Deregulation, benefits

Tn 1985, the Federal Energy Regulatory Commission (FERC) began a series of regulatory actions designed to improve the competitiveness of the natural gas market and give the customers of interstate pipeline companies more seiwice options and thus allow ultimate consumers to benefit from deregulation of wellhead prices. 

Remember that proponents of airline deregulation argued for price benefits of competition, but they did not foresee how it would revolutionize the logistics functions of corporate America through the rise of companies such as Federal Express. Similarly, those who advocated telecommunications competition did not anticipate the new value-added services provided at the switch and whole new categories of customer-owned equipment connected to the network. 

Jansson applies the model to the current Spanish regulation and analyses the effect of the different liberalization measures. In the first case, new pharmacies would open and consumers would benefit, but we can say nothing from a social point of view. In the second case, the evolution of the liberalized prices would depend on the regulation regarding the number of pharmacies. Finally, she studies the effects of total deregulation. She defines the optimal regulation as one whereby a price is fixed and entry is liberalized for that price. 

This introduction of the CTX scheme is widely cited as an example of the benefits of deregulation. Australian drug regulatory authorities subsequently also introduced a similar scheme. 

As might be expected, airline profitability has been far more variable after deregulation than before. The CRS (Fischer, 1986, pg. CRS-2) notes that Under regulation, when the industry had a good year, its benefits normally were spread among all carriers. In 1984 and 1985, however, the distribution of profits was dramatically different. Fischer concludes (pg. CRS-3) Carriers have shown that it is possible to move from the financial brink to profitability, and in some cases, back again, in a relatively short period of time. ... 

FRA s traditional site-specific safety inspection program has produced substantial gains in railroad safety with real benefits for the American people... These substantial safety improvements occurred even as freight railroad traffic and train density increased to record levels following economic deregulation of the industry as a result of the Staggers Rail Act of 1980. 

The major benefit of deregulation is that railroads are better able to apply the money they have to research and training. 

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