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What Happens When Local Phone Service is Deregulated?

8 Pages Posted: 1 Oct 2012  

Jeffrey A. Eisenach

American Enterprise Institute; NERA Economic Consulting

Kevin W. Caves

Navigant Economics

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:

Jeffrey A. Eisenach (Contact Author)

American Enterprise Institute ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

NERA Economic Consulting

1255 23rd Street, NW, Suite 600
Washington, DC 20037
United States
202-466-3510 (Phone)
202-466-3605 (Fax)


Kevin W. Caves

Navigant Economics ( email )

1801 K Street, NW
Suite 500
Washington, DC 20006
United States

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