COST CONSIDERATIONS FOR RURAL TELEPHONE SERVICE

This study estimates the relationship between density and fixed costs for rural telephone companies, together with several other cost factors, to determine the costs of providing telephone service to different areas. It is found that not all rural companies are high-cost companies; rural cooperatives, for instance, have the lowest operating costs and lowest total expenses per access line. Yet low-interest loans, long-distance settlements and disbursements from the universal service fund are made available to these companies on the basis of only a portion of their costs.