The Public Service Commission conducted a survey of Wyoming citizens to obtain data on the public's attitude regarding telecommunications pricing, value and satisfaction. The Division of Economic Analysis prepared the statistical analysis of survey responses.

prepared:

February 15, 2001

The Survey

The Wyoming Public Service Commission (PSC or Commission) and the Division of Economic Analysis of the Wyoming Department of Administration and Information jointly prepared this Telephone Affordability Survey under the Wyoming Telecommunications Act of 1995 and specifically W.S. § 37-15-102, in the Act which states that:

"It is the intent of this act to ensure essential telecommunications services are universally available to the citizens of this state while encouraging the development of new infrastructure, facilities, products and services. The provision of telecommunications services has been developed and regulated under a monopolistic environment. This act recognizes the increasingly competitive nature of the telecommunications industry and the benefits of competition. It is the intent of this act to provide a transition from rate of return regulation of a monopolistic telecommunications industry to competitive markets and to maintain affordable essential telecommunications services through the transition period, and the provisions of this act shall be construed to achieve those goals."

Because the Legislature has charged the Commission to regulate the transition to competitive telecommunications markets in Wyoming with a concern for affordable service, it is important to remain informed on the subject and this survey provides valuable information to assist us. We hope that it is also of interest and value to you in acquiring a better understanding of how Wyoming citizens feel about local telecommunications issues in Wyoming.

On June 6, 2000, the PSC mailed a letter and a short survey to 1,000 Wyoming citizens to determine their opinions on the affordability, value and overall satisfaction with respect to local telecommunication service in Wyoming. The citizens chosen to participate in the survey were selected at random by a company whose business includes the professional development of random addresses within a defined geographic area (in this case the State of Wyoming). The list of addresses for this survey included citizens in each Wyoming county.

Survey Responses

The PSC received 421 survey responses for a 42.1% response rate. Each Wyoming county was represented in the returned survey responses with the exception of Niobrara County from which, for some unknown reason, no one chose to participate in the survey. The number of survey responses by county generally correlated to county population percentages, thereby adding credibility to the balance of the responses as a valid statewide representation.

Current Residence Longevity

The survey responses indicate that approximately 53% of the citizens have lived at their current residence for five years or less. Approximately 23% of the respondents have lived in their current residence between six and ten years, and the remainder, or 24% of the respondents have lived in their current residence longer than ten years.

Income

The annual household income of the respondents was relatively well balanced with 12% of the respondents having an income of less than $12,500; 21% of the respondents' income was between $12,500 and $22,499; 20% of the respondents' income was between $22,500 and $34,999; 19% of the respondents' income was between $35,000 and $49,999; and 28% of the respondents had an income of $50,000 or more.

Age

The age of the respondents was also relatively well balanced with 4% being age 24 years old or younger; 14% of the respondents are between the ages of 25 and 34 years old; 24% of the respondents are between the ages of 35 and 44 years old; 37% of the respondents are between the ages of 45 and 64 years old; and 21% of the respondents are age 65 or older.

Type of Service

Validating the goal and concept of universal service, 98% of the respondents indicated that they currently have local telephone service at their residence. In addition, 48% of the respondents indicated that they have cellular telephone service for personal use; 20% of the respondents indicated that they have an additional telephone line at their residence; and 48% of the respondents have Internet access at the residence. Only 1% of the respondents indicated that they have none of the above mentioned services.

A Change of Service Providers

In the past two year period, 18% of the respondents indicated that they have changed their local service provider and 82% have remained with their current service provider.

Value of Service

A series of four questions were asked in the survey concerning the value of certain services. Respondents were asked to rank their answers on a scale of 1 to 7 with the number 1 representing "poor" and the number 7 representing "excellent." A ranking of 4 on the scale would represent an average consideration.

The first question asked respondents to rank the value of their local telephone service for the price that they paid. The average ranking was 3.3 or overall below average. In fact, 51% of the responses valued their service below average, 19% valued their service as only average and 25% valued their service as above average for the price paid. Five percent did not know.

The second question asked respondents to rank their telephone transmission quality. Here the average ranking was 4.7 or slightly above average. Only 23% of the respondents ranked transmission quality below average, 19% ranked transmission quality as average and 55% ranked transmission quality above average. Three percent did not know.

