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Dominant carrier market power in US international telephone markets

Author

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  • James Alleman
  • Gary Madden
  • Scott Savage

Abstract

An econometric model is used to examine market power in US international telephone markets. Lerner index estimates suggest AT&T's collection rate-cost margin was between 12% and 24% during 1991 to 1995. Although Lerner estimates imply deadweight welfare losses of up to US $261 million per annum, such losses are small compared to those from the inefficient pricing of international interconnection. Settlement rate-cost margins on US bilateral markets of approximately 89% translate into a US $4907 million transfer from consumers to carriers in 1995.

Suggested Citation

  • James Alleman & Gary Madden & Scott Savage, 2003. "Dominant carrier market power in US international telephone markets," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 665-673.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:6:p:665-673
    DOI: 10.1080/0003684022000040957
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    References listed on IDEAS

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    Cited by:

    1. Madden, Gary & Savage, Scott J. & Coble-Neal, Grant, 2002. "Forecasting United States-Asia international message telephone service," International Journal of Forecasting, Elsevier, vol. 18(4), pages 523-543.

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