Telecommunications Act of 1996

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Telecommunications Act of 1996

Legislation in the United States that deregulated telecommunications. It changed regulations for telephones, television broadcasts and cable in order to reduce barriers to entry and increase competition. It also regulated explicit material broadcast on television. See also: Communications Decency Act.
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Most cities requesting Reserve Banks furnished the RBOC with evidence of the strength of their local banks, the size of their commercial markets, and the quality of their communications and transportation infrastructures.
We should also remember that in 1996, the fight was essentially an "intra-family" squabble--i.e., RBOCs, IXCs, CLECs, cable companies and broadcasters; now, we have a plethora of nontraditional players added to the mix, which will probably make achieving consensus more difficult.
Second, Lucent had to diversify its customer base both domestically and internationally, so that it was less dependent on revenues from sales to its established customers, AT&T and the RBOCs. To attract and retain new customers Lucent needed to compete on price.
Table 2 also illustrates that large Regional Bell Operating Companies (RBOCs) were about two and three times as likely to tariff packet switching as medium and small firms, respectively.
The RBOCs challenged TELRIC pricing and the UNE regime.
On the legislative front, the RBOCs keep pushing for statewide and even national franchising, a move that would alleviate the need for the Baby Bells to obtain local cable TV franchises.
While the previously mentioned evidence suggests that RBOC entry into long-distance might exert a positive influence on competitive entry into local telephony, the results do not provide insight on the actual competitive effects of such entry in terms of changes in the conduct or performance of the local telephone market.
However, major ILECs include the RBOCs: Verizon Communications, SBC, BellSouth, and Qwest Communications.
In the months ahead, the RBOCs will be facing two problems: (1) the return of competitors emerging from bankruptcy reorganization lean, mean, debt free, and ready for price wars; and (2) accelerating demand for broadband that, technically, the RBOCs are not in a position to meet.
RBOCs may also choose to work with the CLECs--as is the case of SBC's recently forged agreement with NightFire Software, to establish direct connectivity between SBC's companies and CLECs using the software company's hosted loop ordering service.
In 1996, Pacific Bell was acquired by SBC, and in 1996, NYNEX merged with Bell Atlantic in an attempt by the regional Bell operating companies (RBOCs) to maximize their foothold in the long-distance market.
In November, Lucent announced that SBC (the largest of the RBOCs) would purchase $2.4 billion worth of Lucent Class 5 switches.