Telecommunications reform bill passes

By overwhelming majorities, both houses of the U.S. Congress passed sweeping telecommunications reform legislation that is mainly deregulatory in thrust. By votes of 414-16 and 91-5, respectively, the House of Representatives and Senate approved a bill that has been over a decade in the making. President Clinton signed the measure into law in February.

Apr 1st, 1996

Arlyn S. Powell, Jr.

By overwhelming majorities, both houses of the U.S. Congress passed sweeping telecommunications reform legislation that is mainly deregulatory in thrust. By votes of 414-16 and 91-5, respectively, the House of Representatives and Senate approved a bill that has been over a decade in the making. President Clinton signed the measure into law in February.

The main provision of the law lets long-distance carriers, local telephone companies and cable-TV providers compete in each others` markets. Most regulation of cable-TV rates will be eliminated within three years, cross-ownership of phone and cable companies will be permitted in smaller communities, and media companies will be freer to buy up radio and television stations. The measure is expected to lower long-distance rates, possibly increase local phone and cable-TV rates, and lead to a variety of new television programs and services. It is also predicted to accelerate convergence, the trend that is bringing the players in the telecommunications marketplace into the same arena, no matter what their past specialization.

Matthew J. Flannigan, president of the Telecommunications Industry Association (Arlington, VA), commented, "The Congress has taken a radio-era law and updated it for today`s digital world. The market forces unleashed by this law should create a bandwidth tidal wave. In signing the bill into law, President Clinton confirmed that the U. S. communications industry will lead the world into the information age."

Flannigan added that the TIA believes this law will open all segments of the telecommunications industry to competition, create many new market opportunities for U. S. companies and accelerate the deployment of new technologies. "It will also provide market-based incentives that encourage investment in our nation`s infrastructure, as well as the Global Information Infrastructure," he said.

The law incorporates several policies endorsed by the TIA board of directors last fall, among them:

Establishment of rules to foster the development of a competitive local loop

Lowering of barriers to competition in providing local telephony

Removal of the cable-TV company/ telephone company cross-ownership restriction

Reform of rules prohibiting energy

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