Explaining the Choice Among Regulatory Plans in the U.S. Telecommunications Industry

Stephen G. Donald and David Sappington

Journal of Economics & Management Strategy, 1995, vol. 4, issue 2, 237-265

Abstract: We investigate why different states in the United States choose different regulatory plans in their telecommunications industry. We present a simple theoretical model and an empirical analysis of the issue. We find that a state is more likely to replace rate‐of‐return regulation with incentive regulation when: (1) residential basic local service rates have historically been relatively high; (2) allowed earnings under rate‐of‐return regulation in the state have been either particularly high or particularly low; (3) the state's leaders tend to come from both major political parties, rather than from a single party; (4) the state's urban population is growing relatively rapidly; and (5) the bypass activity of competitors in the state is less pronounced.

Date: 1995
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https://doi.org/10.1111/j.1430-9134.1995.00237.x

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Journal Article: Explaining the Choice among Regulatory Plans in the U.S. Telecommunications Industry (1995)
Working Paper: Explaining the Choice Among Regulatory Plans in the U.S. Telecommunications Industry (1995)
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