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The Telecommunications Act Of 1996

Submitted by jhwebster1 on September 13, 2006

Category: Technology
Words: 1247 | Pages: 5
Views: 172
Popularity Rank: 61,993
Average Member Grade: N/A (Add a Comment / Grade this Paper)

History
In the early part of the twentieth century, the general idea was that all Americans should have phone service. The other general idea regarding phone service was that the government should assist in promoting this as well. As a result of these general ideas the telecommunications industry became a natural monopoly. AT&T, which traces its routes to the founding of the telephone, promoted a Single Policy, Single System geared towards Universal Service. Thus by 1920, AT&T emerged as the dominant telecommunications company. Until 1934 AT&T was highly regulated by the states with price control per the government’s request to protect consumers from abuses often associated with monopolies. The Telecommunications Act of 1934 created the Federal Communications Commission, which took regulation to the federal level.
AT&T retained its natural monopoly status for years until the government realized that AT&T was partaking in monopolizing the telecommunications industry with no controlling factors. The problems began with the accusation that AT&T practiced illegal exclusion because they only purchased equipment from Western Electric. This was the first of two anti-trust suits against AT&T. As a result of the suit United States vs. Western Electric filed in 1949, AT&T retained ownership of Western Electric with the restriction and promise of not entering into the computer industry.
The second anti-trust suit filed in 1974, United States vs. AT&T, had two major issues. The first was that AT&T’s relationship with Western Electric, which AT&T retained in the 1956 settlement, was illegal. The second issue ignited by MCI who was attempting to penetrate the large business market was the fact that AT&T monopolized the long distance market. In 1982, as a result of the lawsuit, AT&T agreed to spin off the regional local telephone companies into seven Regional Bell Operating Companies (RPOCS) in exchange for retaining its Long Distance services and...

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