International Differences in Telephone Rate Structures and the Organization of Business Subscribers.

This study examines the ratio of long-distance to local telephone prices across a sample of developed countries. Using regression analysis, support is provided for the hypothesis that long-distance prices will be lower relative to local prices to the extent that large business subscribers are a larger share of the population of subscribers; however, the lobbying impact of business subscribers interacts with the anticipated deadweight costs of cross-subsidization. Prior competitive entry into the telecommunications sector is also associated with lower relative long-distance prices. Copyright 1994 by Kluwer Academic Publishers