Early History of Telecommunications

The early history of telecommunications in the United States was dominated by one Phone Company: AT&T. In 1984 a Federal ruling restructured an agreement that changed this monopoly. That agreement is the United States District Court's Modification of Final Judgment (MFJ). MFJ ended the Justice Department's suit against AT&T. That breakup created (7) seven independent RBOC’s (Regional Bell Operating Companies) and were organized into (7) seven regional Bell holding companies called Ameritech, Bell Atlantic, Bell South, Nynex, Pacific Telesis, Southwestern Bell, and US West. Each RBOC was assigned a specific geographical area, and each geographical area was divided into service areas called LATA’s (Local Access and Transport Areas) that telephone companies operated within.

The RBOC’s are also called the ILEC’s (Incumbent Local Exchange Carriers). In contrast, CAP’s (Competitive Access Providers) and CLEC’s (Competitive Local Exchange Carriers) are companies that compete against the RBOC’s in the local service areas. IXC’s (Interexchange Carriers) are long-distance service providers such as AT&T, MCI, Qwest, and Sprint.

The Telecommunications Reform Act of 1996 changed the telecommunications landscape yet again. RBOC’s were allowed to merge and the following mergers or acquisitions took place in the following years to change the original (7) seven:

• SBC Communications merged with PacBell (Pacific Telesis) in April 1996
• Bell Atlantic merged with Nynex in April 1996
• Qwest Communications bought US West in July 1999
• SBC Communications merged with Ameritech in October 1999
• Bell Atlantic merged with GTE in June 2000 and renamed itself Verizon
  

So, at this point, it is better to refer to RBOC’s as ILEC’s. They include SBC Communications (now called AT&T 2006), Bell Atlantic (now called Verizon), Qwest Communications, and BellSouth (now also AT&T 2007). The Act attempted to increase competition by opening local markets. RBOC’s were required to open their facilities to competitive providers and, if they complied according to the rules, were allowed to expand into long-distance markets.

Anyone with an Internet access account and a telephone is familiar with service providers and carriers. You pay them money every month. However, "service providers" and "carriers" are broad categories. This section describes the different types of service providers and carriers and the service they offer.

The IXC’s (Interexchange Carriers) provide services between LATA’s. ILEC’s are required to create a point of presence (POP) that IXCs can connect to and provide long-distance services to local users.

A non-Incumbent Telephone Company is called an ITC (Independent Telephone Company) such as Alltel (now Windstream) CenturyTel and Embarq. However, some ITC’s operate in noncompetitive areas, I.E., rural areas that are not covered by the RBOC’s or any other telephone company.

CAP’s (Competitive Access Providers) are carriers that built their own metropolitan SONET rings and offered private metropolitan telephone services to businesses that could bypass the incumbent carriers. The first CAP was Merrill Lynch, which installed a transmission facility in New York to bypass the New York Telephone Company and directly connect to the interexchange carrier. The Merrill Lynch enterprise became Teleport Communications Company. Other CAPs followed, such as Metropolitan Fiber Systems.
The Telecom Act of 1996 permitted CLEC’s (Competitive Local Exchange Carriers) to set up operations in the same areas as the ILEC’s and offer competitive telephone and data services. The Telecom Act of 1996 stipulates that ILEC’s must offer services to CLEC’s at wholesale prices, and allow CLEC’s to plug into the existing phone system and gain access to their CO SS7 signaling (Central Offices). Technically, CLEC’s get access to UNEp’s (Unbundled Network Elements platform), which basically gives CLEC’s access to the local loop and subscribers at the end of those wires.

The latest provider is generally called an ICP (Integrated Communications Provider), which may own a variety of assets including local loop, SONET, cable TV, and wireless systems. ICP’s may offer a full range of services from voice and data services, internet access, web hosting and collocation services, to infrastructure outsourcing, IP telephony and internet integration.