7 - 1 7. Rates and Price Indices This section contains information on telephone price indices and rate levels. 1 It describes and presents a series of price indices maintained by the Bureau of Labor Statistics (BLS). It also discusses rate levels and changes in average rate levels. Telephone Service Price Indices The BLS collects a variety of information on telephone service as part of three separate programs -- the Consumer Price Index (CPI), the Producer Price Index (PPI), and the Consumer Expenditure Survey. They can be found on the Internet at www.bls.gov/data. The monthly price indices represent prices sampled in the middle of the month. A Consumer Price Index for telephone services was first published in 1935. 2 Since that time, telephone prices have tended to increase at a slower pace than most other prices. Table 7.1 shows long-run changes in the Consumer Price Indices for all items, all services, telephone services, each of the seven major categories that currently constitute the overall CPI, and several services that are often characterized as public utilities. The price of telephone service has increased less rapidly than the prices of most of these categories when viewed over a long period of time. Chart 7.1 shows the levels of the overall CPI and the CPI for telephone services over time. The CPI index of telephone services is based on a "market basket" intended to represent the telephone-related expenditures of a typical urban household. It includes both local and long distance services. The annual rate of change during recent years is shown in Table 7.2 for the overall CPI (which measures the impact of inflation on consumers), and the CPI for telephone services. In addition, Table 7.2 shows the Gross Domestic Product chain-type price index (which reflects inflation throughout the economy) prepared by the Bureau of Economic Analysis. Chart 7.2 shows the changes in the overall CPI and the CPI for telephone services over time. For 2007 the nation's overall level of prices (measured by the CPI for all items) rose by 4.1%. The CPI for telephone services rose by 2.1% during 2007. The CPI for telephone services is composed of three subindices. During 2007, the local service component (including subscriber line charges) rose by 4.1%; the price index for interstate toll calls rose by 2.4%, and the price index for intrastate toll calls increased by 5.9%. The changes in these subindices over time are shown in Chart 7.3. 1 For more detailed information, see Industry Analysis and Technology Division, Wireline Competition Bureau, Federal Communications Commission, Reference Book of Rates, Price Indices, and Household Expenditures for Telephone Service (August 2008). Much, but not all, of the material in this section is based on that report. 2 BLS publishes two sets of Consumer Price Indices. The CPI-U, used herein, is based on expenditures of all urban consumers. The CPI-W series is based on expenditures of urban wage earners and clerical workers. 7 - 2 The Bureau of Labor Statistics publishes a number of price indices related to local telephone service, two of which are important to the monitoring program. The CPI index of local telephone charges is based on a broadly defined "market basket" of local services that includes monthly service charges, message unit charges, leased equipment, installation, service enhancements (such as tone dialing and call waiting), taxes, subscriber line charges, and all other consumer expenditures associated with local telephone services except long distance charges. In contrast, the PPI index of monthly residential rates is much more narrowly defined. It is based only on monthly service charges for residential service, optional tone dialing service, and subscriber line charges. It excludes taxes and all other telephone service charges. The annual rates of change for these two indices are presented in Table 7.3. CPI data are available for intrastate toll and interstate toll services since December 1977. Table 7.3 also presents the annual changes in these series for recent years. Price indices are less reliable when industries are changing rapidly. For example, in 1992, long distance carriers began to increase basic long distance rates while at the same time greatly expanding their range of discount offerings aimed at medium and heavy users of long distance service. The fixed market basket of toll calls measured for the CPI did not fully reflect these discounts. In 1998, the CPI for telephone services was altered to include cellular telephone services, making the new index not directly comparable to prior years. In 1995, BLS made major changes to the PPI telephone series, and there are no data after July 1995 comparable with prior data. At that time the BLS introduced revenue-weighted telephone price indices. The new indices categorize the telephone industry into much finer detail, though the new series are not comparable to the old in many categories. Because of these sorts of difficulties, measures of average revenues are sometimes used as alternatives to price indices. Monthly data for the new CPI telephone indices are shown in Table 7.4. With the release of data for January 2004, the Producer Price Index program changed its basis for industry classification from the 1987 Standard Industrial Classification (SIC) system to the North American Industry Classification System (NAICS). Developed in cooperation with Canada and Mexico, NAICS represents a profound change for statistical programs focusing on emerging economic activities. The system was developed using a production-oriented conceptual framework, grouping establishments into industries based on the activity in which they are primarily engaged. While many NAICS industries directly compare with SIC industries, a number of SIC industries were split or combined to form a new NAICS industry. The PPI treats the SIC-to-NAIC comparison as continuous if 80 percent or more of the weight of the SIC-based index comprises at least 80 percent of the weight of the NAICS-based index. All index series that have passed this test are published under the NAICS structure using the index base date and price index history established by the SIC-based index. Documentation of the NAICS to SIC concordance for all subsectors, industry groups, and products may be found at http:// www.bls.gov/ppi/ppinaics.htm. 3 The current 3 Several telecommunications PPIs published by the BLS under the SIC classification system are no long published after the conversion to NAICS. These include “Other Local Service” (SIC pcu4813#114), “Other Local Service except Directory Assistance” (SIC pcu4813#11409), “LEC Intrastate Private Line Service” (SIC pcu4813#311), “Directory Advertising” (SIC pcu4813#91), and “Other Telephone Services” (SIC pcu4813#99). In addition, “Directory Assistance” (SIC pcu4813#11401) is now classified as “Other Local 7 - 3 PPI indices are shown in Table 7.5. Information on Rate Levels Local rates are regulated by state regulatory agencies and vary greatly from area to area. Characterization of any rate as "typical" is therefore difficult. Table 7.6 presents average local residential rates in urban areas. The price indices published by the BLS indicate percentage changes in the price of the telephone services. The BLS does not publish the actual level of rates. The averages shown in Table 7.6 are based on an FCC survey using the same sampling areas and weights that were used by the BLS in constructing the 1986 Consumer Price Index. 4 In October 2007 the national average for the representative total residential service charge was $25.62 monthly. The average charge for connecting new phone service was $43.22. Table 7.7 presents average monthly local rates for single-line business customers in urban areas. Like the residential rates presented above, they are based on an FCC survey using the same sampling areas and weights used by the BLS in constructing the 1986 Consumer Price Index. In October 2007, the representative average monthly charge was $48.67, while the average charge for connecting phone service was $68.74. Table 7.8 contains average revenue per minute for interstate calls. These estimates show that billed revenue per minute has declined over time for both international and domestic services. Standard Deviation Analysis of Residential Rates In October 2003, the Federal Communications Commission adopted a recommendation by the Federal-State Joint Board on Universal Service establishing an annual adjusted nationwide urban rate benchmark for purposes of determining universal service support for non-rural carriers. This benchmark is used by the states and the Commission as a tool to assess the reasonable comparability of rates in rural and high-cost areas served by non-rural carriers to Service” (NAICS 517110114) and “Telephone Communications except Radiotelephone” is now referred to as “Wired Telecommunications Carriers”. 