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In the railroad industry, there have been proposals for carriers to open their networks to competitors at regulated prices in markets that lack competition. Such rail “unbundling” is intended to reduce rates by facilitating competition when the underlying economics of the network makes facilities entry infeasible. These proposals mirror arguments made in support of telephony network element unbundling under the Telecommunications Act of 1996. We examine the unbundling experience in the telecom industry to draw lessons for similar proposals in the rail industry. We suggest network unbundling in railroads is unlikely to achieve its objectives today for many of the same reasons that it largely failed in telecommunications in the past.
