Is a no-hoper, according to Raymond L. Gifford.

More troubling, the FCC’s implementation of the ’96 Act has conferred regulatory duties on the states that cannot be performed well, perhaps not by any entity, but certainly not by the states...

The FCC has directed the state commissions to price unbundled network elements using Total Element Long-Run Incremental Cost (TELRIC). TELRIC pricing is the epitome of what state commissions cannot do. Adopted by the FCC as part of its First Report and Order, which established the pricing methodology for unbundled network elements, TELRIC is a forward-looking pricing methodology that sets rates premised on the costs of an efficient, up-to-date incumbent, using commercially available technology...

Because the methodology is theoretical and forward-looking, there is more latitude respectively to inflate or minimize costs depending on a party’s interests. An incumbent local exchange carrier, seeking maximum cost recovery, will project forwardlooking efficient costs similar to its current, known costs because it wants to recover what it believes are its actual costs, even if they are in the future. Alternatively, a competitive local exchange carrier without its own facilities, will seek to minimize the costs on a future efficient network so that its cost of business is lower.

Thanks to Lynne Kiesling for the pointer.