IDEAS home Printed from
   My bibliography  Save this article

An Examination of Market Power in the Intrastate Long-Distance Telephone Service Markets: Evidence from a Natural Experiment


  • Burnstein, David E


During the preceding 2 decades, state public utility commissions have experimented extensively with regulating telecommunications carriers. More recently, many states have more or less deregulated long-distance service. This paper employs a panel data set of states to examine whether the competitive conduct of long-distance carriers was affected by these events. A methodology is developed to estimate changes in the market conduct parameter following states' decisions to price deregulate long-distance service. This effect is isolated by using a difference-in-difference estimator that compares the change in market conduct of the treatment group (states deregulated during the study period) to the change in market conduct of the control group (states deregulated throughout the study period). My hypothesis is that elimination of price regulation altered the carriers' market conduct and that this change in conduct explains, in part, the price differences in regulated and deregulated markets. The results confirm my hypothesis.

Suggested Citation

  • Burnstein, David E, 2005. "An Examination of Market Power in the Intrastate Long-Distance Telephone Service Markets: Evidence from a Natural Experiment," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 149-171, April.
  • Handle: RePEc:ucp:jlawec:y:2005:v:48:i:1:p:149-71

    Download full text from publisher

    File URL:
    Download Restriction: Access to the online full text or PDF requires a subscription.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Abel, Jaison R, 2002. "Entry into Regulated Monopoly Markets: The Development of a Competitive Fringe in the Local Telephone Industry," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 289-316, October.
    2. Pablo T. Spiller & Edgardo Favaro, 1984. "The Effects of Entry Regulation on Oligopolistic Interaction: The Uruguayan Banking Sector," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 244-254, Summer.
    3. Robert N. Rubinovitz, 1993. "Market Power and Price Increases for Basic Cable Service Since Deregulation," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 1-18, Spring.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Majumdar, Sumit K. & Yaylacicegi, Ulku & Moussawi, Rabih, 2012. "Mergers and synergy: Lessons from contemporary telecommunications history," Telecommunications Policy, Elsevier, vol. 36(2), pages 140-154.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:y:2005:v:48:i:1:p:149-71. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.