Telecommunications Act of 1996

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Telecommunications Act of 1996

Telecommunications legislation passed by the U.S. Congress in 1996. Although it covers many aspects of the field, the most controversial has been the deregulation of local phone service, allowing competition in this arena for the first time. Long-distance carriers (IXCs) and cable TV companies can get into the local phone business, while local telcos (the LECs) can get into long distance. Some of the major provisions follow.

Section 251 - Allows states to regulate prices in the local access market.

Section 254 - Extends universal service to everyone no matter how rural, even if others have to subsidize the expense. See traffic pumping.

Section 271 - Provides a 14-point checklist of requirements for RBOCs to offer intrastate long-distance service.

It Wasn't a Picnic


The RBOCs thought the Act would be a road map for getting into long distance in exchange for ending their local monopolies. What they got were 700 pages of dubious rules that made "deregulating" as complicated as any regulated industry could be. The RBOCs claimed that the Act discriminated against them and that other large telephone companies received more favorable treatment. Complaints and lawsuits ensued.

The Act required that the RBOCs offer competitors access to their local networks at reasonable rates, but both the Supreme Court (1999) and appeals court (2002) said that the FCC should not be deciding how the RBOCs should foster their own competition by unbundling their network services. In 2003, the FCC decided not to force the RBOCs into leasing high-speed lines to competitors. In March 2004, the appeals court upheld that ruling and also overturned a ruling that required the RBOCs to give wireless companies access to their networks. The 2004 rulings were applauded by the RBOCs.
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Based on the most recent publicly available data from the Federal Communications Commission, the latest findings are consistent with a previous Phoenix Center POLICY BULLETIN released in June, which showed that the 1996 Telecom Act generated an additional $267 billion in total telecom investment between 1996 and 2001.
Obama has asked the FCC to reclassify high-speed broadband (Internet) as a public utility under Title II of the 1934 Communications Act instead of treating Internet under section 706 of the 1996 Telecom Act.
Bypassing Bell Atlantic's constitutional and state law claims, Judge Blake held that the county ordinance "fatally conflicts with the terms and goals" of the 1996 Telecom ACt.
Verizon is attempting to use a "loophole" (forbearance) in the 1996 Telecom Act to eliminate competition and return to the monopoly status.
said Congress should understand why the concept of universal service was written into the 1934 Telecommunications Act, and re-affirmed in the 1996 Telecom Act.
To support its premature petitions for forbearance from pro-competitive rules in Section 251 of the 1996 Telecom Act in those six markets, Verizon has supplied information that grossly overstates market competition.
He has completed more than 70 investment banking transactions since passage of the 1996 Telecom Act.
However, the FCC plays a vital role in implementing the 1996 Telecom Act, most importantly in ensuring to the extent possible that the act's rural safeguards are upheld.
The 1996 Telecom Act succeeded in what it was designed to achieve, but almost two decades later it is leaving the FCC to struggle to shoehorn Internet-era technologies into phone-era regulations," Silliman said.
Compared to the $90 billion investment made by Cable operators to offer Triple Play since the 1996 Telecom Act, RBOC investments pale in comparison.
Cox was the first large cable operator to bring competition to telephone companies after the 1996 Telecom Act opened the door for consumer choice.
Are the Communications Act of 1934 and the 1996 Telecom Act the Constitution or the Articles of Confederation?