Local telephone rate structure and telephone penetration: A universal service perspective

This article analyzes the relationships between local telephone rates, demographic factors and telephone penetration rates in rural Illinois. The results of the analysis suggest that monthly rate reductions increase telephone penetration rates more in areas with high poverty rates than in areas with lower poverty rates. These findings suggest that universal service programs designed to produce uniform telephone rates will be less effective in increasing penetration rates than will programs targeted at reducing monthly telephone rates in areas of high poverty.