4 The form used in conducting the 2003 urban rate survey has been revised from previous years. Specifically, a more detailed breakout of carriers’ surcharges and taxes now appear as separate line items on the survey instrument. All carriers are now required to submit all line-item data in terms of dollar amounts (whereas before some line items were reported as percentages). In addition, local rates pertaining to multiline-business customers are no longer requested. These changes to the survey form allow for more accurate estimates of the total monthly recurring costs for basic local residential and single-line business service. Note that all estimates for 2002-2007 reflect usage of the revised survey form, while estimates for years 2001 and prior reflect those obtained from the previous survey instrument. 7 - 4 nationwide urban rates. 5 The urban rate benchmark adopted by the Commission is based upon the most recent average urban residential rate as shown in Table 7.9. Because of the great variation in urban rates nationwide, the Commission adopted a “standard deviation analysis” which measures the dispersion of urban rates from the average. As such, an urban rate benchmark level of two (weighted) standard deviations above the (weighted) average urban rate is used. Table 7.10 presents the results of such a standard deviation analysis for the residential rates reported in the Urban Rate Survey as of October 15, 2007. The average, plus the two standard deviation benchmark, is $36.52. Table 7.10 shows the historical trend in the standard deviation analysis for the years 1993-2007. Over this period, the average plus the two standard deviation benchmark rose by 28.5%. Subscriber Line and Access Charges Long distance companies rely on the loops, switches, and transport facilities of local telephone companies for access to their customers. As a result, local telephone companies recover a portion of their costs from long distance companies accessing their networks. Both the manner in which these access charges have been assessed and the proportion of the costs they have recovered have varied considerably over time. Prior to 1984, AT&T provided almost all interstate long distance service while its local telephone companies provided about three-quarters of the nation’s local telephone service. Under the regulatory oversight of the FCC and state public utilities commissions, for many years AT&T set long distance charges above cost and shared part of its revenues with Bell System and independent local companies. This system reduced pressures on the local companies to raise monthly local rates, but the high long distance rates suppressed demand for long distance calls and induced large corporations to bypass the public switched network. Moreover, while such revenue sharing arrangements were sustainable in an industry where one firm monopolized both long distance and local service, they were not compatible with a competitive long distance industry. In mid-1984, the FCC, in cooperation with a Federal-State Joint Board comprised of both federal and state regulators, introduced sweeping changes to the way that local companies charged for their services. The historic method of sharing revenues was replaced with a new system of access charges that provided a uniform method for local telephone companies to charge for the origination and termination of interstate traffic on their local networks. In particular, monthly subscriber line charges (SLCs) were introduced to recover a portion of the fixed costs of the local telephone companies’ loops directly from end users on a per-line basis. Since local telephone companies were required to reduce their charges to long distance carriers -- dollar for dollar -- the introduction of SLCs permitted reductions in implicit subsidies from long distance service to local service. The rebalancing of prices between local service and interstate long distance calls during the 1980s had a fundamental impact on the telephone industry as the 5 See Federal-State Joint Board on Universal Service, CC. Docket No. 96-45, Order on Remand, Further Notice of Proposed Rulemaking, and Memorandum Opinion and Order, 18 FCC Rcd 22559, 22607-22610, paras. 80-82 (2003), remanded, Qwest Corp. v. FCC, 398 F. 3d 1222 (10 th Cir. 2005). 7 - 5 price of long distance service fell and the volume of long distance calling surged. In mid-1997, as part of its implementation of the 1996 Telecommunications Act, the FCC introduced further interstate access charge reform. Presubscribed interexchange carrier charges (PICCs) were created in order to allow local carriers to recover the remaining portion of their fixed loop costs from long distance carriers on a per-line, instead of a per-minute, basis. A further access charge reform was adopted on May 31, 2000, which eliminated the PICC and consolidated it with the SLC. This took effect on July 1, 2000. 6 Average monthly SLCs and PICCs are shown in Table 7.11 and average per-minute rates charged to long distance carriers are shown in Table 7.12. Both tables report historical averages for all local exchange carriers (LECs) that file access tariffs subject to price-cap regulation and LECs in the National Exchange Carrier Association (NECA) pool. These LECs control over 98% of the telecommunications industry's access lines regulated under Title II of the Telecommunications Act of 1996. 7 Current per-line charges and per-minute charges are reported for each of the carriers in Tables 7.13 and 7.14, respectively. The averages in Table 7.12 clearly illustrate the effectiveness of access reform in reducing the prices long distance carriers pay per minute for access to the local telephone companies' networks. The reductions in per-minute access prices over time have been a major contributing factor to reductions in long distance prices. 6 Access Charge Reform, CC Docket No. 96-262, Sixth Report and Order, 15 Rcd. 12962 (CALLS Order). 7 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (1996 Act). The 1996 Act amended the Communications Act of 1934. 47 U.S.C. §§ 151 et seq. 1957 - 2007 1997 - 2007 CPI All Items 4.1 % 2.7 % CPI All Services 5.0 3.3 CPI Telephone Services ** 1.2 -0.1 CPI Major Categories: - Food & Beverages * 2.7 - Housing * 3.0 - Apparel 2.2 -1.1 - Transportation 3.3 2.9 - Medical Care 5.1 4.2 - Recreation * 1.1 - Other Goods & Services * 3.9 CPI Public Transportation 4.5 2.4 CPI Utility Natural Gas Service 4.2 6.4 CPI Electricity 3.0 3.2 CPI Sewer & Water Maintenance 4.8 4.1 CPI Postage 4.3 2.7 * ** Source: Bureau of Labor Statistics. Chart 7.1 The CPI telephone service index was revised in December of 1997. Table 7.1 Long-Term Changes for Various Price Indices (Annual Rates of Change) Series not established until after 1957. CPI All Items and CPI Telephone Services 1982 - 1984 = 100 0.0 50.0 100.0 150.0 200.0 250.0 1929 1933 1937 1941 1945 1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 CPI All Items CPI Telephone Services 7 - 6 1978 9.0 % 0.9 % 1979 13.3 0.7 1980 12.5 4.6 1981 8.9 11.7 1982 3.8 7.2 1983 3.8 3.6 1984 3.9 9.2 1985 3.8 4.7 1986 1.1 2.7 1987 4.4 -1.3 1988 4.4 1.3 1989 4.6 -0.3 1990 6.1 -0.4 1991 3.1 3.5 1992 2.9 -0.3 1993 2.7 1.8 1994 2.7 0.7 1995 2.5 1.2 1996 3.3 2.1 1997 1.7 0.2 1998 1.6 0.3 * 1999 2.7 0.4 2000 3.4 -2.3 2001 1.6 1.3 2002 2.4 0.2 2003 1.9 -2.7 2004 3.3 -2.5 2005 3.4 0.4 2006 2.5 1.7 2007 4.1 2.1 * The CPI telephone service index was revised in December of 1997. Sources: Bureau of Labor Statistics and Bureau of Economic Analysis. Chart 7.2 Table 7.2 Annual Changes in Major Price Indices CPI - All Items CPI - Telephone Services Note: All values calculated as the percent change from December of the previous year through December of the year shown, except the GDP price index, which is based on changes from 4th quarter to 4th quarter. CPI All Items and Telephone Services -20 -10 0 10 20 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Percen t Ch an g e f r o m Prio r Year CPI - All Items CPI - Telephone Service 7 - 7 1978 1.4 % 3.1 % -0.7 % 0.0 % 1.3 % 0.1 % 1979 1.7 1.6 -0.8 -0.9 0.1 -0.7 1980 7.0 7.1 3.4 5.5 -0.6 2.3 1981 12.6 15.6 14.6 15.9 6.2 8.0 1982 10.8 9.0 2.7 3.9 4.2 1.7 1983 3.1 0.2 1.4 0.0 7.4 3.9 1984 17.2 10.4 -4.3 -5.1 3.6 3.8 1985 8.9 12.4 -3.7 -3.0 0.6 2.1 1986 7.1 8.9 -9.4 -10.0 0.3 -3.5 1987 3.3 2.6 -12.4 -11.8 -3.0 -3.0 1988 4.5 4.6 -4.2 -2.1 -4.2 -3.8 1989 