Information Superhighway:

Issues Affecting Development

RCED-94-285: Published: Sep 30, 1994. Publicly Released: Sep 30, 1994.

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GAO reviewed competition in the telecommunications industry and issues concerning telecommunications legislation, focusing on: (1) managing the transition to a more competitive local telecommunications marketplace; (2) ensuring universal service in a competitive marketplace; and (3) ensuring network security, privacy, reliability, and interoperability.

GAO found that: (1) managing the transition to a more competitive local telecommunications marketplace presents challenges; (2) although government officials believe that increasing competition among telecommunications companies would significantly improve the quality of service, proposed telecommunications legislation could create opportunities for monopolies; (3) universal service funding processes and definitions need revision, since increased competition may cause local telephone companies to lose substantial revenues; (4) as the array of available services expands, questions arise about which services should be provided to everyone at affordable rates and which should be universally available as options; (5) the prospect of increased competition in certain segments of the local telephone service market raises questions about how to ensure continued access to affordable telephone service for all consumers; (6) the information superhighway poses technical challenges concerning the security, privacy, and reliability of personal and proprietary information; (7) standards have not been established to ensure the interoperability of new communications technologies; and (8) questions remain about how to encourage the telecommunications industry to develop a secure, reliable, smoothly functioning infrastructure.

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