There is general concern that producer subsidies distort competition. We examine a telecommunications subsidy system that transfers money from low cost regions to high cost regions of the U.S. Even though the system is designed to be competitively neutral, we find evidence that the system,...

Regulated firms can be tempted to adopt cost-saving technologies, operating procedures, or capital structures without fully assessing the associated risks. We demonstrate how a regulator can costlessly preclude such behavior if she can impose substantial penalties on the firm in the event of...

The connection between broadband deployment and economic prosperity in the United States has garnered public attention due to stimulus plan funding authorized in February 2009 for broadband planning and deployment initiatives. The importance of innovation for a nation's economic well-being is...