UNIVERSAL SERVICE MONITORING REPORT CC DOCKET NO. 98-202 2011 (Data Received Through October 2011) Prepared by Federal and State Staff for the Federal-State Joint Board on Universal Service in CC Docket No. 96-45 This report is available for reference in the FCC's Reference Information Center, Courtyard Level, 445 12th Street, SW, Washington, DC. Copies may be purchased by contacting Best Copy and Printing, Inc., 445 12th Street, SW, Room CY-B402, Washington, DC 20554, telephone (800) 378-3160, or via their website at www.bcpiweb.com. The report can also be downloaded from the Wireline Competition Bureau Statistical Reports Internet site at www.fcc.gov/wcb/iatd/stats.html. 1 Table of Contents Introduction and Summary ..................................................................…....…... 2 to 4 Service List ...........................................................................................…......…. 5 to 9 Status of 2010 Monitoring Report Tables and Charts in the 2011 Report......... 10 New Tables and Charts in the 2011 Monitoring Report..................................... 11 1. Industry Revenues and Contributions .............................................…......… 1-1 to 1-32 2. Program Review ......................................................................…......………. 2-1 to 2-33 3. Subscribership and Penetration ........................................................….……. 3-1 to 3-15 4. Price Indices and Access Charge Rates...............................................…........ 4-1 to 4-9 5. Network Usage ……………………................................................................ 5-1 to 5-4 2 Universal Service Monitoring Report CC Docket No. 98-202 2011 Introduction and Summary This is the fifteenth report in a series of reports prepared by federal and state staff members for the Federal-State Joint Board on Universal Service in CC Docket No. 96-45 (Universal Service Joint Board). 1 This report is based on information available to us as of October 2011. These reports contain information designed to monitor the impact of various universal service support mechanisms, and the methods used to finance them. These mechanisms were adopted by the Federal Communications Commission (Commission), based on recommendations from the Universal Service Joint Board. These reports are part of a monitoring program created by the Commission in 1997 to replace a similar program in CC Docket No. 87-339 that resulted in a series of nineteen Monitoring Reports. 2 The current program incorporates most of the information that was collected under the previous program, and also new materials from the reports of the administrator of the universal service support mechanisms, the Universal Service Administrative Company (USAC). To enhance our monitoring ability, we have created an open docket, 3 which allows data, materials, comments, and studies to be submitted by any interested party at any time. The monitoring program has proven to be valuable, not only as a report on the effects of the Commission’s regulatory policies, but also as a complete census of all incumbent local exchange carriers (incumbent LECs, or ILECs). Because smaller carriers generally are exempt from most Commission reporting requirements, the Monitoring Report incorporates data from several sources, including the National Exchange Carrier Association (NECA) and USAC. USAC collects information from all eligible local exchange carriers (including competitive eligible telecommunications carriers, or CETCs) to administer the universal service support mechanisms. NECA, at the direction of the Commission, collects information in order to administer the access charge pools and also provides information to USAC that is utilized in administering the Universal Service Fund. The Monitoring Report, therefore, contains the only available comprehensive data on all incumbent local exchange carriers, including data on such matters as the number of telephone lines, calling volumes, and certain types of costs. It also includes some information on other carriers. This report presents data for the five subject categories selected for monitoring. The first section provides information on the contributions to the universal service support mechanisms and industry revenues, on which those contributions are based. The next section provides information on the various support mechanisms: low-income support; high-cost support; schools and libraries support; and rural health care support. The remaining three sections provide information on matters that might be affected by the support mechanisms: subscribership and penetration; price indices and access charge rates; and network usage and growth. The Monitoring Report is published once a year. 1 The last report was released in December 2010. Universal Service Monitoring Report, CC Docket No. 98- 202, 2010 (Data Received Through October 2010), prepared by the Federal and State Staff for the Federal- State Joint Board on Universal Service in CC Docket No. 96-45. 2 Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9218, para. 869 (1997) (Universal Service First Report and Order). See 47 C.F.R. § 54.702(i). 3 CC Docket No. 98-202. 3 This organization is a departure from the 2010 report. Section 9 on quality of service is not included in this report. The separate sections on the support mechanisms have been combined into a single section, which describes trends and changes in the support mechanisms since 2010. Many of the tables that appeared in the 2010 report are no longer included in the published report, but instead have been placed on the FCC website at www.fcc.gov/wcb/iatd/monitor.html. In general, these tables are ones of such length that they are best presented as Excel files for ease of search and data manipulation. Several new tables have been added to both the published report and to the FCC website. A table at the end of this section lists the tables from the 2010 report and their status in the 2011 report. Another table lists the new tables in the report. The following is the organization of this report: Section 1 provides an update on industry revenues and the universal service program requirements and contribution factors. Section 2 includes the latest data on the low-income, high-cost, schools and libraries, and rural health care support mechanisms. Section 3 includes the most recent Census data on subscribership from the Current Population Survey and the American Community Survey. It also includes data on telephone penetration by income by state and a discussion of the impact of Lifeline programs on penetration. Section 4 includes updated Consumer Price Index data and updated interstate access rate information. Section 5 includes the latest NECA data on interstate access minutes. This entire report is available electronically in page image (.pdf) format through the Wireline Competition Bureau Statistical Reports Internet site, located at www.fcc.gov/wcb/iatd/monitor.html. The tables of the report are available separately as spreadsheet files in a single compressed (.zip) format file at this site also. In addition, information received well in advance of the next Monitoring Report will be made available on an interim basis in separate staff reports or in raw data files (such as most NECA filings used in the Monitoring Report) on the Wireline Competition Bureau Statistical Reports Internet site. For ease of public reference, parties submitting materials for this docket should provide a duplicate copy to the FCC's Reference Information Center, 4 where copies of all materials filed in the docket are available for public reference. This report has been prepared by the federal staff listed below and reviewed by the state staff listed below. These staff members can be contacted for further information: General Information: Jay Bennett (Federal) (202) 418-2761 James Eisner (Federal) (202) 418-7302 Industry Revenues and Contributions: Susan Lee (Federal) (202) 418-1590 James Eisner (Federal) (202) 418-7302 Craig Stroup (Federal) (202) 418-0989 Low-Income Support: Suzanne Mendez (Federal) (202) 418-0941 James Eisner (Federal) (202) 418-7302 Natelle Dietrich (Missouri) (573) 751-7427 Kimberly Scardino (Federal) (202) 418-1442 4 Courtyard Level, 445 12th Street, SW, Washington, DC. 4 High-Cost Support: Jay Bennett (Federal) (202) 418-2761 James Eisner (Federal) (202) 418-7302 Joel Shifman (Maine) (207) 287-1381 Robert Haga (California) (415) 703-2538 Kerri DeYoung Phillips (Massachusetts) (617) 305-3580 Schools and Libraries Support: Craig Stroup (Federal) (202) 418-0989 John Vu (Federal) (202) 418-2333 Peter Pescosolido (Connecticut) (860) 827-2671 Rural Health Care Support: Craig Stroup (Federal) (202) 418-0989 John Vu (Federal) (202) 418-2333 Vicki Helfrich (Mississippi) (601) 359-2660 George Young (Vermont) (802) 828-2358 Subscribership and Penetration: Jay Schwarz (Federal) (202) 418-0948 James Eisner (Federal) (202) 418-7302 Rates and Price Indices: Jay Schwarz (Federal) (202) 418-0948 James Eisner (Federal) (202) 418-7302 Joel Shifman (Maine) (207) 287-1381 Christine Aarnes (Kansas) (785) 271-3132 Network Usage: James Eisner (Federal) (202) 418-7302 Suzanne Mendez (Federal) (202) 418-0941 M. Gene Hand (Nebraska) (402) 471-0244 5 SERVICE LIST All items filed in CC Docket No. 98-202 must be filed with the Secretary, Federal Communications Commission, 445 12th Street, SW, Room TW-B204, Washington, D.C. 20554, and the following Commissioners and staff members (e-mail addresses of staff members follow their mailing addresses): DOCKET NO. 96-45 JOINT BOARD MEMBERS Commissioner Mignon Clyburn Joint Board Chair Federal Communications Commission 445 12th Street SW, Room 8-A302 Washington, DC 20554 Mignon.Clyburn@fcc.gov Commissioner Michael J. Copps Federal Communications Commission 445 12th Street SW, Room 8-B115 Washington, DC 20554 Michael.Copps@fcc.gov Chairman James H. Cawley Pennsylvania Public Utility Commission 400 North Street Commonwealth Keystone Building Harrisburg, PA 17120-3265 jhc@state.pa.us Board Member John D. Burke Vermont Public Service Board 112 State Street, 4th Floor Montpelier, VT 05620-2701 John.Burke@state.vt.us Commissioner Ann C. Boyle Nebraska Public Service Commission 300 The Atrium, 1200 N Street Lincoln, NE 68508-2020 Anne.Boyle@nebraska.gov Assistant Attorney General Simon ffitch Office of the Attorney General Public Counsel Section 800 5 th Avenue, Suite 2000 Seattle, WA 98104-3188 simonf@atg.wa.gov DOCKET NO. 96-45 FEDERAL-STATE JOINT BOARD STAFF Labros Pilalis Pennsylvania Public Utility Commission P.O. Box 3265 Harrisburg, PA 17105 lpilalis@state.pa.us George Young Vermont Public Service Board Drawer 20 112 State Street, 4th Floor Montpelier, VT 05620-2701 George.Young@state.vt.us Brian Mahern Indiana Utility Regulatory Commission 101 West Washington Street, Suite 1500 East Indianapolis, IN 46204 bmahern@urc.in.gov M. Gene Hand Nebraska Public Service Commission 300 The Atrium, 1200 N Street P.O Box 94927 Lincoln, NE 68509-4927 Gene.Hand@nebraska.gov 6 Peter Pescosolido Connecticut Dept of Public Utility Control 10 Franklin Square New Britain, CT 06051 Peter.Pescosolido@po.state.ct.us Natelle Dietrich Missouri Public Service Commission 200 Madison Street Governor’s Office Building Jefferson City, MO 65102 Natelle.Dietrich@psc.mo.gov Robert Haga California Public Utility Commission 505 Van Ness Avenue San Francisco, CA 94102 RWH@cpuc.ca.gov Kerri DeYoung Phillips Mass. Dept. of Telecommunications & Cable 1000 Washington Street, Suite 820 Boston, MA 02118-6500 Kerri.DeYoung@state.ma.us Vicki Helfrich Mississippi Dept. of Information Technology 3771 Eastwood Drive Jackson, MS 39211 Vicki.Helfrich@its.ms.gov Christine Aarnes Kansas Corporation Commission 1500 SW Arrowhead Rd. Topeka, KS 66604 c.aarnes@kcc.ks.gov Brad Ramsay NARUC 1101 Vermont Ave. NW, Suite 200 Washington, DC 20005 jramsay@naruc.org Barrett C. Sheridan Office of Consumer Advocate 555 Walnut Street, Forum Place, 5 th Floor Harrisburg, PA 17101-1923 bsheridan@paoca.org Joel Shifman Maine Public Utilities Commission 242 State Street State House Station 18 Augusta, ME 04333-0018 Joel.Shifman@maine.gov Jing Liu Washington Utilities & Transportation Commission P.O. Box 47250 1300 South Evergreen Park Drive, SW Olympia, WA 98504-7250 jliu@utc.wa.gov Angela Kronenberg Office of Commissioner Clyburn Federal Communications Commission 445 12th Street SW, Room 8A-302 Washington, DC 20554 Angela.Kronenberg@fcc.gov Lisa Hone Office of Commissioner Copps Federal Communications Commission 445 12th Street SW, Room 8-B115C Washington, DC 20554 Lisa.Hone@fcc.gov 7 Sharon Gillett, Chief Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-C354 Washington, DC 20554 Sharon.Gillett@fcc.gov Carol Mattey, Deputy Chief Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-C352 Washington, DC 20554 Carol.Mattey@fcc.gov Rebekah Goodheart, Associate Chief Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-C330 Washington, DC 20554 Rebehah.Goodheart@fcc.gov Patrick Halley, Legal Advisor Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-C347 Washington, DC 20554 Patrick.Halley@fcc.gov Trent Harkrader, Chief Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-A426 Washington, DC 20554 Trent.Harkrader@fcc.gov Amy Bender, Deputy Chief Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B425 Washington, DC 20554 Amy.Bender@fcc.gov Kimberly Scardino, Deputy Chief Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B448 Washington, DC 20554 Kimberly.Scardino@fcc.gov Ted Burmeister Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B438 Washington, DC 20554 Theodore.Burmeister@fcc.gov Katie King Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B544 Washington, DC 20554 Katie.King@fcc.gov Gary Seigel Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-C408 Washington, DC 20554 Gary.Seigel@fcc.gov 8 Jamie Susskind Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B418 Washington, DC 20554 Jamie.Susskind@fcc.gov Rebekah Bina Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B521 Washington, DC 20554 Rebekah.Bina@fcc.gov Alex Minard Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-A340 Washington, DC 20554 Alexander.Minard@fcc.gov Robert (Beau) Finley Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-B541 Washington, DC 20554 Robert.Finley@fcc.gov Ken Burnley Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-A333 Washington, DC 20554 Kenneth.Burnley@fcc.gov Joseph Cavender Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 5-A236 Washington, DC 20554 Joseph.Cavender@fcc.gov OTHER FEDERAL STAFF Jay Bennett Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-C212 Washington, DC 20554 Jay.Bennett@fcc.gov Rodger Woock, Division Chief Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A224 Washington, DC 20554 Rodger.Woock@fcc.gov Jay Schwarz Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A134 Washington, DC 20554 Jay.Schwarz@fcc.gov Kenneth Lynch Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A103 Washington, DC 20554 Kenneth.Lynch@fcc.gov 9 Suzanne Mendez Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A144 Washington, DC 20554 Suzanne.Mendez@fcc.gov James Eisner Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A102 Washington, DC 20554 James.Eisner@fcc.gov Craig Stroup Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A104 Washington, DC 20554 Craig.Stroup@fcc.gov John Vu Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12th Street SW, Room 6-A360 Washington, DC 20554 John.Vu@fcc.gov Susan Lee Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12 th Street SW, Room 6-B145 Washington, DC 20554 Susan.Lee@fcc.gov Ellen Burton, Assistant Division Chief Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12 th Street SW, Room 6-A233 Washington, DC 20554 Ellen.Burton@fcc.gov Cathy Zima, Deputy Division Chief Industry Analysis & Technology Division Wireline Competition Bureau Federal Communications Commission 445 12 th Street SW, Room 6-A221 Washington, DC 20554 Cathy.Zima@fcc.gov 2010 Table/Chart # Status Table/Chart # Table/Chart Title Table 1.1 Report Table 1.1 Total Telecommunications Industry Revenues Table 1.2 Report Table 1.2 Telecommunications Industry Revenues by Service Table 1.3 Report Table 1.3 Telecommunications and Interconnected VoIP Revenues Reported by Type of Carrier Table 1.4 Report Table 1.4 Contribution Base Revenues By Program: 2009 Table 1.5 Report Table 1.5 Revenues from Telecommunications and Interconnected VoIP Service Provided for Resale: 2009 Table 1.6 Report Table 1.6 Revenues from Telecommunications and Interconnected VoIP Service Provided to End Users: 2009 Table 1.7 Report Table 1.7 Total Revenues: 2009 Table 1.8 Report Table 1.8 Revenues by Type of Provider: 2009 Table 1.9 Report Table 1.9 Carrier Telecommunications Revenues Reported on FCC Form 499-Q: 2009-2011 Table 1.10 Report Table 1.10 Universal Service Program Requirements and Contribution Factors for 2010-2011 Table 1.11 Report Table 1.11 Universal Service Support Mechanisms: 2009 & 2010 Chart 1.1 Report Chart 1.1 Distribution of Universal Service Payments: 2010 Table 1.12 Report Table 1.12 Universal Service Support Mechanisms by State: 2010 Tables 1.13 - 1.18 Website Table 2.1 Report Table 2.1 Lifeline Subscribers and Link Up Beneficiaries Table 2.2 Report Table 2.2 Low-Income Support Payments Chart 2.1 Deleted Table 2.3 Report Table 2.3 Average Lifeline Monthly Support by ILEC Status and by State (December 2010) Table 2.4 Report Table 2.6 Low-Income Support Payments by State: 2010 (Years 1998 - 2010 are on the website) Tables 2.5 - 2.7 Website Table 2.8 Deleted Tables 2.9 - 2.10 Website Table 2.11 Deleted Table 2.12 Report Table 2.4 Federal Lifeline Average Benefits by State: 2010 Table 2.12 Report Table 2.5 Link Up Average Benefits by State: 2010 Table 3.1 Report Table 2.10 High-Cost Support Fund Disbursement History Chart 3.1 Report Chart 2.3 Total High-Cost Support Fund Disbursements and Reserve Table 3.2 Report Table 2.11 High-Cost Support Fund Disbursement History - ILECs and CETCs Chart 3.2 Report Chart 2.4 Total High-Cost Support Fund Disbursements (ILECs and CETCs) and CETC Reserve Tables 3.3 - 3.37 Website Table 4.1 Report Table 2.19 Schools and Libraries Funding Commitments and Disbursements Table 4.2 Report Table 2.20 Schools and Libraries Funding Commitments and Disbursements by State and by Type of Applicant Tables 4.3 - 4.5 Website Tables 4.6 - 4.7 Deleted Chart 4.1 Deleted Table 5.1 Report Table 2.21 Rural Health Care Funding Disbursements by Funding Year Table 5.2 Report Table 2.22 Rural Health Care Funding Commitments and Disbursements by State Tables 5.3 - 5.4 Website Table 6.1 Report Table 3.1 Household Telephone Subscribership in the United States Chart 6.1 Deleted Table 6.2 Report Table 3.4 Historical Telephone Penetration Estimates Table 6.3 Report Table 3.5 Telephone Penetration by Demographic Characteristics Table 6.4 Report Table 3.6 Telephone Penetration by State, 2003-2011 (Percentage of Occupied Housing Units with Telephone Service) Table 6.5 Report Table 3.7 Telephone Penetration by State, Selected Years (Percentage of Households with a Telephone In Unit) Charts 6.2 - 6.8 Deleted Chart 6.9 Report Chart 3.1 Household Telephone Penetration by Income, 1997-2011 Table 6.6 Deleted Table 6.7 Report Table 3.8 Comparison of Penetration Rates by Level of Lifeline Assistance Table 6.8 Report Table 3.9 Comparison of Penetration Rates and Level of Lifeline Assistance for States Tables 6.9 - 6.13 Deleted Table 6.14 Report Table 3.10 Household Penetration by State and Income, 2011 Tables 6.15 - 6.20 Deleted Table 7.1 Report Table 4.1 Long-Term Changes for Various Price Indices Chart 7.1 Report Chart 4.1 CPI All Goods and Services and CPI Telephone Services, 1960-2010 Table 7.2 Report Table 4.2 Annual Changes in CPI Telephone Service and All Items Indices Chart 7.2 Report Chart 4.2 Annual Changes in CPI All Goods and Services and CPI Telephone Services Table 7.3 Deleted Chart 7.3 Deleted Table 7.4 Report Table 4.3 Monthly Consumer Price Indices Tables 7.5 - 7.6 Deleted Table 7.7 Report Table 4.4 Interstate Per-Line Access Charges Table 7.8 Report Table 4.5 Interstate Per-Minute Access Charges Table 7.9 Report Table 4.6 Interstate Per-Line Access Charges by Carrier Table 7.10 Report Table 4.7 Interstate Per-Minute Access Charges by Carrier Table 8.1 Report Table 5.1 Interstate Switched Access Minutes of Use - Incumbent Local Exchange Carriers by Tier Table 8.2 Deleted Chart 8.1 Report Chart 5.1 Interstate Switched Access Minutes for Incumbent Local Exchange Carriers Table 8.3 Report Table 5.2 ILEC Interstate Access Minutes by State Table 8.3 Website Table 8.4 Deleted Tables 9.1 - 9.5 Deleted 2011 Status of 2010 Monitoring Report Tables and Charts in the 2011 Report 10 Table/Chart # Table/Chart Title Chart 2.1 Lifeline Subscribers and Link Up Beneficiaries Table 2.7 Low-Income Support Received by ILECs and CETCs Chart 2.2 Percent of Low-Income Support Received by CETCs Table 2.8 Low-Income Support by Year-End Holding Company Structure: 2010 Table 2.9 Low-Income Support by Program and Year-End Holding Company Structure: 2010 Table 2.12 High-Cost Support Fund Disbursements - by Mechanism and State: 2010 Table 2.13 High-Cost Support Fund Disbursements by Year-End Holding Company Structure Table 2.14 High-Cost Support Fund Disbursements by Holding Company: 2010 Table 2.15 Study Areas with the Highest Per-Line High-Cost Support Fund Disbursement: 2010 Table 2.16 High-Cost Support Fund Claims History Chart 2.5 Total High-Cost Support Fund Claims and Reserve Table 2.17 High-Cost Support Fund Claim History - ILECs and CETCs Chart 2.6 Total High-Cost Support Fund Claims (ILECs and CETCs) and CETC Reserve Table 2.18 High-Cost Support Fund Claims - by Mechanism and State: 2010 Table 3.2 Household Telephone Penetration by Income, 1997-2011 Table 3.3 Nominal Dollar Equivalents by Year Chart 3.2 Telephone Penetration for Single-Family Households At or Below Multiples of the Federal Poverty Guidelines (FPG), 1997-2011 New Tables and Charts in the 2011 Monitoring Report 11 1 - 1 1. Industry Revenues and Contributions This section provides a general overview of the revenues of the U.S. telecommunications industry and the contributions to the universal service support mechanisms that are based on these revenues. 1 Most of the data for 2009 are from filings of annual Telecommunications Reporting Worksheets (FCC Form 499-A) made with the Universal Service Administrative Company (USAC), the data collection agent for the FCC, on April 1, 2010. 2, 3 Revenue data collected on these worksheets are used to administer contributions to the Universal Service Fund (USF), Interstate Telecommunications Relay Service (TRS), North American Numbering Plan (NANP), and local number portability (LNP) programs. Filer revenues also are used to calculate FCC Interstate Telecommunications Service Provider (ITSP) regulatory fees. Data presented for 2010 and 2011 are from FCC Form 499-Q quarterly filings. Revenue Information The Commission has established several universal service mechanisms, governed by Section 254 of the Telecommunications Act of 1996, that help ensure that all Americans have access to affordable telecommunications service. In Section 254(d) of the Telecommunications Act of 1996, 4 Congress mandated that "[e]very telecommunications carrier that provides interstate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service." 5 The Commission implemented this mandate in a 1997 Report and Order. 6 The Commission subsequently designated USAC as the universal service fund administrator. Telecommunications providers currently file FCC Form 499-A (due on April 1 of each year for the previous calendar year revenues) and FCC Form 499-Q (due one month after the close of each calendar quarter). 1 Portions of this section are based on Industry Analysis and Technology Division, Wireline Competition Bureau, Federal Communications Commission, Telecommunications Industry Revenues (May 2011). 2 Much of the information filed on FCC Form 499-A is proprietary. Publicly available information on individual providers is available at Consumer and Governmental Affairs Bureau, Federal Communications Commission, Telecommunications Reporting Worksheet 499-A Search Form at http://fjallfoss.fcc.gov/cgb/form499/499a.cfm. 3 Telecommunications providers filed worksheets containing calendar year 2010 revenue data on April 1, 2011. The worksheets are filed with USAC, which extensively reviews and validates data. Telecommunications providers routinely make revised filings. As a result, the data are not considered reliable enough for publication for several months after the initial filing date. Therefore, the 2010 filings were not available for use in this report, and 2010 and 2011 data were based on the more abbreviated and less reliable FCC Form 499-Q quarterly filings. April 2010 FCC Form 499-A filings containing 2009 revenues were used to compile the 2009 data. Compilation was based on a database prepared by USAC as of December 2, 2010. Therefore, revised or new 2010 FCC Form 499-A filings that were received after December 2, 2010, are not reflected herein. 4 Pub. L. No. 104-104, 110 Stat. 56 codified at 47 U.S.C. §§ 151 et seq. 5 47 U.S.C. § 254(d). 6 See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776 (1997) (subsequent history omitted). 1 - 2 Virtually all providers of telecommunications must file FCC Form 499-A each year. 7 On June 21, 2006, the Commission ruled that providers of interconnected Voice over Internet Protocol (VoIP) service also must file FCC Form 499-A. 8 These filers first provided whole year revenue information starting with their April 2008 FCC Form 499-A filings. FCC Form 499-A asks each filer to report total (including intrastate), 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 and other USF-exempt telecommunications providers and end users (end-user revenues). 9 Filers must provide further breakdowns of local, mobile wireless, and toll services. (Local and toll services include fixed wireless.) The form also asks each filer to select up to five principal business types that best describe its operations. These principal business types include: 10 • Audio Bridge 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 • Coaxial Cable • Incumbent Local Exchange Carrier (ILEC) 7 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, and entities providing interstate telecommunications exclusively to government or public safety entities are not required to file. In addition, broadcasters, non-profit schools, non-profit libraries, non-profit colleges, non-profit universities, and non-profit health care providers 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. However, services provided to exempt entities may be subject to contribution requirements and therefore exempt entities may be required to pay USF pass through charges to their underlying service providers. 8 See Universal Service Contribution Methodology; Federal-State Joint Board on Universal Service, 1998 Biennial Regulatory Review – Streamlined Contributor Reporting Requirements Associated with Administration of Telecommunications Relay Service, North American Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms, Telecommunications Services for Individuals with Hearing and Speech Disabilities, and the Americans with Disabilities Act of 1990, Administration of the North American Numbering Plan and North American Numbering Plan Cost Recovery Contribution Factor and Fund Size, Number Resource Optimization, Telephone Number Portability, Truth-in-Billing and Billing Format, WC Docket No. 06-122, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95- 116, 98-170, Report and Order and Notice of Proposed Rulemaking and Report and Order, 21 FCC Rcd 7518 (2006) (2006 Contribution Methodology Reform Order). 9 Telecommunications providers are considered de minimis and thus are not required to contribute to universal service (or file 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 providers as end users. 10 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-2011.pdf. The 2004 through 2006 forms included a category for “All Distance” carriers. 1 - 3 • Interconnected VoIP • Interexchange Carrier (IXC) • Local Reseller • Operator Service Provider (OSP) • Other Local Service Provider • Other Mobile Service Provider • Other Toll Service Provider • Paging and Messaging Service Provider • Payphone Provider • Prepaid Calling Card Provider • Private Service Provider • Satellite Service Provider • Shared-Tenant Service Provider • Specialized Mobile Radio - Dispatch • Toll Reseller • Wireless Data Service Provider The Form 499-A instructs filers to report amounts actually billed to customers. This means that filers are required to report revenues net of discounts, but without making adjustments to reflect uncollectible revenues or international settlement payments and receipts. Most filers are 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. Mobile wireless and interconnected VoIP providers may use the interim safe harbor percentages to estimate the interstate portion of their revenues. 11 Form 499-A filings sometimes contain inaccurate data. Initial examination of the data occasionally reveals provider 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 or as a result of audits. Nonetheless, disaggregated data are likely to be less accurate than industry totals. Table 1.1 shows the major components of telecommunications revenues for 2000 through 2010. This table was created by aggregating revenue by major service classifications, i.e. local, mobile, and toll, and separately by intrastate and interstate and international. Tables 1.2 and 1.3 provide a look at detailed industry revenues over time. Generally, Form 499-A revenue data can be aggregated in two distinct ways: by type of service provided and by the filer’s principal business activity. 12 Table 1.2 categorizes revenues by type of service and shows, for example, that providers 11 See Instructions to the Telecommunications Reporting Worksheet, FCC Form 499-A Section III.C.3., available at www.fcc.gov/Forms/Form499-A/499a-2011.pdf. In 2001 and 2002, the interim safe harbor for mobile wireless carriers was 15%. In December 2002, the Commission raised the mobile wireless interim safe harbor to 28.5%. Mobile wireless carriers began reporting revenues based on the higher interim safe harbor percent on the FCC Form 499-Q due on February 1, 2003, and began contributing on this basis in April 2003. In the 2006 Contribution Methodology Reform Order, the Commission raised the mobile wireless interim safe harbor to 37.1%. Mobile wireless carriers began reporting revenues based on this higher interim safe harbor percent in the FCC Form 499-Q due on August 1, 2006. The safe harbor for interconnected VoIP providers is 64.9%. 12 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 1 - 4 reported $118.1 billion in mobile service revenues for 2009. Note that this total includes mobile service revenues from some providers whose principal business activity is not mobile service. In contrast, Table 1.3 shows that filers whose principal business activity is mobile service reported total revenues of $120.6 billion for 2009, and this includes some revenues for fixed local and toll services. Table 1.4 illustrates how data from the Form 499-A are used to develop a funding base for the USF. 13 As noted above, providers are considered de minimis for USF purposes if their annual contribution is expected to be less than $10,000. Revenue data for individual filers are not available to the public. However, Tables 1.5 through 1.8 present detailed industry subtotals by type of service and type of business. Starting with the 2009 data, roll-up statistics are presented for the five holding companies with the most end-user telecommunications and interconnected VoIP revenues. In 2009, the top five providers were AT&T Inc., Deutsche Telekom AG, Qwest Services Corp., Sprint Nextel Corporation, and Verizon Communications, Inc. In previous reports, these tables showed detail for the Regional Bell Operating Companies (RBOCs). Table 1.5 displays carrier’s carrier revenue by detailed service type including each Form 499-A revenue line item. Table 1.6 displays similar detail for each of the revenue categories used to report telecommunications service provided to end users. 