Presentation on theme: "Regulation and Antitrust Law CHAPTER 17. U.S. airline deregulation in 1979 lowered fares by an estimated 18 percent. Fares have continued to fall with."— Presentation transcript:
U.S. airline deregulation in 1979 lowered fares by an estimated 18 percent. Fares have continued to fall with the arrival of new low-cost airlines such as America West, Frontier, JetBlue, SouthWest, and Spirit. Airline Deregulation
Fares were falling during 2001 well before 9/11 decreased the demand for air travel. Airline Deregulation Air fares continued to fall through 2004.
Fares could be even lower because barriers to entry exist in the airline industry. Barriers to entry arise from the allocation of slots at major airports and legal restrictions on foreign airlines. Airline Deregulation
Cable television has been on a regulatory roller coaster. When cable first arrived, its prices were regulated. They were deregulated in 1984, but profits soared and prices were re-regulated in 1992. Regulatory Roller Coaster
Congress passed yet another deregulation law in 1996 and set March 31, 1999, as the date the Federal Communications Commission (FCC) would stop regulating most cable TV prices. On that date, federal price controls were removed from packages that included popular channels, such as CNN, Discovery, ESPN, and MTV. Regulatory Roller Coaster
Before the 1999 deregulation, consumers paid an average $31 a month for cable TV services. Back in 1996, when Congress set the March 31, 1999, date, it expected to see effective competition among cable companies, but competition still has not developed. Regulatory Roller Coaster
When the 1992 regulated prices took effect in 1993, prices decreased. But in 1994, the FCC loosened the rules and prices began to rise. In mid-1996, cable rates increased sharply. Between 1996 1999, cable prices increased sharply. Prices have continued to increase but the range and quality of service have improved as well. Regulatory Roller Coaster