Telecom Bill passed

March 1, 1996

Telecom Bill passed

With the recent passage of the telecommunications bill, the U.S. Congress has freed the exploding television, telephone and home-computer industries to leap into each others` turf. President Clinton, signing the bill to make it a law, hailed the action, saying that "consumers will receive the benefits of lower prices, better quality and greater choices in their telephone and cable services. They will continue to benefit from a diversity of voices and viewpoints in radio, television and the print media."

The reworking of the 61-year-old Communications Act will allow local and long- distance telephone companies and cable companies into each others` businesses, deregulate cable rates and allow media companies to more easily expand their holdings. The law covers the $700-billion telecommunications industry, which accounts for one-sixth of the nation`s economy.

The measure also enables cable and long-distance companies to provide local telephone service--a $100-billion market--by preempting state and local regulations. Local Bell telephone companies are permitted into the $70-billion long-distance business.

In addition, the measure anticipates dropping rates for long-distance calls, possibly creating higher prices for local telephone and cable-TV service, and creating a profusion of new TV programs. It does away with regulatory barriers and is certain to accelerate the convergence of local and long-distance telephone businesses with cable operators, cellular companies, broadcast concerns and computer makers.

The legislation directs that the Federal Communications Commission be responsible for writing new rules--many within six months. The agency will decide on a variety of issues, including how new rivals for telephone service will pay local telephone companies to use their networks and how much they are expected to pay for telephone poles.

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