The Impact Of The Commuications Act Of '96 On Vermont

Steven Shepard
December 1996

An editted version of this paper appeared with the title
"WHAT THE COMMUNICATIONS ACT OF 1996 MEANS TO VERMONT" in the Computer User Vermont, October 1996.

In 1934, President Roosevelt signed into law the Communications Act, which created the Federal Communications Commission (FCC) and mandated that telephone communications capability be both universally available throughout the country, and affordable for everyone. This decision came about because telephony, at that time 58 years old, had become so ingrained in the fabric of everyday society that it was perceived to be strategically important to the economic and social well-being of the country.

This year, the Communications Act of 1996 navigated its way through the rocky shoals of the federal government's approvals process. And while its mandates have not yet been implemented, they will lead to changes that will profoundly and positively affect Vermont's residents and businesses.

For the last several years, The state's legislators, regulators, and service providers have jointly worked with due diligence to craft a telecommunications plan that not only aligns with the statutes inherent in the Communications Act, but does so in a way that protects the state's unique social structure and business interests. The changes will not occur overnight, but they will occur, and they will help to put into place a telecommunications infrastructure that is crucially important if the state wants to continue to attract information-based industries and additional jobs.

At a federal level, the Communications Act calls for a reasonably-staged and intelligently-planned migration to a fully competitive telecommunications marketplace. Under the plan, several key changes will take place. Local telephone companies such as NYNEX will be allowed to offer long distance service, initially outside of their current operating areas but later as part of their local services suite, once they prove that they are competing on a "level playing field" with other companies. Long distance providers like AT&T and Sprint will become active players in the local telephony services game, as will cable companies like Adelphia. Cellular providers such as Bell Atlantic-NYNEX Mobile will enter the long distance market, and all of them will become content providers, delivering movies-on-demand, videoconferencing, and Internet access, just to name a few.

If this sounds chaotic and confusing, don't feel alone. The Divestiture of AT&T in 1984 and the marketplace uncertainty that followed were nothing compared to what's coming. There is a good side for Vermont, however. The telecom marketplace has been a regulated, price adjusted and controlled services universe for a very long time. That same market is about to become competitive, subject to the same free market economic forces that affect most other industries. Competition tends to create commodity deliverables, a drop in consumer cost, higher quality services, technological innovation, and improved customer service. For Vermont, that translates into a better telecommunications infrastructure statewide, a more attractive technological environment for businesses looking for a home, better and cheaper services for consumers, schools, businesses, and government, deeper service penetration into rural areas of the state, an improved jobs outlook, and an environment where the market ! controls the technology, rather than the other way around.

When technological innovation fails, it usually does so because its engineers, designers and implementers fail to model it on the functional design of the society it serves. In this case, we seem to be doing exactly that, and I, for one, smell success in the air. It's still a ways off but it's coming. Hold on tight it's going to be a wild ride.


ABOUT THE AUTHOR: Steven Shepard is a Senior Member of Technical Staff with Hill Associates, a telecommunications education and consulting firm in Colchester. He can be reached at s.shepard@hill.com.