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Economies of Scope in the Local Telephone Exchange Market

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  • Gabel, David
  • Kennet, D Mark

Abstract

Using cost data generated by an optimization model, we evaluate the degree of economies of scope in the local telephone exchange market. We find that economies of scope between switched and non-switched services are a decreasing function of customer density, while there are strong economies of scope, regardless of customer density, within the switched telephone market. Copyright 1994 by Kluwer Academic Publishers

Suggested Citation

  • Gabel, David & Kennet, D Mark, 1994. "Economies of Scope in the Local Telephone Exchange Market," Journal of Regulatory Economics, Springer, vol. 6(4), pages 381-398, December.
    • Handle: RePEc:kap:regeco:v:6:y:1994:i:4:p:381-98
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    Cited by:

    1. Gasmi, F. & Laffont, J. J. & Sharkey, W. W., 2002. "The natural monopoly test reconsidered: an engineering process-based approach to empirical analysis in telecommunications," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 435-459, April.
    2. Banker, Rajiv D. & Chang, Hsi-Hui & Majumdar, Sumit K., 1998. "Economies of scope in the U.S. telecommunications industry1," Information Economics and Policy, Elsevier, vol. 10(2), pages 253-272, June.
    3. D. Kennet & Eric Ralph, 2007. "Efficient interconnection charges and capacity-based pricing," International Economics and Economic Policy, Springer, vol. 4(2), pages 135-158, August.
    4. Kaserman, David L. & Mayo, John W., 1999. "Regulatory policies toward local exchange companies under emerging competition: guardrails or speed bumps on the information highway?," Information Economics and Policy, Elsevier, vol. 11(4), pages 367-388, December.
    5. Wilson, Wesley W. & Zhou, Yimin, 2001. "Telecommunications deregulation and subadditive costs: Are local telephone monopolies unnatural?," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 909-930, May.
    6. K. Mert Cubukcu & Jean-Michel Guldmann, 2008. "Geography and the costs of local telephone networks," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(4), pages 821-842, December.
    7. Russell Pittman, 2003. "Vertical Restructuring (or Not) of the Infrastructure Sectors of Transition Economies," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 5-26, March.
    8. Gasmi, F. & Laffont, J. J. & Sharkey, W. W., 2000. "Competition, universal service and telecommunications policy in developing countries," Information Economics and Policy, Elsevier, vol. 12(3), pages 221-248, September.
    9. Russell Pittman, 2001. "Vertical Restructuring of the Infrastructure Sectors of Transition Economies," Industrial Organization 0111002, University Library of Munich, Germany.

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