____

MARKET PRICING SURVEY OF RETAIL COMMUNICATIONS SERVICES IN CALIFORNIA

SAMPLE OF RESIDENTIAL COMMUNICATIONS SERVICES AND PRICE CHANGES 2010 – 2017 COMPARED TO WIRELINE BASIC VOICE SERVICE_______________________________________________________

Staff ReportCalifornia Public Utilities Commission

Communications DivisionApril 2018

CALIFORNIAPUBLIC UTILITIESCOMMISSIONSTAFF REPORT

Simin Litkouhi Lisa PrigozenAuthors

Tom GlegolaSupervisor

Robert WullenjohnManager

Cynthia WalkerDirectorCommunications Division

This Staff Report was prepared by California Public Utilities Commission (CPUC) staff. It does not necessarily represent the views of the CPUC, its Commissioners, or the State of California.

1

MARKET PRICING SURVEY OF RETAIL COMMUNICATIONS SERVICES IN CALIFORNIA

SAMPLE OF RESIDENTIAL COMMUNICATIONS SERVICES AND PRICE CHANGES 2010-2017 COMPARED TO WIRELINE BASIC VOICE SERVICE

Table of Contents

Summary......................................................................................................................................................3

I. Retail Pricing Survey...........................................................................................................................4

April 2017 Price Findings:...................................................................................................................7

II. Surveyed Pricing Trends.....................................................................................................................8

Price Comparison 2017 to 2014:........................................................................................................14

III. Broadband Service Regional Price Differences................................................................................14

IV. Basic Wireline Service Rates and Charges........................................................................................16

Basic Service Rate Findings:...............................................................................................................18

V. Conclusion.........................................................................................................................................19

Appendix A................................................................................................................................................20

Appendix B…………………………………………………………………………………………………………………………………….25

2

Summary

The Commission’s Communications Division (CD) periodically surveys expenditures of California voice and broadband subscribers and reported its findings in the Telephone Service Affordability Report to the Legislature in 2010 and also the Market Pricing Survey Staff report in 2014. Basic voice service rates are also published annually on the CPUC web site. This report, an update of the Market Pricing Survey Staff report of 2014, concerns prices available to potential subscribers for a number of different services from California’s largest service providers. The retail pricing survey is meant to capture the lowest available (i.e., entry) rate for different types of services from the providers most prevalent in the state. This report shows the results of the retail pricing survey conducted in 2017, along with trends over time.

Our most significant findings in this pricing report are as follows:

- The lowest available prices of various communications services vary over time;- While fixed broadband Internet service product offerings vary by region, most service

providers generally have uniform prices throughout California. - Traditional wireline voice service prices have increased since 2010,1 though the increases

since 2014 have been relatively small; - The differences in the prices of various voice and data services offered by each provider

have significantly reduced; - Prices for wireline voice service are generally higher than VoIP, but are lower than

wireless voice and bundled voice packages; and - Basic service rates in real constant dollars peaked in previous decades, both under cost of

service and incentive regulation, but has trended upward following declines in the “real” inflation adjusted price.

- A comparison of regional prices of broadband service showed that most providers offer uniform, or at least very similar, pricing across regions, with cable providers generally offering lower prices and higher speeds.

Because several communications sectors remain moderately or highly concentrated, as evidenced in the Market Share Analysis of Retail Communications report, and in the Competition Proceeding Decision (D.16-12-025), monitoring the State’s communications markets remains appropriate.

1 In D.06-08-030, the Commission froze the rate for basic service and ordered that price caps on basic residential services of Local Exchange Carriers that are not subject to Rate of Return regulation be automatically lifted on January 1, 2009.

3

I. Retail Pricing Survey

It is difficult to obtain objective and comprehensive price data in a market where prices can change frequently, companies often utilize temporary price discounts and price and/or service availability may depend on a consumer’s location. Additionally, the growth in bundling of voice, data and video offerings2 makes separating voice from data and other charges increasingly difficult. Thus our pricing assessment, which is not exhaustive, is based on a sample of the lowest priced market rates available to consumers each year, from 2010-2017.

We compare the lowest available retail price of 8 categories of communications services offered by 15 of the largest service providers in California. As with the 2014 Report, the survey design includes the following categories of communications services:

Wireline– Traditional telephone service via copper cables to a customer’s premise using TDM Protocol;

Fixed Broadband– Internet access service typically via DSL, coaxial cable or fiber optic connections;

VoIP– Fixed and non-fixed interconnected voice telephone service to a customer’s premise using interconnected Internet Protocol;

Mobile Voice only– Typically provisioned via a wireless cellular network; Mobile Data only– Internet access typically provisioned via a wireless cellular network; Mobile Voice & Data– A bundle including both Mobile Voice and Mobile Data (includes

“smart phone” voice and data subscriptions); Wireline Basic & Unlimited Long Distance– A bundle including Local and “Long

Distance,” a phone service that allows a customer to call anywhere in the US at no additional cost;

Fixed Voice & Broadband– A bundle including Fixed Broadband with Wireline voice or fixed interconnected VoIP; and

10GB Shared Mobile– Family Voice and Data plan.

