1. The Evolution of Telecommunications Technology and Policy Dr.Abid University Malaysia Perlis

2. Objectives In this chapter, you will learn to: Describe the growth of telecommunications technology since the late 19th century Identify key inventions and their current equivalents in telephony technology Explain the impetus for and impact of AT&T’s divestiture Discuss how government has influenced the way in which consumers obtain telecommunications services List current policy trends that affect the telecommunications industry 4/29/2015 2

3. Early Signaling and Telegraphy Semaphore - a type of signaling, in which visual cues represent letters or words. Morse code - the transmission of a series of short and long pulses (dots and dashes) that represented characters. Duplexing - simultaneously transmitting a signal in both directions along the same wire. Multiplexing - simultaneously transmitting an indeterminate number of multiple signals over one circuit. 4/29/2015 3

4. Early Signaling and Telegraphy 4/29/2015 4

5. Telephone Technology 4/29/2015 5

6. Telephone Technology 4/29/2015 6

7. Telephone Technology 4/29/2015 7

8. Telephone Technology In 1913, N.J. Reynolds, a Western Electric engineer, developed a better automatic switch, the crossbar switch. It used a grid of horizontal and vertical bars, with electromagnets at their ends. The horizontal bars could rotate up and down to connect to specific vertical bars and thus complete circuits. Time division switching - a transmission technique in which samples from multiple incoming lines are digitized, then each sample is issued to the same circuit, in a predetermined sequence, before finally being transmitted to the correct outbound line. 4/29/2015 8

9. Telephone Technology Space division switching - manipulating the physical space between two lines, thereby closing a circuit to connect a call. Local switching center (often called a local office) - a place where multiple phone lines from homes and businesses in one geographic area converge and terminate. Tandem switching center - an exchange where lines from multiple local offices converge and terminate. Toll switching center - an exchange where lines from multiple tandem switching centers converge and terminate. 4/29/2015 9

10. Telephone Technology 4/29/2015 10

11. Wireless Technology Telegraphs and telephones are examples of wireline, or wire-bound technology, because they rely on physically connected wires to transmit and receive signals. Wireless technology - relies on the atmosphere to transmit and receive signals. 4/29/2015 11

12. Wireless Technology 4/29/2015 12

13. Wireless Technology Vacuum tube - a sealed container made of glass, metal, or ceramic, that contains, in a vacuum, a charged plate that transmits current to a filament. Audion - patented in 1907by DeForest, is a type of vacuum tube that contains an additional electrode in the middle of the positive and negative electrodes. Frequency modulation - one wave containing the information to be transmitted (for example, on a classical FM radio station, a violin concerto) is combined with another wave, called a carrier wave, whose frequency is constant. 4/29/2015 13

14. Wireless Technology Geosynchronous - means that satellites orbit the earth at the same rate as the earth turns. Uplink - a broadcast from an earth-based transmitter to an orbiting satellite. At the satellite, a transponder receives the uplink, then transmits the signals to another earth-based location in a downlink. 4/29/2015 14

15. Wireless Technology 4/29/2015 15

16. Early Computing Computing - the automatic manipulation of input based on logical instructions. Difference engine - an English mathematics professor, proposed an automated calculating machine as large as a locomotive and powered by steam. Electronic Numerical Integrator and Computer (ENIAC) - a multipurpose computer so large that it required its own 30 foot by 50 foot room. 4/29/2015 16

17. Early Computing 4/29/2015 17

18. Early Computing Memory - in the mid-1940s, a U.S. scientist named Jon Von Neumann designed a computer that was capable of retaining logical instructions for use at any time, even after the computer had been turned off, then on again. UNIVAC (Universal Automatic Computer) - the first computer designed for business (and not merely scientific purposes), became available in 1951. 4/29/2015 18

19. Early Computing 4/29/2015 19

20. Early Antitrust Measures After acquiring dozens of new patents from other companies and exponentially increasing its value, the Bell Telephone Company became American Bell in 1880. In 1882, American Bell gained a controlling interest in the Western Electric Company, and together, they became known as the Bell System. In 1885, American Telegraph and Telephone (AT&T) was incorporated as a subsidiary of the Bell System, with the aim of constructing a long distance telephone network and providing long distance service (to Bell System subscribers only). By 1899, AT&T bought out American Bell and became the parent company of the Bell System. 4/29/2015 20

21. Early Antitrust Measures Until 1984, AT&T consisted of the following: AT&T, the parent company and long-distance provider 22 Bell Operating Companies (BOCs), the telephone companies that provided local service in different regions of the nation Western Electric, the manufacturing arm of the company Bell Telephone Laboratories, the research and development arm of the company, responsible for innovation and new technology 4/29/2015 21

22. Early Antitrust Measures Kingsbury Commitment - fearing that the government might use its antitrust laws against it, AT&T approached the U.S. Department of Justice in 1913 with a proposal for reducing its monopoly. As a result of the Kingsbury Commitment, AT&T functioned as a regulated monopoly from 1913 to 1984. Being a regulated monopoly meant that although AT&T was allowed to provide services without any competitors, it was subject to a great deal of constraints dictated by the government 4/29/2015 22