14 Table 1.7 combines data from Tables 1.5 and 1.6 with data on non-telecommunications revenues to obtain total industry revenues. Table 1.8 presents revenue data at a higher level of aggregation and includes detail on USF base; intrastate, interstate, international-to- international, other international; and non-telecommunications revenues. Table 1.9 presents data from quarterly filings of Form 499-Q for 2009, 2010, and 2011. Form 499-Q is far less detailed than Form 499-A. Because Form 499-Q filings do not include a business type, filers were categorized based on the principal business activity selected on their most recent Form 499-A filings. The quarterly form asks filers to identify revenues as carrier’s carrier, end user, or non-telecommunications and to indicate the interstate and international shares of each category. Unlike Form 499-A, the quarterly form does not require filers to classify revenues by types of service. Also, international-to-international revenues are included with non-telecommunications revenues rather than with end user revenues on the quarterly form. 15 As noted above, the universal service rules prohibit the fund administrator from releasing company- specific information contained in Form 499-A and Form 499-Q worksheets. 16 Revenue data for individual filers are not available to the public. long distance category of Table 1.2 may contain some switched toll revenues, perhaps significant amounts in some years. 13 See Telecommunications Industry Revenues (May 2011), available at www.fcc.gov/wcb/iatd/lec.html for a comparison with the funding bases used for the TRS, NANPA, and LNPA support mechanisms. 14 The revenue categories presented in Tables 1.5 through 1.7 are explained in the Form 499-A filing instructions. 15 Filers record international-to-international revenues for calls that they receive outside the United States and that they carry to points outside the United States where the filer is operating as a U.S. carrier. 16 47 C.F.R. §54.711(b). 1 - 5 Program Requirements and Contribution Factors Contributors make payments into the USF based on their interstate and international end user telecommunications revenues. Contributors report their revenue data to USAC, which collects the data and reports them to the Commission. The Commission reviews program requirements and the revenue data and determines the appropriate contribution factor. The Commission’s Office of Managing Director releases a public notice stating the proposed contribution factor for the upcoming quarter. If, after 14 days, the Commission takes no action regarding the proposed contribution factor, the factor becomes final. 17 In February 2002, the Commission issued an order that, in part, eliminated from the contribution base charges identified on customers’ bills as amounts recovering contributions to the universal service support mechanisms, i.e. USF pass through surcharges. This change was intended to prevent double assessment of the pass through surcharges, a situation known as “circularity.” 18 Prior to these changes, providers filed historic revenue information each quarter, including revenue derived from pass through surcharges, and the Commission would use these revenue totals along with total estimated program requirements to calculate the contribution factor. 19 In anticipation of this double assessment, providers would frequently inflate their reported USF pass through surcharges (reported on Line 403) above the contribution factor. The elimination of circularity was implemented in the third quarter of 2002. It reduced each provider’s contribution base by the amount that the provider paid into USF during the prior quarter. The line item “Circularity Adjustment” in Table 1.10 accounts for this change. This eliminated circularity as a reason for providers to inflate pass through charges. In December 2002, the Commission adopted an order that changed the basis for contribution assessments from historic gross-billed revenues to projected collected revenues. 20 This change also addressed the reason given by service providers with declining revenue for marking up their pass through charges. These service providers argued that they had to contribute based on historic amounts that were greater than their current period billings, resulting in the need to mark up their pass through charges. This change was fully implemented in the second quarter of 2003. Having addressed circularity and changing the contribution assessment methodology to address declining revenues, the two main reasons cited by providers for marking up their pass through charges, the Commission adopted a rule requiring those contributors that recover their universal service contributions through a universal service line item to limit their recovery to the interstate portion of the customer’s bill times the relevant contribution factor. 21 17 47 C.F.R. §54.709(a)(3). 18 See Federal-State Joint Board on Universal Service, et al, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116, 98-170, Further Notice of Proposed Rulemaking and Report and Order, 17 FCC Rcd 3752 (2002). 19 The Commission reduces the revenue estimates by 1% to account for uncollectibles. 20 See Federal-State Joint Board on Universal Service, et al, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116, 98-170, Report and Order and Second Further Notice of Proposed Rulemaking, 17 FCC Rcd 24952 (2002). 21 47 C.F.R. §54.712. 1 - 6 Form 499-Q filers now file information on billed revenues for the previous quarter and both projected billed revenues and projected collected revenues for the upcoming quarter. Projected collected revenues, which are projected billed revenues less an allowance for uncollectible revenues, form the basis for USF contribution assessments. Projected collected revenues are then adjusted to eliminate circularity. Starting with the second quarter of 2003, the "Circularity Adjustment" amounts shown in Table 1.10 (discussed in more detail below) reflect expected USF contributions for the quarter rather than the industry's actual contributions from a prior quarter. Table 1.10 shows the program funding requirements for 2010 and 2011. For each program and for each quarter, the table lists projected program demand, administrative costs, interest income, and periodic true-ups. The table also shows the revenue base and contribution factors for each quarter. As explained above, the contribution base is 1% less than reported revenues to reflect the fact that some contribution assessments may prove uncollectible. Sprint Nextel Corporation and Cellco Partnership d/b/a Verizon Wireless, in separate transactions in 2008, each committed to surrender their high cost universal service support over five years. 22 The first installment of this voluntary commitment occurred in the fourth quarter of 2009. Table 1.11 shows universal service disbursements on a mechanism-by-mechanism basis for 2009 and 2010. 23 Chart 1.1 shows the 2010 information graphically. Table 1.12 shows, on a state-by-state basis, the total amount of funding disbursements for each of the universal service mechanisms, estimated contributions towards universal service, and the net estimated dollar flow (disbursements less estimated contributions) for 2010. 24 22 See Applications of Cellco Partnership d/b/a Verizon Wireless and Atlantis Holdings LLC For Consent to Transfer Control of Licenses, Authorizations, and Spectrum Manager and De Facto Transfer leasing Arrangements and Petition for Declaratory Ruling that the Transaction is Consistent with Section 310(b)(4) of the Communications Act, WT Docket No. 08-95, File Nos. 0003463892, et al., ITC-T/C-20080613- 00270, et al., File No. ISP-PDR-20080613-00012, Memorandum Opinion and Order and Declaratory Ruling, 23 FCC Rcd 17444 (2008); Sprint Nextel Corporation and Clearwire Corporation, Applications For Consent to Transfer Control of Licenses, Leases, and Authorizations, WT Docket No. 08-94, File Nos. 0003462540 et al., Memorandum Opinion and Order, 23 FCC Rcd 17570 (2008). 23 Dollar values in Table 1.11 differ from those in Table 1.10 due to the difference between projected demand and actual disbursements. The values used in Tables 1.11 and 1.12 include disbursements that were committed over several years but paid out in the appropriate calendar year. In Section 2, values for the schools and libraries program and the rural health care program are reported based on fiscal year rather than calendar year. 24 For a discussion of the methodology used to estimate contributions per state, see the Technical Appendix at www.fcc.gov/wcb/iatd/monitor.html. Table 1.1 Total Telecommunications Industry Revenues 1 (in Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Carrier's Carrier Revenues 2 Local Service 3 $36,621 $40,108 $38,412 $37,742 $38,546 $39,213 $39,392 $38,383 $39,200 $38,285 $42,363 Mobile Service 5,144 6,180 5,020 4,465 4,164 6,334 5,187 5,360 5,630 4,284 5,010 Toll Service 21,849 19,999 16,476 18,205 15,703 16,892 15,101 16,093 13,623 13,003 10,937 Intrastate 25,553 27,848 25,770 24,825 25,852 27,486 24,848 22,566 21,836 20,173 21,167 Interstate and International 4 38,060 38,439 34,138 35,587 32,561 34,953 34,831 37,270 36,617 35,399 37,143 Total 63,613 66,287 59,907 60,412 58,413 62,439 59,679 59,836 58,452 55,571 58,309 End User Revenues 2 Local Service 3 84,526 87,704 88,712 86,474 83,407 82,382 78,215 75,042 72,693 68,460 64,908 Mobile Service 56,857 68,507 76,501 85,254 94,404 100,743 110,096 115,865 118,855 113,861 110,912 Toll Service 87,767 79,302 67,222 58,983 55,511 52,358 49,278 48,709 47,365 43,159 40,702 Intrastate 147,465 155,347 154,815 150,889 153,265 154,310 157,653 158,380 157,737 149,493 144,022 Interstate and International 4 81,685 80,165 77,619 79,822 80,057 81,173 79,937 81,235 81,176 75,988 72,499 Total 229,149 235,513 232,434 230,711 233,322 235,482 237,589 239,615 238,913 225,481 216,521 Total Revenues Local Service 3 121,147 127,812 127,123 124,216 121,953 121,595 117,607 113,425 111,893 106,745 107,270 Mobile Service 62,000 74,687 81,521 89,718 98,568 107,076 115,283 121,225 124,485 118,145 115,921 Toll Service 109,615 99,301 83,697 77,188 71,214 69,250 64,379 64,802 60,988 56,162 51,639 Intrastate 173,018 183,195 180,585 175,714 179,117 181,796 182,501 180,946 179,573 169,666 165,189 Interstate and International 4 119,745 118,605 111,756 115,409 112,617 116,125 114,768 118,505 117,793 111,387 109,642 Total $292,762 $301,799 $292,341 $291,123 $291,734 $297,921 $297,268 $299,451 $297,365 $281,052 $274,831 Note: Detail may not add to totals due to rounding. 1 2 3 4 5 Preliminary 5 Preliminary 2010 data are based on FCC Form 499-Q quarterly filings through February 28, 2011. 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 2010 are based on type of filer rather than on data filed by service. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). Data include revenues for de minimis filers as well as for other carriers that are exempt from universal service contribution requirements. 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. See Table 1.4 for further details on contribution bases. Payphone revenues are included with local service revenues in this table. Revenues from calls that both originate and terminate in foreign points are reported as end-user revenues, and are included in this table through 2009, but are not included in the universal service contribution base. These revenues are not included in preliminary 2010 data. 1 - 7 Table 1.2 Telecommunications Industry Revenues by Service (in Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Local Exchange $69,947 $72,346 $71,320 $70,606 $68,238 $66,506 $63,264 $62,790 $60,871 $56,839 Pay Telephone 1,932 1,585 1,192 1,063 1,002 924 659 470 379 268 Local Private Line 16,864 21,966 23,070 22,415 23,840 25,673 25,448 24,307 26,314 27,098 Other Local 3,249 3,391 3,418 3,242 2,944 3,331 3,884 3,227 3,321 3,531 Subscriber Line Charges 11,563 12,127 12,758 12,136 11,715 11,113 10,827 10,141 9,283 8,363 Access 17,017 15,096 13,955 12,972 12,352 11,822 11,392 10,543 9,776 8,778 575 1,301 1,410 1,783 1,862 2,227 2,133 1,947 1,948 1,869 Total Local Service and Payphone 121,147 127,812 127,123 124,216 121,953 121,595 117,607 113,425 111,893 106,745 Wireless Service 61,505 74,006 80,678 88,023 96,450 104,489 112,442 117,939 120,934 114,625 495 681 842 1,696 2,118 2,587 2,841 3,286 3,551 3,520 Total Mobile Service 62,000 74,687 81,521 89,718 98,568 107,076 115,283 121,225 124,485 118,145 11,406 10,389 7,902 6,567 6,542 6,631 5,577 5,874 5,664 4,340 Non-Operator Switched Toll 75,183 65,325 54,475 50,178 46,387 44,876 41,570 42,518 38,959 34,943 Long Distance Private Line 16,189 16,402 15,108 15,316 13,906 13,264 12,739 12,080 11,683 11,649 Other Long Distance 3,372 3,259 2,445 2,222 1,801 2,021 2,154 1,661 2,071 2,708 3,467 3,927 3,767 2,905 2,577 2,458 2,340 2,669 2,611 2,522 Total Toll Service 109,615 99,301 83,697 77,188 71,214 69,250 64,379 64,802 60,988 56,162 Total Telecommunications 292,762 301,799 292,341 291,122 291,735 297,921 297,269 299,451 297,366 281,052 Non-Telecommunications 42,261 48,036 60,406 65,186 71,493 86,764 101,061 131,615 151,494 158,859 Total Reported Revenues 335,023 349,835 352,747 356,308 363,227 384,685 398,329 431,066 448,860 439,911 Service Reported as: Intrastate 173,018 183,195 180,585 175,714 179,129 181,796 182,501 180,946 179,573 169,666 Interstate and International 119,745 118,605 111,756 115,409 112,605 116,125 114,768 118,505 117,793 111,387 Total Telecommunications $292,762 $301,799 $292,341 $291,123 $291,734 $297,921 $297,268 $299,451 $297,365 $281,052 1 Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). Universal Service Surcharges on Local Service Bills 1 Additional Revenues from TRS Worksheets Universal Service Surcharges on Local Service Bills 1 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. Operator 1 Additional Revenues from TRS Worksheets Universal Service Surcharges on Local Service Bills 1 Additional Revenues from TRS Worksheets Note: Detail may not add to totals due to rounding. Some data for prior years have been revised. 1 - 8 Service Provider Category 1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Incumbent Local Exchange Carriers $116,158 $117,885 $114,990 $109,480 $105,496 $103,561 $99,997 $93,885 $89,732 $83,451 Competitive Access Providers (CAPs) and Competitive Local Exchange Carriers (CLECs) 9,814 12,998 13,043 15,509 15,112 16,930 17,276 17,476 20,980 16,880 Interconnected VoIP 514 2,394 3,541 9,379 Local Resellers 879 1,393 1,538 721 1,215 630 460 594 540 461 Other Local Exchange Carriers 11 329 406 338 245 216 124 181 288 344 Private Service Providers 39 15 281 267 532 770 1,080 1,031 1,051 1,190 Shared-Tenant Service Providers 202 46 42 22 22 22 19 14 39 35 Competitors of Incumbent LECs 10,945 14,781 15,309 16,857 17,126 18,568 19,473 21,690 26,440 28,289 Fixed Local Service Providers 127,103 132,666 130,300 126,337 122,622 122,128 119,470 115,575 116,172 111,740 Payphone Providers 972 836 641 523 445 481 435 388 275 209 Mobile Telephony Including Cellular, 59,823 71,887 78,568 88,168 98,329 107,834 116,971 123,968 127,730 120,007 Personal Communications Service (PCS) and SMR Telephony Carriers Paging & Messaging Service 3,102 2,197 1,473 1,007 872 579 555 607 426 361 Specialized Mobile Radio (SMR) 191 188 206 33 46 226 48 188 40 71 Dispatch Mobile Data Service Providers and Other Mobile Service Providers 164 324 220 135 218 169 178 180 119 157 Mobile Service Providers 63,280 74,596 80,467 89,342 99,465 108,809 117,752 124,943 128,314 120,597 Interexchange Carriers (IXCs) 87,311 81,272 68,146 61,246 51,589 46,856 44,083 43,701 37,358 32,780 Operator Service Providers (OSPs) 635 611 554 567 523 548 631 595 1,063 940 Prepaid Calling Card Providers 727 133 460 812 1,635 1,828 1,713 2,195 1,999 1,869 Satellite Service Providers 336 373 406 663 721 714 444 708 860 910 Toll Resellers 10,641 8,797 9,279 9,294 12,192 13,362 9,943 8,314 8,256 8,021 Audio Bridge Service Providers 42 58 273 1,185 Other Toll Carriers 1,758 2,516 2,089 2,339 2,543 3,195 2,756 2,973 2,795 2,802 Toll Service Providers 101,407 93,702 80,934 74,920 69,204 66,503 59,611 58,545 52,604 48,507 Total Telecommunications Revenues $292,762 $301,799 $292,341 $291,123 $291,734 $297,921 $297,268 $299,451 $297,365 $281,052 1 Table 1.3 Telecommunications and Interconnected VoIP Revenues Reported by Type of Carrier (in Millions) Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 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, for 2003 through 2005, some filers identified themselves as all distance carriers. These filers have been reclassified to be consistent with prior classifications. Starting with the 2007 FCC Form 499-A filing, which reported 2006 revenue data, some filers identified themselves as interconnected VoIP providers and some filers first began reporting revenues for these services. 1 - 9 Table 1.4 Contribution Base Revenues By Program (2009) 1 (in Millions) 2009 Revenues subject to universal service contribution Billed interstate and international end-user revenues [ Line 412(e) + Line 420(d) + Line 420(e) ] $75,988 less revenues for international-to-international services [ Line 412(e) ] $576 less international revenues of international-only filers and international revenues that were excluded $3,393 because of the LIRE exemption 2 less interstate and other international revenues for 1,775 filers who are de minimis or otherwise exempt from universal service support requirements $49 less uncollectible contribution base revenues [ Line 422(d) + Line 422(e) ] $1,075 (Does not include uncollectible amounts associated with revenues excluded above.) equals $70,895 Revenues subject to TRS contribution Interstate and international end-user revenues $75,988 less interstate and international revenues for 144 filers who identify themselves as private service 445 providers or as shared-tenant 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 388 because it was provided to carriers that do not contribute to universal service support mechanisms [ Line 511(b) ] equals $75,155 Revenues subject to NANPA and LNP contribution Total telecommunications service end-user revenues (including intrastate, interstate and international) $225,481 less telecommunications revenues for 533 filers who identify themselves as private service providers, 806 shared-tenant 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 412 was provided to carriers that do not contribute to universal service support mechanisms [ Line 511 (a) ] equals $224,262 1 2 Source: FCC Form 499. This table shows how contribution bases differ for different programs and provides relative magnitudes, but does not provide the actual amounts used for determining contributions. Amounts shown represent the amounts contained in the FCC Form 499-A database as of December 2, 2010. A provider receives the LIRE Exemption, and its international revenues are excluded from the contribution base, if the total amount of interstate end- user revenues for the filing entity consolidated with all affiliates is less than 12% of the total of interstate and international end-user 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. The universal service administrator continues to receive additional and corrected filings. Exempt amounts were based on revenues and the filer type (i.e., principal business activity) 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 are required to 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. The 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. 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 different amounts than those shown. 1 - 10 Table 1.5 Revenues from Telecommunications and Interconnected VoIP Service Provided for Resale (2009) 1 (in Millions) Data from FCC Form 499-A Five Holding Companies Incumbent Local Exchange Carriers With Most End-User Revenues Other than Affiliates of the Top Five 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) $1,596 $95 $0 $1,691 $142 $13 * $155 .2 Provided under other arrangements 819 491 27 1,337 67 61 0 128 Total Line 303 2,415 585 27 3,028 209 74 * 283 304 Per-minute charges for originating or terminating calls .1 Provided under state or federal access tariff 1,838 1,888 0 3,726 1,621 900 2 2,522 .2 Provided as unbundled network elements or other contract arrangement 445 330 0 775 96 8 * 104 Total Line 304 2,283 2,218 0 4,501 1,717 908 2 2,626 305 Local private line & special access 644 12,547 * 13,191 400 1,995 * 2,395 306 Payphone compensation from toll carriers 8 12 0 19 1 3 * 3 307 Other local telecommunications service revenues 2,079 523 0 2,602 40 12 0 51 308 Universal service support revenues received from 645 960 0 1,605 647 1,991 * 2,639 Federal or state sources Total fixed local service provided for resale 8,074 16,844 27 24,946 3,013 4,982 2 7,996 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 2,321 729 0 3,050 28 31 * 59 Total mobile service provided for resale 2,321 729 0 3,050 28 31 * 59 Toll service 310 Operator and toll calls with alternative billing 4 95 2 101 * * 0 * arrangements (credit card, collect, international call-back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 949 2,035 731 3,715 3 1 * 4 toll-free 8xx service, "10-10 calls", associated monthly account maintenance, PICC pass-through, and other switched services not reported above) 312 Long distance private line services 90 1,021 18 1,129 6 5 0 10 313 Satellite services 0 * * * * 0 0 * 314 All other long distance services 1 48 57 105 5 * * 5 Total toll service provided for resale 1,044 3,199 808 5,051 13 6 * 20 315 Total service provided for resale (carrier's carrier) $11,439 $20,772 $835 $33,047 $3,054 $5,019 $3 $8,075 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 11 Table 1.5 Revenues from Telecommunications and Interconnected VoIP Service Provided for Resale (2009) 1 Continued (in Millions) Data from FCC Form 499-A CLECs and other Local Competitors Payphone Providers Other than Affiliates of the Top Five Other than Affiliates of the Top Five 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) $66 $188 $1 $254 * * $0 * .2 Provided under other arrangements 147 48 * 195 0 0 0 0 Total Line 303 212 236 1 449 * * 0 * 304 Per-minute charges for originating or terminating calls .1 Provided under state or federal access tariff 549 514 3 1,066 0 0 0 0 .2 Provided as unbundled network elements or other contract arrangement 351 123 36 509 0 0 0 0 Total Line 304 900 637 39 1,576 0 0 0 0 305 Local private line & special access 1,346 714 55 2,115 0 0 0 0 306 Payphone compensation from toll carriers 1 2 * 3 22 40 1 63 307 Other local telecommunications service revenues 26 17 * 43 * * * * 308 Universal service support revenues received from 46 42 * 87 * * * * Federal or state sources Total fixed local service provided for resale 2,530 1,648 96 4,274 23 40 1 64 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 13 4 0 17 0 0 0 0 Total mobile service provided for resale 13 4 0 17 0 0 0 0 Toll service 310 Operator and toll calls with alternative billing 3 1 * 3 1 1 * 1 arrangements (credit card, collect, international call-back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 382 602 154 1,139 * * 0 * toll-free 8xx service, "10-10 calls", associated monthly account maintenance, PICC pass-through, and other switched services not reported above) 312 Long distance private line services 288 540 24 852 0 0 0 0 313 Satellite services 1 184 * 185 0 0 0 0 314 All other long distance services 7 6 * 12 * * 0 * Total toll service provided for resale 680 1,332 179 2,191 1 1 * 1 315 Total service provided for resale (carrier's carrier) $3,224 $2,983 $274 $6,481 $23 $41 $1 $65 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 12 Table 1.5 Revenues from Telecommunications and Interconnected VoIP Service Provided for Resale (2009) 1 Continued (in Millions) Data from FCC Form 499-A Mobile Telephony Other Mobile Other than Affiliates of the Top Five Other than Affiliates of the Top Five 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) $7 $0 * $8 * $0 $0 * .2 Provided under other arrangements * 0 0 * 0 0 0 0 Total Line 303 8 0 * 8 * 0 0 * 304 Per-minute charges for originating or terminating calls .1 Provided under state or federal access tariff 1 2 * 3 * * 0 * .2 Provided as unbundled network elements or other contract arrangement 11 2 0 13 1 * 0 1 Total Line 304 11 4 * 15 1 * 0 1 305 Local private line & special access 28 1 0 29 * 20 * 20 306 Payphone compensation from toll carriers 0 0 0 0 * * * * 307 Other local telecommunications service revenues 2 1 * 2 38 1 * 40 308 Universal service support revenues received from 343 132 0 475 5 * 0 5 Federal or state sources Total fixed local service provided for resale 392 137 * 530 44 22 * 66 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 772 274 4 1,050 43 6 4 52 Total mobile service provided for resale 772 274 4 1,050 43 6 4 52 Toll service 310 Operator and toll calls with alternative billing 4 1 * 5 0 0 0 0 arrangements (credit card, collect, international call-back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 66 23 * 89 0 4 2 7 toll-free 8xx service, "10-10 calls", associated monthly account maintenance, PICC pass-through, and other switched services not reported above) 312 Long distance private line services 1 * 0100 00 313 Satellite services 0 0 0000 314 All other long distance services 1 1 * 3 * * 0 * Total toll service provided for resale 72 25 * 98 * 4 2 7 315 Total service provided for resale (carrier's carrier) $1,236 $436 $5 $1,677 $87 $32 $6 $125 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 13 Table 1.5 Revenues from Telecommunications and Interconnected VoIP Service Provided for Resale (2009) 1 Continued (in Millions) Data from FCC Form 499-A Toll Carriers Total All Filers Other than Affiliates of the Top Five Other than Affiliates of the Top Five 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) $1 * $0 $1 $1,813 $295 $1 $2,109 .2 Provided under other arrangements 13 8 1 21 1,045 608 28 1,681 Total Line 303 13 8 1 22 2,857 903 30 3,790 304 Per-minute charges for originating or terminating calls .1 Provided under state or federal access tariff 33 26 * 59 4,041 3,331 5 7,376 .2 Provided as unbundled network elements or other contract arrangement * * 0 * 903 462 36 1,402 Total Line 304 33 27 * 60 4,944 3,793 41 8,778 305 Local private line & special access 152 95 24 270 2,570 15,372 79 18,021 306 Payphone compensation from toll carriers * * 1 1 32 56 2 89 307 Other local telecommunications service revenues 13 7 * 20 2,197 561 * 2,759 308 Universal service support revenues received from 27 10 0 37 1,714 3,135 * 4,849 Federal or state sources Total fixed local service provided for resale 238 146 26 409 14,314 23,819 152 38,285 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 309 Monthly, activation, and message charges except toll 34 18 4 56 3,210 1,061 12 4,284 Total mobile service provided for resale 34 18 4 56 3,210 1,061 12 4,284 Toll service 310 Operator and toll calls with alternative billing 12 37 414 463 23 133 417 574 arrangements (credit card, collect, international call-back, etc.) 311 Ordinary long distance (direct dialed MTS, customer 597 871 2,659 4,127 1,997 3,536 3,547 9,081 toll-free 8xx service, "10-10 calls", associated monthly account maintenance, PICC pass-through, and other switched services not reported above) 312 Long distance private line services 214 385 232 831 599 1,950 274 2,823 313 Satellite services 3 62 83 148 4 246 83 333 314 All other long distance services 11 19 37 67 25 74 94 193 Total toll service provided for resale 838 1,372 3,426 5,636 2,648 5,939 4,416 13,003 315 Total service provided for resale (carrier's carrier) $1,110 $1,536 $3,455 $6,101 $20,173 $30,819 $4,579 $55,571 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 14 Table 1.6 Revenues from Telecommunications and Interconnected VoIP Service Provided to End Users: 2009 (in Millions) Data from FCC Form 499-A Five Holding Companies Incumbent Local Exchange Carriers With Most End-User Revenues Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges: .1 & .3 Traditional Circuit Switched $28,584 $17 * $28,601 $6,318 $19 $0 $6,336 .4 & .5 Interconnected Voice over Internet Protocol $244 $161 * $406 * $1 $0 $2 405 Tariffed subscriber line charges and PICC charges 126 5,547 0 5,673 42 1,540 * 1,581 levied by a local exchange carrier on a no-PIC customer Total local exchange (Line 404 + Line 405) 28,954 5,725 * 34,679 6,360 1,559 * 7,919 406 Local private line and special access service 2,790 3,633 1 6,424 530 469 * 1,000 407 Payphone coin revenues (local and long distance) 61 * * 61 14 * * 14 408 Other local telecommunications service revenues 345 10 0 355 26 1 * 27 Line 403 surcharges on fixed local service 1 156 1,060 * 1,216 26 226 0 252 Total fixed local service provided to end users 32,306 10,428 2 42,735 6,956 2,257 * 9,212 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 64,435 19,877 184 84,496 303 55 0 359 410 Message charges including roaming, but excluding 8,480 2,601 118 11,199 29 13 * 42 toll charges Line 403 surcharges on mobile service 1 462 2,673 5 3,140 2 8 0 10 Total mobile service provided to end users 73,377 25,151 307 98,835 334 76 * 410 Toll service 411 Prepaid calling card (including card sales to 48 54 37 138 * * * * customers and non-carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in 0 0 262 262 0 0 0 0 foreign points 413 Operator and toll calls with alternative billing 150 151 86 386 4 * * 4 arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct-dialed MTS, customer 5,839 8,918 2,854 17,611 220 45 3 268 toll-free 8xx service, "10-10" calls, associated monthly account maintenance, PICC pass-through, and other switched services not reported above), including long distance charges bundled with local exchange service 415 Long distance private line services 1,794 4,722 161 6,677 47 4 * 51 416 Satellite services 1 5 8 14 0 0 0 0 417 All other long distance services 93 495 18 607 2 * 0 2 Line 403 surcharges on toll service 1 38 1,733 116 1,887 1 5 * 6 Total toll service provided to end users 7,963 16,078 3,540 27,581 274 54 3 332 Total telecommunications and interconnected VoIP 113,646 51,657 3,849 169,151 7,564 2,387 3 9,954 service provided to end users 422 Uncollectible revenue/bad debt expense associated 2,007 684 58 2,749 136 30 * 166 with end user revenues other than Line 412 423 Net universal service contribution base revenues $111,639 $50,973 $3,529 $166,140 $7,428 $2,357 $3 $9,788 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 15 Table 1.6 Revenues from Telecommunications and Interconnected VoIP Service Provided to End Users: 2009 Continued (in Millions) Data from FCC Form 499-A CLECs and other Local Competitors Payphone Providers Other than Affiliates of the Top Five Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges: .1 & .3 Traditional Circuit Switched $5,150 $167 $8 $5,325 * $0 $0 * .4 & .5 Interconnected Voice over Internet Protocol $5,300 $1,312 $154 $6,765 $0 $0 $0 $0 405 Tariffed subscriber line charges and PICC charges 56 986 1 1,043 0 0 0 0 levied by a local exchange carrier on a no-PIC customer Total local exchange (Line 404 + Line 405) 10,505 2,466 163 13,134 * 0 0 * 406 Local private line and special access service 1,054 391 10 1,455 1 * * 1 407 Payphone coin revenues (local and long distance) 1 * * 1 86 5 * 91 408 Other local telecommunications service revenues 318 32 1 351 * 1 * 1 Line 403 surcharges on fixed local service 1 59 317 3 378 0 * 0 * Total fixed local service provided to end users 11,937 3,206 176 15,318 87 5 * 93 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 19 19 1 39 * * * * 410 Message charges including roaming, but excluding 2 4 * 5 * * 0 * toll charges Line 403 surcharges on mobile service 1 * 3 * 3 0 0 0 0 Total mobile service provided to end users 21 25 1 47 * * * 1 Toll service 411 Prepaid calling card (including card sales to 3 3 7 13 * * * 1 customers and non-carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in 0 0 51 51 0 0 * * foreign points 413 Operator and toll calls with alternative billing 9 3 2 14 46 4 * 50 arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct-dialed MTS, customer 1,438 1,795 349 3,582 * * * * toll-free 8xx service, "10-10" calls, associated monthly account maintenance, PICC pass-through, and other switched services not reported above), including long distance charges bundled with local exchange service 415 Long distance private line services 336 764 59 1,159 0 0 0 0 416 Satellite services * 7 17 24 * * * * 417 All other long distance services 11 37 2 49 * * 0 * Line 403 surcharges on toll service 1 8 290 10 308 0 0 0 0 Total toll service provided to end users 1,804 2,900 496 5,200 46 4 1 50 Total telecommunications and interconnected VoIP 13,762 6,131 673 20,565 134 9 1 144 service provided to end users 422 Uncollectible revenue/bad debt expense associated 227 87 8 322 1 * * 1 with end user revenues other than Line 412 423 Net universal service contribution base revenues $13,535 $6,043 $614 $20,192 $133 $9 $1 $143 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 16 Table 1.6 Revenues from Telecommunications and Interconnected VoIP Service Provided to End Users: 2009 Continued (in Millions) Data from FCC Form 499-A Mobile Telephony Other Mobile Other than Affiliates of the Top Five Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges: .1 & .3 Traditional Circuit Switched $9 * $0 $9 $11 * $0 $11 .4 & .5 Interconnected Voice over Internet Protocol $8 $1 $0 $10 $3 $1 * $4 405 Tariffed subscriber line charges and PICC charges 0 7 0 7 0 0 0 0 levied by a local exchange carrier on a no-PIC customer Total local exchange (Line 404 + Line 405) 17 9 0 26 13 1 * 14 406 Local private line and special access service 21 1 0 22 20 2 0 21 407 Payphone coin revenues (local and long distance) 0 0 0 0 * * * * 408 Other local telecommunications service revenues 2 * 0 2 13 * * 13 Line 403 surcharges on fixed local service 1 * 1 0 2 * * 0 * Total fixed local service provided to end users 40 12 0 52 46 3 * 49 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 8,779 2,583 15 11,377 334 40 * 374 410 Message charges including roaming, but excluding 1,706 400 17 2,123 9 1 1 11 toll charges Line 403 surcharges on mobile service 1 43 310 * 354 1 4 0 5 Total mobile service provided to end users 10,528 3,293 32 13,853 344 45 1 390 Toll service 411 Prepaid calling card (including card sales to 7 4 5 15 * * * * customers and non-carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in 0 0 6 6 0 0 0 0 foreign points 413 Operator and toll calls with alternative billing 6 * 1 7 0 0 * * arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct-dialed MTS, customer 80 45 86 211 6 3 4 13 toll-free 8xx service, "10-10" calls, associated monthly account maintenance, PICC pass-through, and other switched services not reported above), including long distance charges bundled with local exchange service 415 Long distance private line services * * * 1 1 3 0 4 416 Satellite services * * 0 * * * * * 417 All other long distance services * 4 2 7 * * 0 * Line 403 surcharges on toll service 1 * 6 1 7 * * * * Total toll service provided to end users 93 59 101 253 7 7 4 18 Total telecommunications and interconnected VoIP 10,661 3,364 134 14,159 397 55 5 457 service provided to end users 422 Uncollectible revenue/bad debt expense associated 553 134 2 689 4 * * 4 with end user revenues other than Line 412 423 Net universal service contribution base revenues $10,108 $3,230 $125 $13,464 $394 $54 $5 $453 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 17 Table 1.6 Revenues from Telecommunications and Interconnected VoIP Service Provided to End Users: 2009 Continued (in Millions) Data from FCC Form 499-A Toll Carriers Total All Filers Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service 404 Monthly service, local calling, connection charges, vertical features, and other local exchange service charges except for federally tariffed subscriber line charges and PICC charges: .1 & .3 Traditional Circuit Switched $665 $41 * $706 $40,736 $243 $9 $40,987 .4 & .5 Interconnected Voice over Internet Protocol $15 $12 * $27 $5,571 $1,489 $154 $7,213 405 Tariffed subscriber line charges and PICC charges 1 57 0 58 225 8,137 1 8,363 levied by a local exchange carrier on a no-PIC customer Total local exchange (Line 404 + Line 405) 681 109 1 791 46,531 9,869 164 56,563 406 Local private line and special access service 64 69 21 154 4,480 4,565 32 9,077 407 Payphone coin revenues (local and long distance) 9 2 1 12 171 8 1 179 408 Other local telecommunications service revenues 17 5 1 24 721 50 2 772 Line 403 surcharges on fixed local service 1 2 17 2 21 243 1,621 5 1,869 Total fixed local service provided to end users 774 201 25 1,001 52,146 16,112 203 68,460 Mobile service (including wireless telephony, paging & messaging, and other mobile services) 409 Monthly and activation charges 143 55 9 207 74,014 22,628 209 96,851 410 Message charges including roaming, but excluding 88 18 5 111 10,314 3,037 141 13,491 toll charges Line 403 surcharges on mobile service 1 1 7 * 9 509 3,005 5 3,520 Total mobile service provided to end users 232 80 14 326 84,837 28,670 354 113,861 Toll service 411 Prepaid calling card (including card sales to 107 43 1,859 2,008 164 104 1,907 2,175 customers and non-carrier distributors) reported at face value of cards 412 International calls that both originate and terminate in 0 0 257 257 0 0 576 576 foreign points 413 Operator and toll calls with alternative billing 373 114 69 555 587 272 157 1,016 arrangements (credit card, collect, international call- back, etc.) other than revenues reported on Line 412 414 Ordinary long distance (direct-dialed MTS, customer 1,525 1,520 1,133 4,178 9,108 12,327 4,428 25,862 toll-free 8xx service, "10-10" calls, associated monthly account maintenance, PICC pass-through, and other switched services not reported above), including long distance charges bundled with local exchange service 415 Long distance private line services 199 410 325 934 2,377 5,903 546 8,826 416 Satellite services 16 129 266 411 17 141 291 449 417 All other long distance services 97 848 124 1,068 203 1,384 145 1,733 Line 403 surcharges on toll service 1 7 281 26 314 55 2,314 153 2,522 Total toll service provided to end users 2,324 3,344 4,057 9,725 12,511 22,445 8,203 43,159 Total telecommunications and interconnected VoIP 3,330 3,625 4,096 11,052 149,493 67,227 8,761 225,481 service provided to end users 422 Uncollectible revenue/bad debt expense associated 123 62 42 227 3,050 997 110 4,157 with end user revenues other than Line 412 423 Net universal service contribution base revenues $3,207 $3,564 $3,798 $10,569 $146,443 $66,230 $8,075 $220,748 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 18 Table 1.7 Total Revenues: 2009 (in Millions) Data from FCC Form 499-A Five Holding Companies Incumbent Local Exchange Carriers With Most End-User Revenues Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $40,312 $27,261 $29 $67,601 $9,954 $7,235 $2 $17,191 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403] 1 Payphone 68 12 * 80 14 3 * 17 [Lines 306 and 407] Mobile service 75,698 25,880 307 101,885 362 107 * 469 [Lines 309, 409, 410, and a portion of 403] 1 Toll service 9,007 19,276 4,348 32,631 287 61 3 351 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403] 1 Total telecommunications and IVoIP service revenues 125,085 72,429 4,684 202,198 10,617 7,406 6 18,029 Total telecommunications and IVoIP service provided 11,439 20,772 835 33,047 3,054 5,019 3 8,075 for resale (from Table 5) Total telecommunications and IVoIP service provided to 113,646 51,657 3848.6 169,151 7,564 2,387 3 9,954 end users (from Table 6) Total telecommunications and IVoIP service revenues 125,085 72,429 4,684 202,198 10,617 7,406 6 18,029 418 Enhanced services, inside wiring maintenance, billing and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and other non-telecommunications service revenues .1 bundled with circuit switched local exchange service - - - - - - - - - 1,385 - - - - - - - - - 869 .2 bundled with interconnected VoIP local exchange service - - - - - - - - - 0 - - - - - - - - - * .3 other - - - - - - - - - 95,289 - - - - - - - - - 3,175 419 Gross billed revenues from all sources - - - - - - - - - 298,871 - - - - - - - - - 22,073 421 Uncollectible revenue/bad debt expense associated 3,592 281 with gross billed revenues Total collected revenues from all sources $295,279 $21,793 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 19 Table 1.7 Total Revenues: 2009 Continued (in Millions) Data from FCC Form 499-A CLECs and other Local Competitors Payphone Providers Other than Affiliates of the Top Five Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $14,465 $4,852 $271 $19,588 $2 $1 * $2 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403] 1 Payphone 2 2 * 4 108 45 1 154 [Lines 306 and 407] Mobile service 34 28 1 63 * * * 1 [Lines 309, 409, 410, and a portion of 403] 1 Toll service 2,484 4,232 675 7,391 47 4 1 52 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403] 1 Total telecommunications and IVoIP service revenues 16,985 9,114 947 27,046 157 50 2 209 Total telecommunications and IVoIP service provided 3,224 2,983 274 6,481 23 41 1 65 for resale (from Table 5) Total telecommunications and IVoIP service provided to 13,762 6,131 673 20,565 134 9 1 144 end users (from Table 6) Total telecommunications and IVoIP service revenues 16,985 9,114 947 27,046 157 50 2 209 418 Enhanced services, inside wiring maintenance, billing and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and other non-telecommunications service revenues .1 bundled with circuit switched local exchange service - - - - - - - - - 1,428 - - - - - - - - - 0 .2 bundled with interconnected VoIP local exchange service - - - - - - - - - 2,177 - - - - - - - - - 0 .3 other - - - - - - - - - 27,316 - - - - - - - - - 66 419 Gross billed revenues from all sources - - - - - - - - - 57,968 - - - - - - - - - 275 421 Uncollectible revenue/bad debt expense associated 632 4 with gross billed revenues Total collected revenues from all sources $57,336 $271 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 20 Table 1.7 Total Revenues: 2009 Continued (in Millions) Data from FCC Form 499-A Mobile Telephony Other Mobile Other than Affiliates of the Top Five Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $432 $149 * $582 $90 $25 * $115 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403] 1 Payphone 0 0 0 0 * * * * [Lines 306 and 407] Mobile service 11,300 3,567 36 14,903 387 51 4 442 [Lines 309, 409, 410, and a portion of 403] 1 Toll service 165 84 102 351 7 11 6 25 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403] 1 Total telecommunications and IVoIP service revenues 11,897 3,800 139 15,836 484 87 11 582 Total telecommunications and IVoIP service provided 1,236 436 5 1,677 87 32 $6 125 for resale (from Table 5) Total telecommunications and IVoIP service provided to 10,661 3,364 134 14,159 397 55 5 457 end users (from Table 6) Total telecommunications and IVoIP service revenues 11,897 3,800 139 15,836 484 87 11 582 418 Enhanced services, inside wiring maintenance, billing and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and other non-telecommunications service revenues .1 bundled with circuit switched local exchange service - - - - - - - - - 1,183 - - - - - - - - - 18 .2 bundled with interconnected VoIP local exchange service - - - - - - - - - 0 - - - - - - - - - * .3 other - - - - - - - - - 3,522 - - - - - - - - - 792 419 Gross billed revenues from all sources - - - - - - - - - 20,540 - - - - - - - - - 1,393 421 Uncollectible revenue/bad debt expense associated 721 6 with gross billed revenues Total collected revenues from all sources $19,819 $1,387 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 21 Table 1.7 Total Revenues: 2009 Continued (in Millions) Data from FCC Form 499-A Toll Carriers Total All Filers Other than Affiliates of the Top Five Line Intrastate Interstate International Total Intrastate Interstate International Total Fixed local service other than payphone $1,003 $345 $49 $1,397 $66,258 $39,867 $352 $106,477 [Lines 303, 304, 305, 307, 308, 404, 405, 406, 408, and a portion of 403] 1 Payphone 9 2 2 13 202 63 3 268 [Lines 306 and 407] Mobile service 266 98 18 382 88,047 29,732 366 118,145 [Lines 309, 409, 410, and a portion of 403] 1 Toll service 3,162 4,716 7,483 15,361 15,159 28,384 12,619 56,162 [Lines 310, 311, 312, 313, 314, 411, 412, 413, 414, 415, 416, 417, and a portion of 403] 1 Total telecommunications and IVoIP service revenues 4,440 5,161 7,552 17,153 169,666 98,047 13,340 281,052 Total telecommunications and IVoIP service provided 1,110 1,536 3,455 6,101 20,173 30,819 4,579 55,571 for resale (from Table 5) Total telecommunications and IVoIP service provided to 3,330 3,625 4,096 11,052 149,493 67,227 8,761 225,481 end users (from Table 6) Total telecommunications and IVoIP service revenues 4,440 5,161 7,552 17,153 169,666 98,047 13,340 281,052 418 Enhanced services, inside wiring maintenance, billing and collection, customer premises equipment, published directory, dark fiber, Internet access, cable TV program transmission, and other non-telecommunications service revenues .1 bundled with circuit switched local exchange service - - - - - - - - - 142 - - - - - - - - - 5,026 .2 bundled with interconnected VoIP local exchange service - - - - - - - - - 21 - - - - - - - - - 2,198 .3 other - - - - - - - - - 21,476 - - - - - - - - - 151,635 419 Gross billed revenues from all sources - - - - - - - - - 38,792 - - - - - - - - - 439,911 421 Uncollectible revenue/bad debt expense associated 335 5,570 with gross billed revenues Total collected revenues from all sources $38,458 $434,342 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. Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 1 - 22 Table 1.8 Revenues by Type of Provider (2009) 1 (in Millions) Data from FCC Form 499-A Telecommunications and Telecommunications and Interconnected VoIP Service Interconnected VoIP Service Provided for Resale 2 Provided to End Users 2 Fixed Mobile Toll Total Fixed Mobile Toll Total Local Local Incumbent Local Exchange Carriers (ILECs) 31,196 112 155 31,463 48,947 455 2,586 51,988 Competitive Access Providers (CAPs) and Competitive Local Exchange Carriers (CLECs) 3,338 1 1,580 4,919 8,969 11 2,980 11,961 Local Resellers 78 14 14 105 248 3 105 356 Private Service Providers 122 2 439 563 126 2 500 627 Shared-Tenant Service Providers * 0 * * 27 * 8 35 Coaxial Cable IVoIP Providers 682 * 62 745 5,024 * 1,416 6,441 Interconnected VoIP (IVoIP) Providers 91 0 167 258 1,640 30 265 1,935 Total IVoIP 774 * 229 1,003 6,665 30 1,681 8,376 Other Local Service Providers 154 0 127 281 51 1 11 63 Total Local Competitors 4,465 17 2,390 6,871 16,086 47 5,285 21,417 Fixed Local Service Providers 35,661 129 2,545 38,335 65,032 502 7,871 73,405 Payphone Service Providers 64 0 1 65 93 1 50 144 Mobile Telephony Including Cellular, Personal Communications Service (PCS) and SMR Telephony Carriers 791 4,047 99 4,936 90 112,636 2,346 115,071 Paging & Messaging Service Providers 3 8 4 16 3 335 8 345 Specialized Mobile Radio (SMR) Dispatch 13 * 0 14 1 53 3 57 Mobile Data and Other Mobile Service Providers 50 43 2 96 45 9 7 61 Mobile Service Providers 857 4,099 106 5,062 139 113,033 2,364 115,535 Interexchange Carriers (IXCs) 1,543 15 5,874 7,433 2,822 87 22,438 25,348 Operator Service Providers (OSPs) * 0 34 34 9 0 897 906 Prepaid Calling Card Providers 1 0 370 371 5 129 1,363 1,498 Satellite Service Providers 0 4 291 295 2 23 590 615 Toll Resellers 80 24 1,835 1,939 285 84 5,713 6,082 VoIP Toll Providers 18 0 313 332 8 1 457 466 Audio Bridge Service Providers 7 0 168 175 40 1 969 1,010 Other Toll Carriers 52 13 1,466 1,531 25 1 447 473 Toll Service Providers 1,703 56 10,351 12,110 3,197 326 32,874 36,397 All Filers $38,285 $4,284 $13,003 $55,571 $68,460 $113,861 $43,159 $225,481 Five Holding Companies with Highest End-User Revenue $24,946 $3,050 $5,051 $33,047 $42,735 $98,835 $27,580 $169,151 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1 2 Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). Revenues are classified by the primary carrier type of each reporting entity. For example, revenues reported by a LEC 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. Telecommunications and interconnected VoIP service provided for resale consists of service provided to other contributors to federal universal service support mechanisms for resale. Revenues from services provided to firms that are de minimis or exempt from federal universal service are reported as end-user revenues and are subject to contribution requirements. 1 - 23 Table 1.8 Revenues by Type of Provider (2009) 1 Continued (in Millions) Data from FCC Form 499-A Telecommunications and Interconnected Universal VoIP Service Revenues Other Total Service Revenues Billed Contribution Intrastate Interstate International Other Total 4 Revenues Base Revenues to International 2, 3 International Incumbent Local Exchange Carriers (ILECs) 11,263 51,279 32,166 0 6 83,451 26,188 109,639 Competitive Access Providers (CAPs) and Competitive Local Exchange Carriers (CLECs) 3,984 10,217 6,292 43 329 16,880 7,843 24,723 Local Resellers 104 291 99 * 71 461 216 677 Private Service Providers 430 365 726 5 94 1,190 9,567 10,757 Shared-Tenant Service Providers 9 26 7 0 2 35 89 124 Coaxial Cable IVoIP Providers 1,644 5,286 1,703 * 197 7,185 4,517 11,702 Interconnected VoIP (IVoIP) Providers 1,027 968 975 3 247 2,193 11,003 13,196 Total IVoIP 2,671 6,253 2,678 3 444 9,379 15,520 24,898 Other Local Service Providers 13 189 153 0 1 344 431 775 Total Local Competitors 7,210 17,341 9,955 51 941 28,289 33,666 61,954 Fixed Local Service Providers 18,474 68,620 42,121 51 947 111,740 59,854 171,593 Payphone Service Providers 10 157 50 * 2 209 66 275 Mobile Telephony Including Cellular, Personal Communications Service (PCS) and SMR Telephony Carriers 30,306 87,746 30,703 6 1,552 120,007 65,096 185,103 Paging & Messaging Service Providers 43 310 51 0 * 361 176 537 Specialized Mobile Radio (SMR) Dispatch 6 66 4 0 1 71 444 515 Mobile Data and Other Mobile Service Providers 12 115 33 0 9 157 198 355 Mobile Service Providers 30,367 88,237 30,792 6 1,562 120,597 65,914 186,510 Interexchange Carriers (IXCs) 17,599 9,104 19,146 269 4,261 32,780 14,787 47,568 Operator Service Providers (OSPs) 159 737 192 3 8 940 172 1,112 Prepaid Calling Card Providers 1,288 213 72 21 1,563 1,869 213 2,082 Satellite Service Providers 405 46 228 163 472 910 3,793 4,702 Toll Resellers 4,234 2,128 4,253 39 1,601 8,021 3,044 11,065 VoIP Toll Providers 434 149 99 2 548 798 370 1,167 Audio Bridge Service Providers 952 44 898 16 228 1,185 9,805 10,991 Other Toll Carriers 384 230 197 5 1,573 2,004 841 2,846 Toll Service Providers 25,454 12,652 25,084 519 10,253 48,507 33,026 81,533 All Filers $74,305 $169,666 $98,046 $576 $12,764 $281,052 $158,859 $439,911 Five Holding Companies with Highest End-User Revenue $54,502 $125,085 $72,428 $262 $4,422 $202,198 $96,673 $298,871 Note: Amounts may not add to totals due to rounding. * Denotes values greater than $0 but less than $500,000. 1 2 3 4 Source: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues (May 2011). 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 minimus or otherwise exempt from contributing. This table also includes international revenues that were exempt from contribution because of the LIRE Exemption. See Table 4 for details on exempt amounts. Contribution base amounts reported as uncollectible on Line 422 have been removed. 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. Revenues are classified by the primary carrier type of each reporting entity. For example, revenues reported by a LEC 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. Telecommunications and interconnected VoIP service provided for resale consists of service provided to other contributors to federal universal service support mechanisms for resale. Revenue from services provided to firms that are de minimis or exempt from federal universal service are reported as end-user revenues and are subject to contribution requirements. 1 - 24 Data from FCC Form 499-Q Projected Revenues for 2009 1 Regional Bell Operating Companies 4 $9,226 $9,128 1.0 % $23,362 $42,608 $65,970 $9,124 Other Incumbent Local Exchange 2,475 2,428 1.9 7,840 10,130 17,970 2,441 Carriers (ILECs) Total ILECs 11,700 11,555 1.2 31,202 52,738 83,940 11,565 Competitive Access Providers 4,300 4,240 2.5 4,789 11,822 16,611 3,997 (CAPs) and Competitive Local Exchange Carriers (CLECs) Local Resellers 90 83 8.4 79 359 437 81 Private Service Providers 448 440 2.2 4,492 605 5,097 418 Shared-Tenant Service Providers 10 10 8.9 11 38 49 10 Coaxial Cable IVoIP Providers 5 Interconnected VoIP (IVoIP) Providers 5 1,364 1,340 4.2 255 3,653 3,907 1,379 Total IVoIP 5 Other Local Service Providers 15 13 2.8 179 56 235 14 Total Local Competitors 7,186 7,072 2.9 10,563 21,113 31,676 7,121 Fixed Local Service Providers 18,887 18,628 1.7 41,765 73,852 115,617 18,686 Payphone Service Providers 16 16 3.7 73 190 263 11 Mobile Telephony Including Cellular, 32,285 31,696 2.0 5,718 118,630 124,349 31,776 Personal Communications Service (PCS) and SMR Telephony Carriers Paging & Messaging Service Providers 48 48 12.2 35 360 395 44 Specialized Mobile Radio (SMR) Dispatch 3 3 2.6 11 57 68 4 Mobile Data and Other Mobile Service 13 13 0.3 38 75 113 11 Providers Mobile Service Providers 32,350 31,761 2.0 5,802 119,122 124,924 31,835 Interexchange Carriers (IXCs) 18,680 18,465 1.2 8,144 24,760 32,904 17,994 Operator Service Providers (OSPs) 199 180 10.9 36 913 948 177 Prepaid Calling Card Providers 1,396 1,386 0.8 262 1,443 1,705 1,277 Satellite Service Providers 365 363 1.1 255 430 685 414 Toll Resellers 4,556 4,382 3.1 1,961 5,845 7,806 4,192 VoIP Toll Provider 5 358 336 4.8 323 361 684 337 Audio Bridge Service Provider 6 906 896 0.7 24 564 588 546 Other Toll Carriers 432 424 1.0 1,515 466 1,369 387 Toll Service Providers 26,891 26,431 1.6 12,520 34,783 47,302 25,324 All Filers $78,143 $76,835 1.8 % $60,159 $227,947 $288,107 $75,856 LIRE Exemption 7 ($3,331) Total less LIRE 7 $73,505 See notes at end of table. ($millions) ($millions) Billed to End Users 2 Implied Uncollectible Rate 3 ($millions) ($millions)($millions) ($millions) Collected from End Users 2 3 Billed to End Users 2 Total Revenue 2 Billed to End Users 2 Billed to Resellers 2 Table 1.9 Carrier Telecommunications Revenues Reported on FCC Form 499-Q: 2009 (in Millions) Intrastate, interstate and International Historic Revenues Reported for 2009 1 Interstate and International Interstate and International 1 - 25 Data from FCC Form 499-Q Projected Revenues for 2010 1 Regional Bell Operating Companies 4 $8,796 $8,716 0.9 % Other Incumbent Local Exchange 2,346 2,307 1.7 Carriers (ILECs) Total ILECs 11,142 11,023 1.1 $30,998 $47,384 $78,383 $10,755 Competitive Access Providers 4,203 4,139 1.5 5,018 11,808 16,826 4,147 (CAPs) and Competitive Local Exchange Carriers (CLECs) Local Resellers 91 86 5.2 130 353 483 102 Private Service Providers 458 450 1.7 5,105 643 5,748 435 Shared-Tenant Service Providers 10 10 2.6 10 33 43 11 Coaxial Cable IVoIP Providers 5 360 2,843 3,203 774 Interconnected VoIP (IVoIP) Providers 5 1,674 1,647 1.6 337 4,019 4,356 1,582 Total IVoIP 5 490 4,563 5,053 1,491 Other Local Service Providers 14 13 1.7 182 68 250 14 Total Local Competitors 7,769 7,648 1.6 11,507 22,041 33,547 7,685 Fixed Local Service Providers 18,910 18,671 1.3 42,505 69,425 111,931 18,439 Payphone Service Providers 11 11 2.4 45 163 207 11 Mobile Telephony Including Cellular, 30,509 29,967 1.8 5,119 110,971 116,090 29,220 Personal Communications Service (PCS) and SMR Telephony Carriers Paging & Messaging Service Providers 40 40 0.7 23 297 320 38 Specialized Mobile Radio (SMR) Dispatch 7 7 0.1 15 57 72 9 Mobile Data and Other Mobile Service 14 14 0.9 53 64 117 15 Providers Mobile Service Providers 30,570 30,028 1.8 5,210 111,388 116,598 29,282 Interexchange Carriers (IXCs) 16,593 16,402 1.2 6,667 23,178 29,846 16,326 Operator Service Providers (OSPs) 164 146 10.9 14 789 803 147 Prepaid Calling Card Providers 1,199 1,182 1.4 413 1,413 1,826 1,027 Satellite Service Providers 386 384 0.6 304 428 733 401 Toll Resellers 4,402 4,250 3.4 1,734 5,775 7,509 4,134 VoIP Toll Provider 5 460 446 3.5 307 515 822 475 Audio Bridge Service Provider 6 900 885 1.6 185 976 1,162 885 Other Toll Carriers 597 592 1.0 1,190 740 1,930 670 Toll Service Providers 24,700 24,287 1.7 10,815 33,815 44,630 24,064 All Filers $74,192 $72,997 1.6 % 58,575$ 214,791$ 273,366$ $71,796 LIRE Exemption 7 ($3,500) Total less LIRE 7 $69,497 See notes at end of table. ($millions) ($millions) ($millions) Billed to End Users 2 Implied Uncollectible Rate 3 Billed to Resellers 2 Collected from End Users 2 3 Billed to End Users 2 ($millions) Interstate and International Historic Revenues Reported for 2010 1 Intrastate, interstate and International Interstate and International Total Revenue 2 ($millions) Billed to End Users 2 ($millions) Table 1.9 Carrier Telecommunications Revenues Reported on FCC Form 499-Q: 2010 Continued (in Millions) 1 - 26 Data from FCC Form 499-Q Projected Revenues for 2011 1 Regional Bell Operating Companies 4 % Other Incumbent Local Exchange Carriers (ILECs) Total ILECs 10,225 10,039 1.8 15,904 22,117 38,021 5,095 Competitive Access Providers 4,061 4,003 1.4 2,444 5,669 8,113 1,973 (CAPs) and Competitive Local Exchange Carriers (CLECs) Local Resellers 98 94 4.3 78 156 234 49 Private Service Providers 656 476 27.3 2,536 336 2,872 225 Shared-Tenant Service Providers 9 9 3.8 0 13 13 4 Coaxial Cable IVoIP Providers 5 1,750 1,732 1.0 295 3555 3851 925 Interconnected VoIP (IVoIP) Providers 5 1,456 1,431 1.7 147 1,297 1,444 646 Total IVoIP 5 3,206 3,163 1.3 443 4852 5295 1570 Other Local Service Providers 14 14 0.2 104 34 139 7 Total Local Competitors 8,044 7,760 3.5 5,605 11,060 16,665 3,828 Fixed Local Service Providers 18,269 17,799 2.6 21,509 33,177 54,686 8,923 Payphone Service Providers 9 9 0.6 20 75 94 4 Mobile Telephony Including Cellular, 29,814 29,325 1.6 2,846 53,353 56,199 14,550 Personal Communications Service (PCS) and SMR Telephony Carriers Paging & Messaging Service Providers 35 34 1.1 11 134 145 17 Specialized Mobile Radio (SMR) Dispatch 6 6 2.0 12 27 39 2 Mobile Data and Other Mobile Service 15 15 0.5 36 30 66 6 Providers Mobile Service Providers 29,870 29,380 1.6 2,905 53,544 56,449 14,576 Interexchange Carriers (IXCs) 15,018 14,881 0.9 3,277 11,010 14,287 7,830 Operator Service Providers (OSPs) 139 126 9.7 4 411 414 66 Prepaid Calling Card Providers 933 897 3.9 227 587 814 389 Satellite Service Providers 368 365 0.8 103 175 278 157 Toll Resellers 4,327 4,232 2.2 1,040 3,160 4,201 2,155 VoIP Toll Provider 5 390 385 1.2 176 220 396 210 Audio Bridge Service Provider 6 1,009 1,005 0.5 76 528 604 513 Other Toll Carriers 662 660 0.3 570 369 939 327 Toll Service Providers 22,847 22,550 1.3 5,473 16,460 21,934 11,647 All Filers $70,995 $69,739 1.8 % $29,907 $103,256 $133,164 $35,151 LIRE Exemption 7 ($3,096) Total less LIRE 7 $66,642 See notes on next page. Intrastate, Interstate and International Billed to End Users 2 ($millions) ($millions) ($millions) ($millions) ($millions) ($millions) Implied Uncollectible Rate 3 Billed to Resellers 2 Billed to End Users 2 Total Revenue 2 Billed to End Users 2 Collected from End Users 2 3 Historic Revenues Reported for First Half 2011 1 Interstate and International Table 1.9 Carrier Telecommunications Revenues Reported on FCC Form 499-Q: 2011 Continued (in Millions) Interstate and International 1 - 27 Notes for Table 1.9 1 2 3 4 5 6 7 Calendar 2009 Calendar 2010 Calendar 2011 ($millions) ($millions) ($millions) First Quarter $18,871.0 $17,254.2 $16,674.4 Second Quarter $18,714.7 $16,637.9 $16,403.5 Third Quarter $18,032.8 $17,575.6 $16,848.7 Fourth Quarter $17,164.4 $17,441.4 $16,681.6 Total Projected Collected $72,783.0 $68,909.1 $66,608.2 Data filed on FCC Forms 499-Q and 499-A Worksheets. See also: Industry Analysis and Technology Division, Wireline Competition Bureau, Telecommunications Industry Revenues(May 2011), available at fcc.gov/wcb/iatd/lec.html. Source: In 1984, the Regional Bell Operating Companies (RBOCs) consisted of Ameritech, Bell Atlantic, Bell South, NYNEX, Pacific Telesis, Southwestern Bell and US West. As a result of mergers, by 2009 the RBOCs consisted of AT&T, Qwest, and Verizon. Where operations were sold to other carriers, subsequent revenues are included with ILEC revenues. Beginning in 2010, RBOC revenues are included with ILEC revenues. The filer category Coaxial Cable was added to the 2004 FCC Form 499-A. The category interconnected Voice over Internet Protocol (“Interconnected VoIP”) was added to the revised 2006 FCC Form 499-A, dated August 2006. By 2009, most firms that self identified as Coaxial Cable reported that most of their local service revenues were derived from interconnected VoIP service. Information from recent FCC Form 477 filings, FCC Form 499-A filings, and company websites have been used to reclassify companies so that interconnected VoIP providers that operate using their own coaxial cable TV facilities are classified as “Coaxial Cable.” Filers that self identified as interconnected VoIP but reported only toll revenue on their FCC Form 499-A filings have been reclassified as “VoIP Toll”. Prior to the fourth quarter of 2008, a few audio bridging (teleconferencing) service providers reported their revenues as telecommunications. Starting with the fourth quarter of 2008, all audio bridging service revenues must be reported as telecommunications. See Request for Review by InterCall, Inc. of Decision of the Universal Service Administrator, CC Docket No. 96-45, Order, 23 FCC Rcd 10731(2008). The amounts actually used to calculate contribution factors are shown below. These amounts total less than the total projected collected revenues shown in the table. One reason is that amounts in the table reflect all amounts shown in the FCC Form 499-Q data base, including estimated amounts for non-filers and amounts reported by filers that are de minimis or do not contribute because they provide only international services. In addition, filers are not required to contribute on international revenues if their interstate end-user revenues represent less than 12% of their combined interstate and international end-user revenues -- a test referred to as the Limited International Revenue Exemption (LIRE) or the "12%" rule. In addition, the totals shown above include estimated amounts for some carriers. Finally, some difference may be explained by late filings and corrections made to the data base after the Commission calculated contribution factors. Contribution bases used to calculate factors Note that many filers that self identified as incumbent local exchange carriers (ILECs) or competitive local exchange carriers (CLECs) also reported interconnected VoIP revenues. The quarterly revenues reported by these entities are included with ILEC and CLEC revenues, not with interconnected VoIP provider revenues in these tables. Prior to Q4 of 2008, a few audio bridging (teleconferencing) service providers reported their revenues as telecommunications. Starting with Q4 of 2008, all audio bridging service revenues must be reported as telecommunications. Filers contribute to USF based on the interstate and international telecommunications revenues that they collect from end users. On the FCC Form 499-Q, filers report interstate and international billed end-user historical revenues for the most recently completed quarter. Filers also project the amount of contribution base (i.e. interstate and international end-user revenue) they expect to bill in the upcoming quarter and how much of this billed amount they expect to collect. (For example, the May 2010 filings contain historic revenue data for th Q1of 2010 and projected revenue data for Q3 of 2010.) The difference between projected billed revenues and projected collected revenues is the implied uncollectible amount. Projected collected end-user interstate and international revenues form the USF contribution base. Filers report actual billed and uncollectible amounts in their FCC Form 499-A filings. This information is used to true-up contributions. This table does not include revenue from “international-to-international” telephone calls, which are defined as U.S. telecom calls that traverse U.S. territory but both originate and terminate in foreign points. Such revenues are exempt from universal service contribution and therefore are not included with historical assessable end-user telecommunications revenues on Line 116 of the FCC Form 499-Q, or with projected gross billed or projected collected revenues on Line 119 or Line 120, respectively. International-to-international revenues are included with Line 117 - (all other goods and services) and Line 118 - (gross-billed revenues from all sources), but these lines are not summarized in the tables herein. International-to-international revenues are included with end-user telecommunications revenues on Line 412 of the FCC Form 499-A and are included in contribution bases for telecommunications relay service, local number portability, and number administration. Note: Amounts may not add to totals due to rounding. Each quarter, telecommunications providers that are required to contribute to universal service support mechanisms must file an FCC Form 499-Q. The FCC Form 499-Q collects total, interstate and international billed revenues for the most recently completed calendar quarter (historic revenues) and also collects projected interstate and international -- but not total -- revenues for the upcoming calendar quarter (projected revenues.) Some telecommunications providers file the form even though they are not required to contribute. USAC estimates revenues for most non-filers. In order to avoid double assessment, the FCC Form 499-Q distinguishes between revenues for U.S telecommunications and interconnected VoIP service provided for resale, commonly called "carrier's carrier" revenues, and USF assessable contribution base revenues, commonly called "end-user revenues." Services provided for resale consist of U.S. telecommunications and interconnected VoIP service provided to another contributing filer for resale as U.S. telecommunications or interconnected VoIP service. Revenues from telecommunications and interconnected VoIP service provided to non-filers (actual customers) and to firms that are de minimis or otherwise exempt from federal universal service support mechanisms are reported as end-user revenue. 