Developing a National Wireless Regulatory Framework : A Law and Economics Approach

In this article, we provide a focused economic analysis of the welfare effect of state and local regulation on communications services and, in particular, on the wireless segment of the telecommunications industry. We find that when local regulation in one jurisdiction has sufficiently large quot;extra-jurisdictionalquot; effects in other locations, overall social welfare can be reduced even if state and local governments act as efficient regulators. This finding is important because it shows that the debate over the proper regulatory framework for the wireless industry need not be driven by an assessment of which set of regulators, federal or state, is more competent. Accordingly, because state and local regulation in the wireless industry has the tendency to spill across borders, our analysis suggests that society is likely better to be off with a single, national regulatory framework for wireless services