No need for government regulation & subsidies here; market forces will work and are working admirably to encourage telecommuting.
The fact that physical commuting isn't tax deductible, but home office infrastructure generally is tax deductible, already provides an incentive. But there are other incentives that are stronger. For example, companies that switch their employees to telecommuting, can save an enormous amount of money by cutting back on the amount of square footage they are renting. And individual employees can sleep an extra half hour to an hour (or more) each morning, plus have an extra half hour to an hour (or more) with their families each evening.
Give your employees their sleep and family lives back, and you can bet those employees are going to be self-supervising, conscientious, and a heck of a lot more productive.
I've spelled out the arguements pretty well on my company's website (I haven't posted the URL here before because I don't believe in "stealth advertising," however, in this case it's directly relevant to the topic):
www.cooperative-digital.com
Click on the link for Telecommuting, which will get you to the "Overview" page (which begins with "Dollars and Sense"), and also click the submenu item "Telecommuting Benefits" (that page begins with the words "Benefits of Telecommuting").
We are well aware of the potential ecological and resource benefits of telecommuting. In fact I've wanted to put a little "odometer" on the website, of the same type that is used to count the number of visitors to a website, which instead will count the number of car-trips that have been saved by all of the telecommuters on the systems we've installed. I can even think of a way to make another odometer for counting the person-hours saved each week.
In 1998 we pioneered the feature (which we call OutRoute) that transfers callers to off-site destinations (e.g. from the main office to home offices) without tying up office lines and suffering reduced sound volume. This was done using the previous generation of Panasonic business telephony platform (KXTD-816 and -1232 PBXs, and KXTVS-90, -100, -200 and -300 voicemail systems). In 2004, Panasonic adopted it into their new-generation business telephony platforms (KXTDA-50, -100, and -200 PBXs, and KXTVS-95, -125, -225, and -325 voicemail systems), along with enhancements such as Internet Telephony and other things that could only be done at the manufacturer's level.
Just today we began the first testcase of something new that's been made possible by some of Panasonic's enhancements in the revision 2.02 firmware for KXTDA: "OutRoute for call-centers." In the past, you could OutRoute calls to specific destinations, e.g. the caller wants to speak with Alice, so the call goes to Alice's home office, the caller wants to speak with Bill and the call goes to Bill's home office, etc. With the new version, a caller can choose "the next available representative" and the phone system uses Internet Telephony to route the call to an entire call-distribution group. The members of the call-distribution group can be anywhere, scattered across the country. The calls can be routed using any of three different call-distribution algorithms.
With OutRoute for call centers, we're not just taking cars off the road one at a time, we're taking them off the road by *handfuls* at a time.
By the way, our first testcase client for the distributed call-center application is a company whose owners are very very Reagan-and-Both-Bushes Republican. They see it as a way of expanding their sales & customer service workforce and increasing profitability without having to sink all kinds of money into expanding their physical office. They are my proof-positive that telecommuting is catching on regardless of regulatory or tax issues, and across the spectrum of "red" (Republican), "blue" (Democrat), and "green" (ecology & resources). It's such an obvious win-win solution that it's going to spread like a contagious meme.