time before consumers see a telecommunications marketplace in which local, long distance, wireless and other services (such as cable television and Internet services) are packaged into one product at a low price.

Another example of how competition has benefitted the market place is in the area of insurance. Only five years ago, the property and casualty industry in Georgia was in danger of a market disruption.

That is, companies were being stifled by regulators who sought to limit growth and competition. The result: insurance rates were higher, consumers were dissatisfied, and companies were threatening to pull out of Georgia. With a change in insurance regulatory leadership came a change in approach: allow insurance carriers to compete with more freedom, while keeping a vigilant eye out for those players who would seek to abuse their privilege to compete in a state like Georgia which, as we all know, has experienced incredible growth in the past decade. The result: there is more consumer choice in the area of insurance in Georgia, and premiums have begun to go down.

As we turn the corner on the year 2000, the challenge for regulators in these two areas will be to maintain the balancing act which they have thus far maintained, and to slowly but surely allow corporate competitors incrementally more freedom from regulation which in turn will benefit the Georgia consumer.

The information for this article was received from independent research on the part of the author. All information is based solely upon the law of the State of Georgia and does not apply to any matter outside of Georgia. This article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The law is constantly changing, additional facts or future developments may affect subjects contained herein and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form or information in this web site.