Dominant carrier market power in US international telephone markets
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Alleman, James and Madden, Gary and Savage, Scott. 2003. Dominant carrier market power in US international telephone markets. Applied Economics. 35 (6): pp. 665-673.
Curtin Business School
Communication Economics and Electronic Markets (CEEM) Research Centre
Communication Economics and Electronic Markets Research Centre (Curtin Research Centre)
An econometric model is used to examine market power in US international telephone markets. Lerner index estimates suggest AT&T's collection rate-cost margin was between 12% and 24% during 1991 to 1995. Although Lerner estimates imply deadweight welfare losses of up to US $261 million per annum, such losses are small compared to those from the inefficient pricing of international interconnection. Settlement rate-cost margins on US bilateral markets of approximately 89% translate into a US $4907 million transfer from consumers to carriers in 1995.
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