Model and Parameters

Fortnightly Magazine - July 15 1996
This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.

Objective. Estimate market impacts of "1+" dialing parity plus eliminating traditional LATA boundary.

Model. Measure shifts in market dominance between major competitors, by assuming price changes and estimating revenue impacts across range of demand elasticities, to reflect both changed rates and market shares. Also consider changes to revenues collected by U S WEST through carrier access charge (CAC).

Scope. Limited to residential toll calls carried by AT&T and U S WEST. Does not examine commercial toll customers.

Data. Estimate initial residential MTS market shares for each company using data from Federal Communications Commission.1

Proprietary Restrictions. Model relies upon proprietary work provided to Montana Public Service Commission in staff memorandum dated April 23, 1996. Actual market shares cannot be revealed. Analysis is intended simply as an illustration.

Assumptions. Assume all the reported originating intraLATA toll calls (three-minutes each) are residential, carried by U S WEST.

Assumption provides estimate of residential MTS billed minutes of use (BMOU) for U S WEST. To estimate AT&T's residential MTS BMOU, assume AT&T carries 70 percent of the reported interLATA originating toll calls (three minutes each).2

Toll costs for each carrier are assumed to equal carrier access charges (CACs) for U S WEST.

This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.