The Financial Implications of the Une-Platform: A Review of the Evidence

27 Pages Posted: 2 Sep 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

Christopher C. Klein

Middle Tennessee State University - Department of Economics and Finance

Abstract

Recent reports on the financial consequences of UNE-P sales for Bell Operating Companies have drawn additional attention to long-standing complaints by the BOCs that such sales are confiscatory, and amount to "subsidized competition." This paper subjects the conclusions of these claims and the financial studies upon which they are based to careful scrutiny, and finds that they are largely without merit. Errors in both the alculation of unbundled element revenues, and in the wholesale costs of providing unbundled elements, are identified. Using actual payments by a representative CLEC and publicly available ARMIS expense data, we obtain realistic revenue and current cost figures usable for financial analyses. Our analysis suggests that the wholesale business, taken alone, is profitable for the BOCs.

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, below cost, actual cost, embedded cost

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

Suggested Citation

Beard, Thomas Randolph and Ford, George S. and Klein, Christopher C., The Financial Implications of the Une-Platform: A Review of the Evidence. Commlaw Conspectus Journal of Communications Law & Policy, Fall/Winter 2003. Available at SSRN: https://ssrn.com/abstract=422541 or http://dx.doi.org/10.2139/ssrn.422541

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

Christopher C. Klein

Middle Tennessee State University - Department of Economics and Finance ( email )

Murfreesboro, TN 37132
United States

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