Impact of 1996 Telecommunications Act

TELECOMMUNICATIONS ACT OF 1996 AND ITS IMPACT ON BUSINESS

This research paper summarizes the principal features of the federal Telecommunications Act of 1996 (TCA), as it has been interpreted by the Federal Communications Commission (FCC) and the federal courts, and its principal impact on business.

2. Technological Developments Which Led to TCA

4. Regulatory and Judicial Framework and Interpretations

TCA represented the first major overhaul of American telecommunications (telecom) law since the Communications Act of 1934, which it effectively replaced. Its principal aim was to reduce or to eliminate many federal and state legal and regulatory barriers to entry and competition in the telecom industry that have prevented the telephone, cable television and broadcasting industries from competing in each other's markets and to promote thereby growth and technological progress within it. TCA's genesis lay in the remarkable technological changes which have occurred in recent decades in the telecom industry, which rendered the previous pattern of law and regulation obsolete. While dismantling or substantially modifying many (but not all) such barriers, Congress left many of its statutory mandates vague, which in effect left it up to the FCC and the federal courts to give them substance. The principal impact of TCA on busines

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the contrary are preempted by TCA. The BOCs must do so by permitting other competing carriers to interconnect for exchange and exchange access services, provide unbundled access to their networks, not unreasonably restrict resale (and must make wholesale tariffs available to resellers), provide number portability, afford access to rights-of-way and set up reciprocal compensation arrangements for transport and termination of traffic. Interconnection agreements are to be negotiated commercially, but are subject to compulsory arbitration under the auspices of state public utility commissions if commercial negotiations fail. Quality universal local phone service at just, reasonable and affordable rates must be continued to rural as well as urban customers, subject to guidelines to be established by a Federal-State Joint Board. Schools, libraries and other health care and educational non-profit organizations are to receive at a discount such universal services. No costs from noncompetitive services may be used to subsidize such services. 3. Television and Radio. The former ownership limit under which one person could only own 25 percent of an interest in a television station was raised to 35% and the limit of one company owning only 1

Category: Government - I