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The ex-post option would constitute a market test that could discriminate between alternative explanations of consumers' observed preferences for flat-rate service. By choosing the ex-post option consumers could obtain information about their own local telephone usage at low cost. If they presently select flat-rate service primarily because of uncertainty about what their bills would be under measured rates, then an optional ex-post rate should be popular. However, if consumers' choices to date reflect the behavior of informed subscribers who derive utility simply from being able to place local calls at a zero price, then providing an ex-post option will not significantly increase the total number of consumers on a measured rate. In this case, the market data would provide a method of measuring the 'utility premium' that subscribers attach to flat rates (Mitchell 1979c). The finding of a large premium would support the offering of optional flat-rate service on a subsidy-free basis. This approach would then be desirable even when--because measuring costs are small--mandatory measured service would otherwise be judged a welfare-superior rate structure.
Telecommunications Demand in Theory and Practice, which builds upon the author's seminal 1980 book, Telecommunications Demand: A Review and Critique, provides comprehensive analyses of the determinants and structure of telecommunications demands in the United States and Canada. Theory and empirical application receive equal emphasis with a heavy focus on the developments and econometric research since the divestiture of AT&T in 1984. For the first time, a detailed theoretical analysis of business telecommunications demand on subscriber and usage consumption externalities is presented. Telecommunications Demand in Theory and Practice is without peer in the documentation and analysis of price elasticities of demand for telecommunications services. This new book also includes a comprehensive bibliography with over 500 entries related to telecommunications demand and pricing. Telecommunications Demand will appeal to both academic and consulting economists, telecommunications industry analysts and regulators, and to teachers of courses in applied econometrics and regulated industries.
This revised casebook-plus-commentary offers a basic introduction to the traditional regulation of telephone companies as well as the new lines of businesses they have entered. Drawing on historical and contemporary court decisions as well as on FCC and legislative materials, Brenner documents and evaluates the past twenty years of regulation of the telecommunications industry. In particular, he traces the major regulatory changes from the time of AT&T's single-firm dominance to the increasingly competitive marketplace of today. The law and literature necessary to understand the development and trends in telecommunications are voluminous and, up until now, have been difficult to locate in one place. This book presents the critical concepts and shifts in communications policy coherently and concisely. In this revised and expanded edition, Brenner provides excerpts and comments upon the key decisions in the field, ordering them in a readily accessible manner. He assumes no specialized background in technology, law, or economics. Brenner provides an ideal introduction to this increasingly important field for professionals as well as for scholars and students interested in communications and communications policy.