The third question asked respondents to rank the variety of services offered by their local service provider. Once again, the average ranking of 4.6 was slightly above average. Only 17% of the respondents ranked the variety of services as below average, 16% ranked the variety as average and 57% ranked the variety of services as above average. Ten percent did not know.

The forth question asked respondents to rank the maintenance and installation services provided by their local telephone company. Here, the average ranking was slightly below average at a value of 3.9. Approximately 29% of the respondents ranked maintenance and installation below average, 19% ranked it as average and 40% ranked maintenance and installation services above average. Twelve percent did not know.

We analyzed Wyoming's geographical regions (defined by the Economic Analysis Division's Wyoming Cost of Living Index) and the value of local telephone service. All of Wyoming's citizens (in the Southeast, Southwest, Central, Northeast and Northwest Regions) ranked the value of local telephone service for the price paid about the same and they indicated that it is below average.

Local Service Rates

Survey responses indicate that telephone rates in Wyoming are weighted toward the high end of the scale. Only 4% of the respondents indicated that they pay a rate between $10.00 and $19.99 per month; 7% of the respondents pay between $20.00 and $24.99 per month; 33% of the respondents pay between $25.00 and $35.00 per month; and the majority or 55% of the respondents pay more than $35.00 per month.

We analyzed the relationship between the local telephone basic service rate and the value of local telephone service for the price paid. Here a clear relationship exists indicating that as the rate increases, the perceived value of the service decreases. Of those citizens who pay the lowest rate (between $10.00 and $19.99 per month), only 18% rank the value of the service below average. On the other end of the scale, of those citizens who pay more than $35 per month for local phone service, 60% ranked the value of the service below average.

Another relationship was analyzed comparing Wyoming geographical regions (defined by the Wyoming Cost of Living Index) and the local basic service telephone rate. From this relationship, it appears that a higher percentage of Wyoming citizens in the Central Region pay more than $35.00 per month. On the other end of the scale, a higher percentage of Wyoming citizens in the Northwest Region pay lower rates.

Willingness to Pay More

With regard to a willingness to pay more, we asked people to designate the maximum additional price that they would be willing to pay for non-cellular local phone service before they would cancel their service rather than pay a higher rate. When service cancellation is the alternative, 53% of the respondents indicated that they are unwilling to pay more for non-cellular local telephone service. However, 47% of the respondents are willing to pay more for local service and 3% are willing to pay more than $16.00 per month more.

We analyzed the relationship between annual household income and the willingness of customers to pay more for local telephone service. This relationship indicated that regardless of household income level, Wyoming citizens did not want to pay more for local telephone service. In other words, as the income level increased, there was no appreciable trend indicating a willingness to pay more for local telephone service.

We analyzed another relationship between the amount a customer is currently paying for local telephone service and the maximum additional amount the customer is willing to pay. This relationship indicated that customers who are paying the lowest rate (between $10.00 and $19.99 per month) were the most willing to pay more for local telephone service. At the other end of the scale, those customers who currently pay the most (in excess of $35.00 per month) are least willing to pay more for local telephone service.

Service Importance

One of the questions in the survey asked respondents to rank five information services typically available in Wyoming from most important to least important. Wyoming citizens overwhelmingly responded that local telephone service was most important to them. Next in importance was long-distance telephone service. The third most important service was cable TV. There was a virtual tie for the final two services, but newspaper/magazine was just slightly ahead of the Internet as the least important service.

The Price for Internet

It followed that since most Wyoming citizens assign the lowest relative value to Internet access, they are also unwilling to pay higher rates for better quality or faster Internet service. Over 81% of the respondents indicated that they are not willing to pay more for higher quality Internet access while 19% of the respondents indicated that they would. In addition, the willingness to pay more for Internet service was not a function of age.

Of the few who said that they would pay more for better Internet service, 53% said that they would only pay up to $5.00 more; 39% said that they would pay from $5 to $9.99 more; and only 8% said that they would pay more than $10.00 additional for higher quality Internet service.

Individual Comments

The Telephone Affordability Survey included an optional opportunity for comments on local service rates. Of the 421 survey responses returned, 178 or 42 % included comments which reflect the individual's perception of the telecommunications industry in Wyoming or of their specific service or rate. This report is intended to be a factual representation of the views and perceptions of Wyoming citizens concerning important aspects of local telephone service, and therefore, all survey comments have been included in Appendix A.

