The Fallout From the Telecommunications Act of 1996

Unintended Consequences and Lessons Learned

This study tells the story of the Telecommunications Act of 1996 and its aftermath. In many ways, the Telecom Act failed to serve the public and did not deliver on its promise of more competition, more diversity, lower prices, more jobs and a booming economy.

Instead, the public got more media concentration, less diversity, and higher prices.

Over 10 years, the legislation was supposed to save consumers $550 billion, including $333 billion in lower long-distance rates, $32 billion in lower local phone rates, and $78 billion in lower cable bills. But cable rates have surged by about 50 percent, and local phone rates went up more than 20 percent. Industries supporting the new legislation predicted it would add 1.5 million jobs and boost the economy by $2 trillion. By 2003, however, telecommunications’ companies’ market value had fallen by about $2 trillion, and they had shed half a million jobs.

And study after study has documented that profit-driven media conglomerates are investing less in news and information, and that local news in particular is failing to provide viewers with the information they need to participate in their democracy.

“Those who advocated the Telecommunications Act of 1996 promised more competition and diversity, but the opposite happened,” said Common Cause President Chellie Pingree. “Citizens, excluded from the process when the Act was negotiated in Congress, must have a seat at the table as Congress proposes to revisit this law.”

Download the report (PDF)