The economics of DSL regulation

Legislation regulating the DSL market in the US has failed to level the playing field. Separating the economic interests of incumbent exchange carriers and their affiliates will ultimately serve consumers best. An open market for DSL access run exclusively by the Baby Bells would avoid existing distortions and enable regulation to focus on encouraging the RBOCs to provide access to underrepresented areas where investment would otherwise be unjustified. The costs of these investments could be distributed on a prorated basis through the nonaffiliate exchange carriers' operation in a competitive market.