Communication & Information Technology

Telecommunications Policy

The Answers

1 The Communications ACT of 1934 provided people with UNIVERSAL phone service.

2 What does FCC stand for? Federal COMMUNICATIONS COMMISSION.

3 The CARTERFONE decision allowed other manufacturers communication DEVICES to be connected to AT&T equipment.

4 On January 8, 1982 AT&T agreed to an out-of- court settlement with the US Justice department to DIVEST.

5 “BOC” stands for Bell OPERATING COMPANY.

Preview

Telecommunications Act of 1934 Change in Telecommunications Regulations Telecommunications Act of 1996 Future Change in Telecommunications

Regulations Radio & TV Regulation Cable Regulation Trends in Telecommunication Policy

Telecommunications Act of 1934

Regulated Monopoly Universal Service Interstate

– FCC Intrastate

– PUC Separations and Settlements Rate of Return

Telecommunications Act of 1934 “Regulated Monopoly”

More than one company in telecommunications not permitted.

AT&T

Not Everyone Had Phone Service…

Telecommunications Act of 1934 “Universal Service”

“Service to all…” Major theme of the Communications Act of

1934.

Was the goal of Universal Service realized?

Telecommunications Act of 1934 “Interstate Communications”

Definition:– Communications services that take place between

states.

Regulated by…– FCC (Federal Communications Commission)

Telecommunications Act of 1934 “Intrastate Communications”

Definition:– Communication services that take place within a

state.

Regulated by…– PUC’s (Public Utility Commissions)

Telecommunications Act of 1934 “Separation and Settlements”

Definition:– A joint federal/state board where PUC and FCC

representatives meet to discuss local and long distance interconnect issues.

– The board also regulates the process by which long distance companies pay local phone companies for the right to connect into their local loops.

Telecommunications Act of 1934 “Rate of Return”

Definition:– “Method by which the FCC could determine how

much profit was reasonable for a telecommunications service provider to earn.

Change in Telecommunications Regulations

After World War II 1956

– AT&T prevented from any business except regulated telecommunications.

1960’s– Carterphone– MCI

Change in Telecommunications Regulations

1974 (Justice Department Suit)– The suit asked AT&T to divest itself of Western

Electric & Local Operating Companies.

Change in Telecommunications Regulations

1980 (FCC Computer Inquiry II)– FCC decision about the markets AT&T could enter.– AT&T could enter any market.– Deregulated all competitive services of AT&T.

Competition would drive rates for services.

Change in Telecommunications Regulations

January 8, 1982 (AT&T Vs. The Justice Department Out-Of-Court Settlement)

“Modified Final Judgment”– Broke off the 22 Bell Operating Companies

(BOC’s).– Turned control of the Yellow Pages to the BOC’s.– Kept:

Long Lines Division Western Electric Bell Labs

– Equal Access required of the BOC’s

Change in Telecommunications Regulations

Seven Regional Operating Companies (ROC’s) Formed from the 22 Bell Operating Companies (BOC’s).

Names (ROC’s)?– NYNEX– Bell Atlantic– Bell South– Ameritech– Southwestern Bell– US West– Pacific Telesis

Just After the “Break-up”

Change in Telecommunications Regulations Local Access Transport Areas (LATA)

– “A set of geographic boundaries within each state that defines what will be considered local and long distance service.”

Extra on LATA’s (Not in Text…)– LATA are generally handled by one Telco, not every

call within every LATA is considered a local call. – Rural, and very large LATAs often have multiple

calling areas.

Telecommunications Act of 1996

The Aim of the Act is…– “…to promote competition in every telecommunications

market.” Previous mindset…

– “…protection of the incumbent utility from entrants.”– “…protection of consumers from monopoly power.”

Telecommunications Act of 1996

The Act's provisions fall into five major areas: – Telephone Service – Telecommunications Equipment Manufacturing – Cable Television – Radio and Television Broadcasting – The Internet and Online Computer Services

Telecommunications Act of 1996

Telecommunications Act of 1996 Provision Specifics include:– Remove legal and regulatory barriers to entry.– BOC’s can provide Long Distance.– BOC’s can own and manage companies that provide

equipment.– Infrastructure sharing.– Allows the FCC to control licenses for advanced

television systems.– Deregulates cable rates.

Telecommunications Act of 1996

Projected Benefits of of Telecommunications Act of 1996– Lower phone and data rates.– New competitors offering innovative services.– Rapid implementation of new technologies such as

high-speed Internet access.– Generally, better services for consumers

Telecommunications Act of 1996

How effective has the Act been?– Varied

"Communications Decency Act of 1996“– Rough Going…

Long Distance Telephone– Pretty Good..

Local Telephone Service– Slow to Develop…

Future Change in Telecommunications Regulations

Remember the “Seven Regional Operating Companies?

The Seven ROC’s are now…– Ameritech + Southwestern Bell + Pacific Telesis =

SBC Corporation.– Bell Atlantic + Nynex = Bell Atlantic.– Bell South– US West

BellAtlanticSouthwestern

BellCorporation

1) US West Inc.2) BellSouth3) Bell Atlantic4) Southwest Bell

Radio & TV Regulation

Radio Act of 1912– Allowed Secretary of Commerce to license radio stations– In 1922, 830 kHz was set aside for important news, etc.

Radio Act of 1927– Created the Federal Radio Commission

Assign Bandwidth Control Station Power Issue Licenses

Radio & TV Regulation

Communications Act of 1934– FCC now controls radio– Forbids the FCC from censoring programs.

Cable Regulation

Cable Communication Policy Act of 1984– Incorporated the cable television industry into the C.A of

1934– Must Carry…(Courts struck down)

(1992) Cable Television Consumer Protection & Competition Act.

– “Must Carry” reinstated…– Greater Control of Pricing…

Communications Act of 1996 (De-regulated again…)– March 30, 1999 (FCC Stepped aside from Cable Rate

disputes...)

Trends in Telecommunication Policy

Diminishing Federal Role– Congress leans toward deregulation– Courts have played a big role. (Judge Harold Greene)

Emerging State Role– Deregulation to drive growth

National Information Infrastructure– Computers, networks and databases accessible to all

people in the USA– Standardization– “New Super Information Highway”– Internet2

Trends in Telecommunication Policy

Repricing Services– Recovering costs directly from the service that

generates the cost.– CALC (Customer Access Line Charge)

Pay for the connection

– Local Measured Service Similar to Long Distance Billing

Integration & Mergers

Trends in Telecommunication Policy

Regulating Intellectual Property– Copyright issues.– Enforcement problems.– Congress & Courts will have to play a role.