1 - 28 Universal Service Program Requirements and Contribution Factors for 2010 (in Millions) First Second Third Fourth Full Quarter Quarter Quarter Quarter Year All Support Mechanisms Projections of demand and administrative expenses at the time the contribution factors were adopted High Cost High Cost Loop Support $358.960 $366.880 $372.500 $369.780 $1,468.120 Local Switching Support $96.490 $98.220 $99.530 $104.220 $398.460 Interstate Common Line Support $425.620 $431.950 $450.400 $451.660 $1,759.630 Interstate Access Support Mechanism $144.820 $142.530 $144.480 $153.370 $585.200 Forward-Looking High Cost Mechanism $80.420 $79.990 $81.380 $81.580 $323.370 Prior Period True-ups $23.660 $90.560 $25.000 -$34.930 $104.290 Administrative expenses $7.610 $7.850 $7.480 $1.990 $24.930 Interest income 1 -$0.260 -$0.140 -$0.040 -$0.120 -$0.560 Sprint & Verizon Wireless Phase Down Recovery 2 -$39.210 -$39.210 -$39.210 -$39.210 -$156.840 Program Total $1,098.110 $1,178.630 $1,141.520 $1,088.340 $4,506.600 Low Income Lifeline Assistance $291.410 $332.080 $334.920 $336.280 $1,294.690 Link-Up $15.050 $21.630 $18.570 $18.240 $73.490 Incremental Toll Limitation $3.510 $4.510 $5.720 $7.140 $20.880 Prior Period true-ups $45.230 $26.570 -$14.170 -$49.750 $7.880 Administrative expenses $1.100 $1.480 $1.700 -$0.090 $4.190 Interest income 1 -$0.050 -$0.020 -$0.030 -$0.090 -$0.190 Program Total $356.250 $386.250 $346.710 $311.730 $1,400.940 Rural Health Rural Health Care Support $51.760 $52.380 $33.080 $15.670 $152.890 Prior Period True-ups $3.170 $0.120 -$0.880 -$0.950 $1.460 Administrative expenses $2.590 $2.820 $3.590 $2.350 $11.350 Interest income 1 -$0.310 -$0.330 -$0.310 -$0.420 -$1.370 Program Total $57.210 $54.990 $35.480 $16.650 $164.330 Schools & Libraries Schools and Libraries Support $562.500 $562.500 $562.500 $562.500 $2,250.000 Prior Period True-ups 3 $36.480 $1.540 -$3.350 -$6.940 $27.730 Administrative expenses $18.190 $18.920 $23.140 $9.510 $69.760 Interest income 1 -$4.010 -$3.540 -$3.040 -$3.360 -$13.950 Program Total $613.160 $579.420 $579.250 $561.710 $2,333.540 Grand Total $2,124.730 $2,199.290 $2,102.960 $1,978.430 $8,405.410 Applicable interstate and international end-user revenues Reported contribution base revenues $17,254.235 $16,637.880 $17,575.565 $17,441.382 Circularity Adjustment Amount carriers will contribute to USF in this quarter. -$2,106.540 -$2,180.370 -$2,079.820 -$1,968.920 Subtotal $15,147.695 $14,457.510 $15,495.745 $15,472.462 Adjustment factor for uncollectibles 1.00% 1.00% 1.00% 1.00% Contribution base at the time the factor was calculated $14,996.218 $14,312.935 $15,340.788 $15,317.737 Contribution factor 14.1% 15.3% 13.6% 12.9% Contribution factor times contribution base $2,114.467 $2,189.879 $2,086.347 $1,975.988 Source: Appendix M02 from pertinent filings as shown at http://www.usac.org/about/governance/fcc-filings/2010/ 1 Interest income is shown as negative because it is subtracted from expenses to yield the total. 3 For the schools & libraries mechanism, periodic true-ups include applications of unused fund balance from prior periods. Table 1.10 2 The recovery of support for Sprint and Verizon Wireless is consistent with the support phase-down discussion whereby USAC recovers 20% of CETC support over five years until such time Sprint and Verizon Wireless no longer receive any High Cost support. A discussion of the support phase-downs can be found in DA 08-258 and DA 08-259 released in November 2008. More information can be found in WC 05-337 Released September 2010. 1 - 29 Universal Service Program Requirements and Contribution Factors for 2011 (in Millions) First Second Third Fourth Full Quarter Quarter Quarter Quarter Year All Support Mechanisms Projections of demand and administrative expenses at the time the contribution factors were adopted High Cost High Cost Loop Support $327.700 $328.390 $335.410 $331.390 $1,322.890 Local Switching Support $95.010 $95.900 $97.030 $95.570 $383.510 Interstate Common Line Support $403.690 $400.370 $406.360 $414.930 $1,625.350 Interstate Access Support Mechanism $137.550 $134.020 $131.040 $135.950 $538.560 Forward-Looking High Cost Mechanism $75.040 $73.840 $72.360 $72.980 $294.220 Prior Period True-ups $126.280 $23.800 -$13.190 -$33.680 $103.210 Administrative expenses -$0.150 -$0.130 -$0.390 -$1.400 -$2.070 Interest income 1 $4.310 $4.460 $4.250 $4.270 $17.290 CETC Reserve Pursuant to FCC 10-155 2 $56.850 $65.930 $60.330 $58.700 $241.810 Program Total $1,226.280 $1,126.580 $1,093.200 $1,078.710 $4,524.770 Low Income Lifeline Assistance $341.030 $358.160 $395.600 $488.110 $1,582.900 Link-Up $23.130 $20.270 $23.510 $34.050 $100.960 Incremental Toll Limitation $6.560 $5.360 $3.900 $2.920 $18.740 Prior Period true-ups -$11.890 -$12.390 $3.000 $4.480 -$16.800 Administrative expenses $1.730 $2.090 $1.640 $2.340 $7.800 Interest income 1 -$0.140 -$0.150 -$0.110 -$0.100 -$0.500 Program Total $360.420 $373.340 $427.540 $531.800 $1,693.100 Rural Health Rural Health Care Support $20.520 $20.290 $23.790 $19.710 $84.310 Prior Period True-ups $0.040 -$0.480 -$1.300 -$0.270 -$2.010 Administrative expenses $3.780 $3.670 $3.830 $3.700 $14.980 Interest income 1 -$0.470 -$0.580 -$0.720 -$1.280 -$3.050 Program Total $23.870 $22.900 $25.600 $21.860 $94.230 Schools & Libraries Schools and Libraries Support $562.500 $562.500 $562.500 $562.500 $2,250.000 Prior Period True-ups 3 $43.290 $16.290 -$2.710 $1.410 $58.280 Administrative expenses $19.190 $19.200 $18.640 $18.300 $75.330 Interest income 1 -$3.880 -$3.970 -$3.970 -$3.760 -$15.580 Program Total $621.100 $594.020 $574.460 $578.450 $2,368.030 Grand Total $2,231.670 $2,116.840 $2,120.800 $2,210.820 $8,680.130 Applicable interstate and international end-user revenues Reported contribution base revenues $16,674.393 $16,403.461 $16,848.724 $16,681.649 Circularity Adjustment Amount carriers will contribute to USF in this quarter. -$2,212.480 -$2,097.640 -$2,102.160 -$2,192.520 Subtotal $14,461.913 $14,305.821 $14,746.564 $14,489.129 Adjustment factor for uncollectibles 1.00% 1.00% 1.00% 1.00% Contribution base at the time the factor was calculated $14,317.294 $14,162.763 $14,599.098 $14,344.238 Contribution factor 15.5% 14.9% 14.4% 15.3% Contribution factor times contribution base $2,219.181 $2,110.252 $2,102.270 $2,194.668 Source: Appendix M02 from pertinent filings as shown at http://www.usac.org/about/governance/fcc-filings/2011/ 1 Interest income is shown as negative because it is subtracted from expenses to yield the total. 3 For the schools & libraries mechanism, periodic true-ups include applications of unused fund balance from prior periods. Table 1.10 2 The recovery of support for Sprint and Verizon Wireless is consistent with the support phase-down discussion whereby USAC recovers 20% of CETC support over five years until such time Sprint and Verizon Wireless no longer receive any High Cost support. A discussion of the support phase-downs can be found in DA 08-258 and DA 08-259 released in November 2008. More information can be found in WC 05-337 Released September 2010. Continued 1 - 30 Mechanism Percent of Total Percent of Total High-Cost Support $4,292 59.1 % $4,268 53.7 % High-Cost Loop Support 1,424 19.6 1,297 16.3 Safety Net Additive Support 53 0.7 76 1.0 Safety-Valve 5 0.1 6 0.1 High-Cost Model Support 331 4.6 310 3.9 Interstate Common Line Support 1,537 21.2 1,675 21.1 Interstate Access Support 563 7.8 545 6.9 Local Switching Support 381 5.2 359 4.5 Low-Income Support 1,025 14.1 1,316 16.5 School and Libraries 1,878 25.9 2,282 28.7 Rural Health Care 61 0.8 86 1.1 All Universal Service Support $7,256 100.0 % $7,952 100.0 % Table 1.11 Universal Service Support Mechanisms: 2009 & 2010 (Dollars in Millions) Source: Universal Service Administration Company (USAC). Chart 1.1 Distribution of Universal Service Payments: 2010 2009 2010 Disbursements Disbursements Notes: Figures may not add due to rounding. The figures used in this table are for the calendar year and include disbursements that were committed over several years but paid out in the respective calendar year (2009 or 2010) In Section 2, figures for the Schools and Libraries program and the Rural Health Care program are reported based on fiscal year rather than calendar year. High Cost 53.7% Low Income 16.5% Schools & Libraries 28.7% Rural Health Care 1.1% 1 - 31 (Annual Payments and Contributions in Thousands) Payments from USF to Service Providers 1 High-Cost Support Low-Income Support Schools & Libraries Rural Health Care Amount % of Total Amount % of Total Alabama $93,551 $41,473 $43,944 $354 $179,322 2.26% $127,668 1.58% $51,653 Alaska 218,970 26,839 22,217 49,749 317,775 4.00% 22,302 0.28% 295,473 American Samoa 3,831 82 1,588 228 5,729 0.07% 631 0.01% 5,098 Arizona 67,545 20,868 59,031 1,575 149,019 1.87% 155,754 1.93% -6,735 Arkansas 105,255 12,565 20,788 917 139,526 1.75% 74,492 0.92% 65,033 California 91,824 174,727 348,702 1,233 616,486 7.75% 885,312 10.99% -268,826 Colorado 75,866 2,323 18,003 249 96,441 1.21% 144,377 1.79% -47,935 Connecticut 489 8,196 19,928 0 28,613 0.36% 106,098 1.32% -77,485 Delaware 265 1,789 2,230 0 4,284 0.05% 29,049 0.36% -24,765 Dist. of Columbia 0 1,945 14,842 0 16,786 0.21% 38,199 0.47% -21,413 Florida 67,693 88,201 107,719 226 263,839 3.32% 526,991 6.54% -263,152 Georgia 115,569 50,387 73,008 1,571 240,535 3.02% 262,777 3.26% -22,242 Guam 16,082 287 260 74 16,703 0.21% 4,369 0.05% 12,335 Hawaii 61,772 504 2,552 102 64,930 0.82% 42,275 0.52% 22,655 Idaho 51,785 3,445 6,746 281 62,257 0.78% 39,526 0.49% 22,732 Illinois 71,898 35,665 64,416 1,139 173,118 2.18% 331,196 4.11% -158,078 Indiana 79,290 4,233 41,433 846 125,802 1.58% 154,930 1.92% -29,128 Iowa 129,222 3,894 12,442 613 146,172 1.84% 72,772 0.90% 73,400 Kansas 195,307 4,569 16,958 278 217,112 2.73% 71,094 0.88% 146,018 Kentucky 103,799 12,221 28,806 450 145,276 1.83% 104,924 1.30% 40,352 Louisiana 136,480 35,609 61,258 44 233,390 2.94% 115,153 1.43% 118,237 Maine 24,540 8,472 11,159 58 44,229 0.56% 35,731 0.44% 8,498 Maryland 3,767 11,037 14,082 0 28,887 0.36% 177,736 2.21% -148,849 Massachusetts 2,258 25,912 31,368 130 59,668 0.75% 186,951 2.32% -127,282 Michigan 49,571 56,642 49,821 2,841 158,876 2.00% 228,772 2.84% -69,896 Minnesota 105,707 6,356 22,052 3,125 137,240 1.73% 126,964 1.58% 10,276 Mississippi 260,553 12,392 32,993 180 306,118 3.85% 71,859 0.89% 234,259 Missouri 107,372 11,429 41,875 571 161,247 2.03% 154,834 1.92% 6,413 Montana 85,810 3,762 4,822 838 95,231 1.20% 26,757 0.33% 68,474 Nebraska 88,657 1,874 10,647 1,612 102,790 1.29% 45,830 0.57% 56,960 Nevada 24,440 3,065 3,236 58 30,800 0.39% 72,752 0.90% -41,952 New Hampshire 9,671 1,519 2,622 13 13,825 0.17% 39,195 0.49% -25,370 New Jersey 1,538 24,950 58,819 0 85,308 1.07% 272,827 3.39% -187,519 New Mexico 81,692 13,717 34,328 660 130,397 1.64% 50,327 0.62% 80,069 New York 44,148 95,938 193,945 43 334,074 4.20% 531,331 6.59% -197,257 North Carolina 79,631 61,403 57,235 351 198,620 2.50% 248,017 3.08% -49,397 North Dakota 97,567 2,632 4,560 945 105,704 1.33% 17,796 0.22% 87,908 Northern Mariana Is. 1,214 184 996 0 2,394 0.03% 1,335 0.02% 1,059 Ohio 38,943 59,808 77,572 769 177,091 2.23% 275,361 3.42% -98,270 Oklahoma 148,877 79,107 50,527 797 279,308 3.51% 86,716 1.08% 192,592 Oregon 74,972 5,967 14,686 335 95,960 1.21% 96,174 1.19% -214 Pennsylvania 61,902 34,697 89,139 97 185,834 2.34% 335,559 4.16% -149,725 Puerto Rico 208,626 39,974 23,227 0 271,828 3.42% 77,558 0.96% 194,269 Rhode Island 35 3,003 6,618 0 9,655 0.12% 26,781 0.33% -17,125 South Carolina 118,547 10,776 41,287 14 170,624 2.15% 114,968 1.43% 55,656 South Dakota 90,096 2,184 4,936 680 97,897 1.23% 19,408 0.24% 78,489 Tennessee 60,695 41,962 56,980 350 159,986 2.01% 165,016 2.05% -5,030 Texas 247,395 101,728 234,544 1,691 585,358 7.36% 563,784 7.00% 21,574 Utah 23,190 3,727 16,012 804 43,733 0.55% 59,616 0.74% -15,883 Vermont 20,999 2,590 2,116 59 25,764 0.32% 19,450 0.24% 6,314 Virgin Islands 19,539 84 10,562 22 30,207 0.38% 5,701 0.07% 24,506 Virginia 71,362 21,345 31,634 1,002 125,341 1.58% 235,958 2.93% -110,617 Washington 91,282 16,177 31,770 80 139,309 1.75% 167,202 2.08% -27,893 West Virginia 53,396 5,851 12,725 199 72,171 0.91% 53,890 0.67% 18,281 Wisconsin 131,007 15,189 32,854 7,588 186,638 2.35% 139,941 1.74% 46,697 Wyoming 52,256 453 3,881 113 56,703 0.71% 15,373 0.19% 41,329 Total $4,267,746 $1,315,734 $2,282,499 $85,952 $7,951,931 100.00% $8,057,357 100.00% -$105,426 2 Contributions are preliminary and include administrative cost of approximately $105 million, as shown in USAC's Annual Report. Allocation of contributions among states is an FCC staff estimate. 3 Net dollar flow is positive when payments from USF to carriers exceed contributions to USF. Total is negative because of administrative expenses. Notes: Figures may not add due to rounding. USF is an abbreviation for the Universal Service Fund. 1 Data are from USAC. Table 1.12 Universal Service Support Mechanisms by State: 2010 Total Estimated Contributions 2 Estimated Net Dollar Flow 3 1 - 32 2 - 1 2. Program Review Section 2 includes the latest data on the low-income, high-cost, schools and libraries, and rural health care support programs. The data provided in this section are supplemented by additional tables at www.fcc.gov/wcb/iatd/monitor.html. This website location also provides more details on the history and operation of each of the four support programs. Low-Income Support Program: Lifeline and Link Up The Lifeline program promotes increased telephone subscribership by providing low-income households with discounts on the monthly cost of telephone service. Link Up provides qualified subscribers with a one-time discount (up to a maximum of $30) off of the initial installation fee for one traditional, wireline phone service at the primary residence or the activation fee for one wireless phone service. The Lifeline program was created in 1984, and Link Up rules were created in 1987. In June 2000, the Commission further expanded Lifeline and Link Up to address the needs of households on Tribal lands. 1 The low-income support programs grew substantially between 2008 and 2010. Lifeline subscribers increased 54% from 6.9 million subscribers in 2008 to 10.6 million subscribers in 2010. Table 2.1 reports Tribal and non-Tribal Lifeline subscriber and Link Up beneficiary data for years 1987 through 2010. Similarly, low-income support (the sum of Lifeline and Link Up support) increased 61% from $822 million in 2008 to $1.32 billion in 2010. Table 2.2 reports annual low-income support payments for years 1988 through 2010. Chart 2.1 shows the growth in low-income subscribers and beneficiaries graphically. Table 2.3 reports federal and state Lifeline monthly support by state in December 2010, and indicates the additional contribution from the federal program to reduce local rates where states have authorized statewide or carrier-specific intrastate local rate reductions. The table indicates the average monthly non-Tribal support provided by carriers in each state for both incumbent local exchange carriers (ILECs) and competitive eligible telecommunications carriers (CETCs). In December 2010, CETCs average monthly nationwide combined federal and state support was $12.61 as compared to $11.95 for ILECs. Table 2.4 reports average monthly federal Lifeline support per subscriber by state and average monthly Tribal Lifeline support by state for 2010. 2 Table 2.5 reports the average Link Up support per beneficiary for both Tribal and non-Tribal beneficiaries. Table 2.6 reports low-income support payments by state for Lifeline and Link Up for 2010. American Indian and Native American Tribal Lifeline Tier 4 and Link Up data are also reported. Total 1 Federal-State Joint Board on Universal Service; Promoting Deployment and Subscribership in Unserved and Underserved Areas, Including Tribal and Insular Areas, Twelfth Report and Order, and Further Notice of Proposed Rulemaking, CC Docket No. 96-45, FCC 00-208, 15 FCC Rcd 12,208 (2000). 2 Lifeline support includes Tiers 1-3 support. Tribal support is Tier 4 support. See the program appendix for an explanation of Tiers 1-4 support. 2 - 2 carrier payments data include the carrier's incremental cost of providing toll-limitation services (TLS) in each state. The growth in low-income support between 2008 and 2010 is due to competitive eligible telecommunication carriers receiving substantially more support. Support received by CETCs increased from $147 million in 2008 to $725 million in 2010. In contrast, incumbent local exchange carriers (ILECs) support declined from $675 million in 2008 to $596 million in 2010. Table 2.7 shows annual low-income support since 1998 for both ILECs and CETCs and Chart 2.2 shows the increase in CETC share of total support since 1998. América Móvil and AT&T combined accounted for just over 50% of low-income support payments in 2010. 3 Table 2.8 reports low-income support by holding company for the top 10 recipients of low-income support in 2010. Table 2.9 breaks it out by Lifeline, Link Up and TLS support. Additional data on the low-income support program have been posted at www.fcc.gov/wcb/iatd/monitor.html. These data include Lifeline subscribership and Link Up beneficiaries by state since 2000 and low-income support data by state and study area since 1998. 3 América Móvil owns TracFone and Puerto Rico Telephone Company. Table 2.1 Lifeline Subscribers and Link Up Beneficiaries Year Non-Tribal Tribal Total Non-Tribal Tribal Total 1987 1,063,443 7,953 1988 1,828,862 105,758 1989 2,115,288 206,656 1990 2,466,513 513,155 1991 2,984,290 639,645 1992 3,440,216 743,285 1993 3,971,937 737,362 1994 4,423,119 837,964 1995 4,914,056 823,679 1996 5,233,425 808,354 1997 1 5,110,537 NA 1998 5,380,726 2,195,417 1999 5,640,094 1,834,766 2000 5,856,551 18,688 5,875,239 1,689,867 2,038 1,691,905 2001 6,087,269 56,820 6,144,089 1,670,260 23,355 1,693,615 2002 6,406,176 112,191 6,518,367 1,656,768 29,901 1,686,669 2003 6,343,411 147,203 6,490,614 1,653,301 22,289 1,675,590 2004 6,616,305 176,390 6,792,695 1,669,888 41,034 1,710,922 2005 6,883,048 236,458 7,119,506 1,653,101 86,857 1,739,958 2006 6,648,267 289,249 6,937,516 1,560,348 99,179 1,659,527 2007 6,617,969 329,386 6,947,355 1,385,440 110,495 1,495,935 2008 6,500,374 353,274 6,853,648 1,505,833 116,905 1,622,738 2009 8,168,902 387,623 8,556,525 1,826,921 109,275 1,936,196 2010 10,160,724 419,612 10,580,336 2,504,026 125,865 2,629,891 NA - Not available. Note: The reported subscribers and beneficiaries represent USAC data for the time period January through December which include true-ups for Lifeline subscribers and Link-Up beneficiaries through March of the following year. 1 Subscriber data were not collected in 1997. Lifeline subscribership data were estimated by USAC. Source: Universal Service Administrative Company. Lifeline Link Up 2 - 3 Table 2.2 Low-Income Support Payments (in Thousands) Total Year General Tribal 2 TLS 3 PICC 4 Total Non-Tribal Tribal Total 1988 $31,952 $0 $0 $0 $31,952 $1,991 $0 $1,991 $33,943 1989 50,878 0 0 0 50,878 4,480 0 4,480 55,358 1990 62,464 0 0 0 62,464 11,351 0 11,351 73,815 1991 79,104 0 0 0 79,104 13,705 0 13,705 92,809 1992 93,766 0 0 0 93,766 15,342 0 15,342 109,108 1993 109,083 0 0 0 109,083 17,019 0 17,019 126,102 1994 123,284 0 0 0 123,284 18,573 0 18,573 141,857 1995 137,277 0 0 0 137,277 18,392 0 18,392 155,670 1996 148,186 0 0 0 148,186 18,247 0 18,247 166,433 1997 147,579 0 0 0 147,579 13,711 0 13,711 161,290 1998 1 416,504 0 2,700 2,802 422,006 42,461 0 42,461 464,467 1999 438,578 0 3,134 4,450 446,162 33,988 0 33,988 480,150 2000 482,052 522 2,846 3,168 488,588 30,411 30 30,441 519,029 2001 548,419 6,960 3,195 0 558,574 30,314 475 30,788 589,362 2002 623,350 17,955 3,779 0 645,083 30,323 700 31,022 676,106 2003 657,095 24,167 4,425 0 685,687 30,170 515 30,686 716,373 2004 695,188 30,502 5,111 0 730,800 30,898 1,230 32,129 762,929 2005 716,133 45,124 6,215 0 767,472 31,715 2,788 34,503 801,975 2006 703,958 61,524 8,885 0 774,367 29,832 2,869 32,701 807,068 2007 710,183 73,148 8,514 0 791,846 27,816 3,575 31,391 823,237 2008 695,022 80,922 8,634 0 784,579 30,682 6,578 37,260 821,839 2009 868,134 88,088 8,959 0 965,182 40,812 7,485 48,298 1,013,479 2010 1,127,768 92,930 22,519 0 1,243,217 67,759 9,789 77,548 1,320,765 2 Tribal support is Tier 4 support only. Tiers 1 to 3 support for Tribal beneficiaries is included under General. 3 TLS is an abbreviation for toll limitation service. 4 Carriers no longer charge a residential Presubscribed Interexchange Carrier Charge (PICC) as of July 1, 2000. Source: Universal Service Administrative Company. Lifeline Link Up Lifeline Subscribers and Link Up Beneficiaries (in Thousands) 1 Effective in 1998, the federal Lifeline support mechanism was expanded so that a basic level of assistance would be provided in all states. Additional federal support is also provided wherever a state chooses to provide matching assistance. Prior to the expansion, states were required to match all federal support with their own state support, and if the state provided no support, then no federal support was available in that state. The basic level of federal support was also increased in 1998. Chart 2.1 Note: Data for 1998-2009 were revised. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Lifeline 5,381 5,640 5,875 6,144 6,518 6,491 6,793 7,120 6,938 6,947 6,854 8,557 10,580 Link Up 2,195 1,835 1,692 1,694 1,687 1,676 1,711 1,740 1,660 1,496 1,623 1,936 2,630 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 - 4 Basic Federal Support 1 State Support 2 Federal Match Total Federal Support 3 Total Basic Federal Support 1 State Support 2 Federal Match Total Federal Support 3 Total Basic Federal Support 1 State Support 2 Federal Match Total Federal Support 3 Total Alabama $8.25 $3.50 $1.75 $10.00 $13.50 $8.34 $3.49 $1.74 $10.09 $13.58 $8.33 $3.49 $1.75 $10.07 $13.56 Alaska 8.25 3.50 1.75 10.00 13.50 8.25 3.46 1.73 9.98 13.43 8.25 3.46 1.73 9.98 13.45 American Samoa 8.25 0.00 0.00 8.25 8.25 8.25 3.50 1.75 10.00 13.50 8.25 0.04 0.02 8.27 8.31 Arizona 8.01 1.22 0.61 8.62 9.84 8.25 3.50 1.75 10.00 13.50 8.14 2.42 1.21 9.34 11.76 Arkansas 7.42 2.34 1.17 8.59 10.93 7.09 3.49 1.74 8.84 12.33 7.16 3.24 1.62 8.78 12.03 California 6.60 3.42 1.71 8.31 11.74 8.03 3.50 1.75 9.78 13.28 6.61 3.43 1.71 8.32 11.75 Colorado 8.21 3.49 1.75 9.96 13.46 8.25 3.50 1.75 10.00 13.50 8.21 3.49 1.75 9.96 13.46 Connecticut 7.48 1.18 0.59 8.07 9.25 7.48 3.50 1.75 9.23 12.73 7.48 2.55 1.28 8.76 11.31 Delaware 8.13 0.00 0.00 8.13 8.13 8.13 3.50 1.75 9.88 13.38 8.13 3.23 1.61 9.74 12.97 District of Columbia 5.59 3.50 1.75 7.34 10.84 5.59 3.47 1.73 7.32 10.79 5.59 3.48 1.74 7.33 10.80 Florida 8.19 3.50 1.75 9.94 13.44 8.19 3.50 1.75 9.94 13.44 8.19 3.50 1.75 9.94 13.44 Georgia 8.25 3.38 1.69 9.94 13.32 8.25 3.50 1.75 10.00 13.49 8.25 3.47 1.73 9.98 13.45 Guam 8.25 3.50 1.75 10.00 13.50 NA NA NA NA NA 8.25 3.50 1.75 10.00 13.50 Hawaii 8.25 0.00 0.00 8.25 8.25 NA NA NA NA NA 8.25 0.00 0.00 8.25 8.25 Idaho 8.16 3.47 1.74 9.90 13.37 8.25 2.93 1.46 9.71 12.64 8.17 3.42 1.71 9.88 13.30 Illinois 6.57 0.00 0.00 6.57 6.57 6.43 1.84 0.92 7.35 9.20 6.45 1.52 0.76 7.22 8.74 Indiana 7.51 0.00 0.00 7.51 7.51 7.93 3.45 1.72 9.66 13.11 7.54 0.26 0.13 7.68 7.94 Iowa 7.08 0.00 0.00 7.08 7.08 7.17 0.00 0.00 7.17 7.17 7.09 0.00 0.00 7.09 7.09 Kansas 7.25 3.50 1.75 9.00 12.50 7.05 2.24 1.12 8.17 10.41 7.16 2.93 1.46 8.62 11.55 Kentucky 8.19 3.47 1.74 9.92 13.39 8.55 3.49 1.75 10.30 13.79 8.31 3.48 1.74 10.05 13.53 Louisiana 8.25 0.00 0.00 8.25 8.25 8.30 2.37 1.19 9.49 11.86 8.29 2.16 1.08 9.38 11.54 Maine 7.99 3.50 1.75 9.74 13.24 8.02 3.50 1.75 9.77 13.28 8.00 3.50 1.75 9.75 13.25 Maryland 7.36 3.41 1.71 9.07 12.48 7.40 3.50 1.75 9.15 12.65 7.40 3.49 1.75 9.15 12.64 Massachusetts 8.10 3.50 1.75 9.85 13.35 8.10 3.50 1.75 9.85 13.35 8.10 3.50 1.75 9.85 13.35 Michigan 7.26 2.22 1.11 8.38 10.60 7.47 2.83 1.41 8.88 11.71 7.44 2.75 1.37 8.81 11.56 Minnesota 7.21 1.74 0.87 8.08 9.82 7.14 0.61 0.31 7.45 8.06 7.21 1.70 0.85 8.06 9.76 Mississippi 8.25 3.34 1.67 9.92 13.26 8.25 3.48 1.74 9.99 13.47 8.25 3.43 1.71 9.97 13.39 Missouri 7.32 3.48 1.74 9.06 12.54 7.15 2.67 1.34 8.48 11.15 7.24 3.12 1.56 8.81 11.93 Montana 8.25 2.47 1.24 9.49 11.96 8.25 3.50 1.75 10.00 13.50 8.25 2.73 1.37 9.62 12.35 Nebraska 7.09 3.35 1.67 8.76 12.11 6.65 3.50 1.75 8.40 11.90 6.98 3.39 1.69 8.67 12.06 Nevada 6.11 3.33 1.66 7.78 11.11 5.62 3.39 1.69 7.32 10.70 5.95 3.35 1.67 7.63 10.98 New Hampshire 7.95 0.00 0.00 7.95 7.95 7.92 3.50 1.75 9.67 13.17 7.93 2.60 1.30 9.23 11.83 New Jersey 7.99 3.48 1.74 9.73 13.21 8.00 3.50 1.75 9.75 13.25 7.99 3.49 1.75 9.74 13.23 New Mexico 8.25 3.23 1.61 9.86 13.09 8.25 3.50 1.75 10.00 13.50 8.25 3.30 1.65 9.90 13.20 New York 8.01 3.30 1.65 9.65 12.95 8.10 3.49 1.75 9.85 13.34 8.07 3.44 1.72 9.79 13.23 North Carolina 7.86 3.50 1.75 9.61 13.11 8.05 3.50 1.75 9.80 13.30 8.01 3.50 1.75 9.76 13.26 North Dakota 8.25 1.94 0.97 9.22 11.17 8.25 2.89 1.44 9.70 12.58 8.25 1.99 0.99 9.25 11.23 N. Mariana Islands 8.25 0.00 0.00 8.25 8.25 8.26 0.00 0.00 8.26 8.26 8.25 0.00 0.00 8.25 8.25 Ohio 7.27 3.49 1.75 9.02 12.51 7.38 3.50 1.75 9.13 12.63 7.34 3.50 1.75 9.09 12.58 Oklahoma 7.41 0.39 0.20 7.60 8.00 7.14 0.95 0.48 7.62 8.57 7.21 0.81 0.41 7.62 8.43 Oregon 8.22 3.48 1.74 9.96 13.45 8.25 3.50 1.75 10.00 13.50 8.23 3.49 1.74 9.97 13.46 Pennsylvania 7.65 0.76 0.38 8.02 8.78 7.60 3.50 1.75 9.35 12.85 7.62 2.40 1.20 8.82 11.22 Puerto Rico 8.25 3.50 1.75 10.00 13.50 8.25 3.50 1.75 10.00 13.50 8.25 3.50 1.75 10.00 13.50 Rhode Island 8.10 3.50 1.75 9.85 13.35 8.14 3.50 1.75 9.89 13.39 8.12 3.50 1.75 9.87 13.37 South Carolina 8.22 3.50 1.75 9.97 13.47 8.84 3.50 1.75 10.59 14.08 8.39 3.50 1.75 10.13 13.63 South Dakota 8.31 0.09 0.05 8.36 8.45 8.17 0.00 0.00 8.17 8.17 8.30 0.08 0.04 8.34 8.42 Tennessee 8.16 3.20 1.60 9.76 12.96 8.16 3.50 1.75 9.90 13.40 8.16 3.43 1.72 9.87 13.30 Texas 7.26 3.49 1.75 9.00 12.50 7.84 3.49 1.75 9.59 13.08 7.37 3.49 1.75 9.12 12.62 Utah 8.07 3.50 1.75 9.82 13.32 8.25 3.50 1.75 10.00 13.50 8.08 3.50 1.75 9.83 13.32 Vermont 7.98 3.50 1.75 9.73 13.23 NA NA NA NA NA 7.98 3.50 1.75 9.73 13.23 Virgin Islands 8.25 3.50 1.75 10.00 13.50 NA NA NA NA NA 8.25 3.50 1.75 10.00 13.50 Virginia 7.22 3.25 1.62 8.84 12.09 7.82 3.49 1.74 9.56 13.05 7.78 3.47 1.74 9.51 12.99 Washington 7.70 2.65 1.32 9.02 11.67 8.10 0.82 0.41 8.51 9.32 7.77 2.31 1.15 8.93 11.24 West Virginia 8.27 0.00 0.00 8.27 8.28 8.25 3.48 1.74 9.99 13.47 8.25 3.28 1.64 9.89 13.16 Wisconsin 7.39 2.42 1.21 8.60 11.02 7.00 2.65 1.33 8.33 10.98 7.14 2.57 1.28 8.42 10.99 Wyoming 8.25 3.50 1.75 10.00 13.50 8.25 3.50 1.75 10.00 13.50 8.25 3.50 1.75 10.00 13.50 Total $7.33 $3.08 $1.54 $8.87 $11.95 $7.83 $3.19 $1.59 $9.42 $12.61 $7.61 $3.14 $1.57 $9.18 $12.32 Notes: This table reflects only non-Tribal support. All averages are weighted averages. NA: Not Applicable. ILECs is an abbreviation for incumbent local exchange carriers and CETCs is an abbreviation for competitive eligible telecommunications carriers. 1 Basic federal support includes both Tier 1 and Tier 2 support. See text for definitions. 