As already mentioned, this survey identifies the lowest available prices from each service provider for each of the services they offer, not an average of what people pay. Six months was chosen as the minimum duration of a service price of contracts. The price commitment may be subject to contract or subject to change as in a published tariff or non-contracted service. Consumers that purchase a service at a promotional price will eventually be subject to a price increase if they continue the service, without a further discount. However, to survey only “non-

2 In D. 16-12-025 the Commission noted that 92 percent of California voice subscriptions are bundled with broadband services (at p. 9).

4

introductory prices” would exclude available prices in the market. Many services surveyed did not include a promotional rate, while others did. In any case, without a contract, prices for all services are subject to change. Where promotions were less than 6 months, the non-promotion price is reported. Thus, for simplicity, the available monthly market prices for initiating service by type are displayed and footnotes provide details about the service and whether the price was promotional.

Services within the same category might offer varying amounts of usage allowances, features or capabilities. Broadband services might include different allotments of data transfer available per month and mobile voice services might include texting or voicemail services. Again, the footnotes or endnotes provide details about what is included with each service.

Table 1, below, shows the postpaid prices of services offered by each of the 15 service providers we researched. Beneath Table 1, Chart 1 shows this same data pictorially.

5

Table 1

Surveyed Nominal Prices for Various Communications Market Services in California Prices as of May, 2017 (see endnotes for data sources and service details)

Wireline Basic Fixed

Broadband VoIP MobileVoice

MobileData

Mobile Voice &

Data

WirelineBasic & Unlimited Long

Distance

Fixed Voice &

Broadband

10GB Shared Mobile Voice

& Data

AT&T $23.25i $40.00ii $19.99iii $59.00iv $42.00v

AT&T Mobile

$30.00vi $15.00vii $30.00viii $60.00ix

Comcast - $29.99x $20.00xi - - - - $49.99 xii

Cox - $29.99xiii $10.00xiv - - - - $49.99xv

Cricket - - - $25.00xvi $30.00xvii $30.00xviii - - N/A

Frontier3 $20.00xix $19.99xx $27.99xxi - - - $40.99xxii $60.98xxiii

MagicJack - - $2.92xxiv - - - - -

MetroPCS - - - $30.00xxv $30.00xxvi $30.00 xxvii - -

Skype - - $2.99xxviii - - - - -

Sprint - - - $40.00xxix $40.00xxx $40.00xxxi - - N/A

Consolidated $21.99xxxii $15.00xxxiii $10.00xxxiv - - - $37.53 xxxv

Spectrum (Charter + Time Warner)

- $44.99xxxvi $19.99xxxvii - - - - $64.98xxxviii

T-Mobile - - - $70.00xxxix $70.00xl $70.00xli - - N/A

Verizon Wireless

- - - $30.00xlii $20.00xliii $30.00xliv - - $60.00xlv

Vonage - - $9.99xlvi - - - - - -

3 D.15-12-005, in 2015, approved transfer of control of Verizon California to Frontier Communications Corporation.

6

Chart 1

Surveyed Nominal Prices as of April 2017 for Various Postpaid Communications Market Services in California4

April 2017 Price Findings:

- On average, the three categories of bundled services (#6, 7 and 8) were the most expensive; however, these bundles usually cost less than purchasing the combined services separately.

- Rates for wireline basic voice services, excluding long distance (#1), are closely clustered compared to other service categories (#2 through 8).

4 Symbol overlaps: *a: In category 2, both Cox and AT&T both have lowest priced offerings for fixed broadband at $40.*b: In category 3, both Cox and Consolidated have lowest priced offerings for VoIP at $10, with AT&T at $9.99. *c: In category 4, AT&T, MetroPCS and Verizon all have lowest priced offerings for wireless voice at $40. *d: In category 4, Cricket, Sprint and Cox all have lowest priced offerings for wireless voice at $30.*e: In category 5, both Cricket and MetroPCS have lowest priced offerings for mobile data at $30.*f: In category 6, both AT&T and Sprint have lowest priced offerings for mobile voice and data at $40.*g: In category 6, Cricket, MetroPCS and Verizon all have lowest priced offerings for mobile voice and data at $30.*h: In category 8, Comcast and Frontier have nearly identical lowest priced offerings for fixed voice and broadband at $49.99 and $50, respectively.*7 In category 4, AT&T, MetroPCS and Verizon all have lowest priced offerings for wireless voice at $40.

7

b

c

d e

a

g

f

h

- Prices for wireline voice service (#1) are generally higher than VoIP (#3), but are lower than wireless voice (#4) and bundled voice packages (#6, 7, and 8). These plans offer fewer features, especially if they exclude long distance, and therefore the price is not directly comparable.

- Nomadic VoIP service providers (Magic Jack and Skype) offer low prices for voice services; however, these require a separate broadband service connection, so the prices of these services may not be directly comparable.

II. Surveyed Pricing Trends

Charts A through H, below, show nominal retail prices over time for each surveyed service category from December 2010 to May 2017. The main trends we noticed include:

- Traditional wireline voice service prices have increased since 2010, however there is very little increase since 2014, and appear as the least volatile in rate change (See Price Chart A);

- The prices of numerous voice and data services, including bundled services, offered by each provider have converged. (See Price Charts A, C, F, G and H)

- Prices of mobile voice and data services appear to be converging, if one treats T-Mobile price in the survey as an outlier. (See Price Charts D and E) T-Mobile offers lower priced plans outside the parameters set by this study.

