Deregulation is the elimination or reduction of government control of how business is done, thereby spurring competition and moving toward a more free market. The savings are then passed on to the consumer. More millionaires came from deregulation than from any other change to businesses in America. This has happened in many major industries in the history of the United States.
The first plan to deregulate a major industry was put into place by the Nixon administration in late 1971. The proposal originally addressed rail and truck transportation, but was amended in the late 70's to early 80's, during the Carter administration to include air travel. The federal government held control over the operating rights for trucking service between major cities, and it usually gave such rights to large companies. With the elimination of government control the trucking industry saw a decrease in taxes and an increase in new trucks, loads and deliveries. The small and start-up trucking companies like Southern Freight Inc. were able to develop and grow by providing more localized, high-quality customer service to businesses. This company is a prime example of growth from deregulation. It began as a two-truck operation in 1980, and is now a successful company employing 175 people and 50 contractors in local, regional and long haul markets. Deregulation also helped existing companies, i.e. R.W. Bozel Transfer, Inc. and Werner Enterprises, Inc., expand into new service areas and form enterprises that provide additional services under one roof such as brokerage and freight forwarding. With the end of regulation, small carriers such as R.W. Bozel and Werner could compete on a level playing field, and their customer bases began to grow rapidly as a result of lower pricing and better service. Talk about the American dream!
The ocean industry experienced expanded service, lower rates, and higher productivity. The acts passed not only lessened barriers to enter into transportation markets, but also promoted more independent, competitive pricing among transport service providers. The rail industry also experienced increased productivity, decreased rate pricing, and increased profitability that can be attributed to deregulation.
Airlines also saw many benefits from deregulation. Routes and schedules were opened up to make it easier for upstart airline carriers to expand into new markets. Even today, low-cost carriers continue to challenge the “legacy” airlines that were in existence before deregulation (American, United, Continental, Northwest, US Air, and Delta) causing a paradigm shift. Even though deregulation did affect the movement of air travel, the infrastructure still remains subject to government control and economic twists i.e. inflation, etc. This means that airlines were only partially deregulated, which has still led to positive results. Air travel has increased and prices have fallen by up to 25% since the 1990's. Since deregulation, airlines have reconfigured their routes and updated their equipment to make improvements in efficiency and use of space.
"Since passenger deregulation in 1978, airline prices have fallen 44.9 percent in real terms according to the Air Transport Association. Robert Crandall and Jerry Ellig (1997) estimated that when figures are adjusted for changes in quality and amenities, passengers save $19.4 billion dollars per year from airline deregulation. These savings have been passed on to 80 percent of passengers accounting for 85 percent of passenger miles. The real benefits of airline deregulation are being felt today as never before, with LCCs increasingly gaining market share. The dollar savings are a direct result of allowing airlines the freedom to innovate in routes and pricing....
...As prices have decreased, air travel has exploded. The total number of passengers that fly annually has more than doubled since 1978. Travelers now have more convenient travel options with greater flight frequency and more nonstop flights. Fewer passengers must change airlines to make a connection, resulting in better travel coordination and higher customer satisfaction."
-Fred L. Smith Jr. http://www.econlib.org/library/Enc/AirlineDeregulation.html
Telecommunications was the next major U.S. industry to be deregulated, spurred by the Telecommunications Act of 1996. The goal of this new legislation was to let anyone enter any communications business by opening up local phone markets, thus increasing competition in long distance and provided more convenient bundling and billing options regarding telephone, internet and television. This was proven to provide a boost to MCI and other companies challenging the supremacy of AT&T. AT&T was, prior to deregulation, a controlled or regulated monopoly which held exclusive rights to operate in specific areas. The Federal Communication Commission set rates for long-distance calls, while states had to approve rates for local and in-state long-distance calls. MCI Communications and Sprint Communications were able to win some of the business as a result of the end of AT&T's telephone monopoly, by proving in the process that competition could bring lower prices and improved service.
The newest wave of deregulation was that of the energy industry. This has driven energy rates down and made it easier for people to get into the energy business. People are now able to earn not just linear, but TRUE residual income. And you don't have to live in a service area to become a consultant!!! People across the country now have the right to choose their electricity and/or natural gas provider. Ambit Energy is a great choice, providing up to 30% savings! Allow me to open a door to an industry for you today. Ambit offers the following services to customers in the following areas:
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