The Relative Costs of Local Telephony Across Five Countries

Abstract

In this paper we take three steps towards evaluating the relative performanceof the telecommunications markets in these five countries. First weidentify and then limit our examination to only those components of thetelecommunications network that may generate market power concerns. Wedetermine that market power concerns where they exist at all are limited tothose facilities connecting a customer with its neighboring central officecollectively called the local loop. Second we identify regional factors that maysignificantly affect relative costs for the local loop. Using data and a cost modelfrom the US to examine these regional factors we find that customer density is the most significant. Third using this same cost model along with regional data we estimate local loop costs relative to the US for New Zealand Australia the UK and Sweden.