The recent collapses of firms such as WorldCom and Enron have whetted public and academic interest in accounts of why regulation policy in the United States has been changing and in interpretations of what these changes portend for the future. This volume, edited by Edythe Miller and Warren Samuels, sets out to answer these and other questions through a series of essays that examines markets that are "affected with the public interest."
The book serves a dual purpose: to present a series of related articles on public utilities regulation and to honor Harry Trebing, a long-time professor at Michigan State University, who through his teaching, writing, and professional work has championed well-designed regulatory proposals and has cautioned against hasty deregulation. The two editors, Trebing, and most of the seventeen contributors are well known to regular readers of this journal.
The editors organized the book into five parts: Part 1 consists of two papers under the heading "Economic History and Theory, Market Failure and Public Policy"; part 2 presents three papers under the heading "New Technology, the Network, and the Political Economy of Information"; part 3 has four papers under the heading "Costing and Pricing and the Public Interest"; part 4 has five papers under the heading "Market, Regulatory, and Deregulation Failure"; and part 5 has two papers under the heading "Regulation and the Clash of Economic Philosophies." In addition, the volume begins with a very good introductory essay co-authored by the volumes' editors and with a brief but informative discussion of Trebing's career by David Schwartz.
There are several essays in this volume that merit particular discussion. W. H. Melody couples a useful historical overview of public utilities regulation with a detailed examination of how and why telecommunications regulation has evolved. In addition, he explicitly shows how Trebing's work illuminates this rather convoluted history, a step that several of the authors in this collection do not attempt to make. William Shepherd also presents a very interesting article, one that he organizes around the "three cardinal errors of deregulation." These three errors are premature deregulation, inappropriate mergers and acquisitions, and anticompetitive strategic pricing policies by dominant firms. He asserts, "Deregulation should occur only after the old monopolist's share is below 40 percent, there are at least five comparable strong...