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

Author

Listed:
  • Gregory L. Rosston

    (Stanford Institute for Economic Policy Research)

  • Scott J. Savage

    (Department of Economics, University of Colorado)

  • Bradley S. Wimmer

    (Department of Economics, University of Nevada, Las Vegas)

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.

Suggested Citation

  • Gregory L. Rosston & Scott J. Savage & Bradley S. Wimmer, 2006. "The Impact of "Deregulation" on Regulator Behavior: An Empirical Analysis of the Telecommunications Act of 1996," Discussion Papers 05-006, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:05-006
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    Cited by:

    1. Gregory L. Rosston & Scott J. Savage & Bradley S. Wimmer, 2008. "The Effect of Private Interests on Regulated Retail and Wholesale Prices," Journal of Law and Economics, University of Chicago Press, vol. 51(3), pages 479-501, August.
    2. Gregory L. Rosston & Scott J. Savage & Bradley S. Wimmer, 2013. "Effect of Network Unbundling on Retail Prices: Evidence from the Telecommunications Act of 1996," Journal of Law and Economics, University of Chicago Press, vol. 56(2), pages 487-519.

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    More about this item

    Keywords

    competition; political contributions; private interest; public interest; regulation; telecommunications; universal service;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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