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The Telecommunications Act: The Good, Bad, and Unknown

Amidst much hoopla, on 08-Feb-96 President Clinton signed the Telecommunications Act of 1996 into law. This law has been almost universally condemned by the online community due to a single provision making it a felony to distribute "indecent" materials to minors. However, there are many other provisions of this law which radically reshape the way telephone, long distance, cable, and other companies do business.

This article first gives a brief background on the perceived need for modernization of U.S. telecommunications law. Second, it highlights some lesser-known provisions of the law and speculates on how they will affect consumers. Finally, it summarizes the Communications Decency Act and the fight against it. The full text of the law (close to 400K) is available from the Library of Congress. c104:s.652.enr:

Breaking Down Barriers — When Congress passed the 1934 Communications Act, the telecommunications industry was decidedly different from how it is today. AT&T was the sole provider of long distance service and communications equipment, and it was the sole owner of local service providers. The laws were passed with AT&T solely in mind and assumed that regulated monopolies must exist for things like local telephone service. Broadcasting – which was primarily AM radio at the time – had a very limited bandwidth and was heavily regulated to prevent signal interference.

Despite enormous changes in the intervening years, there have been only a few substantial revisions to the law, including the 1982 break-up of AT&T into smaller, independently owned units called Bell Operating Companies or Regional Bells. Although the break-up opened the long distance market to competition, regional telephone companies continued to monopolize their assigned markets, and the Federal Communications Commission’s (FCC) restrictions remained in place. The FCC kept the regional Bells out of the long distance, cable, and information service markets.

One other major change came in the 1984 Cable Act, which established the FCC’s regulatory authority over cable operators and prevented regional telephone companies from operating cable services within their region. Congress feared allowing the two industries to compete would lead to another AT&T-like monopoly.

For several years, all the regulated companies complained to Congress that the restrictions on competition were no longer necessary. The differences between cable, local telephone, and long distance companies had become relatively small, and each could do business in one another’s markets without much effort. The only things preventing them from doing so were rules established when one company monopolized the market.

Simply put, the Telecommunications Act eliminates barriers preventing cable, long distance, and regional telephone companies from entering each other’s markets, and opens up the market for information services. In the near future, Americans may be able to sign up for Internet service through a phone company, cable company, or long distance company. The monopoly the regional Bells have had over local telephone service will no longer exist, since AT&T, MCI, and your cable company will start offering service. Further, NYNEX, Ameritech, and other regional Bells will begin offering long distance service.

Those aren’t the only industries which benefit from the new law. Broadcast television stations (which have only been able to send one signal through their designated frequency) will be allowed to use modern compression techniques to offer multiple signals as long as they accompany the current one. In addition, The Electric Company will no longer be just a fondly remembered children’s show on PBS, since local electric companies may now enter all the other industries as well.

Unfortunately, it will take some time before the goals of the law become reality. The responsibility for disassembling the barriers that have existed for as much as 60 years has been delegated to the FCC. The FCC faces the herculean task of promulgating over 80 rules and regulations designed to achieve the purposes of the new law by August. These rules will ensure local companies give long distance access to their poles and switch boxes at competitive rates. In addition, the FCC will still ensure that universal service (i.e. telephone service of some sort for all persons) is available.

Due to the time it will take for the FCC to enact rules allowing competition in these industries, it will be months or years before competition really gets rolling. Once it does, unfortunately, you can expect mass marketing campaigns (like those from AT&T vs. MCI vs. Sprint today), only in more industries. The changes are likely to start in larger metropolitan areas; smaller cities and rural areas may never see a significant change.

What will happen to prices? There are two schools of thought on this. Most members of Congress will say that increased competition will lead to lower prices and higher quality of services. Many consumer groups don’t buy this reasoning. They are suspicious because the law was passed after years of negotiations between the players in the telecommunications and cable industries. Consumer groups fear removing the barriers between these industries will lead to a number of mergers and joint ventures, and bigger companies will be able to dominate markets and control prices.

The truth likely lies somewhere between these two positions. Though mergers and increased concentration in certain markets are likely, the existence of behemoth companies does not necessarily lead to market domination. For proof, one need only look at the long distance market, where huge companies like AT&T, MCI, and Sprint compete effectively with each other and a number of smaller companies, while consumers get the benefit of lower prices. So, as long as different companies are offering service in your area, you are likely to be better off. However, some fear small or geographically remote markets may fail to attract competition, effectively granting a monopoly to whatever service provider happens to be there.

The Communications Decency Act — Title V of the Telecommunications Act of 1996 is known as the Communications Decency Act. Congressional intent, as stated in the Senate Report accompanying the law, was to "modernize the protections… against obscene, lewd, indecent, and harassing use of a telephone" and bring those protections into the digital age. However, the method for achieving this goal is analogous to killing a fly with a sledgehammer: the law goes beyond what is necessary and, as some claim, beyond what is constitutionally permissible.

