Telecommunications Policy: Have Regulators Dialed the Wrong Number?

Telecommunications Policy: Have Regulators Dialed the Wrong Number?

Telecommunications Policy: Have Regulators Dialed the Wrong Number?

Telecommunications Policy: Have Regulators Dialed the Wrong Number?


In this timely collection of essays, leading economic and communication scholars examine major policy issues confronting federal and state regulators in the telecommunications industry. The essays describe how past regulatory decisions have contributed to a growing tension between emerging competition and the preservation of specific social objectives like the continuance of universal service, and thus provide a unique perspective on the current public policy debates. Although each author discusses a different policy issue, the common theme in this volume is the compelling argument that past regulatory decisions, which were often motivated by political compromises rather than sound economic analysis, are the primary source of inefficiency that exists in the telecommunications industry today.


In each of the last thirty-two years, the Department of Economics at Western Michigan University has organized a seminar series that features six prominent economists addressing a current topic in economics. During the 1995-96 academic year, the topic was one that has received quite a bit of attention from economists in recent years and is sure to remain "hot" for some years to come: the economics of telecommunications policy. Like some other high-technology sectors, the telecommunications sector has experienced some dramatic internal and external changes during the past several decades. Regulatory policies, which made perfectly good economic sense just a few years ago, are now often inefficient and unnecessary in an era of rapid technological change.

Donald L. Alexander, associate professor in the Economics Department at Western Michigan University, has been a keen observer of the economic and regulatory changes unfolding in the telecommunications sector. He has studied and taught in the field of economic regulation for the past several years, and he is the coauthor (with Werner Sichel) of an extensive study of the 1993 Michigan Telecommunications Act and the coeditor (withWerner Sichel) of Networks, Infrastructure, and the New Task for Regulation (1996).

In this volume, Professor Alexander has brought together six original works by six leading scholars in the fields of economic regulation and telecommunications policy. The authors examine such diverse and timely topics as the total deregulation of telephony, the use of auctions to allocate personal communication services (PCS) spectrum licenses, an assessment of price-cap regulation, universal service policies in a deregulated marketplace, and the origins of the Public Interest Standard in Federal Communications Commission (FCC) regulation. While these topics span a wide range of issues pertinent to economists and policy makers, they all share the common thread that they are affected by substantial and rapid technological change, change in competitors and competition, and policy responses by state and federal regulators.

Professor Werner Sichel

Department of Economics

Western Michigan University . . .

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