The ideas for this book arose out of a long-standing interest in the regulation of public utilities and the effects of such regulation on innovation. This interest was reinforced by attendance at the AT&T- sponsored program on the Economics of Regulated Public Utilities at the Graduate School of Business, University of Chicago in 1976, followed by the completion of series of research projects and papers on the economics of public utilities. Gerald Faulhaber, while visiting Lehigh University to present a paper, also stimulated my interest in this topic. Joseph Szmania of AT&T suggested that I write a paper on innovation in telecommunications for a special edition of the Review of Business, and the resulting article "Pricing and Technological Change in Regional Telecommunications Companies" appeared in that journal in 1989. Liliane Miller, then associated with Quorum Books, proposed a book- length treatment of innovation in the telecommunications industry based on the ideas contained in the above article, resulting in present book. The editors at Quorum Books, especially Eric Valentine and Andrew Schub, have been very helpful in bringing this project to a successful conclusion, and I thank them.
Dean Richard W. Barsness of the College of Business and Economics, Lehigh University provided summer support and other assistance and encouragement for this work. My colleagues Robert Thornton, Chair Department of Economics, and Eli Schwartz generously provided ideas, research materials and counsel, and I am grateful to them.