Transforming the Structure of Network Interconnection and Transport

Regulatory policy in telecommunications is desperately in need of mid-level theory. There is widespread consensus that regulators should try to promote competition. There is also bitter contention about what this implies for particular industry battles. For example, an industry observer declared, “Competition should be the policy. And code that enables competition should be the rule.” He then went on to argue that the Federal Communications Commission (FCC) should require AT&T to allow customers to choose the Internet service provider that provides service over AT&T’s cable facilities. This reach to a policy action, without support from an analysis of the merits of different structural possibilities for competition, makes competition into merely a rhetorical device. In considering whether to mandate sub-loop unbundling, to require line-sharing, or to allow the use of unbundled network elements for the provision of leased lines, the issue is not just the costs of more aggressively promoting competition; such decisions also have profound implications for industry structure.