| Table 1: Quarterly Communications Equipment Price Indexes              |                                                                             |                                                                                              |                                                                                 |                                                                               |
|------------------------------------------------------------------------|-----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|-------------------------------------------------------------------------------|
|                                                                        |
| Product Code:                                                          | PJ_PITTD_WAWO_FORDO_NSDO.Q                                                  | PJ_PITTW_WAWO_FORDO_NSDO.Q                                                                   | PJ_PITTV_WAWO_FORDO_NSDO.Q                                                      | PJ_PITTT_WAWO_FORDO_NSDO.Q                                                    |
|                                                                        |
| Product description:                                                   | Fisher index of product class average prices for voice networking equipment | Fisher index of product class average prices for mobile (cellular) infrastructure equipment. | Fisher index of product class average prices for optical transport equipment.   | Fisher index of product class average prices for optical transport equipment. |
|                                                                        |
| 2002q1                                                                 | 100                                                                         | 100                                                                                          | 100                                                                             | 100                                                                           |
|                                                                        |
| 2002q2                                                                 | 99.4756                                                                     | 97.4306                                                                                      | 95.2462                                                                         | 93.7531                                                                       |
|                                                                        |
| 2002q3                                                                 | 95.6265                                                                     | 85.5318                                                                                      | 93.3811                                                                         | 88.9378                                                                       |
|                                                                        |
| 2002q4                                                                 | 90.6614                                                                     | 82.7026                                                                                      | 92.3867                                                                         | 84.6977                                                                       |
|                                                                        |
| 2003q1                                                                 | 88.2624                                                                     | 79.7117                                                                                      | 91.1105                                                                         | 77.0045                                                                       |
|                                                                        |
| 2003q2                                                                 | 86.3497                                                                     | 76.3045                                                                                      | 90.1039                                                                         | 72.3168                                                                       |
|                                                                        |
| 2003q3                                                                 | 80.9816                                                                     | 62.9188                                                                                      | 86.1531                                                                         | 68.2927                                                                       |
|                                                                        |
| 2003q4                                                                 | 76.1752                                                                     | 59.6097                                                                                      | 85.4595                                                                         | 65.5618                                                                       |
|                                                                        |
| 2004q1                                                                 | 74.0389                                                                     | 59.7012                                                                                      | 84.639                                                                          | 63.5479                                                                       |
|                                                                        |
| 2004q2                                                                 | 72.9737                                                                     | 62.2726                                                                                      | 83.2682                                                                         | 61.9693                                                                       |
|                                                                        |
| 2004q3                                                                 | 72.1842                                                                     | 62.1211                                                                                      | 82.1083                                                                         | 59.1203                                                                       |
|                                                                        |
| 2004q4                                                                 | 69.257                                                                      | 67.2305                                                                                      | 81.9861                                                                         | 56.3086                                                                       |
|                                                                        |
| 2005q1                                                                 | 66.0478                                                                     | 69.9923                                                                                      | 81.7871                                                                         | 53.3101                                                                       |
|                                                                        |
| 2005q2                                                                 | 65.5746                                                                     | 67.8501                                                                                      | 85.8559                                                                         | 50.5499                                                                       |
|                                                                        |
| 2005q3                                                                 | 65.8081                                                                     | 63.6934                                                                                      | 80.3085                                                                         | 49.7132                                                                       |
|                                                                        |
| 2005q4                                                                 | 63.926                                                                      | 60.1334                                                                                      | 77.8188                                                                         | 48.0983                                                                       |
|                                                                        |
| 2006q1                                                                 | 64.5786                                                                     | 58.4424                                                                                      | 80.0188                                                                         | 45.9306                                                                       |
|                                                                        |
| 2006q2                                                                 | 64.2501                                                                     | 59.1605                                                                                      | 79.457                                                                          | 45.0249                                                                       |
|                                                                        |
| 2006q3                                                                 | 62.9425                                                                     | 61.967                                                                                       | 80.028                                                                          | 44.3247                                                                       |
|                                                                        |
| 2006q4                                                                 | 61.3208                                                                     | 64.5183                                                                                      | 79.7595                                                                         | 43.1098                                                                       |
|                                                                        |
| 2007q1                                                                 | 59.6373                                                                     | 64.3654                                                                                      | 80.0793                                                                         | 41.3007                                                                       |
|                                                                        |
| 2007q2                                                                 | 60.23                                                                       | 62.0134                                                                                      | 78.6186                                                                         | 40.0667                                                                       |
|                                                                        |
| 2007q3                                                                 | 60.2284                                                                     | 52.6603                                                                                      | 78.8723                                                                         | 39.3409                                                                       |
|                                                                        |
| 2007q4                                                                 | 57.5988                                                                     | 43.772                                                                                       | 77.4075                                                                         | 38.6091                                                                       |
