Quantifying the Benefits of Entry into Local Phone Service

Nicholas Economides (), V. Viard and Katja Seim ()
Additional contact information
Katja Seim: University of Pennsylvania

No 07-48, Working Papers from NET Institute

Abstract: Local telecommunications competition was an important goal of the 1996 Telecommunications Act. We evaluate the consumer welfare effects of entry into residential local telephone service in New York State using household-level data from September 1999 to March 2003. We address the prevalence of nonlinear tariffs by developing a discrete/continuous demand model that allows for service bundling and unobservable provider quality. We find that the average subscriber to the entrants' services gains a monthly equivalent of $2.33, or 6.2% of her bill, in welfare from competition. These gains accrue primarily from firm differentiation and new plan introductions rather than from price effects.

Keywords: Entry; Nonlinear Pricing; Telecommunications; Discrete/Continuous Demand (search for similar items in EconPapers)
JEL-codes: D43 K23 L11 L13 L96 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2007-12, Revised 2007-12
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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http://www.stern.nyu.edu/networks/Local_Telecommunications.pdf (application/pdf)
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Related works:
Journal Article: Quantifying the benefits of entry into local phone service (2008)
Working Paper: Quantifying the Benefits of Entry into Local Phone Service (2007)
Working Paper: Quantifying the Benefits of Entry into Local Phone Service (2007)
Working Paper: Quantifying the Benefits of Entry into Local Phone Service (2005)
Working Paper: Quantifying the Benefits of Entry into Local Phone Service (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:0748

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