By Steve Pociask
Bankruptcies and layoffs have become commonplace in the information technology sector, particularly for telecommunications service providers and equipment manufacturers. The apparent downturn comes despite the promise of deregulation and increased competition that were to bring significant consumer benefits.
At one time it appeared that competition might slowly replace regulation. Starting with the divestiture of AT&T, competition emerged with the entry of long distance, wireless and cable TV providers, which invested in network infrastructure and vended their services to the public. Regulators adopted simple price adjustment formulae for local telephone services as a means to automate rate changes, thereby eliminating costly and time-consuming regulatory proceedings, as well as allowing incentives for efficient investment. The Internet was commercialized with…