Reflecting on twenty years under the Telecommunications Act of 1996: a collection of essays on implementation.

Author:Wright, Christopher J.
Position:Introduction through Melissa Newman, with footnotes, p. 1-43
 
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TABLE OF CONTENTS REPRESENTATIVE RICK BOUCHER JAMES L. CASSERLY JIM CICCONI CHARLES M. DAVIDSON MICHELE FARQUHAR GEORGE S. FORD ANNA GOMEZ CHAIRMAN REED E. HUNDT MICHAEL L. KATZ MICHAEL KELLOGG GENE KIMMELMAN & MARK COOPER JEFF LANNING BLAIR LEVIN COMMISSIONER SUSAN NESS MELISSA NEWMAN JONATHAN E. NUECHTERLEIN COMMISSIONER MICHAEL O'RIELLY MICHAEL PELCOVITS CHAIRMAN MICHAEL K. POWELL SENATOR LARRY PRESSLER MICHAEL PRYOR GREGORY L. ROSSTON & BRADLEY S. WIMMER GIGI SOHN DAVID SOLOMON LAWRENCE J. SPIWAK JOHN THORNE GERARD J. WALDRON PHILIP J. WEISER KEVIN WERBACH CHAIRMAN RICHARD E. WILEY & THOMAS J. NAVIN JOHN WINDHAUSEN, JR. CHRISTOPHER J. WRIGHT INTRODUCTION

It is appropriate that the Federal Communications Law Journal is devoting this special issue to analysis of the Telecommunications Act of 1996 on its twentieth anniversary because the '96 Act significantly amended the Communications Act of 1934 in many important ways.

The most fundamental change mandated by the Act was to open local telecommunications markets to competition. To implement that change, Congress adopted detailed provisions designed to foster local competition and Congress's decision to address local telecommunications issues upset the traditional division of authority between state and federal regulators. Congress also adopted provisions permitting the Bell Operating Companies to provide long distance service after they opened their local markets to competition. In addition, Congress recognized that local competition would require major changes in the existing universal service and inter-carrier compensation rules and adopted provisions addressing those critical issues. Congress also recognized that regulation should recede as competition developed and enacted a novel provision permitting the Federal Communications Commission to forbear from enforcing provisions of the Communications Act that were not needed once competition developed. These are only a sample of the provisions adopted in 1996.

Congress mandated that the FCC issue rules implementing the market-opening provisions of the Act within six months of enactment. Along with many of the contributors to this special issue, I worked at the Commission while the landmark Local Competition Order was drafted between February and August of 1996. It was only the first of dozens of FCC orders resulting from the Act.

To say that the requirements of the Act and the Commission's implementation of its provisions were subject to extensive debate at the Commission and litigation in the courts is a major understatement, but that is about all I can say in my role as President of the Federal Communications Bar Association. However, this special issue of the FCLJ includes articles by scholars examining the Act and essays by many communications lawyers that, together, provide useful celebration and critical analysis of the Act. Those contributors include key drafters of the Act, the Chairman of the FCC when '96 Act became law, lawyers representing state commissions and public interest groups, and lawyers who represented the many telecommunications companies affected by the Act. I would like to thank all of the contributors for their articles and essays.

I also would like to thank the Journal staff, especially Amy McCann Roller, and the FCBA's Law Journal Committee, especially Jeff Lanning and Larry Spiwak, for their excellent work on this special issue.

Christopher J. Wright

President, Federal Communications Bar Association

REPRESENTATIVE RICK BOUCHER *

By the late 1980s, technological innovations, such as the advent of fiber optics, made it possible to open monopoly communications markets to competition. Consumers, communications companies, and members of Congress saw the opportunities that creating competition in communications services would provide for robust infrastructure investments, market pricing for services and broader public access to information.

