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Impact of alternative technologies on universal service and competition in the local loop

Telematics and Informatics
Publication Date
DOI: 10.1016/s0736-5853(05)80025-5
  • Communication
  • Economics


Abstract A discussion of local loop competition marks a natural progression in the course of telephone deregulation. In the early days of telephony, the focus of regulatory policy was the provision of universal service; but in recent years, the focus has expanded to include innovation and economic efficiency as important regulatory criteria. With the addition of these criteria, the CPE and long-distance markets were opened to competition. Experience with how these markets have opened have important lessons for the last bastion of monopoly: the local loop and the class 5 office. While important lessons from the past can guide the deregulation of the local loop services, the article also considers the particular characteristics of the local loop and how they would qualify conclusions based on previous experience. The convergence of many different technologies and service providers on the local loop, all seeking to replace the twisted pair connection from the home to the network makes for many exciting possibilities in how the telecommunications network will evolve. At the same time, it implies a complex task for service providers, regulators, and customers in understanding the technological, regulatory, social, and economic forces at work. Three scenarios (PCN/PCS as competitors with the Local Loop; alternative access providers as competitors with the LECs; and the lifting of Cable/Telco service separation) presented explore some of the issues that may need attention.

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