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Prospects for Deregulation in Telecommunications

Joseph Farrell ()

Industrial and Corporate Change, 1997, vol. 6, issue 4, 719-40

Abstract: The FCC and state regulators have been working hard since the 1996 passage of the Telecommunications Act to restructure regulation to make it more compatible with competition. Deregulation remains an especially complex problem for telecommunications, given such factors as its dependence on carrier-to-carrier cooperation, tendency toward a natural monopoly, the multi-dimensional aspects of competition, and the political constraint on deregulation. The paper suggests four organizing principles for deregulation: (A) accept some trade-off, given a state of competition; (B) recognize ex ante as well as ex post effects; remove stepping stones if they become deadweight; and (D) evolve away from subsidy mentality. The paper suggests some steps toward exploring the implications and possible implementation of these principles. Copyright 1997 by Oxford University Press.

Date: 1997
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