Telecommunications Act Of 1996 In February of 1996, the U.S. Congress enacted the Telecommunications Act of 1996. The Act was one of the most substantial changes in the regulation of any industry in recent history. The Act replaced all current laws, FCC regulations, and the consent degree and subsequent court rulings under which AT&T was broken into the "baby Bells." It also overruled all existing state laws and prohibited states from introducing new laws. Practically overnight, the telecommunications industry went from a highly regulated and legally restricted monopoly to open competition. Or almost op