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Incentive regulation in local telecommunications: The effects on price markups

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  • Sarah Eckenrod

Abstract

The governing bodies of the telecommunications industry instituted a major shift from rate of return to price cap regulation in an effort to foster competition and improve efficiency. This paper focuses on the local exchange market and examines the price markup before and after the implementation of price cap regulation to measure the effects of the change on consumer welfare. The average price markup increased slightly after price cap regulation; however, the average price decreased, indicating that consumers benefited without firms losing from the regulatory shift. Copyright Springer Science+Business Media, LLC 2006

Suggested Citation

  • Sarah Eckenrod, 2006. "Incentive regulation in local telecommunications: The effects on price markups," Journal of Regulatory Economics, Springer, vol. 30(2), pages 217-231, August.
    • Handle: RePEc:kap:regeco:v:30:y:2006:i:2:p:217-231
    DOI: 10.1007/s11149-006-0012-7
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    Citations

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    Cited by:

    1. Dennis L. Weisman, 2023. "Measuring the Power of Regulatory Regimes," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(1), pages 19-32, February.
    2. Guerriero, Carmine, 2013. "The political economy of incentive regulation: Theory and evidence from US states," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 91-107.
    3. Crowley, Nick & Meitzen, Mark, 2021. "Measuring the price impact of price-cap regulation among Canadian electricity distribution utilities," Utilities Policy, Elsevier, vol. 72(C).
    4. Nongluk Buranabunyut & James Peoples, 2012. "An empirical analysis of incentive regulation and the allocation of inputs in the US telecommunications industry," Journal of Regulatory Economics, Springer, vol. 41(2), pages 181-200, April.

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