(Archived document, may contain errors)

14

July 11, 1977

CONSUMER COMMUNICA TIONS REFORM A C T

H.R. 8 AND S. 530

This bulletin analyzes the proposed changes in telecommunications policy that would amend the Communications Act of 1934 and would further re- quire the Federal Communications Commission to make certain rulings with respect to specialized corrimon carriers (herewith referred to as SCCIS).

STATUS

H.R. 8 was introduced on January 4, 1977, by Congressman Teno Roncalio (D-Wyo.) for hiriself and Congressmen Cochran, Guyer, Perkins, Sebelius, Slack, Ketchum, and Pepper. It was referred to the Committee on Inter- state and Foreign Commerce chaired by Harley 0. Staggers (D-W. Va.). Subsequently, it was assigned to the Communications Subcommittee chaired by Lionel Van Deerlin (D-Calif.) where it is pending with no action scheduled and reportedly has a "low priority."

S. 530 was introduced on January 31 (legislative day, January 19), 1977, by Senators Clifford P. Hansen and Malcolm Wallop, both Republicans from Wyoming. It was referred to the Committee on Commerce, Science, and Transportation chaired by Warren G. Magnuson (D-Wash.) and subse- quently assigned to the Communications Subcommittee chaired by Ernest F. Hollings (D-S. C.). There it is pending with no scheduled hearings at least for the next "couple of months."

BAmgom

In the Communications-Act of 1934, Section 1 proclaimed a national policy "to make available ... to all the people of the United States a rapid, ef- ficient, nationwide communications service with adequate facilities at

NOTE: Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress. reasonable charges." Whereas in 1934 only 31% of the nation's house- holds had telephones, today that figure is 95%. Also a coast-to-coast daytime telephone call costs only $1.30 a minute today versus in 1934 $9.00. The "Local Exchange Service" is provided exclusively by the Bell System and the independent telephone companies. Included in the Bell System are 23 local operating companies (17 wholly owned by AT&T, 4 in which Bell has majority ownership, and 2 where Bell holds a minority interest). Eighty-two percent of America's telephones in 48 states (not including Alaska and Hawaii) are served by Bell. The other 18% of telephone customers are served by 1,618 independent telephone companies in an area embracing 50% of the continental U.S. A major portion of that service is operated by local operating companies that are subsid- iaries of the "Big 5" holding companies. These "Big 5" are General Telephone and Electronics Corporation; United Telecommunications, Inc.; Continental Telephone Corporation; Central Telephone and Utilities Cor- poration; and Mid-Continent Telephone'Corporation. Telephone service in the United States has operated in a monoply fashion for some time now. Since 1945 AT&T has had no competition for the same market in the same geographical area. However, from 1893 onward there was ruthless competition for area control between Bell and the independents. There has been in the last 20 years an Informational-Tech- nological Revolution that is shifting communications and information transmission from the basic telephone to a whole plethora of computer, video, and data transferal devices.

SILICONE CHIPS The first major technological innovation was in solid state electronics. Silicone wafers are now being built up by layers of components through photographic and chemical processes. A trend is the increasing density or number of components within a single chip. The trend shows a con- tinuation of the growing density of the integrated circuit (IC) from 10 in 1960 to 100,000 today to one million in 1980 (R. Whitehead, "The Bits that Bite the Industrial Bullet," Industry Week, January 12, 1976, p. 32.) The Rand Corporation confirms this trend. They predict that chip den- sities will grow ten times between now and 1980. Large computers in 1968-1970 had a component density of 53,000/square inch-#. but the prediction for the 1980's is 4,000,000 per sqqare inch. (Willis H. Hare, "Compu- ters and Society--The Technological Setting" in Computers. Society and the Law: The Role of Legal Education, ed. by J. E. Feininger, Bruce Gilchrist, AFIPS Press, 1973, P. 11.) while the number of components in semi-conductors are increasing, their reliability is growing. The chip failure rate (ppm) in 1960 was 1,000 which should decline to 0.001 in the 1980's (Whitehead, 22.` !Lit., p. 32). Furthermore, increased chip density increases productivity and decreases IC cost. In 1977 a chip of 4K memory will cost 154, per chip per unit while in 1978 a 16K memory chip will cost a penny. (New York Times, June 20, 1970). The costs of transistors have dramat\u202\'e6liy-dropped also. In 1960 a single transistor cost $1.00, but this year 6,000 transistors cost $1.00, and the price of CMCS chips in watches have de- clined 60% in 12 months. (Business Week, March 1, 1976.1

Someone is bound to ask the question, why the sharp declines in prices? The answer is the same process that has always accompanied new products: Efficiency lowers cost, lower costs initiate price reductions, price reductions in turn yield manufacturing volume, and increased volume starts the volume all over again.

