Posted: 5 Apr 2000
This essay is part of a Symposium entitled "American Regulatory Policy: Have We Found A Third Way?" The paper looks at the changes in the regulation of what were once called public utilities and are now called network industries. Traditional regulation is described and compared with the current form and structure of the regulation of these industries. The paper makes the argument that, even though deregulation is occurring consistent with Third Way thinking, it is occurring not only because of changes in world global economic views. Rather, it is changing because of what traditional regulation has accomplished. Traditional regulation constructed the infrastructure for the country and now service is nearly universally available. The traditional form of regulation should now give way and be "renegotiated." This is not to say that government regulation of network industries should be abandoned, however. In fact, severe problems remain including stranded costs, open access, and competition between incumbents and entrants. Because of these remaining problems, government regulation will continue and, ironically, regulators may take more of an active monitoring role on the competitiveness of various industries. The future of regulation depends upon how competitive markets can be and how well consumers are served during the current regulatory generation.
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