By Paul Eric Teske
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Extra resources for After Divestiture: The Political Economy of State Telecommunications Regulation
The Federal Communications Commission, for example, clearly was not captured by AT&T in the 1970s. AT&T did advance the regulated monopoly concept in the early part of this century (Brock, 1981), but the theory of complete business exploitation of the regulatory process is no longer relevant in telecommunications or most other industries today. The FCC opted out of the original coalition and it unraveled, leaving state regulators and residential consumers to try to maintain the status quo. While some concentrated groups held levers in favor of changes in price structure, other business groups were opposed, along with the interests of residential consumers (who are voters).
Telecommunications issues are complex and require continual monitoring. Furthermore, even in states where telecommunications deregulation has been implemented, staffs have not been cut; much activity remains for staffs to analyze and monitor. While efficiency in prices is an important goal, debates about telephone policy also focus on basic issues of societal access and communications rights that were nurtured for decades under the serviceoriented Bell system monopoly. The questions of how separable ideology may be from these other influences and how to measure it are difficult to answer (see, for example, Kingdon, 1988), and I shall characterize regulatory attitudes along several different dimensions.
I expect that elements of both explanations are required to explain state telecommunications regulatory choices in the 1980s. In Chapter 3, I shall explain the economics of telecommunications networks and state regulatory options after 1982. Each holds different implications for the incomes of affected interest groups, and, therefore, the debate between them is a political issue. In this chapter I explain the basic economics of telecommunications networks, which have constrained the policy options available to regulators, and summarize actual federal and state pricing trends after 1982.