*Pages 1--37 from C:\Pdf2Text\Ready4Text_in\pdf\56099.pdf* TELECOMMUNICATIONS INDUSTRY REVENUES 2004 Jim Lande Kenneth Lynch Industry Analysis & Technology Division Wireline Competition Bureau March 2006 This report is available for reference in the FCC's Reference Information Center, Courtyard Level, 445 12th Street S. W., Washington, D. C. 20554. Copies may be purchased by calling Best Copy and Printing Inc., (BCPI), 445 12th Street S. W., Room CY- B402, Washington, D. C. 20554, telephone 800- 378- 3160, facsimile 202- 488- 5563, or via e- mail at fcc@ bcpiweb. com. The report can also be downloaded from the Wireline Competition Bureau’s Statistical Reports Internet site www. fcc. gov/ wcb/ stats. 1 Note: AT& T and MCI are included as RBOC Toll Service Providers for the first quarter of 2006. Chart 1 End- User Telecommunications Revenues 3 Chart 2 Share of Universal Service Contributions By Principal Type of Contributor $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 Billions of Dollars Toll Service $89.2 $91.6 $93.3 $87.8 $79.3 $67.2 $59.0 $55.5 Wireless Service $30.2 $33.7 $43.8 $56.9 $68.5 $76.5 $85.3 $94.4 Local Service $69.1 $75.2 $78.6 $84.5 $87.7 $88.7 $86.5 $83.4 1997 1998 1999 2000 2001 2002 2003 2004 1997 RBOC Toll Service Providers 1.7% Payphone Providers 0.0% RBOCs 11.7% Wireless Service Providers 3.3% Other Toll Service Providers 79.9% CLECs 0.8% Other ILECs 2.6% Preliminary First Quarter 2006 RBOC Toll Service Providers 28.3% Pa yphone Providers 0.1% RBOCs 20.0% Wireless Service Providers 32.3% Other Toll Service Providers 11.3% CLECs 4.4% Other ILECs 3.6% 4 4 FCC Form 499- A Filing Requirements Virtually all providers of telecommunications must file FCC Form 499- A each year. 2 Telecommunications Reporting Worksheets are not filed directly with the Commission but rather with the Universal Service Administrative Company (USAC), which serves as the data collection agent. While the annual worksheets were due April 1, 2005, some providers filed late or submitted revised filings after that date. Year 2004 data do not include information from filings received after October 20, 2005 or information from filings that were incomplete. FCC Form 499- A asks each filer to report total, interstate and international revenues in two broad categories: those billed to universal service contributors for resale (carrier's carrier revenues); and, those billed to de minimis telecommunications providers and end users (end- user revenues). 3 Filers must provide further breakdowns of local, wireless, and toll services. The form also asks each filer to choose the communications business that best describes its operations: 4 • All Distance Service Provider • Coaxial Cable Local Exchange Service Provider • Competitive Access Provider (CAP) or Competitive Local Exchange Carrier (CLEC) • Cellular, Personal Communications Service (PCS) and Specialized Mobile Radio (SMR) Wireless Telephony Service Provider • Incumbent Local Exchange Carrier (ILEC) • Interexchange Carrier (IXC) • Local Reseller • Operator Service Provider (OSP) • Other Local Service Provider • Other Mobile Service Provider • Other Toll Service Provider 2 There are certain exceptions. Providers that offer telecommunications for a fee exclusively on a non- common carrier basis are not required to file if their total annual contribution to universal service would be less than $10,000. Government entities that purchase telecommunications services in bulk on their own behalf, public safety and local government entities licensed under Subpart B of Part 90 of the Commission’s rules, entities providing interstate telecommunications exclusively to government or public safety entities, broadcasters and various non- profit entities are not required to file. Finally, systems integrators that derive less than 5% of their systems integration revenues from the resale of telecommunications and entities that provide services only to themselves or to commonly owned affiliates need not file. 3 Telecommunications providers are considered de minimis and thus are not required to contribute to universal service (or file FCC Form 499- Q) if their annual contributions to universal service would be less than $10,000. For universal service contribution purposes, underlying service providers treat de minimis firms as end users. 4 The detailed definitions of the filer categories are contained in section III. A of the Instructions to the Telecommunications Reporting Worksheet, FCC Form 499- A available at www. fcc. gov/ Forms/ Form499- A/ 499a. pdf. Filers identified as All Distance or Coaxial Cable Service Providers have been re- categorized for the purpose of creating summary statistics. 5 5 • Paging and Messaging Service Provider • Payphone Provider • Private Service Provider • Prepaid Calling Card Provider • Satellite Service Provider • Shared- Tenant Service Provider • Specialized Mobile Radio - Dispatch • Toll Reseller • Wireless Data Service Provider FCC Form 499- A filers are instructed to report amounts actually billed to customers. This means that filers should report revenues net of discounts, but without making adjustments to reflect uncollectible revenues or international settlement payments or receipts. 5 Most filers should be able to report revenues in this manner using information contained in their corporate books of account. Some service providers, however, have no business or regulatory requirements to record intrastate or international revenues separately from interstate revenues, or to use the detailed revenue categories contained in the worksheets. In addition, many wireless providers use the interim safe harbor percentages to estimate the interstate portion of their revenues. 6 FCC Form 499- A filings sometimes contain mistakes. Initial examination of the data occasionally reveals carrier types, revenue amounts and/ or revenues reported in service categories inconsistent with the known operations of the filer. Some corrections have been made based on supplemental filer information. Nonetheless, disaggregated data are likely to be less accurate than industry totals. Summary Tables Table 1 shows the major components of telecommunications revenues for 1997 through 2005. This table was created by aggregating the revenues in the major service classifications designated on FCC Form 499- A. FCC Form 499- Q data was used to provide preliminary figures for 2005. Tables 2 and 3 provide a more detailed look at annual industry revenues over time. Generally, FCC Form 499- A revenue data can be tabulated in two distinct ways: by type of service provided and by type of business. Table 2 categorizes revenues by type of service and shows, for example, that carriers reported $98.6 billion in wireless service revenues for 2004. This total includes wireless service revenues from some carriers that are not identified as wireless carriers. In 5 Filers began to provide some information on uncollectible revenues starting with the February 1, 2003 FCC Form 499- Q filing. Beginning in the second quarter of 2003, contributions have been based on projected collected revenues, rather than billed revenues from a prior period. 6 See the Instructions to the Telecommunications Reporting Worksheet, FCC Form 499- A section III. C. 3. available at www. fcc. gov/ Forms/ Form499- A/ 499a. pdf. 6 6 contrast, Table 3 shows that wireless service providers reported total revenues of $98.4 billion in 2004, including some revenues for fixed local and toll services. Revenue data for 1994 through 1996 were summarized from information filed on TRS worksheets. Revenue data for 1997 and 1998 were derived by combining TRS worksheet and universal service worksheet data. Starting with 1999, revenue data were summarized from FCC Form 499- A, which replaced both the TRS and universal service worksheets. Because of reporting changes, data for 1997 forward are not entirely consistent with data for prior years. For example, special access revenues were included with other access revenues prior to 1997 but have been included with local private line services since then. Similarly, through 1996, filers reported as other local and mobile revenues substantial amounts of customer premises equipment, billing and collection, and other types of revenues that are excluded from contributions to universal service. These revenues are now reported as non- telecommunications revenues. Both tables contain estimates of non- telecommunications revenues that had been reported in prior years. Based on staff estimates, the 1996 telecommunications revenues reported on TRS worksheets would have been $10.5 billion lower if revenues had been reported using current instructions. There are some inconsistencies as a result of changes in universal service worksheets. For example, filers were required in 1997 to include inside wiring maintenance revenues as part of local exchange revenues. In 1998, filers were instructed to report these revenues as non-telecommunications service revenues. The local exchange service revenue data in Table 2 would show a greater increase from 1997 to 1998 if the same reporting instructions had been used for each year. Note also that each year, many filers erroneously report substantial amounts of switched toll revenues as other long distance revenues. The data are examined and some revenues are reclassified based on staff research. Even so, the other long distance category of Table 2 probably continues to contain some switched toll revenues, perhaps significant amounts in some years. Changes in reporting procedures may have caused some of the large increase in non-telecommunications revenues that occurred in 2002. Prior to 2002, each legal entity providing telecommunications was required to file separately. Starting in 2002, entities meeting specific conditions were allowed to file on a consolidated basis. For some companies, the books at the consolidated- entity level include substantial amounts of non- telecommunications revenues for legal entities that do not individually provide telecommunications and therefore would not be required to file on an individual basis. Their revenues, however, must be included when filings are made on a consolidated basis because the revenues are recorded on the consolidated books. Table 4 illustrates how data from the FCC Form 499- A are used to develop funding bases for USF, NANP, LNP and TRS contribution mechanisms. Each of the four programs is supported by a slightly different group of telecommunications providers under slightly different rules. As noted above, providers are considered de minimis for USF purposes if their annual contribution is expected to be less than $10,000. While such providers are thus not required to file FCC Form 499- Q, de minimis status does not exempt service providers from filing FCC Form 499- A because contributions to TRS, NANP and LNP are required regardless of the 7 7 expected annual amount. Note also that NANP, LNP, and TRS each draw contributions from a larger pool of providers than does USF. Specifically, all telecommunications carriers in the United States must contribute to meet the costs of NANP (47 C. F. R. § 52.17), and all telecommunications carriers that provide service in areas covered by the regional LNP database must contribute to meet the costs of LNP (47 C. F. R. § 52.32). Thus, only those providers that are not carriers are not required to contribute. Cost recovery for TRS is slightly different. Every carrier providing interstate services must contribute to the TRS Fund (47 C. F. R. §64.604 (c)( 5)( iii)( A)). In this case, providers that are not carriers, and carriers that do not provide interstate services are not required to contribute. 