Price Caps and Incentive Regulation in Telecommunications PDF Download
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Author: Michael A. Einhorn
Publisher: Springer Science & Business Media
ISBN: 1461539765
Category : Business & Economics
Languages : en
Pages : 247
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Book Description
Michael A. Einhorn In continuing to deregulate telecommunications companies, regulators have begun to consider alternative approaches to traditional cost-based price regulation as a means of encouraging monopoly efficiency, promulgating technological innova tion, protecting consumers, and reducing administrative costs. Under cost-based regulatory procedures that had been used, prices were designed to recover the regulated company's costs plus an allowed rate of return on its rate base; this strategy was costly to administer, provided no consistent incentives to cost-ef ficiency and technological improvement, afforded many opportunities for strategic misrepresentation of reported costs, and may have encouraged both uneconomic expansion of the utility's rate base and cross-subsidization of its competitive services. A category of alternative regulatory approaches can be classified broadly as social contracts. Under the general strategy of social contract regulation, regulators first delimit a group of regulated core services that they continue to regulate and then stipulate a list of constraints that the utility must agree to meet in the future; in exchange, regulators agree to detariff or deregulate entirely other competitive or nonessential services that the utility may offer. As long as no stipulated constraints are violated, the utility may price freely any service; if it reduces costs, it may keep a share of its profits. According to the National Telecommunications Information Administration (NTIA, 1987), social contract agreements of one form or another have been considered or implemented in a majority of American states.
Author: Michael A. Einhorn
Publisher: Springer Science & Business Media
ISBN: 1461539765
Category : Business & Economics
Languages : en
Pages : 247
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Book Description
Michael A. Einhorn In continuing to deregulate telecommunications companies, regulators have begun to consider alternative approaches to traditional cost-based price regulation as a means of encouraging monopoly efficiency, promulgating technological innova tion, protecting consumers, and reducing administrative costs. Under cost-based regulatory procedures that had been used, prices were designed to recover the regulated company's costs plus an allowed rate of return on its rate base; this strategy was costly to administer, provided no consistent incentives to cost-ef ficiency and technological improvement, afforded many opportunities for strategic misrepresentation of reported costs, and may have encouraged both uneconomic expansion of the utility's rate base and cross-subsidization of its competitive services. A category of alternative regulatory approaches can be classified broadly as social contracts. Under the general strategy of social contract regulation, regulators first delimit a group of regulated core services that they continue to regulate and then stipulate a list of constraints that the utility must agree to meet in the future; in exchange, regulators agree to detariff or deregulate entirely other competitive or nonessential services that the utility may offer. As long as no stipulated constraints are violated, the utility may price freely any service; if it reduces costs, it may keep a share of its profits. According to the National Telecommunications Information Administration (NTIA, 1987), social contract agreements of one form or another have been considered or implemented in a majority of American states.
Author: David E. Sappington
Publisher: American Enterprise Institute
ISBN: 9780844740591
Category : Business & Economics
Languages : en
Pages : 416
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Book Description
This book applies new advances in economic theory regarding the asymmetry of information between firms and their regulators to the design of improved telecommunications regulation.
Author: Jaison R. Abel
Publisher:
ISBN:
Category : Public utilities
Languages : en
Pages : 96
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Book Description
Author: Michael A. Crew
Publisher: Springer Science & Business Media
ISBN: 146156249X
Category : Business & Economics
Languages : en
Pages : 213
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Book Description
This volume focuses on incentive regulation and competition. While much of the regulatory action is taking place in telecommunications, the impact of competition and the resultant regulatory change is being felt in other traditional public utilities including electricity. The book reviews topics including price caps, incentive regulation, market structure and new regulatory technologies.
Author: United States. Congress. House. Committee on Energy and Commerce. Subcommittee on Telecommunications and Finance
Publisher:
ISBN:
Category : Telephone
Languages : en
Pages : 490
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Book Description
Author: Leland L. Johnson
Publisher:
ISBN:
Category : Price regulation
Languages : en
Pages : 66
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Book Description
Author: Sumit K. Majumdar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study evaluates the effect of incentive regulation on the productivity of U.S. local exchange carriers between 1988 and 1993. Introducing pure price-cap schemes has a strong and positive, but lagged, effect on technical efficiency. Where price-cap schemes operate in conjunction with an earnings- sharing scheme, there is immediate effect on technical efficiency, but the impact is less strong than the effect of a pure price-caps scheme. Where only an earnings-sharing scheme operates, its effect is detrimental to technical efficiency. Weaker, though broadly positive, results are obtained as to the effect of incentive regulation on scale efficiency.
Author:
Publisher:
ISBN:
Category : Telecommunication
Languages : en
Pages : 804
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Book Description
Author: Dale E. Lehman
Publisher: Springer Science & Business Media
ISBN: 1461543150
Category : Business & Economics
Languages : en
Pages : 134
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Book Description
The Telecommunications Act of 1996 envisioned a competitive free-for-all in the U.S. telecommunications industry with removal of barriers to entry in local telecommunications markets and the lifting of the artificial restrictions that kept the Regional Bell Operating Companies (RBOCs) out of the interLATA long-distance market. After close to 5 years, only one RBOC has been granted permission (controversially) to enter the interLATA market, and local competition has yet to provide most consumers with meaningful choices. In addition, the wave of mergers across the industry has raised the specter of putting the former Bell System back together again. Policymakers now openly question whether the Act can deliver what it promised. Three principal themes are developed in this book. First, there has been a coordination failure between Congress and the FCC in translating the principles embodied in the Act into practice. The authors provide evidence for this by analyzing stock market reactions to legislative and regulatory actions. This coordination failure was largely predictable, given the ambiguity in the Act, as well as conflicting jurisdictions between the FCC and the states. Second, the Act calls for wholesale prices to be `based on cost.' Regulators adopted a costing standard (TELRIC) that provides a means to subsidize competitive entry in local telephone service markets. The ready adoption of the TELRIC standard by regulators is shown to be tied to the third theme: price cap regulation provides regulators with `insurance' against the adverse effects of competition in local telephone markets. Statistical analysis reveals that regulators in price cap states set uniformly lower unbundled network element prices (lower barriers to entry) in comparison with regulators in rate-of-return and earnings sharing states. The result is a triumph of regulatory processes over market processes - the antithesis of the purpose of the Act.
Author: Noel D. Uri
Publisher: Nova Publishers
ISBN: 9781594541650
Category : Business & Economics
Languages : en
Pages : 234
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Book Description
The process of formulating and implementing telecommunications policy in the United States often seems chaotic and disorganised, with overlapping responsibility and frequent conflicts among federal and state regulators, Congress, the Administration, and the Federal judiciary. There has never been a consensus on what should change and what should remain unaltered. Telecommunications policy has evolved gradually over a relatively long period of time, resulting in a cumulative major transformation. It is still tied, however, to the Communications Act of 1934. Actions have been taken that have gradually moved policy from traditional public utility regulation of a monopoly to greater reliance on market forces and encouragement of competition. The policies are an amalgam incorporating elements from a wide range of political and economic views. There is nothing endemic in this transformation process to guarantee that the resulting policies have led to greater economic efficiency or that they are better in some subjective sense than alternatives that are available. policies that have been implemented in order to evaluate their impact. An objective evaluation of the impact of a policy affords an opportunity to make adjustments to it based on the realised economic consequences. This approach to policy making can be looked upon as a learning-by-doing exercise. In this book a number of objective studies based on data from various telecommunications systems are presented. These studies discuss and evaluate policies that have been implemented. In a number of instances, the policies have been misguided. Recommendations to correct the most egregious problems are offered.