The new law makes it a felony, punishable by up to two years in prison or a fine of $250,000, to use a computer service to distribute "any comment, request, suggestion, proposal, image, or other communication that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs, regardless of whether the user of such service placed the call or initiated the communication." draft_bill.excerpt

[This material is also available via the search facilities on Library of Congress Web site at the URL given above. -Geoff]

According to most critics, this law is written too broadly and violates the First Amendment to the Constitution, which states that "Congress shall make no law… abridging the freedom of speech…." It could potentially be illegal under this new law to discuss venereal disease, contraceptives, or anatomy online, for fears it might be deemed offensive. Another provision of the bill (section 507) amends section 1462 of Title 18 of the U.S. Code so as to forbid any discussion of abortion over the Internet.

Contrary to some reports, the Communications Decency Act does not merely apply current obscenity laws from television and radio to the Internet. The new law attempts to go far beyond that. A person using a four letter word in private email could be prosecuted for a felony, even though using the same word in a telephone call would be legal. Online copies of controversial books such as Catcher in the Rye or The Color Purple would not be permitted. Museums might not be able to display images of certain artworks on their Web pages for fear of prosecution. The new law is not necessary for prosecuting individuals who distribute child pornography or obscene materials. Current laws can be (and are) used to prosecute the online distribution of illegal pornography, as well as other illegal activities carried out via computer networks.

A number of groups have started campaigns to show their disapproval of these indecency provisions. After President Clinton signed the bill into law, a number of Web pages turned their backgrounds black for 48 hours to protest. [The TidBITS home page was black. -Tonya] All over the Web, blue ribbons of protest are popping up. Perhaps the most extreme reaction to this new law was John Perry Barlow’s Declaration of the Independence of Cyberspace. Barlow/barlow_0296.declaration

Moments after the bill was signed by President Clinton, the Electronic Frontier Foundation, the American Civil Liberties Union, and several other organizations filed suit in Philadelphia challenging the constitutionality of the law. The case will be heard by three judges and their decision could be appealed directly to the Supreme Court. The entire process will certainly take over a year (see below).

While this case is pending, there is a fight in Congress to repeal the Communications Decency Act. Senators Pat Leahy (D-VT) and Russ Feingold (D-WI) have introduced legislation to eliminate the provisions. Don’t expect to hear much about this legislation, though – it’s extremely difficult to get anything through Congress. repeal.announce

If you are looking for more detailed analysis of the censorship provisions in the Telecommunications Act or are interested in joining the fight against it, the following sites will be of interest:

On Thursday, 05-Feb-96, U.S. District Judge Ronald L. Buckwalter issued a preliminary injunction against certain provisions of the Communications Decency Act. This is a victory, albeit a small one, for the anti-censorship activists. 021596.decision

Judge Buckwalter forbade the Justice Department from prosecuting anyone for distributing "indecent" materials, noting the term is vague and undefined. Anyone who distributes material deemed "patently obscene" can still be prosecuted. The difference between the two terms is not entirely clear, and lawyers and judges have argued about it for the better part of a century. Technically, "obscene" material is not entitled to any First Amendment protection under current laws, though "indecent" material is. Judge Buckwalter felt the new law did not adequately define what constitutes indecent material; therefore, the law was ambiguous and unenforceable.

The decision grants a temporary restraining order, and is not final. The EFF and other organizations have promised to continue to fight all censorship provisions of the new law.

The Unknown Future — Though the battle in the courts and Congress rages on, it is unclear what law, if any, will eventually apply to the transmission of controversial material. One potential solution is allowing users to choose for themselves which sites to visit and which to ignore. Software companies are introducing products which allow material received via online services to be filtered or restricted by a number of criteria, including the nature of the content, the location of the site being accessed, the time of day, the program being used, and other parameters. Such filtering software would not censor anyone and is commonly cited as an alternative to content legislation by civil rights advocates. The software would allow users to visit any site, but would also allow parents, teachers, and others to block access to material they deem objectionable. So far, SurfWatch and Cyber Patrol are available for the Mac; other products are sure to come.

[Note these products work in the depths of already finicky communications software, and have known problems. As these products mature, they’re likely to become more stable. -Geoff]

If you are worried you might be subject to liability, there are a few things you can do to protect yourself. If you run a bulletin board service or Web site which contains potentially controversial material, you can avoid liability under the new law by taking reasonable steps to ensure those areas are not available to minors. Should you happen to be the unlucky soul first prosecuted for violation of this new law, contact the EFF and the ACLU, who will be able to provide legal assistance.

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