Unbundling policy in the United States: players, outcomes and effects

Communications & Strategies, Jan, 2005 by Johannes M. Bauer

Dedicated interoffice transport market unbundling

Unbundled dedicated interoffice transportation is used by carriers to aggregate end-user traffic both in the mass market and the enterprise market. The FCC differentiates DS1 (24 voice grade circuits), DS3 (28 DS1 lines) and dark fiber transport. To make the required granular assessment of impairment in these markets, the FCC first defined three tiers of markets. In defining markets, the FCC attempted to reflect the state of state of competition and the revenue potential of a service and used proxies to capture these features: the number of fiber-based collocators and the number of business lines served in a market. Tier 1 wire centers are characterized by the presence of four or more fiber-based collocators or over 38,000 business lines. About two thirds of the wire centers in this tier have more than 4 fiber-based collocators, signifying the existence of substantial revenue opportunities. According to the Commission's analysis, in this situation it is likely that a CLEC may either be able to deploy facilities itself or acquire services in the wholesale market (7). Approximately 5.4 percent of all 10,796 BOC wire centers fall into this category. Tier 2 wire centers have three or more fiber-based collocators or over 24,000 business lines. About two thirds of these wire centers have three or more fiber-based collocators. Approximately 3.2 percent of all BOC wire centers, serving 12.6 percent of all BOC business lines, fall into the Tier 2 category (FCC, 2005, p. 69). Tier 3 wire centers are all remaining centers.

Using these thresholds, the FCC found that requesting carriers are impaired without access to DS1 capacity "on all routes except those connecting two Tier 1 wire centers" (FCC, 2005, p. 72). In other words, on routes involving Tier 2 or Tier 3 wire centers, DS1 transport circuits have the be made available by ILECs on an unbundled basis. To maintain consistency with its DS3 unbundling rules, the FCC limits the number of unbundled DS1 transport circuits that one carrier may request to 10 (FCC, 2005, p. 73). DS3 loops have to be unbundled for all routes involving at least one Tier 3 wire center; no carrier may request more than 12 DS3 transport circuits (FCC, 2005, pp. 74-75). Likewise, dark fiber only needs to be offered on an unbundled basis on routes involving at least one Tier 3 wire center (FCC, 2005, pp. 75-77). Lastly, based on market evidence, the FCC determined that lack of access to entrance facilities (the facilities connecting a CLEC network to an ILEC network) does not constitute impairment (FCC, 2005, pp. 77-80). As in the case of mass market circuit switching, a 12-month transition plan was adopted for competing carriers to transition away from the use of DS1- and DS3-capacity dedicated transport where they are not impaired. For dark fiber, an 18-month plan was put into place. According to the FCC:

    "these transition plans apply only to the embedded customer base,    and do not permit competitive LECs to add new dedicated transport


            
        
    
                        
		        
                


			
					
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