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Toll-free numbers: Demand, property rights, and public policy

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  • Duffy-Deno, Kevin T.
  • Parsons, Steve G.

Abstract

The demand for Toll Free Numbers (TFNs) languished from 2000 to 2008; however recent growth in demand caused the FCC to open a new toll-free code (855) with the possibility of new code openings in the next three years. The analysis here indicates the demand for TFNs is highly inelastic (the coefficient for own price elasticity for TFNs is approximately −0.04). This has implications for concerns regarding future exhaust of toll-free codes and the price structure for recovery of SMS/800's costs. This article considers the effects of the limited property rights for TFN, and welfare implications of gray markets for vanity TFNs. The FCC's allocation mechanism for new 855 codes is considered and whether other allocation mechanisms, such as auctions, could be welfare superior.

Suggested Citation

  • Duffy-Deno, Kevin T. & Parsons, Steve G., 2012. "Toll-free numbers: Demand, property rights, and public policy," Telecommunications Policy, Elsevier, vol. 36(4), pages 324-334.
    • Handle: RePEc:eee:telpol:v:36:y:2012:i:4:p:324-334
    DOI: 10.1016/j.telpol.2012.01.005
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    References listed on IDEAS

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    Cited by:

    1. Parsons, Steve G., 2014. "Using the Hicks formula to evaluate an estimate of the elasticity of derived demand for toll-free numbers," Telecommunications Policy, Elsevier, vol. 38(2), pages 210-215.

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