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Unbundling Policy in the United States Players, Outcomes and Effects

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  • Bauer, Johannes M.

Abstract

Building on attempts during the 1980s to establish principles of Open Network Architecture (ONA), unbundling obligations became a cornerstone of the framework for local competition devised by the Telecommunications Act of 1996. Several of the regulations developed by the Federal Communications Commission (FCC), including the impairment test to assess whether a network element had to be unbundled, the TELRIC pricing method, the obligation to re-bundle network elements to service platforms and the unbundling provisions for broadband networks were challenged repeatedly in court. In response to multiple defeats of earlier rules, the FCC had to refine its approach and define unbundling obligations more narrowly. Effective as of March 11th, 2005, unbundling obligations will essentially be limited to the local copper loop, dedicated interoffice transportation on routes connecting small markets, and high-capacity loops in small markets. Carriers presently using unbundled network elements that do not qualify under the new rules will have to transition to alternative solutions within 12-18 months. During this period, the FCC has set higher ceiling prices for these unbundled network elements. The Commission affirmed the elimination in 2003 of its unbundling obligations in broadband markets.

Suggested Citation

  • Bauer, Johannes M., 2005. "Unbundling Policy in the United States Players, Outcomes and Effects," MPRA Paper 2455, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:2455
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    File URL: https://mpra.ub.uni-muenchen.de/2455/1/MPRA_paper_2455.pdf
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    References listed on IDEAS

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    1. Pindyck Robert S., 2007. "Mandatory Unbundling and Irreversible Investment in Telecom Networks," Review of Network Economics, De Gruyter, vol. 6(3), pages 1-25, September.
    2. Mandy David M. & Sharkey William W., 2003. "Dynamic Pricing and Investment from Static Proxy Models," Review of Network Economics, De Gruyter, vol. 2(4), pages 1-37, December.
    3. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    4. Valletti, Tommaso M., 0. "The theory of access pricing and its linkage with investment incentives," Telecommunications Policy, Elsevier, vol. 27(10-11), pages 659-675, November.
    5. Bourreau, Marc & Dogan, Pinar, 2005. "Unbundling the local loop," European Economic Review, Elsevier, vol. 49(1), pages 173-199, January.
    6. Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Choi, Sujin, 2011. "Facilities to service based competition, not service to facilities based, for broadband penetration: A comparative study between the United States and South Korea," Telecommunications Policy, Elsevier, vol. 35(9), pages 804-817.
    2. Knieps, Günter & Zenhäusern, Patrick, 2009. "Stepping stones and access holidays: The fallacies of regulatory micro-management," Discussion Papers 123, University of Freiburg, Institute for Transport Economics and Regional Policy.
    3. Baranes, Edmond & Bourreau, Marc, 2005. "An Economist's Guide to Local Loop Unbundling," MPRA Paper 2440, University Library of Munich, Germany.
    4. Thomas Cortade & Edmond Baranes, 2007. "Fusions horizontales sur le marché de l'Internet," Économie et Prévision, Programme National Persée, vol. 178(2), pages 67-77.
    5. Gaudin, Germain & Saavedra, Claudia, 2014. "Ex ante margin squeeze tests in the telecommunications industry: What is a reasonably efficient operator?," Telecommunications Policy, Elsevier, vol. 38(2), pages 157-172.
    6. Pereira, Pedro & Vareda, João, 2013. "How will telecommunications bundles impact competition and regulatory analysis?," Telecommunications Policy, Elsevier, vol. 37(6), pages 530-539.
    7. Vanberg, Margit A., 2007. "Implications of Network Convergence on Local Access Regulation in the U.S. and the EU," ZEW Discussion Papers 07-039, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Pio Baake & Brigitte Preißl (Eds.). Johannes M. Bauer & Per Björstedt & Elena Gallo & Anders Henten & Sven Lindmark & Martijn Poel & Enzo Pontarollo & Knud Erik Skouby & Jason Whalley, 2006. "Local Loop Unbundling and Bitstream Access: Regulatory Practice in Europe and the U.S," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 20, number pbk20.

    More about this item

    Keywords

    Unbundling; voice; broadband;

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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