Regulatory Moral Hazard

Price Caps and Endogenous Entry under the 1996 Telecommunications Act
  • Dennis L. Weisman
Part of the Topics in Regulatory Economics and Policy Series book series (TREP, volume 37)


Two watershed events have fundamentally reshaped the regulatory landscape in the telecommunications industry over the last two decades. The first is the pervasive substitution of price cap regulation (PCR) for rate-ofreturn regulation (RRR); and the second is the passage of the 1996 Telecommunications Act.1 Whereas, each of these events has been studied extensively in their own right, the interaction between them has not. This chapter is a first step in attempting to develop a better understanding of this interaction and its public policy implications. We begin with a brief description of these two watershed events in order to motivate the analysis and provide the requisite institutional framework.


Telecommunication Industry Incumbent Firm Regulate Firm Competitive Entry Competitive Local Exchange Carrier 
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Copyright information

© Springer Science+Business Media New York 2000

Authors and Affiliations

  • Dennis L. Weisman
    • 1
  1. 1.Department of EconomicsKansas State UniversityUSA

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