Trends in telephone service

Industry Analysis Division
Common Carrier Bureau
Federal Communications Commission
May 1996

This report is available for reference in the Common Carrier Bureau Public Reference Room, 1919 M Street, N.W., Room 509. Copies may be purchased by calling International Transcription Services, Inc. at (202) 857-3800. The report can also be downloaded from the FCC-State Link computer bulletin board [BBS file name: TREND196.ZIP] at (202) 418-0241. The FCC-State Link can also be reached by using a gateway feature available through FedWorld, which can be reached via direct dial access (703) 321-3339, via internet telnet access (fedworld.gov), or via the World Wide Web (http://www.fedworl.gov).

To discuss the information in this report, contact: Katie Rangos, or Jim Lande at 202-418-0940

Introduction

Trends in Telephone Service is published by the Industry Analysis Division of the FCC's Common Carrier Bureau. We have designed this report to provide answers to some of the most frequently asked questions about the telephone industry -- questions asked by consumers, members of Congress, other government agencies, telecommunications carriers, and members of the business and academic communities. To this end, the report contains summary information about the size, growth, and development of the telephone industry, including data on market shares, minutes of calling, number of lines, and telephone subscribership. The report also provides information about telephone rates and price changes, consumer expenditures for service, access charges, long distance carriers, the status of local competition, infrastructure, universal service programs, and international telephone traffic.

Trends in Telephone Service summarizes a variety of information contained in other reports that are published periodically by the Industry Analysis Division. In most cases, these other reports give much more detailed information than that provided here. To facilitate further information gathering by consumers and others, we have listed additional sources of information at the end of this report.

Telephone subscribership

Under contract with the Federal Communications Commission, the Bureau of the Census includes questions on telephones as part of its Current Population Survey. This survey, which monitors demographic trends between the decennial censuses, has several strengths: it is conducted regularly by an expert agency, the sample is very large, and the questions are consistent. Thus, changes in the results can be compared over time with a great deal of confidence.

Nearly sixteen million households have been added to the nation's telephone system since these surveys began in November 1983 -- reflecting both an increase in the total number of households and a small, but statistically significant, increase in the percentage of households that subscribe to telephone service. The Census data also reflect slight, but statistically significant, seasonal variations in penetration rates. This pattern, after allowing for effects of the upward trend in the data, is an increase of 0.2% from November to March, followed by a decrease of 0.1% from March to July, followed by a decrease of 0.1% from July to November.

Because of smaller sample sizes, state-by-state data are subject to greater sampling errors than the national data shown in Table 1. Consequently, the state-by-state data shown in Table 2 are based on annual average penetration rates.

Price indexes for telephone services

The Bureau of Labor Statistics (BLS) collects a variety of information on telephone service as part of three separate programs -- the Consumer Price Index (CPI), the Producer Price Index (PPI), and the Consumer Expenditure Survey. The following material illustrates the range of information available from price indexes.

Long Term Trends in Price Indexes

A price index for telephone service was first published in 1935. Since that time, telephone prices have tended to increase at a slower pace than most other prices. Table 3 shows long-run changes in the Consumer Price Indexes 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 being public utilities.

Comprehensive Price Indexes

The CPI index of telephone services is based on a "market basket" intended to represent the telephone related expenditures of a typical urban household. It includes both local and long distance services. The annual rate of change is shown in Table 4 for the overall CPI (which measures the impact of inflation on consumers) and the CPI for telephone services. In addition, Table 4 shows the Gross Domestic Product fixed-weight price index prepared by the Bureau of Economic Analysis (which measures inflation throughout the economy).

Price Indexes for Local Service

The CPI index of local telephone charges is based on a broadly defined "market basket" that includes monthly service charges, message unit charges, leased equipment, installation, service enhancements (such as tone dialing and call waiting), taxes, subscriber line charges, and all other consumer expenditures associated with telephone services except long distance charges. In contrast, the PPI index of monthly residential rates is much more narrowly defined. It is based only on monthly service charges for residential service, optional touch-tone service, and subscriber line charges. It excludes taxes, charges for special services such as call waiting, and all other expenditures. The annual rates of change for these indexes of local costs are presented in Table 5.

