Telecommunications Regulation: Domestic and International US Regulatory History MSIS 5600
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Transcript of Telecommunications Regulation: Domestic and International US Regulatory History MSIS 5600
(c) 2003 Charles G. Gray 1
Telecommunications Regulation:Domestic and International
US Regulatory History
MSIS 5600
Charles G. Gray
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Why Regulation?• “Natural monopoly” services
– Essential services for public welfare– One organization can serve the market most
efficiently
• Substitute for competition– Exclusive (franchised) service areas without
competitors
• Serve the “public interest, convenience and necessity”
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Regulatory Process• Monitor and control providers to insure
– Service on demand– Uniform policies to all users– High quality service– Fair rates to customers– Fair return to stockholders
• US Regulators– Federal - FCC/NTIA– State - PUC/PSC, etc.
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History of Regulation in US Telecommunications
• 1856 - Western Union Telegraph founded• 1866 – Post Roads Act
– 1878 - Commerce Clause interpreted to include telegraph
• 1876 - A. G. Bell filed patent for “Improvement to telegraphy”– Elisha Gray was 4 hours later
• 1877 - Bell Telephone Co. formed - with Hubbard
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History of Regulation in US Telecommunications
• 1878 - Western Union formed the American Speaking Telephone Company
• 1890 – Sherman Anti-trust Act
• 1907 – First state agencies in NY and WI
• 1910 – Mann-Elkins Act (Strengthened the ICC)
• 1912 – Act to Regulate Radio Communications
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History of Regulation in US Telecommunications
• 1913 - First threat of anti-trust action by the DOJ (Kingsbury Commitment)
• 1921 – Willis-Graham Act
• 1927 – “The Radio Act”– Federal Radio Commission (FRC)– Applies only to the United States– Philippines and Panama controlled by Secretary
of State
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History of Regulation in US Telecommunications
• 1934 - Communications Act of 1934 – FCC established– Consolidated FRC and ICC functions
• 1949 - DOJ antitrust suit filed against AT&T
• 1956 - AT&T “Consent Decree” signed with DOJ
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History of Regulation in US Telecommunications
• 1956 - Hush-a-phone decision (action first filed in 1948)
• 1959 – FCC “Above 890” Decision
• 1961 – AT&T TELPAK Tariff
• 1968 - Carterfone decision (action first filed in 1961)
• 1968 – AT&T PCA Requirement
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History of Regulation in US Telecommunications
• 1969 - MCI decision (FCC voted 4-3 in favor)
• 1969 – Private Lines opened to competition
• 1970 – “Ozark Plan”• 1971- Specialized Common Carrier (SCC)
Decision
• 1971 - “Open Skies” Policy
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History of Regulation in US Telecommunications
• 1973 – FCC approved 3 “value added carriers”
• 1974 - DOJ antitrust suit filed against AT&T
• 1976 – Unlimited shared use and resale of private lines
• 1977 – MCI Execunet Decision (Judge S. Wright)
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History of Regulation in US Telecommunications
• 1981 – Resale/shared use of all interstate service
• 1982 - “Modified Final Judgment” is agreed 1/1/84 – Breakup of AT&T (The Bell System)
• 1984 – LATAs implemented• 1995 - FCC begins auctions of PCS
frequencies• 1996 - New Telecommunications Law signed
(Amendment to TA 34)
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History of Regulation in US Telecommunications
• 1997-2000 - Flurry of mergers and acquisitions
• 2000 – EU prohibits MCIWorldcom takeover of Sprint
• 2000-2002 – Bankruptcies, failures, suspected criminal activity
Note that the telephone industry has a long history of litigation and government regulation
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US Regulation of the Computer Industry
• 1971 - Computer Inquiry I (CI-I)
• 1981 – CI-II
• 1986-7 – CI-III
“Enhanced Services” are not regulated
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Common Carriers
• Supplier who “carries” goods, services or people from one point to another for the public
• Airlines, trucking companies, bus companies, telephone companies, etc.
• Accountable to a regulatory agency
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Tariffs Defined
• Published rates, regulations and descriptions of services
• Defines the services offered
• Establishes the rate the customer will pay
• States the obligation of the provider and the customer in the provision and use of service
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Tariff Filing
• When new services are to be offered
• Rates for existing services are to be increased or decreased
• Changes are made in existing services
• Services are to be discontinued
• A “Rate Case” is the usual vehicle for filing tariff changes