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 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

Bell Atlantic Southwestern Bell Corporation 1) US West Inc. 2) BellSouth 3) Bell Atlantic 4) 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.