The Transition to Deregulation

William Tye draws on his large body of work in the area of railroad deregulation to address specific economic problems associated with deregulation. He elucidates principles that can be applied to any major industry entering the competitive marketplace--particularly telecommunications and other utilities, including gas and electric. Tye has updated and revised his previous articles and structured them into an integrated framework. Each section addresses a major issue and can be read on a stand-alone basis. By providing appropriate economic models and rules for successful transition, this work is designed to encourage a smooth changeover to deregulation.

It is important, Tye says, to recognize that the original problems regulation sought to solve do not simply go away, and that new problems can be created by the transition itself. He stresses the need to deal with legacies from the regulated past, such as investments, policies, labor contracts, and sunk investment costs by buyers. He explains why explicit regulatory intervention may be required to correct equity and efficiency imbalances. Sections cover topics such as finance and revenue adequacy, pricing, mergers, and competitive access and will serve as a valuable resource for attorneys, regulatory commission staff, academics, and consultants.