7 Tables 5 through 8 present detailed industry roll- ups by type of revenue and type of filer. Table 5 provides a detailed breakout of revenues for each of the FCC Form 499- A revenue categories used to report services provided to other filers for resale. Table 6 displays similar detail for each of the revenue categories used to report telecommunications service provided to end users. Table 7 combines data from Tables 5 and 6 with data on non- telecommunications revenues to develop total industry revenues. Table 8 provides more aggregated revenue information by type of filers. The revenue categories presented in Tables 5 through 7 are explained in the FCC Form 499- A filing instructions. Table 9 presents an estimate of average revenue per conversation minute. Based on the methodology in Table 9, Commission staff estimated that end users were billed an average of 7 cents for each minute of interstate and international toll calling made during 2004. The average price for each interstate domestic conversation minute was estimated to be 6 cents during 2004. These estimates and year- over- year changes in these estimates should be treated with great caution for a number of reasons. For instance, terminating access minutes are used as a proxy for billed conversation minutes. In certain cases, the two measures track each other closely. Subscriber toll- free calls that terminate on dedicated access lines and some other classes of calls generate access minutes that are billed as terminating minutes only. Some calls, however, generate originating access minutes only or bypass ILEC switched facilities on both ends and therefore generate no access minutes. Some subscriber toll- free calls, on the other hand, do not terminate on dedicated access lines and therefore may generate two terminating access minutes per conversation minute. Additionally, since 1999, NECA filings report total access minutes without separating originating and terminating minutes. The totals are allocated based on carrier common line (CCL) minutes reported in access tariff filings by ILECs that are subject to price- cap regulation and in the NECA pool access tariff filings. Further, some toll calls handled over voice over Internet Protocol (VoIP) networks may terminate via local minutes rather than interstate access minutes. On balance, the assumptions underlying the estimates probably result in an upward bias in the revenue per minute estimates. For 2004, the staff estimates that revenue per minute estimates may be overstated by as much as 20%. 7 See Instructions to the Telecommunications Reporting Worksheet, FCC Form 499- A, Figure 3 at 31, available at http:// www. fcc. gov/ Forms/ Form499- A/ 499a- 2005. pdf. 8 8 The methodology presented in Table 9 mitigates some problems associated with using terminating access minutes as a proxy for conversation minutes. For example, some conversation minutes do not result in ILEC access minutes because they terminate on the facilities of CLECs. These carriers do not report access minutes. Table 9 presents estimates of these minutes based on CLEC shares of local service revenues. These amounts are used to adjust terminating access minutes. Moreover, the methodology presented in Table 9 adjusts terminating access minute totals to better reflect international traffic. International settlement minutes are reported based on the billing status of calls rather than where the calls actually originate. Thus, some U. S. billed calls actually originate in foreign points and vice versa. However, most U. S. billed calls originate in the United States and generate originating but not terminating access minutes. These minutes are added to the reported totals for terminating access minutes so that terminating access minutes better represent conversation minutes. Similarly, foreign billed minutes, which usually generate terminating access minutes, are removed from the terminating access minute total. One category of U. S. billed international calls merits special treatment. Country- direct and country- beyond calls are placed from foreign points, directly with U. S. carriers. Country-direct calls generally originate overseas and terminate in the United States. Such calls are billed by U. S. carriers, generate settlement payments to foreign carriers, and are reported in section 43.61 traffic data reports as U. S. billed calls. Country- beyond calls are similar, but both originate and terminate at foreign points. Country- direct calls result in terminating access minutes. Country- beyond calls generally do not. Unfortunately, section 43.61 data do not separate country- direct from country- beyond calls. This is not a problem for allocating originating access minutes between interstate and international calls, because neither type of call results in appreciable originating access minutes. In estimating interstate terminating access minutes, however, staff chose to subtract country- direct and country- beyond minutes. This means that the number of total interstate terminating minutes, which is used to represent interstate conversation minutes, is biased downward. Staff did not include country- direct or country- beyond minutes with international conversation minutes because country- beyond revenues are reported separately as international- to- international service revenues on FCC Form 499- A and are therefore subtracted when calculating international revenue per minute. Country-direct revenues, however, remain in the revenue base but the corresponding minutes have been removed from the estimate of international conversation minutes. This bias may be offset by the fact that many international- to- international calls generate U. S. billed settlement minutes and are counted as conversation minutes. An increasing share of switched traffic either originates or terminates on wireless telephones. Some wireless minutes and some wireless revenues are included in the revenue per minute calculations. Terminating access minutes include calls that originate on a wireless telephone and terminate on a wireline telephone, but do not include any calls that terminate on wireless telephones. Switched revenues include all long distance charges that are itemized on wireless customers’ bills but do not include any portion of revenues reported as wireless monthly service or airtime charges. Many interstate wireless calls are billed under “bucket of minutes” 9 9 plans and have no explicit toll charges associated with them. Staff does not have sufficient data to assess whether inclusion of some wireless toll minutes and some wireless carrier revenues results in an upward or downward bias in the revenue per minute calculations. Many LECs also offer service bundles that provide toll calling without generating any separate per- minute toll charges. These carriers allocate a portion of monthly plan revenues as toll charges. Some LECs transfer this toll revenue to affiliated toll carrier books and those toll carriers report the revenues as switched long distance service revenue. Other carriers, however, report all of their monthly service revenues as local exchange service revenues. Where such revenues could be identified, they were reclassified to toll service for the purpose of creating roll- up statistics. Thus, the revenue- per- minute estimates are based on both minute and revenue data that includes LEC bundled service offerings. End- user switched toll revenue data also are problematic for other reasons. Through 1996, the figures shown are based on TRS gross revenue data. In order to translate reported gross revenues to end- user revenues, 80% of revenues reported by toll resellers were netted from the total. A second problem is that in some years, filers classified substantial amounts of switched service revenues as (non- switched) other toll. While significant effort has been devoted to identifying and reclassifying these amounts, the other toll category shows a $1.3 billion drop from 1997 to 1998, which suggests that the 1997 figure may still contain significant amounts of misreported switched service revenues. Starting in 1998, many toll carriers used fixed monthly charges to recover account maintenance, ILEC presubscribed interexchange carrier charges (PICCs), and both federal and state universal service contributions. Some toll carriers reported some of these surcharges as local service tariffed PICC charges. An attempt was made to identify these amounts and include them with switched toll revenues. Some filers bill customers percentage surcharges to recover universal service contributions. While filers must separately identify the universal service surcharges on their universal service worksheets, it is not possible to identify a precise amount that is attributable to interstate toll service. The Table 9 adjustments to reflect both PICC and universal service costs and end- user charges should be taken as approximate. Table 9 also shows a number of assumptions that were made in order to separate international revenue data from interstate revenue data. Filers did not separately report end- user revenues for international services for years before 1999. For 1999 and 2000, it appears that many FCC Form 499- A filings understate international revenues and overstate interstate revenues. This could happen if, for example, a filer split revenues between interstate and international service based on a ratio of interstate to international minutes, rather than on actual billings. This would not reduce contribution requirements for the filer but does make the breakout shown in Tables 5, 6, and 7 less reliable. For 2001, carriers reported $1.5 billion more international revenues in FCC Form 499- A filings than they did in section 43.61 filings. The section 43.61 international traffic data appears to be more reliable, but lacks breakouts of carrier’s carrier and end- user revenues. Based on staff analysis of the FCC Form 499- A data, a simple methodology is used to convert section 43.61 international traffic revenue data into 10 10 estimates of international end- user revenues for message telephone service. The same methodology is used in all years. While the Commission does collect detailed international traffic data, there is no clean match between categories of minutes actually reported and the international service end- user revenue data presented in Table 9. The amounts of international- to- international revenues are estimated for 1996 and earlier. Also, an increasing amount of international traffic is being carried on resold private lines and via other new arrangements. It seems likely that much of this traffic is not being properly reported in traffic data reports. For these reasons, the breakout between interstate revenues per- minute and international revenues per- minute is likely to be significantly less accurate than the combined estimate. Table 10 presents an estimate of average revenue per conversation minute, net of access and universal service contribution costs. These estimates indicate that access and universal service contribution costs have declined over time, and that revenues per minute net of access and universal service contribution costs have declined over time as well. The table uses the data on minutes developed in Table 9 and therefore has the attendant uncertainties. The analysis also uses international settlement payment data which, while relatively good, include settlements associated with international- to- international traffic. The analysis does not account for special access payments from toll carriers to local exchange carriers. In some cases, toll carriers recover the cost of these services through charges that are reported as switched toll revenues and that therefore are reflected in per- minute revenue estimates. FCC Form 499- A asks filers to identify the share of their carrier’s carrier and end- user telecommunications revenues attributable to different regions of the country. Table 11 shows total end- user telecommunications revenues by region for local, toll and wireless filers. Table 12 provides data about the relative magnitude of universal service contributions from different classes of telecommunications providers. Since the second quarter of 2003, universal service contributions have been based on projected collected interstate and international end- user revenues rather than on actual billed revenues from a prior quarter. On the first day of the second month of each quarter, filers report preliminary data for billed revenues from the previous quarter, and project billed and collected universal service contribution base amounts for the upcoming quarter. For example, on November 1, 2005, filers reported data for the third quarter of 2005 and projected revenues for the