Appendix
| Landmark Acts and Court Rulings | Summary of Acts and Rulings |
|---|---|
| The Federal Communications Act of 1934 | Congress created the Federal Communications Commission and gave it the authority to regulate interstate telephone, radio and telegraph companies. |
| The 1956 Consent Decree | The Justice Department allowed AT&T to keep its monopoly but restricted it to common carrier functions. The Consent Decree mandated that any patents developed by Bell Labs, then AT&T, be licensed to all applicants requesting them. This led to microwave technology's availability to MCI and the ability of competitive carriers to build long distance networks. |
| The 1969 MCI Case | The Federal Communications Commission ruled that MCI, then known as Microwave Communications Inc., could connect its equipment to the public network providing the network was not harmed. This decision opened the CPE market to AT&T rivals such as Rolm and Executone. |
| The 1982 to 1983 Modified Final Judgment | The Justice Department, in agreement with AT&T and with approval by Judge Harold H. Greene, agreed to a settlement that:
|
| The 1984 Divestiture | The terms spelled out in the Modified Final Judgment were implemented on January 1, 1984. The 22 Bell telephone companies were merged into seven Regional Bell Operating Companies (RBOCs). The RBOCs were allowed to sell local and toll calling within the 197 defined local or LATA areas. They also retained the yellow pages. AT&T kept manufacturing, inter-LATA and international toll calling. |
| The Telecommunications Act of 1996 | Decreed that cable TV companies, electric utilities, broadcasters, interexchange carriers and competitive access providers could sell local and local toll calling.
Allowed local competitors interconnection to and resale of local telephone companies' facilities. Set fees for interconnection services at the LECs'[*] local exchange carriers, costs plus a reasonable profit. Set fees for resale at LECs' costs. Allowed Bell companies to immediately provide out-of-region long distance. Allowed Bell companies to provide inter-LATA toll calling and manufacturing in their regions under FCC approval or by February 1999, whichever is earlier. Dictated that FCC approval depends on the incumbent LEC's meeting conditions of a 14-point checklist of opening its regions for competition. |
| FCC 2001 Deregulation of devices connected to the public switched network | The FCC will no longer set specifications for modems, phones and fax machines connected to the public network. This will be turned over to a private agency. The FCC will continue to set standards for wireless devices. |
[*] The term incumbent LEC, or local exchange carrier, refers to the Bell Operating Companies.
| Date | Decision or Action |
|---|---|
| June 27, 1996 | The FCC spelled out rules on service provider portability. It stated that customers must be able to keep their telephone numbers when they change carriers. It also stated they must be able to keep “smart” features such as call waiting when they change carriers. |
| August 8, 1996 | The FCC set rules for calculating the wholesale fees that BOCs could charge competitors for network elements. It also identified seven pieces of the network that must be leased to rivals. The discounts were in the 17% to 25% range. Access fees to wireless companies were reduced by $1 billion annually. |
| September 12, 1996 | The FCC allowed utilities whose lines cross state boundaries into telecommunications. |
| October 15, 1996 | The U.S. Court of Appeals for the Eighth Circuit stayed (denied) the FCC's jurisdiction in setting interconnection and wholesale pricing at the local level. Stayed the FCC's August 8, 1996 ruling. |
| October 11, 1996 | Justice Clarence Thomas refused to lift the October 15, 1996 stay by the Eighth Court of Appeals. Federal regulators had asked the ruling to be overturned. |
| November 11, 1996 | The FCC appealed Justice Thomas' ruling. The Supreme Court upheld the Eighth Circuit's October 15, 1996 stay on the FCC's ability to set pricing guidelines. |
| May 7, 1997 | The FCC lowered access fees, the fees interexchange carriers charge to transmit and receive calls from the local networks, by $1.7 billion the first year and $18.5 billion over five years. The FCC also raised end-user line charges by $2.75 for each business line and $1.50 for a second home phone line to pay for subsidies for schools and libraries mandated by the Telecommunications Act of 1996. |
| July 1997 | The Eighth Circuit Court of Appeals suspended the FCC's pricing rules. |
| October 1997 | The Eighth Circuit Court of Appeals suspended FCC authority and rules on procedures for interconnection to local networks. |
| December 31, 1997 | The U.S. District Court excluded October's ban of SBC's and U S West's entry into long distance. After long distance companies, the FCC and the Justice Department appealed, the judge delayed implementation of this ruling. |
| January 19, 1999 | The Supreme Court upheld the constitutionality of the Telecommunications Act of 1996 not to allow the baby Bells into in-region long distance before they open their networks to rivals. U S West, SBC and Bell Atlantic had argued that they were singled out because the Act did not apply to GTE, Frontier and Southern New England Telephone Company. |
| January 25, 1999 | The Supreme Court upheld the FCC's authority to implement the Telecommunications Act of 1996 but directed the Eighth Circuit Court of Appeals to approve the FCC's national pricing plans and allowed exemptions of independent telephone companies to rules of the Act. If a network element is available elsewhere, the Bells should not be required to make it available to competitors (e.g., Internet access, voice mail or high-speed data lines). This effectively reversed the Eighth Circuit Court of Appeals' suspension of FCC jurisdiction of interconnection to local networks. |
| July 1999 and January 2001 | The Eight Circuit Court of Appeals struck down FCC rules for how Bell telephone companies set fees for network elements they rent to CLECs. This ruling would have resulted in higher fees for CLECs. However, the FCC appealed to the Supreme Court, which has stated that it will rule on the issue in 2001. The Court also will rule on whether CLECs can rent packages of services if they request them rather than only individual pieces as now required. |
| September 1999 | The FCC increased the number of unbundled network elements the Bells are required to provide competitors. The most important of these is the right for competitors to share the same Bell lines for voice phone service for DSL Internet access service. (See Chapter 6 for DSL service.) |
| January 2001 | The U.S. Court of Appeals struck down an FCC rule that absolved SBC from making connections to data services such as DSL to competitors if the incumbent sold these data services through a separate subsidiary. It appears that instead of a separate subsidiary, SBC will be required to sell data service through a separate division that will be required to lease connections to competitors. |
| February 2001 | On his last day of office, William E. Kennard, the outgoing chairman of the FCC ruled that Bells must share local loops for voice and DSL when they are made up of a mix of fiber and copper as well as all copper, as is often the case. |
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