Download - COMT 220
COMT 220
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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.
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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
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Jurisdiction
• FCC - Interstate Communications• Intrastate
– PUC (Public Utilities Commission)or PSC (Public Service Commission)
– unless “preempted” by the FCC
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Products and Services
Equipment Local Service Long Distance
Intrastate Interstate
“The Bell System”
Pricing behaviour is regulated by controlling the “Rate of Return”
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Carterphone - 1968
Equipment Local Service Long Distance
Intrastate Interstate
“The Bell System”
SomeCompetitionAllowed
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Specialized Common Carriers
1971-1972
Equipment Local Service Long Distance
Intrastate Interstate
“The Bell System”
SomeCompetitionAllowed
Specialized Services
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After the MFJ - 1982
Equipment Local Service Long Distance
Intrastate Interstate
Specialized Services
IntraLATA
IntraLATA
InterLATA
InterLATA
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The Telecom Act of 1996
Equipment Local Service Long Distance
Intrastate Interstate
Specialized Services
IntraLATA
IntraLATA
InterLATA
InterLATA
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Computer Inquiry I - 1972
• Deregulation of Data Processing• Data Transport remains regulated
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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 ?
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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)
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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?
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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)
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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
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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.
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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?