Implications of Telecommunications Deregulation With the passage of a recent telecommunications deregulation bill, the U.S. has embarked on a new age in telecommunications. Yes, probably for urban dwellers. For rural dwellers the picture is less clear. One of the original reasons for telecommunications regulation was to insure equal access to phones for rural dwellers. Without regulation, the costs of much rural phone service would be prohibitive.
Regulation helps apportion the costs of phone service between the urban and rural communities.
At the present time, we will retain much of the regulatory protection for rural phone users. However, there is not currently a great deal of incentive for phone companies to invest in rural communities. The reason is that the return on capital, with deregulation, will be much greater in urban markets, particularly for home entertainment and business network applications. We can only hope that rural communities will get upgraded to ISDN before this shift occurs. Some telecommunications companies, such as U.S. West, have already divested themselves of large numbers of rural local service areas.