On the regional gap of the Japanese local telecommunications

Abstract

The focus of the Japanese local telecommunications policy is moving towards how to solve the problem of digital divide that accompanies the spread of high-speed and broadband services. This paper estimates the translog cost function of two outputs, the telephone service and the leased circuit service, and measures the regional gap of those stand-alone costs and incremental costs. The main point we will make is: the cost gap of the leased circuit service is larger than that of the telephone service between the eleven NTT's regional offices.