The Effects of Regulation and Competition on the Price of AT&T Intrastate Telephone Service.
ABSTRACT Using data on AT&T intrastate toll prices, this study examines the effect of changing regulatory practices and increased competition on AT&T pricing behavior in the intrastate long-distance telecommunications industry. The results suggest that, with some qualification, the price of AT&T telephone service is lower in states which have the longest history of departure from rate-of-return regulation. Moreover, the regulatory climate has a far more significant effect on AT&T prices than does competition. The paper outlines several possible explanations for these results. Copyright 1990 by Kluwer Academic Publishers