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According to the Telecommunications Act of 1996, incumbent local service providers must now open up, or unbundle, their facilities to competitors. "Testing the unbundled loop" refers to testing the transmission path between a service provider's central office and a subscriber's premises.
Overview
In recent years, as the level of telco services has improved, subscribers' expectations for these services have increased. Today, for example, subscribers expect a clear dial tone every time they pick up a receiver. If there is noise or other trouble on the line, they expect it to be corrected immediately with a single call to their provider. They are also accustomed to having services such as call forwarding and call waiting activated within 24 hours of the time they place their request.
Telcos have been able to meet these rising expectations by developing rigorous maintenance and repair programs, by retaining direct access to the cable plant, and by maintaining control of the main distribution frames, testing, and database administration. They have been able to accomplish all this and control costs by using more automated services and fewer people than they had in the past.
The Creation of the Unbundled Loop
Now, however, with implementation of the Telecommunications Act of 1996, the telephone companies' control of their plants and the level of service they provide could decline. According to one of the provisions of the Act, incumbent local-exchange carriers (ILECs) will be required to make their facilities available to competitive local-exchange carriers (CLECs), on a nondiscriminatory basis.
As a result of unbundling their facilities, it will be more difficult for ILECs to retain the direct access to copper cable they need to adequately test and repair these facilities with their current equipment. Decreased access and fewer tests could affect the level of service in the transmission path between a user's premises and a central office, the part of the telco plant known as the local loop. If service in the local loop deteriorated, a providers' customers might take advantage of an option recently granted them by the Telecommunications Act and change service providers. It is clear that deregulation will force telcos to focus on customer service as never before.
In the short term, the burden of maintaining a high level of service in the unbundled local loop will fall primarily on the ILECs. However, as CLECs lease more of the local loop to provide services, they too will need to confront trouble calls directly and deal with the complexities of servicing this essential path to the customers' premises.
Many industry analysts believe CLECs will eventually lease up to 20 percent of the local loop. If CLECs achieve market penetration of this magnitude, the effect on testing and services in the loop will be significant indeed.
Both ILECs and CLECs will face extra costs for the maintenance of the segment of the phone system known as the local loop. By forcing both CLECs and ILECs to confront these service and cost issues, the Telecommunications Act will serve as a great leveler of the local services playing field. Increased competition will eventually cause this leveling to spread to other areas of the world as well, as carriers in Europe, Asia, and other continents deal with the effects of deregulation in their markets.
