Determinants of telephone subscription rates among U.S. households

Promoting universal access and subscription to telephone service has been a public policy goal for more than 100 years.  Traditionally this focus has been on subscription to wireline telephone service.  In recent years, however, the demand for wireless telephone service has grown dramatically.  Today there are over 300 million mobile subscribers in the United States. Taking into account the option to subscribe to a wireless phone, I estimate a model of households' demand for access to telecommunications services. Of particular interest, in the model I control for characteristics that indicate the growing proliferation of wireline and wireless broadband throughout the country. I also investigate the impact of low-income programs, Lifeline and Link-Up, on household's decision to adopt a phone. I estimate the model using a unique household-level dataset that includes roughly 190,000 observations for the 2003-2010 period. The preliminary results indicate that price of cellular service has negative impact on likelihood of subscription to a phone service, while landline service price is insignificant. Low-income programs have no effect on likelihood of subscription.