ompetition. A Look Back and a Look Forward The most important regulatory battles of the next few years will revolve around attempts to preserve these subsidy programs in the face of advanc- ing competition. One approach would be to tax VoIP and other competi- tive services in the same manner that fixed-wire and wireless revenues are taxed to fund the universal service program. Another might be to regulate VoIP or wireless rates SO as to prevent unfair, "predatory" pricing of long- distance voice services, that is, to keep rates high much as the Interstate Commerce Commission and the Civil Aeronautics Board did for decades before their franchises were ended in the 1980s. An Opportunity to Deregulate? Federal and state regulators may find this a propitious time to consider deregulating telecommunications services. The traditional policies of keep- ing business and long-distance rates high to support below-cost residential access to the network are failing as long-distance rates plunge owing to wireless competition and the emerging competition from VoIP. Eight years of competition from the new CLECs has had little effect on prices and therefore on these policies. However, the new competition from wireless and VoIP, if it succeeds in driving telephone rates toward costs, will under- mine the regulators' attempts to transfer wealth through the rate structure in the name of "universal service." Such a rebalancing of rates would be enormously beneficial in terms of economic welfare, generating as much as $7 billion in static efficiency gains to the economy. Equally important, as telecom revenues stagnate, the politically driven demand for explicit universal service subsidies can only be satisfied by higher and higher "contribution rates" (that is, taxes) levied on interstate and inter- national revenues that appear monthly on subscriber bills. These contribu- tion rates are already about 9 percent of revenues and generate more than $6 billion in annual subsidies for a variety of purposes. 16 Given the relatively high pr