first quarter of 2006. Far less detail is filed on the quarterly FCC Form 499- Q than on the annual FCC Form 499- A. Revenue detail for the historic quarter includes total, interstate and international U. S. telecommunications revenues, divided into carrier’s carrier and end- user categories. For the coming quarter, filers provide only billed and projected collected interstate and international end- user revenues. Roll- ups of the quarterly data are available on the Commission’s website at: http:// www. fcc. gov/ wcb/ iatd/ lec. html. 11 Table 1 Overview of Telecommunication Industry Revenues 1/ (Dollar Amounts Shown in Millions) Preliminary 5/ 1997 1998 1999 2000 2001 2002 2003 2004 2005 Carrier's Carrier Revenues 2/ Local Service 3/ $28,289 $29,374 $33,156 $36,621 $40,108 $38,412 $37,742 $38,546 $38,986 Wireless Service 2, 752 3,060 4,652 5,144 6,180 5,020 4,465 4,164 5,998 Toll Service 11,598 13,448 14,934 21,849 19,999 16,476 18,205 15,703 17,376 Intrastate 16,201 18,892 22,293 25,553 27,848 25,770 24,825 25,852 27,073 Interstate and International 4/ 26,438 26,990 30,449 38,060 38,439 34,138 35,587 32,561 35,288 Total $42,639 $45,758 $52,742 $63,613 $66,287 $59,907 $60,412 $58,413 $62,360 End User Revenues 2/ Local Service 3/ $69,137 $75,189 $78,608 $84,526 $87,704 $88,712 $86,474 $83,407 $83,341 Wireless Service 30,199 33,714 43,843 56,857 68,507 76,501 85,254 94,404 101,863 Toll Service 89,193 91,607 93,311 87,767 79,302 67,222 58,983 55,511 48,968 Intrastate 117,454 123,216 134,919 147,465 155,347 154,815 150,889 153,265 156,251 Interstate and International 4/ 71,076 77,294 80,844 81,685 80,165 77,619 79,822 80,057 77,920 Total $188,529 $200,510 $215,763 $229,149 $235,513 $232,434 $230,711 $233,322 $234,171 Total Revenues Local Service 3/ $97,426 $104,563 $111,764 $121,147 $127,812 $127,123 $124,216 $121,953 $122,327 Wireless Service 32,950 36,775 48,495 62,000 74,687 81,521 89,718 98,568 107,861 Toll Service 100,793 105,055 108,246 109,615 99,301 83,697 77,188 71,214 66,343 Intrastate 133,655 142,108 157,212 173,018 183,195 180,585 175,714 179,117 182,124 Interstate and International 4/ 97,514 104,284 111,293 119,745 118,605 111,756 115,409 112,617 113,208 Total $231,168 $246,392 $268,505 $292,762 $301,799 $292,341 $291,123 $291,734 $296,532 Note: Detail may not add to totals due to rounding. 1/ Data include revenues for de minimis filers as well as for other carriers that are exempt from universal service contribution requirements. 2/ Carrier's carrier revenues are reported on the FCC Form 499- A as sales to other universal service contributors for resale. This includes, for example, access services that local exchange carriers provide to toll carriers. Sales to de minimis resellers, end- user customers, governments, non- profits, and any other non- contributors are treated as end- user revenues. Filers contribute to the universal service funding mechanisms based on their end- user revenues. 3/ Payphone revenues are included with local service revenues in this table. 4/ Revenues from calls that both originate and terminate in foreign points are reported as end- user revenues, and are included in this table through 2004, but are not included in the universal service contribution base. 5/ Preliminary 2005 data are based on FCC Form 499- Q quarterly filings through November 2005. Companies that do not contribute to universal service are not required to make these filings. The quarterly filings include preliminary data for the just closed quarter and projections for the coming quarter, and therefore are not as accurate as the subsequent annual filings. Also, FCC Form 499- Q filers do not separate revenue by type of service. Therefore, revenue totals by service type for 2005 are based on type of filer rather than on data filed by service. Source: Data for 1997 and 1998 primarily based on FCC Form 457 Universal Service Worksheets, with data from 1997 FCC Form 431 TRS Worksheets used for service providers not required to file a Universal Service Worksheet. Starting in 1999, data summarized from FCC Form 499- A Telecommunications Reporting Worksheets, which replaced both FCC Form 431 and FCC Form 457. 11 12 Table 2 Telecommunications Industry Revenues by Service (Dollar Amounts Shown in Millions) TRS Worksheet Data Universal Service FCC Form 499- A Data & TRS Data 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Local Exchange $42,245 $45,194 $48,717 $53,771 $59,245 $64,940 $69,947 $72,346 $71,320 $70,606 $68,238 Pay Telephone 1/ 2,182 2,536 2,218 1,932 1,585 1,192 1,063 1,002 Local Private Line 2/ 1,138 1,226 1,616 8,282 10,403 12,914 16,864 21,966 23,070 22,415 23,840 Other Local 3/ 1,407 3,233 2,674 2,847 2,179 2,501 3,249 3,391 3,418 3,242 2,944 Subscriber Line Charges 2/ 7,310 7,597 7,829 8,327 11,052 10,826 11,563 12,127 12,758 12,136 11,715 Access 2/ 25,449 26,314 27,812 21,423 18,449 18,105 17,017 15,096 13,955 12,972 12,352 Universal Service Surcharges on Local Service Bills 4/ 103 260 575 1,301 1,410 1,783 1,862 Additional Revenues from TRS Worksheets 595 595 Total Local Service and Payphone 77,548 83,564 88,647 97,426 104,563 111,764 121,147 127,812 127,123 124,216 121,953 Wireless Service 12,863 16,883 23,444 32,760 36,240 48,117 61,505 74,006 80,678 88,023 96,450 Universal Service Surcharges on Wireless Service Bills 4/ 345 379 495 681 842 1,696 2,118 Additional Revenues from TRS Worksheets 189 189 Total Wireless Service 3/ 12,863 16,883 23,444 32,950 36,775 48,495 62,000 74,687 81,521 89,718 98,568 Operator 1/ 10,539 11,170 10,975 12,002 12,205 10,049 11,406 10,389 7,902 6,567 6,542 Non- Operator Switched Toll 61,468 65,217 73,751 72,059 74,168 78,389 75,183 65,325 54,475 50,178 46,387 Long Distance Private Line 9,043 9,719 10,665 10,504 11,952 13,169 16,189 16,402 15,108 15,316 13,906 Other Long Distance 3,428 3,523 4,299 4,695 3,386 3,656 3,372 3,259 2,445 2,222 1,801 Universal Service Surcharges on Toll Service Bills 4/ 1,810 2,983 3,467 3,927 3,767 2,905 2,577 Additional Revenues from TRS Worksheets 1, 532 1,532 Total Toll Service 84,478 89,629 99,691 100,793 105,055 108,246 109,615 99,301 83,697 77,188 71,214 Total Telecommunications 3/ 174,890 190,076 211,782 231,168 246,392 268,505 292,762 301,799 292,341 291,122 291,735 Non- Telecommunications 3/ 8,324 9,071 10,474 25,633 27,944 33,144 42,261 48,036 60,406 65,186 71,493 Total Reported Revenues 183,214 199,147 222,256 256,801 272,019 301,648 335,023 349,835 352,747 356,308 363,227 Service Reported as: Intrastate 3/ 102,603 112,923 127,849 133,654 142,108 157,212 173,018 183,195 180,585 175,714 179,129 Interstate and International 80,611 86,224 94,407 97,514 104,284 111,293 119,745 118,605 111,756 115,409 112,605 Total Telecommunications 3/ $183,214 $199,147 $222,256 $231,168 $246,392 $268,505 $292,762 $301,799 $292,341 $291,123 $291,734 See notes on next page. 12 13 Notes for Table 2. Note: Detail may not add to totals due to rounding. Some data for prior years have been revised. 1/ TRS filers generally reported pay telephone revenues as local service revenues, access revenues or operator toll revenues. The Universal Service and FCC Form 499- A worksheets contain a separate category for payphone coin revenues. Starting in 1997, payphone revenues include payphone compensation received from toll carriers. 2/ TRS Worksheet filers generally reported special access revenues as access revenues. Reporting changes implemented with the Universal Service Worksheet explain the increase in local private line revenues and the fall in access revenues shown for 1997. TRS Worksheet filers included subscriber line charges with other access charges. Through 1996, these revenues have been disaggregated by assuming that the end- user access revenues in Table 4.2 of Statistics of Communications Common Carriers represents 93% of industry total subscriber line charge revenues. Universal Service Worksheet filers report subscriber line charges in a separate category. The increase from 1997 to 1998 represents PICC charges levied by ILECs as well as $1.2 billion of PICC pass- through charges levied by toll carriers. 3/ Significant amounts of enhanced services, billing and collection, CPE and other non- telecommunications revenues were reported in the TRS mobile and other local service categories through 1996. Universal Service Worksheet filers report these revenues in the non- telecommunications category. For prior years, the amounts of non- telecommunications revenues reported as mobile and other local revenues were estimated as 70% of the amounts that Tier 1 ILECs reported in ARMIS as miscellaneous and nonregulated revenues (then reported as account 5200 and account 5280, respectively) and 10% of amounts reported as mobile service revenues. These amounts have been removed from Other Local and moved to the Non- Telecommunications category. 4/ Charges on end- user bills identified as recovering state or federal universal service contributions are reported separately from local, wireless and toll revenues. Reported amounts are apportioned between local, wireless and toll service based on the proportions of local, wireless and toll intrastate and interstate revenues by type of carrier. Source: Data for 1994 through 1996 summarized from FCC Form 431 TRS Worksheets. Data for 1997 and 1998 primarily based on FCC Form 457 Universal Service Worksheets, with data from 1997 TRS Worksheets used for service providers not required to file a Universal Service Worksheet. Starting in 1999, data summarized from FCC Form 499- A Telecommunications Reporting Worksheets, which replaced both FCC Form 431 and FCC Form 457. 13 14 Table 3 Telecommunications Revenues Reported by Type of Carrier (Dollar Amounts Shown in Millions) Universal Service FCC Form 499- A Data & TRS Data Service Provider Category 1/ 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Incumbent Local Exchange Carriers 2/ $91,527 $95,612 $100,021 $105,154 $108,234 $112,216 $116,158 $117,885 $114,990 $109,480 $105,496 Competitive Access Providers (CAPs) and Competitive Local Exchange Carriers (CLECs) 281 623 1,011 1,919 3,348 5,652 9,814 12,998 13,043 15,509 15,112 Local Resellers 206 410 511 879 1,393 1,538 721 1,215 Other Local Exchange Carriers 157 36 171 11 329 406 338 245 Private Service Providers 112 147 87 39 15 281 267 532 Shared- Tenant Service Providers 87 93 87 202 46 42 22 22 Competitors of ILECs 281 623 1,011 2,481 4,034 6,508 10,945 14,781 15,309 16,857 17,126 Fixed Local Service Providers 91,807 96,235 101,032 107,634 112,268 118,725 127,103 132,666 130,300 126,337 122,622 Payphone Providers 300 349 357 933 1,101 1,213 972 836 641 523 445 Wireless Telephony Including Cellular, 11,933 15,488 21,400 29,944 33,139 46,513 59,823 71,887 78,568 88,168 98,329 Personal Communications Service (PCS) and SMR Telephony Carriers 2/ Paging & Messaging Service 2/ 2,861 3,161 3,232 3,102 2,197 1,473 1,007 872 Specialized Mobile Radio (SMR) 186 191 214 206 33 46 Dispatch Wireless Data Service Providers and Other Mobile Service Providers 2/ 845 1,277 1,909 225 731 221 164 110 220 135 218 Wireless Service Providers 12,777 16,765 23,310 33,030 37,032 50,152 63,280 74,596 80,467 89,342 99,465 Interexchange Carriers (IXCs) 66,381 70,938 79,057 79,080 83,443 87,570 87,311 81,272 68,146 61,246 51,589 Operator Service Providers (OSPs) 536 500 461 603 590 337 635 611 554 567 523 Prepaid Calling Card Providers 16 238 519 888 866 727 133 460 812 1,635 Satellite Service Providers 1,011 475 280 336 373 406 663 721 Toll Resellers 2,840 4,220 6,564 8,010 9,885 9,211 10,641 8,797 9,279 9,294 12,192 Other Toll Carriers 709 773 577 348 710 150 1,758 2,516 2,089 2,339 2,543 Toll Service Providers 70,466 76,447 86,896 89,570 95,992 98,414 101,407 93,702 80,934 74,920 69,204 Adjustments 3/ (461) 280 187 0 0 0 0 0 0 0 0 Total Telecommunications Revenues $174,890 $190,076 $211,782 $231,168 $246,392 $268,505 $292,762 $301,799 $292,341 $291,123 $291,734 1/ Filers are asked to select for themselves a service provider category that best describes their operations. The choices have changed over the years. For example, most satellite service providers identified themselves as other toll carriers in their 1997 FCC Form 431 TRS worksheets because there was no separate category for satellite service providers. Similarly, paging carriers typically identified themselves as other mobile carriers. For 2003 and 2004, some filers identified themselves as all distance carriers. These filers have been reclassified to be consistent with prior classifications. 