The Change in Productive Efficiency in Telecommunications in the United States |
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Authors: | Noel Uri |
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Institution: |
a Industry Analysis Division (RM 2-C311), Media Bureau, Federal Communications Commission, 445 12th Street, SW, Washington, DC 20554, USA. |
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Abstract: | The question addressed here is whether the adoption of incentive regulation, which has become an important regulatory tool in the telecommunications industry in the USA, has resulted in a change in the technical efficiency of local exchange carriers in the USA. After providing an overview of the nature of incentive regulation, a methodology for measuring technical efficiency and its change is introduced. This is a multiple-output/multiple-input distance function approach to measuring technical efficiency. The results of implementing this approach for 19 local exchange carriers for the 1988-2001 period indicate that in the production of local service, intrastate toll/access service, and interstate access to local loops, there was no change in technical efficiency between the 1988-1990 period and the 1991- 2001 period, something that incentive regulation was specifically designed to promote. |
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