What Happens When Local Phone Service is Deregulated?

8 Pages Posted: 1 Oct 2012

See all articles by Jeffrey A. Eisenach

Jeffrey A. Eisenach

NERA Economic Consulting; American Enterprise Institute

Kevin W. Caves

Infotech Consulting

Date Written: October 1, 2012


After more than half a century of monopoly and public utility-type regulation of retail telephone rates, the United States embarked on a path of liberalization in the early 1980s. That process is now nearing completion. However, two areas of telephone service largely remain under traditional regulation: rural-area service and “basic” service. Some states, however, have moved toward deregulation in these areas as well. This paper examines the outcomes of those efforts as compared to states that maintain traditional regulation. It finds that in terms of rates and utilization, consumers in deregulated states are at least as well off as consumers in regulated states.

Suggested Citation

Eisenach, Jeffrey A. and Caves, Kevin W., What Happens When Local Phone Service is Deregulated? (October 1, 2012). Regulation, p. 34, Fall 2012, Available at SSRN: https://ssrn.com/abstract=2155040

Jeffrey A. Eisenach (Contact Author)

NERA Economic Consulting

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Kevin W. Caves

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