Assessing the Performance of the Price Cap Plan for Local Exchange Carriers in the United States

In 1991 the FCC implemented a price cap plan for local exchange carriers' interstate access service designed to deal with the regulatory boundaries problem arising from the breakup of AT&T in 1984. The experience with the price cap plan demonstrates the difficulty of predicting productivity growth accurately and makes clear that regulators cannot depend upon a pure price cap plan to keep prices within a reasonable range of costs. With periodic reviews to readjust plan parameters, however, a price cap plan can maintain the rate-of-return close to the target rate-of-return without diminishing the price cap plan's incentives for efficient production. A simple method of recalculating the X-factor based on the rate-of-return over the previous three years worked well in simulations. If this procedure had been used over the price cap period 1991 to 2000, prices would have been 20 percent lower and expenditures on LECs' telecommunications service subject to a price cap would have been $3.8 billion lower.     

Reviews

R. W. Davies, ed., From Tsarism to the New Economic Policy. Continuity and Change in the Economy of the USSR. London and Basingstoke: Macmillan, 1990, xx + 417 pp., £45.00.

Alastair McAuley, ed., Soviet Federalism, Nationalism and Economic Decentralisation. Leicester and London: Leicester University Press, 1991, ix + 214pp., £38.00.

Loren Graham, ed., Science and the Soviet Social Order. Cambridge, MA and London: Harvard University Press, 1990, ix + 443 pp., £27.95.

Ronald I. McKinnon, The Order of Economic Liberalization: Financial Control in the Transition to a Market Economy. Baltimore, MD, and London: The Johns Hopkins University Press, 1991. xii + 200 pp., £20.00. $32.00.

Mary McAuley, Bread and Justice: State and Society in Petrograd 1917–1922. Oxford: Oxford University Press, 1991, xviii + 461 pp., £45.00.

David Armstrong & Erik Goldstein, eds, The End of the Cold War. London: Frank Cass & Co Ltd, 1990. 216pp., £19.50.

Paul B. Stephan III & Boris M. Klimenko, eds, International Law and International Security: Military and Political Dimensions. A US‐Soviet Dialogue. Armonk, NY, and London: M. E. Sharpe, Inc., 1991, xxii + 362 pp., $90.00.

Richard F. Staar, Foreign Policies of the Soviet Union. Stanford, CA: Hoover Institution Press, 1991, xl + 352 pp., £14.95 p/b.

Robert O. Freedman, Moscow and the Middle East: Soviet Policy Since the Invasion of Afghanistan. Cambridge: Cambridge University Press, 1991, xi + 426 pp., £35.00 h/b, £14.95 p/b.

Galia Golan, Soviet Policies in The Middle East: From World War II to Gorbachev. Cambridge: Cambridge University Press, 1990, ix + 319 pp., £27.50 h/b, £10.95 p/b.

Brian McNair, Glasnost, Perestroika and the Soviet Media. London and New York: Routledge, 1991, x + 231 pp., £35.00.

Shams Ud Din, ed, Perestroika and the Nationality Question in the USSR. New Delhi: Vikas, 1991, xv + 145 pp., £15.95.

Ronald J. Hill & Jan Zielonka, eds, Restructuring Eastern Europe: Towards a New European Order. Aldershot: Edward Elgar, 1990, ix + 226 pp., £28.50.

Aleksa Djilas, The Contested Country: Yugoslav Unity and Communist Revolution 1919–1953. London: Harvard University Press, 1991, v + 259 pp., £27.95 h/b.

Bartlomiej Kamiriski, The Collapse of State Socialism: the Case of Poland. Princeton, NJ: Princeton University Press, 1991, xiv + 264 pp., $39.50 h/b, $14.95 p/b.

David Ost, Solidarity and the Politics of Anti‐Politics. Opposition and Reform in Poland since 1968. Philadelphia, PA: Temple UP, 1990, xi + 279 pp. $34.95.

Roman Laba, The Roots of Solidarity—A Political Sociology of Working Class Democratisation. Princeton, NJ: Princeton UP, 1991, xii + 247 pp., $24.95.

Keith Sword, ed, The Soviet Takeover of the Polish Eastern Provinces, 1939–41. London: Macmillan (in association with the School of Slavonic and East European Studies), 1991, xxiii + 318 pp., £45.00.

William B. Husband, Revolution in the Factory: The Birth of Soviet Textile Industry, 1917–20. New York and Oxford: Oxford University Press, 1990, viii + 227 pp. £25.00.     

An unusual shotgun injury pattern produced by an intermediate target

Discharge of a shotgun with a shotgun casing in its muzzle as a "dust cover" produced a pattern of injuries suggestive of combined intermediate- and distant-range wounds.     

Doctors under the knife

With Bill Clinton's new reforms only a month away, the health-care system is on the operating table--and the doctors are under the knife. Americans have a love-hate relationship with physicians: they like the care that doctors provide but hold them to blame for the nation's health-care mess. NEWSWEEK looks at how the culture of medicine may change, assesses doctors' fears--and examines the brave new world of HMOs.     

Book reviews

A. L. Meiendorf, Optimizatsiya khozyaistvennykh reshenii: metod analiza prirashchenii. Series: Aktual'nye problemy sel'skogo khozyaistva. Moscow: ‘Ekonomika’, 1976.

Oliver H. Radkey, The Unknown Civil War in Soviet Russia. A Study of the Green Movement in the Tambov Region, 1920–21. Stanford, Calif.: Hoover Institution, 1976. xiv+457 pp. $12.95.

Roy and Zhores Medvedev, Khrushchev—The Years in Power. London: OUP, 1977. xi+198 pp. £3.95.

Daniel F. Calhoun, The United Front: the TUC and the Russians, 1923–1928. Cambridge: CUP, 1976. 450 pp. £10.50.

Gabriel Gorodetsky, The Precarious Truce. Anglo‐Soviet Relations 1924–27. Cambridge: CUP, 1977. 289 pp. £9.00.

Herbert S. Dinerstein, The Making of a Missile Crisis: October 1962. Baltimore and London: Johns Hopkins UP, 1976. 302 pp. $14.95.

Donald R. Kelley, Kenneth R. Stunkel, Richard R. Wescott, The Economic Superpowers and the Environment: The United States, The Soviet Union, and Japan. San Francisco: W. H. Freeman & Co., 1976. 335 pp.

Fred Singleton (ed.), Environmental Misuse in the Soviet Union. New York and London: Praeger Publishers, 1976. xvii+103 pp. $13.50. £8.80.

Peter H. Juviler, Revolutionary Law and Order. Politics and Social Change in the USSR. New York: The Free Press, and London: Collier MacMillan, 1976. xii+274 pp. £11.05.

Richard Szawlowski, The System of the International Organizations of the Communist Countries. Leyden: A. W. Sijthoff, 1976. 322 pp.

Jürg Meister, Soviet Warships of the Second World War. London: Macdonald & Jane, 1977. 348 pp. £7.95.