(3) The nongovernmental or for-profit status and the competitive situation
mean that carriers must minimize costs as well as maximize revenues.
Fixed and variable cost factors—installed first costs and operating costs—
are critical, and telecom operators are pursuing new cost-cutting technolo-
gies aggre ssively.
The increased sensitivity to capital and operating costs is driving product and
process innov ation, such as increasing levels of microelectronic and optoelectronic
integration, plus improvements in test, cable, splice, and interconnect hardware
that reduce construction time and costs.
One important concept in telecom policy reform that has affected the use of
fiber optics is “local loop unbundling.” This refers to a mechanism for letting