Carriers Carriers carry traffic for a fee Must have rights of way to lay wire Given some monopoly protection Regulated but being deregulated

Carriers in Most of the World PTT –Traditionally –Originally Postal, Telephone, and Telegraph (authority) –Now, Public Telephone and Telegraph (authority) –Government-owned organization –Traditionally had a complete monopoly on domestic (within-country) service

Carriers in Most of the World Ministry of Telecommunications –Another government organization –Regulated the PTT –The Distinction: PTTs provide service Ministries of Telecommunications regulate their PTTs

Carriers in Most of the World Competition is Increasing –Deregulation: the removal of traditional PTT monopoly rights to increase competition –Allows competition

Deregulation Globally Varies Considerably –Few countries as deregulated as U.S. –Prices generally higher than U.S. –Customer premises usually deregulated most –Data traffic is deregulated heavily –Usually long-distance voice is fairly deregulated –Local service usually is deregulated least

International Service Provided by international common carriers (ICCs) Bilateral Negotiation –Each pair of countries negotiates which ICCs may provide service (bilateral negotiation) –Each pair of countries negotiates settlement charges on calls This bilateral negotiation often brings uneven pricing when you call nearby countries

Carriers in the United States For international service, bilateral negotiation Never a government-regulated domestic monopoly like a PTT Although AT&T was very dominant once

Carriers in the United States AT&T was broken up in 1983 –AT&T continued as long-distance company and as an equipment provider Later, AT&T voluntarily spun off its equipment operations to as Lucent –Local telephone companies were grouped into seven regions, each managed by a Regional Bell Operating Company (RBOC) Also called “Baby Bells” because AT&T was known as the Bell System

Carriers in the United States Local Service –U.S. divided into around 200 regions called Local Access and Transport Areas (LATAs) Intra-LATA Service (Within a LATA) –Incumbent Local Exchange Carrier (ILEC): the traditional monopoly local telephone company –Competitive Local Exchange Carriers (CLECs): Local service competitors for the ILEC

Carriers in the United States Note –LATAs are geographical regions –ILECs and CLECs are carriers that provide service within a single LATA region

Carriers in the United States Inter-LATA Service (Between LATAs) –Inter-exchange Carriers (IXCs) Note: “I” in IXC is not “International ” –AT&T, MCI-Worldcom, Sprint, etc.

Carriers in the United States POP –Point of Presence –Connects all customers of the ILEC, CLECs, IXCs, ICCs –Gives all customers access to everyone else –Allows new carriers to reach the total installed base, making competitive entry possible POP ILEC ICC IXC CLEC

Regulation in the United States Nationally –Federal Communications Commission (FCC) –Sets interstate regulations, standards, prices –Can set intrastate policies that affect the nation-wide system Within States –Public Utilities Commissions (PUCs) –Regulate most intrastate matters, including intrastate pricing

Deregulation in the United States Telecommunications Act of 1996 –Congressional Act –Mandates intra-LATA competition –Before, many PUCs had limited local competition –New competitors for service, including access, that is, the local loop (dial tone service)

Deregulation in the United States Relaxing the Consent Decree –AT&T is being allowed into intra-LATA service –RBOCs are being allowed into inter-LATA service –RBOCs being freed to compete in one another’s territories for intra-LATA service

Deregulation in the United States Telecommunications Act of 1996 –Allows new freedom in pricing –But competition has been developing slowly –So price freedom has largely brought higher prices

Deregulation Trends in the U.S. Customer Premises –Most deregulated –Once, you could not own modems or even telephones –Deregulated in the 1970s –Now fully deregulated: you can do what you like on your premises

Deregulation Trends in the U.S. Data networking services –Now wide open Inter-LATA service –Deregulated in 1970s and 1980s –Now, equal access: you get to choose your long-distance carrier –Now wide-open

Deregulation Trends in the U.S. Intra-LATA Service –Least deregulated –Some prior deregulation –Deregulation really began in earnest only with the Telecommunications Act of 1996

Deregulation Trends in U.S. Degree of Deregulation: Most to Least –Customer premises (total) –Data networks (high deregulation) –Inter-LATA service (high deregulation) –Intra-LATA service (low deregulation)

Carrier Services and Pricing Tariffs –Filed by carriers, approved by authority –Lets customer know exactly what service should be provided –Lets customer know exactly what price they should pay –Provides recourse in disputes –Deregulation is generating many untariffed services for faster response to competition

Local Calling Within local area Flat rate pricing –Fixed payment per month –No charge per call Message unit pricing –Charged message units for each call in local area –Depends on distance and duration –Penalizes Internet access, other resource hogs

Toll Calls Long-distance calls –Inter-LATA or Intra-LATA long-distance calls Even in intra-LATA service, there is a local- versus long-distance distinction –Priced per minute –Price based on distance International calls –Prices depend primarily on country called –Prices depend less on distance than on country called because rates are set through bilateral negotiation

Toll Calls Direct Distance Dialing –Most common method –Calling party pays Collect Calls –Called party pays if accepts calls –Pays more per minute than direct dial rate

Toll Calls 800/888 Numbers –Area codes are 800 or 888 –Called party pays –Pays less per minute than direct dial rates –To support customers 900 Numbers –Caller pays –Pays more per minute than direct dial rate –Called company can charge for user service

Toll Calls WATS –Wide Area Telephone Service –Company can call OUT from site, to phones throughout the WATS service area –Caller pays –Pay less than direct dial rates

Toll Calls