Telephone and cable companies: Rivals or partners in video distribution?

This paper examines the evolving relationships between telephone and cable companies in light of changes in video distribution technologies, costs and regulations. It covers the technological requirements for multichannel video transmission, telco plans for local video distribution and the prospects for hybrid cable/telco services. Competition between the two industries in the USA seems likely in the 1990s.     

Access to and penetration of ICT in rural Thailand

This paper presents an econometric study of information and communication technology (ICT) in all 70,000 rural villages in Thailand, where the ICT considered consists of fixed-line telephone service, mobile telephone service, public telephones, computers, and Internet service. The results may provide information that helps policymakers decide where to put limited resources to promote ICT, and helps profit-seeking ICT companies target regions that maximize revenues. The study found that education is far more important than income in predicting the percentage of households who adopt ICT services, and that some unexpected variables such as the penetration of pickup trucks are useful predictors as well. Even in areas where fixed-line phone service is available, 70% of households with computers choose not to become Internet subscribers, although many presumably have enough money and technical knowledge. By separating availability from penetration of ICT, the study found that they can have different predictors, which means that researchers who do not separate them may get misleading results. There is no evidence showing mobile telephone service as a substitute for fixed-line telephone service. Also, public telephone service had little or no impact as a substitute for fixed-line or mobile telephone service, so phone companies need not fear that deployment of more public telephones will decrease their subscribership. Finally, there appears to be significant unmet demand for telephone service in rural Thailand where the infrastructure does not yet exist.     

美国本地电话的竞争政策及其启示

促进本地电话竞争是美国 1 996年颁布新的《通信法》的一个重要目标。本文将讨论美国促进本地电话竞争的政策目标和主要政策措施 ,分析美国本地电话竞争政策的实施效果 ,最后着重讨论美国本地电话竞争政策对我国的若干启示。     

Broadband expectations and the convergence of ranks

Broadband Internet service to widely held to be a significant contributor to economic development and global competitiveness, and comparison of adoption rates across countries are common. This paper presents evidence that the relative broadband Internet adoption ranks across the Organisation for Economic Co-Operation and Development (“OECD”) countries are converging to the wireline telephone adoption ranks in the mid 1990s. This was a time when wireline telephone service had reached maturity, but before consumers began to abandon traditional telephone services for mobile services and Internet telephone technologies. As such, in the absence of better data on household adoption, wireline telephone rank is a useful proxy for a country's ultimate fixed-line broadband penetration rank. Having such an educated guess available regarding broadband rank should reduce the amount of anxiety over rankings, since similar rankings across the two services implies suitable broadband performance. Large departures, alternately, may be a cause for concern or delight. Like prior analyses, the findings suggest that the adoption of communications services is largely an economic and demographic issue.     

Impact of telephone and satellite earth station installations on GDP : A model for rural areas of LDCs

Presents a method for estimating the impact on national development of installation of telecommunication facilities in rural areas of developing countries. A methodology developed by Hardy is applied to three groups of developing countries and a hypothetical rural region to estimate the impact on GDP per thin route satellite earth station installed over a ten year period. A logarithmic relationship between telephone density and impact on GDP per earth station is found, so that the impact per earth station increases with lower telephone densities. The model can be used to estimate the impact on national GDP of telephone installations and/or thin route earth stations in regions of low telephone density.     

Local number portability and local loop competition. Critical issues

Local telephone number portability (LNP), the ability of a telephone subscriber to change local exchange carriers, location or type of service without changing telephone numbers, is an essential feature of a competitive local loop market. This article describes these three types of portability and then examines the implications for local loop competition of specific LNP issues: implementation techniques; E-911 emergency services delivery; neutrality of subscriber database and number administration; infrastructure cost allocation and cost recovery. Evolution of number portability policy in the US, including jurisdictional complications, is reviewed.     

The effect of ownership on telephone penetration

It is well known that telephone penetration (the number of telephones per 100 population) is strongly related to national income. This report examines whether telephone penetration is significantly influenced by type of ownership (ie whether the telephone system is owned and operated by a private company or a government organization) and by postal responsibility (ie whether the telephone system is run by the same organization which runs the postal system). Economic theory and evidence from other industries suggest that private ownership increases output, and one might guess that postal responsibility would tend to restrict telephone penetration - but are these hypotheses correct and are the effects significant? The author concludes that telephone penetration is significantly more responsive to per capita GDP and to population density in private systems than in government-owned systems. Joint responsibility for postal systems has no significant effect on telephone penetration.     

Telephone number distribution: a snapshot at the beginning of 2000

The United States is depleting its stock of telephone numbers for assignment to telecommunications carriers. If current trends continue the industry could run out of numbers as soon as 2015. There is little empirical examination of this problem in the economics literature. This analysis examines the distribution of telephone numbers across the United States and quantifies the effects of several key factors. The authors examine the effects that population density, competition for local telephone service, wireless telephone service provision and rate exchange area consolidation have on telephone number assignment.     

Forecasting business needs in the telephone market

The last decade has seen substantial changes in the environment in which U.S. telephone companies operate. As regulated monopolies, telephone companies are experiencing effective competition in several areas of their operations. Additionally the consumerist movement has made regulatory agencies more aware of the requirements of the numerous markets served by the utilities. With “good” telephone service available at reasonable cost throughout the United States, users and telephone companies are more aware of secondary product attributes such as style (decorator sets) and auxiliary features (the ability to place one caller on hold and answer another call). These changes reflect the evolution of the marketing function within the telephone companies and the increasing use of marketing research for product line expansion and sales forecasting. What has caused this shifting perspective on the function of marketing? How have the utilities responded? The following discussion deals with these questions as well as the ways in which marketing research has aided the telephone company in forecasting sales to business customers.     

