Opinion ID: 2623481
Heading Depth: 3
Heading Rank: 1

Heading: The Telecommunications Act of 1996

Text: The federal Telecommunications Act significantly changed the delivery of telephone service in this country. [1] At the heart of the Act, and at issue in this case, are the provisions designed to promote local telephone competition. [2] These provisions eliminate state-imposed barriers to competition and force incumbent local exchange carriers to cooperate with their potential competitors. [3] These competitors are referred to as competitive local exchange carriers. [4] The Act facilitates competition in a number of ways. [5] First, the Act requires incumbents to allow competitors to interconnect with the incumbent's existing local network. [6] This provision, referred to as interconnection, allows new entrants to use the incumbent's existing network to provide competing local telephone service. [7] Second, the unbundled access provision of the Act requires incumbents to provide competitors with access to elements of the incumbent's network on an unbundled basis. [8] The unbundling provision permits new entrants that have not completely built out their own networks to offer services over a combination of their own facilities and those leased from incumbents. [9] Third, the Act requires incumbents to sell to competitors, at wholesale prices, any telecommunications services it sells to its customers at retail rates. [10] This provision, referred to as the resale provision, allows competitors to resell to customers at retail prices the telecommunications services they purchase from the incumbent at wholesale. [11] These competitive provisions are found in section 251(c) of the Telecommunications Act. Despite the Act's general theme favoring competition, [12] Congress, in the interest of promoting universal service, exempted rural telephone companies from the duty to compete. Congress defined rural telephone company as a local exchange carrier operating entity to the extent that such entity (A) provides common carrier service to any local exchange carrier study area that does not include either (i) any incorporated place of 10,000 inhabitants or more, or any part thereof, based on the most recently available population statistics of the Bureau of the Census; or (ii) any territory, incorporated or unincorporated, included in an urbanized area, as defined by the Bureau of the Census as of August 10, 1993; (B) provides telephone exchange service, including exchange access, to fewer than 50,000 access lines; (C) provides telephone exchange service to any local exchange carrier study area with fewer than 100,000 access lines; or (D) has less than 15 percent of its access lines in communities of more than 50,000 on February 8, 1996.[ [13] ] Because these rural telephone companies are free from the competitive obligations imposed by the Act, these ILECs remain monopolist providers of local telephone service in their areas. The rural exemption is contained in section 251(f)(1) of the Act and provides, in pertinent part: Subsection (c) of this section shall not apply to a rural telephone company until (i) such company has received a bona fide request for interconnection, services, or network elements, and (ii) the State commission determines (under subparagraph (B)) that such request is not unduly economically burdensome, is technically feasible, and is consistent with section 254 of this title (other than subsections (b)(7) and (c)(1)(D) thereof).[ [14] ] Until a state commission makes the requisite findings under these three elements, rural telephone companies are exempt from competition. [15]