Telecommunications Act of 1996, U.S. legislation that attempted to bring more competition to the telephone market for both local and long distance service. It was passed by Congress in January 1996 and signed into law by Pres. Bill Clinton in February 1996.

The Telecommunications Act of 1996 was the first major re-write of the Communications Act of 1934. It opened up local markets to competition, which changed the dynamics of the existing system of funding universal service. The 1996 Act explicitly adopted principles to guide universal service policy.