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47-674: NECA is mainly composed of rural and small telecommunications companies, and most of them are members of NECA. As part of the Breakup of the Bell System , the FCC announced the Access Charge Plan in December 1982. Under this plan, customers would pay a new flat monthly charge to their local exchange carrier to pay for access to the long-distance telephone network. The National Exchange Carrier Association

94-401: A $ 25.6 billion deal, retaining the name Bell Atlantic, and then with non-Bell GTE on June 30, 2000, to create Verizon Communications in a $ 70 billion deal. Verizon sold all of its wireline operations in northern New England ( Maine , New Hampshire , and Vermont ) in 2008 to FairPoint Communications for $ 2.7 billion; a new operating company, Northern New England Telephone Operations ,

141-615: A 1956 antitrust consent decree, then administered by Judge Vincent P. Biunno in the United States District Court for the District of New Jersey , that barred it from participating in the general sale of computers and required it to retreat from international markets (which consisted of relinquishing ownership in Bell Canada and Northern Electric, a former Western Electric subsidiary). In return, it proposed to give up ownership of

188-532: A call. In this way, the implicit subsidies of the Bell System became explicit post-divestiture. These access charges became a source of strong controversy as one company after another sought to arbitrage the network and avoid these fees. In 2002 the FCC declared that Internet service providers would be treated as if they were local and would not have to pay these access charges. This led to VoIP service providers arguing that they did not have to pay access charges, resulting in significant savings for VoIP calls. The FCC

235-457: A drastic decline in the number of radio station owners, even as the actual number of stations in the United States increased. This decline in owners and increase in stations has resulted in radio homogenization , in which local programming and content has been lost and content is repeated regardless of location. Activists and critics have cited similar effects in the television industry. In

282-649: A major change in that law, because it was the first time that the Internet was added to American regulation of broadcasting and telephony . The primary goal of the law was to "let anyone enter any communications business – to let any communications business compete in any market against any other." Thus, the statute is often described as an attempt to deregulate the American broadcasting and telecommunications markets due to technological convergence . The Telecommunications Act of 1996 has been praised for incentivizing

329-528: Is a United States federal law enacted by the 104th United States Congress on January 3, 1996, and signed into law on February 8, 1996 by President Bill Clinton . It primarily amended Chapter 5 of Title 47 of the United States Code . The act was the first significant overhaul of United States telecommunications law in more than sixty years, amending the Communications Act of 1934 , and represented

376-553: Is home to the AT&;T Global Network Operations Center and is the headquarters of AT&T Corp., the long-distance subsidiary of AT&T Inc. The new AT&T Inc. lacks the vertical integration that characterized the historic AT&T Corporation and led to the Department of Justice antitrust suit. AT&T Inc. announced it would not switch back to the Bell logo, thus ending corporate use of

423-646: The Federal Communications Commission (FCC), the agency assigned to implement and administer the economic regulation of the interstate activities of telephone companies (then dominated by the AT&;T monopoly ) and the licensing of spectrum used for broadcasting and other purposes. Starting in the 1970s, a combination of technological change, court decisions, and updates to American policy goals enabled competitive entry by new companies into some telecommunications and broadcasting markets. In this context,

470-727: The First Amendment . Portions of Title V remain, including Section 230 , which shields Internet firms from liability for the speech of their users, and has been widely credited for enabling the growth of the Internet and social media . Some smaller telecommunications companies and consumer groups stated their opposition to the new statute during Congressional hearings. For example, smaller firms predicted that they would experience difficulty in competing financially even if they faced fewer barriers to entry, and this would result in market consolidation in favor of incumbent firms. This prediction

517-490: The "Baby Bells", would provide local service, and would no longer be directly supplied with equipment from AT&T subsidiary Western Electric . This divestiture was initiated in 1974 when the United States Department of Justice filed United States v. AT&T , an antitrust lawsuit against AT&T. At the time, AT&T had substantial control over the United States' communications infrastructure. Not only

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564-507: The 1996 Act required incumbent telecommunications companies to interconnect their networks with new competing companies, and to provide wholesale access to materials and components as those smaller companies build their networks. The act also clarified intercarrier compensation rates for communications requests that are handled by multiple firms. Regional Bell Operating Companies , who were previously subjected to strict regulations to provide only local telephone service, were allowed to enter

