Was the 1996 Telecommunications Act successful in promoting competition?
[Commentary] Evaluating legislative success is more art than science. Today our nation commemorates the 20th anniversary of the Telecommunications Act of 1996 becoming law, and there is now a sufficient period to evaluate whether the act has achieved what it was intended to accomplish. One of the clear legislative targets was to have competition serve as a force for broadband network development nationwide. The act’s legislative history reflects the goal of Congress “to accelerate the deployment of an advanced capability that will enable subscribers in all parts of the United States to send and receive information in all its forms—voice, data, graphics, and video— over a high-speed switched, interactive, broadband, transmission capability.”
It’s fair to say that the law did not achieve immediate success. Five years after its enactment, only New York and Texas had determined that there was sufficient competition in the local telephone market to enable the Baby Bells operating there to also offer long-distance telephone service. By 2001, concentration within the industry actually increased, with only four companies in the United States handling 95 percent of local telecommunications service: Verizon, SBC, BellSouth and Qwest. Fast forward to today’s telecommunications environment, where permitting both local telephone and cable companies to offer broadband service (including video) has been a powerful driver for new investment to facilities upgrades or new construction. And the National Broadband Map shows that all parts of the country (50 states along with all U.S. territories) now have broadband service, as the law intended. These metrics do not demonstrate that the Telecommunications Act of 1996 was an unqualified success, but they are evidence of the law’s real economic and consumer benefits. We can only hope that the additional passage of time will continue to support what Congress admirably set in motion two decades ago.