Introduction
The actual cost of providing telecommunications services in rural America is generally
higher, per customer, than is the cost of providing these services in urban areas. This
difference is due in part to the lower density of population of rural areas. Rural
carriers, in contrast to urban carriers, have fewer customers to share basic fixed costs
(for example, switches) and these customers are separated by greater distances,
increasing outside plant costs, than are their urban counterparts. The disparity in costs
is also related to the economies of scale and economies of skill enjoyed by large urban
carriers that are not available to rural carriers. For example, the Federal
Communications Commission’s forward-looking economic cost model shows a cost of
866.27,withoutadjustmentforoverheadcosts,toprovidealocalloopinaWyomingwirecenter,comparedtoacostof9.97 to provide a local loop in a New York City
wire center.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/60280/1/austinchilders.pd