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This paper studies empirically whether mandatory unbundling delayed the deployment of DSL service by BellSouth by exploiting a law change in Kentucky and variation in access prices across markets. I find that deregulation in Kentucky triggered deployment, but I find no evidence that access prices affected deployment pace. An upper bound on the welfare loss due to late deployment in rural markets is $21 million. The findings are consistent with a positive effect of deregulation on the profitability of upgrades, but can also result from a strategic delay which is part of the bargaining between the firm and the regulator.