US telecommunications deregulation: Implications for industry structure and social welfare

Abstract

Upon the initial divestiture agreement between the US Department of Justice and the AT&T Company, a blueprint for gradual deregulation of the telecommunications industry was drafted. For the last few years the blueprint has been in the implementation stage. It is time to examine critically the deregulation blueprint and the implementation process from an economic perspective. The basic policy conclusion is that, from an economic welfare standpoint, the blueprint and the path of deregulation is seriously flawed. The critical analysis should help guide future deregulatory policy, especially in other countries considering telecommunications deregulation.