Price Indexes for Long Distance Service

Price index data is available for intrastate toll and interstate toll services since December 1977. These series are also presented in Table 5.

Price Index Limitations

Price indexes are less reliable when industries are changing rapidly. For example, in 1992, long distance carriers began to increase basic rates while greatly expanding their range of discount offerings. The fixed "market basket" of toll calls measured for the CPI did not fully reflect these discounts. In 1995, the BLS made major changes to the PPI telephone series and we have no data after July 1995 that is comparable with prior data. Because of these sorts of difficulties, measures of average revenues are sometimes used as alternatives to price indexes.

Price Levels

Local Rate Levels

The price indexes maintained by the Bureau of Labor Statistics indicate percentage changes in the price of telephone services. The BLS does not publish actual rate levels. Calculations of average rates are based on surveys by FCC staff. These surveys use the same sampling areas and weights used by the BLS in constructing the Consumer Price Index.

Table 6 presents average local rates for residential customers. In October 1994, the national average for flat-rate residential service was $19.00 monthly, including taxes and subscriber line charges.

In most cities, consumers can subscribe to a service with a lower recurring charge than the cost of unlimited one-party service. Lower priced service options include party-line service and measured service. As of October 1994, the national average for the lowest generally available recurring charge was $6.55. The average minimum monthly bill, including subscriber line charges and taxes, was $11.58.

Table 6 also shows rates for a single-line business customer. These rates are representative of the cost of a local access line for small businesses.

Long Distance Rates

In Table 7, AT&T's basic schedule prices for directly dialed long distance calls are shown for January 1984 and April 1996. Higher charges apply to other types of calls such as those using operator assistance. Lower prices are available through calling plans and other volume discounts. In 1993, AT&T first began to charge different rates to residential and business customers. Since 1984, AT&T's basic schedule charges for directly dialed interstate calls have been reduced about 30%.

Table 8 contains AT&T's average revenue per minute for interstate calls. Since 1984, this figure has declined from 32 cents per minute to 18 cents per minute -- a drop of 40%.

Consumer expenditures

The Bureau of Labor Statistics conducts surveys of consumer expenditures, in part, to develop weights for CPI indexes. Table 9 shows expenditures for telephone service for all consumer units. Average annual expenditures on telephone service increased from $325 per household in 1980 to $690 in 1994.

About 2% of all consumer expenditures are devoted to telephone service. This percentage has remained virtually unchanged over the past 15 years, despite major changes in the telephone industry and in telephone usage.

The information on average telephone expenditures can be used to estimate the average monthly bills for households with telephone service. This average was about $61 per month for 1994. Monthly bills have increased significantly since 1980, due partly to higher local rates, but primarily due to more long distance calling. Residential toll calling grew by about 10% a year between 1985 and 1989 -- a period when toll rates declined dramatically. The average American household now spends more on long distance service than on basic local service, reflecting the growth in long distance calling since the AT&T divestiture in 1984.

State telephone rate cases

The actions of state regulatory commissions once provided important indicators of future changes in telephone rates. Rate cases completed by the state commissions tended to result in immediate rate changes. At the same time, the amount of rate relief requested by local telephone companies, but not yet acted upon by state commissions, provided an indicator of future rate changes.

Because it typically took more than a year for a rate case to be completed, the level of pending cases served as an indicator of the rate changes for local and intrastate toll rates during the next year. In recent years, however, more and more states have moved away from traditional rate of return regulation and adopted alternative regulatory approaches. As a result, changes in telephone rates are no longer as closely linked to rate cases. Consequently, the FCC discontinued its reporting requirement on state rate cases in 1995. Table 10

Changes in local telephone technology

Central Office Technology

During the 1980's, telephone companies replaced most of their older "electromechanical" switches with computerized equipment. In the telephone industry these computers are referred to as "stored program control" switches. Switches with the most current technologies are fully digital. That is, computers are used to switch calls and, in addition, telephone conversations are converted to a digital form before being passed through the switch and later reconverted to their original analog form. Some offices are of an intermediate variety: the switching function is done by computer but the calls continue to be processed in their analog form. The spread of these technologies throughout the Bell operating companies is shown in Table 11.

