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The Telecommunications Act of 1996 was widely hailed as the most comprehensive piece of telecommunications legislation in 60 years. The law was the most comprehensive and substantial piece of legislation involving the communications industry since the Communications Act of 1934, which created the Federal Communications Commission. Recognizing the quickly changing nature of communications technology and the vast potential of digital technologies, Congress sought to restructure much of the law governing the telecommunications industry. The act affected the telecommunications industry along a number of fronts, including content, competition, and ownership. Although the law had an immediate effect on the industry, most notably in terms of radio station ownership, parts of the act have yet to come to full fruition.

Industry Deregulation

One stated purpose of the act was to reduce or remove barriers among the various parts of the telecommunications industry to increase competition in the marketplace, ultimately for the benefit of the consumer. For example, the act attempted to increase competition in the delivery of cable television content by repealing legislation preventing telephone operators from delivering video content into customer homes. Likewise, the act also repealed legislation preventing cable operators from delivering phone service into homes. Nonetheless, critics have proclaimed that despite these opportunities, industry economics and infrastructure continue to prohibit direct head-to-head competition in most local markets.

The most immediate effects of the Telecommunications Act of 1996 were felt in the area of station ownership, as the act relaxed long-established ownership caps, both for television and radio stations. With respect to television, the act allowed individual groups to own stations reaching up to 35% of the U.S. population, up from 25%. Moreover, the law also eliminated a 12-station cap on the number of television stations one group could own. The act also eliminated national radio station ownership caps and relaxed local radio ownership caps. This deregulation led to a wave of acquisitions and mergers within the broadcast industry, as group owners quickly began to purchase stations across the country. Critics argue that the effects of this corporate consolidation are a lack of diversity on the airwaves and the loss of local input regarding station programming. Despite the act's favorable attitude toward deregulation, the FCC has continued to closely examine broadcasters' efforts to provide programming for children. The FCC drew criticism in 2005 from the broadcast industry for carrying children's programming requirements to digital television.

Television Ratings and the V-Chip

Congress also used the Telecommunications Act to respond to growing concern over potentially objectionable television content. To allow parents increased control over the types of television content their children could view, the law mandated that all television sets sold in the United States be equipped with V-chips, devices that could block programming based on an electronic ratings system. Moreover, the act also ordered broadcasters to develop a ratings system to work in conjunction with the V-chip. The development of a television ratings system was the subject of some debate, and the initial ratings system offered by broadcasters to satisfy the requirements of the act was eventually modified. Critics took issue with the original age-based television ratings system, which suggested that programs were suitable for children of certain ages. Numerous parent and activist groups argued that such ratings gave parents little information regarding the nature of television content; the result of their complaints was the inclusion of content labels to denote the presence of sex, violence, objectionable language, and so on. This modified television ratings system is in use today by most television networks. Despite the presence of television ratings, the V-chip has yet to enjoy widespread use among parents. Research has suggested that the vast majority of parents do not actively use the V-chip to prevent their children from being exposed to objectionable content. This failure is largely attributed to lack of familiarity with the ratings themselves and difficulty understanding how to activate the V-chip technology.

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