In fending off the special interests, Congress spawned new inequities.
The fourth anniversary of the Telecommunications Act of 1996 most likely will be celebrated with more groans than cheers. The law set out to create "a pro-competitive, deregulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information services to all Americans by opening all telecommunications markets to competition,"[Fn.1] but that objective has not been fulfilled.
In some markets, competition appears to be vanishing rather than flourishing. Some now voice more concerns over the rollout of new, advanced technologies.
Even a cursory look at markets reveals one abject certainty - intelligent individuals in the telecommunications industry view regulatory change not only as a constraint, but as an opportunity. Firms both new and old have seized strategic advantages, often with outcomes far removed from the stated intentions of Congress. These unintended consequences warrant careful study by any policymaker now wrestling with the fallout from the 1996 Act.
The Cream Skimmers
A fundamental tenet of the Telecommunications Act lies in a simple quid pro quo. The regional Bell operating companies, or RBOCs, must first open their local calling markets; that condition lets them gain entry in the coveted long-distance service, or interLATA, market. (That term denotes traffic between more than one "local access transport area.") Only recently was one RBOC, Bell Atlantic, given permission to enter the in-region interLATA long-distance market, and only in New York state.