- There is no clear pricing trend for fixed broadband service (See Price Chart B).5

Price Chart A5 This helps confirm the Commission’s observation in D. 16-12-025 that “It is difficult to obtain objective and comprehensive price data in an unregulated market where prices can change daily and may depend on zip code or other micro-targeting by communications carriers, and when voice (or broadband) services are sold as part of a bundle. Temporary price discounts (“teaser rates”) used as inducements for new customers complicate the analysis. Reviewing rates offered at any given point in time may not reflect what consumers on average pay. Given the growth in bundling of voice, data and video offerings, separating voice from data and other charges becomes increasingly difficult.”

8

Wireline Voice Price Timeline6

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

May

-17

$15.00

$17.00

$19.00

$21.00

$23.00

$25.00

$27.00

AT&T

Frontier

Consolidated

Verizon

Price Chart BFixed Broadband Price Timeline

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

May

-17

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

AT&T

Comcast

Cox

Frontier

Consolidated

Spectrum (Time Warner)

Verizon

Price Chart CVoIP Price Timeline

6 Control of Verizon California was transferred to Frontier in 2016.

9

Price Chart DMobile Voice Price Timeline

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

May

-17

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

AT&T Mobility

Cricket

MetroPCS

Sprint

Verizon Wireless

T-Mobile

Cox

Price Chart EMobile Data Price Timeline

10

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

May

-17

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

AT&T Mobility

Cricket

MetroPCS

Sprint

T-Mobile

Verizon Wireless

Price Chart FMobile Voice & Data Bundle Price Timeline

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

May

-17

$30.00

$50.00

$70.00

$90.00

$110.00

AT&T Mobility

Cricket

MetroPCS

Sprint

T-Mobile

Verizon Wireless

Price Chart GWireline Voice Local & Long Distance Bundle Price Timeline

11

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

Aug-

17

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

AT&T

Frontier

Consolidated

Verizon

Price Chart HFixed Voice & Broadband Bundle Price Timeline

Dec-

10

Mar

-11

Jul-1

1

Jan-

12

Oct

-12

May

-13

Apr-

14

Apr-

15

Apr-

16

May

-17

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

AT&T

Cox

Frontier

Consolidated

Comcast

Spectrum (Time Warner)

Verizon

12

Price Comparison 2017 to 2014

Table 2 below shows the primary differences between the market pricing survey results of 2014 versus the most recent results from 2017. In all but 2 service categories, entry level prices have dropped. These price drops may be accompanied by a drop in aspects of the service, such as fewer gigs of data available or fewer voice features, but more than not this was not the case. These were the lowest available prices for service entry at the given time, a snapshot of the cost to enter a retail market. The fact that many of these prices have dropped may indicate positive effects of competition. Competition may also play a part in the trend for 2017 prices to be closer to each other (by service category) than in 2014. The standard deviation in Table 2 reflects how closely prices match each other.

Table 2Comparison of the Standard Deviation for the

Surveyed Prices of Communications Market Services in California

Wireline Basic

Fixed Broadband

VoIP Mobile Voice

Mobile Data

Mobile Voice & Data

Wireline Basic & Unlimited Long Distance

Fixed Voice & Broadband

10GB Shared Mobile

2014

Standard Deviation 1.66 12.93 18.15 11.43 17.18 10.70 10.84 8.43 8.16

Average $21.50 $30.70 $22.69 $46.67 $25.83 $47.50 $48.99 $39.18 $90.00

Minimum $19.99 $14.99 $2.99 $30.00 $10.00 $30.00 $39.99 $27.99 $80.00

Maximum $24.00 $54.99 $66.99 $60.00 $60.00 $60.00 $66.99 $49.99 $100.00

2017Standard

Deviation* 1.34 10.04 8.10 4.90 8.72 14.62 9.41 8.30 0.00

Average $21.75 $29.99 $13.76 $31.00 $27.00 $38.33 $45.84 $53.59 $60.00

Minimum $20.00 $15.00 $2.92 $25.00 $15.00 $30.00 $37.53 $42.00 $60.00

Maximum $23.25 $44.99 $27.99 $40.00 $40.00 $70.00 $59.00 $64.98 $60.00

*T-Mobile offers only “One Plan” which bundles unlimited domestic voice, text and data. It is not possible to compare T-Mobile offering with other service offering and prices for One Plan was excluded when calculating the numbers in this table except for when calculating the Mobile Voice &Data.

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Price Comparison 2017 to 2014:

- In 2014, the prices of the wireless and broadband service plans offered by each provider varied. However, since 2014, there is a downward price trend for all of the providers with lower variation in prices of all wireless services.

- In comparison to 2014, standard deviation in 2017, has declined or stayed the same for all services except for Mobile Voice and Data showing conversion of prices across providers.

III. Broadband Service Regional Price Differences

The Commission’s investigation into the state of competition in the California communications market included only a limited review of broadband service prices. As a result, CD Staff determined to include in this report an analysis on whether subscribers in different regions of the State paid different prices for the same services. In general CD Staff found that while broadband service availability varies by region and even by neighborhood, prices vary less so, as the largest service providers generally charge uniform prices throughout California.

