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By Paul Eric Teske

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Extra resources for After Divestiture: The Political Economy of State Telecommunications Regulation

Sample text

The interest group theory incorporates the strength of interest groups that provide input into the regulatory process from several different angles, the cleavages that develop on key issues, and the coalitions that form along these cleavages. The institutional theory argues that the accountability structure of regulatory institutions constrains the evaluation of interest group inputs and the subsequent decisions.  I expect that elements of both explanations are required to explain state telecommunications regulatory choices in the 1980s.

4 Even given a network that is designed efficiently, and well­defined services, telephone pricing is difficult in reality because regulators must deal with two types of costs.  The second are marginal or incremental costs, which are forward looking, economic costs.  These costs match auditable accounting reports of the company.  They are the costs of the next increment of service to be added.  Some advocates of the station­to­station view are not convinced.  8 Research on two­part tariffs, usage pricing, peak load pricing, network externalities, demand elasticities, and cost function subadditivity supports the following conclusions.

Therefore, the costs of this equipment are traffic­ sensitive (TS), shared, and caused by usage.  Clearly this would be a cumbersome, expensive system.  3 Monthly flat­rare access costs would be lower than today and usage fees would be higher.  Whatever the answer to this question, the costs of the current network and its future additions must be paid for in some manner to be decided by public policy.  Access, local usage, intraLATA toll, intrastate interLATA toll, WATS, private line services, PBX, Centrex, and pay telephone services all are provided by the same basic system.

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