Posted: 11/1999
FCC UNE Decision Increases Options, Reduces
Costs for CLECs
By Jonathan E. Canis
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This year has seen two groundbreaking decisions by the Federal Communications Commission (FCC) that together dramatically expand the ability of competitive local exchange carriers (CLECs) to provide innovative services, and that will revolutionize the cost of competitive entry into local markets.
In April, the FCC adopted new collocation rules, which will dramatically reduce the cost and increase the availability of collocation. Equally dramatic, in September, the FCC redefined unbundled network elements (UNEs) in compliance with the requirements of the Telecommunications Act and the Supreme Court, granting CLECs dramatic new options for providing traditional and advanced services.
The FCC has adopted the order but had not released it at press time, so not all of the details are known. We know enough, however, to predict that the UNE decision will redefine the economics of competitive local entry. The FCC reestablished six of the seven UNEs it named in 1996 (it will eliminate operator services/directory assistance).
The big news is the new UNEs it will introduce. The FCC likely will name a dozen new UNEs--and potentially more--that will allow CLECs to provide cost-effective high-bandwidth service and substantially reduce the costs of entry. Some of the most significant new UNEs are discussed below.
The extended loop (EEL): This provides the function of loop and interoffice transport, delivered to a CLEC's collocated space in an incumbent LEC (ILEC) tandem or other office. This dramatic development is technically not a combination--CLECs may have to order the functions as a special access service and later convert them to UNEs--but the EEL will dramatically lower the cost of competitive entry by reducing the need for multiple collocation arrangements.
The UNE platform: This provides all network functions needed to provide switched voice service between an interexchange carrier (IXC) point of presence (PoP) and an end user location.
Dark fiber loops and transport: For CLECs with high traffic volumes, this will be the cheapest transport option available. Interoffice transport may run out of capacity, so its utility remains to be seen. Loops, however, where available, may provide dramatic new broadband capabilities for CLECs.
Inside wire (ISW): Due to a Byzantine set of federal and state rules, it is often difficult to determine whether the ILEC or the building owner owns the ISW. Where the ILEC owns it, however, it has to offer ISW as a UNE, which should eliminate the need for CLECs to negotiate with building owners to provide service to individual tenants.
We'll have more information when the full order is released, but these UNEs promise dramatic new means of providing advanced services and reducing costs. One big caveat--many of the new UNEs will not be available immediately because state regulators will have to set rates. This process could take six months to a year or more.
