Monday, February 2, 2004 - The Progress & Freedom Foundation Blog

No Unbundled Packets in MA

Continuing our tour of regulatory actions in the northeast, we now turn our attention to Massachusetts, where they are not only celebrating a Super Bowl victory, but also a definitive statement from the Massachusetts Department of Telecommunications and Electricity that packet switching at remote terminals will not be unbundled. The final order is here. In the docket, AT&T and Covad urged the DTE to order unbundled packet switching under state law after the FCC rejected such a mandate in the Triennial Review. The order is short and sweet in concluding that the DTE could not be consistent with federal law and order packet unbundling.

This arcane action however is important because it is a signal on the margin that some states "get it" on the forward-looking incentives point. If you want more remote packet switching -- an indicator of broadband deployment -- you don't order it unbundled at regulator-set rates. To get broadband deployed, you have to give the entity deploying the service -- be it cable, fiber, DSL or wireless -- the right incentives to invest. And that means the ability to sell access to the product at market, as opposed to regulators', rates. Furthermore, the choice isn't between regulated new investment and non-regulated new investment; it is between investment with market rates and no investment with regulated rates.

posted by Ray Gifford @ 10:48 AM | General