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The transmission of words, sounds, images, or data in the form of electronic or electromagnetic signals or impulses.

From the introduction of the telegraph in the United States in the 1840s to the present-day Internet computer network, telecommunication has been a central part of American culture and society. What would we do without telephone, radio, broadcast television, Cable Television, satellite television, fax machines, cellular telephones, and computer networks? They have become integral parts of our everyday lives. And as telecommunication technology advanced, the more complicated the Telecommunications industry became. As a result, federal and state governments attempted to regulate the pricing of telecommunication systems and the content of transmitted material. The Telecommunications Act of 1996 (Pub. L. No. 104-104), however, deregulated much of the telecommunication industry, allowing competition in markets previously reserved for government-regulated monopolies.


The first telegraph system in the United States was completed in 1844. Originally used as a way of managing railroad traffic, the telegraph soon became an essential means of transmitting news around the United States. The Associated Press was formed, in 1848, to pool telegraph expenses; other "wire services" soon followed.

Many telegraph companies were formed in the early years of the business, but by 1856 Western Union Telegraph Company had become the first dominant national telegraph system. In 1861, it completed the first transcontinental line, connecting San Francisco first to the Midwest and then on to the East Coast. As worldwide interest increased in applications of the telegraph, the International Telegraph Union was formed, in 1865, to establish standards for use in international communication. In 1866, the first transatlantic cables were completed.

The telegraph era came to an end after World War II, with the advent of high-speed transmission technologies that did not use telegraph and telephone wires. By 1988, Western Union was reorganized to handle money transfers and related services.

Telephone Systems

The invention of the telephone in the late nineteenth century led to the creation of the American Telephone and Telegraph Company (AT&T). The company owned virtually all telephones, equipment, and long-distance and local wires for personal and business service in the national telephone system. Smaller companies seeking a part of the long-distance telephone market challenged AT&T's Monopoly in the 1970s.

In 1982, the u.s. justice department allowed AT&T to settle a lawsuit alleging antitrust violations because of its monopolistic holdings. AT&T agreed to divest itself of its local operating companies by January 1, 1984, while retaining control of its long-distance, research, and manufacturing activities. Seven regional telephone companies (known as the Baby Bells) were given responsibility for local telephone service. Other companies now compete with AT&T to provide long-distance service to telephone customers.In an effort to spur competition, however, the Telecommunications Act of 1996 allowed the seven regional phone companies to compete in the long-distance telephone market. The act also permitted AT&T and other long-distance carriers, as well as cable companies, to sell local telephone service.

Local telephone rates are regulated by state commissions, which also work to see that the regional telephone companies provide good maintenance and services. In addition, the use of a telephone for an unlawful purpose is a crime under state and federal laws, as is the Wiretapping of telephone conversations.

In 2002, the U.S. Supreme Court issued two rulings that had a significant impact on large regional telephone companies. The first was Verizon Communications v. FCC 535 U.S. 467, 122 S.Ct. 1646, 152 L. Ed. 2d 701, which had beginnings in the 1990s. Under the 1996 Telecommunications Act, multiple local exchange carriers (LECs) are allowed to compete in the same market. Incumbent LECs, or ILECs, are those that already have a presence in a market. Competing LECs (CLECs) are providers that want to enter an ILEC's market. The ILECs are required to share their telecommunications network with the CLECs for a Good Faith negotiated price (47 U.S.C.A. Secs. 251–52). They must form a written agreement; if there are points of contention in the agreement, they must be submitted for binding Arbitration to the state utility commission. That decision may be appealed to a federal district court if either side believes that it constitutes a violation of the act.

Several LECs and state utility commissions challenged the Federal Communications Commission (FCC), the federal agency charged with regulating communications, over the way it mandated pricing formulas. The Eighth Circuit Court of Appeals sided with the plaintiffs in Iowa Utilities Board v. FCC, 120 F.3d 753 (8th Cir. 1997). The Supreme Court reversed the Eighth Circuit's decision, concluding that the FCC was within its rights to establish a pricing methodology, and ordered the appellate court to determine whether that methodology met the requirements of the 1996 act (AT&T Corp. v. Iowa Utilities Board, 525 U.S. 366, 119 S. Ct. 721, 142 L. Ed. 2d 835 (1999). In Iowa Utilities Board v. FCC, 219 F.3d 744 (8th Cir. 2000), the appellate court ruled that the FCC pricing rules were invalid.

On appeal, the Supreme Court again reversed the Eighth Circuit, observing that the FCC's methodology had been designed so that smaller companies could enter and compete more easily in local phone markets. The ILECs preferred a methodology that would have increased the amount they were allowed to charge the CLECs. The increase would have amounted to billions of dollars in charges. Moreover, the Court held that the FCC also has the authority to force ILECs to combine leased elements upon request by a CLEC. These include local, long-distance, Internet, and pay-per-call information and entertainment services.

