The Impact of "Deregulation" on Regulator Behavior: An Empirical Analysis of the Telecommunications Act of 1996

This paper examines how regulators set local prices in response to the changes brought on by the Telecommunications Act of 1996 (“Telecom Act”). We are particularly interested in the extent to which state regulators set prices that promoted efficiency or were influenced by private-interest groups who had secured rents under a regime of regulated monopoly. Using regional Bell operating company (RBOC) data, our empirical results indicate that private interests continue to influence the structure of retail and wholesale prices, although their influence appears to be waning. We find that changes to the regulatory structure, as measured by federal approval of RBOC Section 271 applications that open up markets to competition and universal service subsidies, resulted in a re-balancing of retail prices and lower overall price levels.competition, political contributions, private interest, public interest, regulation, telecommunications, universal service

Comparative Analysis of Telecommunications Regulations: Pitfalls and Opportunities

Book Review: Controlling Market Power in Telecommunications: Antitrust vs. Sector-specific Regulation by Damien Geradin and Michel Kerf. In this 2003 publication, the authors comprehensively review and analyze the telecommunications regulatory structure of five nations that have achieved some success in promoting competition in telecommunications markets. The authors engage in this analysis in order to evaluate the use of telecommunications sector-specific regulation versus more general, economywide antitrust regulation to accomplish specific goals related to promoting competition and efficiency in the provision of telecommunications services. This review describes the authors’ analysis and highlights its strengths and limitations. It also offers a few suggestions about the circumstances in which a comparative evaluation of different telecommunications regulatory approaches can be most useful

Making and Keeping Regulatory Promises

Multiyear regulatory commitments, or their absence, are an important part of the functioning of the telecommunications services and products industries. In this Article, Warren G. Lavey argues that, under some conditions, it is both possible and beneficial for regulators to commit to a well-defined, multiyear sequence of regulatory changes. First, this Article examines several examples of how efforts for comprehensive reform fared in real multiyear implementations. It also explores how some piecemeal regulatory changes evolved into efforts for comprehensive reform based on a well-defined sequence. This Article considers the effects of multiyear regulatory promises through analysis of several regulatory actions involving telecommunications carriers in Mexico, Venezuela, Hungary, and the United States. The Article then presents two conclusions about making and keeping regulatory promises-regarding procedures and benefits-and analyzes an example of a multiyear promise in the United States with too much uncertainty about timing, carriers\u27 obligations, and regulatory standards. Lastly, the Article summarizes the conclusions and recommendations for promoting greater use of multiyear regulatory plans

Differentiation Strategy and Market Deregulation: Local Telecommunication Entry in the Late 1990s

The authors examine the role of differentiation strategies for entry behavior in markets for local telecommunication services in the late 1990s. Whereas the prior literature has used models of interaction among homogenous firms, this research is motivated by the claim of entrants that they differ substantially in their product offerings and business strategies. Exploiting a new, detailed data set of Competitive Local Exchange Carriers (CLECs) entry into over 700 U.S. cities, the authors take advantage of recent developments in the analysis of entry and competition among differentiated firms. They test and reject the null hypothesis of homogeneous competitors. They also find strong evidence that CLECs account for both potential market demand and the business strategies of competitors when making their entry decisions. This suggests that firms' incentives to differentiate their services should shape the policy debate for competitive local telecommunications.

Regulating Competition in the Interexchange Telecommunications Market: The Dominant/Nondominant Carrier Approach and the Evolution of Forbearance

Although significant competition began to develop in the interexchange market during the mid-twentieth century, the Federal Communications Commission did not undertake a meaningful effort to regulate competitive forces until it commenced its Competitive Carrier rulemaking in 1979. This proceeding, which adopted a market power approach to rate, tariff, and facilities regulation in order to enhance competition, service diversity, and consumer welfare, constituted a fundamental change in the Commission\u27s monopoly-based regulatory approach to telecommunications. The author examines the market power approach to the regulation of competition in the interexchange telecommunications market recently adopted by the FCC, with an emphasis on the arduous administrative, judicial, and legislative course taken to develop and implement forbearance as the primary regulatory policy

Unfit for Prime Time: Why Cable Television Regulations Cannot Perform Trinko\u27s \u27Antitrust Function\u27

Until recently, regulation and antitrust law operated in tandem to safeguard competition in regulated industries. In three recent decisions-Trinko, Credit Suisse, and Linkline-the Supreme Court limited the operation of the antitrust laws when regulation performs the antitrust function. This Note argues that cable programming regulations-which are in some respects factually similar to the telecommunications regulations at issue in Trinko and Linkline-do not perform the antitrust function because they cannot deter anticompetitive conduct. As a result, Trinko and its siblings should not foreclose antitrust claims for damages that arise out of certain cable programming disputes