What is Telecommunication Act of 1996

The Act's stated objective was to open up markets to competition by removing regulatory barriers to entry: The conference report refers to the bill to provide for a pro -competitive, deregulatory national policy framework designed to accelerate rapidly private sector deployment of advanced information technologies and services to all Americans by opening all telecommunications markets to competition. The Act was approved by the 104th Congress on January 3, 1996, and signed into law on February 8, 1996, by President Bill Clinton.

Change in existing Telecommunication Act

Previously, the Communications Act of 1934 (1934 Act) was the statutory framework for U.S. communications policy, covering telecommunications and broadcasting. That act created the Federal Communications Commission (FCC or Commission), the Act explicitly left most regulation of intrastate telephone services to the states. In the 1970s and 1980s, a combination of technological change, court decisions, and changes in U.S. policy permitted competitive entry into some telecommunications and broadcast markets. In this context, the Telecommunications Act was designed to open up markets to competition by removing unnecessary regulatory barriers to entry

Results Achieved
The Act makes a significant distinction between providers of telecommunications services and information services. The term 'telecommunications service' means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.' On the other hand, the term 'information service' means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service. The distinction comes into play when a carrier provides information services. A carrier providing information services is not a 'telecommunications carrier' under the act. For example, a carrier is not a 'telecommunications carrier' when it is selling broadband Internet access. This distinction becomes particularly important because the act enforces specific regulations against 'telecommunications carriers' but not against carriers providing information services. With the convergence of telephone, cable, and internet providers, this distinction has created much controversy.

Affect of Telecommunication act of 1996 on Broadband Networks:

The changes in consumer use of communications services since 1996 are staggering. When Congress enacted the 96 Act, the Internet was in its infancy, the vast majority of multi -channel video programming distributor (MVPD) customers were cable subscribers, there were no cabletelephone or interconnected VoIP subscribers and only 44 million wireless subscribers, and no wireless Internet connections. Today, the United States has more than 26 million cabletelephone customers,13 34 million total interconnected Voice over Internet Protocol (VoIP) subscriptions,14 more than 330 million wireless connections,15 and more than 245 million Internet users, 16 including approximately 120 million wireless data connections.17 Non-cable MVPDs now account for more than 40 percent of MVPD subscribers.18

As these statistics demonstrate, the industry has changed dramatically since 1996. ILEC-provided wire line subscriptions are declining,19 whereas cable-telephone, VoIP, and wireless subscriptions have grown exponentially. Wireless service is increasingly a full substitute for wire line service, with more than 40 percent of consumers identifying their mobile device as their primary or exclusive means of communication. Cable operators face significant competition in many parts of the country from at least three other facilities-based video providers, in addition to a burgeoning industry of over -thetop Internet video providers. Not only is the Internet a dominant presence in consumers lives, but wireless Internet connections are basically on par with wire line connections as consumers means of accessing the Internet. In fact, the ability of ILECs, competitive local exchange carriers (CLECs), wireless carriers, and cable operators to utilize IP technology to deliver voice, data, and video services over their platforms means that the barriers to entry in all of these markets have largely been demolished. Convergence has replaced the monopoly provision of services as the dominant characteristic of the communications sector. The dramatic evolution of technology, innovation developed by the communications sector, and unceasing consumer demand for anytime, anywhere services have resulted in new challenges for the Commission. This evolution has called into question whether ILECs should remain classified as dominant in the voice business, cable operators as dominant in the video business, or whether any technology platform could dominate the data market. So the traditional regulatory models created or solidified by the 96 Act seem archaic in todays dynamic marketplace.

Relation between ILECs and CLECs :

ILEC is the abbreviated form of Incumbent Local Exchange Carrier, and CLEC is the short form of Competitive Local Exchange Carrier. The ILEC and the CLEC were formed soon after the Telecommunications Act of 1996. It was the breakup of the monopoly of AT&T and the Bell Systems in 1984 that led to the ILEC and CLEC. The Incumbent Local Exchange Carrier is a company that is characterized by providing local telephone service. The ILEC owns most of the loops and facilities in a servicing area. The Competitive Local Exchange Carrier is companies that are known to provide an alternative service to the ILEC within its territory. CLEC is a combination of new competitors in the field. A Competitive Local Exchange Carrier is those companies that have rented space from the Incumbent Local Exchange Carrier. The CLEC is always in competition with the ILEC which is an already-established, local telephone provider. One basic difference between an Incumbent Local Exchange Carrier and a Competitive Local Exchange Carrier is that the ILEC provides service to the public, and the CLEC has the right to compete for that business but is not indebted to provide the same plane of service.