These reductions have allowed us to use chip technology in all facets of everyday life. This has included the hand calculator, the digital watch, the video game, and memory units in washers, dryers, and micro- wave ovens. Three years ago the consumer faced a $150 calculator, but now he can get one for $16.00 (U.S. News and World Reportf July 17, 1976). An electronic calculator cos=$107-117966, but by 1974 the cost dropped to $2.50. In 1976 7.5 million calculators were sold; in 1977 the number is expected to double. The price of digital watches are nosediving. Texas Instruments has announced a $20.00 watch, and last year 3.5 million digital watches were sold in the U.S.

The use of IC technology appears unlimited. Robert Boyce of Intel says that out of 25,000 potential applications of large-scale integration technology, only 10% are now being exploited.

U.S. firms account for 75% of the world's supply of IC's, 95% of the world's microcomputers known as computer-on-a-chip, 90% of MOS memory units (Business Week, op. cit.).

TERmimu

A second innovation in communications is the use of remote terminals. These terminals incorporate logic and memory technology and have led to "smart" terminals in the computer field. Just three years ago in 1974,computer terminals accounted for 12% of computer hardware, but by 1980 24% of computer hardware is expected to be terminals (Roy Salzman, "The Computer Terminal Industry: A Forecast," Datamation,- November, 1975, p. 49), According to a Frost and Sullivan Study, in 1970 the number of terminals in use were 280,000 with an annual increase of $50 million. However, by 1980 it is projected that the number of terminals in use will be 4,100,000 with an annual revenue of $5.55 billion (M. Irvin, testimony, The Industrial Reorganization Act, The Communications Industry, S. 1167, part 2, p. 1224, Subcommittee on Antitrust and Mono- poly, Committee on Judiciary, 1973). A study by Arthur D. Little that classifies terminals into general purpose and special purpose use pre- dicts the market to go from 266,000 in 1975 to 574,000 in 1980 (Salzman, op. cit. p. 49). Banking terminals, point of sales terminals, and industrial data col- lection are known in the trade as "special purpose terminals." Their growth is expected to increase from 73 units to 183 units from 1975 to 1980, a growth in dollar volume from .3 billion to almost 5 billion dollars by 1980. A study by Creative Strategies on general purpose terminals reported a 34% a year compound growth rate to 1980 (Electronic News, July 12, 1976).

COMPUTERS

Computers are a growing force in the communications sector. In fifteen years their growth has been phenomenal. In 1960 the aggregate sales of computer hardware, software, information services, and support services were $1.1 billion, while the sales in 1975 were $27.5 billion (Ware, op. cit., p. 13). Althoughin 1975 some 30% of the U.S. labor force de- pends on data processing to do its work, it is predicted to increase to 50% by 1980 and 70% by 1985.

The reliability, greater power, smaller size, and lower costs of com- puters have been a factor in their greater use by business and the public and their decline in prices. These computers have experienced a 15% drop in price every year--a development predicted to continue for the next five years (U.S. News and World Re2ort, "Coming: Another Revolu- tion in Use of Computers," July 19, 1976, p. 54).

The "computer on-the chip," invented in 1971, places logic and memory in a single silicone chip. These microcomputers had a sales growth of $60 million in 1975 and are expected to grow to have a $.5 billion to $1 billion in sales by 1980 (Business Week, March 1, 1976). The decline in memory cost is expected to grow just as fast. A Rand Corporation study showed that in 1964 the cost estimate was approximately $1.00 per bit. In 1965 the cost dropped to 80 a bit, and by the 1980's it will approach .0010 a bit which means that 20 words will be stored for a penny.

COMMUNICATIONS INNOVATIONS

New techniques and equipment in the communications industry have led to more efficient means of business communications. For example, large switching machines are changing over from electro-mechanical to digital. "A rising percentage of all switching will be controlled by stored pro- gram and electronic control increasing from 1970 estimates of 4% to 50% by 1985 and 86% by the year 2000'.' (Paul, Baren,-Andrew J. Lipinski, The Future of the Telephone Industry, 1970-'1985, Institute for the Future, California, 1971-,p. 53).