0.6 1.9 -1.3 -1.7 -2.6 0.5 1990 1.0 1.5 -3.7 -0.1 -2.2 -2.2 1991 5.1 2.1 1.3 -1.3 -1.5 -2.6 1992 0.5 -0.2 -1.3 1.0 -2.4 1.3 1993 1.0 0.8 6.5 3.8 0.2 -1.1 1994 -0.3 0.7 5.4 6.1 -1.0 -1.4 1995 2.6 ** 0.1 ** -3.8 ** 1996 0.9 0.2 3.7 0.8 6.1 0.9 1997 1.0 0.1 -4.3 7.8 2.8 -4.3 1998 1.3 0.0 -0.8 -0.4 1.5 -3.7 1999 2.8 0.2 -0.7 2.4 -1.6 -2.8 2000 5.5 1.5 -11.2 -4.3 -6.0 0.2 2001 4.5 2.7 2.0 -9.4 -1.7 1.7 2002 5.3 1.6 -5.9 -18.5 -6.1 -0.3 2003 2.6 1.9 -10.9 -2.4 -9.4 -12.6 2004 1.1 0.7 -8.7 0.7 -6.6 -2.9 2005 3.3 0.9 -3.0 7.4 0.4 0.2 2006 2.2 2.7 5.1 20.6 3.3 1.2 2007 4.1 1.7 2.4 10.8 5.9 9.2 ** The PPI telephone indices were revised in June of 1995. The series are not comparable. Table 7.3 Annual Changes in Price Indices for Local and Long Distance Telephone Services Local Residential Service Toll Service * Interstate Intrastate Chart 7.3 CPI PPI Source: Bureau of Labor Statistics. * CPI toll indices represent rates for households. Through 1994, PPI toll indices represent rate changes for both business and residential consumers. Since 1995, PPI indices reflect rates for residential customers. CPI PPI CPI PPI Note: All values calculated as the percent change from December of the previous year through December of the year shown. CPI Telephone Service Price Indices -20 -10 0 10 20 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Pe r c e n t C h a n g e f r o m Pr io r Ye a r CPI Local Services CPI Interstate Toll CPI Intrastate Toll 7 - 8 All Goods and Services Telephone Services Land-line Telephone Services, Local Charges Land-line Telephone Services, Long- Distance Charges Land-line Interstate Toll Calls Land-line Intrastate Toll Calls Wireless Telephone Services CUUR0000SA0 CUUR0000SEED CUUR0000SEED01 CUUR0000SEED02 CUUR0000SS27051 CUUR0000SS27061 CUUR0000SEED03 2001 January 108.6 98.8 110.5 89.9 88.0 94.2 68.9 February 109.0 98.7 110.7 89.5 87.6 93.7 68.9 March 109.2 99.4 110.9 90.7 89.0 94.5 68.7 April 109.7 99.0 111.9 89.1 87.2 93.1 68.8 May 110.2 98.7 112.1 88.2 86.2 92.6 68.5 June 110.4 99.0 112.3 88.7 86.7 93.0 68.1 July 110.0 99.6 113.2 88.9 86.8 93.0 68.6 August 110.0 99.6 113.9 88.5 86.4 92.7 68.1 September 110.5 99.2 114.1 87.6 85.5 92.0 67.2 October 110.2 99.9 114.6 88.5 86.4 92.9 67.1 November 110.0 99.6 114.8 87.6 85.5 92.2 67.5 December 109.5 99.7 114.9 87.9 85.8 92.3 67.2 2002 January 109.8 100.3 115.7 88.2 86.2 92.6 67.5 February 110.2 100.3 116.1 87.9 85.8 92.6 67.5 March 110.8 99.1 114.1 87.0 85.0 91.6 67.5 April 111.5 98.2 114.0 85.1 82.7 90.1 67.6 May 111.5 99.3 116.8 85.2 82.6 90.4 66.7 June 111.5 99.2 116.9 85.0 82.4 90.1 66.6 July 111.7 99.5 118.7 84.0 81.3 89.1 67.0 August 112.0 100.6 120.2 84.7 82.6 89.1 67.8 September 112.2 100.1 120.4 83.7 81.4 88.2 67.5 October 112.4 99.9 120.6 83.0 80.7 87.5 67.9 November 112.4 99.8 120.8 82.7 80.7 87.0 67.5 December 112.2 99.9 121.0 82.6 80.7 86.7 67.4 2003 January 112.6 100.4 121.3 83.4 81.9 87.0 67.6 February 113.5 100.5 121.2 83.5 82.2 86.9 67.7 March 114.2 99.7 121.7 81.5 79.8 85.1 67.6 April 113.9 98.7 121.9 79.2 77.4 83.1 67.5 May 113.7 98.1 122.0 77.9 76.0 81.8 67.5 June 113.8 97.5 122.2 76.7 74.6 80.8 66.3 July 114.0 98.1 123.1 77.2 75.6 80.8 66.2 August 114.4 97.8 123.7 76.0 74.0 79.7 66.1 September 114.8 97.4 123.8 75.2 73.3 78.9 66.1 October 114.6 97.1 124.0 74.3 72.1 78.7 66.1 November 114.3 97.2 124.2 74.1 71.8 78.3 66.7 December 114.2 97.2 124.1 74.3 72.0 78.6 66.5 2004 January 114.8 97.0 124.4 73.9 71.6 78.0 66.3 February 115.4 97.1 124.2 73.9 71.6 77.8 66.6 March 116.2 96.7 124.2 73.1 70.6 77.2 66.5 April 116.6 96.5 123.9 72.8 70.1 77.2 66.4 May 117.2 95.9 124.2 71.3 68.8 75.5 66.5 June 117.6 95.8 124.2 71.2 68.4 75.4 66.4 July 117.4 95.6 124.7 70.1 67.6 74.2 66.5 August 117.5 95.0 124.7 68.7 66.0 72.9 66.5 September 117.7 95.3 124.9 69.6 67.0 73.9 66.3 October 118.4 94.6 125.2 68.3 65.7 72.6 65.5 November 118.4 94.9 125.1 69.3 66.4 74.0 65.5 December 118.0 94.8 125.5 68.6 65.7 73.4 65.6 2005 January 118.2 94.8 125.9 68.5 65.7 72.9 65.3 February 118.9 95.1 126.9 68.5 65.3 73.8 65.4 March 119.8 95.0 127.4 67.9 64.9 72.5 65.2 April 120.6 95.3 127.8 68.4 64.9 73.4 65.2 May 120.5 94.8 127.3 67.5 64.0 72.6 65.2 June 120.6 94.6 127.5 67.1 63.7 72.1 65.2 July 121.1 94.4 128.0 66.7 63.3 72.3 64.7 August 121.8 94.1 128.6 65.5 62.0 71.2 64.7 September 123.2 95.1 128.6 67.7 64.5 73.4 64.8 October 123.5 94.6 128.8 66.5 63.2 72.1 64.8 November 122.5 95.2 129.1 67.8 64.1 74.0 64.6 December 122.0 95.2 129.5 67.4 63.7 73.7 64.6 2006 January 122.9 95.2 129.1 67.7 64.1 73.8 64.6 February 123.2 95.2 129.2 67.7 64.2 73.8 64.6 March 123.9 95.0 129.4 67.2 63.8 72.9 64.6 April 124.9 95.4 129.5 68.4 64.9 74.4 64.3 May 125.5 95.2 129.8 67.7 64.1 73.8 64.3 June 125.8 95.4 130.0 67.9 64.5 73.9 64.4 July 126.2 95.6 130.7 67.6 64.1 73.5 64.7 August 126.4 95.9 131.2 68.2 64.8 73.9 64.6 September 125.8 96.1 131.8 68.3 65.0 74.0 64.7 October 125.1 96.8 131.9 69.8 67.0 75.5 64.6 November 124.9 96.5 132.0 69.3 66.8 75.3 64.6 December 125.1 96.8 132.4 69.6 66.9 76.1 64.6 2007 January 125.5 96.9 132.5 69.8 67.2 75.9 64.6 February 126.2 97.1 133.3 69.9 67.2 75.9 64.6 March 127.3 97.5 133.9 70.5 67.2 76.7 64.6 April 128.1 97.6 134.6 70.3 67.5 76.6 64.6 May 128.9 98.5 135.0 72.2 68.6 80.6 64.5 June 129.2 98.5 135.3 72.2 68.5 80.8 64.4 July 129.1 98.6 136.1 72.0 68.5 80.8 64.3 August 128.9 98.8 136.6 72.2 68.7 81.1 64.4 September 129.3 98.9 137.0 72.2 68.7 81.0 64.4 October 129.5 99.0 137.6 72.1 68.7 80.9 64.4 November 130.3 98.8 137.5 72.0 68.7 80.7 64.0 December 130.2 98.8 137.8 71.9 68.5 80.6 64.0 2008 January 130.9 98.9 138.0 72.0 51.5 76.4 64.1 February 131.2 98.8 137.9 71.8 51.5 76.1 64.1 March 132.4 99.0 138.5 72.0 51.5 76.6 64.1 April 133.2 99.5 139.6 72.2 51.7 76.8 64.3 May 134.3 99.9 140.1 73.1 52.8 77.5 64.3 June 135.7 100.7 140.5 75.5 54.1 81.2 64.3 Note: Figures for All Goods and Services, Local Telephone Service, Interstate Toll Service, and Intrastate Toll Service after May, 2000 are converted from 1982-1984 base index series reported by the Bureau of Labor Statistics. Historical data on these series based upon the 1982-1984 index for January, 1972 through May, 2000 can be found in the Industry Analysis and Technology Division, Wireline Competition Bureau, Monitoring Report (October 2002). Table 7.4 Monthly Consumer Price Indices (December 1997 = 100) BLS Series ID 7 - 9 Wired Telecommunications Carriers Local Service, except Private Lines Residence Local Service Business Local Service Coin Local Service Other Local Service NAICS Series ID 517110 5171101 517110111 517110112 517110113 517110114 2001 January 109.6 96.4 94.1 98.9 99.7 86.9 February 109.3 96.5 94.2 98.9 99.7 86.9 March 109.4 96.5 94.2 98.9 99.7 86.9 April 109.2 96.8 94.7 99.2 99.6 86.9 May 109.1 96.8 94.8 99.1 99.5 86.9 June 108.7 97.0 95.1 99.1 99.7 86.9 July 108.7 97.7 96.4 99.1 99.8 87.2 August 109.1 97.7 96.5 99.1 99.9 87.2 September 109.3 97.8 96.5 99.2 100.1 87.2 October 107.1 97.9 96.6 99.2 100.3 87.2 November 107.1 97.9 96.6 99.2 100.3 87.2 December 106.0 97.8 96.6 99.2 100.3 87.2 2002 January 105.1 98.2 97.2 99.4 100.3 87.2 February 104.6 98.2 97.2 99.4 100.3 87.2 March 104.4 98.3 97.2 99.4 100.4 87.2 April 103.9 98.3 97.3 99.4 100.4 87.2 May 104.4 98.3 97.3 99.4 100.4 87.2 June 104.2 98.4 97.4 99.5 100.4 87.2 July 103.8 98.8 98.0 99.6 100.4 99.3 August 104.3 98.8 98.0 99.6 100.4 99.3 September 104.2 98.8 98.1 99.5 100.0 99.7 October 101.6 98.8 98.1 99.5 100.0 99.7 November 102.7 98.8 98.1 99.5 100.0 99.7 December 102.2 98.8 98.1 99.5 100.0 99.7 2003 January 101.8 98.8 98.1 99.5 100.0 99.7 February 102.0 98.8 98.1 99.5 100.0 99.7 March 101.9 98.8 98.1 99.5 100.0 99.7 April 101.6 99.3 98.7 99.9 100.0 99.7 May 102.1 99.6 99.2 100.0 100.0 99.7 June 102.1 99.8 99.7 100.0 100.0 99.7 July 102.2 100.0 100.0 100.0 100.0 100.0 August 102.3 100.0 100.0 100.0 100.0 100.0 September 101.9 100.0 100.0 100.0 100.0 100.0 October 101.3 100.0 100.0 100.0 100.0 100.0 November 100.7 100.0 100.0 100.0 100.0 100.0 December 100.0 100.0 100.0 100.0 100.0 100.0 2004 January 100.4 100.2 100.3 100.0 100.0 100.0 February 99.8 100.2 100.3 100.0 100.0 100.0 March 100.0 100.2 100.3 100.0 100.0 100.0 April 99.8 100.2 100.3 100.0 100.0 100.0 May 99.5 100.2 100.3 100.0 100.0 100.0 June 99.6 100.2 100.3 100.0 100.0 100.0 July 99.4 100.2 100.3 100.0 100.0 100.0 August 99.5 100.2 100.3 100.0 100.0 100.0 September 99.2 100.2 100.4 100.1 100.0 100.2 October 99.0 100.3 100.5 100.1 100.0 100.6 November 98.9 100.4 100.6 100.1 100.0 100.6 December 98.6 100.4 100.7 100.1 100.0 100.6 2005 January 98.9 100.8 101.3 100.2 100.0 100.6 February 98.3 100.8 101.3 100.3 99.8 100.6 March 98.5 100.8 101.3 100.3 99.6 100.6 April 98.8 100.8 101.3 100.4 