2/ Significant amounts of enhanced service, billing and collection, CPE and other non- telecommunications revenues were reported on TRS worksheets by incumbent local exchange carriers (ILECs) and wireless carriers through 1996. Universal Service Worksheet filers report these revenues in the non- telecommunications category. For prior years, the amounts of non- telecommunications revenues reported as mobile and other local revenues were estimated as 70% of the amounts that Tier 1 ILECs reported in ARMIS as miscellaneous and nonregulated revenues (then reported as account 5200 and account 5280, respectively) and 10% of amounts reported as mobile service revenues. These amounts have been removed from incumbent local exchange carrier totals. 3/ Adjustments include some amounts withheld to preserve confidentiality and revisions made after the initial publication of the data. Source: Data compiled from FCC Form 431, FCC Form 457 and FCC Form 499- A filings. 14 15 Table 4 Contribution Base Revenues By Program 1/: 2004 (Dollar Amounts Shown in Millions) 2004 Revenues subject to universal service contribution Interstate and international end- user revenues $80,057 less revenues for international - to - international services 644 less international revenues of international- only filers and international revenues that were excluded because of 3,118 the 12% rule 2/ less interstate and other international revenues for 2,606 filers who are de minimis or otherwise exempt 66 from universal service support requirements less uncollectible contribution base revenues 1,574 equals $74,654 Revenues subject to TRS contribution Interstate and international end- user revenues $80,057 less interstate and international revenues for 114 filers who identify themselves as private service providers or 438 as shared tenent service providers and who therefore are exempt from telecommunications relay service (TRS) contribution requirements if they provide no carrier services less interstate and international revenues for services provided for resale but reported as end user 175 because it was provided to carriers that do not contribute to universal service support mechanisms equals $79,443 Revenues subject to NANPA and LNP contribution Total telecommunications service end- user revenues (including intrastate, interstate and international) $233,322 less telecommunications revenues for 756 filers who identify themselves as private service providers, 1,099 shared tenent service providers or payphone service providers and who therefore are exempt from North American Numbering Plan Administration (NANPA) and local number portability administration (LNP) contribution requirements if they provide no carrier services ? less telecommunications revenues for services provided for resale but reported as end user because it 398 was provided to carriers that do not contribute to universal service support mechanisms equals $231,824 1/ This table shows how contribution bases differ for different programs and provides relative magnitudes, but does not provide the actual amounts used for determining contribution amounts. Amounts shown represent the amounts contained in the FCC Form 499- A database as of October 20, 2005. The universal service administrator continues to receive additional and corrected filings. Exempt amounts were based on revenues and the filer type information contained in the FCC Form 499- A filings. The fund administrators may use carrier type, revenue type, line 603 exemption certifications and additional information requested from filers to determine which filers must contribute. The universal service fund administrator bills delinquent filers based on estimated revenues and may, in some instances, include estimated revenue amounts in contribution base amounts. Note also that universal service contribution factors are set quarterly based on FCC Form 499- Q filings. FCC Form 499- A data are used for true- up and auditing purposes. Also note that local number portability contribution amounts are determined by region of the country rather than on a nationwide basis. As a result of these factors, actual contribution bases have been based on slightly different amounts than those shown. 2/ International revenues are excluded from the contribution base if the total amount of interstate revenues for the filing entity consolidated with all affiliates is less than 12% of the total of interstate and international revenues for the filing entity consolidated with all affiliates. See 47 C. F. R. § 54.706( c). The threshold was increased from 8% to 12% in 2002. See Federal- State Joint Board on Universal Service , et al., CC Docket Nos. 96- 45, 98- 171, 90- 571, 92- 237, 99- 200, 95- 166, 98- 170, Further Notice of Proposed Rulemaking and Report and Order, 17 FCC Rcd 3752, 3806, para. 125 (2002). In addition, filers that provide only international services are exempt regardless of services offered by affiliates. 15 16 Table 5 Revenues from Telecommunications Service Provided for Resale 1/: 2004 ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Regional Bell Operating Company Other Incumbent Local Incumbent Local Exchange Carriers Exchange Carriers Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 303 Monthly service, local calling, connection charges, vertical features, and other local exchange service including subscriber line and PICC charges to IXCs .1 Provided as unbundled network elements (UNEs) $4,217 $606 $4,822 $127 $6 * $134 .2 Provided under other arrangements 567 129 696 111 87 * 198 Total Line 303 4, 784 735 5, 518 238 93 * 332 304 Per- minute charges for originating or terminating calls .1 Provided under state or federal access tariff 3,484 2,445 5,929 2,528 1, 049 2 3, 580 .2 Provided as unbundled network elements or other contract arrangement 583 408 991 78 20 * 98 Total Line 304 4,067 2,853 6,920 2,606 1, 069 2 3, 677 305 Local private line & special access 681 9,314 9,995 281 1, 179 * 1,461 306 Payphone compensation from toll carriers 81 63 38 182 1 1 1 3 307 Other local telecommunications service revenues 1, 478 379 1, 858 31 3 34 308 Universal service support revenues received from 936 920 1,855 614 1, 758 * 2,372 Federal or state sources Total fixed local service provided for resale 12,026 14,264 38 26,328 3,772 4, 104 3 7, 879 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 58 58 11 2 14 Total mobile service provided for resale 58 58 11 2 14 Toll service 310 Operator and toll calls with alternative billing 13 * 13 1 * * 1 arrangements (credit card, collect, international call- back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 220 * 221 6 2 * 7 toll- free 800/ 888 etc. service, "10- 10 calls", associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 312 Long distance private line services 17 2 19 6 5 11 313 Satellite services 314 All other long distance services * 1 1 2 2 * 4 Total toll service provided for resale 250 3 253 15 8 * 23 Total service provided for resale (carrier's carrier) $12,335 $14,267 $38 $26,640 $3,798 $4,114 $3 $7,915 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 16 17 Table 5 Revenues from Telecommunications Service Provided for Resale 1/: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A CLECS and Other P ayphone Providers Fixed Local Competitors Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 303 Monthly service, local calling, connection charges, vertical features, and other local exchange service including subscriber line and PICC charges to IXCs .1 Provided as unbundled network elements (UNEs) $121 $154 $3 $278 * * * * .2 Provided under other arrangements 249 17 * 266 Total Line 303 370 171 3 544 * * * * 304 Per- minute charges for originating or terminating calls .1 Provided under state or federal access tariff 538 414 6 958 * * * * .2 Provided as unbundled network elements or other contract arrangement 233 35 1 269 Total Line 304 771 449 7 1, 226 * * * * 305 Local private line & special access 536 484 * 1,021 1 * * 1 306 Payphone compensation from toll carriers 2 1 1 4 40 31 19 89 307 Other local telecommunications service revenues 221 13 * 234 3 1 * 3 308 Universal service support revenues received from 26 9 34 * * * * Federal or state sources Total fixed local service provided for resale 1,926 1,128 11 3, 064 43 32 19 94 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 1 * 1 Total mobile service provided for resale 1 * 1 Toll service 310 Operator and toll calls with alternative billing 29 * * 29 1 * * 1 arrangements (credit card, collect, international call- back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 97 65 32 194 * * * 1 toll- free 800/ 888 etc. service, "10- 10 calls", associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 312 Long distance private line services 157 394 11 562 * * 313 Satellite services 1 81 12 94 314 All other long distance services 24 2 1 27 2 * * 2 Total toll service provided for resale 307 542 56 905 4 1 * 5 Total service provided for resale (carrier's carrier) $2,233 $1,669 $67 $3,970 $47 $32 $19 $99 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 17 18 Table 5 Revenues from Telecommunications Service Provided for Resale 1/: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Cellular, PCS and SMR Wireless Other Wireless Telephony Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 303 Monthly service, local calling, connection charges, vertical features, and other local exchange service including subscriber line and PICC charges to IXCs .1 Provided as unbundled network elements (UNEs) * * * * * .2 Provided under other arrangements * * * * 1 0.8 2 Total Line 303 * * * * 1 1 2 304 Per- minute charges for originating or terminating calls .1 Provided under state or federal access tariff 2 3 6 * * * .2 Provided as unbundled network elements or other contract arrangement 58 7 * 64 * * * Total Line 304 60 10 * 70 * * * 305 Local private line & special access 39 * 39 * * 306 Payphone compensation from toll carriers * * * * 307 Other local telecommunications service revenues 1 1 * * 308 Universal service support revenues received from 51 149 200 * * * Federal or state sources Total fixed local service provided for resale 151 159 * 310 2 1 3 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 3,232 706 4 3,941 103 25 * 128 Total mobile service provided for resale 3,232 706 4 3,941 103 25 * 128 Toll service 310 Operator and toll calls with alternative billing 20 2 * 22 arrangements (credit card, collect, international call- back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 263 113 1 378 1 * * 1 toll- free 800/ 888 etc. service, "10- 10 calls", associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 312 Long distance private line services * * * * 313 Satellite services * 3 3 314 All other long distance services 3 1 * 4 Total toll service provided for resale 286 117 2 404 1 3 * 4 Total service provided for resale (carrier's carrier) $3,668 $982 $5 $4,655 $106 $29 * $135 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 18 19 Table 5 Revenues from Telecommunications Service Provided for Resale 1/: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Toll Carriers Total All Filers Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 303 Monthly service, local calling, connection charges, vertical features, and other local exchange service including subscriber line and PICC charges to IXCs .1 Provided as unbundled network elements (UNEs) $71 $21 $3 $95 $4,536 $787 $6 $5,329 .2 Provided under other arrangements 10 * 11 939 234 * 1,173 Total Line 303 82 21 3 105 5,475 1, 021 6 6, 501 304 Per- minute charges for originating or terminating calls .1 Provided under state or federal access tariff 166 47 15 228 6,719 3, 959 23 10,701 .2 Provided as unbundled network elements or other contract arrangement 171 52 6 229 1,123 521 7 1,651 Total Line 304 337 99 21 457 7,842 4, 480 30 12,352 305 Local private line & special access 50 180 1 230 1,588 11,158 1 12,747 306 Payphone compensation