For most of the 20th century, the telephone industry was dominated by one company, the Bell System, also known as AT&T.
Designated as a natural monopoly by the federal government, Ma Bell enjoyed control over local and long distance telephone operations, as well as the manufacture and sale of all telephone-related equipment and technology. Naturally, the company thrived without even the threat of competition from outside sources.
But the Golden Era ended for the Bell System in 1982, when the Department of Justice decided to break up the monopoly by filing an antitrust lawsuit against the telecommunications giant. The resulting settlement saw the divestiture of the Bell System into a long distance entity (AT&T) and seven Regional Bell Operating Companies (RBOCs) which served the local market.
Judge Harold Green split the country into 160 local access and transport areas and decreed that local companies could not provide long distance services and long distance companies could not provide local services. While the settlement opened up competition in the long distance market, it allowed the RBOCs to maintain monopolies in their local markets.
It wasn’t until the Telecommunications Act of 1996 that the Baby Bell companies lost their monopolies over local services. The law not only enabled long distance providers to enter the local market (and vice versa), but also struck down barriers that had previously kept new companies from entering the RBOCs’ territory. The newcomers, called Competitive Local Exchange Carriers (CLECs) have helped create, for the first time, a free and open local telecommunications market, driving the development of new technology and services and giving local customers a choice.
But how do customers choose between a continually growing number of local telephone service providers? Today, consumers rely on local networks not only for making local voice calls but also for a vast array of data exchange needs, such as Internet access, faxing, local area networks and more. Speed, capacity and reliability are of particular importance to businesses, and thus among the key marketing points stressed by local providers.
Other factors that differentiate competition include:
B>Technology. Fiber optic networks are by far superior to the old, copper wire telecommunications systems they are rapidly replacing. Local dial tone companies which utilize fiber optics can provide greater clarity, capacity and speed than their copper-bound competitors and are better able to expand with the growing telecommunications needs of their customers. Consumers will also experience less signal interference or loss and fewer transmission errors on fiber optic networks, enabling business to continue as usual, without interruption.
B>Customer service. When there is a problem with the phone lines or just questions that need quick answers, customers need to know they can depend on the accessibility and responsiveness of their local provider.
Calling features. To meet the needs of growing businesses and organizations — and even busy residences — phone companies offer a vast array of calling features, including call waiting, call forwarding, voice mail, caller ID, repeat dialing, conference calling, automatic callback and speed dialing.
Convenience. Telephone companies that can provide both local and long distance services, as well as advanced data services or access needs a business or organization may require, promote the convenience of having all your telecommunication needs met by a single provider. One company to deal with, one bill to pay.
Cost. The best result of the competition spurred by the Telecommunications Act of 1996 has been the reduction in price of local phone services. By bundling local with long distance and advanced data services, some phone companies are able to offer consumers lower-than-average costs to fill all their telecommunications needs. Or, consumers can buy certain pieces here and certain pieces there, allowing them to shop around for the price and service options that best meet their individual needs. Source:Adelphia Business Solutions
