1st Edition

Telephone Companies in Paradise A Case Study in Telecommunications Deregulation

By Milton L. Mueller Copyright 1993

    Computerization has generated dra­matic advances In telecommunica­tions, such as mobile telephones and video conferencing. Coupled with this are major changes in regulation, as telephone companies face new compet­itors. States are experimenting with new forms of utility regulation and de­regulation in order to cope with the demands of rising competition. Here Mueller examines in detail the results of a radical telephone regulation law.In 1986, the state of Nebraska com­pletely discarded traditional utility reg­ulation, deregulating rates and profits of its local telephone companies. The Nebraska experiment has become a benchmark for reassessing the role of state regulation In the future of tele­communications. Using comparative data from five midwestern states, Mueller shows how deregulation af­fected rates, investment, infrastruc­ture modernization, and profits. He uncovers both positive and negative results. Mueller found established telephone companies to be basically conservative, not aggressive and ex­pansionist, and concludes that new competition, not regulation or deregu­lation, is transforming the telecommu­nications industry.This book is the first systematic em­pirical study of the controversial Ne­braska law and its broader effects. It will be a significant addition to the much debated issue of telecommuni­cations deregulation. Economists, pol­icymakers, and telecommunications managers will find in this volume a substantial resource. According to Robert Atkinson, senior vice president of Teleport Communications Group: "Nebraska's experiences with telecom­munications deregulation - the good, the bad and the ugly - need to be un­derstood by all telecommunications policymakers across the country so that they can emulate Nebraska's suc­cesses and avoid its mistakes. Mueller provides the roadmap."

    1. Deregulation: Paradise Gained, Paradise Lost, 1 or Business as Usual? 2. Regulated vs. Unregulated Prices: The Economic Orthodoxy 3. LB 835: The Law and Its History 4. Local Service Rates: Levels and Trends 5. Long Distance Service 6. Investment and Service Innovation 7. The Bottom Line: Rates of Return 8. Nebraska: Model or Warning?

    Biography

    Milton L. Mueller