Carriers carry traffic for a fee Must have

Carriers carry traffic for a fee Must have rights of way to lay wire Given some monopoly protection Regulated but being deregulated

Carriers in Most of the World • PTT – Traditionally – Originally Postal, Telephone, and Telegraph (authority) – Now, Public Telephone and Telegraph (authority) – Government-owned organization – Traditionally had a complete monopoly on domestic (within-country) service

Carriers in Most of the World • Ministry of Telecommunications – Another government organization – Regulated the PTT – The Distinction: • PTTs provide service • Ministries of Telecommunications regulate their PTTs

Carriers in Most of the World • Competition is Increasing – Deregulation: the removal of traditional PTT monopoly rights to increase competition – Allows competition

Deregulation Globally • Varies Considerably – Few countries as deregulated as U. S. – Prices generally higher than U. S. – Customer premises usually deregulated most – Data traffic is deregulated heavily – Usually long-distance voice is fairly deregulated – Local service usually is deregulated least

International Service • Provided by international common carriers (ICCs) • Bilateral Negotiation – Each pair of countries negotiates which ICCs may provide service (bilateral negotiation) – Each pair of countries negotiates settlement charges on calls • This bilateral negotiation often brings uneven pricing when you call nearby countries

Carriers in the United States • For international service, bilateral negotiation • Never a government-regulated domestic monopoly like a PTT • Although AT&T was very dominant once

Carriers in the United States • AT&T was broken up in 1983 – AT&T continued as long-distance company and as an equipment provider • Later, AT&T voluntarily spun off its equipment operations to as Lucent – Local telephone companies were grouped into seven regions, each managed by a Regional Bell Operating Company (RBOC) • Also called “Baby Bells” because AT&T was known as the Bell System

Carriers in the United States • Local Service – U. S. divided into around 200 regions called Local Access and Transport Areas (LATAs) • Intra-LATA Service (Within a LATA) – Incumbent Local Exchange Carrier (ILEC): the traditional monopoly local telephone company – Competitive Local Exchange Carriers (CLECs): Local service competitors for the ILEC

Carriers in the United States • Note – LATAs are geographical regions – ILECs and CLECs are carriers that provide service within a single LATA region

Carriers in the United States • Inter-LATA Service (Between LATAs) – Inter-exchange Carriers (IXCs) • Note: “I” in IXC is not “International” – AT&T, MCI-Worldcom, Sprint, etc.

Carriers in the United States • POP – Point of Presence – Connects all customers of the ILEC, CLECs, IXCs, ICCs – Gives all customers access to everyone else – Allows new carriers to reach the total installed base, making competitive entry possible ILEC CLEC ICC POP IXC

Regulation in the United States • Nationally – Federal Communications Commission (FCC) – Sets interstate regulations, standards, prices – Can set intrastate policies that affect the nation-wide system • Within States – Public Utilities Commissions (PUCs) – Regulate most intrastate matters, including intrastate pricing

Deregulation in the United States • Telecommunications Act of 1996 – Congressional Act – Mandates intra-LATA competition – Before, many PUCs had limited local competition – New competitors for service, including access, that is, the local loop (dial tone service)

Deregulation in the United States • Relaxing the Consent Decree – AT&T is being allowed into intra-LATA service – RBOCs are being allowed into inter-LATA service – RBOCs being freed to compete in one another’s territories for intra-LATA service

Deregulation in the United States • Telecommunications Act of 1996 – Allows new freedom in pricing – But competition has been developing slowly – So price freedom has largely brought higher prices

Deregulation Trends in the U. S. • Customer Premises – Most deregulated – Once, you could not own modems or even telephones – Deregulated in the 1970 s – Now fully deregulated: you can do what you like on your premises

Deregulation Trends in the U. S. • Data networking services – Now wide open • Inter-LATA service – Deregulated in 1970 s and 1980 s – Now, equal access: you get to choose your long -distance carrier – Now wide-open

Deregulation Trends in the U. S. • Intra-LATA Service – Least deregulated – Some prior deregulation – Deregulation really began in earnest only with the Telecommunications Act of 1996

Deregulation Trends in U. S. • Degree of Deregulation: Most to Least – Customer premises (total) – Data networks (high deregulation) – Inter-LATA service (high deregulation) – Intra-LATA service (low deregulation)

Carrier Services and Pricing • Tariffs – Filed by carriers, approved by authority – Lets customer know exactly what service should be provided – Lets customer know exactly what price they should pay – Provides recourse in disputes – Deregulation is generating many untariffed services for faster response to competition

Local Calling • Within local area • Flat rate pricing – Fixed payment per month – No charge per call • Message unit pricing – Charged message units for each call in local area – Depends on distance and duration – Penalizes Internet access, other resource hogs

Toll Calls • Long-distance calls – Inter-LATA or Intra-LATA long-distance calls • Even in intra-LATA service, there is a localversus long-distance distinction – Priced per minute – Price based on distance • International calls – Prices depend primarily on country called – Prices depend less on distance than on country called because rates are set through bilateral negotiation

Toll Calls • Direct Distance Dialing – Most common method – Calling party pays • Collect Calls – Called party pays if accepts calls – Pays more per minute than direct dial rate

Toll Calls • 800/888 Numbers – Area codes are 800 or 888 – Called party pays – Pays less per minute than direct dial rates – To support customers • 900 Numbers – Caller pays – Pays more per minute than direct dial rate – Called company can charge for user service

Toll Calls • WATS – Wide Area Telephone Service – Company can call OUT from site, to phones throughout the WATS service area – Caller pays – Pay less than direct dial rates

Toll Calls