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Regulation and Competition in Telecommunications - an International Comparison 1 Reforming Interconnection 11 The Importance of Interconnection In 1982 ATT was split up by the American government In Japan the Ministry of Posts and Telecommunication is now considering a similar policy towards NTT In both cases the companies have strenuously resisted a massive government intervention pursued in the name of deregulation But in the future divestiture may not be state-imposed at all but rather company-initiated and it may be in the telecommunications companies own interest to split themselves up ATT did so in September 1995 in a second and voluntary divestiture All this is part of the logic of transformation in telecommunications in which service competition leads to infrastructure competition which in turn leads to interconnection unbundling systems integration and eventually radical corporate restructuring In Europe of liberalization of unfrastructure is currently the priority In the US this is also the case for local service in the new legislation before the Fcc and in the state utitlity commissions But the issues are moving beyond liberalization to interconnection and universal service With liberalization of entry multiple networks emerge They must become linked with each other through various interconnection arrangements Interconnection in turn is fairly meaningless without multiple physical interfaces If an incumbent network offers an entrant interconnection at a far-off point little is resolved Thus interconnection and unbundling of network functionalities into modules go hand-in-hand The tension between the integrative and pluralistic forces is most pronounced on the front where they intersect the rules of interconnection of the multiple hardware and software sub networks and their access into the integrated whole As various discrete networks grow they must inter operate in terms of technical standards protocols and boundaries In the networks of networks the interconnection of networks becomes critical This is not a new issue In the US debate over interconnection go back to the 19th century once the original Bell patents had expired Interconnection became
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