Bell is replacing their electro-mechanical toll switches (4A) with large digital ESS switching units (ESS#4), and by 199-0 the transferring to electronic switching on the toll level should be completed. The use of microwave coaxial, millimeter wave guide and laser optics is expected to dramatically increase in long-haul transmission. For example, the Rand Corporation found that satellite channel costs declined from $20,000 to $2, 000 in 1970, and satellite costs are expected to fall to $70 per channel by 1980.

The burgeoning field of fiber-optics (movement of signals through specialized synthetic fibers) is further contributing to cost reduction. A single fiber per channel cable will decline from $6.00 per meter to- day to 304@ in 1990. The Navy is now using fiber-optics telephone systems, and the growth of fiber-optics is expected to go from a base of $1 million in 1975 to $64 million in 1980 to-$823 rhillion by 1990. The fact that fiber-optics enhanced by 25 times the channel capacity of cables is sure to have a significant effect on communications.

TEcHwLoGicAL CHANGE@ WHAT ARE THE ImpucmoNO

Engineers and scientists are just beginning to forecast what these trends in technology will have on the business and private lives of the American consumer. Since these innovations are so fast moving, and in fact seem to change not )Le@krlv but sometimes in the space of months or even weeks, new uses for this technology can-only be anticipated. A rough estimate provided by the Institute of The Future outlines present and future communications services. (See attachment A.)

Projections on revenue from the data communications field seem to have the same optimistic cast. W. F. Redderson, 'AT&T, has estimated that "data communications revenue will grow from $5 billion in 1975 to some $22 billion in 1985. That latter figure is about the size of the total revenues of the Bell System in 1973. In the same period, revenues for data terminals will be going from $2 billion (represented by some 1.3 million terminal devices installed this year) to $14 billion (6 million terminals, including control units and cluster arrangements)" (Datama- tion, November, 1975). Estimates are that total carrier revenues of voice and data will exceed $65 billion in ten years (Rashan L. Sharma, Data Communications, 1976-1986 presented at conference on Federal Government Data Systems, April, 1976, p. 15).

COMPETITION

Because of the technological innovations in the communications industry, new firms have been created to provide the specialized services that business is requiring. These services fall into two areas:

A. Terminal Equipment

Within recent years manufacturers have produced a number of devices that when attached to the basic telephone network help to facilitate a more efficient transmission of communications. Examples of these devices include answering services, machines that exchange printed material (the standard office telecopier), miniature switchboards (for small businesses), and telephone sets that permit frequently used num- bers to be reached by pushing one button.

B. Private Lines

These specialized services allow individual companies to tie togetherf through their own wired or microwave facilities, distant offices that frequently communicate with each other. The communications may include oral, printed, or even computer messages.

The competition in all of these services is only of recent origin. Up until 1968 the AT&T% barred "foreign attachments" to their lines. However, a manufacturer of mobile radio units fought AT&T, and the FCC sustained the challenger in the historic "Carterfone" ruling. In 1969 MCI Telecommunications Corporation applied to the FCC to build and operate specialized common carrier facilities and private-line service between Chicago and St. Louis. The FCC approved the request and allowed MCI to plug into the AT&T system at those terminals. After a two- year "experiment," the FCC concluded that entry into this field served the public interest, and it proceeded to license other common carriers. Finally in 1972 (in the DOMSAT decision), the FCC decided that any com- pany financially sound and technically qualified should be given the opportunity to enter the domestic communications satellite field.

According to the FCC, in order to encourage these companies to enter the business and compete with AT&T, it ruled that Bell could not offer comparable competitive service for three years.

At this time this is where Bell, the independent telephone companies, and the specialized common carriers rank in this competitive field.

