NEWSReport No. CC 97-10                     COMMON CARRIER ACTION            March 19, 1997
                                    
          FCC RELEASES REFERENCE BOOK OF RATES, PRICE INDICES,
            AND HOUSEHOLD EXPENDITURES FOR TELEPHONE SERVICE

     The FCC has released its annual comprehensive Reference Book containing information
related to telephone rates, including both local and long distance rates.  The report also contains
information on subsidized telephone service rates, rates in rural areas, and rate trends.

     The national average monthly charge for residential local service with unlimited touch-tone
calling, including subscriber line charges and taxes, averaged $19.98 in October, 1995, 17 cents per
month higher than the prior year.  Small businesses paid an average of $41.77 per month for single
line service in October, 1995, 13 cents per month higher than the prior year. 

     Long distance companies continued to offer discount and promotional programs to residential
customers in 1996.  The year also saw further introductions of flat-rate calling plans, which supplant
the traditional mileage-based rates with distance-independent per-minute charges.  Resellers,
aggregators, and dial-around carriers have continued to offer competitive rates for long distance
service as well.  Regardless of whether they are high or low volume users, consumers should be able
to find a plan that offers savings over basic long distance rates.  The key to realizing these savings
lies in understanding the types of calls being placed and choosing the calling plan that offers low rates
on these calls.

     The Consumer Price Index for telephone service rose 2.1% during 1996.  This index includes
local service charges (which increased 0.9%), intrastate toll charges (which increased 6.1%), and
interstate toll charges (which increased 3.7%).  The nation's overall rate of inflation was 3.3% for
1996.  Thus, in real terms, the cost of residential telephone service (local, intrastate toll, and
interstate toll combined) fell 1.2% during 1996, and 18.6% 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 report contains Consumer Expenditure Survey data for 1980 through 1994, the latest year
for which data is available.  The average household spent $325 for telephone service in 1980 and
$690 in 1994, which represents about 2% of household expenditures in each year.

     The report contains historical data, background material, and descriptions of methodology.  It
is intended to assist in the analysis and interpretation of telephone price trends.  

     This report is available in the Common Carrier Bureau's public reference room, 2000 M
Street, NW, Room 575, Washington, DC.  Copies may be purchased by calling International
Transcription Service at (202) 857-3800.  This report can also be downloaded [file names:
REFA96.ZIP, REFB96.ZIP, REFC96.ZIP, and REF96.PDF] from the FCC-State Link internet site,
which can be reached via a link from the Common Carrier Bureau home page
(http://www.fcc.gov/ccb/) on the World Wide Web.  The report can also be downloaded from the
FCC-State Link computer bulletin board system at (202) 418-0241.

     For further information, contact Tracy Waldon or Jim Lande at (202) 418-0940.