Telecommunications Regulation and New Services: a Case Study at the State Level
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.
|Date of creation:||16 Jan 2003|
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- 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.
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- James E. Prieger, .
"Regulation, Innovation, and the introduction of new telecommunications services,"
Department of Economics
00-08, California Davis - Department of Economics.
- 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, November.
- James E. Prieger, 2003. "Regulation, Innovation, and the introduction of new telecommunications services," Working Papers 08, University of California, Davis, Department of Economics.
- 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.
- 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.
- 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.
- 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, Wiley Blackwell, vol. 4(2), pages 187-236, Summer.
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