The use of digital technology has allowed local telephone companies to equip almost all of their offices for the provision of "equal access" to competing long distance carriers. Newer signaling systems have been developed that permit calls to be set up more quickly and efficiently. In the late 1980's, telephone company offices began to be converted to the newest system, "Signaling System 7." For several years the telephone industry has been working on an Integrated Systems Digital Network (ISDN). One of the attractions of ISDN is that ordinary local telephone lines (copper loops) can transport high speed data between computers and handle more than one telephone conversation at a time. The number of lines actually equipped with this technology has grown far less rapidly than originally expected. The number of Bell operating company offices and the lines served by offices with these features are shown in Table 12. Of course, not all of the lines served by ISDN compatible offices are actually receiving ISDN service.

Transmission technology

The Bell operating companies file voluminous data on technology as part of their ARMIS reports (ARMIS is an acronym for the Automated Reporting Management Information System.) Each telephone company has a network of transmission paths or "carrier links" tying together their serving offices. As indicated in Table 13), fiber optic cables have rapidly replaced copper to provide these links. During the first half of the 1990's, the proportion of fiber rose to over 80%.

Although fiber technology was first used for interoffice transmission facilities, the technology is now being deployed closer to customers. The number of working "channels" provides an approximation of the number of transmission paths between customers and the telephone company offices serving those customers. Although the number of fiber channels nearly tripled during the first half of the 1990's, copper wire still links more than 90% of customers to the network local distribution facilities.

Equal access

The Bell operating companies serve more than 75% of the nation's telephone lines. Under the Modification of Final Judgment that settled the AT&T antitrust case, the Bell operating companies are obligated to offer equal access to all long distance carriers. The Bell companies have converted almost all of their lines to equal access, although there are a few lines at smaller, older offices where equal access is being provided as the offices are converted to more modern equipment. Independent telephone companies, which serve almost 25% of the nation's lines, are converting offices to equal access at a less rapid pace, but have converted about 90% of their lines. Overall, more than 98% of the nation's telephone lines have been converted to equal access.

Table 14 shows the number of telephone lines and the percentage of these lines converted to equal access since divestiture. Bell companies converted almost half of their lines between December 1984 and December 1985, and an additional 40% in the next three years. Including independents, the United States reached 98% equal access conversion by the end of 1994.

Table 15 shows the number of central office wire centers in each state that had been converted to equal access as of October 25, 1995. The table is derived from NECA's tariff 4 database, which is updated by local exchange carriers. In some cases, there is a lag between an office converting to equal access and that change being reflected in the database. Thus, in some cases, the data continues to show some offices not yet converted to equal access even in states where equal access is reported to be available to all customers. Because the non-equal access offices tend to be smaller offices, the percentage of converted lines is significantly greater than the percentage of converted offices.

Telephone lines

Within the telephone industry there are several alternative, but closely related, definitions of telephone lines or loops. While these differences often make it difficult to easily reconcile data from different statistical series, they are not usually large enough to affect comparisons among companies or trends over time.

Table 16 shows the nation's total number of telephone lines using two alternative measures. "Local loops" is a way of counting lines that is used to determine the amount of Universal Service Fund payments to local exchange carriers. Presubscribed lines are used to determine the amount of payments by the interexchange carriers to support the Universal Service Fund and the Lifeline and Link-Up programs. With virtually all businesses having telephone lines and more than 90% of the nation's households having telephone service, the growth in the number of lines tends to reflect growth in the population and the economy, averaging about 3% per year.

Table 17 shows the number of local exchange carriers and access lines in each state, and shows breakdowns for equal access and non-equal access lines.

Table 18 compares the number of residential local loops with the number of households with telephone service. The difference between these series is an approximate measure of the number of additional residential access lines. Table 18 shows that the percentage of additional lines for households with telephone service has increased dramatically, from about 3% in 1988 to about 12% in 1994.

Telephone numbers

In 1994, many area codes were stretched to their limit as demand for telephone numbers continued to rise. Adding new area codes became difficult because some older telephone equipment was designed to recognize only area codes with a middle digit of 0 or 1 and the supply of those numbers was dwindling. On January 1, 1995, the restriction on the middle digit was removed, and 640 new area codes were made available. During 1995, 15 new area codes were assigned -- the largest single-year expansion of area codes in decades. Many more new area codes are expected in 1996. The changes in area codes are shown in Table 19.

