Abstract
Abstract. The focus of the Japanese local telecommunications policy is shifting towards solving the problem of the digital divide that accompanies the spread of high‐speed and broadband services. The article estimates a translog cost function of two outputs – the standard telephone service and the leased circuit service – and measures the regional gap of those stand‐alone costs and incremental costs. The main point we make is that the cost gap for the leased circuit service is larger than that for the standard telephone service among the 11 Nippon Telegraph and Telephone (NTT) regional offices.
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