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Session Objectives

Session Objectives. Modification of Final Judgement Competitive access providers (CAPs) and competitive local exchange carriers CLECs. AT&T Reorganization (per MFJ). Resources for local exchange functions and yellow pages to BOCs

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Session Objectives

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  1. Session Objectives • Modification of Final Judgement • Competitive access providers (CAPs) and competitive local exchange carriers CLECs

  2. AT&T Reorganization (per MFJ) • Resources for local exchange functions and yellow pages to BOCs • “Chinese Wall” in BOCs between local exchange and other functions • Terminate BOC ties to AT&T and Western Electric • Appropriate reissue of stock • No electronic publishing by AT&T until 1989 • District Court to approve reorganization plan

  3. BOC Requirements (per MFJ) • Equal access to each BOC by all interexchange carriers and information service providers (i.e., equal to prior access by AT&T); equal access to all interexchange carriers by subscribers (i.e., equal to their prior access to AT&T) • No discrimination by BOCs between AT&T and other persons • May share engineering organization (Bellcore)

  4. BOC Requirements (per MFJ) (cont’d) • Line-of-business constraints • No interexchange services; no information services (latter constraint lifted in 1991) • No manufacture of customer premises equipment, but may provide it • No non-monopoly, unregulated products or services except yellow pages or those beyond monopoly power

  5. Consequences of the Divestiture • Basic thrust • “to separate the natural monopoly functions… into… regulated enterprises.” --Assistant Attorney General William Baxter (1982) • And to deregulate the competitive functions • Long lines became a workably competitive industry. • BOC viability was established.

  6. Consequences of the Divestiture (cont’d) • Local rates suffered some net increase. • BOCs lost generous “separations” from AT&T long lines • BOCs gained access charges from IECs in lieu of “separations” • Consumers pay new subscriber line charge to LECs • BOCs saved high license contract fees to AT&T and high prices paid to Western Electric

  7. Competitive Access Providers • Business purpose • For large firms to bypass the LEC for long-distance calls, thus saving access charges • Technology • T-1 lines or optical fiber in metropolitan areas • Digital transmission • Examples • Metropolitan Fiber Systems (now MFS) • Teleport Communications Group

  8. Competitive LECs • Expansion of CAP business • Business customers to IEC point of presence (POP) • Internet connection for ISPs • Specialized metropolitan data networks • Competitive local exchange service • Interconnection of large cities for long distance • Technology • Co-location of switches with incumbent LEC • Effect: Competitive spur to incumbent LECs

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