On May 1, 1993, procedures for routing 800 calls were changed and 800 numbers were made "portable." The new system enables customers to change service providers while still retaining the same 800 number. There has been tremendous growth in the 800 market. The few remaining unassigned 800 numbers are expected to run out this year. The growth of 800 telephone numbers is shown in Table 20. In March 1996, a second toll free calling code -- 888 -- was placed in service.

Minutes of calling

Dial Equipment Minutes

As in the case of telephone lines, there are many alternative measures of calling volumes. Most subscribers purchase service with unlimited local calling. As a result, most calls are not metered and estimates of total calling are subject to wide margins of error. Periodic studies are used within the telephone industry to estimate the number of calls and calling minutes for a variety of purposes. For example, periodic studies of dial equipment minutes (DEMs) are used to estimate the proportion of calling that is interstate and to allocate costs between interstate and intrastate services.

Dial equipment minutes are shown in Table 21. Dial equipment minutes are measured as calls enter and leave telephone switches. Therefore, two DEM minutes are counted for every conversation minute. The volume of local calls has grown at approximately the same rate as the number of local telephone lines. In contrast, the volume of long distance calling surged as prices fell. As a result, a greater portion of calls are long distance. Intrastate toll minutes increased from 8% of all minutes in 1980 to 11% in 1994. During that same period, interstate calling minutes increased from 8% of the total to 15%.

As shown in Table 22, the average telephone line is used primarily for local calling and is used somewhat less than an hour per day. The level of local calling has remained relatively constant for a long period of time despite the introduction of facsimile machines, computer modems and other devices that affect usage. Increases in long distance calling have caused the total usage per line to increase from 46 minutes in 1980 to 52 minutes in 1994.

Switched Access Minutes

An alternative measure of interstate calling became available in 1984. "Switched access minutes" are those minutes transmitted by long distance carriers that also use the distribution networks of local telephone companies. The measure includes minutes associated with ordinary long distance calls and the "open end" of WATS-like calls. It excludes calls made on private telecommunications systems, on leased lines, and minutes on the "closed end" of WATS-like calls. On ordinary long distance calls, minutes are counted both where the call originates and where the call terminates.

Table 23 shows the total number of interstate switched access minutes handled by all long distance carriers. The number of minutes has grown steadily since mid-1984, stemming from a combination of overall economic growth, price reductions, and extensive advertising. Premium minutes have grown rapidly, reflecting both strong underlying traffic growth and the conversion of offices to equal access. Non-premium minutes (principally minutes handled by AT&T's competitors in areas where equal access has not yet been provided) continue to decline as the process of conversion to equal access nears completion.

Telephone industry traffic experts often argue that dial equipment minutes represent the best available information on the proportions of different types of calls while access minutes are the most accurate available data on the volume of interstate calling. However, for reasons that are far from clear, reported changes in access minutes are not entirely consistent with reported changes in dial equipment minutes.

Long distance carriers

Carrier Identification Codes provide information on the number of firms seeking to acquire certain types of interconnecting arrangements with local telephone companies. Any firm that seeks to use "trunk side" connections with local telephone companies is provided a carrier identification code so that traffic can be efficiently routed.

Beginning in 1986, a number of corporations, government agencies and other organizations began to acquire carrier identification codes for their own use, rather than for the purpose of providing telecommunications services to others. After that time, the use of such codes to estimate the number of long distance carriers became less reliable. We believe, however, that the number of firms obtaining these codes provides the best information available on the entry of new firms into the long distance market prior to 1986. The number of codes assigned is shown in Table 24.

Table 25 shows several alternative sources of information on the development of long distance carriers.

Table 26 shows the number of long distance carriers that purchase equal access from the larger local telephone companies in each state. Equal access is the premium access used by major carriers to provide "1-plus" dialing. Within any state, a carrier purchasing access may concentrate its efforts in serving only a few exchanges or a small portion of the state. Thus, the number of carriers available to a particular customer will tend to be smaller than the number of long distance carriers that purchase access somewhere in the state. No data is available for Alaska, which is not served by any of the reporting local companies.

