PUC Autonomy and Policy Innovation: Local Telephone Competition in Arkansas and New York

Abstract

In the pre-divestiture era, the regulatory environment in the U.S. was fairly uniform and harmonious with the FCC setting the course and the accommodative state PUCs making corresponding changes in their own policies. The divestiture fractured this monolithic system as it forced the PUCs to respond to new forces unleashed in their own backyards. Soon there was great diversity in the overall regulatory landscape. Within this new environment, there is considerable disparity among the PUCs in terms of their ability to implement new ideas. This paper seeks to understand the structural factors that influence the latitude of regulatory action by PUCs via a comparative study of local telephone competition policy making in Arkansas and New York. The analysis suggests that the presence or absence of countervailing forces determines the relative autonomy the PUCs enjoy and thereby their ability to introduce new ideas into their states.