Broadband Briefings

Published by NetAction Issue No. 27 August 1, 2003
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Disabling the 1996 Telecommunications Act . . .
And Protecting the Telecommunications Consumer
About Broadband Briefings

Disabling the 1996 Telecommunications Act . . .

Much has changed in the seven years since Congress passed the landmark Telecommunications Act of 1996: more Internet users have access to broadband; more people are using cell phones, more consumers are bypassing the phone company altogether with Voice over Internet Protocol (VoIP) technology.

But - perhaps ironically - when it comes to telephone service very little has changed. The vast majority of consumers are still getting local phone service from a regional Bell company, and the Bells still aren't competing for each other's customers.

Will consumers ever see meaningful competition in local phone service? Not if pro-Bell regulators and legislators continue to roll
back the provisions of the 1996 Act that were meant to promote a more competitive telecommunications marketplace.

In our latest white paper, "Tauzin-Dingell: Helping to Disable the 1996 Telecommunications Act," NetAction advisory
board member Judi Clark looks back at the recent legislative and regulatory efforts to dismantle the 1996 Act, and forward to the
prospects for further erosion of the Act's pro-competitive provisions.

The paper examines the ongoing dispute between the regional Bell companies and competitive local service providers over compensation for calls that are initiated through one phone company and terminated through another. The so-called "reciprocal compensation" agreements between the Bells and competitive companies were the subject of much regulatory and legal wrangling when the Bells realized that under the terms they negotiated they would owe millions of dollars to their competitors.

It looks next at the efforts over several years of Louisiana Rep. Billy Tauzin and Michigan Rep. John Dingell to enact legislation to
protect the Bells from the pro-competitive provisions of the 1996 Act. The final section of the paper examines the Federal
Communications Commission's February 2003 announcement of its intent to issue new rules that free the Bells from competition in the broadband market but uphold competitive in local phone service.

With friends in Congress like Tauzin and Dingell, and an FCC intent on saving a dying industry, "We don't have an entirely unregulated communications monopoly yet; but the Bells are working on it," the paper warns.

. . . And Protecting the Telecommunications Consumer

While federal policy makers are busy protecting the Bell monopolies, their California counterparts are more concerned with protecting consumers. Later this year the California Public Utilities Commission (CPUC) is scheduled to consider adopting a Telecommunications Consumer Bill of Rights.

According to its sponsor Commissioner Carl Wood, "This Bill of Rights is the most comprehensive set of consumer protection rules for telecommunications consumers in the country."

The sweeping set of rules are intended to address a wide range of problems that consumers have complained about for years, including misleading information about rates and terms of service, unauthorized use of customer records, and needlessly complex bills that make it difficult to determine if the charges are accurate.

Customer complaints to the PUC skyrocketed after deregulation of regional monopoly Pacific Bell (which was later absorbed by SBC Communications). For years, California policy makers talked about the need to spell out telecommunications consumers' rights. Despite continuing industry pressure to let the companies police themselves, policy makers appear to be finally ready to act.

About Broadband Briefings

Broadband Briefings is a free electronic newsletter, published by NetAction to promote policies that encourage rapid and widespread deployment of high-speed Internet access. NetAction is a California-based non-profit organization dedicated to promoting use of the Internet for grassroots citizen action, and to educating the public, policycmakers, and the media about technology policy issues.

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