A New Standard for Telecommunications Providers

A New Standard for Telecommunications Providers

The Telecommunications Act of 1996 is a federal law that was passed for the purposes of deregulating the U.S. broadcasting and telecommunications markets. To this end, the Telecommunications Act of 1996 amended the Communications Act of 1934 by introducing several new provisions, including allowing for telephone companies to provide cable television serve to American consumers, requiring that v-chips be installed in all televisions that would allow for parents to block adult and other forms of suggestive or inappropriate programming, and increasing the number of television stations that an individual company can legally own, among other things. The passing of the Telecommunications Act of 1996 represented the first major overhaul of telecommunications law in more than 60 years and created the current telecommunications landscape that has taken hold in the U.S. today.

Why was the Telecommunications Act of 1996 needed?

Prior to the passing of the Telecommunications Act of 1996, the Communications Act of 1934 was the foremost legal framework governing telecommunications and broadcasting with the U.S. The Communications Act of 1934 was passed for the purpose of regulating the telephone, radio, and telegraph communications industries. Moreover, the Communications Act of 1934 also established the Federal Communications Commission or FCC for the purpose of both overseeing and regulating the telecommunications industry within the country, a duty the body still upholds today. The Act contained several subchapters pertaining to the regulation of the telecommunications industry, including rates and fees, competition, and commercials, along with various others. However, the telecommunications industry grew greatly in the decades between 1934 and 1996.

To illustrate this point further, the first television system broadcast in history had only occurred seven years prior to the passing of the Communications Act of 1934 in 1927. Major professional sports, a mainstay on television in today’s climate, were not broadcast via television until the Berlin Summer Olympic Games were televised in 1936. Comparatively, the first transatlantic telephone conversation between people from New York and London also occurred in 1927. Furthermore, telegraph communications, which were still widely used during the 1930s but had become all but obsolete by the 1990s, were also a major focus of the Communications Act of 1934. These developments as it relates to telecommunications technology, as well as the business and commercial implications of such developments given the context of the U.S. free-market economy created a situation in which new legislation was needed.

What are the provisions of the Telecommunications Act of 1996?

Some of the provisions that are contained within the Telecommunications Act of 1996 include:

  • Title I, Telecommunications Services- Title I of the Telecommunications Act of 1996 outlines the general duties of telecommunications carriers and service providers, as well as upholding the principles of non-discrimination as it relates to said, service providers.
  • Title II, Broadcast Services- Title II of the Telecommunications Act of 1996 governs several aspects of broadcast services, including the granting of and licensing of broadcast spectrum by the U.S. government, the terms of said licenses, and procedure that must be followed when looking to renew a license.
  • Title III, Cable Services- Title III of the Telecommunications Act of 1996 governs the cable offerings of telephone companies, the competitive availability of navigation devices, as well as video programming accessibility.
  • Title V, Obscenity and Violence- Title V of the Telecommunications Act of 1996 introduced new regulations as it pertains to graphic, suggestive, and sexual television programming. Under the Act, television manufacturers are required to implement v-chip technology into the televisions they produce, for the purposes of blocking certain programs. What’s More, Title V also mandates that cable operators refuse to offer or carry certain programs altogether, as well as introduce parental choice into television programming. Title V of the Telecommunications Act of 1996 is also referred to as the Communications Decency Act of 1996 (CDA) and was created for the purpose of regulating adult material on both television and the internet.
  • Title VII, Miscellaneous Provisions- Title VII of the Telecommunications Act of 1996 regulates various other aspects of the offering of telecommunications services, such as the privacy of customer information, the prevention of unfair billing practices in the context of services or information provided via toll-free telephone calls, and establishing radio frequency emission standards.

What are the penalties for violating the Telecommunications Act of 1996?

Much like the Communications Act of 1934, the Telecommunications Act of 1996 is enforced by the Federal Communications Commission or FCC. As such, telecommunications services providers, as well as third parties and individuals who act on behalf of these service providers, are subject to a variety of punishments with respect to failing to comply with the law. Such punishments include monetary fines, civil and criminal liabilities, as well a prison time. To further illustrate the potential severity of punishments that can be imposed as a result of failing to comply with the provisions of the Telecommunications Act of 1996, The FCC fined major wireless carriers T-Mobile, AT&T, Sprint, and Verizon with over $200 million combined for illegally selling access to the location information of their prospective customers, without first taking “reasonable measures to protect against unauthorized access to that information”.

The Telecommunications Act of 1996 set the groundwork for the communications and entertainment landscape of the U.S. today. As the most important piece of telecommunications legislation to date, the law greatly altered the ways in which telecommunications service providers were permitted to offer their respective services to their customers. From the commercials that American consumers see when watching television to the restrictions that are placed on the programs that are broadcast on various channels, the Telecommunications Act of 1996 has played an enormous role in telecommunications as we know it today. More importantly, however, the Telecommunications Act of 1996 serves as a deterrent for telecommunications providers, should they seek to break the law and violate the privacy of American consumers.