COMPETITION IN THE LOCAL EXCHANGE

In the field of telecommunications, movement towards competitive provision of basic services and network infrastructure (BSNI) is building momentum, with a growing number of countries reviewing their prohibitions on entry into this remaining preserve of monopoly privilege. Of 32 countries surveyed, 22 maintain monopoly structures with only seven permitting ''active'' competition in BSNI. However, technological change, shifting industry cost structures, growing diversity of user demand, large investment requirements and the globalization of business activity are all working to accelerate the pace of regulatory reform and market-place restructuring. A glimpse of where these trends are ultimately leading can be had by observing the path-breaking progress in competition in local exchange services. A small number of countries, including the United States, have opened some parts of the local exchange to competition. The step-by-step progression towards increasing competition ranges from stand-alone fibre rings for high-speed local communications to competition in all aspects of local exchange services. Achieving greater competition in BSNI requires solving important problems, including among others the preservation of universal service, unbundling of network infrastructure to enable competitive access and the assignment and portability of telephone numbers. In any event, the solid progress in realizing competition at the local exchange level makes the less ambitious goal of expanding competition in the ''long-distance'' market-place seem moderate by comparison.