2 Includes only state support (Tier 3) that is matched by federal support. Source: Universal Service Administrative Company. Table 2.3 Average Lifeline Monthly Support by ILEC Status and by State (December 2010) 3 Total federal support reported in Table 2.3 is different from Table 2.4 since Lifeline subscribers are from different USAC data sources. ILECs CETCs All Carriers 2 - 5 State General Tribal Non-Tribal Tribal General 1 Tribal Alabama $31,758 $3 268,743 26 $9.85 $8.22 Alaska 8,651 17,885 0 100,747 $7.16 14.79 American Samoa 66 0 660 0 8.36 - Arizona 8,460 12,156 28,807 46,741 9.33 21.67 Arkansas 8,791 0 99,286 3 7.38 5.44 California 171,490 36 1,698,086 585 8.41 5.13 Colorado 2,306 1 19,327 5 9.94 12.73 Connecticut 8,191 0 78,054 0 8.74 - Delaware 1,793 0 15,301 0 9.76 - District of Columbia 1,888 0 21,347 0 7.37 - Florida 82,790 0 740,114 2 9.32 3.13 Georgia 45,808 0 398,062 0 9.59 - Guam 280 0 2,295 0 10.15 - Hawaii 482 0 4,730 0 8.49 - Idaho 3,301 172 27,158 661 9.89 21.69 Illinois 29,883 0 351,270 0 7.09 - Indiana 4,040 0 47,821 0 7.04 - Iowa 3,782 0 44,370 2 7.10 10.75 Kansas 3,888 2 38,091 26 8.50 6.54 Kentucky 9,261 0 79,047 0 9.76 - Louisiana 24,287 0 250,418 0 8.08 - Maine 8,090 65 69,766 548 9.59 9.83 Maryland 9,832 0 112,453 0 7.29 - Massachusetts 25,938 0 218,545 0 9.89 - Michigan 52,121 56 510,235 329 8.51 14.27 Minnesota 5,973 334 60,590 1,826 7.98 15.22 Mississippi 10,209 5 109,899 18 7.74 25.23 Missouri 9,879 2 95,534 54 8.61 2.35 Montana 1,774 1,964 7,993 7,418 9.59 22.06 Nebraska 1,741 85 16,287 466 8.66 15.14 Nevada 3,069 23 36,653 314 6.92 5.98 New Hampshire 1,506 0 13,636 0 9.20 - New Jersey 23,245 0 222,487 0 8.71 - New Mexico 8,059 5,528 46,168 21,770 9.89 21.16 New York 95,757 1 815,426 11 9.79 9.75 North Carolina 54,893 1 472,938 4 9.67 14.63 North Dakota 1,834 764 12,929 4,771 8.64 13.34 Northern Mariana Islands 168 0 1,699 0 8.25 - Ohio 58,911 0 539,987 0 9.09 - Oklahoma 20,118 48,606 6,472 210,700 7.72 19.22 Oregon 5,617 39 47,486 244 9.81 13.43 Pennsylvania 34,419 0 325,067 0 8.82 - Puerto Rico 39,190 0 341,502 0 9.56 - Rhode Island 3,029 0 25,666 0 9.83 - South Carolina 7,925 7 69,671 95 9.47 6.38 South Dakota 1,199 996 7,583 6,623 7.03 12.54 Tennessee 40,182 0 342,895 0 9.77 - Texas 93,260 71 882,414 1,136 8.80 5.19 Utah 3,439 232 28,112 949 9.86 20.36 Vermont 2,533 0 21,375 0 9.87 - Virgin Islands 83 0 640 0 10.81 - Virginia 21,371 0 187,599 0 9.49 - Washington 12,486 3,617 106,309 12,452 8.76 24.21 West Virginia 5,337 0 47,936 0 9.28 - Wisconsin 12,988 227 140,703 868 7.65 21.81 Wyoming 393 54 3,082 218 9.94 20.49 Total $1,127,768 $92,930 10,160,724 419,612 $8.88 $18.46 Source: Universal Service Administrative Company. 1 Total federal support reported in Table 2.3 is different from Table 2.4 since Lifeline subscribers are from different USAC data sources. Notes: General support includes Tier 1 to 3 support. Tribal Lifeline rates are just for Tier 4 payments. Tribal Lifeline subscribers also qualify for Tier 1 to 3 support, which is included in General. These calculations exclude TLS. Table 2.4 Federal Lifeline Average Benefits by State: 2010 Subscribers Support per MonthSupport in Thousands 2 - 6 State Non-Tribal Tribal Non-Tribal Tribal Non-Tribal Tribal Alabama $5,517 $0 185,789 0 $29.70 - Alaska 0 72 3 3,717 $52.00 19.40 American Samoa 1 0 18 0 45.00 - Arizona 70 162 4,515 7,947 15.41 20.35 Arkansas 3,185 0 107,554 0 29.61 - California 2,970 0 143,202 5 20.74 19.20 Colorado 33 0 1,877 0 17.50 - Connecticut 29 0 1,145 0 25.52 - Delaware 2 0 89 0 18.00 - District of Columbia 48 0 1,958 0 24.45 - Florida 3,656 0 124,143 0 29.45 - Georgia 4,063 0 155,936 0 26.06 - Guam 10 0 554 0 17.51 - Hawaii 3 0 114 0 22.76 - Idaho 37 0 2,481 8 14.95 14.63 Illinois 5,494 0 187,389 0 29.32 - Indiana 222 0 9,423 0 23.60 - Iowa 72 0 4,109 0 17.44 - Kansas 540 0 18,923 0 28.51 - Kentucky 1,644 0 57,714 0 28.48 - Louisiana 8,638 0 281,284 0 30.71 - Maine 164 1 7,359 49 22.35 24.22 Maryland 1,402 0 47,283 0 29.66 - Massachusetts 4 0 654 0 6.85 - Michigan 3,886 0 132,555 23 29.32 12.22 Minnesota 63 2 5,884 123 10.72 16.05 Mississippi 3,032 0 111,060 0 27.30 - Missouri 1,382 0 54,402 9 25.40 7.22 Montana 13 6 977 482 13.49 12.86 Nebraska 24 0 1,476 2 16.10 17.00 Nevada 66 1 3,390 40 19.37 18.10 New Hampshire 7 0 354 0 19.54 - New Jersey 1,707 0 57,799 0 29.53 - New Mexico 57 55 3,818 2,798 14.86 19.75 New York 88 0 3,347 0 26.30 - North Carolina 3,701 0 125,458 0 29.50 - North Dakota 16 7 1,026 297 15.92 24.28 Northern Mariana Islands 13 0 624 0 20.53 - Ohio 808 0 37,124 0 21.76 - Oklahoma 51 9,403 2,264 107,292 22.36 87.64 Oregon 68 0 7,735 12 8.73 13.33 Pennsylvania 600 0 30,017 0 19.99 - Puerto Rico 812 0 32,271 0 25.16 - Rhode Island 7 0 3,385 0 2.11 - South Carolina 2,252 0 83,466 0 26.98 - South Dakota 10 4 805 242 12.38 16.71 Tennessee 2,344 0 97,019 0 24.16 - Texas 5,874 4 240,366 189 24.44 19.45 Utah 35 3 2,815 142 12.54 19.75 Vermont 19 0 1,325 0 14.26 - Virgin Islands 0 0 11 0 27.45 - Virginia 37 0 1,916 0 19.32 - Washington 530 64 33,785 2,134 15.68 29.83 West Virginia 584 0 19,604 0 29.78 - Wisconsin 1,864 4 64,094 342 29.08 13.08 Wyoming 6 0 338 12 17.81 20.33 Total $67,759 $9,789 2,504,026 125,865 $27.06 $77.78 Source: Universal Service Administrative Company. Table 2.5 Link Up Average Benefits by State: 2010 Beneficiaries Support per BeneficiarySupport in Thousands 2 - 7 State or Jurisdiction Lifeline Link Up General Tribal Non-Tribal Tribal Alabama $31,758 $3 $5,517 $0 $4,417 $41,695 Alaska 8,651 17,885 0 72 61 26,670 American Samoa 66 0 1 0 0 67 Arizona 8,460 12,156 70 162 50 20,896 Arkansas 8,791 0 3,185 0 517 12,493 California 171,490 36 2,970 0 136 174,632 Colorado 2,306 1 33 0 4 2,344 Connecticut 8,191 0 29 0 0 8,220 Delaware 1,793 0 2 0 0 1,794 District of Columbia 1,888 0 48 0 0 1,936 Florida 82,790 0 3,656 0 2,184 88,629 Georgia 45,808 0 4,063 0 94 49,966 Guam 280 0 10 0 0 289 Hawaii 482 0 3 0 0 485 Idaho 3,301 172 37 0 7 3,518 Illinois 29,883 0 5,494 0 378 35,755 Indiana 4,040 0 222 0 5 4,268 Iowa 3,782 0 72 0 7 3,861 Kansas 3,888 2 540 0 94 4,523 Kentucky 9,261 0 1,644 0 1,261 12,166 Louisiana 24,287 0 8,638 0 3,237 36,162 Maine 8,090 65 164 1 5 8,325 Maryland 9,832 0 1,402 0 0 11,234 Massachusetts 25,938 0 4 0 1 25,943 Michigan 52,121 56 3,886 0 491 56,555 Minnesota 5,973 334 63 2 5 6,377 Mississippi 10,209 5 3,032 0 380 13,627 Missouri 9,879 2 1,382 0 156 11,419 Montana 1,774 1,964 13 6 4 3,762 Nebraska 1,741 85 24 0 12 1,862 Nevada 3,069 23 66 1 1 3,159 New Hampshire 1,506 0 7 0 0 1,513 New Jersey 23,245 0 1,707 0 1 24,953 New Mexico 8,059 5,528 57 55 25 13,725 New York 95,757 1 88 0 7 95,854 North Carolina 54,893 1 3,701 0 2,706 61,301 North Dakota 1,834 764 16 7 2 2,623 Northern Mariana Islands 168 0 13 0 0 181 Ohio 58,911 0 808 0 228 59,947 Oklahoma 20,118 48,606 51 9,403 3,095 81,273 Oregon 5,617 39 68 0 8 5,733 Pennsylvania 34,419 0 600 0 4 35,023 Puerto Rico 39,190 0 812 0 0 40,002 Rhode Island 3,029 0 7 0 0 3,037 South Carolina 7,925 7 2,252 0 770 10,954 South Dakota 1,199 996 10 4 1 2,210 Tennessee 40,182 0 2,344 0 240 42,767 Texas 93,260 71 5,874 4 1,849 101,058 Utah 3,439 232 35 3 15 3,725 Vermont 2,533 0 19 0 1 2,553 Virgin Islands 83 0 0 0 0 83 Virginia 21,371 0 37 0 0 21,408 Washington 12,486 3,617 530 64 22 16,719 West Virginia 5,337 0 584 0 0 5,921 Wisconsin 12,988 227 1,864 4 36 15,120 Wyoming 393 54 6 0 0 454 Total $1,127,768 $92,930 $67,759 $9,789 $22,519 $1,320,765 Source: Universal Service Administrative Company. Notes: These dollars represent submitted claims to USAC for the time period January 2010 through December 2010, including true-ups reported through August 2011. General Lifeline support is Tier 1 to 3 support for all subscribers, including Tribal subscribers. Tribal Lifeline support is Tier 4 support only. For Lifeline, "General" payments are made to all Lifeline subscribers and "Tribal" payments are additional payments to Tribal Lifeline subscribers only. For Link Up, the payments and subscribers for the two categories of recipients are kept separate. (in Thousands) Table 2.6 Low-Income Support Payments by State: 2010 TLS Total 2 - 8 Table 2.7 ILECs CETCs Total 1998 $464,207 $260 $464,467 0.1 % 1999 479,353 796 480,150 0.2 2000 517,901 1,128 519,029 0.2 2001 585,790 3,572 589,362 0.6 2002 663,009 13,097 676,106 1.9 2003 693,378 22,994 716,373 3.2 2004 723,580 39,349 762,929 5.2 2005 734,344 67,631 801,975 8.4 2006 707,135 99,933 807,068 12.4 2007 701,990 121,247 823,237 14.7 2008 674,805 147,034 821,839 17.9 2009 643,220 370,259 1,013,479 36.5 2010 595,858 724,907 1,320,765 54.9 Low-Income Support Received by ILECs and CETCs (in Thousands) Notes: ILECs is an abbreviation for incumbent local exchange carriers. CETCs is an abbreviation for competitive eligible telecommunications carriers. CETCs include both wireless and wireline carriers. Percent of Low-Income Support Received by CETCs Chart 2.2 Percent CETCs Source: Universal Service Administrative Company. 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 - 9 Rank Holding Company Name Low-Income Support Percent of Total Cumulative Percent of Total 1 América Móvil $362,919 27.5% 27.5% 2 AT&T Inc. 321,650 24.4 51.8 3 Verizon Communications Inc. 122,941 9.3 61.1 4 Sprint Nextel Corporation 72,342 5.5 66.6 5 Nexus Communications, Inc. 63,163 4.8 71.4 6 Associated Telecommunications Management Services, LLC 40,079 3.0 74.4 7 Qwest Communications International, Inc. 33,422 2.5 77.0 8 CenturyLink, Inc. 24,333 1.8 78.8 9 Smith Bagley, Inc. 22,874 1.7 80.5 10 Frontier Communications Corporation 20,571 1.6 82.1 Other Carriers 236,472 17.9 100.0 All Holding Companies $1,320,765 100.0% 100.0% Rank Holding Company Name Lifeline Support Link Up Support TLS Support 1 América Móvil $362,769 $150 $0 2 AT&T Inc. 309,494 11,798 358 3 Verizon Communications Inc. 121,101 1,789 51 4 Sprint Nextel Corporation 72,342 0 0 5 Nexus Communications, Inc. 45,447 17,693 23 6 Associated Telecommunications Management Services, LLC 17,751 11,250 11,078 7 Qwest Communications International, Inc. 32,629 714 79 8 CenturyLink, Inc. 24,057 276 0 9 Smith Bagley, Inc. 22,662 212 0 10 Frontier Communications Corporation 20,249 273 50 Other Carriers 192,198 33,394 10,879 All Holding Companies $1,220,697 $77,548 $22,519 (in Thousands) Table 2.8 Table 2.9 Low-Income Support by Year-End Holding Company Structure: 2010 Low-Income Support by Program and Year-End Holding Company Structure: 2010 (in Thousands) 2 - 10 2 - 11 High-Cost Support Program The high-cost support mechanisms enable areas with very high costs to recover some of these costs from the federal universal service fund, leaving a smaller remainder of the costs to be recovered through end-user rates or state universal service support mechanisms. In this manner, the high-cost support mechanisms are intended to hold down local rates and thereby further one of the most important goals of federal and state regulation -- the preservation and advancement of universal telephone service. This section of the report outlines the high-cost support mechanisms and provides data for these mechanisms. The high-cost support mechanisms include embedded high-cost loop support (HCLS), 4 safety net additive support (SNAS), safety valve support (SVS), forward-looking non-rural high-cost model support (HCMS), interstate common line support (ICLS) 5 for rate-of-return carriers, 6 interstate access support (IAS) for price-cap carriers, and local switching support (LSS) for carriers that serve 50,000 or fewer access lines. On October 27, 2011, the Commission adopted the USF/ICC Transformation Order, which comprehensively reforms and modernizes the universal service and intercarrier compensation systems into a new Connect America Fund (CAF) to ensure that robust, affordable voice and broadband services are available to Americans throughout the nation. 7 Among other things, the Commission eliminates certain high-cost support mechanisms, modifies others, and establishes a new framework for distributing high-cost funding in the most efficient and technologically neutral manner possible, through market-based mechanisms such as competitive bidding. Some reforms take effect for support in 2012, while others will be implemented in 2013 or later. Accordingly, some data available in 2012 will reflect the effect of reforms, but data reflecting the full effect of the reforms will not be available until later years. 4 This was formerly referred to as the Universal Service Fund, and still bears that name in the Commission rules. It is now referred to as high-cost loop support to avoid confusion with the new, more comprehensive universal service support mechanisms that the Commission developed to implement the 1996 Act. See 47 C.F.R. § 36.601. See also 47 C.F.R. Part 54. 5 Effective July 1, 2004, long term support (LTS) was merged into ICLS. Any LTS amounts reported in subsequent years are out-of-year adjustments for prior payments. Such adjustments occurred for ILECs only in 2005, but continued for some CETCs through 2008. 6 A number of mid-sized carriers have elected to convert to price-cap regulation in recent years and receive ICLS that is frozen at a per-line amount. See, e.g., Windstream Petition for Conversion to Price Cap Regulation and for Limited Waiver Relief, WC Docket No. 07-171, Order, 23 FCC Rcd 5294 (2008). 7 See generally Connect America Fund; A National Broadband Plan for Our Future; Establishing Just and reasonable Rates for Local Exchange Carriers; High-Cost Universal Service Support; Developing a Unified Intercarrier Compensation Regime; Federal-State Joint Board on Universal Service; Lifeline and Link-Up; Universal Service Reform—Mobility Fund; WC Docket Nos. 10-90, 07-135, 05-337, 03-109, CC Docket Nos. 01-92, 96-45, GN Docket No. 09-51, WT Docket No. 10-208, Report and Order and Further Notice of Proposed Rulemaking, FCC 11-161 (rel. Nov. 18, 2011) (USF/ICC Transformation Order and FNPRM). 2 - 12 High-Cost Disbursements Table 2.10 summarizes the annual disbursements 8 for the high-cost support mechanisms from 2003 through 2011. The table values for annual disbursements for 2011 are estimates extrapolated from disbursements made from January through August 2011. The table is based on information provided by the Universal Service Administrative Company (USAC). The values in Table 2.10 are the amounts disbursed in each year. For each year, the values include prior period adjustments disbursed in that year in support of these mechanisms for prior years. Chart 2.3 plots the total annual disbursements since 2003. The table and chart show that total disbursements peaked in 2008 at $4.5 billion. Chart 2.3 and all subsequent high-cost charts also include reserve fund dollars for 2010 and 2011; these funds are described in Table 1.10. The high-cost tables do not include these funds. Table 2.11 compares the annual amounts of support received by ILECs and by CETCs for each support mechanism. Chart 2.4 shows the total disbursement to ILECs and CETCs since 2003. Table 2.12 lists high-cost disbursements within each state in 2010. Mississippi received the most disbursements in 2010 ($261 million) with over 70% in HCMS ($188 million, the most of any state). Texas received almost as much disbursements as Mississippi ($247 million), but its support was primarily in the HCLS mechanism ($113 million, the most of any state). Alaska ($219 million) and Puerto Rico ($209 million) were third and fourth respectively in total disbursements. They were the leading recipients of disbursements for ICLS; all of Puerto Rico’s disbursements were for ICLS while Alaska received disbursements of $104 million for ICLS. Kansas had the fifth highest total disbursements among states in 2010 ($195 million) with over half for HCLS ($101 million). No other state or jurisdiction received more than $150 million dollars in disbursements. Table 2.13 lists total high-cost disbursement received from 2008 through 2010 by holding company for the top 10 recipients in 2008, 2009 or 2010. As a whole, these holding companies received 51% of disbursements in this time period. Verizon/Alltel led all holding companies in disbursements in 2008 and 2009, but a sharp drop in their disbursements in 2010 moved AT&T to the top in 2010. Table 2.14 provides a breakdown by mechanism of disbursements to holding companies for 2010 as well as an analysis of disbursements per supported line for holding companies. As a group, these 25 holding companies accounted for 94% of all supported lines, but only 57% of all disbursements. AT&T and Verizon had the most supported lines and total disbursements in 2010; together they accounted for 57% of supported lines with only 20% of total disbursements. Disbursements per supported line are highly variable; among these 25 holding companies, they range from the thousands of dollars per line (Sandwich Isles Communications and Valley Telephone Cooperative) to less than $10 per line (Qwest and Sprint Nextel). AT&T received the most disbursements for HCMS ($168 million) and ICLS ($120 million). Verizon received the most disbursements for IAS ($135 million). CenturyLink received the most disbursements for HCLS ($99 million). Table 2.15 lists the 10 study areas with the highest disbursements per supported line in 2010. Sandwich Isles Communications is noteworthy for its relatively large number of supported lines in this group and consequently large disbursement in 2010. 8 A “disbursement” is the distribution of funds in a specified time period. These funds were distributed in support of high-cost mechanisms in that period and possibly in support of earlier time periods. The disbursements in support of earlier time periods are the result of true-ups to resolve differences between initial payments and disbursements necessitated by revisions to supporting data. It is possible for disbursements to be negative, thus requiring the recipient to return dollars to the high-cost fund. 2 - 13 High-Cost Claims High-cost claims 9 are strongly correlated with disbursements. The difference is their relation to time. Disbursement dollars are aligned with the time that funds are distributed to the recipients. Claim dollars are aligned with the time period that the funds support. While disbursement dollars for a time period do not change in subsequent reports, it is possible for claim dollars in a time period to change because of subsequent true-ups especially in more recent years. Disbursements are useful for the analysis of the flow of money in and out of the fund while claim dollars are useful for the analysis of the justification for support dollars with respect to the recipient’s needs. 10 Tables 2.16 through 2.18 and Charts 2.3 and 2.4 are claims versions of Tables 2.10 through 2.12 and Charts 2.5 and 2.6. In general, the differences between the claims and disbursements views are minor. Table 2.16 and Chart 2.3 show that total claims (to date) were higher in 2010 than in 2009, but are expected to be lower in 2011. Table 2.17 shows that CETC claims (to date) were higher in 2010 than in 2009, but are expected to be lower in 2011. Table 2.18 lists high-cost claims within each state in 2010. Mississippi had the highest claims in 2010 ($272 million) with over 70% for HCMS ($193 million, the most of any state). Texas had claims almost as high as Mississippi ($259 million), but its support was primarily in the HCLS mechanism ($117 million). Kansas had the third highest total claims among states in 2010 ($227 million) with over half for HCLS ($121 million, highest of any state). Alaska ($195 million) and Puerto Rico ($180 million) were fourth and fifth respectively in total claims. No other state or jurisdiction had more than $150 million dollars in claims. Additional data on the high-cost program have been posted at www.fcc.gov/wcb/iatd/monitor.html. These data include 1) high-cost disbursement and claims by mechanism, study area, and state, 2) ILEC support data by study area and state, 3) changes in local exchange carriers, and 4) nationwide pool results provided by National Exchange Carrier Association, Inc. (NECA). The website also contains further details about the history and operation of the high-cost program. 9 A “claim” is the distribution of funds in support of a specified time period. These funds were distributed in that period and possibly a later time period. The disbursements in later time periods are the result of true- ups to resolve differences between initial payments and disbursements necessitated by revisions to supporting data made at that later date. Claims are always positive values. The claim data used in this report does not include true-ups except for ICLS and LSS in 2009. 10 Example: In December 2009, D dollars were distributed to a recipient; of these D dollars, D P dollars were distributed in support of lines in December 2009 (initial payment) and D T dollars were distributed in support of lines in November 2009 (true-up). In January 2010, J dollars were distributed to the recipient; of these J dollars, J P dollars were distributed in support of lines in January 2010 (initial payment) and J T dollars were distributed in support of lines in December 2009 (true-up). Disbursement dollars for December 2009 and January 2010 were D and J dollars respectively. Claim dollars for December 2009 and January 2010 were D P + J T and J P dollars respectively (assuming no future true-ups for December 2009 and January 2010). Year High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Long-Term Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support 2003 $1,085 $9 $0 $234 $504 $399 $622 $420 $3,273 2004 1,137 12 0 273 275 727 642 422 3,488 2005 1,219 15 4 292 0 1,178 691 425 3,824 2006 1,309 29 1 358 4 1,266 681 448 4,096 2007 1,402 38 3 346 0 1,392 645 460 4,287 2008 1,457 48 2 351 0 1,621 585 416 4,478 2009 1,424 53 5 331 0 1,537 563 381 4,292 2010 1,297 76 6 310 0 1,675 545 359 4,268 2011* 1,185 93 8 283 0 1,600 528 310 4,008 Note: Detail may not appear to add to totals due to rounding. * Estimate for 2011 extrapolated from payments through August 2011. Source: Universal Service Administrative Company. Note: The reserve consists of the 2010 Sprint and Verizon Wireless recovery and the 2011 CETC reserve (see Table 1.10). Total High-Cost Support Fund Disbursements and Reserve (in Millions) Table 2.10 High-Cost Support Fund Disbursement History Chart 2.3 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 M illio n s o f D o lla rs Reserve $157 $242 Disbursement $3,273 $3,488 $3,824 $4,096 $4,287 $4,478 $4,292 $4,268 $4,008 2003 2004 2005 2006 2007 2008 2009 2010 2011 2 - 14 Year Companies High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Long-Term Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support ILECs $1,058.2 $8.8 $0.0 $207.2 $479.1 $382.0 $604.9 $401.6 $3,141.8 2003 CETCs 26.5 0.3 0.0 26.8 25.0 17.4 16.9 18.5 131.4 Total 1,084.6 9.1 0.0 234.0 504.1 399.4 621.7 420.2 3,273.2 ILECs 1,055.4 10.5 0.0 218.9 243.8 645.0 596.0 384.8 3,154.5 2004 CETCs 81.3 1.1 0.0 54.5 31.0 82.0 45.7 37.5 333.1 Total 1,136.6 11.6 0.0 273.4 274.8 727.1 641.7 422.3 3,487.6 ILECs 1,052.1 12.3 3.8 221.3 0.0 953.9 581.9 360.4 3,185.7 2005 CETCs 166.8 2.9 0.6 70.6 -0.2 224.4 109.1 64.4 638.5 Total 1,218.9 15.2 4.4 291.8 -0.2 1,178.3 691.0 424.8 3,824.2 ILECs 1,046.0 24.3 0.3 207.8 0.0 941.9 540.4 355.7 3,116.4 2006 CETCs 263.0 5.1 0.4 149.7 4.5 323.9 140.8 92.5 979.9 Total 1,309.0 29.4 0.7 357.5 4.5 1,265.8 681.2 448.2 4,096.3 ILECs 1,049.8 27.6 1.9 197.6 0.0 979.8 504.1 347.4 3,108.2 2007 CETCs 352.7 10.9 1.1 148.6 0.0 412.1 140.9 112.3 1,178.5 Total 1,402.5 38.5 3.0 346.3 0.0 1,391.9 645.0 459.7 4,286.7 ILECs 1,034.3 34.1 1.5 185.1 0.0 1,063.4 473.3 301.6 3,093.3 2008 CETCs 422.2 13.4 0.3 165.5 0.1 557.2 111.3 114.4 1,384.5 Total 1,456.6 47.5 1.8 350.6 0.1 1,620.6 584.6 415.9 4,477.8 ILECs 1,006.5 38.2 4.9 169.0 0.0 1,066.1 456.3 277.2 3,018.2 2009 CETCs 417.6 14.4 0.1 161.6 0.0 470.6 106.3 103.5 1,273.9 Total 1,424.1 52.5 5.0 330.6 0.0 1,536.6 562.6 380.7 4,292.2 ILECs 959.8 58.9 4.9 156.7 0.0 1,141.4 457.6 275.8 3,055.1 2010 CETCs 336.8 17.1 1.3 153.1 0.0 533.2 87.8 83.4 1,212.7 Total 1,296.6 76.0 6.1 309.8 0.0 1,674.6 545.4 359.2 4,267.7 ILECs 903.4 74.8 5.4 147.0 0.0 1,118.2 437.0 237.2 2,923.1 2011* CETCs 282.0 18.4 2.2 136.3 0.0 482.0 91.1 72.7 1,084.6 Total 1,185.5 93.2 7.6 283.3 0.0 1,600.2 528.2 309.8 4,007.7 Note: Details may not appear to add to totals due to rounding. ILECs are incumbent local exchange carriers. CETCs are competitive eligible telecommunications carriers. * Estimate for 2011 extrapolated from payments through August 2011. Source: Universal Service Administrative Company. Note: The reserve consists of the 2010 Sprint and Verizon Wireless recovery and the 2011 CETC reserve (see Table 1.10). (in Millions) Table 2.11 High-Cost Support Fund Disbursement History - ILECs and CETCs (in Millions) Chart 2.4 Total High-Cost Support Fund Disbursements (ILECs and CETCs) and CETC Reserve $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2003 2004 2005 2006 2007 2008 2009 2010 2011 Support ILECs CETCs CETC Reserve 2 - 15 State High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support Alabama $16,147 $785 $0 $36,380 $19,773 $17,026 $3,440 $93,551 Alaska 88,530 1,243 0 0 103,990 0 25,206 218,970 American Samoa 3 0 0 0 2,921 0 907 3,831 Arizona 28,341 772 0 0 15,500 15,591 7,342 67,545 Arkansas 51,961 152 0 0 46,275 234 6,633 105,255 California 23,437 597 0 0 26,264 37,279 4,247 91,824 Colorado 30,330 198 0 0 22,944 17,814 4,580 75,866 Connecticut 0 0 0 0 0 489 0 489 Delaware 0 0 0 0 0 265 0 265 District of Columbia 0 0 0 0 0 0 0 0 Florida 4,969 137 0 0 11,025 48,871 2,691 67,693 Georgia 31,471 3,107 0 0 51,335 19,508 10,148 115,569 Guam 3,061 0 0 0 12,173 0 848 16,082 Hawaii 39,850 0 0 0 18,153 2,047 1,721 61,772 Idaho 20,937 97 0 0 13,168 12,171 5,412 51,785 Illinois 20,408 564 0 0 32,480 9,339 9,107 71,898 Indiana 25,644 2,136 0 0 29,032 15,646 6,832 79,290 Iowa 33,298 3,157 146 0 59,501 10,640 22,480 129,222 Kansas 101,286 1,300 5,775 0 67,409 5,863 13,673 195,307 Kentucky 32,570 2,880 0 14,728 33,272 15,048 5,300 103,799 Louisiana 76,267 1,988 0 0 41,897 11,587 4,741 136,480 Maine 3,129 412 0 1,770 13,371 52 5,805 24,540 Maryland 144 0 0 0 928 2,319 376 3,767 Massachusetts 7 41 0 0 221 1,460 529 2,258 Michigan 17,497 802 0 0 21,995 515 8,762 49,571 Minnesota 30,718 4,189 21 0 53,932 2,541 14,306 105,707 Mississippi 29,416 741 0 188,392 17,354 20,857 3,792 260,553 Missouri 50,885 1,690 0 0 39,921 10,209 4,667 107,372 Montana 32,484 183 0 13,863 32,102 756 6,422 85,810 Nebraska 27,511 598 0 7,059 32,508 5,846 15,135 88,657 Nevada 5,375 648 0 0 5,174 9,111 4,132 24,440 New Hampshire 91 414 0 0 3,872 2,275 3,019 9,671 New Jersey 0 1 0 0 354 260 924 1,538 New Mexico 33,373 564 0 0 27,747 6,988 13,020 81,692 New York 4,321 2,197 0 0 14,377 12,274 10,979 44,148 North Carolina 9,827 302 0 0 40,673 22,916 5,913 79,631 North Dakota 34,129 8,377 19 0 42,681 658 11,703 97,567 Northern Mariana Islands 0 0 0 0 0 92 1,122 1,214 Ohio 10,156 781 0 0 15,702 9,646 2,658 38,943 Oklahoma 64,015 9,641 0 0 54,697 3,367 17,158 148,877 Oregon 25,609 625 0 0 27,670 14,991 6,077 74,972 Pennsylvania 1,402 103 0 0 35,386 19,004 6,007 61,902 Puerto Rico 0 0 0 0 208,626 0 0 208,626 Rhode Island 0 0 0 0 0 35 0 35 South Carolina 32,694 8,715 0 0 59,023 9,259 8,856 118,547 South Dakota 40,132 3,274 138 2,184 36,227 122 8,018 90,096 Tennessee 13,235 4,320 0 0 28,817 8,902 5,422 60,695 Texas 112,949 2,633 0 0 78,284 35,494 18,034 247,395 Utah 5,631 94 8 0 12,097 2,063 3,296 23,190 Vermont 2,591 400 0 6,085 6,106 2,790 3,026 20,999 Virgin Islands 5,255 0 0 0 14,284 0 0 19,539 Virginia 3,083 522 0 0 9,964 54,387 3,406 71,362 Washington 22,278 196 0 0 37,235 24,556 7,018 91,282 West Virginia 2,508 6 0 28,285 3,613 17,607 1,377 53,396 Wisconsin 33,042 4,181 34 0 75,248 123 18,379 131,007 Wyoming 14,573 203 0 11,041 17,336 4,528 4,575 52,256 Total $1,296,572 $75,965 $6,142 $309,789 $1,674,636 $545,419 $359,222 $4,267,746 Source: Universal Service Administrative Company. Table 2.12 High-Cost Support Fund Disbursements - by Mechanism and State: 2010 (in Thousands) 2 - 16 Rank Holding Company Name 1 2008 2009 2010 Total 1 Verizon Communications Inc. 2, 6 $308,584 $679,881 $359,758 $1,348,223 2 AT&T Inc. 426,412 435,421 473,158 1,334,992 3 CenturyLink, Inc. 3 278,575 351,860 303,992 934,427 4 Telephone and Data Systems, Inc. 231,869 236,141 235,943 703,952 5 Alltel Corporation 2 413,875 - - 413,875 6 Windstream Corporation 97,073 110,335 114,626 322,035 7 Frontier Communications Corporation 4, 6 81,045 70,029 155,930 307,004 8 Telapex, Inc. 5 74,187 77,227 78,765 230,179 9 América Móvil 98,343 28,342 92,006 218,691 10 Qwest Communications International, Inc. 70,234 66,519 66,567 203,320 11 Sprint Nextel Corporation 2 90,479 49,962 46,862 187,303 12 FairPoint Communications, Inc. 55,863 48,389 42,090 146,343 13 Alaska Communications Systems Holdings, Inc. 41,709 45,629 55,953 143,291 14 Embarq 3 97,041 - - 97,041 4 Citizens Communications Company changed their name to Frontier Communications Corporation on July 31, 2008. 5 Telapex, Inc. owns Cellular South. 6 Frontier Communications purchased study areas in 14 states from Verizon Communications on July 1, 2010. 3 CenturyTel merged with Embarq on July 1, 2009. See http://www.centurytelembarqmerger.com/pdf/pressreleases/News_Release_Legal_Close_06-30-09_FINAL.pdf. CenturyTel, Inc. offically changed their name to CenturyLink, Inc. on May 20, 2010. See http://news.centurylink.com/index.php?s=43&item=2313. Table 2.13 High-Cost Support Fund Disbursements by Year-End Holding Company Structure 1 Holding company name indicates common control/common ownership of carriers. Carriers appear on this list if they are in the top ten for any of the presented years. 