ITS 302

• Purposes of the course– Review the history of US telecommunications

as a case study– Examine the basics of regulation, especially

as they apply to telecommunications and information

– Identify the major issues of current concern

Some questions to consider

• Do we need regulation?

• Does history matter?

• Why didn’t the U.S. Telecom Act of 1996 work?

Boundaries

• Type– Jurisdictional– Regulatory category– Service– Technology

• Set by– Law– Regulator– Courts

Boundaries

International long distance

Interstate long distance

State long distance

Local service

Classification of Services

All Services

Common Carrier Broadcast Information Services

Regulated by FCC and State Commissions

Regulated by FCC Not regulated--yet

Common Carrier Services

Common Carrier Services

Wireline Wireless

FCC andState Commissions

FCC States????

Wireline Services

Wireline Services

Interstate--FCC State

localState

LDState

AccessInterstate and International

LD Interstate Access

The Players

• Regulators (federal and state)• Service providers

– Wireline providers– Wireless providers– Cable providers– VoIP providers

• Customers– Residential, small business, large business,

service providers themselves

The Incumbent Local Exchange Carriers (ILECs)

• RBOCs– NYNEX– Bell Atlantic Bell Atlantic + GTE = Verizon (+MCI)= Verizon– Pacific Telesis– Southwestern Bell +SNET = SBC +AT&T = AT&T– Ameritech– Bell South– U.S. West = Qwest

• Independents– Alltel (now Windstream)– Sprint United (then Embarq) Embarq+Century = CenturyLink– Century– Chillicothe– +1300 more

Regional Bell Companies

Now AT&T

Now AT&T

Now AT&T

No longer Verizon

No longer Verizon

Now CenturyLink

ILECs in Ohio

• 43 in total

• Largest include: – AT&T (4 million lines)– Frontier (900,000 lines) (purchase of Verizon)– Cincinnati Bell (800,000 lines)– CenturyLink (purchase of Sprint’s Embarq and United

properties)– Windstream (formerly Alltel and Western Reserve)– Chillicothe (37,000 lines)

– Champaign (12,500 lines)

And now today also . . .

• VoIP providers– Interconnected– Nomadic

• Wireless providers

Who provides what?• In 1950 (all one monopoly)

– International and Interstate Long Distance: “old” AT&T Long Lines

– Local: “old” AT&T Local Operating Companies and the Independents

– State Long Distance: “old” AT&T Local Operating Companies and Independents

– Wireless—not much

• After 1984 (Local companies and Long distance companies)– International and Interstate Long Distance: The New AT&T, MCI,

Sprint, plus other Long Distance companies– Local: RBOCs and Independents– State Long Distance: RBOCs and Independents, and, after a few

years, the long distance companies

• After 1996 (supposed to be competition everywhere)– International and Interstate Long Distance:

AT&T, MCI, Sprint, other long distance companies, RBOCs

– Local: RBOCs, Independents, competitive providers (CLECs)

– State Long Distance: RBOCs, Independents, CLECs, AT&T, MCI, Sprint, other long distance companies

Competition from new providers/technologies

• Wireless providers– Verizon, AT&T, T-Mobile, Sprint (Nextel)

• Internet access– Cable modem services—cable television

companies– DSL—Local telephone companies and

competitive providers (CLECs)

• VoIP providers

Lots of mergers

• Mergers:– Wireless

• Cingular and AT&T Wireless• Sprint and Nextel

– Wireline• SBC and AT&T and Bell South• Verizon and MCI

• More mergers, sales and acquisitions to come

Industry Consolidation

• Biggest local telephone companies – Verizon and AT&T

• Biggest wireless providers – Verizon and AT&T– And now AT&T wants to buy T-Mobile

• Biggest long distance providers– AT&T (owned by former SBC)– MCI (owned by Verizon)

Changes in ILEC Business plans

• Verizon is shedding rural properties• Maine, NH, and Vermont sold to Fairpoint—went

bankrupt• Hawaii sold to private equity firm—went bankrupt• Former GTE properties in 9 states sold to Frontier

(including Athens, Ohio)—will it go bankrupt????

• Ramping up wireless• Shifts from copper to broadband and from circuit

switching to IP networks– AT&T’s U-Verse and Verizon’s FIOS

So, what do we have today?

• Cross platform competition

• Bundling of services – Cable companies

• Cable TV, Cable Modem, Digital Phone (triple play)• And Wireless ???? (quadruple play)

– Telephone companies• Wireline telephone, DSL, Wireless (triple play• And IPTV???? (quadruple play)

– Issues of pricing and service bundling????

Issues of concern• Broadband deployment• Regulatory status of VoIP• Network neutrality (or can the FCC regulate the

broadband network)• Universal service—is it necessary? Who pays for it?

How much should it cost? What should be included?• Regulatory parity in cross platform competition• Viability of competition, and the potential for monopoly• And more . . . . . .

So…..

• What is the role of the regulator?