Developing a Domestic Common Carrier Telecommunications Policy: What Are the Issues?

The Communications Act of 1934 created the Federal Communications Commission to regulate interstate and foreign common carriers and established the Nation's policy goal of making communications services available to all people of the United States (referred to as the Universal Service Mandate). The carriers have interpreted this mandate to mean that other telecommunications services should cross subsidize local telephone service. To achieve this, the American Telephone and Telegraph Company and the independent telephone companies adopted specific pricing policies and methods of distributing common costs which they assert subsidize the cost of local service and, therefore, widen its availability.