2 Verizon Communications Inc. acquired Alltel Corporation from Atlantis Holdings LLC (Atlantis) on January 9, 2009 (http://news.vzw.com/news/2009/01/pr2009-01-09.html, retrieved March 5, 2009). Verizon Wireless and Sprint Nextel, in separate transactions in 2008, each committed to phase down their CETC high-cost universal service support in 20 percent increments over five years, beginning in 2009. These commitments were not implemented until the Commission released an Order on August 31, 2010 providing guidance to the Universal Service Administrative Company regarding the methodology to achieve those commitments. High-Cost Universal Service Support, Federal- State Joint Board on Universal Service, Request for Review of Decision of Universal Service Administrator by Corr Wireless Communications, LLC, WC Docket No. 05-337, CC Docket No. 96-45, Order and Notice of Proposed Rulemaking, 25 FCC Rcd 12854 (2010). To the extent that Verizon Wireless received support prior to the August 31, 2010 Order that should have been surrendered under its commitment, USAC is reclaiming that support in 2010 and 2011. (in Thousands) 2 - 17 Rank Holding Company Name High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support Supported Lines Total Support per Line 1 AT&T Inc. $59,437 $1,671 $4 $167,813 $119,979 $114,466 $9,788 $473,158 37,266 $12.70 2 Verizon Communications Inc. 86,662 6,839 118 12,173 96,747 134,966 22,252 359,758 34,894 10.31 3 CenturyLink, Inc. 99,175 691 21 10,275 92,958 84,629 16,243 303,992 7,337 41.44 4 Telephone and Data Systems, Inc. 65,945 10,557 199 4,247 110,152 14,602 30,241 235,943 3,994 59.07 5 Frontier Communications Corporation 2,390 1,907 0 18,230 19,234 99,728 14,440 155,930 5,844 26.68 6 Windstream Corporation 10,777 7,192 0 5,876 65,186 16,172 9,423 114,626 3,310 34.63 7 América Móvil 0 0 0 0 92,006 0 0 92,006 1,527 60.25 8 Telapex, Inc. 16,745 341 0 46,148 9,659 3,673 2,200 78,765 787 100.12 9 Qwest Communications International, Inc. 589 0 0 22,688 0 42,748 542 66,567 8,418 7.91 10 Alaska Communications Systems Holdings, Inc. 19,520 96 0 0 30,579 0 5,757 55,953 324 172.63 11 Sprint Nextel Corporation 7,502 120 0 5,496 15,830 15,650 2,263 46,862 10,100 4.64 12 General Communication, Inc. 15,342 130 0 0 25,425 0 5,891 46,787 226 207.25 13 FairPoint Communications, Inc. 8,575 166 0 7,325 16,595 5,076 4,353 42,090 1,432 29.40 14 Rural Telephone Service Company, Inc. 21,396 195 3,715 0 14,889 153 331 40,680 65 629.23 15 American Broadband Communications et al. 19,309 266 0 80 10,467 93 5,603 35,818 49 733.20 16 Farmers Telephone Cooperative, Inc. 15,598 1,458 0 0 14,403 0 835 32,295 79 408.46 17 Deutsche Telekom AG 244 245 0 114 27,554 1,962 204 30,323 2,341 12.95 18 Matanuska Telephone Association, Inc. 15,474 0 0 0 13,544 0 1,253 30,271 68 444.75 19 Coral Wireless, LLC 19,526 0 0 0 9,545 50 910 30,031 50 595.53 20 Consolidated Communications, Inc. 9,859 0 0 0 18,371 0 1,503 29,734 247 120.37 21 EATEL Corp., Inc. 17,553 1,018 0 0 10,804 0 269 29,644 34 871.28 22 Sandwich Isles Communications, Inc. 17,405 0 0 0 7,431 0 748 25,583 2 12,371.11 23 Valley Telephone Cooperative, Inc. 13,726 214 0 0 6,794 47 1,781 22,562 15 1,473.87 24 Pioneer Telephone Cooperative (OK) 5,622 1,839 0 0 11,231 0 2,280 20,972 77 274.00 25 Golden West Telecommunications Cooperative, Inc. 10,197 1,178 0 0 8,531 0 1,043 20,950 40 527.02 Other Carriers 738,002 39,839 2,084 9,326 826,721 11,405 219,068 1,846,445 7,220 255.73 Total 1,296,572 75,965 6,142 309,789 1,674,636 545,419 359,222 4,267,746 125,745 33.94 High-Cost Support Fund Disbursements by Holding Company: 2010 (in Thousands) Table 2.14 2 - 18 Study Areas with the Highest Per-Line High-Cost Support Fund Disbursement: 2010 Rank Incumbent ETC State Holding Company 1 Support 2 Supported Lines 3 Annual Support per Line 1 Westgate Communications LLC d/b/a Weavtel Washington Westgate Communications LLC $375,858 16 $23,491 2 Adak Tel Utility Alaska Adak Eagle Enterprises, LLC 2,784,558 165 16,876 3 Beaver Creek Telephone Company Washington May, Bott et al. 465,690 28 16,632 4 Border To Border Texas Border to Border Communications, Inc. 1,828,017 135 13,541 5 Sandwich Isles Comm. Hawaii Sandwich Isles Communications, Inc. 25,583,457 2,068 12,371 6 Allband Communications Cooperative Michigan Allband Communications Cooperative 1,030,962 96 10,739 7 Accipiter Comm. Arizona Accipiter Communications, Inc. 3,340,878 360 9,280 8 Terral Tel. Co. Oklahoma Terral Telephone Company 2,060,376 250 8,242 9 South Park Tel. Co. Colorado American Broadband Communications et al. 1,126,056 180 6,256 10 Dell Tel. Co-Op. - TX Texas Dell Telephone Cooperative, Inc. 4,480,362 769 5,826 1 Holding company name indicates common control/common ownership of carriers. 2 Calendar year disbursements include prior period adjustments. 3 Supported lines is the number of lines in service that are receiving support, not the number of homes in the study area. The Federal Communications Commission now receives the number of supported lines at the end of each quarter. The number of lines in 2010 was based on the total number of supported lines as of June 30, 2010. Table 2.15 2 - 19 Year High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support 2009 $1,420 $52 $3 $332 $1,428 $598 $389 $4,221 2010 1,360 76 6 320 1,695 577 405 4,440 2011* 1,207 94 7 294 1,637 535 380 4,155 * Estimate for 2011 extrapolated from claims through August 2011. Source: Universal Service Administrative Company. Note: The reserve consists of the 2010 Sprint and Verizon Wireless recovery and the 2011 CETC reserve (see Table 1.10). Total High-Cost Support Fund Claims and Reserve Table 2.16 High-Cost Support Fund Claim History (in Millions) Chart 2.5 Notes: Detail may not appear to add to totals due to rounding. Claims are initial payments except for true-ups in ICLS and LSS in 2009. $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 Millions of Dollars Reserve $157 $242 Claims $4,221 $4,440 $4,155 2009 2010 2011 2 - 20 Year Companies High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support ILECs $1,008.8 $37.9 $2.6 $169.1 $1,069.4 $473.0 $284.5 $3,045.3 2009 CETCs 411.2 13.8 0.2 163.0 358.7 124.7 104.3 1,175.8 Total 1,420.0 51.6 2.7 332.2 1,428.1 597.7 388.7 4,221.1 ILECs 961.5 58.7 4.8 156.2 1,117.7 472.4 297.9 3,069.3 2010 CETCs 398.9 17.7 1.2 164.1 577.1 104.1 107.1 1,370.4 Total 1,360.4 76.4 6.0 320.2 1,694.9 576.6 405.1 4,439.7 ILECs 901.9 74.9 4.9 147.0 1,128.4 457.6 288.5 3,003.3 2011* CETCs 304.9 19.0 2.1 147.3 509.0 77.8 91.2 1,151.3 Total 1,206.8 93.9 7.0 294.3 1,637.4 535.4 379.7 4,154.6 Notes: Details may not appear to add to totals due to rounding. ILECs are incumbent local exchange carriers. CETCs are competitive eligible telecommunications carriers. * Estimate for 2011 extrapolated from claims through August 2011. Source: Universal Service Administrative Company. Note: The reserve consists of the 2010 Sprint and Verizon Wireless recovery and the 2011 CETC reserve (see Table 1.10). (in Millions) Table 2.17 High-Cost Support Fund Claim History - ILECs and CETCs Chart 2.6 Total High-Cost Support Fund Claims (ILECs and CETCs) and CETC Reserve (in Millions) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2009 2010 2011 Suppor t ILECs CETCs CETC Reserve 2 - 21 State High-Cost Loop Support Safety Net Additive Support Safety Valve Support High-Cost Model Support Interstate Common Line Support Interstate Access Support Local Switching Support Total Support Alabama $16,541 $786 $0 $37,878 $20,450 $18,225 $4,711 $98,591 Alaska 80,961 1,187 0 0 90,294 0 23,198 195,640 American Samoa 0 0 0 0 3,049 0 1,307 4,356 Arizona 28,387 783 0 0 15,497 16,443 8,147 69,256 Arkansas 65,160 191 0 0 60,344 300 9,277 135,272 California 26,681 587 0 0 27,574 38,725 4,614 98,181 Colorado 30,191 176 0 0 22,538 18,511 4,520 75,938 Connecticut 0 0 0 0 0 514 0 514 Delaware 0 0 0 0 0 262 0 262 District of Columbia 0 0 0 0 0 0 0 0 Florida 5,463 140 0 0 10,879 54,199 3,204 73,884 Georgia 33,129 3,109 0 0 53,755 21,296 11,530 122,819 Guam 3,618 0 0 0 12,402 0 521 16,541 Hawaii 40,175 0 0 0 19,200 2,128 2,121 63,624 Idaho 21,036 78 0 0 13,151 12,692 5,786 52,742 Illinois 20,605 563 0 0 32,384 9,648 10,805 74,004 Indiana 25,817 2,102 0 0 27,185 16,451 7,939 79,495 Iowa 35,033 3,750 137 0 64,511 9,457 24,550 137,437 Kansas 120,733 1,594 5,805 0 76,986 6,294 15,672 227,083 Kentucky 33,123 2,788 0 14,791 33,314 15,445 5,537 104,998 Louisiana 81,947 2,063 0 0 44,831 13,027 5,982 147,851 Maine 3,103 440 0 1,770 14,824 29 6,605 26,772 Maryland 142 0 0 0 899 2,410 440 3,891 Massachusetts 7 41 0 0 197 1,525 520 2,291 Michigan 20,062 860 0 0 25,889 592 10,256 57,659 Minnesota 38,674 4,436 9 0 69,578 3,170 19,198 135,065 Mississippi 30,662 809 0 193,486 20,855 21,687 4,634 272,133 Missouri 48,415 1,645 0 0 39,221 10,492 5,955 105,728 Montana 31,596 180 0 14,514 31,188 790 6,843 85,111 Nebraska 34,431 744 0 9,500 41,685 7,166 19,677 113,203 Nevada 5,733 669 0 0 6,199 9,983 5,867 28,452 New Hampshire 87 421 0 0 4,110 1,553 3,871 10,042 New Jersey 0 1 0 0 361 269 814 1,445 New Mexico 33,194 554 0 0 22,980 8,372 10,336 75,437 New York 4,578 2,228 0 0 14,330 12,767 12,917 46,819 North Carolina 10,530 332 0 0 39,721 24,784 6,164 81,531 North Dakota 33,053 8,118 19 0 42,102 688 13,996 97,976 Northern Mariana Islands 0 0 0 0 0 99 1,044 1,142 Ohio 10,130 797 0 0 14,315 10,089 3,261 38,592 Oklahoma 63,918 9,144 0 0 54,702 3,876 17,951 149,591 Oregon 25,860 514 0 0 27,204 15,575 8,510 77,664 Pennsylvania 1,382 104 0 0 34,827 19,763 5,323 61,399 Puerto Rico 0 0 0 0 180,129 0 0 180,129 Rhode Island 0 0 0 0 0 36 0 36 South Carolina 32,913 8,550 0 0 53,249 9,702 7,783 112,198 South Dakota 41,171 3,074 57 1,886 34,742 148 9,428 90,507 Tennessee 13,255 4,447 0 0 29,407 9,241 5,981 62,331 Texas 117,101 2,719 0 0 81,266 38,483 19,553 259,122 Utah 5,927 94 7 0 10,939 2,132 3,837 22,935 Vermont 2,559 418 0 6,085 6,496 1,927 2,902 20,387 Virgin Islands 5,733 0 0 0 13,266 0 0 18,999 Virginia 3,238 532 0 0 10,664 57,912 3,977 76,322 Washington 21,657 227 0 0 38,758 24,208 7,782 92,632 West Virginia 2,308 0 0 29,025 3,329 18,661 2,535 55,857 Wisconsin 35,754 4,272 0 0 82,868 148 22,093 145,136 Wyoming 14,640 177 0 11,308 16,234 4,681 5,602 52,641 Total $1,360,414 $76,444 $6,034 $320,243 $1,694,880 $576,573 $405,076 $4,439,664 Source: Universal Service Administrative Company. Table 2.18 High-Cost Support Fund Claims - by Mechanism and State: 2010 2 - 22 2 - 23 Schools and Libraries (E-rate) Program Eligible schools, school districts, libraries, and consortia that include schools and libraries may receive discounts for eligible services under the schools and libraries universal service support mechanism, also known as the E-rate program. The discounts range from 20 percent to 90 percent. The level of the discount is based on the percentage of students in the school or school district that are eligible for the national school lunch program (or a federally approved alternative mechanism) and location in a rural area. On September 28, 2010, the FCC released an order revising the E-rate program to maximize the utilization of broadband and eliminate rules that no longer serve their intended purpose. The revisions adopted by the FCC fall into three conceptual categories. First, the FCC enabled schools and libraries to better serve students, teachers, librarians, and their communities by providing more flexibility to select and make available the most cost-effective broadband and other communications services. Specifically, the FCC allowed applicants to lease fiber from the most cost-effective provider, including not-for-profit entities, so that applicants can choose the services that best meet their needs from a broad set of competitive options and in the most cost-effective manner available in the marketplace. The FCC also changed its rules to permit schools to allow community use of E-rate funded services outside of school hours and supports broadband connections to the residential portion of schools that serve students with special circumstances. Additionally, the FCC established a pilot program to establish best practices to support off-campus wireless connectivity for portable learning devices outside of regular school or library operating hours. 11 Further, the FCC indexed E-rate’s funding cap of $2.25 billion annually to inflation to preserve the purchasing power of the E-rate program. As a result, the cap for funding year 2011 was increased to $2,290,682,250. 12 Total commitments to the E-rate program dropped from $2.9 billion in funding year 2009 to $2.6 billion in funding year 2010. Disbursements in funding year 2009 were $2.0 billion as compared to $1.8 billion in funding year 2008. Table 2.19 shows commitments and disbursements by funding year since 1998. Table 2.20 summarizes commitments and disbursements by state and by type of applicant for funding years 2008 through 2010. Additional data on the E-rate program have been posted at www.fcc.gov/wcb/iatd/monitor.html. 11 Schools and Libraries Universal Service Support Mechanism, A National Broadband Plan for our Future, CC Docket No. 02-6, GN Docket No. 09-51, Sixth Report and Order, FCC 10-175 (rel. Sept. 28, 2010) (Sixth Report and Order). 12 See Wireline Competition Bureau Announces E-rate Inflation-based Cap for Funding Year 2011, CC Docket No. 02-6, Public Notice, DA 11-1345 (rel. Aug. 5, 2011), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1345A1.pdf. Table 2.19 Schools and Libraries Funding Commitments and Disbursements by Applicant Type and Service Type Funding Commitments (Dollar Amounts in Thousands) Total School Other Internal Internet Year Commitments Libraries Schools Districts Consortia Connections Access Telecom 1998 $1,695,012 $65,830 $110,223 $1,285,356 $233,603 $885,866 $134,137 $675,009 1999 2,147,209 66,061 180,570 1,597,896 302,682 1,364,921 148,772 633,517 2000 2,071,427 65,853 109,936 1,685,832 209,807 1,133,546 218,756 719,124 2001 2,185,325 57,824 164,419 1,748,575 214,508 1,183,555 224,800 776,970 2002 2,230,278 60,324 159,532 1,760,487 249,935 1,119,707 249,987 860,584 2003 2,698,267 63,237 200,097 2,173,434 261,499 1,514,385 276,043 907,839 2004 2,161,565 54,303 157,396 1,694,919 254,946 969,207 246,034 946,324 2005 2,106,764 54,367 150,151 1,695,026 207,220 871,833 259,084 975,846 2006 1,965,834 63,712 128,818 1,523,559 249,745 621,250 287,239 1,057,345 2007 2,437,477 60,647 173,791 1,962,667 240,372 958,351 308,637 1,170,489 2008 2,511,708 75,906 145,962 2,030,356 259,484 894,608 336,529 1,280,571 2009 2,885,700 83,880 194,027 2,336,048 271,746 1,204,238 348,851 1,332,611 2010 2,584,190 89,809 221,579 1,998,929 273,872 815,803 392,335 1,376,051 Funding Disbursements (Dollar Amounts in Thousands) Total School Other Internal Internet Year Disbursements Libraries Schools Districts Consortia Connections Access Telecom 1998 $1,398,927 $49,870 $83,335 $1,069,681 $196,041 $796,535 $94,824 $507,567 1999 1,653,985 47,456 140,254 1,268,763 197,512 1,105,506 95,499 452,980 2000 1,649,809 43,600 88,521 1,385,363 132,325 1,035,185 133,463 481,161 2001 1,697,981 41,940 117,157 1,400,704 138,181 1,007,845 149,542 540,594 2002 1,596,827 42,100 105,786 1,283,825 165,116 812,661 170,995 613,171 2003 1,946,264 44,327 135,759 1,594,000 172,179 1,083,404 203,699 659,161 2004 1,530,664 39,723 107,140 1,203,719 180,082 649,298 192,945 688,421 2005 1,609,147 48,603 109,910 1,274,881 175,753 624,857 214,559 769,731 2006 1,541,025 45,932 95,983 1,196,955 202,155 460,011 235,301 845,713 2007 1,897,374 47,976 134,911 1,510,610 203,877 707,412 258,103 931,860 2008 1,824,458 57,937 109,959 1,441,091 215,471 529,210 273,598 1,021,651 2009 2,014,291 66,136 142,560 1,591,671 213,924 698,395 280,871 1,035,025 2010 906,671 38,391 74,581 721,405 72,295 243,285 186,071 477,315 Source: Raw data provided by the Universal Service Administrative Company, rollups performed by Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Activity through June 30, 2011. Because of the appeals process, funding commitments and disbursements can be made after the end of the program year. Also, disbursements may continue beyond the end of the program year in the event of delayed internal connections installation. Other adjustments and corrections may also be made. 2 - 24 Table 2.20 Funding Year 2008: July 1, 2008 through June 30, 2009 Library/Library Consortium Schools School Districts Other Consortium Totals Funds Funds Funds Funds Funds Funds Funds Funds Funds Funds State/Territory Committed Disbursed Committed Disbursed Committed Disbursed Committed Disbursed Committed Disbursed Alabama $715,346 $637,018 $798,412 $633,532 $31,102,333 $27,318,996 $8,004,806 $6,494,136 $40,620,898 $35,083,683 Alaska 137,097 113,902 290,496 259,640 25,615,191 21,163,158 0 0 26,042,784 21,536,700 American Samoa 0 0 0 0 0 0 1,593,682 1,058,945 1,593,682 1,058,945 Arizona 1,354,263 1,150,278 8,319,323 6,750,355 52,885,049 37,726,130 266,321 243,248 62,824,956 45,870,010 Arkansas 321,923 277,111 105,108 85,000 11,845,772 7,566,865 11,885,021 8,648,377 24,157,824 16,577,353 California 8,132,572 5,180,686 8,544,540 5,726,183 361,959,492 256,853,255 14,284,470 9,059,314 392,921,073 276,819,439 Colorado 837,728 588,813 908,890 505,212 18,447,823 14,102,144 532,641 1,147,911 20,727,082 16,344,081 Connecticut 178,012 148,994 1,954,986 1,417,491 15,014,749 12,347,026 9,259,558 8,315,699 26,407,305 22,229,210 Delaware 5,507 2,923 191,492 134,516 758,767 696,026 0 0 955,767 833,465 District of Columbia 859,807 439,223 1,577,428 997,355 6,729,207 5,122,392 1,421,205 195,695 10,587,648 6,754,665 Florida 3,100,569 2,546,114 5,224,096 3,735,417 67,134,106 58,994,259 13,176,627 11,748,445 88,635,398 77,024,235 Georgia 4,981,119 4,404,142 1,679,471 1,344,859 65,730,993 54,660,341 10,110,799 9,385,070 82,502,382 69,794,413 Guam 17,172 13,331 19,550 11,855 873,516 482,338 0 0 910,238 507,525 Hawaii 0 0 2,024,130 1,152,650 1,190,971 744,394 138,025 49,239 3,353,126 1,946,283 Idaho 130,474 113,462 413,053 349,695 5,245,124 4,420,749 45,943 42,787 5,834,594 4,926,692 Illinois 1,714,636 1,499,758 5,335,178 4,286,404 78,547,249 51,139,398 1,568,235 1,411,352 87,165,298 58,336,912 Indiana 2,870,343 2,470,197 1,274,053 974,845 18,916,718 15,571,695 7,413,843 6,723,856 30,474,957 25,740,593 Iowa 174,715 130,389 630,731 426,594 7,627,311 6,105,140 3,790,662 3,641,234 12,223,419 10,303,357 Kansas 716,195 635,415 392,374 341,400 14,339,015 12,133,827 1,938,036 1,802,680 17,385,620 14,913,322 Kentucky 755,163 481,818 204,938 143,652 23,280,077 18,991,116 9,360,964 9,244,464 33,601,142 28,861,051 Louisiana 4,840,552 4,008,654 3,253,036 2,965,212 30,981,909 26,357,436 4,438,315 3,218,240 43,513,811 36,549,542 Maine 84,198 78,645 797,005 647,674 4,459,102 3,712,431 3,051,415 2,866,196 8,391,719 7,304,946 Maryland 309,922 260,424 1,790,289 1,286,856 10,162,088 9,292,597 194,944 194,944 12,457,243 11,034,820 Massachusetts 1,565,297 1,452,787 3,376,492 2,741,240 25,420,004 18,667,300 649,468 600,741 31,011,261 23,462,068 Michigan 1,565,300 1,320,119 2,988,830 2,384,092 40,371,074 32,576,746 6,363,854 5,393,233 51,289,058 41,674,189 Minnesota 1,473,757 938,298 2,287,521 1,704,731 13,257,548 10,848,229 5,353,416 5,151,302 22,372,242 18,642,560 Mississippi 1,637,326 1,383,779 1,250,693 989,973 25,918,152 20,948,665 5,799,816 4,812,564 34,605,986 28,134,982 Missouri 1,835,007 1,703,037 1,425,892 756,483 21,744,361 17,192,872 8,469,478 7,647,669 33,474,739 27,300,062 Montana 63,316 48,314 417,433 348,616 5,043,919 4,266,975 9,326 7,146 5,533,994 4,671,051 Nebraska 239,279 133,489 416,733 337,471 8,119,656 7,620,733 1,342,794 1,263,899 10,118,461 9,355,592 Nevada 365,929 320,412 338,738 281,988 4,361,624 3,577,835 0 0 5,066,292 4,180,235 New Hampshire 7,901 6,477 344,809 222,646 2,404,004 1,954,208 64,206 57,380 2,820,921 2,240,711 New Jersey 1,394,704 1,194,647 5,885,616 4,565,674 47,055,975 36,073,901 1,441,972 283,855 55,778,266 42,118,076 New Mexico 180,563 162,562 3,810,845 2,508,868 28,155,327 21,343,286 616,848 550,010 32,763,583 24,564,726 New York 10,469,709 5,890,119 31,654,782 24,214,821 298,759,282 104,082,979 31,087,407 25,302,012 371,971,181 159,489,931 North Carolina 1,787,535 1,548,460 1,562,661 1,112,326 58,459,108 51,747,891 1,603,641 1,169,428 63,412,944 55,578,104 North Dakota 8,009 6,239 344,740 292,168 939,188 781,951 2,530,550 2,435,791 3,822,487 3,516,149 Northern Mariana Isl 11,636 0 13,419 13,089 906,720 893,081 0 0 931,774 906,170 Ohio 3,059,554 2,812,586 9,368,418 6,811,416 58,986,628 42,800,360 4,074,458 3,787,252 75,489,059 56,211,614 Oklahoma 2,053,907 1,532,963 2,229,480 1,694,990 37,080,968 31,264,311 118,558 103,189 41,482,913 34,595,453 Oregon 273,334 157,511 880,619 588,909 14,157,900 12,008,212 2,469,505 1,314,996 17,781,358 14,069,627 Pennsylvania 2,979,277 2,650,162 9,933,881 7,235,322 62,743,283 53,234,520 14,234,499 12,940,586 89,890,940 76,060,589 Puerto Rico 3,287,829 2,655,820 4,904,369 3,355,739 8,451,122 7,364,156 0 0 16,643,319 13,375,716 Rhode Island 94,670 87,637 614,769 552,476 3,229,875 2,904,076 2,035,484 2,004,913 5,974,798 5,549,101 South Carolina 447,532 349,102 420,268 376,171 22,717,249 16,911,152 15,876,902 15,061,518 39,461,950 32,697,944 South Dakota 6,951 5,767 1,598,914 1,349,066 3,277,028 2,613,182 2,032,697 1,858,977 6,915,591 5,826,992 Tennessee 1,009,455 881,307 901,287 842,448 54,038,215 47,559,906 4,513,317 1,975,864 60,462,274 51,259,526 Texas 3,338,718 1,866,492 8,311,801 6,565,434 241,379,223 169,028,787 7,447,665 4,825,081 260,477,407 182,285,795 Utah 223,103 123,603 141,414 101,601 5,541,011 4,455,584 14,094,840 9,267,220 20,000,369 13,948,007 Vermont 21,914 16,682 553,440 377,124 1,406,226 1,119,165 50,189 42,968 2,031,769 1,555,938 Virgin Islands 0 0 446,494 413,082 71,144 60,823 6,157,966 5,058,585 6,675,603 5,532,491 Virginia 1,556,884 1,416,678 943,163 691,147 29,468,236 26,269,071 455,241 444,940 32,423,525 28,821,836 Washington 1,590,670 1,162,068 1,088,603 915,592 28,235,722 24,535,686 4,431,459 3,873,682 35,346,454 30,487,028 West Virginia 135,857 109,701 53,449 41,037 9,897,113 7,718,061 2,910,211 2,736,217 12,996,629 10,605,017 Wisconsin 954,501 790,740 1,493,311 1,239,025 14,230,683 11,757,323 8,233,044 7,907,733 24,911,539 21,694,821 Wyoming 29,408 28,321 230,590 158,113 1,681,522 1,407,765 2,539,590 2,100,373 4,481,111 3,694,572 Totals $75,906,148 $57,937,172 $145,962,052 $109,959,275 $2,030,355,653 $1,441,090,506 $259,483,913 $215,470,956 $2,511,707,765 $1,824,457,910 Source: Raw data provided by the Universal Service Administrative Company, rollups performed by Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Activity through June 30, 2011. Because of the appeals process, funding commitments and disbursements can be made after the end of the program year. Also, disbursements may continue beyond the end of the program year in the event of delayed internal connections installation. Other adjustments and corrections may also be made. Schools and Libraries Funding Commitments and Disbursements by State and by Type of Applicant 2 - 25 Table 2.20 Funding Year 2009: July 1, 2009 through June 30, 2010 Library/Library Consortium Schools School Districts Other Consortium Totals Funds Funds Funds Funds Funds Funds Funds Funds Funds Funds State/Territory Committed Disbursed Committed Disbursed Committed Disbursed Committed Disbursed Committed Disbursed Alabama $979,976 $732,627 $1,026,307 $720,679 $55,909,298 $40,452,531 $7,214,269 $7,158,400 $65,129,849 $49,064,236 Alaska 178,248 140,514 263,632 216,854 24,775,165 22,012,997 0 0 25,217,046 22,370,366 American Samoa 0 0 0 0 0 0 4,967,160 2,758,238 4,967,160 2,758,238 Arizona 1,019,216 853,753 10,724,960 6,993,927 65,031,575 50,486,413 1,617,962 1,452,203 78,393,713 59,786,296 Arkansas 305,276 239,984 509,940 475,400 13,550,503 9,377,367 11,833,538 7,587,213 26,199,257 17,679,964 California 7,486,147 5,262,851 12,697,844 8,375,821 395,822,581 217,791,422 15,775,940 6,997,328 431,782,511 238,427,423 Colorado 949,976 746,226 799,291 571,184 21,954,895 15,136,086 439,883 350,556 24,144,045 16,804,051 Connecticut 170,928 146,978 1,500,024 1,049,604 14,272,010 12,573,091 6,698,373 6,113,126 22,641,335 19,882,799 Delaware 296,981 296,862 145,794 95,718 786,648 530,295 1,307,702 1,299,343 2,537,124 2,222,217 District of Columbia 554,819 413,989 1,923,691 1,137,944 1,353,825 875,301 1,596,237 318,609 5,428,572 2,745,843 Florida 2,930,786 2,689,691 17,378,836 13,884,544 95,448,183 81,989,920 2,998,486 2,613,611 118,756,290 101,177,766 Georgia 4,789,355 4,297,666 2,882,380 2,521,974 77,934,768 61,318,589 10,175,961 9,289,607 95,782,464 77,427,837 Guam 13,246 0 12,242 1,834 757,840 258,361 0 0 783,328 260,196 Hawaii 236,466 221,476 2,925,391 2,046,060 1,265,194 749,481 0 0 4,427,052 3,017,017 Idaho 165,302 143,697 153,324 131,747 6,368,243 5,593,955 4,948,222 652,911 11,635,091 6,522,310 Illinois 2,066,767 1,845,053 5,824,270 3,817,615 82,304,825 51,817,234 2,079,623 1,949,342 92,275,484 59,429,244 Indiana 3,755,124 3,425,817 2,828,381 2,437,622 21,108,448 17,197,753 9,379,372 8,143,866 37,071,325 31,205,058 Iowa 177,341 123,599 1,084,982 828,262 8,917,196 7,131,712 4,669,649 4,119,432 14,849,168 12,203,006 Kansas 918,322 716,157 553,186 444,034 14,956,827 12,549,542 3,538,919 1,965,948 19,967,254 15,675,681 Kentucky 698,695 559,605 324,303 169,764 41,756,996 29,159,960 9,978,790 8,992,671 52,758,784 38,882,001 Louisiana 4,947,146 4,250,431 2,060,226 1,653,178 50,358,710 42,277,568 1,382,405 1,139,687 58,748,487 49,320,864 Maine 73,044 66,085 957,607 768,651 5,509,997 4,323,320 3,118,623 2,966,436 9,659,272 8,124,492 Maryland 1,151,869 253,558 1,789,126 1,147,686 16,640,909 9,733,092 724,252 668,680 20,306,155 11,803,016 Massachusetts 3,888,731 3,181,947 3,448,485 2,602,644 31,958,421 25,687,653 531,423 458,024 39,827,060 31,930,267 Michigan 1,800,861 1,637,324 3,083,370 2,305,950 43,460,536 33,333,077 8,203,110 6,238,916 56,547,877 43,515,267 Minnesota 1,333,869 1,249,931 2,446,056 1,893,437 14,197,192 11,739,743 5,421,943 5,074,615 23,399,060 19,957,727 Mississippi 1,747,187 1,560,116 2,049,445 1,651,456 27,071,979 21,871,295 5,296,410 4,819,430 36,165,021 29,902,297 Missouri 1,257,721 1,188,697 1,898,240 1,129,145 28,452,145 22,401,471 9,944,940 8,337,939 41,553,046 33,057,251 Montana 50,419 38,543 226,711 188,087 4,451,413 3,613,175 16,375 8,850 4,744,918 3,848,657 Nebraska 160,496 143,705 395,457 313,294 8,672,117 7,920,829 1,628,470 1,541,309 10,856,538 9,919,138 Nevada 291,989 257,033 838,524 795,610 7,345,465 4,950,739 0 0 8,475,979 6,003,382 New Hampshire 7,047 6,847 523,869 399,227 2,263,953 1,850,844 65,097 58,713 2,859,966 2,315,631 New Jersey 2,053,621 1,386,680 9,800,571 7,944,126 62,333,048 45,430,163 562,222 315,504 74,749,462 55,076,472 New Mexico 167,573 142,516 4,252,863 2,140,895 36,514,374 24,730,175 2,601,522 559,906 43,536,332 27,573,492 New York 11,027,373 6,887,509 40,740,902 30,516,781 232,471,343 126,830,674 32,318,760 26,069,564 316,558,378 190,304,528 North Carolina 1,786,665 1,660,167 2,359,525 1,695,519 63,444,002 49,196,453 3,272,896 1,408,618 70,863,088 53,960,757 North Dakota 7,754 6,562 369,016 283,760 2,942,174 2,699,341 3,464,736 2,313,874 6,783,680 5,303,538 Northern Mariana Isl 0 0 13,377 13,228 976,888 906,975 0 0 990,265 920,203 Ohio 3,420,419 3,092,173 9,371,160 7,385,320 64,662,281 51,987,627 4,166,614 3,872,802 81,620,474 66,337,921 Oklahoma 2,389,336 2,102,477 2,667,555 2,235,450 78,381,869 48,391,736 108,763 89,251 83,547,522 52,818,913 Oregon 362,658 325,017 574,754 445,170 14,371,654 12,045,835 2,341,027 1,379,383 17,650,093 14,195,405 Pennsylvania 3,029,019 2,800,394 9,207,346 6,354,586 69,402,087 58,404,644 14,077,516 13,477,980 95,715,968 81,037,604 Puerto Rico 6,492,576 4,291,971 4,636,318 3,365,187 42,708 28,241 0 0 11,171,602 7,685,399 Rhode Island 141,544 130,362 891,909 850,070 4,956,204 4,083,881 2,563,998 2,465,999 8,553,655 7,530,313 South Carolina 541,318 418,153 3,067,402 958,616 33,032,670 21,317,588 14,599,577 13,909,410 51,240,967 36,603,767 South Dakota 5,801 4,932 1,924,619 1,097,375 2,234,452 1,743,336 1,776,969 1,704,052 5,941,841 4,549,695 Tennessee 913,517 804,670 1,359,155 875,096 60,062,986 49,382,879 3,054,545 2,269,123 65,390,203 53,331,769 Texas 2,391,095 1,574,694 9,829,459 7,684,810 325,669,375 186,794,330 9,106,090 6,622,579 346,996,019 202,676,412 Utah 234,590 153,849 154,742 102,361 7,643,286 6,002,115 15,856,283 10,790,356 23,888,901 17,048,681 Vermont 15,915 12,147 871,592 582,258 1,566,963 1,167,373 45,864 40,091 2,500,334 1,801,869 Virgin Islands 25,980 0 2,061,355 1,597,034 43,740 43,740 6,075,391 5,733,059 8,206,466 7,373,833 Virginia 2,240,287 1,802,857 1,401,581 1,173,789 33,947,848 28,708,138 389,801 376,924 37,979,518 32,061,709 Washington 1,464,413 1,197,188 2,441,065 2,196,339 27,326,301 22,391,160 4,724,619 3,920,367 35,956,397 29,705,053 West Virginia 265,169 204,269 83,091 62,822 12,004,655 9,197,217 4,159,379 2,862,180 16,512,294 12,326,488 Wisconsin 470,574 423,489 2,411,765 2,049,071 16,188,226 12,582,602 8,552,475 8,527,867 27,623,040 23,583,028 Wyoming 29,369 23,351 259,906 181,563 1,170,665 900,277 2,373,514 2,139,740 3,833,454 3,244,931 Totals $83,879,914 $66,136,195 $194,026,920 $142,560,177 $2,336,047,656 $1,591,671,316 $271,745,693 $213,923,629 $2,885,700,183 $2,014,291,317 Source: Raw data provided by the Universal Service Administrative Company, rollups performed by Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Activity through June 30, 2011. Because of the appeals process, funding commitments and disbursements can be made after the end of the program year. Also, disbursements may continue beyond the end of the program year in the event of delayed internal connections installation. Other adjustments and corrections may also be made. Schools and Libraries Funding Commitments and Disbursements by State and by Type of Applicant 2 - 26 Table 2.20 Funding Year 2010: July 1, 2010 through June 30, 2011 Library/Library Consortium Schools School Districts Other Consortium Totals Funds Funds Funds Funds Funds Funds Funds Funds Funds Funds State/Territory Committed Disbursed Committed Disbursed Committed Disbursed Committed Disbursed Committed Disbursed Alabama $927,170 $160,300 $835,623 $284,462 $44,727,465 $16,575,555 $10,755,848 $377,433 $57,246,106 $17,397,750 Alaska 168,074 112,143 172,747 121,766 27,404,578 16,316,470 0 0 27,745,400 16,550,380 American Samoa 0 0 0 0 0 0 1,560,647 2,080 1,560,647 2,080 Arizona 1,382,208 399,287 8,424,276 3,997,263 53,028,282 17,470,446 1,130,684 125,502 63,965,450 21,992,498 Arkansas 357,837 197,507 232,953 129,796 19,261,965 5,967,569 13,200,151 214,601 33,052,906 6,509,473 California 9,335,170 3,414,886 13,957,052 6,696,390 319,515,810 109,016,123 21,120,348 5,311,512 363,928,379 124,438,911 Colorado 921,793 298,065 932,985 466,263 33,159,176 11,559,660 627,713 425,408 35,641,667 12,749,396 Connecticut 184,353 80,438 1,506,053 388,902 18,008,588 8,926,278 4,119,729 3,113,946 23,818,724 12,509,564 Delaware 301,642 267,759 202,436 40,605 947,827 26,582 1,433,214 0 2,885,119 334,947 District of Columbia 1,269,572 94,774 2,356,863 463,924 8,065,579 432,388 1,368,185 2,646 13,060,198 993,732 Florida 3,675,133 827,929 54,090,144 2,989,264 57,600,381 25,213,340 905,761 298,691 116,271,420 29,329,225 Georgia 4,376,816 3,776,102 1,758,041 953,693 68,002,545 29,304,084 10,072,862 2,481,906 84,210,265 36,515,785 Guam 25,033 0 5,179 3,819 0 0 0 0 30,212 3,819 Hawaii 90,275 0 3,083,399 293,550 3,475,072 628 0 0 6,648,746 294,177 Idaho 145,781 31,954 491,637 405,695 5,988,975 684,626 4,898,383 2,349,611 11,524,776 3,471,885 Illinois 2,128,206 833,239 4,293,499 1,023,034 98,101,177 40,542,816 5,229,702 184,830 109,752,585 42,583,920 Indiana 4,182,785 2,662,570 3,624,132 2,248,657 36,706,319 14,094,563 420,060 181,415 44,933,295 19,187,205 Iowa 163,545 102,639 832,021 467,106 8,564,879 3,801,850 4,565,942 3,484,012 14,126,388 7,855,607 Kansas 846,269 326,865 229,418 83,716 14,283,941 6,114,961 2,480,249 186,441 17,839,877 6,711,983 Kentucky 740,316 360,433 348,263 210,306 35,798,966 15,280,151 8,961 0 36,896,506 15,850,890 Louisiana 5,599,203 3,057,515 2,767,936 1,262,509 48,357,113 25,173,929 3,045,096 424,525 59,769,348 29,918,478 Maine 80,596 9,043 479,572 108,794 3,695,349 879,438 3,859,699 2,023,455 8,115,216 3,020,730 Maryland 539,165 220,615 2,073,282 423,981 24,928,617 2,934,748 1,091,892 516,068 28,632,956 4,095,412 Massachusetts 1,833,010 1,395,102 3,337,143 1,651,770 24,133,341 13,616,796 388,152 278,464 29,691,646 16,942,133 Michigan 2,275,239 843,153 2,697,421 912,824 38,698,573 9,769,805 6,696,291 3,990,723 50,367,525 15,516,505 Minnesota 1,373,582 407,089 2,627,653 1,058,673 21,883,459 3,348,077 5,304,332 3,578,980 31,189,026 8,392,819 Mississippi 1,929,032 1,002,797 1,220,503 721,312 25,332,665 10,112,551 7,415,946 457,211 35,898,146 12,293,871 Missouri 1,493,714 662,435 3,560,936 674,212 22,464,632 6,563,827 11,751,432 4,361,802 39,270,713 12,262,277 Montana 56,694 32,421 196,118 151,872 4,747,853 2,826,523 23,273 9,736 5,023,939 3,020,552 Nebraska 219,647 113,284 462,579 302,561 8,774,308 5,574,874 1,315,000 882,627 10,771,534 6,873,345 Nevada 304,318 9,393 621,859 336,443 7,034,663 771,702 0 0 7,960,841 1,117,539 New Hampshire 7,670 1,413 659,312 288,374 2,433,958 664,323 63,858 34,593 3,164,799 988,704 New Jersey 1,830,304 414,020 8,805,800 3,477,879 54,290,596 9,061,712 499,807 160,363 65,426,506 13,113,973 New Mexico 606,598 95,247 3,338,991 1,375,621 29,009,864 11,335,829 3,083,418 366,028 36,038,871 13,172,725 New York 9,389,540 3,510,837 39,218,013 16,665,659 172,578,086 38,018,356 25,042,209 2,985,950 246,227,848 61,180,802 North Carolina 2,023,181 1,106,631 2,399,952 1,432,977 74,361,942 29,309,971 3,260,922 327,986 82,045,997 32,177,565 North Dakota 9,458 6,146 440,665 215,992 1,250,193 627,266 3,528,447 2,297,693 5,228,763 3,147,097 Northern Mariana Isl 63 0 15,261 7,539 969,234 798,986 0 0 984,558 806,525 Ohio 3,508,430 561,416 9,492,526 4,802,814 63,034,107 28,617,588 3,747,001 1,419,972 79,782,063 35,401,790 Oklahoma 2,081,182 1,520,108 1,699,388 1,021,852 57,273,236 31,080,008 138,246 62,129 61,192,052 33,684,098 Oregon 331,100 72,406 785,142 532,318 13,731,001 3,365,160 1,111,946 95,146 15,959,189 4,065,030 Pennsylvania 3,405,750 1,832,372 11,202,274 3,777,864 52,697,847 17,359,177 12,539,899 7,928,351 79,845,770 30,897,764 Puerto Rico 10,536,262 4,781,443 4,107,628 3,052,516 882,486 14,952 28,813 21,000 15,555,189 7,869,911 Rhode Island 282,643 81,594 390,551 186,778 5,456,306 3,349,898 3,308,211 2,891,085 9,437,712 6,509,354 South Carolina 466,328 153,309 836,416 286,660 21,729,753 7,082,615 21,861,763 8,347,678 44,894,260 15,870,262 South Dakota 5,117 2,760 1,012,703 452,951 2,012,074 1,056,671 2,213,208 16,377 5,243,102 1,528,759 Tennessee 1,006,576 389,274 1,546,978 1,286,585 52,025,755 31,279,201 4,591,482 137,145 59,170,790 33,092,205 Texas 2,654,145 739,498 11,031,778 4,112,489 202,657,339 63,236,858 9,412,297 4,771,985 225,755,560 72,860,831 Utah 165,951 1,458 240,245 31,756 7,036,646 2,220,805 19,132,001 0 26,574,843 2,254,019 Vermont 21,196 7,285 887,336 163,829 1,857,899 451,579 43,632 22,165 2,810,063 644,857 Virgin Islands 0 0 934,424 654,624 0 0 9,690,868 2,666,948 10,625,292 3,321,571 Virginia 2,120,029 612,517 1,236,121 169,324 41,912,474 18,568,381 434,424 15,914 45,703,048 19,366,136 Washington 1,682,062 321,026 731,537 336,369 25,181,884 8,171,095 4,531,915 30,421 32,127,398 8,858,911 West Virginia 255,820 123,549 100,763 46,840 15,303,229 5,284,055 4,171,720 2,200,012 19,831,531 7,654,456 Wisconsin 465,526 348,730 2,899,859 1,257,986 16,622,950 6,349,473 14,328,196 232,287 34,316,531 8,188,475 Wyoming 28,236 8,292 143,610 70,139 1,928,303 1,200,334 2,318,435 0 4,418,583 1,278,765 Totals $89,809,343 $38,391,070 $221,578,994 $74,580,899 $1,998,929,260 $721,404,651 $273,872,272 $72,294,852 $2,584,189,869 $906,671,472 Source: Raw data provided by the Universal Service Administrative Company, rollups performed by Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Activity through June 30, 2011. Because of the appeals process, funding commitments and disbursements can be made after the end of the program year. Also, disbursements may continue beyond the end of the program year in the event of delayed internal connections installation. Other adjustments and corrections may also be made. Schools and Libraries Funding Commitments and Disbursements by State and by Type of Applicant 2 - 27 2 - 28 Rural Health Care Support The portion of the 1996 Telecommunications Act that covers universal service support for rural health care providers states that “[a] telecommunications carrier shall . . . provide telecommunications services . . . to any public or non-profit health care provider . . . at rates that are reasonably comparable to rates charged for similar services in urban areas in that state.” 