Local-loop unbundling: Difference between revisions

Revision as of 21:44, 24 May 2022

Revision as of 10:42, 14 August 2022

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New entrants, on the other hand, argue that since they cannot economically duplicate the incumbent's local loop, they cannot actually provide certain services, such as [[Asymmetric Digital Subscriber Line|ADSL]] without LLU, thus allowing the incumbent to monopolise the respective potentially competitive market(s) and stifle innovation. They point out that alternative access technologies, such as [[wireless local loop]], have proven uncompetitive and/or impractical, and that under current pricing models, the incumbent is in many cases, depending on the regulatory model, guaranteed a fair price for the use of its facilities, including an appropriate return on investment. Finally, they argue that the ILECs generally did not construct their local loop in a competitive, risky, market environment, but under legal monopoly protection and using taxpayer's money, which means, according to the new entrants, that ILECs ought not to be entitled to continue to extract regulated rates of return, which often include monopoly rents from the local loop.

Most industrially developed nations, including the US, [[Australia]] and, the [[European Union]] [[European Union member state|Member States]]s, and India have introduced regulatory frameworks providing for LLU. Given the above-mentioned problems, regulators face the challenging task of regulating a market that is changing very rapidly, without stifling any type of innovation, and without improperly disadvantaging any competitor.

The process has been long - the first action in the EU resulted from a report written for the European Commission in 1993. It took several years for the EU legislation to require unbundling and then in individual EU countries the process took further time to mature to become practical and economic rather than simply being a legal possibility.