Federal Preemption of Local Government Telegraph Franchise Entry Barriers

The US central government enactment of the 1866 Post Roads Act preempted state and municipal telegraph franchise entry barriers. Like present-day telecommunication companies, local franchise regulations were an entry barrier to US telegraph companies. These pre-1866 state and municipal telegraph laws were barriers of both entry and trade between states. Barriers that would of reduced the benefits of a common market if the barriers had not been preempted by the 1866 Post Roads Act. I document what laws were preempted by the 1866 Post Roads Act, explain how these laws increased entry barriers, provide evidence that preemption was enforced, and use two counterfactuals to calculate rough estimates of the decrease in entry costs from enforcement of the act.