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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28486
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| Title: | Funding Universal Service: The Effect of Telecommunications Subsidy
Programs on Competition and Retail Prices |
| Authors: | Chiang, Eric P. - Florida Atlantic University
Hauge, Janice A. - University of North Texas |
| Keywords: | Subsidies, Universal Service Fund, Telecommunications, Regulation |
| Issue Date: | 2007 |
| Series/Report no.: | NET Institute Working Paper;07-08 |
| Abstract: | There is general concern that producer subsidies distort competition. We
examine a telecommunications subsidy system that transfers money from
low cost regions to high cost regions of the U.S. Even though the system
is designed to be competitively neutral, we find evidence that the
system, combined with carrier of last resort policies, promotes cream
skimming by entrants in low cost areas and less entry in high cost
areas, where incumbents are more likely than entrants to receive
subsidies. We are unable to rule out the possibility that state
regulatory policies favor incumbents in states that are net
beneficiaries of the subsidy system. |
| URI: | http://hdl.handle.net/2451/28486 |
| Appears in Collections: | NET Institute Working Papers Series
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