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ECO 436 Industry Seminar

ECO 436 Industry Seminar. Dr. David G. Loomis Illinois State University 309-438-7979. What is Telecommunications?. Definition is difficult Changes with technology and customer preferences. Industry Segments. Voice Video Data. In Each Segment. Wireline technologies

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ECO 436 Industry Seminar

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  1. ECO 436 Industry Seminar Dr. David G. Loomis Illinois State University 309-438-7979

  2. What is Telecommunications? • Definition is difficult • Changes with technology and customer preferences

  3. Industry Segments • Voice • Video • Data

  4. In Each Segment • Wireline technologies • Wireless technologies

  5. Causes of Convergence • Technology / Internet Protocol • Telecommunications Act of 1996 (TA ’96) • Economics – reduce costs, increase revenues, maximize profits

  6. 4 Products that Consumers Seem to Want • Landline voice • High speed Internet Access • Cable TV / Entertainment • Wireless voice/data

  7. Landline Voice • Long Distance Voice • Local Voice

  8. Wireless Voice

  9. Video / Cable TV

  10. Data / Internet Access

  11. International

  12. Market Structure Today • Key to understanding wireline market structure is LATAs • LATA - Local Access and Transport areas - created at the divestiture of AT&T, these are areas that the RBOCs are precluded from operating outside of. (map of IL LATAs)

  13. Types of Calls • Local calls - defined by company regulated by state commission • Intra-LATA calls - "toll" calls - calls that originate and terminate within the same LATA. Usually defaults to the local telephone company. Some states allow competition. Regulated by state regulatory commissions. • InterLATA intrastate calls - calls that originate and terminate in different LATAs but are still within the same state. Regulated by state regulatory commissions.

  14. Types of Calls • InterLATA interstate calls - calls that originate and terminate in different LATAs and states. Regulated by the FCC. • Local telcos provide access to the local network to IXCs for interLATA calls. This is called "switched access". Access for intrastate switched access is regulated by state; interstate is regulated by FCC.

  15. Company “types” – Local Exchange Companies (LECs) • 7 RBOCS - NYNEX; Bell Atlantic, Bell South, SBC (formerly Southwestern Bell), Ameritech, US West, Pacific Telesis. • In 1982, 25 Bell Operating companies served 81% of the phone lines but only 41 % of the assigned geographic territory in the U.S. (Brock p. 65) • Large "independents" - GTE, Sprint Local (Centel), SNET, thousands of small independents • A total of 1,432 independent telcos served the remaining 59 % of the territory but provided only 19% of the telephone lines. (Brock p. 65)

  16. Company “types” - Interexchange carriers (IXCs) • Traditional Long Distance Carriers - AT&T; MCI/Worldcom, Sprint, Qwest, and thousands of resellers.

  17. Market Share of IXCs (WSJ, A3, 9/27/99)

  18. Company “types” • CAPs Competitive Access Providers • ALTs – Alternate Local Transport companies • CLECs – Competitive Local Exchange Companies • Started by supplying high-speed data and voice in local market to large business • MFS, Teleport, Eastern Telelogic

  19. Industry Fragmentation

  20. Regulation and History • Communications Act of 1934 • FCC vs. States • Increasing Entry • Divestiture • LD competition • Local Competition

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