The effect of state regulatory policy on telecommunications infrastructure modernization: A comparative study of network modernization in BellSouth states during 1989-1994

This study evaluates the effectiveness of public and private sector strategies designed to promote telecommunications network modernization. This study defines telecommunications network modernization in terms of percentages of deployment of five network elements. Each of the five elements is weighted equally and an additive composite network modernization ranking is calculated. The subjects of the study are the nine states served by BellSouth Telecommunications, Inc. The study\u27s dependent variable is the level of network modernization within a state for a particular year. The independent variables are BellSouth\u27s corporate network modernization strategy, a state\u27s economic regulatory policies and a state\u27s regulatory network modernization policy. Other variables dealing with a state\u27s demographics and the structure of a state\u27s regulatory commission are considered in testing the study\u27s hypotheses. A longitudinal designed time-series study is used to evaluate the effects of network policies in the states served by BellSouth. The study reviews the network modernization ranking among the nine states from 1984 through 1994. The data in the study were obtained from the Federal Communications Commission\u27s ARMIS Reports and from the state commissions through a survey. State regulatory policies designed to promote network modernization are categorized as either implicit or explicit policies in this study. Deregulation is classified as an implicit policy while a network policy with a specific network deployment schedule is defined as an explicit policy. Tennessee was the first state to adopt such an explicit network modernization policy. During the early years of the study, a relationship appeared to exist between an aggressive corporate network modernization strategy and a state\u27s high ranking in network modernization. However, by the end of the period studied, the presence of a state regulatory network modernization policy appeared to have the strongest relationship to a state\u27s network modernization ranking. This study found that Tennessee\u27s explicit network modernization policy propelled this state from last place in network modernization at the beginning of the study period to first place by the end of the study period. A significant finding of the study is that no relationship was detected between a state\u27s movement toward less regulation of BellSouth and its ranking in network modernization. The implications of this study point to the need for some level of continued explicit government attention to telecommunications network modernization. This study found that the lack of public leadership in this area could lead to the uneven deployment of new network services which could result in the segregation of our society into information haves and have-nots. This study concludes that the use of implicit public policies, such as deregulation alone, may not be sufficient to ensure that America\u27s telecommunications network remains modern