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Session Objectives. Modification of Final Judgement Competitive access providers (CAPs) and competitive local exchange carriers CLECs. AT&T Reorganization (per MFJ). Resources for local exchange functions and yellow pages to BOCs

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Session objectives
Session Objectives

  • Modification of Final Judgement

  • Competitive access providers (CAPs) and competitive local exchange carriers CLECs

At t reorganization per mfj
AT&T Reorganization (per MFJ)

  • Resources for local exchange functions and yellow pages to BOCs

  • “Chinese Wall” in BOCs between local exchange and other functions

  • Terminate BOC ties to AT&T and Western Electric

  • Appropriate reissue of stock

  • No electronic publishing by AT&T until 1989

  • District Court to approve reorganization plan

Boc requirements per mfj
BOC Requirements (per MFJ)

  • Equal access to each BOC by all interexchange carriers and information service providers (i.e., equal to prior access by AT&T); equal access to all interexchange carriers by subscribers (i.e., equal to their prior access to AT&T)

  • No discrimination by BOCs between AT&T and other persons

  • May share engineering organization (Bellcore)

Boc requirements per mfj cont d
BOC Requirements (per MFJ) (cont’d)

  • Line-of-business constraints

    • No interexchange services; no information services (latter constraint lifted in 1991)

    • No manufacture of customer premises equipment, but may provide it

    • No non-monopoly, unregulated products or services except yellow pages or those beyond monopoly power

Consequences of the divestiture
Consequences of the Divestiture

  • Basic thrust

    • “to separate the natural monopoly functions… into… regulated enterprises.”

      --Assistant Attorney General William Baxter (1982)

    • And to deregulate the competitive functions

  • Long lines became a workably competitive industry.

  • BOC viability was established.

Consequences of the divestiture cont d
Consequences of the Divestiture (cont’d)

  • Local rates suffered some net increase.

    • BOCs lost generous “separations” from AT&T long lines

    • BOCs gained access charges from IECs in lieu of “separations”

    • Consumers pay new subscriber line charge to LECs

    • BOCs saved high license contract fees to AT&T and high prices paid to Western Electric

Competitive access providers
Competitive Access Providers

  • Business purpose

    • For large firms to bypass the LEC for long-distance calls, thus saving access charges

  • Technology

    • T-1 lines or optical fiber in metropolitan areas

    • Digital transmission

  • Examples

    • Metropolitan Fiber Systems (now MFS)

    • Teleport Communications Group

Competitive lecs
Competitive LECs

  • Expansion of CAP business

    • Business customers to IEC point of presence (POP)

    • Internet connection for ISPs

    • Specialized metropolitan data networks

    • Competitive local exchange service

    • Interconnection of large cities for long distance

  • Technology

    • Co-location of switches with incumbent LEC

  • Effect: Competitive spur to incumbent LECs