99.4 100.6 May 98.9 100.8 101.3 100.4 99.4 100.6 June 99.1 100.8 101.3 100.4 99.4 100.6 July 99.4 100.9 101.5 100.4 99.4 100.6 August 99.4 100.9 101.5 100.4 99.4 100.6 September 99.1 100.9 101.5 100.4 99.4 100.6 October 99.2 100.9 101.5 100.4 99.4 100.6 November 98.9 100.9 101.5 100.4 99.4 100.6 December 98.9 100.9 101.6 100.4 99.4 100.6 2006 January 98.6 101.1 101.9 100.5 99.4 100.6 February 98.5 101.3 102.3 100.5 99.4 100.6 March 99.0 101.4 102.4 100.5 99.4 100.6 April 98.8 101.4 102.4 100.6 99.4 102.1 May 99.1 101.9 103.3 100.6 99.4 102.1 June 99.5 102.0 103.3 100.8 99.4 102.1 July 99.9 102.0 103.4 100.8 99.4 102.1 August 100.3 102.2 103.7 100.8 99.4 102.1 September 100.7 102.2 103.7 100.8 99.4 102.1 October 101.4 102.2 103.7 100.8 99.4 102.1 November 100.8 102.6 104.2 101.1 99.4 102.1 December 101.6 102.7 104.3 101.3 99.4 102.1 2007 January 101.1 102.8 104.3 101.3 99.4 103.5 February 101.3 102.8 104.4 101.3 99.4 103.5 March 101.9 102.9 104.3 101.8 99.4 103.5 April 102.3 102.9 104.3 101.8 99.4 103.5 May 102.3 102.9 104.3 101.8 99.4 103.5 June 103.0 102.9 104.3 101.8 99.4 103.5 July 104.0 103.1 104.7 101.8 99.4 103.5 August 103.6 103.7 105.8 101.7 99.4 102.7 September 104.3 103.8 106.0 101.7 99.4 102.7 October 104.2 103.8 106.1 101.7 99.4 102.7 November 103.7 103.8 106.0 101.7 99.4 102.7 December 103.7 103.8 106.0 101.7 99.4 102.7 2008 January 103.5 104.2 106.6 101.7 99.4 102.7 February 104.2 104.2 106.6 101.7 99.4 102.7 March 104.2 104.2 106.7 101.7 99.4 102.7 April 104.0 104.2 106.7 101.7 99.4 102.7 May 104.5 104.2 106.7 101.7 99.4 102.7 June 104.7 104.2 106.7 101.7 99.4 102.7 Note: The values for the last several months are subject to revision. Table 7.5 Monthly Producer Price Indices (December 2003 = 100) 7 - 10 Public Switched Toll Service Residence Switched Toll Service Intrastate Residence Switched Toll Service Interstate Residence Switched Toll Service International Residence Switched Toll Service Business Switched Toll Service Business Switched Access Toll Service NAICS Series ID 5171102 51711021 517110211 517110212 517110213 51711022 517110221 2001 January 127.0 123.5 111.5 135.3 194.8 132.6 135.5 February 126.4 123.4 112.5 133.5 197.8 131.2 136.0 March 126.6 123.8 113.2 134.0 195.9 131.0 135.4 April 125.8 123.4 112.7 133.5 196.2 129.5 135.0 May 125.4 123.6 112.6 134.5 193.0 128.2 132.8 June 124.3 122.5 113.7 131.8 183.6 127.1 131.0 July 123.6 122.3 114.2 130.6 185.1 125.6 130.4 August 124.5 124.4 114.4 137.7 175.1 124.7 128.7 September 124.8 122.9 114.6 134.4 169.2 127.9 130.5 October 119.5 118.5 113.3 125.4 158.8 121.0 124.5 November 119.4 119.3 114.1 128.8 146.0 119.7 120.1 December 116.8 118.2 114.7 125.7 142.2 114.7 115.4 2002 January 114.3 116.2 114.0 121.2 140.6 111.3 112.4 February 113.1 114.2 114.5 116.1 135.6 111.6 113.5 March 112.6 113.3 114.2 115.3 128.6 111.5 113.8 April 111.4 112.5 113.8 112.7 131.9 109.8 113.6 May 112.4 112.0 113.9 111.7 129.7 113.0 114.1 June 112.0 111.7 113.6 110.5 133.1 112.4 115.0 July 110.5 111.4 113.2 110.1 134.5 109.2 111.5 August 111.7 112.8 115.8 110.8 135.2 110.1 112.0 September 111.4 111.3 115.8 107.2 132.3 111.4 112.6 October 105.1 103.4 115.6 86.5 125.9 107.7 110.0 November 107.8 108.4 115.2 101.8 122.4 106.8 108.1 December 106.7 108.4 114.4 102.5 123.3 104.0 106.9 2003 January 105.7 107.1 114.2 99.2 122.3 103.5 105.9 February 106.1 106.9 104.5 110.4 118.9 105.0 106.7 March 105.9 107.0 104.4 111.0 118.2 104.2 105.1 April 104.7 104.8 103.8 106.3 113.8 104.6 106.3 May 105.4 106.6 104.1 111.7 109.9 103.5 103.9 June 105.1 105.7 104.1 109.7 108.1 104.2 105.7 July 105.3 106.5 103.8 110.6 116.2 103.6 103.7 August 105.5 106.6 103.6 111.8 113.1 103.9 103.9 September 104.5 104.7 102.7 108.5 108.4 104.2 104.7 October 103.1 104.0 102.0 108.1 104.0 101.8 103.0 November 101.7 102.0 101.2 104.0 101.6 101.2 100.5 December 100.0 100.0 100.0 100.0 100.0 100.0 100.0 2004 January 100.7 101.1 99.3 104.1 98.4 100.1 100.1 February 99.5 99.3 98.7 99.4 100.3 99.7 99.5 March 99.7 100.2 98.3 103.9 93.2 99.0 98.8 April 99.2 99.8 98.1 102.3 95.7 98.5 98.1 May 98.7 99.5 98.0 102.4 93.0 97.4 96.7 June 98.8 99.6 98.1 102.9 91.1 97.7 97.4 July 98.3 99.7 98.4 102.2 94.2 96.3 96.5 August 98.6 100.6 98.5 104.4 94.7 95.6 96.0 September 97.9 99.6 97.8 102.9 91.7 95.5 95.7 October 97.3 99.8 98.2 103.2 91.6 93.7 93.5 November 96.9 98.8 97.9 102.1 85.5 93.9 94.6 December 96.2 98.1 97.1 100.7 86.5 93.3 93.2 2005 January 96.5 98.8 97.4 101.7 89.6 93.1 92.8 February 94.9 96.8 96.1 97.7 89.2 92.0 91.7 March 95.5 98.7 96.8 101.8 90.5 90.8 91.3 April 96.1 98.9 97.0 101.6 93.4 91.9 91.8 May 96.3 100.1 97.0 105.6 90.9 90.5 89.8 June 96.8 100.6 97.8 105.8 92.3 91.1 90.7 July 97.4 102.2 98.2 108.5 98.1 90.2 89.9 August 97.3 102.3 98.0 109.1 98.0 89.9 89.7 September 96.8 100.9 97.9 105.3 97.9 90.6 89.7 October 96.8 101.5 98.1 107.4 94.9 89.9 89.3 November 96.2 101.0 97.5 107.2 93.1 88.9 90.3 December 96.1 101.5 97.3 108.2 95.4 87.9 88.8 2006 January 95.2 100.4 97.5 104.5 96.8 87.4 88.3 February 94.5 99.9 96.4 105.4 91.8 86.6 87.6 March 95.6 101.8 96.6 110.6 91.8 86.4 87.2 April 95.2 100.7 97.4 106.2 93.4 86.9 88.0 May 95.2 102.9 94.7 115.8 91.8 83.8 84.0 June 96.1 103.4 97.5 113.3 95.6 85.1 85.8 July 97.0 105.0 97.8 116.2 101.8 84.9 85.7 August 97.7 106.0 98.1 119.3 98.5 85.2 86.7 September 98.8 107.3 98.3 123.0 97.3 86.0 87.0 October 100.4 109.9 98.3 129.0 97.8 86.2 86.2 November 98.6 108.1 98.4 125.2 95.7 84.4 86.2 December 100.4 110.9 98.5 130.5 100.9 84.5 85.9 2007 January 98.3 106.1 97.7 118.0 113.9 85.4 86.6 February 99.0 108.6 100.2 119.6 120.5 84.1 85.4 March 100.7 111.3 100.6 124.3 120.6 85.0 84.7 April 102.1 115.1 102.3 128.8 126.3 83.8 84.2 May 102.2 115.4 103.7 129.3 124.7 83.7 83.5 June 104.3 119.2 104.8 134.7 128.2 84.0 84.3 July 107.5 125.6 105.9 144.3 133.6 83.8 85.6 August 105.1 122.4 106.8 137.7 134.6 82.3 83.9 September 107.2 126.1 106.9 144.2 135.1 82.8 81.9 October 106.9 127.0 108.4 146.6 131.2 81.1 80.7 November 105.2 124.7 106.6 145.2 124.4 79.9 79.2 December 105.2 124.0 107.6 144.6 120.9 80.6 78.1 2008 January 103.9 120.7 106.2 139.7 118.7 81.8 79.8 February 106.2 124.7 107.7 147.0 117.1 82.3 79.0 March 106.2 124.9 108.3 149.3 110.1 82.2 77.5 April 105.5 122.6 109.0 144.3 111.0 83.4 78.6 May 107.2 129.8 110.2 153.8 121.7 78.8 77.0 June 107.7 130.5 109.9 158.7 110.4 79.3 76.2 Note: The values for the last several months are subject to revision. Table 7.5 Monthly Producer Price Indices - Continued (December 2003 = 100) 7 - 11 Outbound Business Switched Access Toll Service Intrastate Business Switched Access Toll Service, Outbound Interstate Business Switched Access Toll Service, Outbound International Business Switched Access Toll Service, Outbound Inbound Business Switched Access Toll Service Intrastate Business Switched Access Toll Service, Inbound Interstate Business Switched Access Toll Service, Inbound International Business Switched Access Toll Service, Inbound NAICS Series ID 5171102211 51711022111 51711022112 51711022113 5171102212 51711022121 51711022122 51711022123 2001 January 154.7 112.6 299.3 186.2 108.5 109.6 117.5 110.7 February 153.2 112.1 299.1 172.0 112.0 114.0 125.2 101.4 March 152.9 112.7 290.4 184.5 111.0 112.6 122.6 111.3 April 152.9 111.4 301.0 169.3 109.8 110.4 120.6 109.8 May 150.1 110.7 291.9 163.6 108.5 110.6 117.1 107.4 June 146.2 111.0 271.3 163.9 109.8 111.2 120.3 106.9 July 146.3 111.5 270.3 164.1 108.1 112.4 115.0 106.9 August 144.9 111.3 268.0 154.1 106.0 108.2 111.9 102.8 September 148.2 110.5 285.1 158.2 105.7 105.8 111.6 112.5 October 137.0 108.0 243.0 145.1 107.1 111.2 113.5 99.5 November 134.7 109.5 221.6 158.6 99.7 103.3 97.6 98.4 December 125.4 105.8 190.1 152.1 101.5 94.1 108.4 87.4 2002 January 122.0 105.7 176.0 145.0 99.0 101.2 98.5 81.0 February 121.5 105.6 172.5 146.2 102.3 104.3 104.9 82.2 March 123.1 105.4 179.6 151.0 100.9 105.2 100.3 86.2 April 122.1 105.1 170.7 160.0 101.7 101.0 105.5 78.8 May 121.6 103.9 155.6 190.4 103.7 105.4 107.2 88.8 June 122.5 104.4 165.5 178.1 104.4 104.2 109.7 88.8 July 118.4 104.1 154.8 158.4 101.9 105.3 102.9 85.3 August 116.5 104.0 152.4 143.4 105.6 107.7 110.5 91.2 September 117.2 104.0 153.3 148.8 106.3 108.1 109.4 119.5 October 114.7 103.5 153.2 127.5 103.4 104.2 103.7 126.5 November 113.8 103.0 150.8 125.2 100.2 101.6 99.6 98.9 December 110.9 102.5 139.1 121.4 101.4 100.2 103.5 98.1 2003 January 109.7 102.1 133.0 123.4 100.6 104.7 97.7 113.0 February 108.2 101.9 128.6 118.1 104.5 105.3 106.7 117.6 March 108.2 102.0 127.0 120.0 100.8 105.5 97.5 114.0 April 108.2 101.3 129.8 119.9 103.6 105.6 104.0 120.0 May 104.7 100.9 117.6 109.2 102.8 105.8 101.4 124.6 June 105.8 101.1 118.2 118.2 105.4 107.6 107.6 118.7 July 103.9 