APPENDIX A

Individual Comments:

"Local telephone rates are very unreasonable, the service stinks and they are like parasites that prey on other people charging more and giving less."

"It is awful to have to pay $47.40 to have a phone in your home. We do not have Internet or cable TV. This is just for phone and who can do without a phone?"

"At the end of 1998 we were paying roughly $35.00 per month for the same services we receive now. Since then, rates have gone up roughly 86% including a $15.00 distance fee. This used to be one of the most affordable utilities and now it has become ridiculously expensive in the last 12 months. We are paying roughly $65 per month now."

"It seems unnecessary that our basic phone bill is half of a hundred dollars. Outrageous for a necessity nowadays. Why isn't there any competition? Only one phone service for customers to go to! Please, $25 for basic service is just right. People work to pay bills and still live, not just survive."

"Telephone service is too high and causes hardship on those on fixed income."

"The rate structure is too high for the quality of the service we are receiving."

"I use my cell phone for my long distance needs and will likely use it for all my needs and cancel my local service even if I have to surrender my Internet access."

"My local phone service is $50.00 per month - way too high!"

"I am on a fixed Social Security income and if the rates increase substantially I may have to do without the service."

"It is just about cheaper to have cellular service. That is wrong!"

"I feel very discriminated against because of high rural phone rates and lack of economical upgrades."

"My basic phone bill is an OUTRAGE; $50.00 just to have a phone!"

"The taxes and surcharges (mainly the one for universal service) really upset me. Why do I pay and have to continually pay for other people's service. They chose to live where they are. At the very least tell me when I will have paid enough to connect the rest of the world up."

"My local monthly service is much too high. I am on the verge of alternative service or doing without phone service. The current rate even with the universal service fund is a hardship for me considering I have mortgage payments that require a large portion of my income."

"We feel our phone rates around this county are extremely high. For the elderly, it takes all their Social Security income or any other source of income to pay our utilities much less the high priced phone service."

"I would pay more for an Internet service like AOL or Digital AT&T".

"Why do you want to know!"

"I am pleased with the service but prices are outrageous. Considering switching to a cell phone just for the price alone!"

"Should be lower not higher."

"Local rates should not go up for residential use unless the quality of transmission is improved. The variety of services offered isn't necessary - most people use few if any of the options provided. Rates should not be used to subsidize expansion into outlying areas - those people should cover their own costs."

"They seem very high, with all the taxes and charges tacked on. I don't believe that the individual citizen actually needs so many choices. Businesses may use them but I don't want to have to pay for them nor do I want to spend so much time sorting through tons of information I don't need. Thank you."

"Currently we have no choice in selecting our local telephone provider. We have to take it or leave it. I'm sure it is this way in most counties of Wyoming."

"I think this "distance charge" is outrageous!! I mean, you charge us 'x' amount with 'x' amount credit--what a joke! This charge is just a way for you to make more money--ridiculous! My lines are also so old I'm told, that I don't get very fast Internet and no services like caller I.D. Maybe if lines were newer, I'd be glad to pay a little more! But then why complain, you people don't listen anyway!!"

"Too many changes, promotions, new types of service, etc. Difficult to keep up with all of them, and difficult to compare servers."

"Our local telephone rates are very high and the quality is not that good. Internet is very slow. We live about 16 miles out and it is not right that our lines cost more than other homes."

"I think $85 per month is too much for 2 phone lines."

"Telephone services are totally outrageous in price. They should go down not up."

"Local phone service is over priced for what you get and they just keep increasing the price. Installation of new business lines are not done in a timely manner."

"Rates for long distance are much too high."

"Rates have been going up each year, and as an older person, I don't think this is necessary."

"I think the telephone rates are outrageous and they should have to compete with other companies just like other businesses."

"My feeling (having lived in several other parts of the US) is that the rates are higher than necessary in Wyoming. I'm sure there are a multiplicity of reasons for this such as lack of population density, geographical area to cover, making up for lost business to McLeod and others, etc. I wish that we would be better informed as to why increases are thought necessary, or even considered."

"Bad."

