Shared loop is the access network connection between the customer’s location and the local public switched telephone network (PSTN) exchange. It is usually a loop made up of two copper wires on which two operators provide services. One operator will utilize the lower frequency portion of the loop to provide voice telephony and the other will use the higher-frequencies to provide high-speed data services.
To establish the initial price for shared loop, the following principles are used:
The price of the loop will be cost-oriented and set on the basis of reasonable costs, called long run incremental costs (LRIC).
Charges for other necessary inputs is on the basis of reasonable LRIC plus mark-up.
The company should be able to recover the costs of setting up order handling processes as well as the costs of dealing with operators and maintaining the service.
The starting charge will be geographically averaged, but the company may request de-averaged prices if this can be justified by differences in the underlying costs.