al policies are developed and enforced. The assumption is often made that OFDM provides additional user-to-user interference resilience. This is not actually the case. What actually happens is that the modem will avoid using subcarriers that are badly impaired. There is therefore a direct physical layer capacity cost suffered by other users whenever a new high data rate service is deployed in a local loop. This is physical layer contention loss expressed in the frequency domain. There will also be MAC layer contention loss expressed in the time domain, but that's a topic for Chapter 3. In terms of access economics copper has the advantage over fibre in that it is usually already deployed and fully amortised. The problem is that the income from a user is not directly coupled to the cost that will be borne by other users in the form of a degraded service offering. The problem has been exacerbated by competition policy that has encouraged service unbundling in the belief that this will improve market efficiency and a relaxed regulatory environment that has failed to take into account potential spectral interference issues. Thus, theoretical improvements in market efficiency are being dissipated by the technical inefficiency that is consequent on the competition policy that was introduced on the assumption that overall delivery efficiency would improve. This is not necessarily the case and a strong argument could be made that artificially created competition in the local loop will prove to be an expensive experiment that will fail in the longer term. My good friend David Cooper of Hillebrand and Partners23 reflected on the conundrum of unbundling the local loop, to the delight of free-market regulators but with adverse technical effects He commented as follows At the micro economic level, entrepreneurs necessarily have to align economics with technology if they want to remain competitive. Governments and regulators can afford to misalign economics and technology, and there is no control mechanism that limits this. Pe