|                                                                        |
| 2008q1                                                                 | 59.9216                                                                     | 44.2463                                                                                      | 75.9839                                                                         | 38.0799                                                                       |
|                                                                        |
| 2008q2                                                                 | 58.6353                                                                     | 41.7915                                                                                      | 76.2917                                                                         | 36.1477                                                                       |
|                                                                        |
| 2008q3                                                                 | 57.6705                                                                     | 40.0377                                                                                      | 76.2215                                                                         | 34.8581                                                                       |
|                                                                        |
| 2008q4                                                                 | 55.0547                                                                     | 38.5626                                                                                      | 73.6257                                                                         | 33.7093                                                                       |
|                                                                        |
| 2009q1                                                                 | 52.5133                                                                     | 34.6417                                                                                      | 73.9089                                                                         | 32.7624                                                                       |
|                                                                        |
| 2009q2                                                                 | 52.6505                                                                     | 31.7477                                                                                      | 74.0955                                                                         | 31.7433                                                                       |
|                                                                        |
| 2009q3                                                                 | 49.2349                                                                     | 32.1787                                                                                      | 72.3868                                                                         | 31.3069                                                                       |
|                                                                        |
| 2009q4                                                                 | 50.5151                                                                     | 30.6879                                                                                      | 70.5217                                                                         | 30.7503                                                                       |
|                                                                        |
| 2010q1                                                                 | 46.8587                                                                     | 30.4588                                                                                      | 68.09                                                                           | 29.4877                                                                       |
|                                                                        |
| 2010q2                                                                 | 43.5249                                                                     | 30.7081                                                                                      | 66.2891                                                                         | 28.896                                                                        |
|                                                                        |
| 2010q3                                                                 | 41.6827                                                                     | 30.6936                                                                                      | 65.0919                                                                         | 28.7048                                                                       |
|                                                                        |
| 2010q4                                                                 | 40.6762                                                                     | 31.6054                                                                                      | 65.4528                                                                         | 28.1353                                                                       |
|                                                                        |
| 2011q1                                                                 | 37.5279                                                                     | 32.8104                                                                                      | 64.0099                                                                         | 27.1654                                                                       |
|                                                                        |
| 2011q2                                                                 | 34.833                                                                      | 31.7344                                                                                      | 63.3633                                                                         | 26.1826                                                                       |
|                                                                        |
| 2011q3                                                                 | 34.3986                                                                     | 30.2838                                                                                      | 61.8544                                                                         | 25.4329                                                                       |
|                                                                        |
| 2011q4                                                                 | 33.8388                                                                     | 29.1681                                                                                      | 62.9131                                                                         | 24.9485                                                                       |
|                                                                        |
| 2012q1                                                                 | 33.283                                                                      | 28.0463                                                                                      | 62.0408                                                                         | 24.392                                                                        |
|                                                                        |
| 2012q2                                                                 | 33.467                                                                      | 27.003                                                                                       | 61.3857                                                                         | 23.6828                                                                       |
|                                                                        |
| 2012q3                                                                 | 31.3536                                                                     | 26.5846                                                                                      | 59.8699                                                                         | 23.5378                                                                       |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Table 2: Annual Communications Equipment Price Indexes                 |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Product Code:                                                          | PJ_PITTD_NSFR.A                                                             | PJ_PITTW_NSFR.A                                                                              | PJ_PITTT_NSFR.A                                                                 | PJ_PITTV_NSFR.A                                                               |
|                                                                        |
| Product description:                                                   | FRB price index for data networking equipment.                              | FRB price index for wireless (cellular) phones and networking equipment.                     | FRB price index for transport, local loop, and legacy central office equipment. | FRB price index for voice networking equipment.                               |
|                                                                        |
| 2002                                                                   | 31.6285                                                                     | 47.8309                                                                                      | 48.7203                                                                         | 59.2799                                                                       |
|                                                                        |
| 2003                                                                   | 24.2218                                                                     | 39.2424                                                                                      | 42.5032                                                                         | 52.6828                                                                       |
|                                                                        |
| 2004                                                                   | 18.9337                                                                     | 35.3573                                                                                      | 39.1341                                                                         | 47.3125                                                                       |
|                                                                        |
| 2005                                                                   | 17.1615                                                                     | 33.2719                                                                                      | 35.4452                                                                         | 43.6889                                                                       |
|                                                                        |
| 2006                                                                   | 16.2526                                                                     | 31.0205                                                                                      | 32.3089                                                                         | 42.336                                                                        |
|                                                                        |
