Make or Buy? Unbundled Elements as Substitutes for Competitive Facilities in the Local Exchange Network

Phoenix Center Policy Paper No. 14

16 Pages Posted: 8 Aug 2003

See all articles by Thomas Randolph Beard

Thomas Randolph Beard

Auburn University - Department of Economics

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Date Written: September 2002

Abstract

In this paper, we estimate demand curves for unbundled loops sold by incumbent local exchange telecommunications carriers to their retail rivals. Of primary interest are the cross-price effects between unbundled loops purchased with and without unbundled switching. As expected, we find downward-sloping demand curves for unbundled elements, with own-price elasticities in the elastic region of demand. Interestingly, however, we also find no evidence of positive cross-price elasticities between alternative modes of unbundled element entry.

Keywords: telecommunications, competition, policy, communications, TELRIC, UNE-Platform, UNE-P, UNE-L, UNE-Loop, unbundling, unbundled, network, elements, UNEs, UNE, FCC, Federal Communications Commission, 1996 Telecommunications Act, TELRIC, LRIC, long run incremental cost

JEL Classification: K2, L1, L5, L9, L4

Suggested Citation

Beard, Thomas Randolph and Ford, George S., Make or Buy? Unbundled Elements as Substitutes for Competitive Facilities in the Local Exchange Network (September 2002). Phoenix Center Policy Paper No. 14. Available at SSRN: https://ssrn.com/abstract=422527 or http://dx.doi.org/10.2139/ssrn.422527

Thomas Randolph Beard

Auburn University - Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States

George S. Ford (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States

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