from toll carriers 11 9 5 25 135 105 64 303 307 Other local telecommunications service revenues 23 3 * 27 1, 757 400 * 2, 157 308 Universal service support revenues received from 22 1 * 24 1,648 2, 837 * 4,486 Federal or state sources Total fixed local service provided for resale 525 313 30 868 18,444 20,001 101 38,546 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 16 5 * 21 3,422 739 4 4, 164 Total mobile service provided for resale 16 5 * 21 3,422 739 4 4, 164 Toll service 310 Operator and toll calls with alternative billing 30 40 123 193 93 43 123 259 arrangements (credit card, collect, international call- back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 2,276 4,265 3, 900 10,441 2,863 4, 446 3,934 11,242 toll- free 800/ 888 etc. service, "10- 10 calls", associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 312 Long distance private line services 772 2,029 190 2,991 953 2, 429 201 3, 583 313 Satellite services 3 30 105 138 4 114 117 235 314 All other long distance services 44 140 163 347 75 146 164 385 Total toll service provided for resale 3,124 6,505 4, 482 14,110 3,986 7, 177 4,540 15,703 Total service provided for resale (carrier's carrier) $3,665 $6,823 $4,512 $15,000 $25,852 $27,916 $4,645 $58,413 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 19 20 Table 6 Revenues from Telecommunications Service Provided to End Users: 2004 ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Regional Bell Operating Company Other Incumbent Local Incumbent Local Exchange Carriers Exchange Carriers Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, $38,853 $213 $39,065 $7,305 $21 * $7,326 vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges 405 Tariffed subscriber line charges and PICC charges 206 8,159 8,365 60 1,851 * 1,912 levied by a local exchange carrier on a no- PIC customer Total local exchange (Line 404 + Line 405) 39, 059 8, 371 47, 430 7, 365 1, 872 * 9, 237 406 Local private line and special access service 2, 568 4,249 6,816 357 515 * 872 407 Payphone coin revenues (local and long distance) 352 * 353 22 * * 22 408 Other local telecommunications service revenues 350 7 357 83 4 * 87 Line 403 surcharges on fixed local service 1/ 180 1,090 1,270 29 200 229 Total fixed local service provided to end users 42, 509 13, 717 56, 226 7, 856 2, 591 * 10, 448 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 176 8 185 47 9 56 410 Message charges including roaming, but excluding 77 12 89 21 5 26 toll charges Line 403 surcharges on mobile service 1/ 1 2 3 * 1 1 Total mobile service provided to end users 255 23 277 68 15 83 Toll service 411 Prepaid calling card (including card sales to 1 * 1 * 1 1 1 customers and non- carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in foreign points 413 Operator and toll calls with alternative billing 147 1 148 6 1 * 7 arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct- dialed MTS, customer 2,266 89 2,355 226 37 2 265 toll- free 800/ 888 etc. service, "10- 10" calls, associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 415 Long distance private line services 985 1 986 73 6 * 79 416 Satellite services * * 417 All other long distance services 35 * 36 8 1 * 10 Line 403 surcharges on toll service 1/ 7 8 15 2 3 * 4 Total toll service provided to end users 3, 441 99 3,541 315 48 3 366 Total telecommunications service provided to 46,205 13,839 60,044 8,239 2, 654 3 10,897 end users 422 Uncollectible revenue/ bad debt expense associated 915 139 1, 054 94 20 * 114 with end user revenues other than Line 412 423 Net universal service contribution base revenues $45,290 $13,700 $58,990 $8,145 $2,635 $3 $10,783 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal contributions. 20 21 Table 6 Revenues from Telecommunications Service Provided to End Users: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A CLECS and Other P ayphone Providers Fixed Local Competitors Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, $6,044 $147 $18 $6,210 * * * * vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges 405 Tariffed subscriber line charges and PICC charges 8 948 * 957 * * * levied by a local exchange carrier on a no- PIC customer Total local exchange (Line 404 + Line 405) 6, 053 1, 095 18 7, 166 * * * * 406 Local private line and special access service 1, 128 1,829 5 2,962 3 * 4 407 Payphone coin revenues (local and long distance) 5 2 * 7 246 14 1 260 408 Other local telecommunications service revenues 254 27 23 304 4 * * 4 Line 403 surcharges on fixed local service 1/ 33 229 2 264 * * * Total fixed local service provided to end users 7, 473 3,183 48 10,704 253 15 1 268 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 10 3 * 13 410 Message charges including roaming, but excluding 1 1 2 toll charges Line 403 surcharges on mobile service 1/ * * * Total mobile service provided to end users 12 3 * 15 Toll service 411 Prepaid calling card (including card sales to 1 1 21 23 * * * * customers and non- carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in * * foreign points 413 Operator and toll calls with alternative billing 35 28 1 64 55 12 * 67 arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct- dialed MTS, customer 671 757 207 1,635 9 1 * 10 toll- free 800/ 888 etc. service, "10- 10" calls, associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 415 Long distance private line services 191 267 43 501 * * 416 Satellite services 13 31 6 50 417 All other long distance services 39 18 6 63 * * * * Line 403 surcharges on toll service 1/ 4 94 4 102 * * * Total toll service provided to end users 953 1,195 289 2,437 64 13 * 78 Total telecommunications service provided to 8,438 4,381 337 13,156 318 28 1 346 end users 422 Uncollectible revenue/ bad debt expense associated 243 81 10 333 2 1 * 2 with end user revenues other than Line 412 423 Net universal service contribution base revenues $8,195 $4,300 $328 $12,823 $316 $27 $1 $344 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal contributions. 21 22 Table 6 Revenues from Telecommunications Service Provided to End Users: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Cellular, PCS and SMR Wireless Other Wireless Telephony Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, $77 * * $77 $14 * * $14 vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges 405 Tariffed subscriber line charges and PICC charges 4 4 * 1 1 levied by a local exchange carrier on a no- PIC customer Total local exchange (Line 404 + Line 405) 77 4 * 81 14 1 * 15 406 Local private line and special access service 16 * 17 38 * 38 407 Payphone coin revenues (local and long distance) * * * * * * 408 Other local telecommunications service revenues 2 2 14 1 15 Line 403 surcharges on fixed local service 1/ * * * * * * Total fixed local service provided to end users 96 4 * 100 66 3 * 69 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 56,282 15,377 136 71,795 680 88 * 768 410 Message charges including roaming, but excluding 14,492 4,308 28 18,829 59 32 1 92 toll charges Line 403 surcharges on mobile service 1/ 342 1,742 * 2,084 2 19 * 21 Total mobile service provided to end users 71,116 21,428 164 92,708 740 140 1 881 Toll service 411 Prepaid calling card (including card sales to 7 1 2 10 * * * * customers and non- carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in 5 5 * * foreign points 413 Operator and toll calls with alternative billing 27 9 * 37 * * * arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct- dialed MTS, customer 526 183 12 721 14 4 * 18 toll- free 800/ 888 etc. service, "10- 10" calls, associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 415 Long distance private line services 25 13 1 39 * 30 30 416 Satellite services 3 3 417 All other long distance services 5 15 2 23 * * * * Line 403 surcharges on toll service 1/ 10 21 * 32 * * * * Total toll service provided to end users 600 243 22 866 15 37 * 52 Total telecommunications service provided to 71,812 21,675 187 93,674 821 179 1 1, 001 end users 422 Uncollectible revenue/ bad debt expense associated 1,482 423 3 1,909 8 1 * 9 with end user revenues other than Line 412 423 Net universal service contribution base revenues $70,330 $21,252 $178 $91,760 $814 $178 $1 $992 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal contributions. 22 23 Table 6 Revenues from Telecommunications Service Provided to End Users: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Toll Carriers Total All Filers Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, $4,491 $60 $8 $4,558 $56,785 $441 $26 $57,251 vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges 405 Tariffed subscriber line charges and PICC charges 58 419 * 477 333 11,382 * 11,715 levied by a local exchange carrier on a no- PIC customer Total local exchange (Line 404 + Line 405) 4,549 479 8 5,036 57,117 11,822 26 68,966 406 Local private line and special access service 74 304 7 385 4,184 6, 897 12 11,093 407 Payphone coin revenues (local and long distance) 30 25 1 56 655 42 1 699 408 Other local telecommunications service revenues 14 3 * 18 721 42 23 787 Line 403 surcharges on fixed local service 1/ 20 77 * 98 263 1, 597 2 1, 862 Total fixed local service provided to end users 4, 688 889 15 5, 592 62,941 20,402 64 83,407 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 316 46 5 367 57,512 15,531 141 73,183 410 Message charges including roaming, but excluding 53 11 1 65 14,703 4, 369 30 19,103 toll charges Line 403 surcharges on mobile service 1/ 2 6 * 8 347 1,771 * 2,118 Total mobile service provided to end users 371 62 6 439 72,562 21,670 171 94,404 Toll service 411 Prepaid calling card (including card sales to 354 402 2, 507 3,263 363 405 2,531 3, 299 customers and non- carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in 639 639 644 644 foreign points 413 Operator and toll calls with alternative billing 739 835 443 2,018 1,009 886 445 2, 341 arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct- dialed MTS, customer 9,586 15,673 4,884 30,142 13,297 16,742 5, 106 35,145 toll- free 800/ 888 etc. service, "10- 10" calls, associated monthly account maintenance, PICC pass- through, and other switched services not reported above) 415 Long distance private line services 1,370 6,249 1, 070 8,689 2,644 6, 566 1,114 10,323 416 Satellite services 7 96 154 257 20 129 160 310 417 All other long distance services 233 386 122 742 321 420 131 872 Line 403 surcharges on toll service 1/ 85 2,211 127 2,423 108 2, 338 132 2, 577 Total toll service provided to end users 12,373 25,852 9,947 48,173 17,762 27,487 10,262 55,511 Total telecommunications service provided to 17,432 26,803 9,969 54,204 153,265 69,559 10,498 233,322 end users 422 Uncollectible revenue/ bad debt expense associated 723 707 268 1,698 3,467 1, 371 281 5, 119 with end user revenues other than Line 412 423 Net universal service contribution base revenues $16,709 $26,096 $9,062 $51,867 $149,798 $68,187 $9,573 $227,558 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal contributions. 