To obtain a representative sample, CD Staff surveyed the broadband options and pricing in the following cities and Census Designated Places (CDPs):

Alamo – suburban, Alameda County Bakersfield – urban, Kern County Boron – rural, Kern County Crowley Lake – rural, Mono County Los Angeles – urban, Los Angeles County Rancho Tehama Reserve– rural, Tehama County Sacramento – urban, Sacramento County Salinas – urban, Monterey County San Diego – urban, San Diego County San Francisco – urban, San Francisco County San Jose – urban, Santa Clara County Willits – half rural, half urban, Mendocino County

Complete data obtained from this survey is found in Appendix A. In general, this comparison showed most providers offer uniform, or at least very similar, pricing across regions, with cable providers generally offering lower prices and higher speeds. For example, in the six cities and CDPs in this sample where Comcast and AT&T compete, AT&T’s lowest prices are higher than Comcast’s, with AT&T providing broadband service at slower advertised speeds.

14

Additionally, though a provider’s pricing may be uniform, it does not necessarily mean that services offered are uniform. For example, the lowest price for AT&T’s aDSL service is $30 or $40 per month in all locations sampled across the State. However, subscribers in one location may pay $30 for broadband service at advertised speeds of up to 5 mbps downstream, while others may pay $30 for broadband service at advertised speeds of up to 30 mbps downstream. Subscribers to Sonic.net broadband service also encounter these pricing differences.

For example, as indicated in Image 1, below, Sonic.net offers broadband using fiber technology to some neighborhoods in San Francisco, while it offers consumers in other neighborhoods broadband service at lower speeds, though at the same cost.

Image 1 Comparison of Broadband Service Prices in Different Neighborhoods in San Francisco

Digital Subscriber Line (DSL) service is particularly sensitive to the distance and length of its underlying copper facility technology between the Digital Subscriber Line Multiplexer and the customer location. This means that though a service may be offered at a single monthly rate to all consumers, the actual service speed that a customer may receive will vary. This distance sensitivity is less pronounced for cable and fiber facility technologies, though there are other factors inherent in networks that can cause variability in speed between customer locations and time of use.

15

IV. Basic Wireline Service Rates and Charges

For most Californians, the price of traditional wireline service is set at the discretion of the service provider, since basic service regulation price caps were lifted in January 2011 for the four largest service providers in the State.7

Chart 2 below shows the basic residential service rates in current dollars adjusted by inflation for AT&T California (formerly Pacific Bell) and Verizon California (now Frontier) from 1984 to 2017.8 This means, for example, that the inflation-adjusted rate shown between 1994 and 2008 declined because of the rate of inflation, not due to a change in the nominal (unadjusted) rate. Since 2011, AT&T’s basic rate adjusted values have exceeded previous rate peaks coincident with rates established by the CPUC in its 1984 and 1994 rate setting proceedings. In contrast, the rate for Verizon (now Frontier), which has historically exceeded AT&T’s, is now less than AT&T’s and less than the CPUC 1994 rate setting peak.9 Since 2008, the inflation-adjusted rate for both providers has risen, but more so for AT&T than for Verizon.

Chart 2 also shows the LifeLine rates in current dollars for AT&T California and Verizon California (now Frontier) from 1984 to 2017. The historical trend of LifeLine telephone rates being set at 50% of the AT&T rate was no-longer applicable in 2012 and LifeLine rates therefore do not escalate following the lifting of price caps.10 In real, constant dollars, the price of LifeLine today is less than in 1984, 1994 and 2010. Further, the price as of October 2017, has not changed much since 2012.

The data used to construct Chart 2 are shown in Appendix B attached to this report.

7 The rate freeze as ordered in D.07-09-020 expired January 1, 2011. Price setting is still a regulatory activity for some smaller telephone companies serving primarily rural areas.8 The index of nominal rates adjusted for inflation is based on the BLS Inflation Calculator. http://www.bls.gov/data/inflation_calculator.htm . .9 The Commission during periods of regulatory rate setting established the Pacific Bell (now AT&T) basic rates lower than other California local exchange carriers. In particular, Pacific Bell’s basic service rates were not established solely upon the direct embedded state jurisdiction cost of provisioning the service, rather they were established based on the residual unfunded total company revenue requirement supported by a subsidy to promote universal service. Because of Pacific Bell’s large size relative to other California companies, revenues from high value services disproportionately contributed to its “cost” recovery relative to smaller telephone companies. These revenue streams also funded intercompany “Cost Pooling” which subsidized small telephone company costs. 10 D.10-11-033 (at 3), capped each carrier’s LifeLine rate at no more than 50 percent of its basic service rate.

16

Chart 2

19841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018

$0

$10

$20

$30

$40

AT&T and Verizon Basic Monthly Rates 1984 - 2018Adjusted to 2018 Dollars

Verizon AT&T LifeLine Rates

Mon

thly

Rat

es (i

n 20

18 $

)

Table 3, below, shows the wireline basic service rates of the URF carriers in California inclusive of both the state tariffed rate and the federal subscriber line charge. Historically, under cost of service regulation, the costs of provisioning local telephone service were bifurcated between state and federal jurisdiction.11 The FCC created the subscriber line charge as a means to recover interstate local access costs attributed to federal jurisdiction. The URF carriers have discretion whether or not to recover their federal jurisdictional assigned costs. Thus, the total amount recovered by the URF carriers for their basic service is the sum of the state and federal charges. It is appropriate to combine these as they represent the true service provider offered price to the consumer for subscribing to wireline basic service.

