Carriers

1
Carriers

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

2
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

3
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

4
Carriers in Most of the World

• Competition is Increasing
• Deregulation the removal of traditional PTT
  monopoly rights to increase competition
• Allows competition

5
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

6
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

7
Carriers in the United States

• For international service, bilateral negotiation
• Never a government-regulated domestic monopoly
  like a PTT
• Although ATT was very dominant once

8
Carriers in the United States

• ATT was broken up in 1983
• ATT continued as long-distance company and as an
  equipment provider
• Later, ATT 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 ATT was known
  as the Bell System

9
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

10
Carriers in the United States

• Note
• LATAs are geographical regions
• ILECs and CLECs are carriers that provide service
  within a single LATA region

11
Carriers in the United States

• Inter-LATA Service (Between LATAs)
• Inter-exchange Carriers (IXCs)
• Note I in IXC is not International
• ATT, MCI-Worldcom, Sprint, etc.

12
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
ICC
POP
CLEC
IXC
13
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

14
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)

15
Deregulation in the United States

• Relaxing the Consent Decree
• ATT is being allowed into intra-LATA service
• RBOCs are being allowed into inter-LATA service
• RBOCs being freed to compete in one anothers
  territories for intra-LATA service

16
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

17
Deregulation Trends in the U.S.

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

18
Deregulation Trends in the U.S.

• Data networking services
• Now wide open
• Inter-LATA service
• Deregulated in 1970s and 1980s
• Now, equal access you get to choose your
  long-distance carrier
• Now wide-open

19
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

20
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)

21
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

22
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

23
Toll Calls

• Long-distance calls
• Inter-LATA or Intra-LATA long-distance calls
• Even in intra-LATA service, there is a local-
  versus 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

24
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

25
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

26
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

27
Toll Calls