13 The Commission's universal service rules permit eligible health care providers to receive support for any telecommunications service. 14, 15 Additionally, the 1996 Act directs the Commission to establish competitively neutral rules – to enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services for all public and nonprofit . . . health care providers. 16 Table 2.21 shows rural health care disbursements by service speed for each funding year from 1998 through 2010. 17 Table 2.22 shows commitments and disbursements on a state-by-state basis for 2008, 2009, and 2010. The figures in these tables do not include any of the commitments or disbursements made under the rural health care pilot program discussed below. Additional rural health care data, including disbursements by speed and by state and disbursements per person in rural areas, have been posted at www.fcc.gov/wcb/iatd/monitor.html. In September 2006, the FCC established the rural health care pilot program to provide funding to stimulate deployment of the broadband infrastructure necessary to support innovative telehealth and telemedicine services to those areas of the country where the need for these benefits is most acute. 18 Specifically, the pilot program provides funding to support the design and construction of state or regional broadband networks dedicated to health care and the advanced services provided over those networks, as well as connecting those networks to Internet2, National LambdaRail, Inc. (both dedicated nationwide backbones), or the public Internet. 19 13 47 U.S.C. § 254(h)(1)(A). 14 47 C.F.R. § 54.601. 15 A 1.544 Mbps (T1) maximum bandwidth cap was employed in Funding Years 1 and 2. See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9101-04 (1997), paras. 620-624. The Commission removed the bandwidth cap for year three and beyond. See Federal- State Joint Board on Universal Service, CC Docket Nos. 97-21 and 96-45, Sixth Order on Reconsideration in CC Docket No. 97-21, Fifteenth Order on Reconsideration in CC Docket No. 96-45, 14 FCC Rcd 18756, 18767-72, paras. 17 – 24 (1999) (Fifteenth Order on Reconsideration). 16 47 U.S.C. § 254(h)(2)(A). 17 Because of the appeals process, funding commitments and disbursements may be made after the funding year ended. 18 Rural Health Care Support Mechanism, WC Docket No. 02-60, Order, 21 FCC Rcd 11111 (2006) (Rural Health Care Pilot Program Order). 19 Rural Health Care Support Mechanism, WC Docket No. 02-60, Order, 22 FCC Rcd 20360, 20361 (2007) (Rural Health Care Pilot Program Selection Order). 2 - 29 In 2007, the Commission selected 69 applicants covering 42 states and three U.S. territories to participate in the pilot program. 20 The Commission made available to these participants approximately $139 million in rural health care support per funding year for three years. 21 Rural health care pilot program commitments and disbursements by speed and by state have been posted at www.fcc.gov/wcb/iatd/monitor.html. For more information on the pilot program, visit the pilot program website. 22 20 Rural Health Care Pilot Program Selection Order. Following mergers, there are now 61 projects in the pilot program. See www.fcc.gov/encyclopedia/rural-health-care-pilot-program. 21 See RHCPP Selection Order at 20372-73, paras. 32-33. USAC did not issue a pilot program funding commitment for the first funding year (Funding Year 2007 of the existing rural health care program). Unused pilot program support, however, is carried over to the next pilot program funding year. See Letter from Dana Shaffer, FCC, to Scott Barash, USAC, CC Docket No. 02-60 (Jan. 17, 2008). USAC reported that it rolled forward the Funding Year 2007 demand estimate and commitment cap of $139.26 million to Funding Year 2008, except for $0.53 million, which was committed and invoiced for Funding Year 2007. Universal Service Administrative Company, Federal Universal Service Support Mechanisms Fund Size Projections for the Fourth Quarter 2009 at 21. 22 See Rural Health Care Pilot Program at www.fcc.gov/encyclopedia/rural-health-care-pilot-program. Table 2.21 Rural Health Care Funding Disbursements by Funding Year Voice Grade Broadband Other Service Funding 56K to 200K to 1.5Mb to 4.0Mb or Speed Year 199K 1.49Mb 3.99Mb and faster Unknown Total 1998 $98,339 $201,476 $3,075,590 $0 $0 $3,375,405 1999 178,433 778,169 3,289,825 0 58,132 4,304,559 2000 242,640 451,643 9,559,894 59,994 0 10,314,172 2001 288,619 204,066 17,964,276 98,382 0 18,555,343 2002 406,711 146,886 20,492,887 573,644 0 21,620,128 2003 440,617 760,318 23,189,835 1,473,855 7,559 25,872,184 2004 570,681 2,741,730 25,265,034 2,283,207 141,133 31,001,784 2005 874,374 3,061,965 32,608,427 3,054,174 527,767 40,126,707 2006 1,059,618 3,101,332 34,029,394 2,918,913 4,169,755 45,279,013 2007 1,247,809 3,049,342 44,555,019 5,285,465 811,323 54,948,958 2008 1,488,543 2,415,259 50,626,720 8,363,711 490,049 63,384,282 2009 1,651,030 2,461,900 50,077,883 9,435,294 2,524,360 66,150,466 2010 579,253 428,728 22,156,169 3,967,741 2,356,299 29,488,190 Note: Disbursements through June 30, 2011. Because of the appeals process, funding commitments and disbursements may be made after the program year ended. Figures do not include any commitments or disbursements made under the Rural Health care Pilot Program. Source: USAC data. Rollups performed by the Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. 2 - 30 Table 2.22 Rural Health Care Funding Commitments and Disbursements by State Funding Year 2008: July 1, 2008 through June 30, 2009 Total Providers Total Providers Funds Receiving Funds Receiving State Committed Commitments Disbursed Support Alabama $292,149 73 $277,619 71 Alaska 35,176,871 233 34,685,598 229 American Samoa 141,191 1 141,191 1 American Somoa 0 0 0 0 Arizona 1,351,112 68 1,147,749 63 Arkansas 625,143 68 507,342 61 California 1,027,177 117 987,959 110 Colorado 256,696 24 227,144 22 Connecticut 0 0 0 0 Delaware 350 2 350 2 District of Columbia 0 0 0 0 Florida 477,243 22 210,519 17 Georgia 1,720,183 99 1,541,901 96 Guam 87,800 2 71,528 2 Hawaii 148,487 18 148,487 18 Idaho 303,596 32 286,135 30 Illinois 1,176,600 74 1,110,897 67 Indiana 885,715 60 688,373 56 Iowa 559,794 72 544,671 71 Kansas 289,699 56 271,288 51 Kentucky 518,703 77 481,253 69 Louisiana 70,440 24 47,359 21 Maine 21,865 7 20,833 7 Maryland 0 0 0 0 Massachusetts 151,250 3 146,564 3 Michigan 1,557,579 110 1,369,115 105 Minnesota 2,723,473 200 2,502,176 196 Mississippi 179,100 24 172,861 23 Missouri 591,082 65 565,551 61 Montana 876,559 80 836,439 79 Nebraska 1,528,465 113 1,484,746 110 Nevada 91,924 14 91,924 14 New Hampshire 14,658 2 14,658 2 New Jersey 0 0 0 0 New Mexico 756,947 60 697,058 57 New York 70,059 23 55,308 17 North Carolina 335,257 53 307,078 51 North Dakota 1,235,010 103 1,119,502 103 Northern Mariana Is. 0 0 0 0 Ohio 389,297 36 323,363 33 Oklahoma 627,662 49 543,625 48 Oregon 300,256 21 284,631 17 Pennsylvania 103,740 14 67,299 13 Puerto Rico 0 0 0 0 Rhode Island 0 0 0 0 South Carolina 11,453 5 9,748 4 South Dakota 1,408,740 90 1,383,304 87 Tennessee 205,404 21 177,949 19 Texas 1,040,762 63 1,015,258 59 Utah 756,173 54 721,283 51 Vermont 108,390 22 108,195 21 Virgin Islands 46,404 10 46,404 10 Virginia 770,336 145 725,214 143 Washington 68,045 33 58,300 29 West Virginia 213,666 23 187,428 21 Wisconsin 4,977,564 292 4,882,558 285 Wyoming 113,786 14 88,550 12 Totals $66,383,855 2,871 $63,384,282 2,737 Source: USAC data. Rollups performed by the Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Disbursements through June 30, 2011. Because of the appeals process, funding commitments and disbursements may be made after the program year ended. Figures do not include any commitments or disbursements made under the Rural Health care Pilot Program. 2 - 31 Table 2.22 Rural Health Care Funding Commitments and Disbursements by State Funding Year 2009: July 1, 2009 through June 30, 2010 Total Providers Total Providers Funds Receiving Funds Receiving State Committed Support Disbursed Support Alabama $354,564 87 $329,952 83 Alaska 38,154,146 249 37,433,784 242 American Samoa 220,158 1 220,158 1 American Somoa 0 0 0 0 Arizona 1,486,437 67 901,677 47 Arkansas 726,908 107 646,705 102 California 1,107,190 119 768,914 55 Colorado 251,624 24 209,840 17 Connecticut 0 0 0 0 Delaware 0 0 0 0 District of Columbia 0 0 0 0 Florida 356,659 23 233,356 21 Georgia 2,080,369 122 1,969,631 116 Guam 14,333 1 0 0 Hawaii 164,653 18 94,082 10 Idaho 384,794 42 194,534 32 Illinois 1,221,308 104 921,247 72 Indiana 852,294 66 734,782 62 Iowa 529,885 92 438,159 78 Kansas 346,280 65 287,134 51 Kentucky 584,345 71 467,616 63 Louisiana 58,298 24 31,481 12 Maine 67,455 9 40,634 5 Maryland 0 0 0 0 Massachusetts 130,624 2 129,848 1 Michigan 1,938,414 100 1,665,851 79 Minnesota 3,061,971 222 2,587,272 196 Mississippi 190,369 34 169,920 30 Missouri 639,828 62 591,940 55 Montana 765,072 82 679,598 71 Nebraska 1,605,238 121 1,482,696 108 Nevada 48,711 14 19,245 6 New Hampshire 15,003 6 15,003 6 New Jersey 0 0 0 0 New Mexico 803,040 53 443,469 33 New York 114,136 31 33,076 12 North Carolina 359,753 58 333,529 51 North Dakota 1,144,851 109 897,569 85 Northern Mariana Is. 0 0 0 0 Ohio 720,431 42 688,347 29 Oklahoma 767,805 69 654,202 39 Oregon 329,072 22 268,893 8 Pennsylvania 59,726 20 53,641 19 Puerto Rico 0 0 0 0 Rhode Island 0 0 0 0 South Carolina 20,717 11 20,441 10 South Dakota 1,067,265 73 822,286 58 Tennessee 398,392 45 344,123 42 Texas 1,635,426 88 1,575,810 80 Utah 851,309 55 590,969 41 Vermont 62,043 18 57,695 16 Virgin Islands 56,451 11 56,451 11 Virginia 754,069 147 439,266 47 Washington 121,818 38 56,537 15 West Virginia 210,088 25 186,948 23 Wisconsin 5,636,584 300 5,262,079 289 Wyoming 115,870 15 100,078 13 Totals $72,585,778 3,164 $66,150,466 2,542 Source: USAC data. Rollups performed by the Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Disbursements through June 30, 2011. Because of the appeals process, funding commitments and disbursements may be made after the program year ended. Figures do not include any commitments or disbursements made under the Rural Health care Pilot Program. 2 - 32 Table 2.22 Rural Health Care Funding Commitments and Disbursements by State Funding Year 2010: July 1, 2010 through June 30, 2011 Total Providers Total Providers Funds Receiving Funds Receiving State Committed Support Disbursed Support Alabama $505,851 74 $321,609 17 Alaska 28,469,092 190 18,601,857 121 American Samoa 351,250 1 103,250 1 American Somoa 0 0 0 0 Arizona 910,225 43 457,985 36 Arkansas 614,500 63 338,354 28 California 1,161,157 87 526,401 31 Colorado 205,022 11 142,985 8 Connecticut 0 0 0 0 Delaware 0 0 0 0 District of Columbia 0 0 0 0 Florida 229,282 20 121,550 17 Georgia 1,973,003 107 1,249,589 65 Guam 0 0 0 0 Hawaii 104,360 13 0 0 Idaho 113,700 16 61,589 12 Illinois 1,256,269 64 284,702 24 Indiana 597,916 51 311,894 35 Iowa 191,718 33 16,141 6 Kansas 380,168 37 201,803 10 Kentucky 535,950 55 221,967 22 Louisiana 37,165 9 26,024 3 Maine 0 0 0 0 Maryland 0 0 0 0 Massachusetts 131,647 2 0 0 Michigan 701,331 44 176,220 27 Minnesota 1,491,747 100 480,491 41 Mississippi 62,753 11 33,775 7 Missouri 444,839 39 170,072 23 Montana 547,086 60 270,920 33 Nebraska 1,484,668 93 892,264 79 Nevada 17,642 3 0 0 New Hampshire 3,300 1 2,475 1 New Jersey 0 0 0 0 New Mexico 466,169 28 325,515 17 New York 34,564 6 8,949 4 North Carolina 233,781 32 38,959 8 North Dakota 851,287 37 517,391 20 Northern Mariana Is. 0 0 0 0 Ohio 435,038 17 90,235 7 Oklahoma 837,275 36 206,487 11 Oregon 217,190 8 99,150 4 Pennsylvania 23,084 6 17,270 5 Puerto Rico 0 0 0 0 Rhode Island 0 0 0 0 South Carolina 7,474 8 2,236 4 South Dakota 123,683 6 97,287 3 Tennessee 301,552 24 136,829 14 Texas 2,148,672 68 1,509,622 47 Utah 338,112 14 236,707 5 Vermont 39,830 15 1,545 4 Virgin Islands 66,890 12 0 0 Virginia 684,366 129 94,700 13 Washington 44,680 10 8,106 5 West Virginia 126,920 14 51,172 7 Wisconsin 3,674,055 234 993,147 118 Wyoming 158,833 10 38,965 6 Totals $53,335,095 1,941 $29,488,190 949 Source: USAC data. Rollups performed by the Industry Analysis and Technology Division, Wireline Competition Bureau, FCC. Note: Disbursements through June 30, 2011. Because of the appeals process, funding commitments and disbursements may be made after the program year ended. Figures do not include any commitments or disbursements made under the Rural Health care Pilot Program. 2 - 33 3 - 1 3. Subscribership and Penetration Continuing analysis of telephone penetration statistics allows one to examine the aggregate effects of Commission actions and industry evolution on households' decisions to maintain, acquire or drop telephone service. This chapter presents comprehensive data on telephone penetration statistics collected by the Bureau of the Census primarily through the American Community Survey (ACS) and the Current Population Survey (CPS). Along with telephone penetration statistics for the nation and each of the states, data are provided on penetration for various demographic characteristics. In particular, attention is given to penetration rates for lower income households given the Commission’s various low income programs such as Lifeline. To provide regular, high-quality data on telephone penetration, the Commission requested that the Census Bureau include questions on telephone availability as part of its CPS, which monitors demographic trends between decennial censuses. The CPS is a staggered panel survey in which the people residing at particular addresses are included in the survey for four consecutive months in one year and the same four months in the following year. Use of the CPS has several advantages: it is conducted every month by an independent and expert agency, the sample is large, and the questions are consistent. Thus, changes in the results can be compared over time with a reasonable degree of confidence. In addition to the CPS, the ACS also provides data for calculating a measure of telephone penetration. The ACS has replaced the decennial census long form and thus also provides a wealth of data and large sample sizes, though on a less frequent basis than the CPS. Whereas the CPS reports household penetration, the ACS follows the design of past decennial censuses and reports telephone penetration for occupied housing units. In this chapter, penetration measures from the CPS, the ACS, and decennial censuses (prior to the ACS) are reported as complements to each other. 1 The specific questions regarding telephone availability asked in the CPS are: "Does this house, apartment, or mobile home have telephone service from which you can both make and receive calls? Please include cell phones, regular phones, and any other type of telephone." And, if the answer to the first question is "no," this is followed up with, "Is there a telephone elsewhere on which people in this household can be called?" If the answer to the first question is "yes," the household is counted as having a telephone "in unit." If the answer to either the first or second question is "yes," the household is counted as having a telephone "available." In contrast to the CPS, the ACS simply asks “Does this house, apartment, or mobile home have telephone service from which you can both make and receive calls? Include cell phones.” Thus, the ACS question is most similar to the CPS’s “in unit” rather than “available” penetration rate. Although the CPS is conducted every month, not all questions are asked every month. The telephone questions are asked once every four months, in the month that a household is first 1 Penetration statistics derived from the CPS cannot be directly compared with the penetration estimates based on the responses to the long forms of the 1990 and 2000 decennial censuses or the American Community Survey (ACS). This is due to differences in sampling techniques and survey methodologies as well as differences in the context in which the questions are asked. For example, the 2010 ACS reported 97.5% of all occupied housing units in the United States had telephone service available, whereas the March 2010 CPS data showed a household penetration rate of 96.0%. This difference is statistically significant and may indicate that the CPS value is on the low side and the ACS value is on the high side, with the most probable value lying somewhere in between. 3 - 2 included in the sample and in the month that the household re-enters the sample a year later. Since the sample is staggered, the reported information for any given month actually reflects responses over the preceding four months. Aggregated summaries of the responses are reported to the Commission, based on the surveys conducted through March, July, and November of each year. The ACS provides annual telephone penetration statistics based on data collected monthly throughout the year. The CPS data are based on a nationwide sample of about fifty to sixty thousand households in the 50 states and the District of Columbia. The CPS does not cover outlying areas that are not states, such as Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Northern Mariana Islands. 2 The ACS form is sent to approximately 250,000 addresses per month, for a total of about 3 million addresses per year. The ACS covers the states, the District of Columbia, and Puerto Rico. Statistical Tables and Charts Table 3.1 provides a general overview of the national penetration rate since November 1983 using March, July, and November CPS statistics. The national penetration rate has tended to increase while the absolute number of households without a telephone available has declined. Table 3.2 provides national telephone penetration rates over time for each income category since 1997, the year before the current Lifeline mechanism was in place. Chart 3.1 plots this same data. Between 1997 and 2011, there was a statistically significant increase in the penetration rate for all households. There also were statistically significant increases in penetration rates in the two lowest income categories over this time period. For other income categories, the penetration rates have remained roughly flat since 1997. Note that the increases in the national telephone penetration rate for the lower income categories cannot be attributed primarily to increases in real income, because real-income increases are reflected in the movement of households between categories. Thus, penetration changes within each income category represent changes while holding real income constant. For reference, Table 3.3 shows the nominal dollar equivalents for each 1984 dollar amount used in classifying income categories. Chart 3.2 provides an alternative look at lower income telephone penetration. Here, penetration rates are plotted for households at or below various multiples of the Federal Poverty Guidelines (FPG). Not surprisingly, penetration rates are higher as households below higher multiples of the FPGs are included. Similarly to Chart 3.1, low income household telephone penetration has tended to increase over time. Note that in both Charts 3.1 and 3.2, a change in the CPS question is noted for March 2005. Through November 2004, this question had been worded: "Is there a telephone in this house/apartment?" Because of the increasing number of households that have wireless only, there was some concern that some of these households may not think of their mobile phones when asked if they have a telephone. Consequently, beginning in December 2004, CPS changed its telephone question to the wording given above. The values since March 2005 reflect the new question. While there is an apparent drop in the penetration rate between November 2004 and March 2005, at least some of this drop may be attributable to households that responded to the 2 Annual data for Puerto Rico have been available from the American Community Survey (ACS) starting with 2005. The latest available value for Puerto Rico from that survey is 93.5% for 2010, compared to a national average (for the 50 states and the District of Columbia) of 97.5% using the ACS. 3 - 3 previous form of the question by reporting phones that were not in service. Table 3.4 combines several data sources to show longer-term telephone penetration rates as far back as 1920. In this table, ACS (using occupied housing units) and CPS (using households) results are compared for more recent years. Table 3.5 used CPS data to show penetration rates for households with various demographic characteristics such as the number of persons in the household, the age of the householder, and the race of the householder. Tables 3.6 and 3.7 complement each other by reporting, for the states and District of Columbia, penetration rates using ACS (3.6) and CPS (3.7) data. Note, however, that only the ACS provides a penetration rate for Puerto Rico. In Table 3.6, rates are reported since 2003. Refer to previous monitoring reports for earlier ACS, state-level results. In Table 3.7 only selected years are shown. The Wireline Competition Bureau’s Telephone Subscribership in the United States provides similar statistics for each year. Table 3.8 compares penetration rates and changes based on states’ total, average levels of Tier 3 Lifeline assistance. This allows one to compare the rate of change for states with different levels of low-income telephone support. In Table 3.8, a state is classified based on how much total Tier 3 support is provided: • “Full or High Assistance” states providing at least $3.00 of state support to get federal matching support of at least $1.50 per line per month; • “Intermediate Assistance” states providing between $0.50 and $3.00 of state support, and receiving between $0.25 and $1.50 federal matching support per line per month; • “Basic or Low Assistance” states providing less than $0.50 of state support, and receiving less than $0.25 federal matching support per line per month. For purposes of classification, the weighted average support across all providers is used. By state, these values are displayed in the “All Providers” column of Table 3.9. Table 3.8 shows that for low income households, states offering “Full of High Assistance” have seen an increase of 5.1 percentage points between 1997 and 2011. “Intermediate Assistance” states have seen a 6.9 percentage point increase for the same period. A simple statistical test finds both these increases to be significant. Finally, for states with “Basic of Low Assistance,” a statistically insignificant 2.9 percentage point increase occurred over the period. Also in Table 3.8, one can see how penetration changed for all households in each category. 3 Table 3.10 reports for each state and the District of Columbia the most recent penetration rates by income category. 3 A similar comparison from 1984 to 1997 is contained in the Telephone Penetration report released May 10, 2010. Households Percentage Households Percentage with with without without Households Telephones Telephones Telephones Telephones (millions) (millions) (millions) November 1983 85.8 78.4 91.4 % 7.4 8.6 % November 1984 87.4 79.9 91.4 7.5 8.6 November 1985 88.8 81.6 91.9 7.2 8.1 November 1986 89.9 83.1 92.4 6.8 7.6 November 1987 91.3 84.3 92.3 7.0 7.7 November 1988 92.6 85.7 92.5 6.9 7.5 November 1989 93.9 87.3 93.0 6.6 7.0 November 1990 94.7 88.4 93.3 6.3 6.7 November 1991 95.7 89.4 93.4 6.3 6.6 November 1992 97.0 91.0 93.8 6.0 6.2 November 1993 98.8 93.0 94.2 5.8 5.8 November 1994 99.8 93.7 93.8 6.2 6.2 November 1995 100.4 94.2 93.9 6.2 6.1 November 1996 101.3 95.1 93.9 6.2 6.1 November 1997 102.8 96.5 93.8 6.3 6.2 November 1998 104.1 98.0 94.2 6.1 5.8 November 1999 105.4 99.1 94.1 6.3 5.9 March 2000 105.3 99.6 94.6 5.7 5.4 July 2000 105.8 99.8 94.4 5.9 5.6 November 2000 106.5 100.2 94.1 6.3 5.9 March 2001 107.0 101.1 94.6 5.8 5.4 July 2001 106.9 101.7 95.1 5.2 4.9 November 2001 107.7 102.2 94.9 5.5 5.1 March 2002 108.3 103.4 95.5 4.8 4.5 July 2002 108.5 103.2 95.1 5.3 4.9 November 2002 109.0 104.0 95.3 5.1 4.7 March 2003 112.1 107.1 95.5 5.0 4.5 July 2003 112.1 106.8 95.2 5.3 4.8 November 2003 113.1 107.1 94.7 6.0 5.3 March 2004 112.9 106.4 94.2 6.5 5.8 July 2004 113.5 106.5 93.8 7.1 6.2 November 2004 113.8 106.4 93.5 7.4 6.5 March 2005 114.5 105.8 92.4 8.7 7.6 July 2005 114.4 107.5 94.0 6.8 6.0 November 2005 115.2 107.0 92.9 8.2 7.1 March 2006 115.5 107.2 92.8 8.4 7.2 July 2006 116.2 109.9 94.6 6.3 5.4 November 2006 116.4 108.8 93.4 7.6 6.6 March 2007 117.1 110.8 94.6 6.4 5.4 July 2007 117.7 111.7 95.0 5.9 5.0 November 2007 118.2 112.2 94.9 6.0 5.1 March 2008 117.8 112.2 95.2 5.6 4.8 July 2008 118.0 112.6 95.4 5.5 4.6 November 2008 118.6 112.7 95.0 5.9 5.0 March 2009 118.4 113.2 95.6 5.2 4.4 July 2009 118.4 113.3 95.7 5.1 4.3 November 2009 119.2 114.0 95.7 5.1 4.3 March 2010 118.3 113.6 96.0 4.7 4.0 July 2010 118.3 113.5 96.0 4.8 4.0 November 2010 119.4 114.0 95.5 5.4 4.5 March 2011 119.8 114.9 95.9 4.9 4.1 July 2011 119.3 114.1 95.6 5.2 4.4 Table 3.1 Household Telephone Subscribership in the United States Date Source: U.S. Census Bureau, Current Population Survey. 3 - 4 3 - 5 Chart 3.1 Household Telephone Penetration by Income, 1997-2011 Income Groups in 1984 Dollars 82 84 86 88 90 92 94 96 98 100 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year T e lephone Penetr a tion Rate $9,999 or less $10,000 - $19,999 $20,000 - $29,999 $30,000 - $39,999 $40,000 or more All Households Mar. 2005: Revised CPS Question 3 - 6 Chart 3.2 Telephone Penetration for Single-Family Households at or below Multiples of the Federal Poverty Guidelines (FPG), 1997-2011 82 84 86 88 90 92 94 96 98 100 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Tel ephone Penetr a ti on R a te 1 x FPG 1.35 x FPG 1.5 x FPG 2 x FPG All Households Mar. 2005: Revised CPS Question Year $9,999 or Less $10,000 - $19,000 $20,000 - $29,999 $30,000 - $39,999 $40,000 or Greater All Households 1997 86.0% 93.0% 96.5% 97.6% 98.2% 94.0% 1998 85.7 93.7 96.1 97.4 98.2 94.1 1999 85.5 92.9 96.0 97.2 98.2 94.0 2000 87.5 93.3 96.1 97.3 98.0 94.5 2001 87.6 93.4 95.9 97.1 97.8 94.4 2002 89.1 94.3 96.9 98.1 98.8 95.5 2003 89.2 94.6 97.0 98.1 98.8 95.5 2004 88.0 93.2 95.3 96.7 97.7 94.2 2005 86.4 91.2 94.1 95.2 96.0 92.5 2006 86.3 91.8 94.4 95.4 96.5 92.9 2007 88.4 94.1 95.9 96.8 97.9 94.6 2008 89.7 94.3 96.2 97.4 98.3 95.2 2009 90.4 95.2 96.6 97.3 98.3 95.6 2010 91.9 95.8 96.9 97.7 98.6 96.1 2011 91.5 95.9 96.8 97.8 98.3 95.9 Year $10,000 $20,000 $30,000 $40,000 1997 $15,595 $31,190 $46,785 $62,380 1998 15,809 31,618 47,427 63,236 1999 16,082 32,164 48,246 64,328 2000 16,686 33,372 50,058 66,744 2001 17,173 34,346 51,519 68,692 2002 17,427 34,854 52,281 69,708 2003 17,953 35,906 53,859 71,812 2004 18,265 36,530 54,795 73,060 2005 18,840 37,680 56,520 75,360 2006 19,474 38,948 58,422 77,896 2007 20,015 40,030 60,045 80,060 2008 20,812 41,624 62,436 83,248 2009 20,732 41,464 62,196 82,928 2010 21,212 42,423 63,635 84,846 2011 21,780 43,561 65,341 87,122 Note: For each 1984 dollar amount, the equivalent nominal dollar amount is shown over time. Source: U.S. Census Bureau, Current Population Survey (March CPS Supplement). Note: Income groups classified by 1984 dollars. Total penetration rates may differ slightly from those in Table 3.1 due to sampling differences between the March CPS and the March CPS Supplement. Table 3.2 Household Telephone Penetration by Income, 1997-2011 Table 3.3 (in 1984 Dollars) Nominal Dollar Equivalents by Year 3 - 7 1920 % 1930 1940 1950 1960 1970 1980 1990 % 2000 2001 2002 2003 2004 2005 2006 2007 2008 3 2009 2010 2011 Table 3.4 Historical Telephone Penetration Estimates 35.0 40.9 36.9 61.8 78.3 90.5 92.9 94.8 93.3 97.6 94.4 96.9 94.9 96.6 95.3 96.2 95.1 95.7 93.8 94.8 93.1 94.1 93.6 94.6 94.8 98.2 95.2 Percentage of Occupied Housing Units with Telephone Service 1 Percentage of Households with Telephone Service 2 Year 95.8 95.6 1 Housing Unit penetration statistics are from the U.S. Census Bureau's Historical Statistics of the United States, Colonial Times to 1970 , Part 2, page 783 (1920 - 1970); the decennial censuses (1980 - 2000); and the Census Bureau's American Community Survey (ACS) 1-year estimates (2001 - 2010). 97.7 95.7 97.5 2 Household penetration data (1990 - 2010) are annual averages from the U.S. Census based on the Current Population Survey. For 2011, July CPS data are used. 4 At the time of publication, 2011 ACS statistics were not available. 