On the House Energy and Commerce Subcommittee on Telecommunications and Finance, we began a long process of holding hearings, introducing early legislative drafts and proceeding to markups and floor consideration of bills. The culmination of that effort was the Communications Act of 1996. (1) The first seeds for the Act were planted in 1989 with a proposal I co-authored with then Senator Al Gore to allow telephone companies to offer cable television service inside their telephone service areas. (2) That amendment to the cross-ownership restriction of the 1984 Cable Act became the first plank in the Telecommunications Act of 1996. (3)

Over time, additional planks were added. The monopoly local telephone exchange was opened to competition. (4) The long-distance market was made more competitive by enabling the Bell Regional Operating Companies to offer nationwide long-distance service once they had fully established that their local telephone exchanges were open to voice competition, (5) and the Bell companies were given the permission to manufacture telecommunications equipment. (6)

In the same timeframe that the '96 Act made communications markets competitive, the Clinton administration and the FCC adopted a light touch regulatory approach for the nascent fiber-optic broadband network. That farsighted decision ignited a virtual explosion in broadband investments and created the foundation for the modern Internet which is now the preferred medium for communications of all kinds.

The 1996 Telecommunications Act was a product of bipartisan cooperation in both the House and the Senate. It passed in both bodies by overwhelming margins. As we mark the twentieth anniversary of the Act, we are reminded that landmark achievements in Congress rarely happen on a partisan basis. The nation now faces new communications policy challenges ranging from transitioning from the circuit switched telephone network to an all IP network, finding effective ways to transition large allocations of spectrum from government ownership to commercial auctions and securing a durable foundation for network neutrality protections. Just as for the '96 Act, bipartisan cooperation will be the key to legislative success.

* Rick Boucher was a member of the United States House of Representatives from 1983 until 2011. He is currently a partner and head of the government strategies practice in the Washington, DC office of Sidley Austin LLP.

(1.) Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, 118 (codified as amended in scattered sections of 47 U.S.C.).

(2.) See Cable Competition Policy Act, H.R. 2437, 101st Cong. (1989).

(3.) See Telecommunications Act, [section] 202(i) (amending telephone company/cable cross-ownership restrictions contained in 47 U.S.C. [section] 533(a)).

(4.) 47 U.S.C. [section] 251 (2012).

(5.) 47 U.S.C. [section] 271 (2012).

(6.) 47 U.S.C. [section] 273 (2012).

JAMES L. CASSERLY *

It was an honor and a privilege to participate in the herculean effort needed to implement the Telecommunications Act of 1996, (1) and I will be forever grateful to Commissioner Susan Ness for giving me that opportunity. The Act required dozens of rulemakings, and established tight timetables, but the entire agency rose to the challenge and implemented the Act as faithfully as possible. Key factors in the success of this effort were the Commissioners' wisdom, humility, and willingness to compromise, the Bureau and Office staffs' experience, professionalism, and collegiality, the active and (usually) constructive participation of a wide range of stakeholders, and--something I only came to appreciate with hindsight--the strong oversight provided by engaged congressional overseers.

But the biggest successes of the Act came not from new regulations that Congress instructed the agency to promulgate but from new freedoms the Act created. Telephone companies were allowed to provide video services, (2) opening the door for new competition to cable and satellite providers (though it took a decade before this opportunity was aggressively pursued). Cable companies were freed from the yoke of rate regulation, (3) restoring their ability to maintain and upgrade their networks and enabling them to carry a multitude of new channels and to develop new services. Broadcasters were freed from certain ownership limitations and given greater assurance of license renewals, and a pathway for transmission of digital, high-definition signals was opened. (4) And Congress established a national policy "to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation." (5)

Inevitably, then, telephone, cable, and broadcast services are vastly better today than they were twenty years ago, but these gains are trifling compared to the explosive growth of the Internet. We should not forget that only a small percentage of Americans used the Internet in 1996 and that those who did typically did so using dial-up access that allowed only 14, 28, or at most 56 thousand bits per second--and there were proposals to focus on "integrated services digital networks" that would increase speeds to 128 or perhaps 256 kbps. Fortunately, cable company innovators didn't listen, and they plowed ahead with a risky bet on cable modem technology, which in turn drove telcos to deploy digital subscriber line technology, which paved the way for wireless and satellite broadband--all of which now allow consumers to communicate at many millions of bits per second. I firmly believe that this progress would have come much more slowly were it not for the Commission's steadfast determination, in 1998 and 1999, to follow the guidance that Congress had given and resist the entreaties of those who demanded regulation of Internet service providers. The benefits of this "hands-off' approach have surpassed all expectations, and the predicted harms proved to be illusory. Chairman Kennard and his colleagues deserve enormous...

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