How this will work out should be interesting. Given that there are really only two viable wireline options (telco and cableco), and that the wireless options are all owned by one of those two, the market won’t look anything like long distance did in the 1990s (and to some degree, still does).

However, you shouldn’t expect any rush by your local telephone company to lower prices. Instead, they will focus on the new options provided by “winbacks” and by offering very targeted discounts that only go to those threatening to switch. In other words, if you want better pricing, call up your local provider once forbearance is granted and threaten to leave. If you just sit back and keep paying your bill, don’t expect to get anything in the near future.

Finally, what happens in your local market will depend on how the local competitors decide to behave. People served by Videotron have had much better pricing (from both Videotron and Bell) for the last two years. If Rogers continues to offer modest discounts to the legacy Bell service, don’t expect a price war… and be prepared for increases wherever each side feels the other will play along.

The difference with local dial tone is the number of competitors and the ability to compete across a range of access vehicles: wireless, twisted pair, coax and over-the-top IP. That’s why I think it will more closely follow the model we saw in long distance.