Since the 1990s, local exchange telecommunications carriers (LECs) have been subject to incentive regulation plans. This paper discusses theoretical and practical aspects of the evolution of price regulation as retail competition increases and as regulators mandate extensive availability of...

The benefits of competition among the long-distance interexchange carriers (IXCs) are not realized equally by all their customers. Despite the declines in rates under the discount plans, we document that basic message toll service (MTS) rates have been rising for several years. We show that...