The Telecommunications Act of 1996

The goal of the framers of The Telecommunications Act of 1996, passed in February of that year, was to promote uniform local telephone competition. A key proviso of the Telecommunications Act of 1996 is that it takes away from each state the ability to approve competition in local telecommunications. It lays down a time frame and a method whereby competition will be opened to a variety of vendors. It also outlines a procedure for local telephone companies to expand their operations into manufacturing and inter-LATA, in-region and out-of-region, telecommunications.

The Act redefines the responsibilities of the state public utility commissions versus those of the Federal Communications Commission. Essentially, it is up to the states to approve rates for local calling and resale and interconnection of Bell services to competitors. However, resale rates charged by the LECs (local exchange carriers), cannot be above their own costs.