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The effect of subscriber line charges on residential telephone bills

By Alexander C. Larson, Thomas J. Makarewicz and Calvin S. Monson

Abstract

This paper evaluates the way in which subscriber line charges (SLCs) have affected telephone company residential customers, comparing residential telephone bills before and after the $2.60 SLC began. Customer bills are analyses using the net bill reduction method and the consumer welfare method. Bills of low-income area and senior citizen customers are studied using a similar technique. The cumulative bill savings accruing to customers whose bills have been lowered for outweigh the small increases experienced by those whose bills are higher. Since the SLC programme began, interstate long-distance usage by low-income area customers has grown, on average, to nearly the same levels as usage for all residential customers.

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