CEI Releases Study on Phone Competition; FCC done with UNE-P (Yeah you know me)

by on December 15, 2004

Well it seems like UNE-P – that wonderfully hyphenated acronym that in non-telecom speak stands for “pure reselling” – is on its way out. Today’s FCC press release gave us a teaser of the rules that the Commission adopted for network unbundling “open access” mandates. While there was some small reform of access rules for providers who are merely resellers, the Commission still hasn’t embraced the market alternatives available, leaving a narrow and misleading picture of the overall telecom marketplace.

Competition is much broader than just wireline vs. wireline. Indeed, CEI released a study today that finds that for every 1% increase in local phone rates, demand for wireless services increases by nearly 2%. Thus it concludes that there is true intermodal competition, despite the fact that the FCC rules do not acknowledge this. There is a check on wireline phone rates from going sky-high in the absence of UNE rules from cable, wireless and VoIP.

I think that the paper would be a good reference in light of the FCC Order, especially to refute the dissents of Copps and Adelstein, who proclaim that the sky is falling (and prices rising) for consumers. And long-term, the study will be important ammunition in the debate over telecom reform and how to think of “competition.”

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