Telecommunications Regulation and New Services: a Case Study at the State Level

James Prieger

Department of Economics from California Davis - Department of Economics

Abstract: 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.

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Working Paper: Telecommunications Regulation and New Services: a Case Study at the State Level (2003)
Journal Article: Telecommunications Regulation and New Services: A Case Study at the State Level (2001)
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