Free State: Berkman Study Flawed

The Berkman study does not accomplish its intended purpose because it does not: 1) provide a complete and objective survey of the subject matter or 2) accurately and comprehensively summarize the broadband experiences of other countries. Therefore, the study should be accorded little if any weight. A principal failing of the Berkman study is that it simply ignores several studies by well-respected economists concluding that the U.S. experience with FCC-mandated network unbundling regulation resulted in diminished network investment by both incumbents and putative competitors, and, concomitantly, that with the elimination of such mandatory unbundling regimes in the 2003 time-frame, investment is new broadband facilities surged. At the core of the Berkman Center report, and running throughout, is the notion that regulators can get the scope of unbundling and the price of the unbundled elements "just right." The U.S. experience with unbundling shows just how difficult, if not impossible, it is for regulators to get it "just right," and how investment and the development of sustainable competition suffer from getting it wrong.