GOALS OF THE ACT

The Telecommunications Act of 1996 was supposed to get government out of the telecommunications business. Instead, for now, it has accomplished the opposite. While Congress set broad rules allowing local telephone, long-distance and cable companies to invade each other's turf, it left the details to the FCC.
The Telecom Act deregulated many aspects of telecommunications services, allowing local telephone companies, long-distance providers and cable operators to compete for customers by offering services previously restricted by monopoly protection.
For example, long-distance providers and cable operators may now offer local telephone service. Local telephone companies may offer entertainment video services through their local telephone lines to customers. Deregulation as a result of the Telecom Act is expected to increase competition by enabling telecommunication companies to expand services and service bases.
But how will consumers benefit from the new competition? The removal of the barriers to competition will eventually mean lower prices, greater customer choice and control.
Companies which had no competition before will be forced to become more cost-conscious and more service-oriented. In addition, users should find new technologies coming online at a faster rate, offering a much wider choice of features and services. Competition will cause the technological envelope to be pushed.
Competition should drive down prices, local cable and phone officials said, but there is no guarantee that will happen…

RESULT OF THE ACT
The unintended result of the Telecom Act is merger mania and consolidation.
As a result of mergers and lack of regional competition, the telecommunications industry has shed more than half million jobs, and lost 2 trillion dollars in value.
After the mergers, consumers will overpay. (Refer to Slide for Percentages) Mergers may lead to increased prices and stifle competition. To compete, companies will need a national presence.
As a result, smaller companies failed or were bought out.
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As of August 1996, announced mergers included Bell Atlantic buying NYNEX for 20 Billion dollars.
NYNEX Corporation served five New England states (Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) as well as most of New York state.
Later, in 2000, The Federal Communications Commission unanimously approved Bell Atlantic’s $64.7 billion deal to buy GTE Corp. clearing the way for the creation of the largest U.S. local telephone company. Bell Atlantic then formed the company that we are all familiar with, Verizon Wireless.
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SBC Communications Inc. acquired Pacific Telesis Group in a deal worth $16.7 billion.
In 1999, SBC bought Ameritech (Baby Bell) and in February 2005, SBC announced its plans to acquire former parent company AT&T Corp. for over $16 billion. SBC took on the AT&T name upon merger closure on November 18, 2005. SBC began trading as AT&T Inc. on December 1, 2005. In 2006 AT&T purchased BellSouth which was the last remaining Baby Bell.
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US West (a Bell company) and Continental Cablevision.

US West purchased Continental Cablevision for 11.8 billion dollars. This made US West the 3rd largest cable company in the U.S. Over time, US West turned into Media One Group and eventually turned into a company that we are all familiar with, Comcast. Comcast is the largest cable company and home Internet service provider in the United States, and the nation's third largest home telephone service provider.

In theory, competition will lower prices. In reality, mergers among the RBOCs and other telecommunications players (cable companies in particular) have raised fears that the former monopolistic phone system will rise from the dead. Some consumer groups say there will be less competition and higher prices.[24] Mergers, deregulated through the Telecom Act, "will pave the way for a few $100 billion conglomerates to dominate the world market for communications, information and entertainment services."