The effect of incentive regulation in telecommunications in the USA
by Noel D. Uri
International Journal of Services Technology and Management (IJSTM), Vol. 3, No. 4, 2002

Abstract: Incentive regulation is now an important regulatory tool in the telecommunications industry in the USA. The issue explored here is whether incentive regulation has resulted in an increase in productive efficiency. After providing an overview of the nature of incentive regulation, one methodology for measuring its effects on productive efficiency is reviewed. This methodology is data envelopment analysis (DEA) and allows for the measurement of both scale efficiency and technical efficiency of individual local exchange carriers. The results indicate that most local exchange carriers were technically efficient over the 1988-1998 period. Four LECs, however, consistently demonstrate scale inefficiency. In the aggregate, however, based on the DEA results there was no identifiable improvement in aggregate LECs' technical efficiency between 1988 and 1998. Subsequently, an alternative methodology, a stochastic frontier production function approach, is considered. The results from this methodology confirm that there was no change in technical efficiency over the period of study, something that incentive regulation was specifically designed to enhance.

Online publication date: Wed, 13-Aug-2003

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Services Technology and Management (IJSTM):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com