In a decision that involved two cases, the Supreme Court ruled that state utility commissions and individual commissioners may be sued in federal court by long-distance phone companies that disagree with the way they are enforcing federal laws (Verizon Maryland v. Public Service Commission of Maryland, 535 U.S. 635, 122 S. Ct. 1753, 152 L.Ed. 2d 871 (2002), Mathias v. Worldcom Technologies, Inc., 535 U.S. 682, 122 S. Ct. 1780 (Mem), 152 L.Ed. 2d 911 (2002).

In the first of these cases, Bell Atlantic Maryland, the region's ILEC, had refused to pay reciprocal compensation to Worldcom, a CLEC. The second case involved the same issue, except that the ILEC in question was Ameritech Illinois. Under the 1996 Telecommunications Act, local calls trigger the ILEC's obligation to offer reciprocal compensation, while long-distance calls do not. The Maryland and Illinois ILECs refused to offer reciprocal compensation when their customers made phone calls to Internet service providers that were customers of the CLECs, arguing that a call to an Internet service provider is a long-distance call even though the number may be local. They reasoned that a phone call to another person connects the caller to that person, but a connection to the Internet gives the caller access to websites and information around the world—hence, a long-distance call.

The Maryland Public Service Commission and the Illinois Commerce Commission, respectively, rejected this argument, and the ILECs sued them in federal court, along with individual commissioners and the CLECs in question. The federal courts upheld the utility commission's decisions; the Forth and Seventh Circuit Courts did so, as well, on appeal (Bell Atlantic Maryland, Inc, v. MCI WorldCom, Inc., 240 F.3d 279 [4th Cir. 2001]; Illinois Bell Telephone Co. v. Worldcom Technologies, Inc., 179 F.3d 566 7th Cir. [1999]). One of the arguments made by the ILECs was that federal courts had no jurisdiction over these cases under the Telecommunications Act.

The Supreme Court held that the 1996 Telecommunications Act is a federal law, and as such, federal courts should be able to enforce the law by hearing cases brought against state regulators. As for whether individual commissioners could be sued, the Court cited Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed 714 (1908), and said that state officials can be sued in their official capacity as long as the suit alleges an ongoing violation of federal law, and as long as the relief sought can be characterized as prospective (looking toward the future).


In the early twentieth century, radio was regarded primarily as a device to make maritime operations safer and a potential advancement of military technology. During World War I, however, entrepreneurs began to recognize the commercial possibilities of radio. By the mid-1920s, commercial radio stations were operating in many parts of the United States, and owners began selling air time for advertisements. The Federal Radio Commission was created, in 1927, to assign applicants designated frequencies under specific engineering rules and to create and enforce standards for the broadcasters' privilege of using the public's airwaves.

The commission later became the Federal Communications Commission (FCC), which was established by the Communications Act of 1934 (47 U.S.C.A. § 151 et seq.). The FCC issues licenses to radio and television stations, which permit the stations to use specific frequencies to transmit programming. Licenses are issued only on a showing that public convenience, interest, and necessity will be served and that an applicant satisfies certain requirements, such as citizenship, good character, financial capability, and technical expertise.

Before 1996, the FCC restricted persons or entities from acquiring excessive power through ownership of a number of radio and television facilities. The rule was based on the assumption that if one person or company owned most or all of the media outlets in an area, the diversity of information and programming on these stations would be restricted.

The Telecommunications Act of 1996 eliminated the limit on the number of radio stations that one entity may own nationally. The FCC was also directed to reduce the restrictions on locally owned radio stations. Congress determined that less regulation was in the public interest.

In addition, the FCC seeks to prohibit the broadcast of obscene and indecent material. The Supreme Court has upheld regulations banning obscene material, because Obscenity is not protected by the First Amendment. It also permits the FCC to prohibit material that is "patently offensive," and either "sexual" or "excretory," from being broadcast during times when children are presumed to be in the audience (FCC v. Pacifica Foundation, 438 U.S. 726, 98 S. Ct. 3026, 57 L. Ed. 2d 1073 [1978]).


The commercial exploitation of television did not begin in the United States until the late 1940s. The FCC followed its example from radio and established licensing procedures for stations seeking permission to transmit television signals. It became the oversight body for the U.S. television industry.

The FCC has applied to television a prohibition similar to that imposed on radio against the broadcast of obscene and indecent material. For purposes of parental control, the Telecommunications Act of 1996 mandated the establishment of an advisory committee to rate video programming that contains indecent material. The act also stated that, by 1998, new television sets had to be equipped with a so-called V-chip to allow parents to block programs with a predesignated rating for sex and violence.

