The Revenue and Efficiency Implications of Timed Local Calls

The case for timed local calls (TLC) is overwhelming on both equity and efficiency grounds. However, Telecom's example of a pricing structure for (TLC) would probably have raised revenue substantially. The efficiency effects depend on the structure of local prices and on what is done with the additional revenue (e.g. reducing STD). There could also be considerable savings in capital equipment requirements. Alternative TLC pricing structures are considered which may be both superior to, and more acceptable than, the original proposal.