Telecommunications Act of 1996

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The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. It was approved by the 104th Congress on January 3, 1996. Dick Armey served as House Majority Leader during its passage.

Contents 1 Overview 2 Universal Service 3 External links 4 References 5 Notes 6 See also

[edit] Overview

The Act mainly deregulated, but also created new regulations. Congress forced local telephone companies to share their lines with competitors at regulated rates if "the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer." (Section 251(3)(2)(B)) A new group of telephone companies, "Competitive Local Exchange Carriers" (CLECs), grew to compete with the incumbents (not "ILECs" or Incumbent Local Exchange Carriers).

Most media ownership regulations were thrown out by the Act, and independents were bought up. The Act was claimed to foster competition, but instead it led to historic industry consolidation, reducing the number of major media companies from around 80 in 1986, to 5 in 2005.

"In truth, the bill promised the worst of both worlds:", wrote communications scholar Robert McChesney in The Problem of the Media, "more concentrated ownership over communications with less possibility for regulation in the public interest. Accordingly, both the cable and the telecommunication industries have become significantly more concentrated since 1996 and customer complaints about lousy service have hit all-time highs. Cable industry rates for consumers have also shot up, increasing some 50 percent between 1996 and 2003." (p. 53)

Title V of the 1996 Act is the Communications Decency Act, aimed at regulating Internet indecency and obscenity, but was ruled unconstitutional by the US Supreme Court as violating the First Amendment. Portions of Title V remain, including the Good Samaritan Act, which protects ISPs from liability for third party content on their services, and legal definitions of the Internet.

The US Congress is currently considering legislation that would essentially replace the Telecommunications Act of 1996.^[1][2][3]

[edit] Universal Service

Another unusual feature of the Telecommunications Act was the degree that it privatized the activities of government. It created a 9% surcharge on telephone bills called the "Universal Service Charge" which was to be used to reduce the cost of telecommunications in rural areas, for schools, for the poor, and for high cost areas. This program disbursed approximately $6.5 B in grants to reduce the costs of telecommunications. These funds are not administered by government but by a non-profit called the Universal Service Administrative Company. This non-profit is a subsidiary of the National Exchange Carrier Association a non-profit created in 1984 by telecommunications companies to administer the fees that long distance companies pay to access local telephone networks. This experiment with privatization has been a fairly large disaster as scanty program oversight has led to theft and fraud in the hundreds of millions of dollars. The most egregious act was by Victor Fajardo-Velez, the former secretary of education for Puerto Rico, who mismanaged or stole nearly $100 million in subsidies. At last count, there were lawsuits surrounding this money in over 30 states.

The FCC also used this act to create two new private governmental agencies, the Schools and Libraries Corporation and the Rural Health Care Corporation. The FCC did this on its own discretion, not with authority from Congress or even directly from the President. It was able to do this because it created these organizations outside of the formal structure of government. This was an amazing usurping of the legislative process by a government agency and violated many laws, among them both the Constitution and the Corporation Control Act of 1945. The GAO wrote a scathing report entitled "FCC Lacked Authority to Create Corporations to Administer Universal Service Programs". The FCC subsequently terminated the two corporations and folded their functions into the Universal Service Adminstrative Company, an entity authorized by Congress even though it is a private non-profit corporation with no direct democratic oversight from government.

[edit] External links

• FCC - Telecom Act of 1996 webpage with copies of the Act
• Cybertelecom - tracking FCC regulatory proceedings that impact the Internet including ERate, the Communications Decency Act, Mergers, and more

• http://www.oswego.edu/~messere/telcom1.html - Analysis of The Telecommunications Act of 1996. This article by Fritz Messere (Associate Professor of Communication Studies at SUNY Oswego) describes the impact of the Act on radio and television broadcasting, Internet and on-line computer services, and provides sources and suggested further reading.

• http://www.mega.nu:8080/ampp/PEGB/chap04.htm#metatop - “Chapter 4: Liberalisation: Case Studies in Telecommunications” from the London School of Economics’ Course Guide to Political Environment for Global Business, by Richard Jerram, Michael Hodges, Louis Turner, and Richard Kurz. This article describes the main effects of US telecommunications reform and discusses the consequences of The 1996 Telecommunications Act.

[edit] References

• A Legislative History of the Communications Act of 1936, by Paglin, Max D. - Oxford University Press, New York. 1989.
• Brinkley Act - Section 325(b) of the Communications Act of 1934 that was written into law in an attempt to halt live broadcasting from radio studios in the United States linked via telephone land lines to superpower border-blaster transmitters located along the Mexican side of the Rio Grande (Rio Bravo), international border. This provision was carried through into the Telecommunications Act of 1996 by incorporation of the Communications Act of 1934, as amended to Section 325(c).
• Library of Congress. S.652.RS - 27/30 Mar 1995 - 104-23 Initial text of proposed legislation.
• Library of Congress. Senate Report 104-23 7 June 1995 Document, description of the intentions for each section of S.652.
• Library of Congress. S7881-7912 - 7 Jun 1995 - S.652 Measure laid before the Senate. Speeches made by Senators.
• Library of Congress. S.652 - All Congressional Actions w/Amendments All speeches, ammendments on the Senate Floor, 23 March 1995 thru 8 February 1996.
• U.S. Senate. 104th Congr. 2nd Sess. Vote 8 - 1 Feb 1996 Senate passes the final revision of S.652, sent to President Clinton who signed it into law on 8 Feb 1996.
• U.S.G.P.O. Public Law No: 104-104 Telecommunications Act of 1996.

[edit] Notes

[edit] See also

• Forced-access regulation
• Communications Act of 1934
• Telecommunications Act of 2005 (Communications Act of 2006)
• COPE Act of 2006 (Communications Act of 2006)