23 24 Table 7 Total Revenues: 2004 ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Regional Bell Operating Company Other Incumbent Local Incumbent Local Exchange Carriers Exchange Carriers Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $54,102 $27,918 $82,020 $11,605 $6,694 $3 $18,301 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403 1/] Payphone 433 63 38 534 23 1 1 25 [Lines 306 and 407] Mobile service 313 23 336 79 18 97 [Lines 309, 409, 410, and a portion of 403 1/] Toll service 3, 692 102 3, 793 330 56 3 389 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403 1/] Total telecommunications service revenues 58,540 28,106 38 86,684 12,037 6, 769 6 18,812 Total telecommunications service provided for resale 12,335 14,267 38 26,640 3,798 4, 114 3 7, 915 (from Table 5) Total telecommunications service provided to 46,205 13,839 60,044 8,239 2,654 3 10,897 end users (from Table 6) Total telecommunications service revenues 58,540 28,106 38 86,684 12,037 6, 769 6 18,812 418 Enhanced services, inside wiring maintenance, billing - - - - - - - - - 12,725 - - - - - - - - - 2,641 and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and non- telecommunications service revenues 419 Gross billed revenues from all sources - - - - - - - - - 99,409 - - - - - - - - - 21,454 421 Uncollectible revenue/ bad debt expense associated 827 178 with gross billed revenues Total collected revenues from all sources $98,582 $21,275 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 24 25 Table 7 Total Revenues: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A CLECS and Other P ayphone Providers Fixed Local Competitors Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $9,392 $4,307 $58 $13,757 $12 $1 * $13 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403 1/] Payphone 7 4 1 11 285 45 19 349 [Lines 306 and 407] Mobile service 13 4 * 16 [Lines 309, 409, 410, and a portion of 403 1/] Toll service 1, 260 1,736 345 3,342 68 14 1 82 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403 1/] Total telecommunications service revenues 10,671 6,050 404 17,126 365 60 20 445 Total telecommunications service provided for resale 2,233 1,669 67 3, 970 47 32 19 99 (from Table 5) Total telecommunications service provided to 8,438 4,381 337 13,156 318 28 1 346 end users (from Table 6) Total telecommunications service revenues 10,671 6,050 404 17,126 365 60 20 445 418 Enhanced services, inside wiring maintenance, billing - - - - - - - - - 10,704 - - - - - - - - - 426 and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and non- telecommunications service revenues 419 Gross billed revenues from all sources - - - - - - - - - 27,829 - - - - - - - - - 871 421 Uncollectible revenue/ bad debt expense associated 479 5 with gross billed revenues Total collected revenues from all sources $27,351 $866 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 25 26 Table 7 Total Revenues: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Cellular, PCS and SMR Wireless Other Wireless Telephony Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $246 $164 * $410 $68 $3 * $71 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403 1/] Payphone * * * * * * * [Lines 306 and 407] Mobile service 74,348 22,133 168 96,649 844 165 1 1,009 [Lines 309, 409, 410, and a portion of 403 1/] Toll service 886 360 24 1, 270 15 40 1 55 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403 1/] Total telecommunications service revenues 75,480 22,657 192 98,329 927 208 2 1, 136 Total telecommunications service provided for resale 3,668 982 5 4,655 106 29 * 135 (from Table 5) Total telecommunications service provided to 71,812 21,675 187 93,674 821 179 1 1,001 end users (from Table 6) Total telecommunications service revenues 75,480 22,657 192 98,329 927 208 2 1, 136 418 Enhanced services, inside wiring maintenance, billing - - - - - - - - - 25,858 - - - - - - - - - 1,947 and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and non- telecommunications service revenues 419 Gross billed revenues from all sources - - - - - - - - - 124,187 - - - - - - - - - 3,083 421 Uncollectible revenue/ bad debt expense associated 2,307 14 with gross billed revenues Total collected revenues from all sources $121,880 $3,070 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 26 27 Table 7 Total Revenues: 2004 Continued ( Dollar Amounts Show n in Millions) Data from FCC Form 499- A Toll Carriers Total All Filers Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $5,171 $1,168 $40 $6,378 $80,595 $40,255 $100 $120,951 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403 1/] Payphone 42 34 6 82 790 147 65 1,002 [Lines 306 and 407] Mobile service 387 67 6 460 75,984 22,409 175 98,568 [Lines 309, 409, 410, and a portion of 403 1/] Toll service 15,498 32,357 14,429 62,283 21,748 34,664 14,802 71,214 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403 1/] Total telecommunications service revenues 21,097 33,626 14,481 69,204 179,117 97,475 15,143 291,734 Total telecommunications service provided for resale 3,665 6,823 4, 512 15,000 25,852 27,916 4, 645 58,413 (from Table 5) Total telecommunications service provided to 17,432 26,803 9,969 54,204 153,265 69,559 10,498 233,322 end users (from Table 6) Total telecommunications service revenues 21,097 33,626 14,481 69,204 179,117 97,475 15,143 291,734 418 Enhanced services, inside wiring maintenance, billing - - - - - - - - - 17,192 - - - - - - - - - 71,493 and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and non- telecommunications service revenues 419 Gross billed revenues from all sources - - - - - - - - - 86,395 - - - - - - - - - 363,227 421 Uncollectible revenue/ bad debt expense associated 2,132 5,941 with gross billed revenues Total collected revenues from all sources $84,263 $357,286 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Includes a proportionate share of amounts reported on Line 403 as surcharges or other amounts on bills identified as recovering state or federal universal service contributions. 27 28 Table 8 Revenues by Type of Carrier 1/: 2004 (Dollar Amounts Shown in Millions) Data from FCC Form 499- A Telecommunicati ons Services Telecommunications Services P rovided for Resale 2/ P rovided to End Users 2/ Fixed Mobile Toll Total Fixed Mobile Toll Total Local Local Regional Bell Operating Companies $26,328 $58 $253 $26,640 $56,226 $277 $3,540 $60,044 Other Incumbent Local Exchange Carriers (ILECs) 7,879 14 23 7,915 10,447 83 366 10,897 Total ILECs 34,207 72 276 34,555 66,674 361 3,906 70,941 Competitive Access Providers (CAPs) and Competitive 2,718 1 660 3,379 9,644 12 2,077 11,733 Local Exchange Carriers (CLECs) Local Resellers 116 6 122 931 * 162 1,093 Private Service Providers 46 * 211 257 83 3 190 275 Shared- Tenant Service Providers 2 * 2 14 * 6 20 Other Local Service Providers 182 29 211 32 * 2 34 Total Local Competitors 3,064 1 905 3,970 10,704 15 2,437 13,156 Fixed Local Service Providers 37,271 73 1,181 38,525 77,378 376 6,343 84,097 Payphone Service Providers 94 5 98 268 78 346 Wireless Telephony Including Cellular, Personal 310 3,941 404 4,655 100 92,708 866 93,673 Communications Service (PCS) and SMR Telephony Carriers Paging & Messaging Service Providers * 123 4 127 4 725 16 745 Specialized Mobile Radio (SMR) Dispatch * 1 * 1 * 44 * 44 Wireless Data and Other Mobile Service Providers 2 5 7 64 112 35 211 Wireless Service Providers 313 4,070 408 4,790 169 93,589 917 94,675 Interexchange Carriers (IXCs) 777 8 11,074 11,859 4,917 284 34,528 39,729 Operator Service Providers (OSPs) 1 26 28 2 493 495 Prepaid Calling Card Providers 3 1 119 123 59 32 1,421 1,512 Satellite Service Providers 1 5 140 145 155 14 407 576 Toll Resellers 37 7 1,928 1,973 438 109 9,673 10,220 Other Toll Carriers 49 822 871 22 * 1,650 1,672 Toll Service Providers 868 21 14,110 15,000 5,592 439 48,173 54,204 All Filers $38,546 $4,164 $15,703 $58,413 $83,407 $94,404 $55,511 $233,321 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Revenues are classified by the primary carrier type of each reporting entity. For example, revenues reported by an RBOC affiliate that identifies itself as an IXC are included in the table as IXC revenues. Many LECs provided both local and long distance services as part of package plans. Most of the revenues for the toll portion of these bundles were reported as toll revenues on FCC Form 499- A filings of LEC toll affiliates. Filers identified as All Distance or Coaxial Cable Service Providers have been re- categorized for the purpose of creating summary statistics 2/ Telecommunications service provided for resale consists of services provided to other contributors to federal universal service support mechanisms for resale. Revenues from services provided to firms that are de minimis under or exempt from federal universal service support mechanisms are reported as end- user service and are subject to contribution requirements. 28 29 Table 8 Revenues by Type of Carrier 1/: 2004 Continued (Dollar Amounts Shown in Millions) Data from FCC Form 499- A Universal Telecommunications Service Revenues Other Total Service Revenues Contribution Intrastate Interstate International Other Total 4/ Base Revenues to International 2/ 3/ International Regional Bell Operating Companies $13,700 $58,540 $28,106 $38 $86,684 $12,725 $99,409 Other Incumbent Local Exchange Carriers (ILECs) 2,638 12,037 6,769 6 18,812 2,641 21,453 Total ILECs 16,338 70,577 34,875 44 105,496 15,367 120,862 Competitive Access Providers (CAPs) and Competitive 4,150 9,410 5,403 * 299 15,112 5,037 20,149 Local Exchange Carriers (CLECs) Local Resellers 249 930 265 * 20 1,215 218 1,433 Private Service Providers 202 109 340 * 83 532 5,048 5,580 Shared- Tenant Service Providers 4 17 3 2 22 43 65 Other Local Service Providers 23 205 39 1 245 357 602 Total Local Competitors 4,628 10,671 6,050 * 404 17,126 10,704 27,829 Fixed Local Service Providers 20,966 81,248 40,925 * 449 122,622 26,070 148,692 Payphone Service Providers 28 365 60 20 445 426 870 Wireless Telephony Including Cellular, Personal 21,430 75,480 22,657 5 187 98,329 25,858 124,187 Communications Service (PCS) and SMR Telephony Carriers Paging & Messaging Service Providers 108 735 137 * 872 343 1,215 Specialized Mobile Radio (SMR) Dispatch 1 44 1 * 46 80 126 Wireless Data and Other Mobile Service Providers 70 147 70 * 1 218 1,524 1,742 Wireless Service Providers 21,609 76,407 22,864 5 188 99,465 27,805 127,270 Interexchange Carriers (IXCs) 26,007 15,752 27,314 463 8,060 51,589 12,888 64,477 Operator Service Providers (OSPs) 131 348 152 4 19 523 151 674 Prepaid Calling Card Providers 1,167 239 160 36 1,200 1,635 127 1,762 Satellite Service Providers 297 221 195 59 245 721 700 1,422 Toll Resellers 6, 064 4,204 5,474 56 2,458 12,192 2,728 14,920 Other Toll Carriers 1, 492 333 330 21 1,859 2,543 597 3,140 Toll Service Providers 35,158 21,097 33,626 639 13,842 69,204 17,191 86,395 All Filers $77,760 $179,117 $97,475 $644 $14,498 $291,734 $71,493 $363,227 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1/ Revenues are classified by the primary carrier type of each reporting entity. For example, revenues reported by an RBOC affiliate that identifies itself as an IXC are included in the table as IXC revenues. Many LECs provided both local and long distance services as part of package plans. Most of the revenues for the toll portion of these bundles were reported as toll revenues on FCC Form 499- A filings of LEC toll affiliates. Filers identified as All Distance or Coaxial Cable Service Providers have been re- categorized for the purpose of creating summary statistics 2/ Telecommunications service provided for resale consists of services provided to other contributors to federal universal service support mechanisms for resale. Revenues from services provided to firms that are de minimis under or exempt from federal universal service support mechanisms are reported as end- user service and are subject to contribution requirements. 3/ Universal service contribution base revenues consist of all interstate and international end- user telecommunications revenues except for international- to-international revenues reported on Line 412. The totals include revenues from filers who are de minimis or otherwise exempt from contributing. This table also includes international revenues that were exempt from contribution because of the 12 percent rule. See Table 4 for details on exempt amounts. Contribution base amounts reported as uncollectible on Line 422 have been removed. 4/ Carriers report non- telecommunications service revenues on Line 418. This category includes enhanced services, inside wiring maintenance, billing and collection, customer premises equipment, published directory, dark fiber, Internet, foreign carrier and other non- U. S. telecommunications service revenues. 