The Positive Effects of Unbundling on Broadband Deployment

15 Pages Posted: 7 Oct 2004

See all articles by George S. Ford

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Lawrence J. Spiwak

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Date Written: September 2004

Abstract

This POLICY PAPER examines whether there is a relationship between regulated rates for "unbundled local loops" and deployment of broadband technology by incumbents and entrants. Using an econometric model that analyzes 2002 and 2003 local loop rates and takes into account price variability and other factors that may impact broadband deployment, this POLICY PAPER finds that unbundled loop prices based on Total Element Long Run Incremental Cost ("TELRIC") are associated with increased availability of broadband services and increased availability of competitive broadband services (four or more providers). As a result, this POLICY PAPER concludes that current policies which are hostile to the market-opening provisions of the 1996 Act will actually make it harder to achieve President Bush's stated goal of "universal, affordable access for broadband technology by 2007" and will, instead, lead to greater economic concentration and incumbent market power in the industry as firms are forced to exit the market.

Keywords: Telecommunications, Competition, Unbundling, Entry, 1996 Act, Broadband deployment

JEL Classification: K23, L10, L5, L50, L51, L52, L96

Suggested Citation

Ford, George S. and Spiwak, Lawrence J., The Positive Effects of Unbundling on Broadband Deployment (September 2004). Available at SSRN: https://ssrn.com/abstract=600767 or http://dx.doi.org/10.2139/ssrn.600767

George S. Ford

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

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

Lawrence J. Spiwak (Contact Author)

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

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States
202-274-0235 (Phone)
202-318-4909 (Fax)

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