When considering the charges their customers pay, AT&T monthly combined charges currently are higher than Frontier (Verizon California) combined charges for flat rate basic service.

Table 311 A regulatory issue of the rate setting era was that many utility costs were not attributable to any single service which made it difficult to accurately assign costs among services and state and federal jurisdictions. In order to keep access rates low, high valued state and interstate services, such as long-distance, toll, special access and ancillary service revenues subsidized basic telephone access services. Recreation of “cost” based rates based on today’s conditions using prior cost review methodologies might result in higher than current market rates because basic service subscriptions and contributing toll, access and ancillary revenue streams have declined from historical levels.

17

URF CARRIER BASIC SERVICE MONTHLY RATES AND CHARGESFor VOICE GRADE ACCESS LINES

As of April 1, 2017

 Company Flat Rate Measured Rate

Subscriber Line Charge

Combined State & Subscriber Line

ChargeArea

AT&T $26.00 $23.25 $4.51 $30.51 Statewide

Frontier/ Verizon

$22.00 $13.40

$6.50 $28.50 Frontier California Inc. (GTE)

$5.24 $27.24 Frontier California Inc. (Contel)

$22.00 $15.00 $0. 70 $22.70Frontier Communications of the Southwest

$21.00 $17.00 $6.50 $27.50CTC/CA Embedded Market Area

$20.00 NA $2.26 $22.26 CTC of CA West Coast Market Area

Consolidated $21.99 $15.99 $6.50 $28.49 Near Roseville

Basic Service Rate Findings:

- In inflation-adjusted dollars, LifeLine basic service rates have increased only slightly since 2012.

- In inflation-adjusted dollars, AT&T California’s basic service rates have exceeded Frontier/Verizon California’s in the last seven years.

- In inflation-adjusted dollars, the single largest increases to basic service rates have occurred under rate regulation in 1994.

- Consumer fixed monthly rates include both a state and a federal charge component and

these charges should be combined to assess the actual consumer total charge.

- AT&T’s combined basis service charges are higher than Verizon’s and Consolidated combined basic service charges.

- AT&T has the highest measured rate charges.

18

V. Conclusion

Staff will continue to monitor entry-level retail prices using our retail pricing survey. Overall, for all services surveyed, market prices exhibit fluctuations up and down over time, depending on the service provider and service. However, since 2015, most prices have gone down or are at the same price level, and many of the services included have improved with increased features or data allotments, for example, perhaps owing to competition Additionally, since 2014, the difference in prices offered by different providers have trended closer to each other.

The price of basic service should be evaluated relative to the broader market offerings. For example, for most consumers, AT&T’s basic service can be substituted by purchasing VoIP or mobile voice service at lower or higher prices depending upon available minutes, long-distance, bundling and the service provider chosen by the consumer. While Verizon’s wireline basic local service prices were higher than AT&T’s between 1984 and 2010, AT&T’s price increases since 2008 have resulted in AT&T’s prices exceeding Verizon’s since 2011. However, when considering the subscriber line charge, AT&T’s current basic service price is comparable to other providers.

When comparing basic service rates to market prices, it is also appropriate to combine the state rate with the federal line charge as these are both revenue to the basic service provider and more accurately reflects the price paid by the consumer. When excluding the federal subscriber line charge, wireline basic local voice service rates are generally less expensive than most other communications services. However, when including the subscriber line charge, basic local service rates are about the same as the providers’ VoIP service rates, which include long distance. Further, when basic service is combined with unlimited long distance, wireline service is no longer the lowest price offering. Mobile voice and VoIP services are generally less expensive than wireline voice when including unlimited long distance.

There is not much regional price difference in California. The lowest priced services are comparable for most providers; however the level of service offering changes by providers. Comcast offers uniform pricing for same speeds across regions at the lower level of prices. AT&T’s lowest prices are higher than Comcast’s, and offer lower speeds.

This report offers the latest results of Staff’s periodic monitoring of market prices via the retail pricing survey. This is just one aspect of the competitive marketplace. Past reports to review in context with this report produced by the Communications Division are the “Market Share Analysis of Retail Communications in California”, the “Affordability of Basic Telephone Service Survey” and the “Limited English Proficiency” reports. These reports can be found at: http://www.cpuc.ca.gov/General.aspx?id=4170. Additionally, D.16-12-015 directs Staff to produce a comprehensive report on the state of competition in communications markets by the end of 2018.

19

Appendix A

Survey of Regional Fixed Broadband Service Providers April 2017

Company Alamo Bakersfield Boron Crowley LakeComcast $29.99 up to

10mbps,$39.99 up to

55mbps,$49.99 up to

100mbps, $59.99 up to

200mbps, $69.99 up to

250mbps, $89.99 for up to 1G, $299.95 for

2GAT&T $40 up to

10mbps$40 up to 50mbps where available;

18/1.5 mbps in about half the blocks.

