Cost Efficiency and Technology of Rural Telephone Companies

Abstract

After passing by overwhelming margins in Congress, the President signed on February 8, 1996 the Telecommunications Act of 1996 (Public Law 104–104). The Act established several sweeping national telecommunications policies. In particular, the Act formally created a national economic policy to promote the introduction of competition into the local telecommunications marketplace. In addition, the Act codified a popular notion of universal service along with several significant extensions. These policies, however, were viewed with some apprehension inside and outside of Congress at the time of the Act’s enactment, because policies that promote competition may be in conflict with policies that maintain or extend universal service. In fact, these concerns resulted in exemptions, suspensions and modifications from parts of the law’s competitive requirements for rural telephone companies.

The views and opinions of the author do not necessarily state or reflect the views, opinions, or policies of SBC Communication, Inc. or any of its subsidiaries. I am thankful to Yangru Wu and Michael Crew for comments but retain responsibility for any errors.