| 2007                                                                   | 15.4713                                                                     | 28.7097                                                                                      | 29.7505                                                                         | 40.1542                                                                       |
|                                                                        |
| 2008                                                                   | 14.4742                                                                     | 24.5086                                                                                      | 27.2399                                                                         | 38.0014                                                                       |
|                                                                        |
| 2009                                                                   | 12.9211                                                                     | 21.8343                                                                                      | 24.9555                                                                         | 36.151                                                                        |
|                                                                        |
| 2010                                                                   | n.a.                                                                        | 21.3598                                                                                      | 23.2962                                                                         | 32.9113                                                                       |
|                                                                        |
| 2011                                                                   | n.a.                                                                        | n.a.                                                                                         | n.a.                                                                            | n.a.                                                                          |
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| Notes to table of IP system communications equipment price indexes     |                                                                             |                                                                                              |                                                                                 |                                                                               |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| The quarterly-frequency price indexes shown are matched-model Fisher   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| chain aggregations of unit values for detailed product categories.     |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Data comes from private vendors including Dell'Oro, Synergy and        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Gartner.  In almost all cases, these consultancies construct revenue   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| estimates and unit shipment estimates by product for the major         |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| companies in the market for each product.  The unit values used in the |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| construction of the price indexes are the ratio of revenues to units   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| (number of devices) shipped in most cases.  In a few cases, revenue is |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| divided by a measure of capacity, such as ports.                       |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| These quarterly-frequency indexes are used as indicators of the likely |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| path of the annual-frequency benchmark indexes and to establish        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| quarterly pattern within the year.  In all cases, the scope of the     |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| indicator data falls short of the scope of the industry.               |                                                                             |                                                                                              |                                                                                 |                                                                               |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| The annual benchmark price indexes shown incorporate additional        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| information on prices for the product class from other sources when    |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| available.  The annuals also account for the prices of secondary       |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| products and miscellaneous receipts (using the BLS PPIs), making these |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| "industry" price indexes, as if there were a separate industry in the  |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| NAICS system for each of them.                                         |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| For use in IP, the quarterly indicator shipments series deflated by    |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| price indexes is benchmarked to the annual real output benchmarks.  A  |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| benchmarked price index is not produced separately.  The quarterly     |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| price index tables show the raw (unbenchmarked) indexes.               |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| Weights used to aggregate are based on product production figures from |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| CIR, controlled to ASM/CM primary product figures, adjusted for        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| secondary products and miscellaneous receipts shared out               |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| proportionally across the synthetic "industries".                      |                                                                             |                                                                                              |                                                                                 |                                                                               |
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| Product descriptions and comments                                      |                                                                             |                                                                                              |                                                                                 |                                                                               |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| data net: data networking equipment -- equipment used to manage data   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| traffic in local area networks(LANs), in wider networks, such as       |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| telecom service provider networks, and in storage area networks.       |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Indicator data includes ethernet switches, routers, SAN switches, and  |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| wireless LAN equipment.                                                |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| voice net: enterprise and home voice equipment -- enterprise voice     |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| equipment,such as PBX/KTS equipment, including newer generation        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| IP-based equipment; home voice equipment such as ordinary corded and   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| cordless phones and answering machines.  Cell phones are *not*         |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| included in this category.  Indicator data includes enterprise voice   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| network equipment (PBX systems, including phones), but does not        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| include consumer terminals.                                            |                                                                             |                                                                                              |                                                                                 |                                                                               |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| transport: transmission, local loop, and legacy central office         |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| equipment.  Indicator data includes fiber optic long-haul and local    |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| loop equipment.  Central office equipment and non-fiber transmission   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| equipment (e.g. radio-wave backhaul) are not covered in the indicator. |                                                                             |                                                                                              |                                                                                 |                                                                               |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| wireless: wireless system equipment -- used to manage traffic in       |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| mobile phone and data networks, including cellular.  Satellites and    |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| related ground equipment are not in scope, but special purpose mobile  |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| systems, such as public safety and military communications are.        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Includes cell phones, though with a very small weight, matching the    |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| low importance in domestic production.  Indicator data includes base   |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| station controllers, mobile switching centers, and base transceiver    |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| stations.                                                              |                                                                             |                                                                                              |                                                                                 |                                                                               |
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|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Corresponding Census 7-digit product codes:                            |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| data net: 3342107 (part)                                               |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| voice net: 3342101 (part), 3342107 (part)                              |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| transport: 3342101 (part), 3342104                                     |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| wireless: 3342203, 3342209 (part)                                      |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| Corresponding 2007 CIR 10-digit product codes:                         |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
|                                                                        |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| data net: 3342107 + {228,239,245,252,462,267,499(part)}                |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| voice net: 3342101 + {119,125,199(part)}, 3342107 + {425,426}          |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| transport: 3342101 + {105,199(part)}, 3342104100                       |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |
| wireless: 3342203, 3342209109                                          |                                                                             |                                                                                              |                                                                                 |                                                                               |
|                                                                        |