cussed for a very long time. The first is to eliminate the local service sub- sidies and allow the ILECs to raise rates so that they are slightly above the actual cost of provisioning service. Subsidies could continue for high- cost rural areas and low-income families (roughly 18 percent of the total), but would be eliminated elsewhere. New entrants would then have a greater chance of playing successfully in the local access business. The subsidy dollars, estimated to be in the neighborhood of $15 billion, could then be redeployed to finance universal broadband access deployment. The monies could be distributed among ILECs, CLECs, cable companies, ISPs, wireless companies, and DSL providers, to facilitate broadband. A second solution is to call for the structural separation of the ILECs, which would result in the establishment of retail and wholesale arms. The retail arm would continue to sell to traditional customers, while the wholesale arm would sell unbundled network resources to "all comers," including the retail arm of the ILEC. The result would be enhanced inno- vation; the downside would undoubtedly be strong resistance from the ILECs because of the cost and complexity required to carry out struc- tural separation. The FCC, led by Kevin Martin, has indicated that it wants less gov- ernment intervention in the telecommunications marketplace rather Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright © 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. The Byzantine World of Telecom Regulation Chapter 4 than more, a good thing in light of the industry's current troubles. One could argue that well-intended regulatory strictures have in fact done damage. Consider the case of WorldCom once again. The company's orig- inal plan in the late 1990s was to challenge local service providers all over the world by creating a broadband voice and data IP network through acquisitions and mergers. The regula