Re-wiring American network industries for competition, 1970-2010
The American deregulatory movements of the 1970s and 80s promoted free market competition as the ultimate regulator of market conduct unencumbered by the administrative inefficiencies and purported industry capture that plagued independent regulatory agencies like the Interstate Commerce Commission or the Civil Aeronautics Bureau. Decades later, we observe little convergence in the extent, meaning, and practice of market competition across deregulated industries—the central puzzle of the dissertation.
Comparing the recent histories of electric power, natural gas distribution, railroads, and telecommunications since deregulation, I argue that differences in competition reflected how the physical networks of these industries were politically re-wired to allow for competition. Deregulation involved more than simply lifting the price and entry controls that marked earlier regulatory regimes. Instead, regulators discovered that control over key network segments by incumbents of the regulatory era constituted a formidable barrier to new market entry. Across all four industries, regulators experimented with opening up incumbent-owned networks of rail, wire, and pipe to competitors under non-discriminatory terms. In response, incumbent network owners strongly resisted regulatory efforts to transform their privately-held networks into open competitive highways.
The dissertation traces the political and technical struggles to implement contested forms of competitive network access and interconnection. Rather than remain fixed and given, the physical networks and resultant market structures of each industry were consequence rather than a constraint of deregulatory policy choices.
Major railroad trunk lines from 1918 and present day