100.7 108.2 119.9 103.4 107.5 100.3 142.0 August 104.1 100.6 107.3 124.2 103.6 107.7 102.0 130.7 September 103.0 100.5 107.8 112.9 107.1 111.9 106.6 149.1 October 102.7 100.5 111.1 104.0 103.3 107.1 101.6 129.5 November 100.9 100.2 103.0 102.0 99.8 103.9 96.9 103.3 December 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 2004 January 99.6 99.9 100.5 94.8 100.8 101.9 101.4 93.4 February 98.0 98.8 95.1 97.1 101.5 100.0 104.7 90.4 March 98.1 99.8 95.4 90.2 99.9 100.8 101.2 77.6 April 97.2 99.1 92.1 91.9 99.3 101.4 98.6 85.8 May 96.0 98.5 89.2 89.7 97.6 100.7 94.6 85.7 June 96.4 98.6 89.8 91.6 98.8 100.3 98.1 84.0 July 95.8 98.5 86.3 93.0 97.5 99.7 94.8 87.5 August 95.9 98.3 87.5 93.3 96.1 101.7 90.1 87.6 September 95.1 98.0 85.1 90.7 96.4 102.1 90.8 86.2 October 91.9 96.3 78.0 82.9 95.7 101.4 89.6 83.3 November 92.7 97.5 79.2 80.6 97.2 101.6 94.0 76.1 December 91.9 96.7 75.8 84.1 95.1 100.2 88.6 84.5 2005 January 90.9 96.5 73.8 79.8 95.3 99.2 90.4 78.7 February 90.9 96.5 74.1 79.2 92.8 97.8 84.9 77.3 March 90.6 96.4 73.8 76.6 92.2 99.1 82.5 79.6 April 90.7 96.5 74.6 76.1 93.2 101.4 83.8 78.3 May 89.1 95.9 69.7 72.3 90.8 101.5 77.8 75.1 June 89.1 96.3 68.6 72.7 92.9 99.8 84.0 75.8 July 88.2 96.0 66.2 69.6 92.3 99.9 82.4 77.1 August 88.3 95.8 67.4 69.1 91.7 99.6 81.6 72.0 September 87.5 95.5 65.6 66.7 92.7 97.5 85.2 73.1 October 87.4 95.4 65.7 65.7 92.0 97.0 84.1 70.1 November 87.7 95.9 65.9 65.4 93.8 98.7 88.0 65.0 December 86.9 95.4 64.2 63.7 91.5 97.4 81.9 77.5 2006 January 86.7 95.0 63.1 67.2 90.5 96.4 80.7 68.8 February 85.1 94.4 58.4 63.0 91.1 96.6 82.5 63.5 March 85.5 94.5 59.0 65.0 89.7 95.8 78.6 72.8 April 85.4 94.6 59.7 63.2 91.6 94.7 85.1 60.3 May 84.5 94.3 57.8 59.1 83.3 93.0 64.9 61.4 June 82.8 94.1 50.7 56.2 89.9 94.0 81.2 63.6 July 84.2 94.4 56.7 57.7 87.8 94.6 75.5 61.5 August 84.8 94.6 54.7 65.8 89.3 94.9 79.0 62.7 September 85.5 95.6 57.0 61.8 89.2 94.8 79.1 59.0 October 84.3 95.1 54.8 58.3 88.7 95.5 78.1 57.1 November 84.8 95.2 57.7 56.5 88.2 95.0 77.5 57.6 December 83.7 94.9 56.7 49.9 89.0 94.6 78.9 59.9 2007 January 84.8 94.9 58.1 51.0 89.0 94.6 79.4 57.5 February 83.4 94.6 57.2 47.2 88.1 94.2 78.0 58.2 March 83.0 94.8 56.1 48.3 86.9 94.5 74.2 64.6 April 82.5 94.7 57.3 41.9 86.3 94.6 74.6 58.8 May 82.3 94.9 56.2 43.8 85.0 94.5 73.5 54.2 June 82.9 95.1 56.9 44.3 86.0 94.5 74.0 59.1 July 84.2 95.4 58.3 45.8 87.4 94.7 75.8 61.0 August 81.2 94.6 54.0 46.1 87.7 94.4 76.0 63.7 September 79.4 94.1 51.3 47.1 85.5 93.4 73.4 60.5 October 76.7 93.6 48.8 42.2 86.7 93.8 74.6 63.6 November 74.7 93.0 45.6 43.9 86.0 94.6 73.3 61.6 December 74.4 93.0 45.3 43.0 83.6 93.3 70.1 61.7 2008 January 74.9 93.2 45.8 43.6 87.1 93.8 75.2 63.9 February 73.5 93.0 44.1 42.2 87.5 93.3 76.0 64.2 March 73.3 92.9 43.7 42.9 83.8 93.4 68.2 70.7 April 73.7 93.0 44.3 42.8 86.1 93.8 72.9 66.2 May 73.6 92.9 43.9 43.9 82.0 93.3 66.1 67.0 June 73.4 92.9 43.5 44.5 80.2 92.8 64.3 63.0 Note: The values for the last several months are subject to revision. Table 7.5 Monthly Producer Price Indices - Continued (December 2003 = 100) 7 - 12 Business Special Access Switched Toll Service, except Private Lines Outbound Business Special Access Switched Toll Service Intrastate Business Special Access Switched Toll Service, Outbound Interstate Business Special Access Switched Toll Service, Outbound International Business Special Access Switched Toll Service, Outbound Inbound Business Special Access Switched Toll Service Intrastate Business Special Access Switched Toll Service, Inbound NAICS Series ID 517110222 5171102221 51711022211 51711022212 51711022213 5171102222 51711022221 2001 January 125.4 118.6 86.9 138.3 129.1 134.8 121.8 February 118.9 116.1 91.9 139.5 114.0 123.1 106.7 March 119.9 113.5 87.8 138.8 106.7 128.9 113.4 April 115.7 111.9 100.2 122.4 117.2 121.1 108.3 May 116.6 112.2 105.6 124.7 111.8 122.9 119.8 June 117.4 110.4 94.7 122.5 113.7 127.0 116.3 July 113.4 111.4 88.6 136.0 101.9 116.5 102.1 August 114.5 106.9 80.0 121.6 109.3 124.9 118.1 September 121.3 118.0 104.7 130.8 127.3 126.2 119.9 October 112.3 110.2 106.1 118.2 112.9 115.6 109.1 November 118.7 113.5 63.0 114.6 156.6 126.1 124.5 December 113.0 108.8 102.1 105.3 128.3 118.9 109.3 2002 January 108.9 99.9 100.7 90.1 115.4 121.7 128.6 February 107.2 106.1 103.0 103.2 119.4 108.9 93.6 March 106.2 105.4 111.3 99.6 117.5 107.3 98.5 April 101.3 99.6 114.7 87.7 109.7 103.7 92.9 May 110.6 106.7 106.6 106.3 115.0 116.1 116.7 June 106.6 105.0 104.5 103.6 113.1 108.9 106.2 July 103.9 103.1 106.0 97.4 114.1 105.1 99.3 August 106.0 103.9 93.2 103.3 115.8 108.9 104.9 September 108.7 108.4 111.3 106.8 118.5 109.2 103.4 October 102.5 99.8 97.7 94.9 109.1 106.2 96.7 November 103.9 102.7 101.9 100.4 110.1 105.6 94.8 December 97.6 96.0 92.0 85.5 111.0 100.0 95.4 2003 January 98.2 94.7 100.9 88.1 95.9 103.2 110.5 February 101.3 97.8 90.6 96.0 102.7 106.2 95.5 March 102.1 101.3 99.9 104.2 98.8 103.1 105.5 April 100.8 98.2 100.5 89.0 110.2 104.6 97.9 May 102.7 101.7 89.1 98.7 116.1 104.1 104.1 June 100.9 97.4 94.2 92.1 105.0 106.0 96.1 July 103.5 106.7 109.1 108.9 109.0 98.9 104.5 August 103.8 105.2 105.8 105.5 109.9 101.8 90.8 September 102.9 104.7 107.7 101.7 112.9 100.3 107.2 October 99.2 99.4 98.5 99.8 98.7 98.9 98.6 November 102.9 104.9 105.1 107.1 106.7 100.0 102.7 December 100.0 100.0 100.0 100.0 100.0 100.0 100.0 2004 January 100.3 99.2 101.1 98.7 98.1 101.8 101.1 February 100.1 100.5 91.0 111.5 88.8 99.5 96.0 March 99.5 96.6 90.6 104.1 84.0 103.7 102.5 April 99.3 97.7 98.1 104.4 83.9 101.6 95.7 May 99.0 97.5 93.1 104.3 86.2 101.2 99.0 June 98.4 96.7 93.5 103.0 84.4 100.8 103.3 July 95.7 95.0 91.8 97.3 87.7 96.7 97.8 August 94.7 93.4 94.1 92.7 86.7 96.7 99.1 September 95.2 93.3 96.0 94.1 83.1 97.9 106.0 October 94.1 93.8 93.8 93.2 87.8 94.6 98.3 November 92.5 91.7 87.9 91.8 84.7 93.6 92.3 December 93.6 91.9 90.1 91.8 84.0 96.0 96.6 2005 January 94.0 92.1 87.6 91.7 86.7 96.8 98.9 February 92.6 92.5 81.1 92.9 90.5 92.6 94.2 March 89.7 88.0 91.0 83.2 80.7 92.2 95.3 April 92.2 91.7 91.7 86.8 90.6 92.9 100.8 May 92.1 93.4 99.3 87.7 92.0 90.1 102.9 June 91.9 93.6 99.1 90.3 88.8 89.4 95.1 July 90.7 92.4 96.1 88.0 89.0 88.2 96.1 August 90.2 91.0 93.8 84.5 89.9 89.0 96.2 September 92.8 96.2 92.0 97.5 92.3 87.9 86.3 October 91.1 91.4 87.1 87.8 90.4 90.7 90.2 November 85.9 83.3 69.7 71.6 92.3 89.6 92.0 December 86.0 84.4 69.7 75.9 90.0 88.2 88.2 2006 January 85.3 84.1 74.1 76.5 84.7 87.1 87.7 February 84.2 83.4 68.0 73.3 90.9 85.4 83.2 March 84.5 84.7 73.6 78.3 85.0 84.2 82.4 April 84.5 85.5 68.1 84.1 82.0 83.0 75.6 May 83.4 80.8 69.3 70.9 82.6 87.2 90.3 June 83.6 83.4 64.7 76.9 87.1 83.8 75.8 July 83.1 82.7 68.1 74.1 86.3 83.8 80.8 August 81.9 81.2 66.0 72.6 83.5 82.9 82.1 September 83.6 83.5 67.2 72.5 93.2 83.6 82.6 October 86.3 82.6 68.9 72.0 90.2 91.4 85.6 November 80.3 79.3 69.3 70.3 82.6 81.9 82.8 December 81.4 80.6 65.0 71.7 87.1 82.5 80.9 2007 January 82.5 80.8 65.6 71.7 81.4 86.5 84.1 February 81.1 80.7 62.6 72.6 90.9 81.1 81.2 March 85.5 85.2 71.6 74.6 90.2 85.1 82.7 April 82.8 82.5 68.1 72.7 88.8 82.5 80.0 May 84.0 84.6 70.8 74.2 87.4 81.4 79.7 June 83.4 82.4 68.7 72.4 89.0 85.2 83.6 July 80.0 79.8 66.3 70.2 89.0 79.3 80.6 August 78.8 78.0 62.8 69.3 90.6 79.8 81.1 September 84.6 84.5 65.2 76.2 96.9 83.6 79.5 October 81.8 81.3 63.7 72.9 91.4 82.0 76.0 November 81.2 76.2 63.6 66.7 96.5 94.5 87.4 December 85.8 83.0 61.4 75.9 94.4 92.7 85.4 2008 January 86.1 83.6 62.8 76.1 93.4 92.2 76.9 February 89.0 85.7 63.3 78.4 95.4 97.2 82.7 March 92.1 89.9 63.0 83.5 96.8 97.4 83.3 April 93.5 91.9 62.5 86.0 98.0 96.8 83.3 May 82.4 78.6 62.8 69.9 98.0 92.2 80.6 June 85.8 83.8 61.7 76.6 97.8 90.3 78.1 Table 7.5 Monthly Producer Price Indices - Continued (December 2003 = 100) Note: The values for the last several months are subject to revision. 