Federal preemption and state regulation of transportation and telecommunications

Transportation and telecommunications are two of the most important infrastructural industries in the American economy. As these industries are so vital and because they exhibit characteristics that have frequently rendered them quasi-monopolistic, their growth has been accompanied by state and federal regulation. We document how the imposition of regulation has led to continual conflicts over the extent to which federal regulation should take precedence over state regulation. We illustrate how the justifications for federal preemption have been applied not only to the regulation, but also to the recent deregulation, of railroads, trucking, and telecommunications. We contend that political factors, such as congressional support, precedent-setting court rulings, and, most important, political pressure from affected interest groups that is related to the revenues still generated within states by these industries, ultimately determine the form of preemption that emerges from the Congress.