If you were to look for AT&T in the Fortune 500, you would look in vain and that is because Ma Bell as a regulated utility does not qualify. However, if she did, Bell would throw Exxon out of first place. The total assets of AT&T are $80*2 billion, the largest in the world com- pared to Exxon's $32.9 billion. In net income AT&T is still the winner with $3.2 billion, clearly ahead of Exxon--$2.5 billion. It employs more people (939,054), has more shareholders (3 million), and owns more vehicles (170,000) than any other company around. As mentioned before, it has 23 regional phone companies, and.its manufacturing and supply arm (Western Electric Company) ranks number 18 on the Fortune list. The Bell Telephone Laboratories serve as a R&D unit for the telephone companies and Western Electric, while the Long Lines Department operates the long distance and other inter-city service. This year AT&T posted a $1 billion per quarter profit record. "In a $35 billion industry dominated by the $29 billion operating revenues of the Bell System and the $5.5 billion received by the independents, the revenues enjoyed by the new terminal equipment suppliers and specialized carriers amount to less than $200 million." .(Senator Gary Hart (D-Col.) Congressional Record, Vol. 123, No. 32, February 24, 1977A AT&T and the independent telephone companies control 97% of the United States telecommunications industry. "...the statistics show that both the comparative markets (terminal equipment and private lines) are ex- panding at a much faster rate than the revenues of the new entrants. AT&T's and the.independents' revenues from terminal equipment and pri- vate lines are increasing each year by substantial amounts--by $373 million in 1975, for example, nearly twice as much as the total revenues of their competitors. Currently the established industry dominates these competitive markets overwhelmingly with over a 95% s:hare of the $4.2 billion of industry revenues which comes from private lines and terminal equipment. All projections are that they will continue to dominate these areas in the future with increasing revenues" (Hart, Ibid).

On the other side of the issue arethe 400 or so companies manufacturing the terminal equipment and serving as SCC's. They are one-half of 1% share of the total telecommunications market. In 1975 the total revenues of the Interstate Private Line--Telephone Equipment market was $4.2 billion. out of that figure only $194 million was received by Bell's competitors. (See Attachment B,,) Most of these companies are small; however, they do include such communications giants as RCA, Western Union, IBM, ITT, and Southern Pacific.

LoBBYiNG EFFoRTs

It is obvious that AT&T, faced with the increased competition in specialized business communications, is significantly involved in the lobbying effort to persuade Congress to restrict entry by the SCC1s into this lucrative field. The Bell System along with the "Big 51' independents and the much smaller other independent telephone companies are vigorously supporting the Consumer Communications Reform Act. In 1976, AT&T spent over $2.5 million lobbying for this legislation. For the first three months of 1977 it also spent $342,000 in support of this legislation while the independent phone companies in the same time period spent $30,000.

On May 19 of 1976, the Ad Hoc Committee for Competitive Telecommunica- tions was formed. It is composed of five companies that provide a variety of private line services. It has an annual budget of $270,000. They are:MCI Telecommunications Corporation which offers a private line service in 34 metropolitan areas linked by a microwave network; Data Transmission Company which operates a private line service transmitting data to 23 areas across the country; Graphanet Systems, Inc.; Southern Pacific Communications Company; and United States Transmission Systems, Inc. Furthermore, there are two trade associations that oppose AT&T's 11monopoly" position. They are the North American Telephone Association, Inc., a group of equipment manufacturers; and the Computer Industry Association, a group of small and medium-sized computer firms. MAjog PRovisioNs OF THE BiLL

A. Preamble - Section 2

According to Bell Telephone,this is a restatement of the Communications Act of 1934. This preamble declares that duplication of telephone faci- lities and services is "contrary to the public interest" because it supposedly fosters higher charges and results in economic and technical inefficiencies.

B. Equipment --!:Section 2(d) and-.Sections.6 and 7

This would give the states the authority to regulate the rates for tele- phone equipment used both in interstate and intrastate services. Re- cently the FCC has allowed competitors to enter the equipment market.

C. Specialized Carriers - Sections 4, 5, and 8

This would make it'possible for AT&T to purchase the assets of the competing carriers driven out of business by this bill. Furthermore, these sec- tions state that any company not primarily providing exchange services will be denied a certificate to operate unless the FCC determines that the proposed service of the specialized carrier is "not like or similar to any service or services provided by a telephone or telegraph" company. This would prevent the FCC from continuing those decisions that have permitted the growth of companies providing private lines tailored for specific markets.

ARGumms Fog

1. Control

Centralized control of the lines, traffic capability, and technological innovation centralizes responsibility. Accountability rests with one firm, one carrier, and one entity.charged witi"the workability of tele- communications. Thisgives the customer the best communications at the lowest possible price.

2. CoMEatibility.

Compatible standards of usage, equipment, and protocols are crucial-to permit different equipment and technology to evolve and grow as a single entity.

3. Quality

Quality is guaranteed through Bell Telephone Laboratory criteria. A sole source supplier is the nation's best insurance for future communi- cation quality. 4. Innovation

A controlled team approach best ensures innovation rather than a di- versified, competitive approach to telecommunications.

