Federal Preemption and State Regulation of Transportation and Telecommunications

Transportation and telecommunications are two of the most importantinfrastructural industries in the American economy. As theseindustries are so vital and because they exhibit characteristicsthat have frequently rendered them quasi-monopolistic, theirgrowth has been accompanied by state and federal regulation.We document how the imposition of regulation has led to continualconflicts over the extent to which federal regulation shouldtake precedence over state regulation. We illustrate how thejustifications for federal preemption have been applied notonly to the regulation, but also to the recent deregulation,of railroads, trucking, and telecommunications. We contend thatpolitical factors, such as congressional support, precedent-settingcourt rulings, and, most important, political pressure fromaffected interest groups that is related to the revenues stillgenerated within states by these industries, ultimately determinethe form of preemption that emerges from the Congress.