| Description |
With all inventions, time is the ultimate test of success. The telephone seems to have weathered pretty well. It is one of those few inventions that can claim a nearly unparalleled universality in its acceptance and demand. The world today seems hardly imaginable without the telephone. But, as the saying goes, all things come with a price. This paper seeks to examine the price of telephony. As the telephone developed, it soon became clear that most everyone would want access to telephone service. But access at what price? After all, telephony was established as a profit making enterprise. Under a classical framework, this price would be left to the regulation of the invisible hand. But this was not to be. The characteristics of telephony proved evasive to the constraints of a perfectly competitive market. As a result, government regulation intervened. For almost a century, access prices have been the result of regulatory decisions. This paper will look at how access prices have and will continue to be determined by providing a theoretical background for regulation and then developing a historical narrative of the metamorphosis of access prices - where we've been and where we're going. In the end, the conclusion is reached that our journey will return us to our beginning. In terms of regulating access prices - give the job back to the invisible hand. |
