An Empirical Examination of Entry Patterns in Local Telephone Markets*

In this analysis we examine the market entry patterns of new local telephone companies. We construct and estimate a multinomial logit model using information describing numbering code distribution within local telephone markets and the associated income, density, and regulatory characteristics of these markets. Our findings support the conventional wisdom that facilities-based entry by new local competitors is more likely to occur in large urban telephone markets. In addition, we present evidence that, with the exception of territories served by Ameritech, entry is more likely to occur in Bell Operating Company service territories.