1. COMT 2201 Regulation This Material may be found in: Cole, Chapter 1. Also in: Datapro Reports on Communications Networking Services, Report #3002, A History of Telecommunications Regulation.

2. COMT 2202 Public Utilities Monopolies or Near-Monopolies Having the monopoly is deemed to be in the public’s best interest Regulation provides oversight to prevent abuse Examples: –Railroads –Water, Gas, Electricity –Telecommunications

3. COMT 2203 Jurisdiction FCC - Interstate Communications Intrastate –PUC (Public Utilities Commission)or PSC (Public Service Commission) –unless “preempted” by the FCC

4. COMT 2204 Products and Services EquipmentLocal ServiceLong Distance IntrastateInterstate “The Bell System” Pricing behaviour is regulated by controlling the “Rate of Return”

5. COMT 2205 Carterphone - 1968 EquipmentLocal ServiceLong Distance IntrastateInterstate “The Bell System” Some Competition Allowed

6. COMT 2206 Specialized Common Carriers 1971-1972 EquipmentLocal ServiceLong Distance IntrastateInterstate “The Bell System” Some Competition Allowed Specialized Services

7. COMT 2207 After the MFJ - 1982 EquipmentLocal ServiceLong Distance IntrastateInterstate Specialized Services Intra LATA Intra LATA Inter LATA Inter LATA

8. COMT 2208 The Telecom Act of 1996 EquipmentLocal ServiceLong Distance IntrastateInterstate Specialized Services Intra LATA Intra LATA Inter LATA Inter LATA

9. COMT 2209 Computer Inquiry I - 1972 Deregulation of Data Processing Data Transport remains regulated

10. COMT 22010 Computer Inquiry II - 1980 Computer Inquiry I seen as obsolete Basic data communications services are now regulated Enhanced Services are not regulated –Enhanced Services, including CPE sales, offered by Bell Operating Companies, must be moved to a separate subsidiary WHY ?

11. COMT 22011 Computer Inquiry III - 1992 Attempts to deregulate the entire data communications arena Creates the concept of “Comparably Efficient Interconnections” Creates the ONA (Open Network Architecture) concept Never really led to regulation -- until the 1996 Act (which used different words)

12. COMT 22012 Technical Consequences Changes in regulation often force technical changes In 1984, deregulation changed the number of long-distance providers from 1 to 2 or more -- what are the issues?

13. COMT 22013 Technical Consequences of the MFJ Customer must be able to indicated via dialed digits which provider to use –Initially - Use line side access –Interim - Use Feature Group B 950-10xx Long-term: Replace all central office switches with program control switches capable of doing database lookups. –Introduce 10XXX (now 1010XXX override codes)

14. COMT 22014 Introduction of Competition Before: Local ServiceLong Distance All Costs are combined in the “Rate Base” Regulators set prices based on policy/politics Total provider revenue is correct

15. COMT 22015 Competition cont… After Local ServiceLong Distance Prices and costs are not divided equally, revenues are no longer correct. Implicit subsidies are replaced by explicit payments.

16. COMT 22016 Local Service Competition Rural Area ServiceUrban Area Service All Costs are combined in the “Rate Base” Regulators set prices based on Universal Service mandates/desires; cost-based rural service may not be reasonably affordable Total provider revenue is correct QUESTION: What happens if these services are deregulated and provided by multiple companies?