Unbundled access

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 or business case reasons). Its applications are mostly found in network-oriented industries (like telecommunication, mail and energy) and often concerns the last mile. Unbundled access is similar to Bit-stream access, where the incumbent provider gives competitive access not to the actual copper wire of the local loop, but to a high-speed ADSL data connection. Both setups ensure competition for the backhaul but leave "last mile" infrastructure the responsibility of the incumbent carrier. In the United States, the Telecommunications Act of 1996 added a number of provisions designed to increase competition. Incumbent local exchange carriers (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.