Unbundled Access
Encyclopedia
Unbundled access is an often practiced form of regulation
during liberalization
, where new entrants of the market (challengers) are offered access to facilities of the incumbent
, that are hard to duplicate (e.g. for technical reasons or business-case wise). Its applications are mostly found in network
-oriented industries (like telecommunication, mail and energy) and often concerns the last mile
.
Unbundled access differs from Bitstream access
in that the incumbent offers fewer services at the last mile and the backhaul
is not a part of the services.
added a number of provisions designed to increase competition. Incumbent local exchange carrier
s (ILEC), under this law, are required to interconnect with competing telecommunications carriers, allowing access to individual elements of the ILEC's own network on an unbundled basis. The Telecommunications Act of 1996 provided three ways for companies to enter the new competitive telecommunications market: facilities systems, unbundled access, and resale networks.
Unbundled access is defined as "The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.
In 2005, after much litigation concerning its original unbundling rules, the Federal Communications Commission
(FCC) made the decision to limit the number and types of unbundled elements that telecommunications carriers were required to offer competitors under the common carrier laws outlined in 47 U.S.C §§ 251. In particular the FCC removed the requirement for ILECs to unbundle Fiber-to-the–Home, and abolished line sharing as an unbundled element. Additionally, the FCC prohibited access to UNEs for the exclusive service to mobile wireless services and long distance services, and removed unbundled switching from the list of UNEs.
Pricing for unbundled access is regulated by powers granted to a State commission
. A just and reasonable rate is determined on a nondiscriminatory basis and is based on cost of providing the interconnection or unbundled network element. Provisions in the legislation also allow for these pricing structures to include a reasonable profit for the provider.
This option allows companies, such as cable television
, wireless providers, and electric/gas utilities, who already have customers, installation and maintenance crews, and billing systems, to lease the network elements they are missing, such as voice switches
or electronic ordering systems, to complete their local telephone system. The 1996 Act
, thus mandates that the traditional vertical hierarchy of the telephone industry be divided into parts, known as Unbundled Network Element
s (UNE), so that competitive new entrants can choose what they need to provide competitive local telecommunications service.
Mail
In the United Kingdom, Downstream access
(DSA) was first introduced in 2003. Mail which has been collected and distributed by a competitor (challenger), but is handed over to Royal Mail
for delivery (the last mile
). The ability to utilise the Royal Mail network in this way ended a 350 year monopoly.
, independent Transmission system operator
(in the US Independent system operators) were formed.
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...
during liberalization
Liberalization
In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...
, where new entrants of the market (challengers) are offered access to facilities of the incumbent
Incumbent
The incumbent, in politics, is the existing holder of a political office. This term is usually used in reference to elections, in which races can often be defined as being between an incumbent and non-incumbent. For example, in the 2004 United States presidential election, George W...
, that are hard to duplicate (e.g. for technical reasons or business-case wise). Its applications are mostly found in network
Computer network
A computer network, often simply referred to as a network, is a collection of hardware components and computers interconnected by communication channels that allow sharing of resources and information....
-oriented industries (like telecommunication, mail and energy) and often concerns the last mile
Last mile
The "last mile" or "last kilometer" is the final leg of delivering connectivity from a communications provider to a customer. The phrase is therefore often used by the telecommunications and cable television industries. The actual distance of this leg may be considerably more than a mile,...
.
Unbundled access differs from Bitstream access
Bit stream access
Bit-stream access refers to the situation where a wireline incumbent installs a high-speed access link to the customers premises and then makes this access link available to third parties, to enable them to provide high speed services to customers...
in that the incumbent offers fewer services at the last mile and the backhaul
Backhaul (telecommunications)
In a hierarchical telecommunications network the backhaul portion of the network comprises the intermediate links between the core network, or backbone, of the network and the small subnetworks at the "edge" of the entire hierarchical network...
is not a part of the services.
United States
In the United States, the Telecommunications Act of 1996Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...
added a number of provisions designed to increase competition. Incumbent local exchange carrier
Incumbent local exchange carrier
An ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the breakup of AT&T into the Regional Bell Operating Companies , also known as the "Baby Bells." The ILEC is the former Bell System or Independent Telephone...
s (ILEC), under this law, are required to interconnect with competing telecommunications carriers, allowing access to individual elements of the ILEC's own network on an unbundled basis. The Telecommunications Act of 1996 provided three ways for companies to enter the new competitive telecommunications market: facilities systems, unbundled access, and resale networks.
Unbundled access is defined as "The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.
In 2005, after much litigation concerning its original unbundling rules, the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
(FCC) made the decision to limit the number and types of unbundled elements that telecommunications carriers were required to offer competitors under the common carrier laws outlined in 47 U.S.C §§ 251. In particular the FCC removed the requirement for ILECs to unbundle Fiber-to-the–Home, and abolished line sharing as an unbundled element. Additionally, the FCC prohibited access to UNEs for the exclusive service to mobile wireless services and long distance services, and removed unbundled switching from the list of UNEs.
Pricing for unbundled access is regulated by powers granted to a State commission
Public Utilities Commission
A Utilities commission, Utility Regulatory Commission , Public Utilities Commission or Public Service Commission is a governing body that regulates the rates and services of a public utility...
. A just and reasonable rate is determined on a nondiscriminatory basis and is based on cost of providing the interconnection or unbundled network element. Provisions in the legislation also allow for these pricing structures to include a reasonable profit for the provider.
This option allows companies, such as cable television
Cable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...
, wireless providers, and electric/gas utilities, who already have customers, installation and maintenance crews, and billing systems, to lease the network elements they are missing, such as voice switches
Telephone exchange
In the field of telecommunications, a telephone exchange or telephone switch is a system of electronic components that connects telephone calls...
or electronic ordering systems, to complete their local telephone system. The 1996 Act
Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...
, thus mandates that the traditional vertical hierarchy of the telephone industry be divided into parts, known as Unbundled Network Element
Unbundled Network Element
Unbundled Network Elements are a requirement mandated by the United States Telecommunications Act of 1996. They are the parts of the telecommunications network that the incumbent local exchange carriers are required to offer on an unbundled basis...
s (UNE), so that competitive new entrants can choose what they need to provide competitive local telecommunications service.
Downstream access
Downstream access is the term used to describe mail which has been collected and distributed by a competitor, but is handed over to Royal Mail mail centres for final processing onto local delivery offices, where they are delivered.- History :...
(DSA) was first introduced in 2003. Mail which has been collected and distributed by a competitor (challenger), but is handed over to Royal Mail
Royal Mail
Royal Mail is the government-owned postal service in the United Kingdom. Royal Mail Holdings plc owns Royal Mail Group Limited, which in turn operates the brands Royal Mail and Parcelforce Worldwide...
for delivery (the last mile
Last mile
The "last mile" or "last kilometer" is the final leg of delivering connectivity from a communications provider to a customer. The phrase is therefore often used by the telecommunications and cable television industries. The actual distance of this leg may be considerably more than a mile,...
). The ability to utilise the Royal Mail network in this way ended a 350 year monopoly.
Energy
In many countries, during the liberalization of the energy marketEnergy market
Energy markets are those commodities markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy...
, independent Transmission system operator
Transmission system operator
File:Electricity grid simple- North America.svg|thumb|380px|right|Simplified diagram of AC electricity distribution from generation stations to consumersrect 2 243 235 438 Power stationrect 276 317 412 556 Transformer...
(in the US Independent system operators) were formed.