An empirical examination of entry patterns in local telephone markets

In this analysis we examine the market entry patterns of new local telephon e companies. We construct and estimate a multinomial logit model using info rmation describing numbering code distribution within local telephone marke ts and the associated income, density, and regulatory characteristics of th ese markets. Our findings support the conventional wisdom that facilities-b ased entry by new local competitors is more likely to occur in large urban telephone markets. In addition, we present evidence that, with the exceptio n of territories served by Ameritech, entry is more likely to occur in Bell Operating Company service territories.