This has obvious implications for consumers because it means that service providers have less money to spend on making improvements to their current infrastructure and on deploying new equipment in order to offer advanced services. 

But the reduction in capital expenditures has much worse implications for equipment manufacturers.  The U.S. high-tech equipment manufacturing base is dying.  These companies have laid off hundreds of thousands of employees and idled many plants that were the economic backbones of their communities.  

Lucent, which employed 150,000 people in 1999, has announced plans to cut its workforce to 35,000 by the end of this year.  Corning has been forced to idle four of its five fiber optics plants. 

These companies cannot afford to starve for much longer.  While there are business and general economic reasons that affect capital expenditures, government policy does play a part, and the FCC’s current unbundling regulations are killing these companies. 

Rules that require a company to share parts of its network, even new parts of its network, with competitors are perverse.  These rules stifle investment by giving ILECs a disincentive to deploy new facilities.  Why would you deploy new facilities when competitors can use that equipment to steal your customers?