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Telecommunications Regulation and New Services: a Case Study at the State Level

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Author Info
James E. Prieger

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Abstract

The effects that regulation has on the innovation and the introduction of new telecommunications services have not been previously quantified in the literature. This study compares state-regulated services in Indiana under rate of return regulation (RoRR) and under alternative regulation. The econometric model comprises an count process (for innovation) followed by a duration process with selection (for regulatory delay). Moving away from RoRR increased the rate of service creation to three times the old rate. Expected approval delays nearly disappear. A prediction exercise indicates that the firm would have introduced 12 times as many services to consumers if the alternative regulation had been in place the entire time.

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Paper provided by California Davis - Department of Economics in its series Department of Economics with number 00-11.

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Handle: RePEc:fth:caldec:00-11

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Postal: University of California Davis - Department of Economics. One Shields Ave., California 95616-8578
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Sappington, David E. M. & Weisman, Dennis L., 1996. "Potential pitfalls in empirical investigations of the effects of incentive regulation plans in the telecommunications industry," Information Economics and Policy, Elsevier, vol. 8(2), pages 125-140, June. [Downloadable!] (restricted)
  2. Bonanno, Giacomo & Haworth, Barry, 1998. "Intensity of competition and the choice between product and process innovation," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 495-510, July. [Downloadable!] (restricted)
  3. Quandt, Richard E., 1983. "Computational problems and methods," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 1, chapter 12, pages 699-764 Elsevier. [Downloadable!] (restricted)
  4. James E. Prieger, 2002. "Regulation, Innovation, and the Introduction of New Telecommunications Services," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 704-715, 07. [Downloadable!] (restricted)
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  5. Barten, Anton P., 1997. "Annual report 1996," European Economic Review, Elsevier, vol. 41(3-5), pages 971-973, April. [Downloadable!] (restricted)
  6. Greenstein, Shane & McMaster, Susan & Spiller, Pablo T, 1995. "The Effect of Incentive Regulation on Infrastructure Modernization: Local Exchange Companies' Deployment of Digital Technology," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 4(2), pages 187-236, Summer.
  7. Jan Paul Acton & Ingo Vogelsang, 1989. "Introduction," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 369-372, Autumn. [Downloadable!] (restricted)
  8. Ai, Chunrong & Sappington, David E M, 2002. "The Impact of State Incentive Regulation on the U.S. Telecommunications Industry," Journal of Regulatory Economics, Springer, vol. 22(2), pages 133-59, September. [Downloadable!] (restricted)
  9. Cabral, Luis M B & Riordan, Michael H, 1989. "Incentives for Cost Reduction under Price Cap Regulation," Journal of Regulatory Economics, Springer, vol. 1(2), pages 93-102, June.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. James Prieger, 2008. "Product innovation, signaling, and endogenous regulatory delay," Journal of Regulatory Economics, Springer, vol. 34(2), pages 95-118, October. [Downloadable!] (restricted)
  2. James E. Prieger, 2004. "The Impacts of the Americans with Disabilities Act on the Entry and Exit of Retail Firms," Econometric Society 2004 North American Winter Meetings 589, Econometric Society. [Downloadable!]
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  3. Mark Frank, 2003. "An Empirical Analysis of Electricity Regulation on Technical Change in Texas," Review of Industrial Organization, Springer, vol. 22(4), pages 313-331, June. [Downloadable!] (restricted)
  4. Prieger, James, 2005. "Endogenous Regulatory Delay and the Timing of Product Innovation," Working Papers 05-4, University of California at Davis, Department of Economics. [Downloadable!]
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