7 - 13 Interstate Business Special Access Switched Toll Service, Inbound International Business Special Access Switched Toll Service, Inbound Other Toll Service Private Line Service Intrastate Private Line Service Other Telephone Services NAICS Series ID 51711022222 51711022223 51711029 5171103 51711031 5171109 2001 January 174.2 161.1 124.8 99.1 97.5 99.6 February 152.4 155.7 126.2 99.1 97.5 99.6 March 163.4 161.8 123.8 99.1 97.5 99.6 April 147.0 173.0 124.5 99.1 97.5 99.6 May 147.3 172.5 124.3 99.0 97.2 99.6 June 158.0 178.3 124.1 99.1 97.4 99.6 July 138.5 177.2 123.0 99.1 97.4 99.5 August 152.6 169.3 122.8 99.1 97.4 99.5 September 154.9 167.8 123.9 99.3 98.0 99.6 October 134.0 164.0 123.3 99.3 98.1 99.6 November 153.2 154.4 123.0 99.3 98.1 99.8 December 141.9 134.7 124.6 99.3 98.1 99.8 2002 January 141.9 150.3 125.5 99.3 98.1 99.8 February 123.2 145.4 123.2 99.4 98.3 99.8 March 117.7 147.7 121.6 99.4 98.3 99.8 April 111.0 144.7 121.7 99.5 98.6 99.7 May 132.6 142.4 122.5 99.6 98.8 99.7 June 118.9 142.7 122.8 99.6 98.9 99.7 July 112.1 142.0 122.0 99.7 99.1 99.7 August 119.3 144.8 122.1 99.7 99.1 99.7 September 120.5 144.0 122.1 99.7 99.1 99.7 October 115.8 140.6 117.5 100.0 100.1 100.0 November 115.0 142.5 118.2 100.0 100.1 99.9 December 101.3 141.5 115.1 100.0 100.1 100.0 2003 January 103.8 141.4 112.3 100.0 100.1 100.1 February 116.1 142.3 113.3 100.0 100.1 100.0 March 105.6 116.6 111.0 100.0 100.1 100.0 April 111.5 117.4 110.8 100.0 100.1 100.0 May 108.3 113.3 106.9 100.0 100.1 100.0 June 115.6 106.1 106.6 100.0 100.1 100.0 July 95.8 108.0 105.0 100.0 100.0 100.0 August 107.4 104.5 106.3 100.0 100.0 99.8 September 98.2 107.6 104.2 100.0 100.0 99.8 October 97.8 112.2 103.1 100.0 100.0 100.0 November 99.1 100.3 101.4 100.0 100.0 99.9 December 100.0 100.0 100.0 100.0 100.0 100.0 2004 January 103.9 106.5 101.7 100.0 100.0 100.0 February 100.0 104.0 99.0 100.0 100.0 99.9 March 107.9 119.8 96.5 100.0 100.0 99.9 April 105.4 92.8 95.0 100.0 100.0 99.9 May 103.2 89.8 94.3 100.0 100.0 99.9 June 100.8 94.2 92.2 100.0 100.0 99.9 July 92.8 89.2 91.5 100.0 100.0 99.9 August 92.4 86.4 89.9 100.0 100.0 99.9 September 92.9 84.9 90.8 100.0 100.1 99.9 October 87.7 84.5 88.2 100.1 100.3 100.1 November 87.6 71.0 87.3 100.2 100.5 100.1 December 91.7 72.9 88.0 100.2 100.6 100.7 2005 January 92.8 70.4 85.5 100.3 100.9 100.6 February 84.7 44.9 86.3 100.3 101.0 100.7 March 83.2 72.1 83.5 100.4 101.2 100.6 April 83.0 67.7 83.5 100.5 101.3 100.6 May 75.6 67.8 81.2 100.5 101.3 100.6 June 76.4 68.6 82.5 100.5 101.3 100.6 July 73.4 64.3 81.5 100.5 101.3 100.6 August 75.2 66.1 80.3 100.5 101.3 100.6 September 75.9 73.7 80.9 100.5 101.3 101.0 October 81.4 67.1 78.9 100.5 101.3 101.2 November 78.0 76.2 78.5 100.5 101.3 101.8 December 76.1 65.2 78.3 100.5 101.3 101.2 2006 January 73.5 64.6 78.5 100.6 101.9 101.2 February 71.1 66.0 78.2 101.0 102.9 101.1 March 68.3 64.8 76.0 101.3 103.6 101.1 April 68.0 50.7 76.2 101.5 104.3 101.2 May 72.8 63.0 75.3 101.8 105.1 101.1 June 69.7 47.6 75.6 101.9 105.5 101.1 July 68.1 59.0 74.6 101.9 105.5 101.1 August 65.5 55.9 74.0 101.9 105.5 101.1 September 67.1 59.7 75.0 101.9 105.5 101.1 October 74.9 58.2 73.5 101.9 105.5 101.1 November 65.0 56.5 70.9 102.0 105.7 101.1 December 66.4 58.3 71.4 102.1 106.0 101.1 2007 January 69.9 58.8 71.7 102.2 106.3 101.1 February 64.5 60.9 71.5 102.2 106.6 101.5 March 68.8 58.4 70.8 102.2 106.9 103.5 April 66.7 57.7 70.5 102.2 107.0 102.3 May 65.4 58.7 70.5 102.2 107.0 102.2 June 68.4 60.0 70.2 102.2 107.0 102.2 July 62.4 60.5 69.9 102.2 107.0 101.9 August 63.0 59.9 69.6 102.2 107.0 101.8 September 68.3 58.6 69.4 102.2 107.1 101.8 October 67.7 57.5 68.7 102.3 107.2 101.8 November 78.5 55.0 68.8 102.3 107.2 101.8 December 77.0 56.5 69.0 102.3 107.2 101.8 2008 January 79.9 56.7 67.7 102.3 107.2 101.7 February 83.7 54.6 68.9 102.3 107.2 101.7 March 83.7 53.6 67.3 102.3 107.2 101.7 April 82.9 54.3 67.9 102.3 107.2 101.7 May 78.6 49.3 67.6 102.3 107.2 101.7 June 77.2 52.2 66.9 102.3 107.2 101.7 Note: The values for the last several months are subject to revision. Table 7.5 Monthly Producer Price Indices - Continued (December 2003 = 100) 7 - 14 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1 2007 2 Representative Monthly Charge 3,4 $12.58 $12.44 $12.32 $12.30 $12.36 $13.03 $13.05 $13.16 $13.19 $13.62 $13.71 $13.67 $13.75 $13.77 $13.64 $14.49 $14.38 $14.54 $14.57 $14.66 $15.03 $15.62 Subscriber Line Charges 2.04 2.66 2.67 3.53 3.55 3.56 3.55 3.55 3.55 3.54 3.54 3.53 3.52 3.58 4.50 5.05 5.74 5.86 5.81 5.82 5.97 5.74 Additional Monthly Charge for Touch- Tone Service 1.57 1.52 1.54 1.52 1.33 1.06 0.97 0.94 0.77 0.44 0.30 0.25 0.10 0.09 0.06 0.04 a 4 a 4 a 4 a 4 a 4 a 4 Taxes, 911, and Other Charges 1.51 1.56 1.58 1.70 2.00 2.12 2.15 2.29 2.31 2.41 2.40 2.42 2.39 2.48 2.57 3.03 3.94 4.12 4.14 4.15 4.26 4.26 Total Monthly Charge $17.70 $18.18 $18.11 $19.05 $19.24 $19.77 $19.72 $19.95 $19.81 $20.01 $19.95 $19.88 $19.76 $19.93 $20.78 $22.62 $24.07 $24.52 $24.52 $24.64 $25.26 $25.62 Basic Connection Charge 4 45.63 44.04 42.94 43.06 43.06 42.00 41.50 41.38 41.28 40.91 41.11 41.04 41.24 41.26 41.45 40.02 39.83 39.22 39.26 39.62 39.68 39.81 Additional Connection Charge for Touch-tone Service 1.34 1.31 1.55 1.76 1.77 1.27 1.22 1.23 0.85 0.23 0.23 0.17 0.12 0.12 0.12 0.12 a 4 a 4 a 4 a 4 a 4 a 4 Taxes, 911, and Other Charges 2.28 2.20 2.11 2.44 2.32 2.30 2.29 2.30 2.33 2.44 2.36 2.46 2.38 2.57 2.53 2.81 1.33 3.32 3.44 3.17 3.45 3.41 Total Connection Charge $49.25 $47.55 $46.60 $47.26 $47.15 $45.57 $45.01 $44.92 $44.46 $43.58 $43.70 $43.67 $43.74 $43.95 $44.10 $42.95 $41.16 $42.54 $42.71 $42.80 $43.13 $43.22 Additional Charge if Drop Line and Connection Block Needed a 1 a 1 6.04 6.07 6.89 6.89 6.50 7.29 6.74 5.90 5.74 5.65 5.64 5.86 5.84 5.84 5.85 12.13 12.45 12.65 13.91 12.65 Lowest-Cost Inside Wiring Maintenance Plan 0.58 0.85 0.89 1.07 1.07 1.20 1.25 1.31 1.45 1.52 1.78 1.68 2.22 2.66 3.03 3.62 3.62 3.64 4.08 4.42 4.96 5.38 1 Revised. 2 Subject to revision. 3 Rates are based upon flat-rate service where available and measured/message service with 100 five-minute, same-zone, business-day calls elsewhere. Beginning in 2001, all rates reflect flat-rate service. 4 Beginning in 2002, rate includes additional monthly charges for touch-tone service. Table 7.6 Average Residential Rates for Local Service in Urban Areas, 1986-2007 (As of October 15) Note: Details may not add to totals due to rounding. 7 - 15 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1 2007 2 Monthly Representative Service Charge 3 $31.06 $30.97 $32.29 $32.45 $32.70 $32.25 $32.48 $32.58 $32.76 $32.44 $32.41 $32.18 $31.88 $30.86 $30.65 $32.11 $32.21 $33.54 $36.58 Subscriber Line Charges 3.55 3.57 3.57 3.56 3.57 3.57 3.57 3.54 3.54 3.54 3.52 4.39 4.91 5.63 5.76 5.71 5.71 5.90 5.73 Extra for Touch-Tone Service 4 2.43 2.35 1.84 1.71 1.67 1.21 0.97 0.82 0.38 0.32 0.25 0.19 0.18 a 4 a 4 a 4 a 4 a 4 a 4 Taxes, 911, and Other Charges 4.21 4.32 4.42 4.57 4.63 4.61 4.79 4.87 4.99 4.97 5.03 5.04 5.45 5.47 5.55 5.67 5.83 5.88 5.87 Total Monthly Charge $41.25 $41.21 $42.12 $42.29 $42.57 $41.64 $41.80 $41.81 $41.67 $41.27 $41.21 $41.80 $42.43 $41.95 $41.96 $43.49 $43.75 $45.32 $48.17 Monthly Charge for Flat-Rate Service $33.04 $33.29 $34.12 $34.06 $34.85 $34.39 $34.45 $34.42 $34.68 $34.39 $33.73 $33.45 $32.02 $32.92 $33.17 $34.20 34.19 $34.56 $35.17 Subscriber Line Charges 3.65 3.69 3.70 3.70 3.70 3.70 3.69 3.61 3.61 3.56 3.50 4.35 4.77 5.77 6.03 6.01 6.03 6.16 6.16 Extra for Touch-Tone Service 4 2.12 2.11 1.87 1.84 1.76 1.12 1.00 0.89 0.53 0.49 0.47 0.43 0.39 a 4 a 4 a 4 a 4 a 4 a 4 Taxes, 911, and Other Charges 4.90 4.98 5.22 5.34 5.50 5.36 5.58 5.55 5.58 5.63 5.49 5.68 5.98 8.16 7.91 7.53 7.77 7.68 7.35 Total Monthly Charge for Flat-Rate Service $43.71 $44.07 $44.91 $44.94 $45.81 $44.57 $44.71 $44.47 $44.39 $44.07 $43.20 $43.90 $43.15 $46.85 $47.12 $47.74 $47.99 $48.39 $48.67 Number of Sample Cities with Flat-Rate Service 59 56 54 54 54 53 53 53 53 54 54 54 54 52 52 56 56 56 56 Monthly Charge for Measured/Message Service $16.18 $16.17 $16.76 $16.55 $16.60 $16.74 $17.06 $17.26 $17.28 $17.16 $17.06 $16.92 $17.16 $17.56 $17.21 $18.49 18.30 $16.41 $18.59 200 Five-Minute, Business-Day, Same-Zone Calls 16.11 16.19 16.70 17.23 17.57 17.38 17.15 17.10 17.18 17.15 17.24 17.63 17.56 16.78 17.17 17.86 18.16 16.93 17.77 Subscriber Line Charges 3.54 3.55 3.55 3.54 3.55 3.55 3.54 3.51 3.51 3.53 3.52 4.39 4.90 5.56 5.65 5.86 5.80 5.49 5.57 Extra for Touch-Tone Service 4 2.48 2.39 1.87 1.73 1.68 1.22 0.98 0.83 0.39 0.33 0.25 0.20 0.19 a 4 a 4 a 4 a 4 a 4 a 4 Tax, Including 911 Charges 4.41 4.53 4.56 4.77 4.86 4.83 5.01 5.13 5.22 5.19 5.28 5.32 5.76 4.71 4.78 5.07 5.14 4.74 5.07 Total Monthly Charge for Measured/Message Service $42.72 $42.83 $43.44 $43.82 $44.26 $43.72 $43.75 $43.84 $43.57 $43.35 $43.35 $44.45 $45.57 $44.61 $44.82 $47.29 $47.40 $43.57 $47.00 Number of Sample Cities with Measured/Message Service 83 83 84 84 84 87 87 86 85 85 85 85 85 86 85 86 85 78 78 Cost of a Five-Minute, Business-Day, Same-Zone Call $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.10 $0.10 $0.09 $0.11 Basic Connection Charge $71.05 $71.36 $72.75 $72.55 $71.41 $69.88 $67.87 $68.47 $68.67 $65.83 $67.87 $67.77 $67.04 $67.29 $67.23 $67.24 $67.35 $62.55 $62.67 Additional Connection Charge for Touch-Tone Service 4 1.70 1.89 1.13 1.19 1.17 0.92 0.27 0.17 0.17 0.12 0.12 0.12 0.12 a 4 a 4 a 4 a 4 a 4 a 4 Tax, Including 911 Charges 4.06 4.15 4.32 4.33 4.25 4.13 4.17 4.20 4.45 4.13 4.53 4.40 4.69 5.09 6.95 6.42 6.15 6.41 6.06 Total Connection Charge $76.81 $77.40 $78.20 $78.07 $76.83 $74.93 $72.31 $72.85 $73.29 $70.09 $72.55 $72.29 $71.86 $72.39 $74.18 $73.66 $73.50 $68.96 $68.74 Additional Charge if Drop Line and Connection Block Needed $5.92 $7.87 $6.90 $6.83 $6.64 $6.49 $7.28 $6.98 $6.54 $6.54 $6.65 $6.62 $6.62 $6.52 $13.43 $13.76 $13.96 $11.45 $11.45 Lowest-Cost Inside Wiring Maintenance Plan $1.78 $1.91 $2.05 $2.03 $2.08 $2.26 $2.39 $2.63 $2.84 $3.04 $3.53 $3.92 $4.86 $4.73 $4.65 $4.94 $6.27 $5.77 $5.62 Note: Details may not add to totals due to rounding. 