Abstract
Social scientists have not yet developed and tested a satisfactory explanation of the causes of deregulation of American industry because there are too few federal cases for quantitative analysis. This article compares interest group and institutional theories, using state telecommunications regulation after the AT&T divestiture in 1984 as a laboratory. All state public utility commissions faced similar policy choices in a short period of time. The logistic regression analyses of state decisions about rate structures and competitive entry show that institutional factors, including regulatory resources, ideology, and legislative party control, have more influence than interest group pressure. The article recommends using the larger number of cases and wider variance in state policies generally to understand institutional choice.
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