Deregulation and Restructuring in Telecommunications Services in the United States and Germany

Abstract

[Excerpt] Because of the slower pace of reform, however, Telekom also stands to learn from the mistakes made in the United States, where deregulation has led to increased inequality among consumers and workers. For consumers, the restructuring has benefited businesses because they no longer pay rates that subsidize universal residential service. Both business and high-end retail customers can take advantage of falling prices for long-distance calling, high-speed networks, or enhanced features such as voice messaging. For lower-income consumers, however, the basic costs of local service have risen, and these consumers are less likely to be able to take advantage of new products or enhanced features, even if they are less costly than before (Keefe and Boroff 1994, p. 318). For labor, restructuring has not only displaced employees and reduced union strength, but it has also created more unequal labor market conditions both within and between union and nonunion segments. To the extent that Germany wishes to preserve equality for consumers and workers, this chapter provides an analysis of how inequality in U.S. outcomes has occurred.