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physical presence of facilities within a state does not by itself confer jurisdiction upon a state public service commission communications over those facilities must originate and terminate within the state to constitute an intrastate transmission Teleconnect Co v Bell Telephone Co of Pennsylvania, 10 FCC Rcd 1626 (1995) aff d, Southwestern Bell Telephone Co v FCC, No 95 1139 (DC Cir June 27, 1997) Thus, the fact that a public power utility s telecommunications facilities typically reside wholly within a single state does not necessarily mean that communications services offered by these utilities are intrastate Conversely, communications that originate and terminate within the same state, but which may be routed through a separate state, are, nevertheless, considered intrastate in nature 3 FCC, In The Matter Of Federal-State Joint Board On Universal Service, CC Docket No 96 45 , Report to Congress, FCC 98 67, 1998 WL 166178, 22 (rel April 10, 1998) ( Report to Congress )
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local telephone company would subsidize services to low-income or other high-cost residential consumers by charging in ated rates to businesses, long-distance providers and other users of more pro table services4 Between 1934 and 1996, Congress amended the Communications Act many times to respond to signi cant technological, commercial, legal and other developments, and the FCC and the courts interpreted the Act on scores of occasions As new services that de ed easy classi cation came on the market, the FCC and the states repeatedly fought over who had jurisdiction over them Similarly, as the lines between computer applications, data processing and telecommunications blurred, the FCC and the telecommunications industry continuously battled over whether, or to what extent, the new services should be regulated as telecommunications services or left unregulated as enhanced or information services Despite constant tensions, however, the Communications Act survived for decades without fundamental change In the early 1990s, pressure for a major overhaul of the federal communications laws began to mount Incumbent and potential new local and long-distance telephone companies, wireless providers, cable operators, computer rms, data processors, electric utilities and entities of many other kinds were eager to enter each other s lines of business but were thwarted by the 1934 Act s cumbersome cross-ownership restrictions and burdensome requirements By the mid 1990s, Congress was ready to try a new regulatory paradigm Trent Lott (R-MS) voiced perhaps the most succinct expression of the new spirit in Congress when he observed, during the debates on what became the Telecommunications Act of 1996, that the primary objective of the Act was to establish a framework where everybody can compete everywhere in everything Congressional Record at S7906 (June 7, 1995) On February 8, 1996, the President signed the landmark Telecommunications Act of 1996 into law The Act had been passed by vast majorities in both houses of Congress, in large part, all major stakeholders perceived that they had more to gain than to lose from the new law In the words of the FCC, the Act fundamentally changed telecommunications regulation by replacing the old regulatory regime that encouraged monopolies, with a new regulatory regime that requires the FCC to remove the outdated barriers that protect monopolies from competition and af rmatively promote ef cient competition using tools forged by Congress 5 It is with this background that we examine the key legal issues surrounding municipal or public sector entry into broadband
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441 Federal law encourages, but does not af rmatively empower, local governments to provide communications services
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4411 Cable services The term cable service means (A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming services, and (B) subscriber interaction, if any, which
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