611-413: The 1996 Telecommunications Act was designed to allow smaller companies to enter those markets and for existing companies to operate across market sectors, via the relaxation of cross-ownership rules, multi-sector prohibitions, and other barriers to entry . One specific provision empowered the FCC to preempt all attempts by state or local governments to prevent telecommunications competition. A report by

658-623: The 2003 edition of his book A People's History of the United States , historian Howard Zinn named the act as a significant factor in the loss of alternative and community media, and possibly the loss of public control of information: the Telecommunications Act of 1996...enabled the handful of corporations dominating the airwaves to expand their power further. Mergers enabled tighter control of information...The Latin American writer Eduardo Galeano commented..."Never have so many been held incommunicado by so few." There have been attempts by

705-614: The Bell System The monopoly position of the Bell System in the U.S. was ended on January 8, 1982. AT&T Corporation proposed by in a consent decree to relinquish control of the Bell Operating Companies , which had provided local telephone service in the United States. AT&T would continue to be a provider of long-distance service , while the now-independent Regional Bell Operating Companies (RBOCs), nicknamed

752-498: The Bell System's many local operating companies were transferred into seven independent Regional Bell Operating Companies (RBOCs), or "Baby Bells". This divestiture reduced the book value of AT&T by approximately 70%. The breakup of the Bell System resulted in the creation of seven independent companies that were formed from the original twenty-two AT&T-controlled members of the System. On January 1, 1984, these companies and

799-532: The Bell logo by the Baby Bells, with the lone exception of Verizon. Due to discrepancies between the pricing of the "old" AT&T shares and the new "when-issued" shares, investors were able to make risk-free profits, most spectacularly Edward O. Thorp , who made $ 2.5 million in what was at the time the NYSE 's largest (nominal) block trade. Telecommunications Act of 1996 The Telecommunications Act of 1996

846-681: The House of Representatives stated that the goal of the new legislation was to "provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced information technologies and services to all Americans by opening all telecommunications markets to competition". One purpose of the Telecommunications Act of 1996 was to foster competition among companies willing to provide multiple communications services (such as voice calls and Internet connectivity) within network technologies that has previously been confined by law to one type of service. Therefore,

893-470: The Midwest-Kendall . SBC Communications (named Southwestern Bell Corporation until 1995) purchased Pacific Telesis in 1997 for $ 16.5 billion, creating an organization with about 100,000 employees, an annual net income of $ 3 billion, and revenue of about $ 23.5 billion. SBC purchased Southern New England Telecommunications in 1998 for $ 5.01 billion, and Ameritech in 1999 for $ 61 billion, creating

940-529: The act created precise regulatory regimes based on type of network architecture, with companies subjected to different regulations depending on whether they operated in telephone, cable television, or Internet networks. The act makes a significant distinction between providers of telecommunications services and information services, with the different regulations to be followed by companies in each sector leading to confusion when those sectors technologically converged in later years. In order to enable competition,

987-403: The act has failed to enable the competition that was one of its stated goals. Instead, it may have inadvertently exacerbated the ongoing consolidation of the media marketplace that had commenced in the decades before the act's passage. The number of American major media content companies shrank from about fifty in 1983 to ten in 1996, and to just six in 2005. An FCC study found that the act led to

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1034-661: The act incentivized upgrades to telecommunications infrastructure and new construction, despite increased industry concentration. In the long term, this helped to spread broadband access to more of the country. Critics have maintained that many of the purported goals of the Telecommunications Act of 1996 did not come to fruition in the years and decades after its passage. The act's structure of regulations based on type of network infrastructure failed to predict technological convergence and created awkward regulatory burdens for companies operating in multiple segments of media and telecommunications markets. This may prohibit innovation or make

1081-485: The antitrust case, but no longer automatically received Western Electric equipment, and were no longer bound to use AT&T as their long-distance provider. These companies were: Regulatory changes brought about by the Telecommunications Act of 1996 allowed the Baby Bells to merge with each other or with non-Bell companies. Subsequently, a series of mergers and divestments has left six companies owning parts of

1128-408: The breakup was that local residential service rates, which were formerly subsidized by long-distance revenues, began to rise faster than the rate of inflation. Long-distance rates, meanwhile, fell both due to the end of this subsidy and increased competition. The FCC established a system of access charges where long-distance networks paid the more expensive local networks both to originate and terminate

