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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28426
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| Title: | Retail Prices and Facility-Based Entry into the Telecommunications Market |
| Authors: | Gabel, David - Queens College
Gideon, Carolyn - Tufts University |
| Keywords: | Retail Prices, Facility-Based Entry, Telecommunications |
| Issue Date: | 2005 |
| Series/Report no.: | NET Institute Working Paper;05-15 |
| Abstract: | There is growing sentiment that rate rebalancing to eliminate cross
subsidies between local business and local residential telephone markets
is necessary to induce efficient entry in the residential market. If the
elasticity of supply with respect to the relative prices for business
and residential local service is high in both the local business and
local residential markets, then the efficiency gains from rebalancing
may be large. Alternatively, other factors related to differences in
characteristics between business and residential local telephone
markets, such as lower costs, lower elasticity of demand, and greater
willingness-to-pay for quality or redundancy in the business segment of
local telephone may be more important determinants of entry. In this
paper we simultaneously measure the elasticity of supply in the business
market with regards to the price of business services relative to the
price of residential service, using entry, economic and demographic data
a the wire center level. We find that business entry is driven by market
demand and cost characteristics, and that the effect of cross subsidies
in prices on entry is less clear. |
| URI: | http://hdl.handle.net/2451/28426 |
| Appears in Collections: | NET Institute Working Papers Series
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