Type of work: Article (academic)
This paper focuses on estimating whether a natural level of non-penetration exists, and if so, what the maximum attainable penstration rate is. Universal
service penetration levels have steadily increased over the last decade. This paper hypothesizes that penetration levels will level off over time at some
point below 100%. Econometric models have been created to estimate penetration rates as a function of several explanatory variables, including per capita
personal Income, price changes for residential local service, price changes for toll services, and the existence of lifeline programs. The modeling results
also provide Information on cross-elasticities between toll and local service and the effects of the FCC’s subscriber line charges and lifeline programs
on the universal service policy goal. In summary, this research provides new information on the topic of what constitutes universal service and provides considerable data regarding own-price and cross-price elasticities associated with residential local service.