5. Cost

A single source of telecommunications with its control, responsibility, universality, compatibility, innovation will produce efficiency, pro- ductivity, and low telephone rates.

"The infusion of competition into telephone industry services would produce some advantages for the business user but only at the expense of the general rate-payer. Clearly, monopoly communications services provided by the telephone industry on an end-to-end basis under the common carrier theory provide the greatest advantage for the largest number of citizens. One good analogy is the Post Office Department which has been protected from competition by statutes--The Private Ex- press Statutes--which antedate the U.S. Constitution. The purpose of these statutes is to protect that portion of the Postal Service's revenues which are derived from the transportation of letters for others. This protection is needed to provide a secure economic foundation so that the Postal Service can render service throughout the country ir- respective of the loss or gain from its operations in any specific areall (Leroy D. Schecher, General Manager, West River Telephone Com- pany: National Policy and the Future of Telecommunications, December, 1976, pp. 62-63).

ARGumENTs AGAiNsT

1. Control

A policy of centralizing telecommunications coordination, centralizing telecommunications services, centralizing equipment manufacturing, and centralizing R&D raises the question of accountability. Is account- ability to be assigned to one firm? Is it assigned to the government? Should it be relegated to corporate stewardship?

2. Compatibility

Standards can be developed for equipment, hardware, protocols, soft- ware, and terminals without total ownership and control. Standards and compatibility in American industry are abundant and consonant with ser- vice diversity and product specialization. Standards and competition are not contradictory concepts.

3. Quality

Quality is a relative concept. Not all subscribers want a Ford, not all demand a Seville. Some seek more quality than that offered by telephone carriers while others desire less quality than that provided by telephone carriers. Quality resides on a spectrum--some need average quality, some demand higher quality, others desire lower transmission quality. In a word, it's all subjective.

4. Innovation

A total approach to communications service can exact an economic cost. It can dampen and throttle service and product innovation, new market- ing, new services, new production, and new hardware. Recently a FCC administrative law judge verified that suspicion by observing that AT&T lagged or "blundered" in technical areas of terminal, switching, and transmission equipment. Competition, diversity, and rivalry have tra- ditionally yielded new services, new features, new technology in re- sponsiveness to consumer needs.

5. Cost

Rates can rise or fail to decline, not because of the economies of scale but because of lagged innovation, throttled efficiency and management misjudgments of technological choices. An FCC investigation document and Bell System officials acknowledge that some equipment sold to operating companies was clearly and patently obsolete at the time of the sale. The consuming public bore the cost of such outdated equipment.

"I point out to you at once that I regard this bill (H.R. 8 and S. 530) as an abomination. It is a radical bill; it runs counter to our most inveterate traditions of free enterprise. It would have Congress give its approval to breaking up the nationwide free-trading market that our Constitution seeks so carefully to preserve and that has contri- buted so powerfully to the development of the American economy, by turning back to the several states the authority to impose restrictions on the marketability of the products issuing from one of our most dynamic and vitally important industries--the production of communica- tions and electronic equipment. It would erect impregnable barriers to preserve a nationwide monopoly at the very heart of the entire American economy. It would do these things without even looking at the benefits that competitive free enterprise has brought to this in- dustry during the very short eight years in which it has had an oppor- tunity to function, and without any persuasive demonstration of the horrendous threatened consequences on which this revolutionary step is predicated. And it would do all these things in the name of protecting the consumer." (Alfred E. Kahn, Chairman--New York State Public Ser- vice Commission. Testimony by witnesses and statements,submitted for the Record before hearings of the Subcommittee on Communications of the House Committee on Interstate and Foreign Commerce, September 28-30., 1976).

