Chapter List

Local and long distance telephone revenues in the United States exceed those of all advertising media combined. Clearly, point-to-point transmission of voice, data, and video represents the single largest sector of the communications industry. The sheer size of this market has two effects: companies in other areas of the media want a piece of the market, and telephone companies want to grow by entering other media.

The Telecommunications Act of 1996 was designed to stimulate competition in the provision of these services, but, to date, comparatively little competition has emerged. Almost all local phone service in the United States is still provided by the traditional local telephone company, referred to in Chapter 18 as the incumbent local exchange carrier (ILEC), and almost all of the competitive service providers that were going to provide competition to the ILECs in delivering broadband connectivity to the home have disappeared.

Ironically, the advanced technology that promised new markets and revenues for both incumbent and competitive service providers has been a major factor preventing a more competitive environment. The reason...