But like real estate and intellectual property, there is public government role in licensing and deeding where they are more efficient. In telecommunications, there is also a clear government role in enforcing contracts, whether between and among carriers or between consumers and carriers. The issues above are what I might call efficiency regulation. Such regulation neither creates nor precludes competition. The role of government is not merely efficiency, but distributional as well.
Government is concerned about outcomes, concerns about equity.
Thus there is a government role, according to many, in wealth, service offerings, quality of service, pricing, and other factors in a market. These are important issues but it is here that government starts to get into trouble. Equity regulation can have profound effects upon competition, often not good effects. Paradoxically, most of the failings of 20th century regulations were not based on what I would call equity regulation , but rather on a misapplication of efficiency regulation. Although there were always equity trappings of helping one group or another, the core of 20th century utility regulation was premised on the notion of natural monopoly, that certain types of industries always face declining average cost curves and could thus be served most efficiently by a single provider.