1175-403: The breakup, which had become much more lucrative with the rise of dial-up Internet access in the early 1990s. Even this, however, would not save AT&T Corporation. It would soon be absorbed by one of the Baby Bells, SBC Communications (formerly Southwestern Bell), which then co-opted the AT&T name to form the present-day AT&T Inc. Following divestiture in 1984 and the creation of

1222-585: The charges for nine years, at which point all access charges would then be phased out. Another consequence of the divestiture was in how both national broadcast television (i.e., ABC , NBC , CBS , PBS ) and radio networks ( NPR , Mutual , ABC Radio ) distributed their programming to their local affiliated stations. Prior to the breakup, the broadcast networks relied on AT&T Long Lines' infrastructure of terrestrial microwave relay , coaxial cable , and, for radio, broadcast-quality leased line networks to deliver their programming to local stations. However, by

1269-477: The early 2010s. In the media and broadcasting sector, most media ownership regulations were eased, and the cap on radio station ownership was eliminated. The act also attempted to prohibit indecency and obscenity on the Internet, via a section that was separately titled as the Communications Decency Act , though most of this section was ruled unconstitutional by the U.S. Supreme Court for violating

1316-417: The expansion of networks and the offering of new services across the United States, though it is often criticized for enabling market concentration in the media and telecommunications industries. Previously, the Communications Act of 1934 was the statutory framework for American communications policy, covering telephony , broadcasting , and (via later amendments) cable television . The 1934 Act created

1363-472: The former Bell System as of 2024. The breakup led to a surge of competition in the long-distance telecommunications market by companies such as Sprint and MCI . AT&T's gambit in exchange for its divestiture, AT&T Computer Systems , failed, and after spinning off its manufacturing operations (most notably Western Electric, which became Lucent, then Alcatel-Lucent , now Nokia ) and other misguided acquisitions such as NCR and AT&T Broadband , it

1410-422: The high tariffs set by AT&T for broadcast customers, the split of the Bell System into separate RBOCs, and the end of contracts that the broadcast companies had with AT&T. AT&T was allowed to enter the computer market after the breakup; observers expected that with Bell Labs and Western Electric, American Bell would challenge market leader IBM . The company's post-breakup strategy did not work out

1457-413: The largest U.S. local phone company at the time. AT&T Corporation , the original parent, was acquired effective November 18, 2005, by SBC, which renamed itself AT&T Inc. and began using the ticker symbol "T" and a new AT&T corporate logo. The new company then acquired BellSouth for $ 85.8 billion on January 3, 2007, with FCC approval. Bell Atlantic merged with NYNEX on August 18, 1997, in

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1504-468: The late 1970s to the early 1980s) due to some stations not being equipped yet with ground station receiving equipment to receive the networks' satellite feeds, and due to the broadcast networks' contractual obligations with AT&T up until the breakup in 1984, when the networks immediately switched to satellite exclusively. This was due to several reasons — the much cheaper rates for transmission offered by satellite operators that were not influenced by

1551-463: The law unable to handle evolving market conditions. The law also fails to provide a guideline for regulating previously separate network technologies that have since converged (e.g. voice calls can now be delivered over Internet networks via services like VoIP ). According to some critics, this situation has in fact created re-regulation of the marketplace with contradictory and inconsistent rules for companies to follow. Critics have also claimed that

1598-399: The local operating companies placed under them were: In addition, there were two members of the Bell System that were only partially owned by AT&T. Both of these companies were monopolies in their coverage areas, received Western Electric equipment and had agreements with AT&T whereby they were provided with long-distance service. They continued to exist in their pre-breakup form after

1645-438: The local operating companies. This last concession, it argued, would achieve the government's goal of creating competition in supplying telephone equipment and supplies to the operative companies. The settlement was finalized on January 8, 1982, with some changes ordered by the decree court: the regional holding companies received the Bell trademark, Yellow Pages, and about half of Bell Labs. Effective January 1, 1984, ownership of

1692-475: The long-distance market. The 1996 Act also introduced more precise and detailed regulations for the funding of universal service programs via subsidies generated by monthly customer fees. This was intended to reduce the tendency of smaller telephone firms to charge above-market rates for underserved users, and to provide more transparency of fees charged to customers. However, universal service subsidies were only used to build landline telephone networks until

