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COMT 220

COMT 220. Regulation. This Material may be found in: Cole, Chapter 1. Also in: Datapro Reports on Communications Networking Services, Report #3002, A History of Telecommunications Regulation. Public Utilities. Monopolies or Near-Monopolies

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COMT 220

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  1. COMT 220 Regulation This Material may be found in: Cole, Chapter 1. Also in: Datapro Reports on Communications Networking Services, Report #3002, A History of Telecommunications Regulation.

  2. Public Utilities • Monopolies or Near-Monopolies • Having the monopoly is deemed to be in the public’s best interest • Regulation provides oversight to prevent abuse • Examples: • Railroads • Water, Gas, Electricity • Telecommunications

  3. Jurisdiction • FCC - Interstate Communications • Intrastate • PUC (Public Utilities Commission)or PSC (Public Service Commission) • unless “preempted” by the FCC

  4. Products and Services Equipment Local Service Long Distance Intrastate Interstate “The Bell System” Pricing behaviour is regulated by controlling the “Rate of Return”

  5. Carterphone - 1968 Equipment Local Service Long Distance Intrastate Interstate Some Competition Allowed “The Bell System”

  6. Specialized Common Carriers1971-1972 Specialized Services Equipment Local Service Long Distance Intrastate Interstate Some Competition Allowed “The Bell System”

  7. After the MFJ - 1982 Specialized Services Equipment Local Service Long Distance Intrastate Interstate Intra LATA Inter LATA Intra LATA Inter LATA

  8. The Telecom Act of 1996 Specialized Services Equipment Local Service Long Distance Intrastate Interstate Intra LATA Inter LATA Intra LATA Inter LATA

  9. Computer Inquiry I - 1972 • Deregulation of Data Processing • Data Transport remains regulated

  10. Computer Inquiry II - 1980 • Computer Inquiry I seen as obsolete • Basic data communications services are now regulated • Enhanced Services are not regulated • Enhanced Services, including CPE sales, offered by Bell Operating Companies, must be moved to a separate subsidiary WHY ?

  11. Computer Inquiry III - 1992 • Attempts to deregulate the entire data communications arena • Creates the concept of “Comparably Efficient Interconnections” • Creates the ONA (Open Network Architecture) concept • Never really led to regulation -- until the 1996 Act (which used different words)

  12. Technical Consequences • Changes in regulation often force technical changes • In 1984, deregulation changed the number of long-distance providers from 1 to 2 or more -- what are the issues?

  13. Technical Consequences of the MFJ • Customer must be able to indicated via dialed digits which provider to use • Initially - Use line side access • Interim - Use Feature Group B 950-10xx • Long-term: Replace all central office switches with program control switches capable of doing database lookups. • Introduce 10XXX (now 1010XXX override codes)

  14. Introduction of Competition Before: Local Service Long Distance All Costs are combined in the “Rate Base” Regulators set prices based on policy/politics Total provider revenue is correct

  15. Competition cont… • After Local Service Long Distance Prices and costs are not divided equally, revenues are no longer correct. Implicit subsidies are replaced by explicit payments.

  16. Local Service Competition Rural Area Service Urban Area Service All Costs are combined in the “Rate Base” Regulators set prices based on Universal Service mandates/desires; cost-based rural service may not be reasonably affordable Total provider revenue is correct QUESTION: What happens if these services are deregulated and provided by multiple companies?

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