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DA-14-520A3

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2014 Urban Rate Survey
The form and content of the Urban Rate Survey for fixed voice services was adopted in an Order
released in April 2013.1 That Order concluded that the urban rate survey would be conducted
from a statistically valid sample of fixed terrestrial voice providers drawn from 2010 Census
urban areas and urban clusters within Metropolitan Statistical Areas.
Sample Selection
The Urban Rate Survey asked for voice service rates from a sample of service providers. To
determine which voice providers to sample, the Wireline Competition Bureau (Bureau) relied on
data collected via FCC Form 477, which is a biannual voice and broadband data collection. The
Bureau used the U.S. Census Bureau’s definition of urban to determine what areas were eligible
for the survey and then defined as the sample pool any fixed terrestrial voice service provider
that operated in these areas.
The sample was determined in a two-stage process. First, 500 census tracts were selected using
random generator software from the 58,332 urban census tracts in the 50 states and Puerto Rico.
The selection criteria for census tracts were weighted so that those with a greater number of
households received a higher probability of being chosen. Second, a service provider was
randomly chosen from each of the selected census tracts. The Bureau used FCC Form 477 data
to determine which companies are providing fixed residential voice service in a given area. The
selection criteria for service providers was weighted so that non-incumbent local exchange
carriers (LECs) that nationally have low voice connection density per ZIP code area had a lower
probability of being selected than other service providers. This sampling process resulted in an
Urban Rate Survey sample of 500 service provider/census tract pairs; the pairs encompassed 497
different census tracts and 103 different companies.
Collection of Data
On December 16, 2013, the Bureau contacted all companies included in the Urban Rate Survey
sample to notify them that they must report their voice service rates for specific census tracts by
January 17, 2014. Many companies were asked to report rates for multiple census tracts. Survey
participants were given a hyperlink and told how to log in to the Urban Rate Survey data
collection system. In the system, survey participants reported rate components for standard, non-
promotional, standalone residential voice services. Specifically, the survey asked for current
rates on unlimited or flat-rate local voice service (i.e. R-1 service), measured or messaged voice
service, and unlimited all-distance service offered to customers in the specified census tract. If a
provider did not offer a given service at that time in the specified census tract, they indicated this
in the system.

1 Connect America Fund, WC Docket No. 10-90, Order, 28 FCC Rcd 4242 (Wireline Comp. Bur. and Wireless
Telecom. Bur. 2013).

For each type of service, respondents reported values of the following monthly rate components
charged to customers: recurring service charge, Federal subscriber line charge (SLC), Access
Recovery Charge, State SLC, mandatory extended area service (EAS), voluntary EAS, and the
total of all other surcharges, taxes, and TRS charges. Respondents also indicated whether the
service was provided by circuit switched or VoIP technology. Once the respondent had
completed all questions, a certifying official submitted the survey.
To ensure accurate and consistent data, Bureau staff was available to answer questions, and did
respond to requests for assistance. Bureau staff also followed up with any companies not
initially responding to the survey. These efforts resulted in a 99 percent response rate. Further
information about the data collection process, including instructions provided to Urban Rate
Survey respondents is available athttp://www.fcc.gov/encyclopedia/urban-rate-survey-data"> http://www.fcc.gov/encyclopedia/urban-rate-survey-data.
Rate Floor Computation
The Commission specified in the 2011 USF/ICC Transformation Order what components were
to be included in calculating the rate floor. For each survey response, a monthly rate was
calculated as the sum of the local end-user rate and state regulated fees (specifically, state
subscriber line charges (SLCs), state universal service, and mandatory extended area service
charges) for unlimited or flat-rate local service. While the survey required respondents to report
if they offered measured or message local service, the survey instrument did not collect data
from respondents regarding average minutes of use for customers electing to purchase such
service plans. Incorporating measured service rate structures would require significant
assumptions regarding customers’ minutes of use; as a result, the Bureau decided to calculate the
rate floor using only data for local flat-rate services. The Bureau based its calculation on data
from incumbent LECs. There were 17 incumbent LEC service providers in 135 census tracts
that reported rates for the unlimited or flat-rate local service. These rates ranged from $11.15 to
$34.93, with a median of $20.62. The average monthly rate of $20.46 was calculated as a
weighted average of these rates.


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