Government Regulation & Deregulation

The Constitution of the United States, in the "commerce Clause," accords to Congress the "powerato regulate commerce with foreign nations, and among the several States" (Miners, Ringleb & Edwards, 1994, p. 122). In 1824, Chief Justice John Marshall established some of the basic guidelines of the Commerce Clause in Gibbons v. Ogden, holding that commerce among the states means "interstate commerce," or "commerce which concerns more States than one" (Miners, et al, 1994, p. 123). From this ruling, the Congress and the national government has moved over time to create a number of regulatory frameworks that have a direct impact on both interstate and intrastate commerce; public utility corporations, the telephone and the tele-communications sector, the airlines and other transportation sectors, and banking/finance have all be subject to varying degrees of federal (and state) oversight and regulation; in some instances, the government has shifted from a close regulatory climate to one of deregulation (Miller & Jentz, 2000).

In the 1980s and continuing to the present time, Miller and Jentz (2000) have noted that a number of industrial sectors, notably the utility, transportation and telecommunications sectors, have been subject to waves of deregulation in which government scrutiny and oversight have been reduced. The goal of deregulation is, for the most part, to encourage competition and to encourage entry of new organizations into the sector being deregulated (Solomon, 199

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ulation, will then be possible. However, Thomas (2002) cautions that some electricity providers will still require regulation because they are, in essence, monopolies. What this suggests, according to Business Week (Deregulation is great, buta, 1999). Is that the so-called "New Economy" is being driven by the belief (and the underpinning and supportive policy) that a deregulated marketplace is likely to be a more competitive, cost-effective marketplace capable of meeting the needs of the public and individuals consumers. However, the question of whether or not deregulation will work in the long term is not as yet answered. By removing the heavy hand of government control, from key industries such as telecommunications, public utilities and transportation, deregulation has dramatically increased the flexibility and the responsiveness of American corporations in a time of rapid technological and competitive change. However, as Business Week (Deregulation is great, buta, 1999) noted, in the airline and telecommunications industries predatory pricing has been observed. Customer satisfaction has correspondingly declined as the cost savings anticipated in both sectors have not been realized and, in some instances, quality of serv

Category: Government - G