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
Date Written: September 2002
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: Suggested Citation