The Economic Impact of Wireless Number Portability

Authors


  • I thank Tim Bresnahan, Liran Einav, Jon Levin, Brian Viard, Greg Rosston, Pat Bajari, Tom Holmes, three anonymous referees and the Editor for their insightful comments. I also thank Charles Mahla and Allan Keiter for providing me with wireless data. All remaining errors are my own.

Abstract

This paper examines the price response of wireless carriers to the introduction of number portability in the U.S. I find that wireless prices decreased in response to number portability, but not uniformly across plans. Average prices for the plans with the fewest minutes decreased by only $0.19/month (0.97%), but average prices for medium and high-volume plans decreased by $3.64/month (4.84%) and $10.29/month (6.81%), respectively. The results suggest that higher-volume users in the wireless market benefited more from the policy-induced reduction in switching costs.

Ancillary