Wave $49.95 for 50/5 mbps, $69.96

for 100/5 mbps, $79.95 for

250/10 mbpsSonic $40, 20/1 mbps,

limited availability

Brighthouse (Charter)

$44.99, Starting at 60 mbps

Race $25 for 25 mbps, $60 for 1G

Suddenlink $44.99 for 50/5 mbps, With TV/Phone

bundle, $79.99 for 50/5 mbps, $99.99 for

up to 200 mbps, $109.99 for up to 400 mbps, $134.99 for up

to 1GFrontier $19.99 for 1 mbps

with phone, $49.99 for up to 15 mbps with

phone

20

Survey of Regional Fixed Broadband Service Providers April 2017(continued)

Company Los Angeles Rancho Tehama Sacramento Salinas

Comcast $29.99 up to 10mbps,$39.99 up to 55mbps,

$49.99 up to 100mbps, $59.99 up to 200mbps, $69.99

up to 250mbps, $89.99 for up to 1G,

$299.95 for 2G

$29.99 up to 10mbps,

$39.99 up to 55mbps,

$49.99 up to 100mbps, $59.99 up to 200mbps,

$69.99 up to 250mbps, $89.99

for up to 1G, $299.95 for 2G

AT&T $40, up to 10, 18, 25 or 45

mbps depending on

availability, $60 up to 100 mbps,

$30 up to 5 mbps that is

only available where higher speeds are not

$40 for up to 50 mbps, $60 for up to

100 mbps, $80 for 1G

$40 for up to 24/3mbps in some areas, mostly up to

12/1mbps

Sonic $40, up to 20, 40 or 50 mbps

where available, $70 for

"double" line to increase capacity

$40 for 20/1 mbps, $70 for "double" line to increase capacity

Frontier FiOS: $40 for 50/50 mbps,

$50 for 100/100mbps,

$60 for 150/150mbps $160 for up to 300/300mbps

Time Warner (Charter)

$44.99 for 100 mbps

Ducor $24.95 for 1/.384 mbps, $67.95 for

package (6/1)

Consolidated $15 for 5 mbps, $25 for 18mbps, $35 for 30mbps, $40 for 50 mbps, $50 for 100

mbps

21

Survey of Regional Fixed Broadband Service Providers April 2017(continued)

Company San Diego San Francisco San Jose Willits

Comcast $29.99 up to 10mbps$39.99 up to

55mbps$49.99 up to

100mbps

$29.99 up to 10mbps$39.99 up to 55mbps

$49.99 up to 100mbps

$29.99 up to 10mbps

$39.99 up to 55mbps

$49.99 up to 100mbps

AT&T $40 Up to 50 mbps, $60 for up

to 100 mbps, $80 up to 940

mbps

$40 for top speed available: most have up to 12/1 mbps or 18/1 mbps; a few

blocks 75/8 mbps, a few with 24/3 mbps,

45/6 mbps

$40 Up to 50 mbps, $60 for up to 100

mbps, $80 up to 1000 mbps,

$40 Highest available speed is 18/1 mbps. Some census blocks have

12/1 mbps

Wave $39.99, $49.95 for 50/5, $69.96 for 100/5, $79.95 for

250/10Sonic $40 for 20, 40, 50,

$70 for "double" line to increase

capacity

$40 for 20, 40, 50, $70 for "double" line to increase capacity

Time Warner (Charter)

