Telecommunications Industry

Until the 1980s the world telecommunications system had a relatively simple administrative structure. In the United States telephone service was supplied by a regulated monopoly, American Telephone and Telegraph (AT&T). Telegraph service was provided mainly by the Western Union Corporation. In almost all other countries both services were the monopolies of government agencies known as PTTs (for Post, Telephone, and Telegraph).

In the United States, however, beginning in 1983, the situation became far more complex. As a result of an antitrust suit launched by the federal government, AT&T agreed in a court settlement to divest itself of the local operating companies that provided basic telephone service. They remained regulated local monopolies, grouped together into eight regional companies. AT&T now offers long-distance service in competition with a half dozen major and many minor competitors while retaining ownership of a subsidiary that produces telephone equipment, computers, and other electronic devices.

During the same period Great Britain's national telephone company was sold to private investors as was Japan's NTT telephone monopoly. For telegraphy and data transmission, Western Union was joined by many other major companies, while many leading multinational firms formed their own telecommunications services that link offices scattered throughout the world.

New technology also brought continuing changes in the providers of telecommunications. Private companies such as Comsat in the United States were organized to provide satellite communications links within the country. An international organization called Intelsat, which is jointly owned by the various PTTs and private communications companies, furnished the global links in the satellite telecommunications networks.

The introduction of more widespread competition into the highly integrated telecommunications networks proved a controversial move. Supporters praised it as a way of liberating the field from monopolistic practices that retarded technology and kept rates uneconomically high. But critics pointed out, at least in the early years of deregulation, that rates for the vast majority of users rose sharply and that in some respects technical progress became far more difficult. When the world's largest US telecommunications network was under the control of a single regulated corporation, system-wide changes and long-term planning were possible.

In February 1996, the U.S. passed a law approving landmark telecommunications reform. The measure scrapped many rules limiting competition in telephone service, television, and radio markets; relaxed restrictions on media ownership; mandated that television manufacturers equip new sets with the so-called “v-chip”, which would allow parents to block violent television programming; and set criminal penalties for the distribution of “indecent” material over the Internet computer network.

According to industry experts, American consumers stood to benefit the most from provisions in the legislation increasing telephone competition. The bill allowed national long-distance telephone companies to compete in local phone markets currently controlled by the so-called baby Bells, the companies created in the 1984 court-ordered breakup of AT&T's telephone monopoly. In return, the Bells would be able to offer national long-distance service to their customers.

The legislation's provisions setting criminal penalties for distributing pornography over the Internet were extremely controversial. Supporters of the bill said that children had unfettered access to explicit material on the Internet and some measure of control was needed. Opponents of the antipornography measure criticized it as a blow to free speech and said that because the Internet was a global computer network, the United States regulations on it would be impossible to enforce.

The United States spearheaded a 1997 agreement among 67 nations of the World Trade Organization (WTO) that would open telecommunication markets in those countries to free competition. Designed to end state monopolies over national telecommunications, the agreement was applauded by officials from the nations involved as a measure that would drastically cut the costs of global telecommunications services. It was believed that the agreement would save the countries involved more than $1 trillion by the year 2010. The agreement was hailed by observers as the most significant legislation negotiated by the two-year-old World Trade Organization. According to the agreement, the WTO would become the arbitrator in any disputes between member nations and international corporations, in order to ensure that the elimination of market barriers was conducted uniformly. Critics, however, questioned whether the WTO, which relied primarily on the goodwill of the member nations and the threat of economic penalties against non-cooperating members, held enough authority or power to mediate effectively in the event of serious international disputes.

CONTENTS

Учебное издание

Свиридова Людмила Аниновна

Сорокина Марина Михайловна

ТЕЛЕКОММУНИКАЦИИ

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по профессионально-ориентированному чтению и обработке информации

Редактор Л.И. Сергейчик

Корректор Л.И. Сергейчик

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