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Xerox University Microfilms 300 North ZM b Road Ann Arbor, Michigan 40106 74-24,359 LEWIS, John Patrick, 1942- THE ECONOMICS OF INTERCOMMUNICATIONS IN THE USSR: THE POSTAL SERVICE AND TELEPHONE AND TELEGRAPH SYSTEMS. The Ohio State University, Ph.D., 1974 Economics, general University Microfilms, A XEROX Company, Ann Arbor, Michigan © Copyright by John Patrick Lewis 1 9 74 THIS DISSERTATION HAS BEEN MICROFILMED EXACTLY AS RECEIVED. THE ECONOMICS OF INTERCOMMUNICATIONS IN THE USSR: THE POSTAL SERVICE AND TELEPHONE AND TELEGRAPH SYSTEMS DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By John Patrick Lewis, B.A., M.A. ***** The Ohio State University 1 9 7 4 Reading Committee: Approve Dr. Warren W. Eason Dr. Josef C. Brada, Jr. Dr. Larry J. Wipf A d v iser Department of Economics ACKNOWLEDGMENTS This study of intercommunications systems in the USSR has benefited from the encouragement, suggestions and crit ic ism s o f a number o f in d iv id u a ls to whom, w ith th e r e a d e r 's indulgence, I should like to express my thanks. Professor Warren W. Eason in itially suggested the subject of this dissertation and also gave me access to his microfilm collection of statistical sources on the prewar Soviet industrialization period. Beyond this, however, he has been much more theui a graduate adviser. On my behalf, he has given unstintingly of his time in innumerable ways during my graduate years at The Ohio State University. I ^ trust he w ill not find my gratitude, as Robert Louis Steven son once remarked, "a lame sentiment . more embarrassing than welcome." I am also indebted to Drs. Josef Brada .and Larry Wipf, the other members of my convnittee, who critically reviewed the dissertation. Dr. Brada greatly improved the exposition on communications growth in the final chapter. None of these three is responsible, of course, for errors that may rem ain. At an earlier stage of the research, Professors Hol land Hunter of Haverford College and the late Norman Kaplan ii of the University of Rochester offered helpful suggestions. Murray Feshbach and his colleague, Stephan Rapawy, allowed me the use of their fine library of Soviet sources at the Foreign Demographic Analysis Division of the Department of Commerce in Washington, D.C. The International Research and Exchanges Board (IREX) made it possible for my family and me to spend the 1972-73 academic year in Moscow on the Graduate Student/Young Faculty Exchange. During that uniquely rewarding exper ience, I was extremely fortunate in having been affiliated with the All-Union Correspondence Institute of Electrotech nical Communications (VZEIS) and, in particular, its Econ omics kafedra. The faculty members there, whose names and works appear throughout the present volume, created a very friendly atmosphere in which to work and were most patient ^with a foreign student whose linguistic struggles with Rus sian were, on more than one occasion, a source of amusement. I would like to single out the generous help of the follow ing Soviet economists: I.A. Podgorodetskii, my adviser at VZEIS; L.M. Soloveichik, professor of conmunications econ omics at the Moscow Electrotechnical Communications Insti tute (MEIS); O.S. Srapionov, head of the Economics Division of the Central Scientific Research Institute of Communica tions (TsNIIS), the research organ of the Ministry of Com m un ication s; N.M. Gubin, dean a t VZEIS; and A.V. Razgovorov and N.F. Golitsyn, two other members of the department. I l l Each made an important contribution to my research. I would be remiss if I failed to acknowledge the in fluence of a remarkable lady, Lida Petrovna Kostina, and her family, who so often eased the "cultural shock" of life in Moscow. Her concern for my progress in writing the dis sertation manifested itself in many ways. I am afraid I can never repay her kindness. Only those who have experienced the burdens and sac rifices involved with the writing of a dissertation can ap preciate how much these impositions are borne by one's family. Mary Beth, Matthew and Leigh Ann have grown accus tomed to this situation because they are still too young to have known any other. My w ife, Judy, has given more thaL one could reasonably ask of another human being. It is literally true that this dissertation would not have been completed save for her constant encouragement and love, am delighted to have at last emancipated her from this abnormal existence. iv VITA Hay 5 , 1942 ......................................Bom - Gary, Indiana 1964 ............................ B.A. (Economics), St. Joseph's College, Rensselaer, Indiana 1965 ............................................... M.A. (Economics) , Indiana University, Bloomington, Indiana 1965-1967 .......................................... Instructor, Economics, Robert Morris Junior College, Carthage, _ I l l i n o i s 1967-1968 .......................................... Instructor, Economics, Eastern Illinois University, Charleston, I l l i n o i s 1968-1969; Summer (1971 and 1973) .......................................... Teaching Associate (Economics), . The Ohio State University, Columbus, Ohio / 1969-1970 ...................................... Teaching Associate (Interna tional Studies), The Ohio State University, Columbus, Ohio Summer (1970); 1970-1972; 1973-1974 .......................................... NDEA (Title VI) Fellow, The Ohio State University, Columbus, Ohio 1972-1973 .......................................... International Research and Exchange Fellow (in USSR), U.S. Department of State PUBLICATIONS "Economics: The Consequences of the Newest Natural Science," The American Economist, Vol. XV, No. 1, Spring 1971, pp. 7 1 -78. v Economic Theory; Comparative Economic Systems and Soviet-type Economies; and Economic Development and Planning v l ACKNOWLEDGMENTS VITA ................... LIST OF TABLES LIST OF FIGURES INTRODUCTION. ^ Chapter I . THE DEVELOPMENT OF THE POSTAL SERVICE AND TELEGRAPH AND TELEPHONE SYSTEMS IN THE USSR ......................................................................................... Introduction The P o sta l S e r v ic e The Telegraph System Long Distance Telephone Communications Local Telephone Communications C onclusion I I . THE CONCEPT AND COMPOSITION OF SOVIET COMMUNICATIONS OUTPUT .................................................... Introduction The P o sta l S e r v ic e Telegraph Communications Long Distance Telephone Communications Local Telephone Communications C onclusion I I I . COMMUNICATION RATE THEORY IN THE USSR . Introduction The Public U tility Concept: Soviet and American Comparisons and Contrasts Some Rate and Cost Considerations in the U.S. and USSR • Soviet Price Theory as It Affects Communications Services C onclusion Page IV . COMMUNICATION RATE POLICY IN THE USSR . 18? Introduction A Brief History of Soviet Communica t io n R ates Current Soviet Communication Rates C on clu sion V. POSTOAR GROWTH IN THE SOVIET COMMUNICATION INDUSTRY 250 Introduction Communications and Economic Growth Earlier Studies of Soviet Transpor tations and Communications CES and VES Production Functions of Communications in the USSR Summary V I. SUMMARY 285 APPENDIX 291 BIBLIOGRAPHY 313 ▼111 LIST OF TABLES T able Page 1 Planned Norms of Subscriber Telegraph Dis tribution, by Branch of the Economy, USSR .... 37 2 Capital Costs and Operating Costs of Long Distance Telephone Offices: 1970 Soviet E stim a tes ............................................................................. 55 3 Telephone Use by Sector in

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