1739-491: The mid-1970s, the then-new technology of satellite distribution offered by other companies like RCA Astro Electronics and Western Union , with their respective Satcom 1 and Westar 1 satellites, started to give the Bell System competition in the broadcast distribution field, with the satellites providing higher video and audio quality, as well as much lower transmission costs. However, the networks stayed with AT&T (along with simulcasting their feeds via satellite through

1786-526: The public airwaves. The act was also unpopular with early Internet activists, and was named specifically in EFF founder John Perry Barlow 's essay, A Declaration of the Independence of Cyberspace , as an act "which repudiates your own [American] Constitution and insults the dreams of Jefferson, Washington, Mill, Madison, DeToqueville, and Brandeis." On the other hand, a Brookings Institution study concluded that

1833-596: The seven Baby Bells, the service within the LATAs remained regulated until 1996, when the Telecommunications Act of 1996 was passed. Following this, the Baby Bells began consolidating among themselves. Section 271 of the Telecommunications Act of 1996 also established a way that regulators could approve BOCs to enter the interLATA market in regions where they provide local exchange service. In 1998, Ameritech sold some of its Wisconsin Bell lines (covering 19 exchanges) to CenturyTel , which merged them into its company CenturyTel of

1880-403: The way it had planned. Its attempt to enter the computer business failed, and it quickly realized that Western Electric was not profitable without the guaranteed customers the Bell System had provided. In 1995, AT&T spun off its computer division and Western Electric, exactly as the government had initially asked it to do. It then re-entered the local telephone business that it had exited after

1927-576: Was acquired by CenturyLink (now Lumen Technologies ), an independent telephone provider, bringing Qwest Corporation (originally Mountain Bell), Northwestern Bell, and Pacific Northwest Bell under its control. While based in San Antonio, Texas, since 1992, AT&T Inc. moved its headquarters to Dallas by the end of 2008. The name change came after AT&T's merger with BellSouth, as well as with southeast-region telephone operations. Bedminster, New Jersey ,

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1974-521: Was correct, and by 2001 concentration of the American telephone market had increased with four major companies owning 85% of all network infrastructure, rather than the increased competition that the act intended. Critics warned that the same would happen in the media content industry. Consumer activist Ralph Nader argued that the act was an example of corporate welfare spawned by political corruption, because it gave away to incumbent broadcasters valuable licenses for digital broadcasting frequencies on

2021-517: Was created. Operations in Vermont were later split into Telephone Operating Company of Vermont , but continued with FairPoint. In 2010, Verizon sold 4.8 million access lines in 14 states, including Verizon West Virginia (originally The Chesapeake and Potomac Telephone Company of West Virginia), to Frontier Communications . US West was acquired by Qwest in June 2000 for $ 43.5 billion. On April 6, 2011, Qwest

2068-560: Was it the sole telephone provider throughout most of the country, its subsidiary Western Electric produced much of its equipment. Relinquishing ownership of Western Electric was one of the Justice Department’s primary demands. Believing that it was about to lose the suit, AT&T proposed an alternative: its breakup. It proposed that it retain control of Western Electric, Yellow Pages , the Bell trademark, Bell Labs , and AT&T Long Distance. It also proposed that it be freed from

2115-433: Was left with only its core business with roots as AT&T Long Lines and its successor AT&T Communications . It was at this point that AT&T was purchased by one of its own spin-offs, SBC Communications , the company that had also purchased two other RBOCs and a former AT&T associated operating company (Ameritech, Pacific Telesis, and SNET), and which later purchased another RBOC (BellSouth). One consequence of

2162-436: Was set up to collect the fees and distribute the funds. This United States government–related article is a stub . You can help Misplaced Pages by expanding it . This article related to a non-profit organization is a stub . You can help Misplaced Pages by expanding it . This article about a telecommunications corporation or company in the United States is a stub . You can help Misplaced Pages by expanding it . Breakup of

2209-419: Was split on this issue for some time; VoIP services that used IP but in every other way looked like a normal phone call generally had to pay access charges, while VoIP services that looked more like applications on the Internet and did not interconnect with the public telephone network did not have to pay access charges. However, an FCC order issued in December 2011 declared that all VoIP services would have to pay

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