Costs and Consequences of Federal Telecommunications Regulations
66 Pages Posted: 25 Apr 2007
Federal telecommunications regulations cost consumers as much as $100 billion annually in higher prices and the value of forgone services. The total cost of regulation to consumers and telecommunications firms is as much as $118 billion annually. Regulation and taxation both redistribute wealth, but regulation does more harm per dollar redistributed. Almost all of the federal telecommunications regulations harm economic welfare more than the amount of general taxation that would be required to redistribute the same amount of wealth as the regulation. Information on regulatory outcomes is poor. For some regulations, outcomes are effectively unknown; for others, the best evidence shows that the regulation makes a negligible contribution to the outcome it is supposed to achieve. Only one regulation - enhances 911 - has clear evidence of large positive outcomes.
Keywords: telecommunications, telephone, regulation, costs, benefits, outcomes, long-distance, universal service, wireless, spectrum
JEL Classification: D61, D62, K23, L51, L96
Suggested Citation: Suggested Citation