Providing incentives for increasing backbone bandwidth will not solve loop capacity problems. Let me mention just a couple of the loop unbundling issues that the FCC could address to improve market conditions for high bandwidth competition. One issue is whether the FCC should establish rules of engagement for use of unbundled loops by competitors. Right now, incumbent LECs manage the inventory of local loops for themselves. This management includes tracking the type of loop facilities serving particular customers.
Some loops are more conducive to high speed services than others.
Incumbent telcos also know which loops with these characteristics can be modified to permit high bandwidth service. Incumbent telcos also track the particular bandwidth services being transmitted over loops in the same bundle. Telcos need to manage the power of the loops inside a particular bundle. If too many loops in a bundle are transmitting high bit rate services, the signals can bleed into each other and deteriorate service. This may be an area where rules of priority might be helpful.