Canadian consumers and telephone pricing: From luxury to necessity and back again?

Changes are being sought in Canada's telecommunications services which would deregulate the industry and result in reduced long-distance telephone rates and increased local charges. This article examines historical data on telephone rates and penetration, and contemporary evidence on the results of telephone industry changes in both Canada and the USA. The authors argue that such changes would benefit business users and harm residential users. They would challenge Canada's long-term commitment to universal telephone services — an ironic development in an information age where access to electronic technology is becoming essential for daily life.     

Usage sensitivity and priority coding: a flexible approach to telecommunications pricing

This article proposes a priority coding system to decrease peak telephone demand and decrease costs to the telephone company. The system has been used for computer time and decreases the cost of servicing off-peak users as well as decreasing the price to such users.     

The rationale for local measured service

This article argues the case for a programme of charging telephone customers for their actual usage of the telephone system. The author compares the telephone to other public utilities and shows the inefficiencies which have arisen from the current flat-rate system. Flat-rate service should be provided as an option for consumers, but only in such a way that low-volume users do not subsidize high-volume users.     

Rural telephony since divestiture

This paper determines whether local rural telephone rates have increased as well as whether rural rates have increased more or less than other telephone rates since the divestiture of AT&T. Also, examined are long distance rates, penetration levels and subsidization in rural telephone markets in an attempt to ascertain whether universal service is in jeopardy in rural areas.The author would like to thank Erwin A. Blackstone, Gerald Faulhaber and Alfred E. Kahn for their helpful comments.     

Local exchange competition in early US network development: considerations for developing countries

This paper examines the claim that competition between the Bell system and independent telephone companies, and not AT&T's regulated monopoly, was responsible for the rapid growth in telephone penetration in the United States. A mathematical model is developed to test if competition contributed to network expansion, when alternative explanations such as diffusion and economic growth are also taken into account. The model is estimated with time series data on telephone penetration in the US from 1876 to 1982, using both Ordinary Least Squares (OLS) and Feasible Generalized Least Squares (FGLS). The results indicate that local exchange competition is indeed a significant influence on increase in telephone penetration, even in the early stages of network development. This has clear policy implications for the current transition to competition in developing countries.     

The future for telephony in Japan

Discussions about the future of telecommunications tend to focus on data transmission, facsimile or video communication, rather than on traditional telephony. However, the importance of telephony in society will remain unaffected for the next few decades, and it has many aspects which need attention. In this article, the share of telephones in the public network, present and future, are first reviewed, with an examination of telephone traffic growth. Second, technical possibilities for improving telephone service are pointed out. Finally, the author discusses the benefits of the evolving digital network for telephone subscribers.     

Predatory pricing and foreclosure in Canadian telecommunications

This article provides a historical perspective and current data on predatory pricing in the Canadian telecommunications industry. It is a rejoinder to another article in Telecommunications Policy, by Steven Globerman, which argued that tighter regulation of the Canadian telephone industry is unnecessary to prevent anticompetitive abuses in the industry. The author argues that predatory pricing has been an enduring feature of the industry, and precipitated the need for regulation in the first place. In the light of the evidence provided on activities and reorganization by the largest telephone company, it is argued that a high degree of deregulation has already taken place and regulators should contemplate means of reestablishing regulation.     

Beyond universal service: Characteristics of Americans without telephones, 1980–1993

This paper explores the characteristics of Americans who lack home telephone service by drawing on FCC and Census data covering the period 1980–1993. It focuses on groups who have experienced lower than average telephone penetration per household - the elderly, the poor, women and children, blacks and Hispanics, and rural Americans. Income was found to be the single most influential factor in predicting the presence of a telephone in the home, although strong mitigating factors were also identified. Low penetration rates were found among women single heads of households. Low rates were also found among the two minorities studied in comparison with the white majority, even when controlled for income. Finally, the elderly, once thought to suffer from isolation, were found to enjoy higher than average telephone penetration rates. The paper concludes with a brief discussion of lingering questions and proposes considerations for policies that might lead to higher levels of participation.     

Loop density and telephone company cost: Panel data evidence

The assumption that telephone company loop costs are determined significantly by loop density has been a bedrock assumption relied on in the development and implementation of several telecommunications programs including federal and state universal service programs. Increasingly telecommunications program development and implementation have focused on this relationship to the exclusion of all others. This article examines embedded loop cost data from a panel of Illinois telephone companies in order to examine the relationship between the costs that these companies report incurring and their respective loop densities. The analysis turns up little evidence that density is the sole driver of embedded costs.     

Estimating the impact of low-income universal service programs

This policy study uses U.S. Census microdata to evaluate how subsidies for universal telephone service vary in their impact across low-income racial groups, gender, age, and home ownership. Our demand specification includes both the subsidized monthly price (Lifeline program) and the subsidized initial connection price (Linkup program) for local telephone service. Our quasi-maximum likelihood estimation controls for location differences and instruments for price endogeneity. The microdata allow us to estimate the effects of demographics on both elasticities of telephone penetration and the level of telephone penetration. Based on our preferred estimates, the subsidy programs increased aggregate penetration by 6.1% for households below the poverty line. Our results suggest that automatic enrollment programs are important and that Linkup is more cost-effective than Lifeline, which calls into question a recent FCC (2012) decision to reduce Linkup subsidies in favor of Lifeline. Our study can inform the evaluation of similar universal service policies for Internet access.     

Increase response to industrial surveys

The results of this article support the contention that a prenotification telephone call increases the probability of response to a mail survey request. The article also discusses the practical problems associated with the use of a telephone prenotification in an industrial setting and provides a step-by-step procedure to help overcome these problems.