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An unbundled network element (UNE) is a part of a telecommunications network that incumbent local exchange carriers (ILECs) are required to offer on an unbundled basis under the U.S. Telecommunications Act of 1996.
Because new entrants to the telecommunications market may not be able to duplicate the incumbent's local loop infrastructure, UNE allows them to use infrastructure built by the incumbent for competition in the telecommunications market.
UNE gets its name from ILEC competitors, which are allowed to purchase network infrastructure, such as loops, switches and lines separately at a discount. This allows them to offer services without actually installing any of their own lines to customers. Based on the Telecommunications Act of 1996, the FCC could require local exchange carriers (LECs) to give UNEs at a cost-based price, which may include reasonable profit. The FCC has determined that cost means forward-looking economic cost and has required that states use a methodology called total element long run incremental cost (TELRIC) to determine an appropriate figure.