The regulation of telecommunications systems and services are developed to help or improve the ability of citizens in a country to reliably communicate with each other at reasonable cost. Telecom rules and regulations are usually imposed by a government agency. These rules are designed to maintain the quality and cost of public utility services.

In the United States, the Telecommunications Act of 1996 was created to allow competition into the telecommunications industry. It provides a national framework for the deregulation of the local exchange market, a deregulation that was already taking place on a state-by-state basis through the actions of state regulatory commissions. Its summary impact on the local exchange market is to require current LECs to remove all barriers to the competition (e.g., interconnect, white and/or yellow pages access, co-location, and wholesaling of facilities restrictions) in return for LEC access to the long distance market.

Telephone companies in the United States are regulated by the government, but not owned by the government. For most European countries and many other countries, local telephone service is provided by government owned post telephone and telegraph (PTT) operators. In some European countries, the post (mail) network has been separated from the operation of telephone and telegraph networks. In some countries, the telephone and telegraph systems have become privatized, and are no longer owned by the government.

Networks, as a rule, connect to long distance networks through a separate toll center (tandem switch) for inter-exchange connection,. In the United States, this toll center is called a point of presence (POP) connection.

To connect local systems to each other (long distance), inter-exchange service is provided. In the US, these are called inter-exchange carriers (IXCs). In the United States, from 1984 until 1997, IXC and LEC operating companies were legally required to refrain from engaging in directly competitive business operations with each other. Since 1997, one business entity can engage in both IXC and LEC business if it satisfies certain competitive legal rules. In Europe and throughout the rest of the world, the same PTT operators also usually provide inter-exchange service within their country. In any case, governments regulate how networks are allowed to interconnect to local and long distance networks...

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