Paved with Good Intentions: How interLATA Data Relief Undermines the Competitive Provisions of the 1996 Act

By Walker, Jean F. | Federal Communications Law Journal, May 2001 | Go to article overview

Paved with Good Intentions: How interLATA Data Relief Undermines the Competitive Provisions of the 1996 Act


Walker, Jean F., Federal Communications Law Journal


I. INTRODUCTION

Just over five years ago, former President Clinton signed the Telecommunications Act of 1996 ("1996 Act") into law, effectively opening long-shut doors to competition.(1) Today, Congress faces the question whether to close those doors once again. H.R. 1542, the "Internet Freedom and Broadband Deployment Act of 2001," seeks to provide Bell Operating Companies ("BOCs") with interLATA relief for the provision of data services. This allows BOCs to provide data services across the LATA boundaries that have restrained them for the nearly two decades since the breakup of AT&T, without complying with the competitive provisions of the 1996 Act. H.R. 1542 aims to lift limitations on "consumer choice and welfare"(2) and to "bridge" the "digital divide."(3) The newly introduced H.R. 1542 takes the place of its identical twin from the 106th Congress, H.R. 2420.(4) This Note illustrates how legislative initiatives like H.R. 1542 not only will fail their essential purpose, but also will harm the consumer choice and welfare they claim to protect.

As the market moves toward convergence among and within telecommunications industries, legislators evaluating H.R. 1542 must remember the purpose underlying AT&T's divestiture and the subsequent competitive provisions of the 1996 Act: "Free and open competition brings about the lowest possible prices and the mix of services that is most closely aligned with consumers' preferences."(5) Until the local exchange markets are open to robust competition, some regulation must remain in place to afford more choice and lower prices to consumers. If enacted, H.R. 1542 will destroy consumer choice and raise prices by toppling the painstakingly constructed balance struck by the 1996 Act.

In the past few decades, the climate has transformed for telecommunications companies from unification to fragmentation and back again. Part II of this Note discusses the beginning of this cycle, the divestiture of AT&T, which imposed the original restrictions on BOCs with respect to the provision of interLATA service. Part III describes the competitive provisions of the 1996 Act, which replaced the twelve-year-old restrictions imposed by the divestiture of AT&T.(6) In light of this history, H.R. 1542 attempts to solve the problem of the digital divide by providing expansive interLATA relief for data services. Part IV examines the problem of the digital divide, and Part V provides the background of H.R. 1542. As this Note will show, several feasible solutions superior to H.R. 1542 already exist to address the same problem. Part VI discusses alternatives to changing the current law and why these alternatives are far better than H.R. 1542's heavy-handed solution. Part VII argues that the critical shortcoming of H.R. 1542 is not that it represents an ill-fitting, duplicative solution to the problem of the digital divide, but rather that it will harm consumers in rural and urban areas by eliminating choice and raising prices.

II. THE HISTORY OF THE BELL OPERATING COMPANIES

To properly understand the debate surrounding this type of legislation, one must understand the terminology and law that arose out of the divestiture of AT&T. The entrance of MCI and other companies into the long-distance market in the 1970s first foreshadowed a potential antitrust action against AT&T.(7) Despite competition from MCI and others, AT&T still commanded about eighty percent of the long-distance market in the late 1970s and early 1980s.(8) The Justice Department ("DOJ") leveled an antitrust suit against AT&T in 1974,(9) because "in the absence of restrictions on their ability to enter new lines of business, the BOCs would cross-subsidize competitive services with their monopolized local services, and would discriminate against competing long-distance companies when providing the connection to the local network."(10)

On January 15, 1981, proceedings commenced before Judge Harold Greene in the DOJ's case to break up AT&T's monopoly. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Paved with Good Intentions: How interLATA Data Relief Undermines the Competitive Provisions of the 1996 Act
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.