The Telecommunications Act of 1996, enacted by the U.S. Congress on February 1, 1996, and signed into law by President Bill Clinton on February 8, 1996, provided major changes in laws affecting cable TV, telecommunications, and the Internet. The law's main purpose was to stimulate competition in telecommunication services. The law specifies:
- How local telephone carriers can compete
- How and under what circumstances local exchange carriers (LEC) can provide long-distance services
- The deregulation of cable TV rates
The Telecommunications Act of 1996 (the "Act") provided a framework that was to encourage both competition and the development of advanced telecommunications services. Lawmakers envisioned that by encouraging competition, new products and services would be made available to all Americans. In this regard, legislators were very cognizant of avoiding the creation of information "haves" and "have-nots". By providing open access to telecommunications networks for consumers and service providers, advancing universal service and developing a new regulatory framework, the stage was set for the advent of futuristic services.
In passing the Telecommunications Act of 1996 ("1996 Act") Congress took radical steps to restructure U.S. telecommunications markets. These steps may result in very significant benefits to consumers of telecommunications services, telecommunications carriers, and telecommunications equipment manufacturers. But the degree of success of the 1996 Act depends crucially on its implementation through decisions of the Federal Communication Commission and State Public Utility Commissions as well as the outcomes of the various court challenges that these decisions, and the Act itself, face (Hubbard, 1998).
The 1996 Act envisions a network of interconnected networks that are composed of complementary components and generally provide both competing and complementary services. The 1996 Act uses both structural and behavioral instruments to accomplish its goals. The Act attempts to reduce regulatory barriers to entry and competition. It outlaws artificial barriers to entry in local exchange markets, in its attempt to accomplish the maximum possible competition.................