Most small long distance carriers purchase access in only one state, providing nationwide service from the area in which they operate by reselling services purchased from other carriers. Table 27 shows the evolution of larger carriers that purchase equal access.

Long distance market shares

Minutes of Interstate Calling

Measures of switched access minutes first became available in 1984 and are shown in Table 23. Such information is publicly available for the total industry and for AT&T but not for other carriers. Thus, access minutes can be used to compute a market share for AT&T but not for smaller carriers.

Since 1984, AT&T's traffic has grown at a rate slower than the industry average. The result has been a declining market share for AT&T. AT&T's market share is shown in Table 28. AT&T's share of the interstate market, measured in minutes, declined from over 80% in late 1984 to about 56% at the end of 1995. At the same time, its share of the equal access market, which was 100% prior to the implementation of equal access, has also declined to 56%.

"Presubscribed" Lines

Telephone lines are said to be "presubscribed" to the long distance carrier that receives the ordinary long distance calls placed on the line. Where equal access is available, each customer is asked to choose a long distance carrier. Thereafter, all of the customer's long distance calls will be routed to the chosen long distance carrier unless the customer alters normal dialing procedure -- for example, accessing an alternate long distance carrier by dialing special codes. Where equal access is not yet available, the use of long distance carriers other than AT&T usually requires alternative dialing procedures.

The National Exchange Carrier Association (NECA) provides information on the number of lines presubscribed to each long distance carrier. NECA collects the information from each local telephone company in order to comply with FCC rules that require NECA to recover certain expenses from the larger long distance carriers. This information is shown in Table 29.

NECA reports that, in December 1994, there were 148 million presubscribed lines in the United States. Special access lines, WATS lines, and other specialized lines are not included in the counts of presubscribed lines. The number of lines presubscribed to AT&T has remained roughly constant while the number of lines presubscribed to other carriers has grown. At the end of 1994, about 70% of these lines were presubscribed to AT&T, 15% to MCI, 6% to Sprint, and 1% to LDDS. About five hundred smaller carriers, serving 11 million lines, account for the remaining 8% of the industry.

Toll Revenues

Long distance telephone companies with over $100 million in annual revenues report their annual revenues to the FCC. The reported revenues are shown in Table 30, and include both interstate and intrastate revenues. In 1994, services provided by long distance carriers generated about $67.4 billion in revenues. During the past few years, revenues have grown at a far slower pace than the volume of long distance calling because of sharp price cuts. In 1984, AT&T's toll revenues of $35 billion accounted for 90% of the revenues received by all long distance carriers. By 1994, with its revenues virtually unchanged, its share of total revenues had fallen to 55%.

Chart 1 compares alternative measures of AT&T's market share using minutes, lines and revenues. In that chart, a second measure of revenues has been added. The alternative measure is based on financial reports to stockholders. Revenues reported to the FCC usually differ from revenues reported to stockholders. The largest differences tend to relate to the treatment of access charges and international settlements--accounting for the difference between the annual revenue share points labeled "FCC" and the revenue share line labeled "SEC" in Chart 1.

Total telecommunications industry revenues

Since 1993, all carriers with interstate revenues have been required to file annual Telecommunications Relay Service (TRS) Fund Worksheets. Because revenues derived from providing access to the interstate network are considered to be interstate, virtually all carriers are required to file information. Over 2800 carriers filed these worksheets in 1995 and reported $184 billion of revenue for 1994. Table 31 shows these revenues for the ten revenue categories provided in the TRS worksheets. The revenues are shown by type of carrier in Table 32. Carriers billed $66 million for local services, $35 million for access services, and $83 million for toll services in 1994. A large share of access revenues represents payments from toll carriers to traditional local exchange carriers for access.

The publication Carrier Locator: Interstate Service Providers lists each of the 2,847 carriers that filed a worksheet along with the categories of revenues reported. It also contains an address and contact telephone number for each carrier.

Table 32

Local competition

The potential for competition in the local-calling market will be greatly increased by the recent passage of the Telecommunications Act of 1996. The new law provides for competition in local telephone service. Even before passage of this historic new law, competitors had begun offering switched local service in seven states: California, Illinois, Maryland, Massachusetts, Michigan, New York, and Washington. Competitive activity is not evenly spread within these states: the first seeds of competition have sprouted in urban areas where many potential customers are concentrated. Generally, new competitors are small and are still experimenting in the market.

