Macroeconomic Effects of Telecommunications Deregulation

This study analyzes and assesses the macroeconomic effects of changes in the regulatory environment for the telecommunications industry and telecommunications firms due to the Federal Communications Commission (FCC) Triennial Review (February 2003) and a D.C. Appeals Court decision early this year (March 2004), which vacated portions of the Triennial Review. Taken together, the Triennial Review and Appeals Court decision have substantially altered the regulatory backdrop for the telecommunications industry.1 The study looks at the potential impacts of changes in the economic behavior of the Bell companies and Competitive Local Exchange Carriers (CLECs) and how these changes could impact on real economic growth, capital spending, jobs, disposable income, consumer spending, profits, and the federal budget. A blend of “macro” and “micro” analysis is used in the research, through computer simulations with the Sinai-Boston (SB) (2004 Version) macroeconometric model of the U.S.

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