$44.99 Starting at 100 Mbps

Cox $29.99, up to 10, 25 where

available, $39.99 up to 100, $49.99

up to 200Raw Bandwidth

$29.95 for Up to 3/.5 mbps, $39.95

for up to 12/1, $49.95 Up to 20/1.5

$29.95 for Up to 3/.5 mbps, $39.95 for up to 12/1, $49.95 Up to

20/1.5

22

i See http://www.att.com/shop/home-phone/landline.html (Measured rate)ii 12-month rate; 1-yr contract; up to 45Mbps, 1TB per month $10 per extra 50GB (up to $100); excludes installation charge; See https://www.att.com/internet/iii Unlimited North America; requires internet service subscription and 24-month DitecTV or 12-month U-Verse subscription; https://www.att.com/home-phone/plans.htmliv All Distance package, unlimited local and nationwide; some features included. See http://www.att.com/shop/home-phone/landline.htmlv Home Phone Service Plus Internet bundle; Unlimited local calling + High Speed Internet up to 3Mbps, 150GB of data/month. Additional $10 charge per each 50GB of data usage in excess of data plan. Price good for 12-month, new customer only. See http://www.att.com/shop/home-phone/landline.htmlvi Mobile Share Advantage plan, unlimited talk, text and data; LTE speed for 1Gb and slows to 128kbps afterwards. No voice only plan. See https://www.att.com/shop/wireless/plans/planconfigurator.htmlvii DataConnect 250 MB per month; Tablets and smaller devices (gaming, camera, etc) only. Laptop is $50 per month for 5 GB; See https://www.att.com/esupport/article.html#!/wireless/KM1048698viii Mobile Share Advantage plan, unlimited talk, text and data; LTE speed for 1Gb and slows to 128kbps afterwards. See https://www.att.com/shop/wireless/plans/planconfigurator.htmlix 10GB; does not include device access charges ($20 per month for laptop, $10 for tablet). https://www.att.com/esupport/article.html#!/wireless/KM1047205x Base package; 12-month rate; Download speeds up to 55 Mbps; price fixed for 12-month; See https://www.xfinity.com/learn/internet-service (https://www.xfinity.com/learn/offers/details?offerId=9626100605)xi Xfinity Unlimited Saver: unlimited nationwide voice, $3.95 per month for voicemail, some features. See https://www.xfinity.com/learn/offers/details?offerId=9022700013xii Performance Plus Unlimited Saver Double Play; download speed up to 25Mbps, unlimited nationwide voice, $3.95 per month for voicemail, some features. 24-month contract. See https://www.xfinity.com/learn/offers/details?offerId=9022700013xiii Cox Internet Starter; Download speeds up to 5Mbps; 12-month rate; See https://www.cox.com/residential/internet.htmlxiv Digital Telephone Premier Plan; Unlimited local and long distance calling to US, Canada and Mexico (landline only); price good for 12-month; See https://www.cox.com/residential/phone.html (Huntington Beach)xv Digital Telephone Premier + Internet Essential; Up to 15 Mbps; 12-months; Unlimited local and long distance calling to US, Canada and Mexico (landline only); 13 calling features; See https://www.cox.com/residential/special-offers/bundles.htmlxvi Unlimited Talk & Text; See https://www.cricketwireless.com/cell-phone-plans . (Monthly taxes included.)xvii Unlimited Talk & Text + Data Access (1GB monthly cap) (No stand alone data plan available); See https://www.cricketwireless.com/cell-phone-plans (Monthly taxes included.)xviii Unlimited Talk & Text + Data Access (1GB monthly cap); See https://www.cricketwireless.com/cell-phone-plans (Monthly taxes included.)xix See http://carrier.frontiercorp.com/crtf/tariffs/u/38/CA/local/Tariff.pdfxx Simply Broadband Max (DSL); Download speeds up to 6Mbps; Must have Autopay; first year price; See https://frontier.com/es-US/shop/internet/dsl/simply-max?sc_lang=enxxi https://frontier.com/shop/bundles/fios-ctf/fios-ctf Digital Voice Service Essentials, Unlimited Local Calls, 30 Minutes Long Distance/Mo, Call Waiting, Caller ID Name & Number; See https://frontier.com/shop/phone (Arcadia, CA)xxii Digital Voice Service Unlimited, Unlimited Local & Nationwide Calling, Call Waiting, Caller ID Name & Number, Voicemail. See https://frontier.com/shop/phone (Arcadia, CA)xxiii Broadband Max Internet + Digital Voice Service Unlimited. See https://frontier.com/shop/bundles (Arcadia, CA)xxiv $35 for 12 months; First time customers only; Unlimited local and long distance to US, Canada, Puerto Rico, Virgin Islands; Includes caller ID, voicemail, call forwarding, call waiting, and other features; See http://www.magicjack.com/plans.htmlxxv Unlimited talk, text and data (first 2GB LTE speed, then 128k max); Includes voicemail and other features. No voice only plan. See https://www.metropcs.com/shop/plans (Taxes and regulatory fees included.)xxvi Unlimited talk, text and data (first 2GB LTE speed, then 128k max); Includes voicemail and other features. No data only plan. See https://www.metropcs.com/shop/plans (Taxes and regulatory fees included.)xxvii Unlimited talk, text and data (first 2GB LTE speed, then 128k max); Includes voicemail and other features; See https://www.metropcs.com/shop/plans (Taxes and regulatory fees included.)xxviii Unlimited minutes to US; See https://secure.skype.com/en/calling-rates?wt_mc_id=legacy&expo365=bundled

