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Meddling Through: Regulating Local Telephone Competition in the United States

Author

Listed:
  • Robert G. Harris
  • C. Jeffrey Kraft

Abstract

After a brief history of telecommunication policies and the development of local competition in the United States, this paper analyzes the Telecommunications Act of 1996 and subsequent FCC and state regulatory decisions. Unfortunately, these recent policy changes have generated pervasive, intrusive regulations, undermining the objectives the Telecom Act was intended to promote: competition, innovation, and investment in telecommunications infrastructure. States should allow incumbent local carriers to rebalance their retail rates and set interconnection prices based on actual costs. Federal policymakers should reduce and liberalize regulations, allowing market forces more freedom to allocate resources and shape industry structure.

Suggested Citation

  • Robert G. Harris & C. Jeffrey Kraft, 1997. "Meddling Through: Regulating Local Telephone Competition in the United States," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 93-112, Fall.
  • Handle: RePEc:aea:jecper:v:11:y:1997:i:4:p:93-112
    Note: DOI: 10.1257/jep.11.4.93
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.11.4.93
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    References listed on IDEAS

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    1. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
    2. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Matthew Gentzkow, 2006. "Valuing New Goods in a Model with Complementarities: Online Newspapers," NBER Working Papers 12562, National Bureau of Economic Research, Inc.
    2. Carlo Cambini & Piercarlo Ravazzi & Tommaso Valletti, 2000. "La tariffazione dell'accesso nelle telecomunicazioni: principi economici e interventi regolatori in alcuni paesi industrializzati," ICER Working Papers 10-2000, ICER - International Centre for Economic Research.
    3. Patrick Massey, 2004. "Is Irish Utility Regulation Failing Consumers?," Economics, Finance and Accounting Department Working Paper Series n1451104, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    4. Chiang, Eric P. & Hauge, Janice A., 2013. "The impact of non-neutral federal regulatory policy on competition," Telecommunications Policy, Elsevier, vol. 37(11), pages 1142-1149.
    5. Massey, Patrick, 2004. "Is Irish Utility Regulation Failing Consumers?," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2004(4-Winter), pages 1-18.
    6. repec:oup:jcomle:v:4:y:2008:i:4:p:1065-1096. is not listed on IDEAS
    7. Clifford Winston, 1998. "U.S. Industry Adjustment to Economic Deregulation," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 89-110, Summer.
    8. Kahn, Alfred E. & Tardiff, Timothy J. & Weisman, Dennis L., 1999. "The Telecommunications Act at three years: an economic evaluation of its implementation by the Federal Communications Commission," Information Economics and Policy, Elsevier, vol. 11(4), pages 319-365, December.
    9. Knorr, Andreas, 2002. "Liberalization in telecommunications," HWWA Discussion Papers 162, Hamburg Institute of International Economics (HWWA).
    10. Diaz-Bautista, Alejandro, 2002. "The role of telecommunications infrastructure and human capital: Mexico┬┤s economic growth and convergence," ERSA conference papers ersa02p102, European Regional Science Association.
    11. Russell Pittman, 2001. "Vertical Restructuring of the Infrastructure Sectors of Transition Economies," Industrial Organization 0111002, EconWPA.
    12. White, Lawrence J., 2000. "US telephone deregulation: lessons to be learned, mistakes to be avoided," Japan and the World Economy, Elsevier, vol. 12(2), pages 173-183, May.
    13. Inderst, Roman, 2002. "Why competition may drive up prices," Journal of Economic Behavior & Organization, Elsevier, vol. 47(4), pages 451-462, April.
    14. Harvey James & Derek Johnson, 2002. "Understanding Regulatory Environments and their Impact on Economic Change," Industrial Organization 0202001, EconWPA.
    15. Dino Falaschetti, 2004. "Can Voting Reduce Welfare? Evidence from the US Telecommunications Sector," Public Economics 0401006, EconWPA.
    16. Dino Falaschetti, 2004. "Can Voting Reduce Welfare? Evidence from the US Telecommunications Sector," Public Economics 0401009, EconWPA.
    17. Dino Falaschetti, 2003. "Can latent groups influence policy decisions? The case of telecommunications policy," Public Economics 0311002, EconWPA.
    18. Dino Falaschetti, 2003. "Voter Turnout, Regulatory Commitment, and Capital Accumulation: Evidence from the US Telecommunications Sector," Microeconomics 0311002, EconWPA.

    More about this item

    JEL classification:

    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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