23. The Communications Act of 1934 From 1910 to 1934, the Interstate Commerce Commission (ICC) regulated telegraph and radio service. In 1934, Congress passed the Communications Act of 1934, which established the Federal Communications Commission (FCC), state Public Utilities Commissions (PUCs), and initial guidelines for the telephone industry. The Communications Act of 1934 also put into law the provisions of the Kingsbury Commitment. 4/29/2015 23

24. Challenging the Monopoly Hush-a-Phone decision - a Supreme court ruling that allowed "foreign attachments," or devices that were not manufactured by AT&T to be affixed to AT&T telephones. However, the Hush-a-Phone decision did not allow other companies’ equipment to interconnect with AT&T lines 4/29/2015 24

25. Challenging the Monopoly 4/29/2015 25

26. Challenging the Monopoly The restriction against interconnecting to AT&T’s telephone network was challenged in 1965 and eventually lifted in 1968 through the Carterfone decision. In 1969, a company called Microwave Communications International (MCI) began carrying business phone calls over a private microwave link between St. Louis, Missouri and Chicago. Because MCI didn’t use the Bell System, it did not have to pay AT&T for use of its infrastructure. 4/29/2015 26

27. AT&T Divestiture The Modified Final Judgment (MFJ) - accompanied by over 500 pages of instructions detailing exactly how AT&T should be divided. The Justice Department’s primary goal for breaking up AT&T was to spur innovation and competition in a field that would prove even more vital in the latter part of the century than it had in the first. 4/29/2015 27

28. AT&T Divestiture As part of the MFJ, AT&T was forced to divide. From the 22 former Bell Operating Companies that provided local phone service and phone directories, the MFJ created seven Regional Bell Operating Companies (RBOCs). The business that AT&T kept was separated into two divisions: AT&T Technologies, which handled the innovation and production of new technologies, and AT&T Communications, which handled long distance phone service. The research and development business, formerly Bell Laboratories, became Bell Communications Research (Bellcore) and was jointly owned by the new RBOCs. 4/29/2015 28

29. AT&T Divestiture 4/29/2015 29

30. AT&T Divestiture 4/29/2015 30

31. AT&T Divestiture Until the divestiture of AT&T, the distinction between local service and long distance service was not clear. In the MFJ, Judge Harold Greene subdivided each RBOC region into Local Access and Transport Areas (LATAs), roughly equivalent to area codes at that time. Phone service within a specific LATA was known as intraLATA service. Companies that supply local, or intraLATA telephone service are known as local exchange carriers (LECs). 4/29/2015 31

32. AT&T Divestiture 4/29/2015 32

33. AT&T Divestiture InterLATA - a service that allowed for calls between LATAs was known. Interexchange carriers (IXCs) - another name for InterLATA service providers. Examples of IXCs include Sprint, MCI (now WorldCom), and AT&T. Equal access - requiring local phone companies to provide equal access to their facilities meant that AT&T no longer had an unfair advantage over new competitors in long distance services. 4/29/2015 33

34. The Telecommunications Act of 1996 4/29/2015 34

35. The Telecommunications Act of 1996 The Act codified requirements for the interconnection of all local exchange carriers. These policies included: Interconnecting with other service providers and not imposing any barriers to interconnection Enabling nondiscriminatory resale of their services to competitors Providing number portability, or the ability of telecommunications service users to retain their same telephone number without hampering the quality, reliability, or convenience of their phone service Allowing competitors to access and connect to their facilities 4/29/2015 35

36. The Telecommunications Act of 1996 To increase competition in local phone service, the Act placed the following requirements on all ILECs: Negotiating interconnection agreements in good faith Providing competitors with the same type and quality of access to their facilities that they themselves could obtain at their cost Providing competitors with access to subscriber information, such as telephone numbers and billing data Offering nondiscriminatory, wholesale prices for telecommunications services to all competitors 4/29/2015 36

37. The Telecommunications Act of 1996 4/29/2015 37

38. The Telecommunications Act of 1996 4/29/2015 38

39. Emerging Technologies At this time, Congress is debating a bill that would remove all long-distance and high-speed Internet access service restrictions on RBOCs. One issue that the RBOCs continue to battle is the access fees applied to each connection with a customer or another carrier. In 1999, Congress mandated cable service providers to allow any Internet company to distribute content over its infrastructure without any extra cost 4/29/2015 39

40. Summary In 1837, Samuel Morse invented the telegraph, which consisted of an electromagnet and a hand-operated switch, known as a key, to alternately open or close an electrical circuit over a wire. What he transmitted was a series of short and long pulses (dots and dashes) that represented characters, known as Morse code. To connect multiple subscribers, Alexander Graham Bell devised the telephone exchange, where subscriber lines terminated and operators connected the circuits to complete a call. The first computer designed for business (and not merely scientific purposes), the Universal Automatic Computer (UNIVAC) became available in 1951. 4/29/2015 40

41. Problems 4/29/2015 41