Telecommunications: Development of Competition in Local Telephone Markets

摘要

The breakup in 1984 of the American Telephone and Telegraph Company (now calledAT&T) promoted competition in the long-distance and telephone equipment markets. The breakup was not, however, designed to promote competition in local telephone service markets since it was assumed that these markets were likely to remain monopolistic. By the early 1990s, some companies had begun to enter local telephone markets and compete against incumbent carriers, particularly in large cities, prompting some states to make regulatory changes to encourage further entry. Ultimately, many experts came to believe that more competition in the provision of local telephone service was possible but would not fully develop without significant revisions to communications law. With the enactment of the Telecommunications Act of 1996 on February 8, 1996, the Congress sought to increase competition in local telephone and other telecommunications markets. The law imposed a variety of obligations on incumbent local telephone companies that were designed to open their networks to competitors. Six months later, the Federal Communications Commission (FCC) issued its first major set of rules implementing the provisions of the act affecting local telephone markets. You asked us to provide information on (1) the development of competition in local telephone markets and the market strategies employed by new carriers in five states under the 1996 Telecommunications Act and (2) the key issues affecting that development and the enforcement activities of federal and state regulators to address those issues.