1 Revised. 2 Subject to revision. 3 Rates are based on flat-rate service where available and measured/message service with 200 five-minute, same-zone, business-day calls elsewhere. 4 Starting in 2002, additional monthly charges for touch-tone service are included in the monthly charge. Table 7.7 Average Local Rates for Businesses with a Single Line in Urban Areas (As of October 15, 2007) 7 - 16 Table 7.8 Average Revenue per Minute AT&T All Carriers All Interstate All Interstate and International and International International All Interstate Switched Services Switched Services Switched Services Switched Services 1984 $0.32 NA NA NA 1985 0.31 NA NA NA 1986 0.28 NA NA NA 1987 0.25 NA NA NA 1988 0.23 NA NA NA 1989 0.22 NA NA NA 1990 0.20 NA NA NA 1991 0.20 NA NA NA 1992 0.19 $0.19 $1.01 $0.15 1993 0.19 0.19 1.02 0.15 1994 0.18 0.18 0.93 0.14 1995 NA 0.17 0.91 0.12 1996 NA 0.16 0.76 0.12 1997 NA 0.15 0.69 0.11 1998 NA 0.14 0.58 0.11 1999 NA 0.14 0.54 0.11 2000 NA 0.12 0.52 0.09 2001 NA 0.10 0.35 0.08 2002 NA 0.09 0.28 0.07 2003 NA 0.08 0.20 0.07 2004 NA 0.08 0.14 0.06 2005 NA 0.07 0.13 0.06 2006 NA 0.07 NA NA NA - Not available. Note: Data for some prior years have been revised. Sources: AT&T information provided by AT&T. Other estimates from Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (August 2008). 7 - 17 a. Maximum Charge 38.59$ b. Minimum Charge 16.70$ c. Representative Monthly Charge 25.62$ (Weighted Average) d. Weighted Standard Deviation (Std Dev) 5.45$ e. Average + 2*(Std Dev) ( = c + 2d) 36.52$ f. Percent to Average ( = [e/c] * 100) 143% Table 7.9 Standard Deviation Analysis of Residential Rates in the Sample Cities (As of October 15, 2007) 7 - 18 Table 7.10 Historical Standard Deviation Analysis of Residential Rates in the Sample Cities (As of October 15, 2006) 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1 2007 2 Maximum Rate $32.68 $31.63 $30.62 $28.65 $28.78 $28.27 $28.75 $29.72 $34.75 $34.95 $35.56 $35.35 $35.16 $37.01 $38.59 Minimum Rate $12.18 $12.18 $13.04 $13.04 $13.05 $13.05 $13.05 $13.21 $15.31 $15.93 $16.30 $16.03 $16.39 $17.10 $16.70 Representative Monthly Rate (Average) $19.95 $19.81 $20.01 $19.95 $19.88 $19.76 $19.93 $20.78 $22.62 $24.07 $24.52 $24.52 $24.57 $25.27 $25.62 Weighted Standard Deviation (Std Dev) $4.23 $4.28 $3.41 $3.28 $3.35 $3.24 $3.46 $3.57 $4.20 $4.32 $4.90 $4.93 $4.49 $4.78 $5.45 Average + 2*(Std Dev) $28.41 $28.38 $26.84 $26.51 $26.58 $26.24 $26.85 $27.92 $31.01 $32.71 $34.32 $34.38 $33.55 $34.83 $36.52 Percentage to Average 142% 143% 134% 133% 134% 133% 135% 134% 137% 136% 140% 140% 137% 138% 143% Average + 3*(Std Dev) $32.65 $32.66 $30.25 $29.78 $29.93 $29.47 $30.31 $31.49 $35.21 $37.03 $39.22 $39.31 $38.04 $39.61 $41.96 Percentage to Average 164% 165% 151% 149% 151% 149% 152% 152% 156% 154% 160% 160% 155% 157% 164% 1 Revised estimates. 2 Subject to revision. 7 - 19 Table 7.11 (National Average per Month per Line) 1 Residential and Non-Primary Multiline Non-Primary Multiline From To Single-Line Residential Business Residential Business Business and Centrex 05/26/84 05/31/85 $0.00 $4.99 06/01/85 09/30/85 1.00 4.99 10/01/85 05/31/86 1.00 4.97 06/01/86 12/31/86 2.00 4.97 01/01/87 06/30/87 2.00 5.12 07/01/87 12/31/87 2.60 5.12 01/01/88 11/30/88 2.60 5.01 12/01/88 03/31/89 3.20 5.01 04/01/89 12/31/89 3.50 4.94 01/01/90 06/30/90 3.48 4.84 07/01/90 12/31/90 3.48 4.83 01/01/91 06/30/91 3.48 4.77 07/01/91 11/27/91 3.49 4.74 11/28/91 06/30/92 3.49 4.76 07/01/92 06/30/93 3.49 4.68 07/01/93 06/30/94 3.50 5.37 07/01/94 06/30/95 3.50 5.45 07/01/95 06/30/96 3.50 5.50 07/01/96 06/30/97 3.50 5.53 07/01/97 12/31/97 3.50 5.68 01/01/98 06/30/98 3.50 $4.98 6.92 $0.49 $1.50 $2.52 $0.35 07/01/98 12/31/98 3.50 4.99 7.11 0.49 1.38 2.38 0.38 01/01/99 06/30/99 3.50 5.88 7.05 0.49 1.38 2.22 0.32 07/01/99 12/31/99 3.50 5.84 6.94 0.95 1.77 2.78 0.42 01/01/00 06/30/00 3.50 5.81 6.94 0.92 1.70 2.44 0.35 08/11/00 06/30/01 4 4.28 5.99 6.88 0.00 0.00 2.30 0.37 07/01/01 12/31/01 4.78 6.66 0.00 0.00 1.35 0.22 01/01/02 06/30/02 4.92 6.79 0.00 0.00 1.35 0.22 07/01/02 06/30/03 5.62 6.45 0.00 0.00 0.48 0.08 07/01/03 06/30/04 5.96 6.37 0.00 0.00 0.20 0.04 07/01/04 06/30/05 5.92 6.24 0.00 0.00 0.19 0.05 07/01/05 06/30/06 5.92 6.26 0.00 0.00 0.21 0.04 07/01/06 06/30/07 5.91 6.27 0.00 0.00 0.23 0.04 07/01/07 06/30/08 5.93 6.30 0.00 0.00 0.23 0.05 Source: Access tariff filings. 5.93 Charged to End Users 2 Rates in Effect Single-Line Business Centrex 4 Although the charges took effect on July 1, 2000, some companies made adjustments to the tariffs which did not take effect until August 11, 2000. 2 Prior to 1/01/98, carriers did not charge separate subscriber line charge (SLC) rates for primary and non-primary residential lines. Therefore, the residential and single-line business average SLCs reported prior to 1/01/98 include all residential SLC charges. The average residential and single-line business SLC rate as of 1/01/98 excludes non-primary residential SLCs. Non-primary SLCs are now reported separately, except for the LECs in the NECA pool, which continue to charge a single residential SLC. Under price-cap regulation, as of July 1, 2003, the caps on SLCs for primary residential and single-line business, non-primary residential, and multiline business and Centrex lines equal $6.50, $7.00, and $9.20, respectively. For NECA pool companies, the residential SLC cap is $6.50, while the multiline business and Centrex SLC cap equals $9.20. 3 On 1/01/98, price-cap carriers began to charge presubscribed interexchange carrier charges (PICCs). The reported PICCs are averages per line including both price-cap and NECA pool lines. While carriers did not charge different rates for Centrex and multiline business SLCs, they did charge different PICC rates for these lines. Therefore, the average multiline business and Centrex PICC rates are reported separately. However, multiline business line counts, used to compute average PICC rates, include Centrex lines for LECs in the NECA pool, which do not charge PICCs or distinguish in access filings between the two line types. On 7/01/00, price-cap carriers stopped charging residential and single-line business PICCs. Therefore, under price-cap regulation, as of July 1, 2000, the caps on PICCs for multiline business lines equal $4.31. Centrex groups of 9 or fewer lines are capped at the multiline business PICC rate of $4.31 per group. Centrex groups with more than 9 lines are capped at $0.48 per line (1/9th the multiline business rate). Charged to Long Distance Carriers 3 (Presubscribed Interexchange Carrier Charges)(Subscriber Line Charges) 5.81 5.93 1 This table shows average rates (weighted by access lines) for all local exchange carriers (LECs) that file access tariffs subject to price-cap regulation and all LECs in the National Exchange Carrier Association (NECA) pool. Residential and 5.83 5.81 5.88 5.94 5.85 7 - 20 Table 7.12 Interstate Per-Minute Access Charges (National Average in Cents per Minute) 1 Total Charge per Conversation Minute 3 05/26/84 01/14/85 5.24 ¢ 5.24 ¢ 3.10 ¢ 17.26 ¢ 01/15/85 05/31/85 5.43 5.43 3.10 17.66 06/01/85 09/30/85 4.71 4.71 3.10 16.17 10/01/85 05/31/86 4.33 4.33 3.10 15.38 06/01/86 12/31/86 3.04 4.33 3.10 14.00 01/01/87 06/30/87 1.55 4.33 3.10 12.41 07/01/87 12/31/87 0.69 4.33 3.10 11.49 01/01/88 11/30/88 0.00 4.14 3.10 10.56 12/01/88 02/14/89 0.00 3.39 3.00 9.60 02/15/89 03/31/89 0.00 3.25 3.00 9.46 04/01/89 12/31/89 1.00 1.83 3.00 9.11 01/01/90 06/30/90 1.00 1.53 2.50 7.78 07/01/90 12/31/90 1.00 1.23 2.50 7.48 01/01/91 06/30/91 1.00 1.14 2.40 7.18 07/01/91 06/30/92 0.88 1.06 2.40 6.97 07/01/92 06/30/93 0.79 0.95 2.40 6.76 07/01/93 06/30/94 0.88 1.16 2.20 6.66 07/01/94 06/30/95 0.84 1.08 2.10 0.28 ¢ 6.89 07/01/95 06/30/96 0.74 0.89 1.96 0.21 6.16 07/01/96 06/30/97 0.72 0.89 1.95 0.17 6.04 07/01/97 12/31/97 0.64 0.84 1.63 0.14 5.18 01/01/98 06/30/98 0.68 0.23 1.29 0.21 4.04 07/01/98 12/31/98 0.91 0.20 0.99 0.30 3.82 01/01/99 06/30/99 0.82 0.16 0.98 0.32 3.71 07/01/99 12/31/99 0.37 0.10 0.86 0.28 2.82 01/01/00 06/30/00 0.32 0.10 0.86 0.31 2.85 08/11/00 06/31/00 4 0.23 0.07 0.52 0.26 1.91 07/01/01 12/31/01 0.15 0.07 0.48 0.24 1.71 01/01/02 06/30/02 0.15 0.07 0.47 0.24 1.69 07/01/02 06/30/03 0.02 0.01 0.48 0.22 1.46 07/01/03 06/30/04 0.00 0.00 0.48 0.22 1.44 07/01/04 06/30/05 0.00 0.00 0.50 0.25 1.53 07/01/05 06/30/06 0.00 0.00 0.52 0.25 1.59 07/01/06 06/30/07 0.01 0.00 0.54 0.25 1.63 07/01/07 06/30/08 0.01 0.00 0.56 0.26 1.71 Source: Access tariff filings. Rates in Effect From To Sensitive per Switched Interstate Charges for Switched Access Service Minute 2 Traffic Sensitive per Switched Minute Non-Traffic Minute 1 Carrier Common Line per Terminating Access Minute 1 Carrier Common Line per Originating Access 4 Although the charges took effect on July 1, 2000, some companies made adjustments to the tariffs which did not take effect until August 11, 2000. 