Cable television became a viable commercial form of telecommunication in the 1980s. Both the FCC and local governments had an interest in regulating cable systems, with municipalities awarding a cable system franchise to one vendor. Cable operators negotiated system requirements and pricing with local governments, but federal law imposed some restrictions on rates to consumers. Concerns about rate regulation led Congress to enact the Cable Television Consumer Protection and Competition Act of 1992 (Pub. L. No. 102-385). The act gave the FCC greater control of the cable television industry and set rate structures to control the price of cable subscriptions. The Telecommunications Act of 1996, however, reversed the 1992 act by ending all rate regulation. The act also allowed the seven regional telephone companies to compete in the cable television market to end the monopoly that cable systems had enjoyed under the previous regulatory scheme.For customers who cannot obtain cable television programming, the transmission of television signals by satellite has been a practical solution. Since their introduction in the 1990s, direct broadcast satellite systems have competed with cable television systems, offering high-quality video and audio signals, and access to a wide range of programming.

Transmission of Digital Data

In the 1980s and 1990s, the use of digital data transmission revolutionized the communication of words, images, and sounds. Computer-driven means of telecommunication have made possible electronic mail (E-Mail), the sharing of computer files, and, most importantly, the Internet.

The Internet is a network of computers linking the United States with the rest of the world. Originally developed as a way for U.S. research scientists to communicate with each other, by the mid-1990s the Internet had become a popular form of telecommunication for personal computer users. Written text represents a significant portion of the Internet's content, in the form of both E-mail and articles posted to electronic discussion forums. In the mid-1990s, the appearance of the World Wide Web made the Internet even more popular. The Web is a multimedia interface that allows for the transmission of what are known as Web pages, which resemble pages in a magazine. In addition to combining text and pictures or graphics, the multimedia interface makes it possible to add audio and video components. Together these various elements have made the Internet a medium for communication and for the retrieval of information on virtually any topic.

The federal government has attempted to regulate this form of telecommunication. Congress passed the Electronic Communications Privacy Act of 1986 (ECPA) (18 U.S.C.A. § 2701 et seq. [1994]), also known as the Wiretap Act, which made it illegal to read private E-mail. The ECPA extended to electronic mail most of the protection already granted to conventional mail. This protection, however, has not been extended to all E-mail that is transmitted in the workplace.

A controversial issue in the workplace is whether an employer should be able to monitor the E-mail messages of its employees. An employer has a strong legal and financial motive to prohibit unauthorized and inappropriate use of its E-mail system. Under the Wiretap Act, a company is not restricted in its ability to review messages stored on its internal E-mail system. In addition, interception of electronic communications is permitted when it is done in the ordinary course of business or to protect the employer's rights or property. This exception would apply when, for example, an employer has reasons to suspect that an employee is using the E-mail system to disclose information to a competitor or to send harassing messages to a coworker. Finally, the prohibitions of the Wiretap Act do not apply if the employee whose messages are monitored has explicitly or implicitly consented to such monitoring.

Congress sought to curb the transmission of indecent content on the Internet and other computer network telecommunications systems by enacting the Communications Decency Act (CDA) (47 U.S.C.A. § 223(a)-(h)), as part of the Telecommunications Act of 1996. The CDA made it a federal crime to use telecommunications to transmit "any comment, request, suggestion, proposal, image, or other communication which is obscene or indecent, knowing that the recipient of the communication is under 18 years of age, regardless of whether the maker of such communication placed the call or initiated the communication." It includes penalties for violations of up to five years imprisonment and fines of up to $250,000.

In Reno v. American Civil Liberties Union, 521 U.S. 844, 117 S. Ct. 2329, 138 L. Ed. 2d 874 (1997), the Supreme Court struck down the "indecent" provision as a violation of the First Amendment right of free speech.

Standards in Telecommunication

Certain telecommunication methods have become standards in the telecommunication industry because devices with different standards cannot communicate with each other. Standards are developed either through the widespread use of a particular method or by a standard-setting organization. The International Telecommunication Union, a United Nations agency which sits in Geneva, Switzerland, and one of its operational bodies, the International Telegraph and Telephone Consultative Committee, play a key role in standardizing telecommunication methods. For example, the committee's standards for the fax machine that were adopted in the 1980s facilitated the dramatic increase in use of this form of telecommunication.

Further readings

Benjamin, Stuart Minor, Douglas Gary Lichtman, and Howard A. Shelanski. 2001. Telecommunications Law and Policy. Durham, N.C.: Carolina Academic Press.

Black, Sharon K. 2002. Telecommunications Law in the Internet Age. San Francisco: Morgan Kaufmann.


Broadcasting; Electronic Surveillance; Employment Law; Entertainment Law; Fairness Doctrine; Privacy; Pornography.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
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