"They are ridiculously high. We have to pay $90+ JUST for local phone service--no long distance in that charge."

"Costs too much--out of line with other area's rates like Bell South, S.W. Bell etc. Other charges like "vacation rates" are more than double Bell South rates--unreasonable charge to re-connect from vacation-rate-time--unreasonable in comparison to other "Baby Bells" and other local servers."

"Way too high!"

"I am angry about the distance access fee which is applied to my bill each month. I recently called for service work and was told that the cost would be $60 for the first 30 minutes and $25 for each additional 15 minutes. That is $110 per hour. I make a wage that is one tenth of that. Should I have to work a day and a half to get one hour of service work? This is incredibly wrong. I can not afford that kind of "service"."

"Way too much for the residence line. Impossible to get through to someone intelligent to handle any problems that may and do arise frequently. Basically U.S. West is incompetent!"

"Recently changed to McLeod USA from US Worst. Saved over $10 just in distance charges [over 40 miles to Casper]. Still costs over twice what my family in California has to pay."

"If we get a cell phone the cost of local service would be too great and we would choose ONE. I'm not going to have both bills. We would choose the cheaper phone service--what we have now or a cell phone."

"We currently have approximately 800 feet of phone cable on the ground. We cannot get US West to bury it. The service is very poor. The prices are way out of line. We are currently paying $52.35 a month for Basic Service. Three miles north they are paying $85. My question is WHY!!! The only other service available is $25 a month. The problem is they do not cover my side of the street yet!!"

"US West is uncooperative and arrogant. It was refreshing to switch to McLeod. Consumers are treated like second class citizens in WY by the major utility companies. No competition!"

"With your continuing rate increases, soon it will be impossible for anyone to afford any of your so-called services! My phone costs have doubled in the last 10 years--my income has gone down."

"Why are we paying more for local phone service just because we are out of the city limits?"

"Our phone rates are extremely high and now they went higher this past year because we are rural--the whole of Johnson County is almost rural! We are charged 50 cents for 911 service charge and don't receive the services--This is wrong."

"We pay long distance to Jackson which is the same distance to Afton, but pay local for Afton. Jackson is more important because we all work in town."

"Phone services should not be such a significant portion of our monthly payments. I am not convinced that the phone company's marginal cost of serving my household could be anywhere near the expense of $35.54 per month. These costs for a phone line are OUTRAGEOUS!"

"Local basic phone service is outrageously priced. I also despise not being able to choose my local provider."

"Expensive".

"My base phone price is about $10 less in the Phoenix, AZ area."

"Too high!"

"The phone company really has a monopoly and as a result seems to be able to get away with ripping off the customer. I truly feel that the service charge to have a phone and what they charge per minute for long distance is ridiculous and a complete rip off. Out of all the services to use, this one (home phones) are the biggest gyp."

"I feel that for the price we pay for local service that a second line should be made available at a much more reduced rate. Maybe 75 to 85 %."

"The telephone rates are high enough! No more rate increases, please."

"Far too expensive when we only live 6 miles from the city limits."

"In Guernsey WY we have only one local phone company."

"Our local service is the highest in the state and I feel we are being ripped off, gouged. We like many others in this area are eagerly waiting the competition other local providers would provide--and resultant lower rates. With either a business or elderly parents or any type of sickness you need phone service so you bite the bullet and pay almost $50 a month (only) for local service in this area."

"Don't like any of the extra taxes that are put on my bill."

"Too high, bad service."

"They are very high. It costs me $50 per month just to have phone, with no extras."

"We currently use cellular for long distance, better value and more convenient."

"Very poor customer service and very high rates!"

"I thought that by the US Government breaking up AT&T that my phone bill would stay lower because of "competition" in phone service. Just the opposite is true. What will happen to the computer industry with breaking up Bill Gates, etc.?"

"Our local rate keeps getting higher and the service has not gotten better. We only have one option and on several occasions I have wanted to disconnect the phone."

"US West--too high. Bills are not consistent-- one month the price is different from the next month for the same thing--no good explanation why."

"I think that the cost of having 2 lines is outrageous. Nothing was done except throw a switch to utilize the one incoming line for service. Additional lines off the same service line should not be more than $5 per month more."