David A. Williams Policy Analyst Economics/Taxation

Attachment A

NEW COMMUNICATIONS SERVICES

1. Cashless Society Transactions: Recording of financiaT transacTionst with a hard-copy output for buyer and seller, a permanent record and updating of balance in computer memory. 2. Dedicated Newspaper A set of pages with printed and graphic information, possibly including photographs, the organization of which has been predetermined by the user to suit his preferences. 3. Computer-Aided School Instruction: @t the very minimum, computer determination of the day's assign- ment for each pupil, and at the end of the day, recor 'ding of the day's progress report. At its most complex, such a ser- vice would-use a 'real ti.me, interactive video color display with voice input and output and an appropriate program suited to each pupil's progress and temperament. 4. Shopping Transactions ( tore-Catalogs): Interactive programs, perhaps video assisted, which describe or show goods at request of the buyer, advise him of the price, location, delivery time, etc. 5. Person-to-Person (Paid Work at Home): Switched video and facsimile service substituting for normal day's contacts of middle-class managerial personnel where daily-contacts are mostly of a routine nature. May also apply to contacts with the public by receptionist, doctor or his assistant., etc. 6. Plays and Movies from a Video Library: @election of all plays arid movies. Color and good sound are required. 7. Computer Tutor: From a library of self-help programs available, a computer, in an interactive mode, coaching the pupil (typically adult) in the chosen subject. 8. Message Recording: Probab-ly of currently available type but may include video memory (a patient showing doctor the rash he has developed). 9. Secretarial Assistance: Written or dictated letters typed by a remotely situated secretary. 10. Household Mail and Messages: Letters and notes transmitted directly to or from the house by ineans.of hom facsimile machines. 11. Mass Mail and Direct Advertising Mail: Higher output, larger size pages, color output may be necessary to attract the attention of the recipient -- otherwise similar to item 10 above.

12. Answering Services: Storage of incoming messages or notes whom to call, possibly wi@h computer logic recognizing emergency situations and diverting the cal I - 13. Grocery Price List, Information and Ordering: Grocery price list providing up-to-the-ininute,undated information about perishable foodstuffs. Video color display may be needed to allow selection of selected merchandise. 14. Access to Company Files: Information in titles, coded for security; regularly updated files are availablewith cross refereilces, indicating-the code where detailed information is stored. Synthesis also may be available. 15. Fares and Ticket Reservations As provided by travel agencies now but more comprehensive and faster. Cheapest rates, information regarding the differences betweeen carriers with respect-to service, memos, etc., may be available. 16. Past and Forthcoming Events_: Events, dates of events, and their brief description; short pre- views of future theater plays; and recordings of past events. 17 Correspondence School: Taped or live high school, university, and vocational courses available on reques-t with an option either to audit or take for credit. Course would be on TV, paper support on facsimile. 18. Daily Calendar and Reminder abou "Aointmen'ts. Prerecorded special appointments and regularly occurring appoint- ments stored as a programmed reminder. 19. Computer-Assisted Meetings: Partidipption..of computer,as. a partner in a meeting, answering ques- tions.of fact, deriving correlations, and extrapolating trends. 20. Newspaper, Electronic, General: Daily newspaper, possible printed during the high, available in time for breakfast. Special editions following major news breaks. 21. Adult Evening Courses on TV: Noninteractive, Broadcast -liodelive courses on TV--wider choice of subjects than at present. 22. Banking S----rvices Money Orders, transfers, advice. 23. Legal Information: Directory of lawyers, computerized legal counseling giving precedents, rulings in similar cases', describing jurisdiction of varous courts and chances of successful -suits in a particular area of litigation.

24. Special Sales Information Any sales within the distace specified by the user and for items specified by him will be "flashed" onto the howe display unit. 25. -Consumers' Advisory Service: Equivalent of Consum er Reports, giving best buy, products rated "acceptable" etc. 26. Weather Bureau Country-wide, regional forecasts or special forecasts (for farniers, fishermen), hurricane and .1-ornado warnings similar to current AAU special forecast service. 27. Bus, Train, and Air Schedulj.2.2: ' Centrally available information with one number to call. 28. Res ta uran ts : Following a query for a type of restaurant (Japanese, for instance), reservations, menu, prices are shown. Displays of dishes, location of tables, may be included. 29. Library Access: After an interactive "browing"-with a "librarian computer: and a quotation for the cost of hard copy facsimile or a slow scan video transmission., a book or a magazine is transmitted to the home. 30. Index, All Services, Served by the Home Terminal: Includes prices or charges-of the above, or available communications services."

(Electronics, "Fiber Optic Developments Spark Worldwide Interest," August 5, 1976, p..83.)

-KEti-a-c ff m--e n_Y_ B TOTAL U.S_ TELECOMMUNICATIONS 'MARKET 1975 S35.3 (in. billions of- dollars)

(excluding Western Union)

Market penetration of the Specialized Common Carriers SCC and the. Interconnect- Industry.

Local Exchange Service

Miscell, 17

WNW--

Intrastate Toll Services Seiv& $6.9 IQ s 0 A " I

4% %X Ci- a ft 4,

a. AF

SCC_ Interconnect - $51 million $143 million

SOURCE: Report by the-FCC Common Carrier Bureau, submitted to Congress Sept. 28, 1976