The Telecommunications Act of 1996
The Telecommunication Act of 1996 changes the telecommunications regulation and open the market for competition. In all the others regulatory government encouraged natural monopolies. In this act the state removed the outdated barriers that protect the monopolies from competition and affirmatively promote efficient competition using tools forged by Congress. State and federal regulators devoted their efforts over many decades to regulating the prices and practices of these monopolies and protecting them against competitive entry.
The Telecommunication Act of 1996 established three principal goals: 1. Opening the local exchange and exchange access market to competitive entry. 2. Promoting increased competition in telecommunications markets that are already open to competition, including the long distance services market. This opened one of the last monopoly bottleneck strongholds in telecommunications - the local exchange and exchange access markets. This reformed the telecommunication era by opening all providers to enter all markets. 3. Reforming our system of universal service so that universal service is preserved and advanced as the local exchange and exchange access markets move from monopoly to competition. Universal service reform order will rework the subsidy system to guarantee affordable service to all Americans in an era in which competition will be the driving force in
All the previous rulings shielded the telephone companies from competition. The 1996 Act required telephone companies to open their network to competition.
The 1996 Act moves beyond the distinction between interstate and intrastate matters that was established in the pervious regulation, and instead expands the applicability of national rules to historically intrastate issue, and state rules to historically interstate issues.

SUMMARY

In 1913, telegraph was popular way of communication. AT&T commits to dispose its telegraph stock. It also agreed to provide long distance connection to Independent telephone systems and not to purchase any more Independent telephone companies except as approved by the Interstate Commerce Commission. However, AT&T was still the giant telecommunication company.
In 1956, the final judgment limited the Bell System to common carrier communications and government projects but preserving the long-standing relationships between the manufacturing, research and operating arms of the Bell System. In this judgment AT&T retained Bell Laboratories and Western Electric Company. This final judgment brought to a close the Justice Department's seven-year-old antitrust suit against AT&T and Western Electric which sought separation of the Bell System's manufacturing from its operating and research functions. AT&T was still controlling the telecommunication industry.
In 1982, AT&T was requested to divestiture its stock ownership in Western Electric; termination of exclusive relationship between AT&T and Western Electric; divestiture by Western Electric of its fifty percent interest in Bell Telephone Laboratories, AT&T's telecommunications research and development facility, is a jointly owned subsidiary in which AT&T and Western Electric each own 50% of the stock; separation of telephone manufacturing from provision of telephone service; and the compulsory licensing of patents owned by AT&T on a non-discriminatory basis.
It was in the Telecommunication Act of 1996 that true competition was allowed. The Act of 1996 opened the market to all competitors. AT&T being the first telecommunication company paved the road for the telecommunication industry as well as set the policy and standards for others to follow.
In my view there is still time before we see true competition in the telecommunication industry. AT&T is still the giant long-distance provider. You only need to have 30 percent of the market share to be considered a monopoly. The current news tells that AT&T and MediaOne merger puts AT&T back at a monopoly side. Recently, AT&T won the final approval of FCC. But in signing off on the deal, the FCC required that AT&T comply with rules barring any company from owning more than 30 percent of the nation's market for subscription-television services, including cable and satellite. The FCC calculates that the new AT&T would reach roughly 42 percent of that market.
The conditions will force AT&T to either sell off its roughly 25 percent stake in cable systems owned by Time Warner Inc. Even after the divestitures, AT&T would be the nation's largest provider of long-distance telephone service and cable TV.