TELRIC-BS – TELRIC-Blank Slate – This is the label economist and former regulator Alfred E. Kahn has given to the FCC’s pricing formula for UNEs. The BS component stands for “blank slate,” because he argues that regulators ignore the ILEC’s actual costs and instead adopt the costs of a hypothetical, most efficient new entrant.

UNE – Unbundled Network Element – The Telecommunications Act of 1996 required the incumbent to make access to its network available to competitors at technically feasible points. Unbundled network elements comprise loops, the network interface device, local circuit switching, dedicated and shared transport, signaling and call-related databases, and operations support systems.

Alfred E. Kahn, who has long analyzed the regulation of U.S. public utilities, underscores the key point in his colorful depiction of the rule as “TELRIC-BS.” The appended acronym is said to stand for “blank slate,” which captures perhaps the key pricing element: costs are determined by regulators to be what a most efficient network would incur if built today. Since prices are periodically reset and costs, driven by technological advance, tend to fall over time in telecommunications networks, network owners will predictably recoup less than the costs they incur when the facilities they create are rented in future periods. Alfred E. Kahn, Letting Go: Deregulating the Process of Deregulation or Temptation of the Kleptocrats and the Political Economy of Regulatory Disingenuousness, Institute of Public Utilities and Network Industries (Michigan State University, 1998). See also Robert S. Pindyck, Mandatory Unbundling and Irreversible Investment in Telecom Networks, NATIONAL BUREAU OF ECONOMIC RESEARCH WORKING PAPER w10287 (Feb. 2004). | sending the right signal (application/pdf, 897 KB) : promoting competition through telecommunications reform, a report to the u.s. chamber of commerce, September 22, 2004