Sweeping Changes in Telecommunications Law on the Horizon

Strategic Insights -

Telecommunications law is on the cusp of its most significant overhaul since the breakup of the Bell telephone system a decade ago. The House of Representatives is poised to pass a bill that would fundamentally change the rules for electronic communications, affecting virtually every aspect of an industry worth over $300 billion annually. The legislation would grant regional Baby Bell telephone companies greater freedom to provide long-distance service and make equipment, while forcing local telephone companies to open their networks to new rivals. The stakes are high, with telecommunications companies investing tens of billions of dollars in advanced video and voice networks. A Senate battle is expected, with some experts predicting a mere 50-50 chance of passage this year. Despite the challenges, the momentum in the House is building, driven in part by the willingness of industry combatants to take their fight to the Senate.

Key Takeaways:

  • The House of Representatives is on the verge of passing a landmark telecommunications bill that would rewrite the consent decree breaking up AT&T and grant greater freedoms to regional Baby Bell telephone companies.
  • The legislation would force local telephone companies to open their networks to new rivals, paving the way for seamless interconnection and increased competition.
  • The bill would also allow telephone companies to offer cable television services, blurring the boundaries between local and long-distance services.
  • The legislation has been years in the making, with key lawmakers like Representative Jack Brooks and Representative John D. Dingell working tirelessly to craft a compromise.
  • Industry leaders like Roy Neel, former chief of staff to Vice President Al Gore, and Richard Brown, vice chairman of Ameritech Inc., are cautiously optimistic about the bill's chances.
  • The proposed legislation would be the most significant overhaul of telecommunications law since the breakup of the Bell system a decade ago.

Statistics:

  • The telecommunications industry has over $300 billion in annual revenue.
  • Tens of billions of dollars are being invested in advanced video and voice networks.
  • 90% of American homes have access to cable television networks.
  • Long-distance carriers pay nearly half the cost of long-distance calls in access charges to local companies.
  • AT&T has agreed to buy McCaw Cellular Communications, while MCI is building its own local networks to bypass local telephone companies.

Sources:

  • The New York Times, no date given, but likely 1994 or 1995.
  • Author's note: This article is likely from an internal source, but the publication date or further information is not provided.