FCC RELEASES REFERENCE BOOK ON RATES, PRICE INDEXES
            AND HOUSEHOLD EXPENDITURES FOR TELEPHONE SERVICE


     The FCC has released a comprehensive report on telephone service rate levels, price indexes, and
household expenditures.  

     The report contains historical data, background material, and descriptions of methodology.  The
Reference Book:  Rates, Price Indexes, and Household Expenditures for Telephone Service was prepared
by James L. Lande of the Common Carrier Bureau's Industry Analysis Division.  It is intended to assist
in the analysis and interpretation of telephone price trends.  

     The Consumer Price Index for telephone service rose 1.8% during 1993.  This index includes local
service charges (which increased 1.0%), state toll charges (which increased .2%), and interstate toll charges
(which increased 6.5%).  The nation's overall rate of inflation was 2.7% for 1993.  Thus, in real terms,
the cost of residential telephone service fell about 1% during 1993, and about 16% since divestiture.  The
actual decline, however, was somewhat greater because the CPI toll indexes do not fully recognize the
lower rates offered by toll discount plans.  

      The national average monthly charge for residential local service with unlimited calling, including
subscriber line charges and taxes, averaged $18.82 in October 1993, about $.12 per month higher than the
prior year.  Small businesses paid an average of $42.57 per month for single line service in October, 1993,
about $.28 per month higher than the prior year. 

      The report contains Consumer Expenditure Survey data for 1980 through 1992, the latest year for
which data is available.  The average household spent $325 for telephone service in 1980 and $623 in
1992.  This was about 2% of household expenditures in each year.  The average household spends
between $28 and $30 per month for long distance services.  Toll calling grew by about 10% per year in
the late 1980s, following the dramatic fall of interstate rates.  Toll calling has been growing at about 5%
per year since then.  

     The report also contains information on subsidized telephone service rates, rates in rural areas, and
rate trends since 1930.  

     The report and its underlying data are available for reference in the Industry Analysis Division's
Public Reference Room, Common Carrier Bureau, 1250 23rd Street, N.W, Plaza Level.  Report data can
be obtained via the FCC - State Link computer bulletin board at (202) 632-1361.  Copies of the report
may be purchased by calling International Transcription Services (ITS) at (202) 857-3800.

                                                 FCC

     For additional information, contact Jim Lande of the Bureau's Industry Analysis Division, (202) 632-
1371.