"We pay more per month for having a phone than we do our cell phone and have been tempted to just switch to our cell phone. Most of our phone calls consist of telemarketers so by switching we would have the discretion of who we wanted to talk to because we would be initiating the call."

"The phone fades out completely on a regular basis. Then to re-call there is the added fee. But this is Wyoming."

"Seems a little high but so is everything else. Thanks."

US West often is difficult to get service from. The phone cost for Rural connections are getting prohibitive (upwards of $65/month)!"

"You ask for only comments on rates so I'll refrain from other comments - my bill shows the following: Residence Wyoming - $40.95, WY USF Support Res. - $6.14, Local Service Charges - $8.45, Federal Access Charge - $3.50, E-911, Hearing Impaired, TAP - .58, WY Universal Service Fund - $2.14 [total recurring charges $49.48]. Taxes FED - $1.41, State - $2.73, [total taxes = $4.14]. TOTAL LOCAL CHARGES - $53.62. Internet CIC Charges - $21.75."

"They provide very poor quality on timely service calls and installation and repairs. Also poor customer service from their service reps. Otherwise, I guess they're OK..."

"Lived in Fremont County 10 years."

"Local telephone service has been excellent. I have no complaints. Thanks!"

"Have had nothing but problems with US West since getting phone service here four years ago The bill are undecipherable and have all kinds of mysterious charges that no one there seems to be able to explain when asked. At one point we were being billed nearly $85 for local service. This is outrageous."

"I think it's outrageous paying $35+ a month for a phone - one line, and excluding long distance. We have never had a normal, reasonable phone bill since we've had it hooked up."

"Phone prices have become extremely high due to the extra charges and taxes. The phone bill with the explanation of charges are on average about $25 of the total local service. The cost of having a phone is outweighing the need. If our professions did not require us to have one we would drop our service."

As for us I am concerned the telephone service is very poor and the charges excessive. It is cheaper to call out of state than in WY. (Long distance to Rock Springs 12 miles - HA, HA)."

"The service itself is expensive and the cost per call is too high per minute."

"Local telephone rates are very high for a person on a fixed income. Older people need the security of a phone at their home."

"It is ridiculous to have to pay that much just to have a phone even if you only use it once a month. Within the next year we are thinking highly of canceling our phone and use only cell phones. It is half the price of a home phone. - including long distance. I feel if prices go up anymore, you will see a lot of people doing that."

"If the phone rates go up I will go to satellite Internet connection. I will also have a cellular phone. Other states phone (basic) is not so high."

"I feel that our regular monthly rates are too high."

"Local service is too high for people in our county and town."

"As to question #2, I find it interesting that based on local telephone rates, $23.10 for the basic residence line, one could not possibly check off the first box, $10.00--$19.99. Although I consider myself to be a 'simple' telephone customer, at $44.40 for phone rates, minus long distance, to be robbery.!"

"Rates are extremely high!"

"For what we receive the price is ridiculous. No service from these people. They treat you like a dog. Everyone needs a phone. I hope the cell phones eventually replace this bunch of parasites."

"I think the price of the phone is outrageous. I think it's a necessity because I have kids- when they need me, and to go to work, and emergencies."

"I do not have anything but the basic phone service. No long distance at all. We use phone cards."

"I switched services because they said it was the same or lower, but they get you to switch, then they add new charges each time or add more onto the local service."

"Rates are about right. Thank you."

"At&T/US West customer service stinks. They have hung up on me at least 5 times because I argue with them about my info listing for my business. The second I get adamant about changing it they hang up. It has taken 4 months of hassles to get this corrected."

There are six added charges [monthly service]. Seems they go up or are added to frequently. Fed ex tax needs to be repealed."

"No local people to contact is not desirable. Slow bps for the same price is not equitable."

"Would be interested in a service to block telemarketers."

"I feel the price of monthly service just to have phone is appalling and you have to pay it because you need it."

"I feel that local is too much compared to long distance. And in Dubois, it's not like you can switch to another provider, when you're not happy."

"High cost."

"It's just about cheaper now just to have cellular service. That is wrong."

"Too high for the use we get out of it."

"I am so displeased with my phone rate that I am going to cancel it and go with Cellular One!"

"Generally--rates are higher than we think they should be!"

"I think it is sad to think that your basic service is $40 just to have a phone! I consider the phone a needed item!"

