Telephony & Telephony & Satellite Satellite

TechnologiesTechnologies

Telecommunications Act of Telecommunications Act of 19961996

• Removed entry barriers between local, long distance, and cable service providers

• Designed to stimulate competition in the telephone business

• So far, not much competition has emerged

Telephone PenetrationTelephone Penetration• More than 95% in United States• $83 a month

– $36 for local service– $12 for long distance– $35 for wireless

LATALATA• Local Access Transport Area

Local Telephone NetworkLocal Telephone Network• Traditional: all lines go back to

central office• Fiber-to-feeder: all lines go to fiber

remote terminal and then to central office

AT&TAT&T• 800 pound gorilla

• Communication Act of 1934– Immunity from antitrust actions– Promise to provide universal phone

service– “Natural monopoly”

1956 Consent Decree1956 Consent Decree• Law suit against AT&T dropped when

they agreed to stay out of computer business

1974 Lawsuit1974 Lawsuit• AT&T

– Denied use of non-Bell equipment– Denied interconnection with Bell

network– Held a bias toward Western Electric for

equipment– Engaged in predatory pricing

MFJ in 1982MFJ in 1982• Seven RBOCs formed (baby bells)• AT&T kept long distance business• AT&T kept Western Electric• AT&T entered the computer market

MFJ Ban RemovedMFJ Ban Removed• Telecommunications Act of 1996

removed ban of phone companies getting into the cable business

• To this day, telcos are more interested in pursuing markets in telephony than in cable

New Services?New Services?• New types of content?• Value-added services complementing

basic service?• New mechanisms for delivering

existing and emerging services?• New uses not feasible under the

technical limitations of old networks?

NoNo• Over 90% of fiber optic capacity went

unused in 2005

Ancillary ServicesAncillary Services• Mass-audience applications for the

telephone– 800 and 900 numbers– Bundled packages

• LNP – Local Number Portability• DSL (Digital Subscriber Line)

– Developed in 1989– Sat on a shelf for about a decade

Media MergerMedia Merger• Verizon bought MCI in 2005• SBC bought AT&T – then became

AT&T• New AT&T has a local telephone

service in many parts of the county• AT&T wants to buy BellSouth

Telecommunications Act of Telecommunications Act of 1996 and Bigness1996 and Bigness

– Rate competition– Service quality– Public access– Freedom of speech

What Will Happen?What Will Happen?• Greater bandwidth• Is cable Internet a

telecommunications service?• Voice over IP will continue to grow

Baby BellsBaby Bells• SBC = Southwest Bell + Pacific

Telesis + Ameritech• Verizon = NYNEX + Bell Atlantic +

GTE• Qwest = U.S. West• BellSouth = BellSouth