• United States
Managing Editor

UNE-P winners and losers

Feb 28, 20032 mins

Looks like a split decision for RBOCs, competitors

So… who was helped and who was hurt by last week’s Triennial Review?

Certainly in the short term, the Bells did not get what they were looking for. By handing local loop leasing policy to the states, the Federal Communications Commission essentially guaranteed that alternative carriers will still be able to access Bell facilities – including switching – at wholesale prices that regional Bell operating companies say are below their own costs.

Good for the competitive local exchange carriers and the interexchange carriers. The state regulatory bodies have been friendlier to RBOC competitors and are unlikely to remove switching from the unbundled network element-platform (UNE-P) list.

But in three years, competitive DSL data providers will lose out on line-sharing if they do not also offer voice. Also, last week’s ruling won’t force the RBOCs to share space on new fiber network buildouts with other DSL providers.

Good for the RBOCs.

Will this result in higher prices for DSL and a spike in 2003 capital spending by the RBOCs on fiber buildouts? Unlikely.

The RBOCs continue to see substantial competition from the multicable system operators (MSO) for broadband access. They’ll have to keep prices reasonable in order to avoid losing broadband revenue to the MSOs.

On capital spending, Wachovia Securities notes that the FCC failed to lay out milestones to require specific deployments over specific timeframes. There’s therefore no incentive to ramp up 2003 buildouts above and beyond current RBOC plans for further deployments.

Demand, pricing, MSO competition and Congressional bills that encourage deployment will dictate DSL deployment beyond 2003, Wachovia believes.

For business lines, UBS Warburg notes that the FCC eliminated the requirements of the RBOCs to provide UNE-P access for lines at T-1 or higher speeds, which are usually used by mid to large-size businesses. The FCC put no limitations on the use of UNE-P at the DS-O level, which are used by small businesses.

Currently, 40% of the UNE-P lines are in the business market, according to UBS Warburg. However very little of the growth comes from the business market, the firm states.

So the results of the Triennial Review looks like a mixed bag for now, with small wins and losses on both sides. Longer term, it appears market forces will determine who actually gained or lost from last week’s ruling.

Managing Editor

Jim Duffy has been covering technology for over 28 years, 23 at Network World. He covers enterprise networking infrastructure, including routers and switches. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy and at

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