[tantalor]

What does "allow the Bells to enter long distance more than upgrade America's networks" mean? I can't parse that jargon.

Edit: "Bell telephone companies, largely to serve the growing market for data transmission and Internet access, are trying to enter the long-distance telephone market denied to them in the order that broke up AT&T in the 1980’s." http://praxagora.com/andyo/wr/bell_application.html

Edit: I still don't get it. Why was it denied?

[EEGuy]

It's history that goes /way/ back to the circuit-switched phone call days, and monopoly behavior. Here's my take on it:

To stop the high-priced no-progress monopoly behavior of the old AT&T in the long-distance telephone market AT&T essentially owned, the US sued AT&T, resulting in a consent decree settlement in 1984 where AT&T divested itself of 70% of its assets in order to retain its then-highly-profitable long distance business and its Western Electric switchgear business [1].

Competition was opened in long distance; prices and eventually profits went to commodity levels. Switchgear too; Western Electric gear was very expensive; competitors such as Nortel [2] and Digital Switch Corp (later DSC) [3] flourished for a while then crashed in 2001 as fiber and competition made long distance so cheap.

Meanwhile, the local telcos remained monopolies and thrived, merged, and eventually one of them (SBC) bought out several others and the old AT&T while others became Verizon.

But before all that consolidation (and the telecom crash [4]), the local "Bells" (telcos) argued for a return to enter the coveted Long Distance market. They don't have that for regulated landline service, which itself is now dying.

Long story short: Beware a monopoly if you're a customer, consolidate to become a monopoly and complain of regulations if you want to control a market.

EDIT: Moved to proper position as a reply

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[1] https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System

[2] https://en.wikipedia.org/wiki/Nortel

[3] http://www.fundinguniverse.com/company-histories/dsc-communi....

[4] http://www.economist.com/node/1234711

[mbreese]

It was part of the anti-trust case that broke up AT&T in the 80s and broke up local phone service into the baby-Bells. They were restricted from entering the market for long distance phone service as part of the deal.

The author is arguing that the primary purpose of the Telecom Act of 1996 wasn't to upgrade data networks, but rather deregulate them so that they could enter the long distance market. Given that AT&T and MCI ended up getting bought by two of the old baby-bells, this argument might have some merit.

[tantalor]

> restricted from entering the market for long distance phone service

Sure but what does that mean? And why?

[kcorbitt]

One of the reasons that Bell was broken up in the first place was because they wouldn't allow competitors with cheaper long-haul rates for long distance calls to patch into their interconnects and thus offer their services to Bell customers. It sounds like as a result of the settlement that broke up the monopoly the baby bells had some sort of restriction on providing cross-country or inter-regional service. The author is contending that the 1996 legislation, lobbied for by the telecom industry, was more about removing that restriction than actually motivating them to provide better service.

[throw_away]

It used to be that phone calls were tiered, in that you got free "local" access, but it cost more to call out of your immediate area. The baby bells handled local access, but you used a different company to get your per minute long distance calls to work. There were ads on tv all the time trying to get you to switch your long distance provider.