The Telecommunications Act of 1996 is a bill that President Clinton signed on February 8, 1996. The bill was passed for the deregulation of all segments of the Telecommunications industry. This would allow telephone companies, broadcasters, and cable operators to enter each other's markets. The overall intent was to create competition, to liberate and to open the door for the next major break through in the Telecommunications industry.
The bundling of different products will become the norm in the future of the Telecommunications industry, but it will take a few years. Federal judges have struck down key provisions of the telecommunications act. "Raising questions about the soundness of Congress' plan to unleash competition in the vast telecommunications market." (Gruenwald) Telephone companies, broadcasters, and cable operators have been entering each other's markets, but the process has been slow. "The long-distance carriers have the marketing skills, the brand awareness, and the technological know how to put together packages of local, long distance, data, and video services. In the long-term, that puts them in better shape to become 21st century 'supercarriers'- single sources for all communications services." (Catherine) Many mergers and shifts have occur in the first few years after the act; for instance, Bell Atlantic and Nynex merged in 1997 only a year and some months after the Act was signed. Deregulation has benefited some consumers tremendously by lowering prices in Telecommunications industry in certain areas of the United States. "As carriers begin to market bundles of communications services, consumers should benefit. The communications companies say low-cost services will offset high-cost ones in a package. And in just about every service, competion and more efficient technology should push prices down." (Arnst) Competition was the main reason for the telecommunications act of 1996 and liberalizing the telecommunications Industry was the first step to bring about competion. The short-term effect of the Telecom Act caused restructurings, mergers and rearranging of industries. Cable operators, Broadcasters and other businesses have entered each other's markets in the telecommunications industry. For example, ATT now has an Internet Service Provider and they are planning on providing local telephone service in the future. The idea is that all major players in the telecommunications industry have plans to provide cable, telephone, and Internet services all in one package at a lower price, which will create intense competition in the telecommunications industry.
The high-speed links of the information superhighway can now be created by the telecommunications industry. "Like the transcontinental railroads that turned the U.S. into a world economic power in the 19th century, this I-way infrastructure has the potential to put the U.S. economy ahead of the rest of the world in the 21st." (Arnst) Efficient new ways of doing business will be made possible by the so-called "Electronic commerce." The idea is to create an internet highway or "I-way" as it is called that would allow internet, cable and telephone services using one medium. This will not happen for now until competition brings the prices of telecommunication services down which has been a slow process. The best medium for this I-way would be fiber optics, but it will be expensive.
In the future buyers and sellers, producers and consumers, will interact on the Internet. For instance, "The rapidly falling prices of communications can cut tens of billions of dollars off the country's health-care bill, as hospitals buy supplies electronically rather than processing each order by hand. The networks will also be fertile grounds for all sorts of new ventures-everything from Web "zines to movies on demand." (Arnst) So far the telecommunications act has had positive and negatives. The positives are that there will be strong demand for data communications. "Traffic will grow rapidly, led by strong demand for data communications." (Elstrom) The negatives are that the telecommunications act of 1996 has failed to promote competition as of today. "The new act has been a disappointment to television audiences. The competition it sought to promote has not materialised. Instead, consumers seem to be paying more to watch the same old service." (The Economist. Jan. 24, 98) Moreover, according to Peter Elstrom, long distance carriers will come across regulatory restraints and heavy cost for entering local markets.
Clearly, the intent of the Telecommunications Act of 1996 was to liberalize