Broadband Policy Lessons for 2010

[Commentary] In the Telecommunications Act of 1996 Congress laid out the principles and policy options that were intended to promote competition in the communications and broadband markets. These open access policies require telecommunications providers, mostly incumbents, to make available to their competitors, usually at regulated rates, various parts of their network or service, so that the competitors can begin to compete using these components as part of their service, without having to replicate the full investment that the incumbent originally made.

Open access policies include:

1) Unbundling -- gives competing broadband companies the right to use local copper loops;

2) Bitstream access -- gives competitors the right to use existing DSL lines;

3) Collocation -- gives competitors the right to install equipment in phone company facilities;

4) Wholesaling or functional separation -- requires incumbents to offer services at wholesale prices to competitors, or establish separate companies selling unbundled components.

But from the start implementation of unbundling was burdened and thwarted, largely by incumbents who resisted implementation through footdragging and litigation, but also by a judiciary that was highly skeptical of the theory behind unbundling, receptive to the arguments of the incumbents, and who exhibited little deference to the judgment of the FCC.

In their new book, The Curse of the Mogul: What's Wrong with the World's Leading Media Companies, Jonathan Knee, Bruce Greenwald, and Ava Seave come to this conclusion regarding telecommunication infrastructure:

"An ideal world would consist of local hybrid networks—wireless and fiber—with exclusive territories cooperating across regional boundaries. The resulting structure would minimize costs, maximize potential service quality, and not coincidentally generate high profits at reasonable profits."