International Long Distance Calling

Title: International Long Distance Calling

Research Question: What is the relationship between long distance competition and prices?

Methodology: The study examined changes in telco concentration and long distance prices on various routes. It used data from the US Department of Justice and seminar participants at the FCC.

Results: The study found that decreased concentration is associated with significantly lower prices for consumers. However, the relationship between concentration and price varies depending on the type of long distance plan. For international flagship plans, increased competition on a route is associated with lower prices. In contrast, for basic international plans, increased competition on a route is associated with higher prices.

Implications: The findings suggest that while competition generally leads to lower prices, it may not always be the case. Price dispersion can increase as competition increases, especially for basic international plans. This implies that regulators should consider these factors when promoting competition in the long distance market.

Link to Article: https://arxiv.org/abs/0109036v2 Authors: arXiv ID: 0109036v2