Regulatory basics

Answers to basic questions about the Triennial Review and UNE.

What is the Triennial Review?

Every three years the Federal Communications Commission gathers to consider changes to its policies regarding unbundled network elements (UNE). The pending Triennial Review is expected to wind up this month.

What are UNE-Ps?

Unbundled network element-platforms are bundles of UNEs that regional Bell operating companies must sell at steep discounts to competitive carriers. While RBOCs typically offer a discount of about 20% on resold lines, discounts on UNE-P lines can be in the 40% to 60% range. UNEs include items such as local loops, switching, network connectivity devices and interoffice transport. The RBOCs would like to see switching removed from the UNE list because they say the price of UNE-P does not reflect the network investment the RBOCs make in the switches. Without switching as part of the UNE list, there could really be no UNE-P.

Who would be affected if UNE-Ps are phased out?

CLECs that don’t maintain their own switching equipment would be affected. AT&T and WorldCom would be affected, because they are the two largest resellers of UNE-P services. Both would likely continue to offer local services by installing their own switches. Some smaller, regional CLECs might go out of business because they can’t afford to invest in switching.

Facilities-based CLECs such as Allegiance Telecom and Time Warner Telecom won’t be affected, because they already provide services using their own switches.

On the user side, consumers and small businesses would be affected by a loss of UNE-P, while large businesses would see no direct impact.

Why would the FCC retain UNE-Ps?

UNE-Ps were designed to let competitive carriers build a customer base in a particular market before having to deploy their own facilities. If the FCC believes competitive carriers will eventually replace UNE-Ps with their own facilities-based services, it might allow UNE-Ps to continue in some form.

UNE-Ps also promote competition in the consumer and small-business marketplace. State regulatory commissions, which control UNE-P pricing, would like to see UNE-Ps continue.

What is line-sharing?

Line-sharing requires incumbent providers, such as the RBOCs, to let broadband competitors provide DSL access over the same loop customers use for voice connection. With line-sharing, a customer can get high-speed access from a competitive DSL provider without having to order a separate phone line for the DSL connection.

RBOCs say line-sharing hurts them because it forces RBOCs to share their network equipment with the broadband providers. Because they have to share the equipment, the RBOCs say they are less likely to make network upgrades.

Why keep line sharing?

Again, competition is the answer. Competitive DSL providers will find it tough to compete with the RBOCs if they are forced to install and pay for a separate local loop for DSL only, while the RBOCs can offer voice and DSL over one loop.