3 Errata #53: released April 12, 2010, regarding 2008 ACS 1-year and 2006-2008 ACS 3-year estimates for household kitchen facilities and telephone service. Two errors were found affecting the 2008 ACS 1-year data and the 2006-2008 ACS 3- year data for telephone service. The errors involve the last two items in Question 8 on the housing section of the 2008 ACS questionnaire which asks whether the housing unit has telephone service (including cell phones). The error involved the incorrect capture of the responses to those items. It affected the estimates of householders who reported no telephone service, resulting in an underestimate of "no" responses and an increased imputation rate for both items. At the national level, the percent of households reporting no telephone service in 2008 was 1.8 percent; however, after correcting the data capture error, the percent reporting no telephone service is approximately 2.8 percent. NA 4 3 - 8 Characteristic 2008 2009 2010 2011 Persons in Household 1 92.8% 93.5% 93.9% 93.5% 2 - 3 96.0 96.4 96.5 96.5 4 - 5 96.6 96.9 96.6 96.5 6 + 95.2 96.1 95.8 95.5 Age of Householder 15 - 24 Yrs Old 90.8 92.0 93.5 93.8 25 - 54 Yrs Old 94.8 95.2 95.5 95.3 55 - 59 Yrs Old 96.0 96.6 96.6 95.9 60 - 64 Yrs Old 96.5 97.0 96.2 96.2 65 - 69 Yrs Old 96.5 97.2 96.8 96.7 70 - 99 Yrs Old 96.6 96.9 96.7 96.4 Race of Householder White 95.9 96.3 96.4 96.1 Black 91.0 92.1 92.7 93.0 Hispanic Origin 91.7 92.6 93.1 92.6 United States Total 95.2 95.7 95.8 95.6 Source: U.S. Census Bureau, Current Population Survey. Note that 2008 to 2010 values are annual averages. For 2011, values are July 2011 figures since complete 2011 figures were unavailable at the time of publication. Table 3.5 Telephone Penetration by Selected Demographic Characterisitcs (Percentage of Households with Telephone Service) 3 - 9 State Alabama 93.3 % 92.6 % 93.9 % 98.0 % 97.5 % 97.4 % Alaska 96.6 96.3 97.7 98.1 98.1 98.3 Arizona 93.1 93.6 93.7 97.0 96.4 97.0 Arkansas 90.9 90.3 91.3 97.6 97.1 96.9 California 97.0 96.6 96.7 98.7 98.3 97.9 Colorado 95.1 94.6 94.3 98.2 97.7 97.7 Connecticut 97.3 96.5 96.8 99.1 98.8 98.3 Delaware 97.5 97.0 95.8 98.7 98.6 98.2 District of Columbia 95.2 94.5 92.6 97.8 96.7 96.7 Florida 94.0 92.4 93.4 97.9 97.6 97.2 Georgia 92.9 90.9 92.7 97.1 97.1 96.9 Hawaii 95.6 95.7 94.9 98.1 97.6 97.5 Idaho 96.2 94.2 94.2 99.0 98.3 97.4 Illinois 94.4 93.7 94.8 98.6 97.9 97.7 Indiana 94.4 93.4 94.2 98.4 97.2 97.1 Iowa 96.0 94.9 95.3 98.9 98.2 97.4 Kansas 93.6 92.7 93.8 98.9 97.9 97.5 Kentucky 92.0 91.9 93.1 97.8 96.8 96.9 Louisiana 92.9 91.6 92.5 97.3 96.5 96.8 Maine 96.6 95.7 95.9 98.8 98.5 97.8 Maryland 95.8 95.3 95.6 99.0 98.5 97.6 Massachusetts 96.2 95.5 96.1 98.8 98.7 98.4 Michigan 93.4 92.1 93.0 98.6 97.5 97.2 Minnesota 96.7 95.8 95.4 99.2 98.6 98.2 Mississippi 89.6 88.4 91.2 96.9 97.2 96.9 Missouri 95.4 93.6 94.3 98.5 97.7 97.3 Montana 95.0 93.6 93.7 97.5 97.2 97.0 Nebraska 95.5 94.4 94.5 99.0 98.3 98.0 Nevada 95.9 94.6 94.3 97.6 97.7 97.7 New Hampshire 96.9 97.0 97.5 98.6 98.5 98.3 New Jersey 95.8 95.3 95.1 97.9 97.9 97.9 New Mexico 92.5 91.7 92.4 95.7 94.7 95.3 New York 95.5 94.8 95.0 97.9 97.4 97.2 North Carolina 93.8 93.2 93.4 98.1 97.6 97.6 North Dakota 94.7 94.7 94.8 99.2 98.0 98.4 Ohio 95.4 94.2 94.6 98.1 97.1 97.2 Oklahoma 93.1 92.9 93.2 98.0 97.8 97.8 Oregon 95.3 95.2 94.9 98.7 97.9 97.7 Pennsylvania 96.5 95.9 95.9 98.8 98.2 98.0 Rhode Island 96.4 95.6 96.0 97.8 97.9 97.2 South Carolina 92.3 92.0 93.2 97.2 96.6 97.1 South Dakota 95.3 96.0 95.3 98.6 98.2 98.0 Tennessee 92.9 92.8 93.7 98.1 97.6 97.2 Texas 92.9 92.6 93.5 98.0 97.7 97.4 Utah 96.5 96.2 96.0 99.3 98.3 97.8 Vermont 97.9 97.2 96.9 98.8 98.0 97.8 Virginia 95.6 95.2 95.2 98.3 97.6 97.4 Washington 96.5 96.2 96.3 99.0 98.1 97.8 West Virginia 94.5 93.8 93.6 96.9 96.4 96.3 Wisconsin 96.4 95.6 96.1 99.0 98.4 98.0 Wyoming 94.9 93.4 95.0 98.7 98.0 97.7 Total United States 94.8 % 94.1 % 94.6 % 98.2 % 97.7 % 97.5 % Puerto Rico 73.8 % 73.6 % 80.6 % 91.9 % 92.4 % 93.5 % * See footnote 3 on Table 3.4. Source: U.S. Census Bureau, American Community Survey. 20092005 2006 2007 2010 Table 3.6 Telephone Penetration by State, 2005-2010 (Percentage of Occupied Housing Units with Telephone Service) 2008* 3 - 10 Table 3.7 Telephone Penetration by State, Selected Years (Percentage of Households with a Telephone in Unit) State Alabama 88.4 % 92.2 % 91.9 % 91.6 % 95.2 % Alaska 86.5 94.4 94.3 95.2 97.1 Arizona 86.9 93.1 93.9 92.9 95.2 Arkansas 86.6 86.9 88.6 87.9 93.4 California 92.5 95.0 95.8 95.4 96.4 Colorado 93.2 95.5 96.3 95.1 97.7 Connecticut 95.5 97.5 96.4 93.9 97.9 Delaware 94.3 96.1 96.3 91.5 97.4 District of Columbia 94.9 93.0 93.2 92.2 91.1 Florida 88.7 93.1 92.1 91.8 93.7 Georgia 86.2 89.7 91.1 89.8 93.0 Hawaii 93.5 94.8 94.7 94.8 95.7 Idaho 90.7 92.9 93.9 94.8 97.9 Illinois 94.2 93.0 91.5 89.6 95.2 Indiana 91.6 93.7 94.5 90.8 92.5 Iowa 96.2 96.6 96.2 95.4 97.7 Kansas 94.3 93.9 94.8 94.3 97.5 Kentucky 88.1 92.3 93.3 91.3 95.0 Louisiana 89.7 91.1 92.6 91.8 96.5 Maine 93.4 96.5 97.9 95.7 98.2 Maryland 95.7 96.7 95.0 94.0 96.2 Massachusetts 95.9 95.7 94.6 94.5 97.6 Michigan 92.8 95.0 95.0 92.6 96.8 Minnesota 95.8 97.1 97.4 96.2 98.5 Mississippi 82.4 87.5 89.2 89.5 96.0 Missouri 91.5 95.3 95.8 94.2 96.1 Montana 91.0 94.3 94.6 93.0 94.9 Nebraska 95.7 96.0 97.3 94.3 95.6 Nevada 90.4 93.5 94.0 91.2 96.6 New Hampshire 94.3 96.1 97.7 95.8 98.2 New Jersey 94.8 93.6 94.6 93.8 95.9 New Mexico 82.0 86.2 91.2 91.2 92.4 New York 91.8 93.4 95.1 92.1 94.8 North Carolina 88.3 93.5 93.9 92.8 95.5 North Dakota 94.6 96.3 95.8 96.3 98.5 Ohio 92.4 94.5 94.8 94.1 96.7 Oklahoma 90.3 91.3 91.2 89.2 95.7 Oregon 90.6 96.0 94.8 95.7 97.6 Pennsylvania 94.9 96.9 96.6 95.6 98.2 Rhode Island 93.6 95.7 94.9 95.3 97.2 South Carolina 83.7 91.3 93.2 93.1 94.3 South Dakota 93.2 93.3 94.3 95.9 97.8 Tennessee 88.5 94.0 95.5 92.3 92.2 Texas 88.4 91.0 93.5 91.1 95.2 Utah 92.5 96.7 95.9 96.9 96.7 Vermont 92.3 95.9 95.6 95.6 98.1 Virginia 93.1 94.9 95.4 93.2 95.3 Washington 93.0 94.5 94.9 96.9 98.1 West Virginia 87.7 92.9 94.0 92.6 96.2 Wisconsin 95.2 97.0 94.8 94.8 98.3 Wyoming 89.9 95.0 94.7 94.8 97.3 Total United States 91.6 % 93.9 % 94.4 % 93.1 % 95.8 % Source: U.S. Census Bureau, Current Population Survey. 20101984 1996 2000 2005 3 - 11 Table 3.8 Comparison of Penetration Rates by Level of Lifeline Assistance Low-Income Households † All Households Change Change Lifeline Category# Num. March 1997 March 2011 Change per Year March 1997 March 2011 Change per Year Full or High Assistance 33 85.6% 90.7% 5.1% * 0.36% 93.7% 95.4% 1.8% * 0.13% Intermediate Assistance 14 87.2 94.1 6.9 * 0.49 95.0 97.4 2.3 * 0.17 Basic or Low Assistance 4 86.2 89.1 2.9 0.21 93.9 95.1 1.2 0.08 Average All States 86.0 91.5 5.5 * 0.39 94.0 95.9 1.9 * 0.14 Note: Changes may not appear to be the same as calculated differences due to rounding. † Households with income under $10,000 expressed in March 1984 dollars. See Table 3.3 for current equivalents. * Change is statistically significant at the 95% confidence level. # States are classified by total, average level of Tier 3 Lifeline support. 3 - 12 All Providers ILECs Only CETCs Only Alabama 1995 $5.24 $5.25 $5.23 78.0% 91.3% 13.3% * 91.3% 96.0% 4.8% Alaska 1994 5.20 5.25 5.18 74.1 90.2 16.1 94.3 96.4 2.1 Arizona 1987 3.62 1.83 5.25 82.4 89.4 7.0 90.3 96.4 6.1 Arkansas 1986 4.87 3.51 5.23 78.8 93.2 14.4 * 88.7 96.0 7.3 * California 1985 5.14 5.14 5.25 87.7 91.5 3.8 94.0 96.2 2.2 Colorado 1986 5.24 5.24 5.25 88.0 91.3 3.3 96.5 97.0 0.5 Connecticut 1993 3.83 1.77 5.25 85.9 94.5 8.6 95.6 97.9 2.2 Delaware 1998 4.84 0.00 5.25 94.4 92.5 -1.8 95.2 97.5 2.3 District of Columbia 1987 5.21 5.25 5.20 81.1 87.7 6.6 91.4 93.1 1.7 Florida 1994 5.25 5.25 5.25 84.4 90.2 5.8 92.1 93.5 1.4 Georgia 1991 5.20 5.07 5.24 81.6 87.4 5.7 90.4 93.3 2.9 Hawaii 1987 0.00 0.00 0.00 89.9 89.1 -0.8 94.9 95.6 0.7 Idaho 1987 5.13 5.21 4.39 87.9 90.7 2.8 95.0 96.6 1.7 Illinois 1998 2.29 0.00 2.76 83.2 92.1 8.8 93.5 95.7 2.1 Indiana 1998 0.40 0.00 5.17 91.6 85.4 -6.3 94.3 92.9 -1.3 Iowa 1998 0.00 0.00 0.01 87.7 95.4 7.6 96.1 98.3 2.2 Kansas 1998 4.39 5.25 3.36 87.0 95.6 8.6 94.9 97.9 3.1 Kentucky 1998 5.22 5.21 5.24 87.7 89.3 1.6 93.1 95.1 2.0 Louisiana 1998 3.25 0.00 3.56 81.7 95.5 13.8 91.2 97.6 6.4 Maine 1987 5.25 5.25 5.25 90.5 96.8 6.4 93.7 98.7 5.0 * Maryland 1987 5.24 5.12 5.24 85.9 90.9 5.0 95.3 95.0 -0.3 Massachusetts 1990 5.25 5.25 5.25 91.7 97.6 6.0 95.9 98.1 2.2 Michigan 1989 4.12 3.34 4.24 86.0 95.2 9.2 94.9 97.9 3.0 Minnesota 1988 2.55 2.61 0.92 91.7 95.8 4.1 97.4 98.2 0.8 Mississippi 1991 5.14 5.01 5.22 76.6 93.2 16.6 * 89.4 96.1 6.6 * Missouri 1987 4.69 5.22 4.01 95.2 89.8 -5.4 97.5 96.3 -1.2 Montana 1987 4.10 3.71 5.25 86.3 89.2 2.9 94.1 96.5 2.4 Nebraska 1998 5.08 5.02 5.25 92.8 94.5 1.6 97.0 97.1 0.2 Nevada 1988 5.02 4.99 5.08 90.8 90.3 -0.5 93.8 96.6 2.8 New Hampshire 1998 3.90 0.00 5.25 93.6 91.2 -2.4 97.1 97.4 0.3 Note: Changes may not appear to be the same as calculated differences due to rounding. † Households with income under $10,000, expressed in March 1984 dollars. See Table 3.3 for current equivalents. * Increase is statistically significant at the 95% confidence level. Table 3.9 Comparison of Penetration Rates and Level of Lifeline Assistance for States Year Lifeline Began State Low Income Households † Change, 1997- 2011 March 1997 March 2011 March 1997 March 2011 All Households Change, 1997- 2011 Average State Support Plus Federal Match (Tier 3) per Line (December 2010) 3 - 13 All Providers ILECs Only CETCs Only Table 3.9 Comparison of Penetration Rates and Level of Lifeline Assistance for States Year Lifeline Began State Low Income Households † Change, 1997- 2011 March 1997 March 2011 March 1997 March 2011 All Households Change, 1997- 2011 Average State Support Plus Federal Match (Tier 3) per Line (December 2010) New Jersey 1998 $5.24 $5.22 $5.25 88.6% 91.6% 2.9% 96.1% 95.7% -0.4% New Mexico 1987 4.95 4.84 5.25 69.6 87.8 18.2 * 86.0 92.2 6.2 New York 1985 5.16 4.95 5.24 87.5 86.9 -0.6 94.5 94.2 -0.4 North Carolina 1986 5.25 5.25 5.25 83.6 92.5 8.8 93.5 95.8 2.3 North Dakota 1990 2.98 2.91 4.33 93.6 92.8 -0.8 96.2 97.9 1.7 Ohio 1987 5.25 5.24 5.25 88.5 93.4 4.9 95.0 3.8 5.5 Oklahoma 1996 1.22 0.59 1.43 78.9 94.3 15.4 * 91.8 3.3 11.0 Oregon 1986 5.23 5.22 5.25 90.5 93.6 3.0 95.3 6.6 12.9 Pennsylvania 1996 3.60 1.13 5.25 93.6 95.6 2.0 97.3 5.8 5.9 Rhode Island 1987 5.25 5.25 5.25 87.6 93.4 5.8 94.6 5.7 12.4 South Carolina 1995 5.25 5.25 5.24 76.2 89.6 13.4 * 92.0 2.8 11.4 South Dakota 1988 0.12 0.14 0.00 90.5 96.8 6.3 94.7 8.6 10.9 Tennessee 1992 5.15 4.80 5.24 89.3 88.7 -0.6 94.1 1.6 10.9 Texas 1988 5.24 5.24 5.24 79.6 90.5 10.9 * 91.0 6.4 10.0 * Utah 1987 5.24 5.24 5.25 98.3 90.8 -7.5 97.5 5.0 11.3 Vermont 1986 5.25 5.25 0.00 84.6 95.2 10.7 93.9 6.0 11.5 Virginia 1988 5.21 4.87 5.23 84.7 88.0 3.4 93.6 16.6 11.3 Washington 1987 3.46 3.97 1.22 89.0 97.8 8.8 96.1 -5.4 9.8 West Virginia 1986 4.91 0.00 5.22 83.8 94.3 10.5 * 93.6 1.6 14.2 Wisconsin 1991 3.85 3.63 3.98 87.8 93.5 5.7 96.4 2.9 11.2 Wyoming 1991 5.25 5.25 5.25 89.5 93.2 3.8 94.9 18.2 15.8 Note: Changes may not appear to be the same as calculated differences due to rounding. † Households with income under $10,000, expressed in March 1984 dollars. See Table 3.3 for current equivalents. * Increase is statistically significant at the 95% confidence level. 3 - 14 State $9,999 or Less $10,000 to $19,999 $19,999 to $29,999 $30,000 to $39,999 $40,000 or More All Households Alabama 91.3 % 96.2 % 97.4 % 99.2 % 99.5 % 96.0 % Alaska 90.2 97.5 95.9 99.0 98.5 96.4 Arizona 89.4 97.5 99.4 98.4 99.5 96.4 Arkansas 93.2 96.5 96.8 96.8 98.5 96.0 California 91.5 95.7 97.4 98.0 98.4 96.2 Colorado 91.3 96.2 98.7 98.9 98.9 97.0 Connecticut 94.5 98.8 98.3 95.7 99.4 97.9 Delaware 92.5 97.2 99.5 98.3 99.6 97.5 District of Columbia 87.7 90.6 94.5 91.9 98.2 93.1 Florida 90.2 93.8 92.9 96.5 95.8 93.5 Georgia 87.4 93.2 95.3 97.2 97.2 93.3 Hawaii 89.1 96.6 97.1 96.4 97.4 95.6 Idaho 90.7 99.0 99.3 95.8 97.7 96.6 Illinois 92.1 95.6 93.6 99.3 98.5 95.7 Indiana 85.4 93.0 97.1 95.2 95.7 92.9 Iowa 95.4 98.5 99.8 97.4 99.8 98.3 Kansas 95.6 98.6 97.5 100.0 98.8 97.9 Kentucky 89.3 95.2 98.1 98.5 99.3 95.1 Louisiana 95.5 97.2 98.9 99.2 99.3 97.6 Maine 96.8 99.1 99.0 99.6 99.5 98.7 Maryland 90.9 93.0 95.7 95.3 97.5 95.0 Massachusetts 97.6 98.8 98.8 94.7 98.6 98.1 Michigan 95.2 98.8 97.6 99.2 99.2 97.9 Minnesota 95.8 97.6 98.6 99.5 99.5 98.2 Mississippi 93.2 94.8 97.2 99.3 100.0 96.1 Missouri 89.8 96.5 98.1 99.1 99.6 96.3 Montana 89.2 97.2 100.0 100.0 99.3 96.5 Nebraska 94.5 97.2 98.7 99.0 96.9 97.1 Nevada 90.3 97.4 97.4 99.0 99.0 96.6 New Hampshire 91.2 97.5 98.1 98.7 99.2 97.4 New Jersey 91.6 95.4 95.3 97.7 97.4 95.7 New Mexico 87.8 93.4 90.6 95.0 95.9 92.2 New York 86.9 94.1 96.6 97.3 97.7 94.2 North Carolina 92.5 96.4 95.9 96.4 98.5 95.8 North Dakota 92.8 100.0 98.6 97.5 100.0 97.9 Ohio 93.4 97.0 97.4 99.5 99.0 97.0 Oklahoma 94.3 97.2 96.9 96.1 96.6 96.2 Oregon 93.6 97.7 99.3 99.0 99.5 97.8 Pennsylvania 95.6 97.8 98.8 99.1 99.7 98.0 Rhode Island 93.4 97.3 97.5 97.2 99.0 96.9 South Carolina 89.6 95.0 98.4 98.0 98.2 95.2 South Dakota 96.8 99.1 98.2 99.4 100.0 98.7 Tennessee 88.7 93.0 94.6 94.2 95.5 92.6 Texas 90.5 95.6 95.8 96.6 98.4 95.3 Utah 90.8 97.9 98.4 99.0 98.6 97.3 Vermont 95.2 100.0 98.0 100.0 99.7 98.6 Virginia 88.0 93.3 95.6 96.8 98.0 94.7 Washington 97.8 97.4 98.0 100.0 99.5 98.5 West Virginia 94.3 97.0 97.0 98.6 99.2 96.8 Wisconsin 93.5 96.9 99.0 99.4 99.4 97.6 Wyoming 93.2 97.7 98.6 97.8 98.2 97.2 United States 91.5 95.9 96.8 97.8 98.3 95.9 Table 3.10 Household Penetration by State and Income, 2011 Source: U.S. Census Bureau, Current Population Survey (March CPS Supplement). 3 - 15 4 - 1 4. Price Indices and Access Charge Rates This section contains information on telephone price indices and access charge rates. The first part discusses the Consumer Price Index (CPI) maintained by the Bureau of Labor Statistics (BLS). The second part discusses the subscriber line charge and other access charges. Telephone Service Price Indices The BLS collects information on telephone service as part of the CPI. Monthly CPI data can be found on the Internet at www.bls.gov/cpi. The monthly price indices represent prices sampled in the middle of the month. A CPI for telephone services was first published in 1935. 1 Since then, telephone prices have tended to increase at a slower pace than most other prices. Table 4.1 shows long-term changes in the 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 4.1 shows the levels of the overall CPI and the CPI for telephone services over time. The CPI for telephone services is based on a "market basket" intended to represent the telephone-related expenditures of a typical urban household. It includes both land-line telephone service and wireless telephone service. The annual rate of change during recent years is shown in Table 4.2 for the overall CPI (which measures the impact of inflation on consumers), and the CPI for telephone services. Chart 4.2 shows the changes in the overall CPI and the CPI for telephone services since 1998. For 2010, the nation's overall level of prices (measured by the CPI for all items) rose by 1.5% and the CPI for telephone services declined by 0.9%. The land-line telephone service index increased by 2.2% during 2010, while the wireless telephone index decreased by 3.4%. Monthly data for the CPI indices, including the land-line telephone service, are shown in Table 4.3. In January 2010, BLS discontinued collecting four land-line telephone indices, including local charges, long distance charges, interstate toll calls, and intrastate toll calls. These four indices were combined into a single land-line telephone service index, which began in December 2009. The Producer Price Index (PPI), also published by BLS, continues to release sub-indices for telephone services. We no longer include them in this report because they have become less meaningful as the bundling of telephone services has become more common in the land-line telephone industry. 2 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. 1 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. 2 PPI data are available on the BLS website at www.bls.gov/ppi/ 4 - 2 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 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. 3 Average monthly SLCs and PICCs are shown in Table 4.4 and average per-minute rates charged to long distance carriers are shown in Table 4.5. Both tables report historical averages for all LECs that file access tariffs subject to price-cap regulation and all LECs that participate in the NECA pool, charging the NECA tariff rates. Current per-line charges and per-minute charges are reported for the two groups of carriers, and for individual carriers, in Tables 4.6 and 4.7, respectively. The averages in Table 4.5 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. 3 Access Charge Reform, CC Docket No. 96-262, Sixth Report and Order, 15 Rcd 12962 (CALLS Order). 1960-2010 2000-2010 CPI All Items (SAO) 4.1 % 2.3 % CPI All Services (SAS) 4.9 3.0 CPI Telephone Services (SEED) 1.7 0.2 CPI Major Categories: - Food & Beverages (SAF) * 2.7 - Housing (SAH) * 2.6 - Apparel (SAA) 2.0 -0.8 - Transportation (SAT) 3.8 2.8 - Medical Care (SAM) 5.9 4.1 - Recreation (SAR) * 1.0 - Other Goods & Services (SAG) * 3.6 CPI Public Transportation (SETG) 5.1 2.3 CPI Utility (Piped) Gas Service (SEHF02) 5.3 5.8 CPI Electricity (SEHF01) 3.8 4.0 CPI Water & Sewerage Maint. (SEHG01) 5.7 5.0 CPI Postage (SEEC01) 4.8 3.1 Table 4.1 Long-Term Changes for Various Price Indices (Average Annual Rates of Change) * Series not established until after 1960. Note: The CPI Telephone Services index was revised in December of 1997. To calculate values in this table, Series MUUR0000SE270A is used for periods prior to this revision and CUUR0000SEED is used for periods after the revision. After each row, the series ID is provided and should be preceeded by CUUR0000 when referencing the series. Source: Bureau of Labor Statistics. Chart 4.1 CPI All Goods and Services and CPI Telephone Services, 1960-2010 Base Period: 1997 = 100 0 20 40 60 80 100 120 140 160 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year CP I Level CPI - All Goods and Services CPI - Telephone Services 4 - 3 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 2008 0.1 2.9 2009 2.7 1.0 2010 1.5 -0.9 Note: Values report the percent change from December of the previous year through December of the year shown. Sources: Bureau of Labor Statistics and Bureau of Economic Analysis. Table 4.2 Annual Changes in CPI Telephone Services and All Items Indices All Goods and Services Telephone Services Chart 4.2 Annual Changes in CPI All Goods and Services and CPI Telephone Services -10 -5 0 5 10 1998 2000 2002 2004 2006 2008 2010 Year Percen t Ch an g e f r o m Prio r Year All Goods and Services Telephone Services 4 - 4 All Goods and Services Telephone Services Land-line Telephone Services Wireless Telephone Services CUUR0000SA0 CUUR0000SEED CUUR0000SEED04 CUUR0000SEED03 2008 January 97.7 96.3 * 100.7 February 98.0 96.2 * 100.7 March 98.9 96.4 * 100.7 April 99.5 96.9 * 101.0 May 100.3 97.2 * 101.0 June 101.3 98.0 * 101.0 July 101.9 98.7 * 101.0 August 101.5 98.6 * 101.0 September 101.3 98.6 * 101.0 October 100.3 98.7 * 101.0 November 98.4 98.9 * 101.1 December 97.4 99.0 * 101.2 2009 January 97.8 99.2 * 101.1 February 98.3 99.2 * 101.2 March 98.5 99.3 * 101.2 April 98.7 99.4 * 101.2 May 99.0 99.6 * 101.2 June 99.9 99.5 * 101.2 July 99.7 99.9 * 101.2 August 99.9 100.0 * 101.2 September 100.0 100.3 * 101.2 October 100.1 100.2 * 101.2 November 100.2 99.8 * 100.0 December 100.0 100.0 100.0 100.0 2010 January 100.3 100.0 101.0 99.2 February 100.4 99.6 101.1 98.3 March 100.8 99.6 101.1 98.3 April 101.0 99.7 101.4 98.3 May 101.0 99.7 101.4 98.2 June 100.9 99.6 101.4 98.1 July 101.0 99.8 101.6 98.2 August 101.1 99.8 101.8 98.2 September 101.2 99.9 102.0 98.2 October 101.3 99.8 102.1 97.8 November 101.3 99.6 102.2 97.5 December 101.5 99.1 102.2 96.4 2011 January 102.0 98.7 103.0 95.2 February 102.5 98.6 103.0 95.0 March 103.5 98.6 103.1 94.8 April 104.1 98.5 102.9 94.9 May 104.6 98.5 102.9 94.8 June 104.5 98.5 103.0 94.8 July 104.6 98.3 103.3 94.1 August 104.9 98.3 103.4 94.1 September 105.1 98.4 103.6 94.1 October 104.8 98.6 103.9 94.1 Notes: Series values for All Goods and Services are converted from the 1982-1984 base index series reported by the Bureau of Labor Statistics (BLS). Series values for Telephone Services and Wireless Telephone Services are converted from the December 1997 base index series reported by BLS. Land-line Telephone Services index began in December 2009. Series are not seasonally adjusted. Series may be referenced via the BLS website with the Series ID listed at the top of each column. Table 4.3 Monthly Consumer Price Indices (December 2009 = 100) BLS Series ID 4 - 5 Table 4.4 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 07/01/08 06/30/09 5.90 6.27 0.00 0.00 0.22 0.05 07/01/09 06/30/10 5.88 6.21 0.00 0.00 0.18 0.04 07/01/10 06/30/11 5.89 6.19 0.00 0.00 0.13 0.04 07/01/11 06/30/12 5.88 6.13 0.00 0.00 0.11 0.03 Source: Access tariff filings. Interstate Per-Line Access Charges 1 Rates in Effect Residential and (Subscriber Line Charges) Charged to End Users 2 Centrex Charged to Long Distance Carriers 3 (Presubscribed Interexchange Carrier Charges) Single-Line Business 5.83 5.81 5.88 5.93 5.93 5.94 5.85 2 Prior to 1/01/1998, 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 1/01/1998 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 7/1/2003, 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 7/01/2000, residential and single-line business PICCs was eliminated. Since then the PICCs cap for multiline business lines equal $4.31 for price cap carriers. 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). 4 Although the charges took effect on 7/1/2000, some companies made adjustments to the tariffs which did not take effect until 8/11/2000. 5.81 5.70 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. 5.78 5.75 5.74 4 - 6 Table 4.5 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 07/01/08 06/30/09 0.01 0.00 0.63 0.24 1.80 07/01/09 06/30/10 0.00 0.00 0.64 0.26 1.85 07/01/10 06/30/11 0.00 0.00 0.67 0.27 1.92 07/01/11 06/30/12 0.00 0.00 0.68 0.28 1.98 Access Minute 2 Minute 1 4 Although the charges took effect on 7/1/2000, some companies made adjustments to the tariffs which did not take effect until 8/11/2000. 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 revenues 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 common line (CCL) rates for NECA carriers were eliminated. 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 both traffic-sensitive and non-traffic-sensitive charges per switched minute. Minute 1 MinuteAccess Non-TrafficCarrier Common Line per Terminating Sensitive per Switched Rates in Effect From To Sensitive per Switched Interstate Charges for Switched Access Service Carrier Common Line per Originating Traffic 4 - 7 Table 4.6 Interstate Per-Line Access Charges by Carrier (in Dollars per Month per Line) 1 Rates Effective from 07/01/11 to 06/30/12 Subscriber Line Charges PICC 2 2010 Average Monthly Access Lines 3 (Thousands) Company Residential Non-Primary Multiline Multiline Centrex Residential Non-Primary Multiline and Residential Business Business and Residential Business Single-Line and Single-Line and Business Centrex Business Centrex ACS $6.50 NA $9.07 $0.00 $0.00 77 0 69 AT&T 5.48 5.17 5.31 0.00 0.00 24,284 2,404 15,238 América Móvil 6.50 6.50 9.20 0.00 0.00 582 1 154 CenturyLink 5.80 5.82 6.44 0.00 0.00 9,619 651 3,875 Cincinnati Bell 5.27 5.27 5.27 0.00 0.00 376 21 240 Consolidated 6.50 6.50 9.20 0.00 0.00 81 4 35 FairPoint 6.16 6.14 6.17 0.00 0.00 650 51 191 Frontier 6.38 6.88 9.05 1.61 0.23 3,754 163 1,290 Hawaiian Telecom 6.50 7.00 8.15 0.00 0.00 302 24 85 Innovative 6.50 NA 9.15 0.00 0.00 40 0 16 PTI Pacifica Inc. 6.50 7.00 9.20 1.14 1.14 8 0 6 Verizon 6.19 6.14 6.40 0.24 0.04 14,115 1,519 7,850 Windstream 6.33 6.55 7.99 0.26 0.20 1,786 301 669 Price Caps 5.83 5.70 6.02 0.11 0.03 55,674 5,140 29,717 NECA Pool 6.50 NA 9.20 0.00 NA 4,138 NA 1,089 Price Caps and NECA Pool $5.88 $5.70 $6.13 $0.11 $0.03 59,812 5,140 30,806 NA - Not Applicable. Source: Access tariff filings. 3 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. 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 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. 2 PICC is an abbreviation for Presubscribed Interexchange Carrier Charge. 4 - 8 Table 4.7 Interstate Per-Minute Access Charges by Carrier (In Cents per Minute) 1 Rates Effective from July 1, 2011 to June 30, 2012 Year 2010 Carrier Local Common Switching Line per Minutes of Company Originating Use Access (Millions) Minute ACS 0.00 ˘ 0.00 ˘ 0.52 ˘ 0.30 ˘ 1.67 ˘ 455 AT&T 0.00 0.00 0.49 0.28 1.57 110,189 América Móvil 0.00 0.00 0.62 0.16 1.61 1,813 CenturyLink 0.00 0.00 0.75 0.20 1.96 38,968 Cincinnati Bell 0.00 0.00 0.71 0.66 2.80 1,759 Consolidated 0.00 0.00 0.35 0.18 1.09 215 FairPoint 0.00 0.00 0.55 0.29 1.72 3,172 Frontier 0.06 0.00 0.57 0.39 2.02 12,957 Hawaiian Telecom 0.00 0.00 0.72 0.36 2.20 724 Innovative 0.00 0.00 0.69 0.20 1.84 223 PTI Pacifica Inc. 0.00 0.00 0.46 0.17 1.30 37 Verizon 0.00 0.00 0.56 0.27 1.71 58,916 Windstream 0.00 0.00 0.60 0.32 1.87 5,860 Price Caps 0.00 0.00 0.56 0.27 1.71 235,286 NECA Pool 0.00 0.00 3.57 0.53 8.46 9,468 Price Caps and NECA Pool 0.00 0.00 0.68 0.28 1.98 244,754 Source: Access tariff filings. Minute Total per SwitchedSwitched Traffic Charge per Sensitive Non-Traffic Sensitive per Carrier Common Line per Terminating 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 both traffic-sensitive and non- traffic-sensitive charges per switched minute. 2 Non-traffic sensitive charges include charges assessed on a per-month, per-unit basis. Access Minute 2 Access Minute 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. Access Conversation Minute 3 4 - 9 5. Network Usage To monitor use of the public switched telephone network, the National Exchange Carrier Association (NECA) provides quarterly reports to the Commission on the volume of interstate access minutes of use (MOU) passing through the local switches. The data reported in this section include new annual data for 2010 as well as revisions of the data that were contained in our previous reports. 1 The minutes reported here are those minutes that pass through the incumbent local exchange carriers' switches. The following descriptions of minutes of use measures are based on information provided by NECA: Access MOU are "earned MOU" which are derived by dividing the earned revenues by the corresponding rate. Access minutes of use generating revenues have been discounted, which can produce distortions in revenue amounts. Further, revenues are normalized to include changes in terminating/originating and percent interstate use factors, billing adjustments, and the imputations of access charges (where applicable). Revenues are also calendarized, which will change derived minutes. Access MOU include only the domestic portion of international calls. Similarly, WATS and toll-free (800/888/877/866) calls are counted only on one end of the call. 2 Finally, minutes include time for incomplete calls and setup time. Chart 5.1 and Table 5.1 present NECA information on local access minutes for interstate traffic that pass through the incumbent LECs’ switches. In Table 5.1, data are shown for totals of the tier 1 carriers, the non-tier 1 carriers, and the industry. 3 These figures do not include the minutes from the closed end of WATS or toll-free calls. Table 5.2 presents interstate access minutes of use data by state from 2006-2010. Annual study area data for the years 2006 through 2010 are posted at www.fcc.gov/wcb/iatd/monitor.html. 1 The FCC routinely posts quarterly MOU data at www.fcc.gov/wcb/iatd/neca.html. 2 WATS calls usually generate access minutes only at the terminating end of the call and toll-free calls usually generate access minutes only at the originating end of the call; both types of minutes are counted in the terminating minutes. 3 Tier 1 carriers are non-NECA pool incumbent local exchange carriers with annual operating revenues of $144 million or more in 2010. 5 - 1 5 - 2 Chart 5.1 Interstate Switched Access Minutes of Use for Incumbent Local Exchange Carriers (in Billions) 0 100 200 300 400 500 600 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Table 5.1 Interstate Switched Access Minutes of Use Tier 1 Non Tier 1 Industry Year Total Total Total 1987 203,204 12,508 215,712 1988 230,398 14,211 244,609 1989 259,529 17,530 277,058 1990 287,442 20,006 307,448 1991 306,376 21,661 328,036 1992 327,172 22,577 349,749 1993 347,021 24,220 371,240 1994 374,173 27,230 401,403 1995 401,536 30,389 431,925 1996 434,718 33,378 468,097 1997 461,461 35,837 497,299 1998 481,078 37,749 518,828 1999 512,729 39,585 552,314 2000 523,928 42,990 566,917 2001 495,491 44,200 539,691 2002 442,684 43,958 486,642 2003 399,579 44,384 443,963 2004 377,832 44,531 422,363 2005 356,992 43,953 400,945 2006 335,651 43,560 379,211 2007 308,924 39,937 348,861 2008 280,110 35,857 315,968 2009 246,226 32,132 278,358 2010 212,214 27,804 240,019 Source: National Exchange Carrier Association, various filings. Incumbent Local Exchange Carriers by Tier (in Millions) 5 - 3 Table 5.2 ILEC Interstate Switched Access Minutes of Use by State (in Millions) State 2006 2007 2008 2009 2010 Alabama 5,962 5,699 5,562 4,971 4,255 Alaska 1,237 1,135 1,344 958 722 American Samoa 19 19 19 18 19 Arizona 7,121 6,573 6,059 5,286 4,629 Arkansas 3,871 3,434 3,099 2,791 2,346 California 37,936 35,521 31,441 27,664 23,587 Colorado 7,248 6,695 6,116 5,371 4,563 Connecticut 5,986 5,425 4,795 4,178 3,718 Delaware 1,565 1,487 1,392 1,216 1,010 District of Columbia 2,057 1,857 1,720 1,616 1,444 Florida 27,599 24,812 22,234 19,039 15,891 Georgia 12,383 11,757 10,992 9,671 8,269 Guam 257 262 221 162 143 Hawaii 1,571 1,594 1,927 1,887 1,999 Idaho 2,214 2,050 1,860 1,629 1,401 Illinois 15,580 14,860 13,699 11,931 10,083 Indiana 7,610 6,968 6,459 5,535 4,756 Iowa 4,655 4,200 3,120 2,729 2,386 Kansas 3,592 3,264 2,816 2,431 2,016 Kentucky 4,864 4,555 4,092 3,644 3,303 Louisiana 5,311 4,654 4,250 3,714 3,224 Maine 1,866 1,573 1,394 1,336 1,133 Maryland 9,371 8,615 7,729 7,043 6,296 Massachusetts 8,737 7,356 6,514 5,726 5,044 Michigan 9,752 8,855 7,930 6,758 5,735 Minnesota 5,672 5,039 4,624 4,031 3,538 Mississippi 3,786 3,500 3,230 2,860 2,521 Missouri 7,882 7,293 6,674 5,904 5,169 Montana 1,499 1,362 1,244 1,119 953 Nebraska 2,107 1,929 1,796 1,614 1,436 Nevada 4,729 4,130 3,475 2,907 2,301 New Hampshire 2,157 1,916 1,649 1,462 1,051 New Jersey 13,303 12,478 10,742 9,856 8,007 New Mexico 2,809 2,571 2,297 1,972 1,712 New York 20,566 19,369 17,185 15,361 13,542 North Carolina 11,881 10,900 10,090 8,738 7,732 North Dakota 828 728 685 609 548 Northern Mariana Islands 56 52 48 47 37 Ohio 12,524 11,632 10,549 9,104 7,889 Oklahoma 4,225 3,579 3,185 2,901 2,539 Oregon 4,759 4,277 3,786 3,270 2,721 Pennsylvania 15,325 13,896 12,686 11,172 9,697 Puerto Rico 3,492 3,419 3,426 3,214 3,177 Rhode Island 994 896 814 734 660 South Carolina 6,016 5,603 5,143 4,518 3,986 South Dakota 979 1,119 848 639 554 Tennessee 7,652 7,075 6,453 5,630 4,829 Texas 23,427 21,985 20,184 17,607 15,176 Utah 2,848 2,548 2,323 1,915 1,618 Vermont 1,283 1,167 1,028 960 789 Virgin Islands 478 379 372 354 332 Virginia 11,347 10,456 9,560 9,111 8,030 Washington 7,854 6,905 6,174 5,383 4,446 West Virginia 3,078 2,903 2,760 2,490 2,271 Wisconsin 6,295 5,662 5,407 4,950 4,242 Wyoming 997 875 746 625 543 Total 379,211 348,861 315,968 278,358 240,019 5 - 4 Customer Response Publication: 2011 Universal Service Monitoring Report You can help us provide the best possible information to the public by completing this form and returning it to the Industry Analysis and Technology Division of the FCC's Wireline Competition Bureau. 1. 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