1 This table shows average rates (weighted by minutes of use) for all local exchange carriers (LECs) that file access tariffs subject to price-cap regulation and all LECs in the National Exchange Carrier Association (NECA) pool. The average rates reported here do not include the average revenue per minute from subscriber line charges (SLCs) or primary interexchange carrier charges (PICCs), both of which are reported in Table 1.1. Effective 07/01/03, the carrier 2 Non-traffic-sensitive charges include charges assessed on a per-month, per-unit basis. Prior to 07/01/94, these charges were included in the average traffic-sensitive rates. 3 The total charge per conversation minute consists of charges on the originating end of the call, which are adjusted for dialing and call setup time, plus charges on the terminating end. Originating charges per conversation minute equal the carrier common line charge per originating access minute plus the traffic-sensitive charge per switched minute, both multiplied by 1.07 to account for dialing and call setup time, plus the non-traffic-sensitive charge per switched minute. Terminating charges per conversation minute equal carrier common line charges per terminating access minute plus 7 - 21 Table 7.13 Interstate Per-Line Access Charges by Carrier (In Dollars per Month per Line) 1 Rates Effective from 07/01/07 to 06/30/08 Subscriber Line Charges Presubscribed Interexchange Carrier Charges 2006 Average Monthly Access Lines 2 (Thousands) Company Residential Non-Primary Multiline Residential Non-Primary Centrex Residential Non-Primary Multiline and Residential Business and Residential and Residential Business Single-Line and Single-Line Single-Line and Business Centrex Business Business Centrex ALLTEL (KY & NE) $6.06 $6.43 $7.73 $0.00 $0.00 $1.79 $1.47 458 14 191 AT&T 4 5.54 5.38 5.50 0.00 0.00 0.00 0.00 35,832 4,714 19,201 CenturyTel 3 6.37 6.57 7.51 0.00 0.00 0.80 1.15 428 22 117 Cincinnati Bell 5.25 5.25 5.25 0.00 0.00 0.00 0.00 575 43 258 Citizens 3 6.11 6.40 9.20 0.00 0.00 4.31 0.74 1,373 79 379 Embarq 5 5.70 5.59 7.00 0.00 0.00 0.00 0.00 4,690 445 1,536 Hawaiian Telecom 6.50 7.00 8.15 0.00 0.00 0.00 0.00 419 46 114 Iowa Telecom 6.15 6.15 8.66 0.00 0.00 0.00 0.00 176 7 42 Qwest 6.02 6.24 6.52 0.00 0.00 0.00 0.00 7,902 887 2,947 Verizon 6.28 6.30 6.77 0.00 0.00 0.53 0.07 24,890 3,370 12,552 Windstream 6 6.50 7.00 9.20 0.00 0.00 2.10 1.64 329 34 80 Price Caps 5.87 5.81 6.14 0.00 0.00 0.24 0.05 77,072 9,660 37,417 NECA 6.50 NA 9.20 0.00 NA 0.00 NA 8,683 NA 2,074 Price Caps and NECA $5.93 $5.81 $6.30 $0.00 $0.00 $0.23 $0.05 85,755 9,660 39,491 NA - Not Available. 3 Data reflect only those company study areas subject to price-cap regulation. 5 Embarq replaced Sprint after their merger which occurred on May 17, 2006. 6 Windstream replaced Valor after their merger which occurred on July 17, 2006. Source: Access tariff filings. 4 Following the merger of SBC Communications Inc. (SBC) with AT&T Corporation on November 18, 2005, SBC changed its name to AT&T Inc. Bellsouth became part of AT&T Inc. on December 29, 2006. 2 Access line counts measure lines that companies report as qualified to receive subscriber line charges (SLCs). ISDN-BRI lines, which are charged non-primary SLC and PICC rates, are included in the non-primary residential line counts. ISDN-PRI lines, which are charged rates equal to five times the multiline business SLC and PICC rates, are multiplied by five and added to multiline business counts. Multiline Business 1 This table shows average rates (weighted by access lines) for all local exchange carriers (LECs) that file access tariffs subject to price-cap regulation and all LECs in the National Exchange Carrier Association (NECA) pool. Rates are composites of all regions and subsidiaries of each local exchange carrier. For example, non- primary residential SLCs can be less than primary residential SLCs due to weighting by access lines. Note that at the disaggregated level, non-primary rates are always greater than or equal to non-primary rates. The primary line rate is weighted by the number of primary residential lines and the non-primary residential rate is similarly weighted by the number of non-primary access lines. Because the weight on primary lines versus non-primary lines is not constant, the primary rate is not necessarily lower than the non-primary rate at the holding company level. No information is available for those carriers that are not in the NECA pool, but are subject to rate-of-return regulation. 7 - 22 Table 7.14 Interstate Per-Minute Access Charges by Carrier (In Cents per Minute) 1 Rates Effective from July 1, 2007 to June 30, 2008 Year 2006 Minutes of Use Carrier (Millions) Common Line per Company Originating Access Local Minute 2 Originating Terminating Switching ALLTEL (KY & NE) 0.00 ¢ 0.00 ¢ 0.55 ¢ 0.32 ¢ 1.79 ¢ 561 854 1,916 AT&T ILEC 5 0.00 0.00 0.46 0.27 1.48 46,215 108,977 158,451 CenturyTel 6 0.14 0.00 0.55 0.30 1.88 404 1,381 1,785 Cincinnati Bell 0.00 0.00 0.61 0.40 2.07 655 1,998 2,580 Citizens 0.20 0.00 0.51 0.51 2.28 1,107 3,957 5,063 Embarq 7 0.00 0.00 0.79 0.17 1.97 4,708 18,683 20,669 Hawaiian Telecom 0.00 0.00 0.63 0.20 1.71 355 1,013 1,839 Iowa Telecom 0.00 0.00 1.59 0.67 4.63 221 331 551 Qwest 0.00 0.00 0.74 0.16 1.84 13,007 24,166 37,296 Verizon 0.03 0.00 0.50 0.22 1.52 30,245 83,119 113,797 Windstream 8 0.00 0.00 0.77 0.48 2.56 245 832 1,120 Price Caps 0.01 0.00 0.53 0.24 1.59 97,723 245,311 345,069 NECA 0.00 0.00 1.30 0.69 4.07 * * 17,063 All Price Caps and NECA 0.01 0.00 0.56 0.26 1.71 * * 362,132 * NECA no longer files information regarding originating and terminating Carrier Common Line (CCL) charges. 6 Data reflect only those company study areas subject to price-cap regulation. 7 Embarq replaced Sprint after their merger which occurred on May 17, 2006. 8 Windstream replaced Valor after their merger which occurred on July 17, 2006. Source: Access tariff filings. 4 The total charge per conversation minute consists of charges on the originating end of the call, which are adjusted for dialing and call setup time, plus charges on the terminating end. Originating charges per conversation minute equal the carrier common line charge per originating access minute plus the traffic-sensitive charge per switched minute, both multiplied by 1.07 to account for dialing and call setup time, plus the non-traffic-sensitive charge per switched minute. Terminating charges per conversation minute equal carrier common line charges per terminating access minute plus both traffic-sensitive and non-traffic-sensitive charges per switched minute. Switched Traffic Sensitive per Carrier Common Line per Terminating Switched Non-Traffic Sensitive per Total Charge per Access Minute Conversation Minute 4 5 Following the merger of SBC Communications Inc. (SBC) with AT&T Corporation on November 18, 2005, SBC changed its name to AT&T Inc. Bellsouth became part of AT&T Inc. on December 29, 2006. Carrier Common Line 2 Effective 07/01/03, the carrier common line (CCL) rates for NECA carriers were eliminated. 3 Non-traffic sensitive charges include charges assessed on a per-month, per-unit basis. Prior to July 1, 1994 these charges were included in the average traffic-sensitive rates. Access Minute 3 Access Minute 2 1 This table shows average rates (weighted by minutes of use) for all local exchange carriers (LECs) that file access tariffs subject to price-cap regulation and all LECs in the National Exchange Carrier Association (NECA) pool. Rates are composites of all regions and subsidiaries of each local exchange carrier. No information is available for those carriers that are not in the NECA pool, but are subject to rate-of-return regulation. The average rates reported here do not include the average revenue per minute from subscriber line charges (SLCs) or primary interexchange carrier charges (PICCs), both of which are reported in Table 1.1. 7 - 23