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Loop Dreams: The Price of Connection for Local Service Competition


July 1995




Competition, Costs, Interconnection, Markets (Rural, Urban), Prices, Services


Full Paper          Executive Summary          Broadband Model



Part of a series on universal service, Loop Dreams, compares the 1993 price of basic local telephone service with the cost of the loop, the major component of local service.  Also called a "line" or the "last mile," the loop links customers with networks.  Loop Dreams explains differences among definitions of costs (embedded, Incremental, and future) and traditional rates (local, state toll, and interstate toll).  Research shows that for some markets, the local prices do not cover the loop costs regardless of the definition.  The issues covered in this paper continue in the conflicts that accompany the introduction of competition into the local service market.  An early version of the New Technology Deployment Model was used to calculate the data.





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