FOR IMMEDIATE RELEASE: NEWS MEDIA CONTACT:

December 29, 2006 Mark Wigfield 202-418-0253

Email: mark.wigfield@fcc.gov

**FEDERAL-STATE UNIVERSAL SERVICE JOINT BOARD STAFF RELEASES MONITORING
REPORT**

## Comprehensive Report Tracks Trends Related to Universal Service 

Washington, D.C. -- The staff of the Federal-State Joint Board on
Universal Service has released its most recent Monitoring Report on
Universal Service. This report reflects information on the telephone
industry filed with the Federal Communications Commission (FCC) through
May 2006. This report, with a few exceptions, reflects data filed with
the Federal Communications Commission (FCC) by the telephone industry
for the year 2005 and prior years.

The report released today addresses the various universal service
support mechanisms, which amounted to about \$6.5 billion in 2005. In
2005, disbursements among the four categories of universal service
mechanisms were: 58.7% for high-cost support; 28.6% for schools and
libraries support; 12.4% for low-income support; and 0.4% for rural
health care support. The report presents data in eleven categories:

1)  **Industry Revenues and Contributions** -- Total industry revenues
    for telecommunications services provided to end users in 2005 were
    about \$234 billion, compared to about \$233 billion in 2004.
    Revenues for fixed local service providers remained at about \$83
    billion, while wireless service providers' revenues increased to
    about \$102 billion, from about \$94 billion, and toll service
    providers' revenues decreased to about \$49 billion, from about \$56
    billion.

2)  **Low-Income Support** -- Total low-income support increased to
    about \$804 million in 2005, from about \$763 million in 2004.

3)  **High-Cost Support** -- In 2005, total high-cost support amounted
    to about \$3.8 billion, an increase from about \$3.5 billion
    in 2004. This increase is due to support to competitive carriers
    (CETCs) increasing from \$0.3 billion in 2004 to \$0.6 billion in
    2005.

4)  **Schools and Libraries Support** -- Schools and libraries are
    making substantial use of their available support, with commitments
    remaining about \$2 billion and disbursements remaining below \$1.9
    billion for the latest school years.

5)  **Rural Health Care Support** -- The demand for rural health care
    support has remained at a modest level, with disbursements remaining
    at about \$25 million for the July 2004 - June 2005 funding year.

6)  **Subscribership and Penetration** -- According to the Current
    Population Survey, the percentage of households subscribing to
    telephone service declined to an average of 93.1% in 2005, from
    93.8% in 2004.[^1]

7)  **Rates and Price Indices** -- The price index of overall telephone
    rates increased 0.4% in 2005, compared to the general rate of
    inflation of 3.4% for all goods and services.

8)  **Network Usage** -- Interstate toll usage for customers of
    incumbent local exchange carriers declined to 401 billion minutes in
    2005, from 422 billion minutes in 2004.

9)  **Quality of Service** -- The data show noticeable differences in
    the quality of service among carriers. For example, complaints per
    million residential access lines in 2005 ranged from 17 to 897 for
    different carriers.

10) **Infrastructure** -- The total number of access lines in service
    for the mandatory price-cap carriers (the regional Bell operating
    companies) declined to about 127 million in 2005, from about 136
    million in 2004. On the other hand, measures of their fiber
    transmission generally grew in 2005.

11) **Revenues, Expenses and Investment** -- For the larger local
    exchange carriers in 2005, 55% percent of net income was interstate,
    35% of revenues was interstate, and 31% of expenses was interstate.

A monitoring program was established in the mid‑1980\'s, at the
recommendation of the Separations Joint Board, to track trends related
to universal service and related matters. Since then, Joint Board staffs
have prepared Monitoring Reports at least once a year ‑‑ a compendium of
hundreds of pages of statistical data on subscribership and penetration,
loop costs, separations factors, universal service fund payments, etc.
The report is unique in that it is the only document that includes
information on every incumbent local telephone company in the nation. In
1998 the publication of this report was moved from the Separations Joint
Board staff to the Universal Service Joint Board staff. This is the
ninth Monitoring Report from the Universal Service Joint Board staff.

The full text of this document is available for public inspection and
copying during regular business hours at the FCC Reference Information
Center, Portals II, 445 12th Street, SW, Room CY-A257, Washington, DC
20554. This document may also be purchased from the Commission\'s
duplicating contractor, Best Copy and Printing, Inc., Portals II, 445
12th Street, SW, Room CY-B402, Washington, DC 20554, telephone
202-488-5300 or 1-800-378-3160, facsimile 202-488-5563, TTY
202-488-5562, or via e-mail at \< [fcc@bcpiweb.com]{.underline}\>. The
report may also be downloaded from the Wireline Competition Bureau
Statistical Reports Internet site, which can be reached at
\<http://[www.fcc.gov/wcb/stats]{.underline}\>. It is available in both
page image (.pdf) format and in a compressed (.zip) format, which, when
unzipped yields text and spreadsheet files.

-FCC-

Wireline Competition Bureau contact: Alexander Belinfante at (202)
418-0944; TTY (202) 418-0484.

CC Docket No. 98-202

[^1]: In 2006 the penetration rate for the months for which data is
    available has increased from the corresponding months in 2005.