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Transforming Network Interconnection and Transport: Policy Direction Summary

Implementing a regulatory regime that helps to unlock the potential for new network services remains a difficult but crucially important task. Rather than merely stating an abstract commitment to promote competition, regulators should look for simple, significant policy actions that foster a propitious structure for the most beneficial forms of competition. This paper argues that regulators should establish a geographically comprehensive lattice of competing, independently owned network interconnection points from which telephony operators are required to provide zero-price telephony call termination. Other forms of intrusive regulation of inter-company interconnection and access, such as mandatory collocation, loop unbundling, and line sharing, should be avoided or rapidly phased out. These actions would provide a needed framework for telecommunications capacity markets and bandwidth trading, encourage the rapid development and roll-out of new, broadband network services, and foster a more even geographic diffusion of such services.