Household Expenditures for Telephone Service

HOUSEHOLD EXPENDITURES FOR TELEPHONE SERVICE
[SOURCE: Federal Communications Commission, AUTHOR: Pedro Almoguera]
The FCC released its "Reference Book of Rates, Price Indices and Household Expenditures for Telephone Service. It highlights the data collected through the
Industry Analysis and Technology Division’s annual Urban Rates Survey. The local rate data compiled for 2005 and 2006 reflect the inclusion of various taxes and surcharges and, as such, provide an estimate of the monthly charges residential and single-line business customers pay for local telephone service provided by wireline telephone companies. The average rate paid by residential customers for unlimited touch-tone calling rose to $25.27 in 2006, an increase of 2.6% from $24.64 in 2005. The average connection charge for residential customers increased to $42.92 in 2006 from $42.80 in 2005, which represents an increase of 0.3%. The increased availability and marketing of discount and promotional long distance plans, as well as the popularity of wireless “bucket-of-minutes” plans, has made basic schedule rates obsolete for many long distance customers, particularly business customers and high volume residential consumers. Today wireline, wireless, and cable companies are offering consumers bundled packages of local and long distance service, and buckets of minutes that can be used to call anyone, anywhere, and anytime. The average revenue per minute of wireline long distance calling, which reflects rates paid by residential and business consumers, remained at 6 cents for the third consecutive year, and represents a decrease of 60% from 1992, when discount and promotional long distance plans were introduced. According to Bureau of Labor Statistics (BLS) surveys, average monthly expenditures for telephone service for all U.S. households rose from $82.50 in 2004 to $87.33 in 2005, an increase of 5.8%. Telephone service continues to comprise approximately 2% of household expenditures. Also, according to BLS surveys, urban households continue to spend more on telephone service than
rural households. During 2005, average annual expenditures for urban households were $1055, as compared to $966 for rural households. According to data provided by TNS Telecoms, a marketing research firm, households with wireline telephone service spent an average total of $97 per month on telephone services during the year 2005
(compared to $92 in 2004); $36 per month on local service (same as in 2004); $8 per month on long distance service (compared to $9 in 2004); and $53 per month on wireless service (compared to $47 in 2004).
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-276876A1.pdf