The Federal Communications Commission and state regulators are working together to encourage local competition and to develop a better understanding of its evolving nature. Table 33 shows the current state of local competition. Rapid progress is expected once the ground rules for competition -- including interconnection, number portability, unbundling, universal service and resale -- are established.

Access charges

In the 1980's the FCC, in cooperation with a "Federal-State Joint Board" composed of both federal and state regulators, introduced sweeping changes to the way that telephone services were priced.

As recently as the early 1980's, almost all long distance service continued to be provided by AT&T. AT&T, in turn, charged prices far above cost for long distance calls and shared the revenues with local telephone companies. From AT&T's perspective, this revenue sharing was largely internal because it owned the Bell operating companies, which provided about three- quarters of the nation's local telephone service. The transfer of revenues from long distance service was an important--and rapidly growing--source of revenues to local telephone companies and reduced pressures to raise local monthly rates.

The method of sharing revenues that had developed historically had several major deficiencies. First, the amounts of revenue shared had grown far beyond expectations--by the early 1980's, two-thirds of the price of a long distance call was passed back to local telephone companies. Doing so was inefficient--suppressing the demand for long distance calls and inducing large corporations to arrange private systems that "bypassed" the public switched network. Finally, while such revenue sharing arrangements were perhaps sustainable in an industry where one firm monopolized both long distance and local service, they were not compatible with a competitive long distance industry. MCI and other new competitors had not been party to developing the revenue sharing arrangements and did not want to share their revenues with local telephone companies-- especially those owned by AT&T (then the dominant competitor in the long distance market).

The "access charges" introduced in mid-1984 had several major elements. Monthly "subscriber line charges" (SLCs) were introduced for business lines in 1984 and subsequently for residential customers. Currently, the SLC is $6.00 monthly for most business lines and $3.50 for most residential lines. Local telephone companies were required to reduce their charges to long distance carriers--dollar for dollar--as SLCs were introduced.

The "rebalancing" of local and long distance prices had fundamental impacts on the telephone industry and upon consumers as the price of long distance service fell and the volume of long distance calling surged. Average monthly SLCs are shown in Table 34, and average per-minute rates charged to long distance carriers are shown in Table 35. The per-minute access rates charged by local telephone companies are generally higher for smaller companies. The range of access rates proposed for mid- 1996 are shown in Table 36.

Lifeline and universal service programs

The FCC has established two types of assistance programs for low income subscribers. Programs of the first type are designed to assist poor subscribers in affording the monthly costs of service, and are called "lifeline" plans. Other programs -- connection assistance or "Link-Up" programs -- are designed to help low income subscribers defray installation charges in order to begin receiving telephone service. Participating states have wide latitude in selecting means tests and shaping the benefits of the programs. In 1996, programs have been established in all 50 states, the District of Columbia, the Virgin Islands, and the Commonwealth of Puerto Rico. The states with each type of program are indicated in Table 37, along with the year during which a program was first certified.

In addition to the programs for low income subscribers, a "Universal Service Fund" provides support to local telephone companies that have high costs. All of these assistance programs are financed currently by monthly charges imposed on larger long distance carriers. Under current FCC rules, each long distance carrier serving more than .05% of the nation's telephone lines is billed monthly on a per-line basis to support these programs. These charges are shown in Table 38.

Cellular telephone service

The Federal Communications Commission licenses cellular telephone companies but does not impose reporting requirements on the cellular industry. The Cellular Telecommunications Industry Association periodically publishes summary information on their industry, a selection of which is shown in Tables 39 and 40.

International telephone service

International telecommunications has become an increasingly important segment of the telecommunications market. International telephone calling -- propelled by technological innovation, increased international trade and travel, and stable or declining international telephone rates -- has skyrocketed. The number of calls has increased more than 600% since 1980. In 1994, Americans spent about $12.4 billion dollars on 2.3 billion international calls. International private line revenues have also increased since 1980, but telex and telegraph services declined substantially over the same period. These trends are shown in Table 41.

