Incentive Regulation in Practice: A Massachusetts Case Study

The Massachusetts public utility commission has pursued policies to promote competition and efficient pricing in telecommunications since the divestiture of AT&T in 1984. As part of this effort, the Massachusetts Commission approved incentive regulation for AT&T and Verizon – the only two companies for which prices were regulated in the state. This article is a case study of what preceded the incentive plans, how the plans themselves were decided, and what came after.