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

Gregory Rosston (), Scott Savage () and Bradley Wimmer ()
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Gregory Rosston: Stanford Institute for Economic Policy Research
Bradley Wimmer: Department of Economics, University of Nevada, Las Vegas

No 05-006, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: 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.

Keywords: competition; political contributions; private interest; public interest; regulation; telecommunications; universal service (search for similar items in EconPapers)
JEL-codes: L51 L96 (search for similar items in EconPapers)
Date: 2006-01
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Citations: View citations in EconPapers (2)

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