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Liberalization and the Ascendancy of Trade 153

corporation in the world. Called the Bell System, it employed almost I
million people and its annual revenues were nearly $70 billion, consti-
tuting approximately 2% of US GNP.
4 These RBOCs are Nynex, Bell Atlantic, Bell South, Ameritech, Pacific
Telesis, US West and Southwestern Bell. Judge Greene barred them
from taking part in three areas of business: long-distance services;
telecommunication hardware manufacturing; and the provision of infor-
mation services. The RBOCs always have considered these conditions to
have been unreasonable, and have waged protracted campaigns to win
the legal right to offer 'content-related' services, including the delivery of
television signals direct into homes through telephone lines. The federal
courts defined 'information services' as a broad range of activities, from
cable television to electronic publishing. In 1970, the FCC adopted rules
that prevented potential telephone companies competing with cable
television operators in order to provide the latter with an opportunity
to establish themselves. These commonly called 'telco-cable cross-
ownership rules' were incorporated into the Cable Communications
Policy Act of 1984 and involved an amendment to the Communications
Act of 1934. These provisions were radically rolled back, however,
through the Telecommunications Act of 1996. This extraordinary piece
of regulatory liberalization· legislation will be addressed in chapter 7.
5 Robert R. Bruce, 'lntelsat in Transition,' Chronicle of International
Communication, VI (3) (April 1985) 5-7.
6 Markey testimony in US Congress. House. Committee on Foreign
Affairs. Subcommittees on International Operations and on Interna-
tional Economic Policy and Trade. Hearings on 'Foreign Policy Impli-
cations of Competition in International Telecommunications.' 99th
Congr., lst sess., 19 February; 6, 28 March 1985, p. 46 (emphasis
added).
7 Jochen K.H. Schlegel, 'Competition in International Communications,'
Transnational Data and Communications Report, X (5) (May 1987) 19;
and Hills, The Democracy Gap, p. 57.
8 Meheroo Jussawalla, 'Economics and Global Impact of Telecom
Deregulation,' Transnational Data and Communications Report, XI (3)
(March 1988) 15. Other factors for declining US equipment exports
included the relocation of US manufacturing activities to relatively
low-wage countries and the (temporary) lack of experience of American
companies in the equipment export market relative to Japanese and
European competitors. Schlegel, 'Competition in International Commu-
nications,' p. 20. As Jill Hills points out, however, the liberalization
of equipment had begun prior to the divestiture. As such, this balance-
of-trade decline had begun prior to 1982. Hills, 'Dynamics of
US International Telecom Policy,' Transnational Data Report, XII (2)
(February 1989) 15.
9 Joan E. Spero, 'Information: the Policy Void,' Foreign Policy, 48 (Fall
1982) 150.
I 0 Hornet in Hearings on 'International Communication and Information
Policy,' p. 178.
II Tunstall, Communications Deregulation, pp. 202-3.