U.S. and foreign carriers compensate each other when one carries traffic that the other bills. The number of calls billed in the United States increased at a faster pace than calls billed in foreign countries, contributing to rapid increases in net settlement payments to foreign carriers. These net payments reached $4.3 billion in 1994. On average, carriers billed $.92 per minute for international calls in 1994 and paid $.52 per billed minute in settlements. Trends in settlement payments are shown in Table 42. On average, for all traffic, carriers retained $.39 for each international minute that they handled in 1994, compared with $.44 per minute in 1993. Some of this decline results from the fact that some carriers did not reflect discounts to customers in their 1993 data, but did in their 1994 data.

International traffic data is available on a country-by- country basis. Table 43 summarizes traffic by region of the world. Five markets -- Canada, Mexico, the United Kingdom, Germany, and Japan -- currently account for about half of the international calls billed in the United States.

Since 1985, when MCI first entered the market in competition with AT&T, numerous carriers have begun to provide international service. Thirty-four U.S. carriers provided international telecommunications service in 1994 by using their own facilities or lines leased from other carriers. These carriers billed $13.0 billion for international services, of which $12.4 billion was for telephone service. Table 44 shows the U.S.-billed revenues for each of the 34 carriers. Together, AT&T, MCI, and Sprint account for 97% of the facilities-based service billed in the United States.

In addition to the 34 carriers that owned or leased facilities, some 180 carriers reported the resale of international message telephone service. These carriers reported $1.1 billion of resale revenue in 1994. The revenues for the larger resellers are shown in Table 45.


The information in this report and, in many cases more detailed information, can be obtained from the FCC-State Link Electronic Bulletin Board by calling (202) 418-0241. The FCC- State Link can also be reached by using a gateway feature available through the National Technical Information Service's FedWorld system. FedWorld can be reached via direct dial access at (703) 321-3339, via internet telnet access (fedworld.gov), or via the World Wide Web (http://www.fedworld.gov).

Printed copies of statistical reports are available for reference in the Common Carrier Bureau's Public Reference Room (Room 509 at 1919 M Street, N.W.) and from the Commission's duplicating contractor (International Transcription Services, Inc. (ITS), 202-857-3800). Copies can also be downloaded from the FCC-State Link.

Additional information on regulated carriers, including investments, revenues, expenses, and earnings, is contained in the annual Statistics of Communications Common Carriers, available from the U.S. Government Printing Office (202-512- 1800).

FCC rules require carriers to provide more detailed traffic data about international telephone service than about domestic service. Because of delays in international settlements, such information is typically received by the commission much later than domestic data and is usually published separately. Detailed international data is available from International Telecommunications Data, and Trends in the International Telecommunications Industry, both of which are published by the Industry Analysis Division.

The information on cellular telephone service shown in Tables 39 and 40 was prepared by the Cellular Telecommunications Industry Association (1133 21st Street N.W., Washington, D.C. 20036, (202) 785-0081).

The United States Telephone Association represents virtually all local telephone companies (1401 H Street N.W., Washington D.C. 20005, (202) 326-7300). Like many trade associations, it collects information from each of its members. Annually, it publishes and sells statistical publications such as Statistics of the Local Exchange Carriers.

Two widely used sources of names, addresses and other information for companies in the telephone industry are Telephony's Directory & Buyers' Guide for the Telecommunications Industry and the Industry Analysis Division's Carrier Locator.

For more information on the following subjects, the following individuals may be contacted at (202) 418-0940:

Access Charges ........................Jim Lande
Consumer Expenditures .................Jim Lande
International Statistics ..............Linda Blake or Jim Lande
Lifeline Assistance Programs ..........Mary Green or Larry Povich 
Lines and Calling Volumes .............Alexander Belinfante
Local Competition .....................Emily Hoffnar
Long Distance Companies ...............Katie Rangos
Market Shares .........................Katie Rangos, Jim Lande
Prices and Rates ......................Jim Lande
State Rate Cases ......................Mike Lehner
Subscribership and Penetration ........Alexander Belinfante
Technology and Equal Access ...........Jonathan Kraushaar
Telecomm. Relay Fund Worksheets .......Jim Lande

Translated into HTML from the original WordPerfect and Lotus 1-2-3 files.
Last modified: 1997-01-27 by Henning Schulzrinne