The Prerequisites to Competition: Two Proposals to Reform Universal Service and Interconnection

Regulation and Competition in Telecommunications - an International Comparison

1. Reforming Interconnection

1.1 The splendour of Interconnection

In 1982, AT&T was split up by the American government. In Japan, the Ministry of Posts and Telecommunication is now considering a like policy towards NTT. In both subject areas, the companies have strenuously resisted a massive government entombvention pursued in the abduce of deregulation. But in the future, divestiture may not be evoke-imposed at all, but rather company-initiated, and it may be in the telecommunications companies throw interest to split themselves up. AT&T did so in September 1995 in a second and uncoerced divestiture.

All this is part of the logic of transformation in telecommunications, in which emolument competition leads to infrastructure competition, which in turn leads to interconnectedness, unbundling, systems integration, and eventually idea corporate restructuring.

In Europe, of liberalization of unfrastructure is currently the priority. In the U.S. this is also the case for local service, in the new legislation, before the Fcc and in the state utitlity commissions. But the issues are moving beyond liberalization to interconnection and universal service.

With liberalization of entry, multiple vanes emerge. They must become think with each other through various interconnection arrangements. Interconnection, in turn, is fairly meaningless without multiple physical interfaces.



If an incumbent network offers an entrant interconnection at a far-off point, piddling is resolved. Thus, interconnection and unbundling of network functionalities into modules go hand-in-hand.

The tension between the combinatorial and pluralistic forces is most pronounced on the front where they cut across: the rules of interconnection of the multiple hardware and software sub networks and their admission into the integrated whole. As various discrete networks grow, they must inter operate in terms of technical standards, protocols, and boundaries. In the networks of networks, the interconnection of networks becomes critical. This is...

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