Local measured telephone service in the USA: A quantitative analysis

Patricia L. Pacey and Larry Singell

Telecommunications Policy, 1984, vol. 8, issue 3, 249-255

Abstract: The USA has steadfastly held to a flat rate for local telephone service, whereas most other countries are characterized by a user-sensitive (measured service) system of pricing. Economic theory suggests some method of measured service pricing more accurately reflects the true costs of local service. This article seeks to determine how many US consumers could be induced to switch to measured service pricing, and using ordinary least squares, derives a model of the demand for measured service. The factors are identified that will induce the US population to move towards a measured service rate structure. The findings indicate that consumers are quite responsive to both relative price (between a local flat rate and a measured service rate) and advertising.

Keywords: Telephone; service; +; USA; Service; pricing; Ordinary; least; squares; method (search for similar items in EconPapers)
Date: 1984
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