Journal of Economic Perspectives: Vol. 11 No. 4 (Fall 1997)


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Meddling Through: Regulating Local Telephone Competition in the United States

Article Citation

Harris, Robert G., and C. Jeffrey Kraft. 1997. "Meddling Through: Regulating Local Telephone Competition in the United States." Journal of Economic Perspectives, 11(4): 93-112.

DOI: 10.1257/jep.11.4.93


After a brief history of telecommunication policies and the development of local competition in the United States, this paper analyzes the Telecommunications Act of 1996 and subsequent FCC and state regulatory decisions. Unfortunately, these recent policy changes have generated pervasive, intrusive regulations, undermining the objectives the Telecom Act was intended to promote: competition, innovation, and investment in telecommunications infrastructure. States should allow incumbent local carriers to rebalance their retail rates and set interconnection prices based on actual costs. Federal policymakers should reduce and liberalize regulations, allowing market forces more freedom to allocate resources and shape industry structure.

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Harris, Robert G. (U CA, Berkeley and Econ Consulting Group, Emeryville, CA)
Kraft, C. Jeffrey (Econ Consulting Group, Emeryville, CA)

JEL Classifications

L98: Industry Studies: Utilities and Transportation: Government Policy
L96: Telecommunications


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