Public utility markets in the United States are commonly subject to both price and entry regulation. However, as dissatisfaction with much of the nation's regulatory system has mounted within the last decade, the wisdom of protecting utilities from competitors has come increasingly under attack. Numerous court cases and administrative rulings by regulatory agencies, as well as developments in the economics literature. have pointed to the benefits of allowing existing buyers of a utility's services to "bypass" the utility and transact for the services with either incumbent firms or new entrants. The issue of entry deregulation has been at the heart of debates over regulatory reform in such industries as telecommunications, cable and satellite television transmission, the postal service, and electricity generation.
Harry G. Broadman & Joseph P. Kalt,
How Natural Is Monopoly? The Case of Bypass in Natural Gas Distribution Markets,
Yale J. on Reg.
Available at: http://digitalcommons.law.yale.edu/yjreg/vol6/iss2/2