"Costs too much and US West is our only provider."

"The rates are now outrageous. Services by the provider have been promised and not rendered. Public Service Commission needs to keep service affordable."

"(US West). Do not understand 'distance fee' which causes basic phone line, without any long distance charges, to be fifty some dollars a month. Would switch company, but there is no other company in this area."

"The rates are much too high already. I will have to discontinue service when I retire if it goes higher and I'm thinking of discontinuing my long distance now. It's too high."

"All the add-ons on the phone bill are confusing."

"The add-on charges are excessive. Ordered service basic is $30.05; add-on cost is $8.61. This is extreme in my opinion."

"Have only one party line for business and could use at least 20 lines (10 for business and 10 for employee housing). Also have 45 trailers, i.e., mobile homes that could use additional lines-not to mention 40 individual cabins."

"Seems very high compared to the same service originally provided by AT&T years ago."

"I think U.S. West stinks and would look at other service if available."

"Expensive for the current level of service. The price and pay should include DSL, voice mail, caller ID. Lack of choice hurts."

"Rates were increased dramatically (30%) in last 2 years without increase or benefit in basic service. There is no competition to U.S. West in our area, so I can't say that competition would lower rates, but I doubt it. Deregulation seems only to have raised consumer cost in every area--air travel, utility expenses, phone service, etc."

"It costs an average of $54 for phone service that's not calls. Calls are less than the charge to have the phone, It lists the same tax charges 3 times and I would like to know how that is possible."

"Would like explanation of itemized charges and why te charges are just added without any one ordering or saying they want this and will pay for it??"

"Coming from SLC, Green River, Wyoming is pretty rural for us. You would think the rates would be cheaper, but it is the opposite. With all the new technology couldn't they give us better rates or some competition? I strongly disagree with charging us long distance rates to call Rock Springs. Whose bright idea was that?"

"Local rates have gone up so much that it is fast becoming more affordable for me to discontinue my telephone service and establish a cell phone calling plan with a cellular dealer. This makes little sense to me."

"Local phone rates are the highest we have ever paid! We paid $15 less in our previous location which was a more rural area in another state. We feel since U.S. West has a monopoly they can get away with charging more for basic service. People must have a telephone. The sad thing is it is almost cheaper to use a cellular phone as the primary telephone."

"For the fuzzy sounding telephone lines we have in Wheatland, I feel the local service is overpriced."

"As with anything, it seems that prices are continually rising, creating a bigger gap between rich and poor. Those of us "low wage earners" have to keep finding ways to afford necessities like phone service! Even the smallest increase in cost makes a dent in our income! We hope that a cap can finally be put on phone costs so we can continue to have a way to communicate with others--especially in emergency situations! (NO MORE INCREASES!!!)"

"Local service is too high. Internet service is $20--should be free."

"Would pay more for basic because of limited alternatives, but think it is high enough."

"Didn't like residential increase. May get business list because it is now LESS expensive, and I'd have free yellow page listing for my home business. Always use Clear Choice for long distance."

The basic phone rate is twice too much - $23.10 for a single line!! Then we are privileged to pay another $7.52 in taxes for a 32.5% of the total cost. Grand total of $30.62 just to have a phone line in your house."

"Have been disabled and passed blood clots to my right lung in November. Am sooo lucky to still be alive. Don't need to know what's available, as most likely I can't afford it."

"Why bother asking question #3 when we don't have any options concerning local service? There is no competition allowed."

"Cost is too high."

"I think we are definitely overcharged for local monthly service."

"I think it is unfair that U.S. West charges the same rate for residential service as they do for a business. The additional surcharges are also getting out of hand."

"My local phone rate has increased from $29 to $44 an month is 5 years. This is absurd when executives receive millions of dollars per year. I am tired of government agencies coddling these Baby Bells. If they will not permit real competition, reduce their rates! I want to see satellite phone where you can call any where for a fixed monthly rate."

"We have always had poor to no service from U.S. West. Have even had to contact the Wyoming Public Service Commission to stop price gouging and long distance slamming. If we had a choice we would change service."

"The personal home rates are ridiculous. The reason given is the lack of population. My rational is the infrastructure goes across a large land mass at a very, very low rate. Rates should not be based on population density but markets of service does make sense. More use equals higher rates."