Regulatory regimes and efficiency in US local telephony

The paper assesses the efficiency consequences of differentregulatory regimes for US local telephony. Specifically, alternativeregulatory regimens (price-cap regulation and incentive regulation)are contrasted with traditional rate-of-return regulation (ROR).Relative efficiency scores are obtained from the Data EnvelopmentAnalysis (DEA) approach. The regression analysis on the determinantsof efficiency, after controlling for technical change effects,indicates that alternative forms of regulation appear to inducea higher level of efficiency for the regulated firms than ROR.