xxix Unlimited Freedom single line plan, Unlimited talk, text and data (2 GB data at LTE speed and 2G speed afterwards). (No data only plan available) https://www.sprint.com/en/shop/plans/single-line-cell-phone-plans.html?INTNAV=TopNav:Shop:SingleLinePlansxxx Unlimited Freedom single line plan, Unlimited talk, text and data (2 GB data at LTE speed and 2G speed afterwards). https://www.sprint.com/en/shop/plans/single-line-cell-phone-plans.html?INTNAV=TopNav:Shop:SingleLinePlansxxxi Unlimited Freedom single line plan, Unlimited talk, text and data (2 GB data at LTE speed and 2G speed afterwards). https://www.sprint.com/en/shop/plans/single-line-cell-phone-plans.html?INTNAV=TopNav:Shop:SingleLinePlansxxxii As reported by Consolidated in annual URF pricing reportxxxiii Up to 5 Mbps download. See https://www.consolidated.com/residential/high-speed-internet (3791 Breuner Ave, Sacramento, CA 95819)xxxiv Hosted Voice (VoIP) service, unlimited long distance, voicemail, must have CCI internet service. See https://www.consolidated.com/residential/phone/phone-plans#/ (3791 Breuner Ave, Sacramento, CA 95819)xxxv Hosted Voice (VoIP) service, unlimited long distance, voicemail, must have CCI internet service. See plans#/ (3791 Breuner Ave, Sacramento, CA 95819)xxxvi Up to 100 MBps download speed, no data cap, https://www.timewarnercable.com/residential/order/session/dbc407fd-98ca-4303-b5a7-8598110df015?new_services (Arcadia, CA)xxxvii Unlimited calling to US, Canada, Mexico, China, India, EU, Hong Kong, US territories; voice mail, unlimited directory assistance, (requires broadband service subscription); https://www.timewarnercable.com/residential/order/session/dbc407fd-98ca-4303-b5a7-8598110df015?new_services (Arcadia, CA) (Phone taxes, fees, & surcharges are included in price; other equipment, install, taxes, fees & surcharges may apply.)xxxviii Up to 100 Mbps download speed, no data cap, unlimited calling to US, Canada, Mexico, China, India, EU, Hong Kong, US territories; voice mail, unlimited directory assistance, (requires broadband service subscription); https://www.timewarnercable.com/residential/order/session/dbc407fd-98ca-4303-b5a7-8598110df015?new_services (Arcadia, CA) (Phone taxes, fees, & surcharges are included in price; other equipment, install, taxes, fees & surcharges may apply.)xxxix ONE Plan; unlimited domestic voice, text and data (top 3% data user may experience slower speed). (No voice only plan available) See https://www.t-mobile.com/cell-phone-plans?icid=WMM_TM_Q117TMO1PL_H85BRNKTDO37510 (Price for 4-lines is $160) (Price includes taxes and fees)xl ONE Plan; unlimited domestic voice, text and data (top 3% data user may experience slower speed). (No voice only plan available) See https://www.t-mobile.com/cell-phone-plans?icid=WMM_TM_Q117TMO1PL_H85BRNKTDO37510 (Price for 4-lines is $160) (Price includes taxes and fees)xli ONE Plan; unlimited domestic voice, text and data (top 3% data user may experience slower speed). (No voice only plan available) See https://www.t-mobile.com/cell-phone-plans?icid=WMM_TM_Q117TMO1PL_H85BRNKTDO37510 (Price for 4-lines is $160) (Price includes taxes and fees)xlii Single Line Plan; Unlimited talk and text, 500 MB data; (No voice only plan) See https://www.verizonwireless.com/plans/single-device-plan/xliii Data Only Plan; Device access charge not included; 2GB data sharable; (Access charge:$10 tablet, $20 hotspot and $5 other connected devices); See https://www.verizonwireless.com/plans/data-only-plan/xliv Single Line Plan; Unlimited talk and text, 500 MB data; (No voice only plan) See https://www.verizonwireless.com/plans/single-device-plan/xlv Data Only Plan; Device access charge not included; 10GB shared data; (Access charge:$10 tablet, $20 hotspot and $5 other connected devices); See https://www.verizonwireless.com/plans/data-only-plan/xlvi 1-year promotional price; Unlimited minutes US, Canada, Puerto Rico; Free activation; Includes caller ID, call waiting, anonymous call block, 3-way calling, call forwarding and more; See https://www.vonage.com/personal/phone-plans/vonage-north-america?

Appendix B

California Wireline Basic Service Rates (In 2018 Dollars)Year

AT&T Basic Rates (2018 Dollars)AT&T Change from Base Year

Verizon Basic Rate (2018 Dollars)Verizon Change from Base Year

1984 $ 20.07

100.0% $ 23.72

100.0%1985

$ 19.3896.6%

$ 22.9096.6%1986

$ 18.6693.0%

$ 22.0593.0%1987

$ 18.3991.6%

$ 21.7391.6%1988

$ 17.6788.0%

$ 20.8888.0%1989

$ 16.8984.2%

$ 19.9684.2%1990

$ 16.0580.0%

$ 18.9780.0%1991

$ 15.1975.7%

$ 17.9575.7%1992

$ 14.8173.8%

$ 17.5073.8%1993

$ 14.3471.4%

$ 16.7470.6%1994

$ 19.07

95.0% $ 29.24

123.3%1995

$ 18.5592.4%

$ 28.44119.9%

1996 $ 18.06

90.0% $ 27.69

116.7%1997

$ 17.5387.3%

$ 26.88113.3%

1998 $ 16.40

81.7% $ 26.46

111.6%1999

$ 16.1380.4%

$ 26.03109.7%

2000 $ 15.70

78.2% $ 25.33

106.8%2001

$ 15.1375.4%

$ 24.41102.9%

2002 $ 14.96

74.5% $ 24.14

101.8%2003

$ 14.5872.6%

$ 23.5399.2%2004

$ 14.3171.3%

$ 23.0997.4%2005

$ 13.8969.2%

$ 22.4194.5%2006

$ 13.3666.6%

$ 21.5690.9%2007

$ 13.0965.2%

$ 21.1289.1%2008

$ 12.8564.0%

$ 20.7487.5%2009

$ 15.8579.0%

$ 23.3898.6%2010

$ 18.8293.8%

$ 22.7896.0%2011

$ 22.45111.9%

$ 23.5399.2%2012

$ 22.96114.4%

$ 22.8696.4%2013

$ 24.76123.4%

$ 22.5194.9%2014

$ 25.43126.7%

$ 23.3198.3%2015

$ 25.45126.8%

$ 23.3398.4%2016

$ 26.16130.3%

$ 23.0297.1%2017

$ 26.54132.2%

$ 22.4694.7%

2018 $ 27.00

134.5% $ 22.00

92.8%

YearAT&T LifeLine Rates (2017 Dollars)

AT&T Change from Base YearVerizon/Frontier Lifeline Rate (2017 Dollars)

Verizon/Frontier Change from Base Year2012

$ 7.33100.0%

$ 6.33100.0%

2013 $ 7.21

98.4% $ 6.23

98.4%2014

$ 7.1096.9%

$ 6.91109.2%

2015 $ 7.11

97.0% $ 6.92

109.3%2016

$ 7.1697.7%

$ 6.63104.7%

2017 $ 7.14

97.4% $ 6.47

102.2%

… End of Report