29 30 Table 9 Estimates of Average Revenue per Conversation Minute (Dollar Amounts and Minut es Shown in Millions) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Interstate operator service revenues 1/ $6,561 $6,878 $6,454 $7,113 $6,971 $5,747 $6,603 $5,480 $3,843 $2,508 $4,267 + Other interstate switche d toll revenues 2/ $38,843 $42,139 $47,865 $42,075 $42,620 $45,026 $38,753 $32,870 $26,431 $24,050 $21,848 + International- to- internati onal toll revenues 3/ $166 $249 $374 $561 $1,121 $983 $1,087 $924 $636 $1,148 $644 + Charges on bills identified as USF $878 $2,213 $2,830 $2,945 $2,361 $2,028 $1,789 contributions 4/ + PICC pass- through reported as SLC $1,208 $0 $0 $0 $0 $0 $0 revenues 5/ - 80% of revenues reported by toll resellers $1,251 $2,582 $4,211 n. a. n. a. n. a. n. a. n. a. n. a. n. a. n. a. = Total end- user switched toll revenues $44,153 $46,435 $50,107 $49,325 $52,797 $53,969 $49,273 $42,219 $33,270 $29,734 $28,548 - International- to- international toll revenues 3/ $166 $249 $374 $561 $1,121 $983 $1,087 $924 $636 $1,148 $644 = U. S. international and interstate end- user $43,987 $46,186 $49,733 $48,764 $51,677 $52,986 $48,186 $41,295 $32,634 $28,586 $27,904 switched toll revenues End- user international MTS revenues 6/ $12,543 $14,335 $14,598 $15,661 $14,726 $14,980 $14,909 $11,380 $9,956 $8,944 $9,180 - International reoriginating revenues 13/ $0 $28 $43 $248 $287 $370 $430 $712 $574 $633 $744 - International- to- international toll revenues 3/ $166 $249 $374 $561 $1,121 $983 $1,087 $924 $636 $1,148 $644 = International revenues for U. S. end users $12,377 $14,058 $14,180 $14,853 $13,318 $13,627 $13,391 $9,743 $8,746 $7,163 $7,792 Total end- user switched toll revenues $44,153 $46,435 $50,107 $49,325 $52,797 $53,969 $49,273 $42,219 $33,270 $29,734 $28,548 - End- user international MTS revenues 6/ $12,543 $14,335 $14,598 $15,661 $14,726 $14,980 $14,909 $11,380 $9,956 $8,944 $9,180 = Interstate domestic switched end- user $31,610 $32,100 $35,509 $33,664 $38,071 $39,507 $34,364 $30,840 $23,314 $20,790 $19,368 revenues U. S. billed international minutes 13,616 15,889 19,325 22,753 24,250 28,515 29,216 33,280 35,988 42,664 63,512 - Country- direct/ beyond minutes 9/ 350 500 728 1,053 933 1,736 1,935 1,330 1,127 1,422 1,447 - Reoriginating minutes 13/ 0 5 26 98 532 802 1,412 4,414 3,664 5,354 6,893 = U. S. billed international minutes excluding 13,266 15,384 18,571 21,602 22,785 25,978 25,869 27,536 31,197 35,888 55,172 country- direct/ beyond and reoriginating ILEC originating interstate access minutes 7/ 162,043 169,236 173,300 181,900 184,000 208,267 204,154 194,464 175,092 153,255 139,002 + Estimated CLEC originating minutes 8/ 580 1,218 1,816 4,118 6,452 12,079 18,034 22,947 21,186 22,988 21,937 - U. S. billed international minutes excluding country- direct/ beyond and reoriginating 9/ 13,266 15,384 18,571 21,602 22,785 25,978 25,869 27,536 31,197 35,888 55,172 = Domestic originating access minutes 149,357 155,071 156,545 164,416 167,667 194,369 196,319 189,875 165,081 140,355 105,767 ILEC terminating interstate access minutes 7/ 239,360 262,712 292,800 315,400 334,800 344,465 363,295 345,306 310,908 290,753 283,443 + Estimated CLEC terminating minutes 8/ 856 1,891 3,068 7,141 11,739 20,757 32,092 40,746 37,620 43,613 44,732 - Country- direct/ beyond international 350 500 728 1,053 933 1,736 1,935 1,330 1,127 1,422 1,447 settlement minutes 9/ Foreign billed international settlement - minutes 10/ 6,385 7,121 8,291 9,107 10,208 10,765 12,719 13,478 13,575 13,575 18,547 = Domestic terminating access minutes 233,481 256,982 286,849 312,381 335,398 352,721 380,734 371,245 333,826 319,369 308,181 Conversation minutes 11/ U. S. interstate and international minutes 246,747 272,366 305,420 333,984 358,183 377,163 406,603 398,780 365,023 355,257 363,353 International conversation minutes 9/ 13,266 15,384 18,571 21,602 22,785 25,016 25,869 27,536 31,197 35,888 55,172 Interstate domestic conversation minutes 233,481 256,982 286,849 312,381 335,398 352,147 380,734 371,245 333,826 319,369 308,181 End- user revenue per U. S. interstate and international minute $0.18 $0.17 $0.16 $0.15 $0.14 $0.14 $0.12 $0.10 $0.09 $0.08 $0.08 International conversation minute 12/ $0.93 $0.91 $0.76 $0.69 $0.58 $0.54 $0.52 $0.35 $0.28 $0.20 $0.14 Interstate domestic conversation minute $0.14 $0.12 $0.12 $0.11 $0.11 $0.11 $0.09 $0.08 $0.07 $0.07 $0.06 See notes on next page. 30 31 Notes for Table 9. n. a. - not applicable Note: Some data for prior years have been revised. 1/ Starting in 1997, interstate operator service revenues include interstate and international prepaid calling card revenues (currently Table 6, Line 411) plus revenues from interstate and international operator and toll calls with alternative billing arrangements (currently Table 6, Line 413). 2/ Starting in 1997, other interstate switched toll revenues are equal to revenues from interstate and international ordinary long distance and other switched toll services (currently Table 6, Line 414). 3/ Starting in 1997, amounts shown are revenues from international calls that both originate and terminate at foreign points (currently Table 6, Line 412). International- to- international revenues were not reported separately prior to 1997. Amounts for 1992 through 1996 were estimated using a 50% growth rate. Most international- to- international services are provided to foreign customers. Some international- to- international services, such as call- back service, generate both originating and terminating access minutes. 4/ Carriers only report aggregate universal service surcharge revenues. Such revenues are allocated across services based on the share of contribution base revenues generated by each service. 5/ PICC charges were introduced in 1998. The reporting instructions for 1998 data were not clear and many toll carriers reported PICC pass- through charges as local revenues rather than as toll revenues. Carrier- by- carrier information was used to identify misclassified amounts to ensure that the amount of toll revenues for 1998 was accurate. 6/ Table 2 of Trends in the U. S. Internati onal Telecommunications Industry contains estimates of international end- user revenues. Preliminary figures are used for 2004. Note that these figures differ significantly from data contained in Table 6 herein. Table 3 in Trends in the U. S. Internati onal Telecommunications Industry contains data for country- direct/ beyond and reoriginated minutes. 7/ Based on National Exchange Carrier Association (NECA) filings. Separate data were available for originating and terminating access minutes through 1998. Beginning in 1999, ILEC total interstate access minutes (M onitoring Report , Table 8.1) are allocated between originating and terminating based on the originating and terminating shares of carrier common line (CCL) minutes of use reported by carriers subject to price- cap regulation and all local exchange carriers in the NECA pool (see Trends in Telephone Service, Table 1.4. The May 2004 edition contains data for 2003.) These figures exclude the minutes of rate- of- return ILECs. 8/ CLEC access minutes are estimated based on the local service competitors share of the local services market. Data taken from Table 8.7 of Trends in Telephone Service. That table, reproduced in relevant part below, includes all local service revenues of local carriers, but includes only local exchange service revenues of wireless and toll carriers. Local service competitors' share of 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 local revenues 0.4% 0.7% 1.0% 2.3% 3.5% 5.8% 8.8% 11.8% 12.1% 15.0% 15.8% 9/ World total MTS minutes billed in the United States from Section 43.61 International Telecommunications Data includes data for all U. S. points, all settlement arrangements and all U. S. carriers. Billing types covered are 1, 11, and 21. (See the International Data report for an explanation of billing types.) Starting in 1995, carriers separately reported country- direct/ beyond minutes. Most country- direct traffic generates terminating access minutes and generally represents billed end- user revenues from U. S. customers. Country- beyond minutes generally do not result in access minutes and generate revenues that are reported as international- to- international. Some other international- to- international traffic, however, results in access minutes and ordinary U. S. billed minutes of traffic. In the absence of better assumptions, and recognizing the offsetting bias for call- back minutes, the country- beyond/ direct minutes are treated as terminating access minutes but are not included as international conversation minutes. 10/ World total MTS minutes originating or terminating in the United States but billed in foreign countries are from Section 43.61 International Telecommunications Data . Includes data for all U. S. points, all settlement arrangments and all U. S. carriers. Billing types covered are 2, 12, and 22. (See the International Data report for an explanation of billing types.) Foreign billed minutes of international traffic generate terminating access minutes. 11/ International conversation minutes are estimated as U. S. billed international traffic minutes excluding country- direct/ beyond and reoriginating minutes. Domestic conversation minutes are estimated as domestic terminating access minutes. An unknown quantity of conversation minutes result in reported interstate or international switched toll revenues but not in reported interstate access minutes. This may result in an upward bias in the revenue per minute estimates. For 2002 and 2003, revenue per minute estimates may be overstated by as much as 10% or 20%. 12/ International revenue per- minute amounts published herein differ from estimates published in Trends in the U. S. International Telecommunications Industry, Table 2, because the latter estimates include revenues and billed minutes associated with calls that originate and terminate at foreign points. 13/ Reorigination traffic originates and terminates outside of the United States. U. S. carriers receive settlement- like payments for this service which are reported as U. S. billed revenues in 43.61 reports. For FCC Form 499 reporting, these amounts are treated as settlements and not reported as revenues. Reorigination data are taken from Table 3 in Trends in the U. S. International Telecommunications Industry and from Section 43.61 International Telecommunications Data . 31 32 Table 10 Estimates of Access and Universal Service Contribution Costs per Conversation Minute (Dollar Amounts and Minut es Shown in Millions, Per- Minute Am ounts Shown in Do llars and Cents) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Minutes data from Table 9 1/ ILEC originating interstate access minutes 162,043 169,236 173,300 181,900 184,000 208,267 204,154 194,464 175,092 153,255 139,002 Originating minutes of international traffic 13,266 15,384 18,571 21,602 22,785 25,978 25,869 27,536 31,197 35,888 55,172 Domestic originating access minutes 149,357 155,071 156,545 164,416 167,667 194,369 196,319 189,875 165,081 140,355 105,767 ILEC terminating interstate access minutes 239,360 262,712 292,800 315,400 334,800 344,465 363, 295 345,306 310,908 290,753 283,443 Terminating minutes of international traffic 6, 735 7,621 9,019 10,159 11,141 12,501 14,654 14,808 14,702 14,997 19,994 U. S. Interstate and international 246,747 272,366 305,420 333,984 358,183 377,163 406,603 398,780 365,023 355,257 363,353 conversation minutes International conversation minutes 13,266 15,384 18,571 21,602 22,785 25,016 25,869 27,536 31,197 35,888 55,172 Interstate domestic conversation minutes 233,481 256,982 286,849 312,381 335,398 352,147 380,734 371,245 333,826 319,369 308,181 End- user revenue per minute data from Table 9 U. S. interstate and international minute $0.18 $0.17 $0.16 $0.15 $0.14 $0.14 $0.12 $0.10 $0.09 $0.08 $0.08 International conversation minute $0.93 $0.91 $0.76 $0.69 $0.58 $0.54 $0.52 $0.35 $0.28 $0.20 $0.14 Interstate domestic conversation minute $0.14 $0.12 $0.12 $0.11 $0.11 $0.11 $0.09 $0.08 $0.07 $0.07 $0.06 Access cost per interstate 2- ended minute 2/ $0.068 $0.065 $0.061 $0.056 $0.039 $0.033 $0.024 $0.018 $0.016 $0.014 $0.015 Originating access minutes $0.032 $0.031 $0.029 $0.026 $0.022 $0.018 $0.013 $0.010 $0.008 $0.007 $0.008 Terminating access minutes $0.034 $0.033 $0.030 $0.028 $0.016 $0.013 $0.011 $0.008 $0.007 $0.007 $0.007 Access cost per average conversation minute 3/ U. S. interstate and international minutes $0.054 $0.050 $0.045 $0.041 $0.026 $0.022 $0.016 $0.012 $0.010 $0.009 $0.009 International conversation minutes $0.049 $0.047 $0.043 $0.039 $0.030 $0.026 $0.019 $0.014 $0.012 $0.010 $0.010 Interstate domestic conversation minutes $0.054 $0.051 $0.046 $0.041 $0.026 $0.022 $0.016 $0.012 $0.010 $0.009 $0.008 Universal service contributions assessed on a per- line basis ($ millions) 4/ $891 $907 $944 $973 $0 $0 $0 $0 $0 $0 $0 Expressed per minute 5/: U. S. interstate and international minutes $0.004 $0.003 $0.003 $0.003 $0.006 $0.007 $0.007 $0.007 $0.006 $0.007 $0.006 International conversation minutes $0.004 $0.003 $0.003 $0.003 $0.025 $0.025 $0.029 $0.024 $0.020 $0.016 $0.011 Interstate domestic conversation minutes $0.004 $0.003 $0.003 $0.003 $0.005 $0.005 $0.005 $0.006 $0.005 $0.005 $0.005 CLEC access revenues assessed on a per- minute basis ($ millions) 6/ $26 $93 $213 $369 $573 $854 $913 $586 Expressed per conversation minute $0.0001 $0.0003 $0.0006 $0.0009 $0.0014 $0.0023 $0.0026 $0.0016 International- to- international revenues as % of total international end- user revenues 7/ 1.3% 1.7% 2.6% 3.6% 7.6% 6.6% 7.3% 8.1% 6.4% 12.8% 7.0% Net international settlement payouts ($ millions) 7/ $4,289 $4,919 $5,601 $5,207 $4,663 $4,477 $4,335 $2,649 $2,560 $2,650 $2,961 Per U. S. interstate and international minute $0.017 $0.018 $0.018 $0.015 $0.012 $0.011 $0.010 $0.006 $0.007 $0.007 $0.008 Per international conversation minute $0.319 $0.314 $0.294 $0.232 $0.189 $0.167 $0.155 $0.088 $0.077 $0.064 $0.050 PICC charges billed by Tier 1 carriers ($ millions) 8/ $2,000 $2,258 $1,732 $571 $134 $72 $76 Expressed per conversation minute $0.006 $0.006 $0.004 $0.001 $0.000 $0.000 $0.000 Access and universal service contribution costs 9/ per: U. S. interstate and international minute $0.075 $0.072 $0.066 $0.059 $0.050 $0.046 $0.038 $0.028 $0.026 $0.025 $0.024 International conversation minute 10/ $0.371 $0.364 $0.340 $0.275 $0.249 $0.224 $0.209 $0.130 $0.111 $0.094 $0.073 Interstate domestic conversation minute $0.058 $0.054 $0.049 $0.044 $0.037 $0.034 $0.026 $0.020 $0.018 $0.017 $0.015 Revenue per- minute net of access and universal service contribution costs, per: U. S. interstate and international minute $0.104 $0.098 $0.096 $0.087 $0.094 $0.094 $0.081 $0.076 $0.063 $0.056 $0.053 International conversation minute 10/ $0.562 $0.550 $0.423 $0.413 $0.335 $0.314 $0.309 $0.224 $0.169 $0.106 $0.068 Interstate domestic conversation minute $0.078 $0.071 $0.075 $0.064 $0.077 $0.078 $0.064 $0.063 $0.052 $0.048 $0.048 Access and universal service contribution costs as a percentage of revenue per minute U. S. interstate and international minutes 41.8% 42.2% 40.8% 40.3% 34.8% 33.1% 31.7% 27.0% 29.1% 30.9% 31.4% International conversation minutes 39.8% 39.9% 44.6% 40.0% 42.6% 41.6% 40.3% 36.7% 39.7% 47.0% 51.9% Interstate domestic conversation minutes 42.6% 43.2% 39.3% 40.7% 32.3% 30.2% 28.7% 24.4% 25.6% 26.0% 24.1% See notes on next page. 32 33 Notes for Table 10. Note: Some data for prior years have been revised. Some 2004 international data are preliminary. See text for additional commentary. 1/ The number of conversation minutes is based on the number of access minutes. An unknown quantity of conversation minutes result in reported revenues but do not result in interstate access minutes. Therefore, the analysis may overstate average access and universal service contribution costs per minute. Note that the end- user revenue per- minute data taken from Table 9 includes revenues from universal service pass- through charges levied on end users by filers to recover contribution amounts. 2/ Originating and terminating per- minute charges are derived from data in Table 1.2 of Trends in Telephone Service. Charges for the year are calculated as charges for the first and second half of each year, weighted by the actual access minutes for the respective halves. 3/ Access cost per average conversation minute is calculated as the total cost of originating and terminating access (based on ILEC but not CLEC access minutes and costs per minute shown in the table) divided by conversation minutes. For example, for international minutes, originating access minutes equal the U. S. billed international minutes excluding country- direct/ beyond minutes and hubbing minutes. Similarly, terminating access minutes equal the number of foreign billed minutes plus country- direct/ beyond minutes. Ideally, country- direct minutes would be treated differently from country- beyond minutes, but Section 43.61 international traffic data reports do not contain that breakout. For simplicity, all CLEC minutes are treated as domestic access minutes. 4/ Source: National Exchange Carrier Association (NECA). Through 1997, toll carriers were assessed based on the number of presubscribed lines. 5/ Through 1997, universal service contributions per minute were calculated as the assessments based on lines divided by all U. S. conversation minutes. Starting with 1998, the amounts are estimated as the approximate contribution rate for interstate and international revenues times the average per- minute charges. 6/ Interstate access per- minute revenues reported on FCC Form 457 and FCC Form 499- A by carriers other than ILECs. 7/ Section 43.61 International Telecommunications Data . Totals exclude settlement payouts for hubbing service. Net international settlement payouts have been reduced by the ratio of international- to- international service revenues to total international end- user revenues, reflecting the assumption that these revenues cause a proportionate share of net settlement payouts. 8/ Since 1998, Tier 1 incumbent local exchange carriers were allowed to recover a portion of interstate expenses through presubscribed interexchange carrier charges (PICCs) on access lines. Where the access line was presubscribed, the PICC was levied on the interexchange carrier (IXC) and the associated revenues were reported as carrier's carrier revenues. The PICC charges shown in the table are based on Tier 1 carrier charges as well as line count information from Tariff Review Plans and from the Statistics of Communications Common Carriers . Where consumers did not have a presubscribed IXC, however, the ILEC billed the PICC charge to the customer rather than the IXC. We estimated that 97% of ILEC PICC revenues were collected from IXCs. Note that PICCs on residential and single line business lines were eliminated on July 1, 2000 and that PICC charges largely have been phased out for other lines. 9/ Includes tariffed per- minute access charges, net international settlement payouts, universal service contributions and PICC charges but excludes the cost of dedicated access lines. 10/ The net cost of settling international traffic consists of the settlement payouts for U. S. billed traffic less the settlement receipts for foreign billed traffic. The minutes of foreign billed traffic are not included as international conversation minutes because U. S. carriers do not bill U. S. customers for this traffic. U. S. carriers incur terminating access charges for these minutes and international transmission costs. The terminating access costs are included in the cost per- minute estimates. Trends in the U. S. International Telecommunications Industry shows end- user revenue per minute handled, as compared to end- user revenue per U. S. billed conversation minute shown herein. 33 34 Table 11 End- User Telecommunications Service Revenues By Region of the Country: 2004 (Dollar Amounts Shown in Millions) By Type of Filer All Services Fixed Local Toll Wireless Total Region as and including for P ercent of Payphone Satellite Region Total Southeast: $19,504 $10,242 $22,089 $51,835 22.2 % Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee, and U. S. Virgin Islands Western: 10,423 6,404 11,710 28,537 12.2 Alaska, Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming West Coast: 10,353 7,486 14,005 31,845 13.7 California, Hawaii, Nevada, American Samoa, Guam, Northern Mariana Islands, and Wake Island Mid- Atlantic: 10,967 8,381 9,318 28,665 12.2 Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia Mid- West: 12,205 7,307 13,808 33,321 14.3 Illinois, Indiana, Michigan, Ohio, and Wisconsin Northeast: 10,507 7,381 11,348 29,236 12.5 Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont Southwest: 10,154 6,827 12,395 29,376 12.6 Arkansas, Kansas, Missouri, Oklahoma, and Texas Filers that did not identify revenues by region 1/ 330 176 1 506 0.2 Total $84,443 $54,204 $94,675 $233,321 100.0 % 1/ Filers that are exempt from contributing to local number portability administration are not required to provide a breakout by region of the country. 34 35 Table 12 Share of Universal Service Contributions 1/ By Principal Type of Contributor Using Traditional Carrier Categories 2/ Preliminary 1/ Q1 Service Provider Category 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Regional Bell Operating Companies (RBOCs) 11.7 %14.4 %14.3 %16.2 %18.3 %19.9 %19.9 %19.8 %20.6 %20.0 % Including CLEC Affiliates. Incumbent Local Exchange Carriers (ILECs) 2.6 1. 4 1.5 1. 7 2.1 2. 8 3.2 3. 4 3.7 3. 6 Other Than RBOCs Competitive Local Exchange Carriers (CLECs) Local Resellers and Other Local Carriers Other Than RBOCs 0. 8 1. 3 2. 6 2. 2 2. 7 3. 3 3. 5 3. 8 4. 5 4. 4 Total: Fixed Local Service Providers 15.1 17.1 18.5 20.1 23.1 26.0 26.6 27.0 28.9 28.0 Payphone Providers 0.0 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.1 0.1 Wireless Service Providers 3.3 5. 1 6.6 9. 2 12.0 17.2 24.8 27.8 27.7 32.3 RBOC Toll Service Providers 1.7 1. 7 2.0 2. 3 3.0 3. 4 5.0 6. 8 8.7 28.3 Other Toll Service Providers 79.9 76.0 72.9 68.3 61.9 53.3 43.6 38.5 34.7 11.3 Total: Toll Service Providers 81.6 77.7 74.9 70.6 64.9 56.7 48.6 45.2 43.4 39.6 Total All Filers 100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %100 %100.0 %100.0 % 1/ For years 1997 through 2002, the percentages are based on shares of reported subject interstate and international end- user billed revenues. The percentages shown for 2003 and 2004 are based on shares of reported subject interstate and international end- user collected revenues. Preliminary percentages shown for 2005 are based on FCC Form 499- Q filings. Preliminary percentages for the first quarter of 2006 are based on projected collected revenues for that quarter, from FCC Form 499- Q filings. Calculations exclude revenues for calls that both originate and terminate in foreign points. Calculations for years 1999 through 2003 include revenues for all filers. For the purposes of this table, AT& T and MCI filings are classified as RBOC filings as of the first quarter of 2006. 2/ Prior to 2004, the FCC Form 499- A asked each filer to identify a single category of communications business that best described its operations. The service provider categories listed on FCC Form 499- A correspond to traditional breakdowns of the industry. Starting in 2004, carriers were allowed to specify more than one category and were allowed to identify themselves as an All Distance service provider. Revenues from these filers have been categorized using the traditional industry classification that best described each company. Source: 1997 and 1998: FCC Form 457 filings; 1999 through 2004: FCC Form 499- A filings; 2005 and 2006: FCC Form 499- Q filings. 35 36 Customer Response Publication: Telecommunications Industry Revenues: 2004 You can help us provide the best possible information to the public by completing this form and returning it to the Industry Analysis & Technology Division of the FCC's Wireline Competition Bureau. 1. Please check the category that best describes you: ____ press ____ current telecommunications carrier ____ potential telecommunications carrier ____ business customer evaluating vendors/ service options ____ consultant, law firm, lobbyist ____ other business customer ____ academic/ student ____ residential customer ____ FCC employee ____ other federal government employee ____ state or local government employee ____ Other (please specify) 2. Please rate the report: Excellent Good Satisfactory Poor No opinion Data accuracy (_) (_) (_) (_) (_) Data presentation (_) (_) (_) (_) (_) Timeliness of data (_) (_) (_) (_) (_) Completeness of data (_) (_) (_) (_) (_) Text clarity (_) (_) (_) (_) (_) Completeness of text (_) (_) (_) (_) (_) 3. Overall, how do you Excellent Good Satisfactory Poor No opinion rate this report? (_) (_) (_) (_) (_) 4. How can this report be improved? 5. May we contact you to discuss possible improvements? Name: Telephone #: Questions? 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