ReedSmith
Judith L. Harris Reed Smith LLP
Direct Phone: +1 2024149276 1301 K Street, N.W.
Email: jlharris@reedsmith.com Suite 1100 - East Tower
Washington. D.C. 20005-3373
Amy S. Mushahwar
+1 2024149200
Direct Phone: +1 2024149295 Fax +1 2024149299
Email: amushahwar@reedsmith.com
FILED/A CEPTED
reedsmith.com
December 17,2010
DEC I 72010
Federal COmmunications Commissloo
Marlene H. Dortch, Secretary Office of the secretary
Federal Communications Commission
Office of the Secretary
445 1t
h
Street, SW, Room TW-A325
Washington, DC 20554
Re: "Bill Shock" Comments
CG Docket No. 10-207; CG Docket No. 09-158
Dear Ms. Dortch:
On behalf of The Nielsen Company ("Nielsen") please find an original and four (4) copies of the above
referenced public filing.
date-stamp the extra copy of the filing and return it to the awaiting courier.
JLH/ASM:lsj
Enclosures
r
i '-t... '..-.
NEW YORK. LONDON. HONG KONG. CHICAGO. WASHINGTON, D.C.• BEIJING. PARIS. LOS ANGELES. SAN FRANCISCO. PHILADELPHIA. PITTSBURGH
OAKLAND. MUNICH. ABU DHABI. PRINCETON. NORTHERN VIRGINIA. WILMINGTON. SILICON VALLEY. DlJ.B~C;:ENTURYCITY.RICtl.MOt'lP. GREECE
US_ACTIVE·105155610.1
Nielsen is the world's foremost provider of data
and insights into the mobile market
• Customer Value Metrics (CVM) service collects and
analyzes 65,000+ wireless lines in the U.S. each
month to determine what wireless customers do and
pay for (not what they think they do/pay for)
• CVM measures three key factors when assessing
overages:
- How many people go into overages?
- How often do they go into overages?
- By how much do they go into overages?
CVM Methodology Overview
Panel Recruitment
.
~:--.;...=
~;~-'
Panelists recruited from
multiple sample providers
Upfront survey tor panelists
Panelists provide credentials for
onlln~ billing
MScraping" online bills: 50+
fields per carrie
Categorization of bill data
i i
• Approach
- Consumers recruited from 6 large sample
providers, plus Nielsen's own panels
- 65,000+ line-level bills each month using
advanced "e-bill scraping" technology
- Panelists surveyed for demographic and
(supplemental) device info
- Biases mitigated by weighting sample
against universe benchmarks
- us Census Bureau demographics
Carrier market share
Penetration of Family Plans
Penetration of iPhones
- Consistent categorization of data reported
on bills
- Billing data collected monthly and reported
quarterly and monthly
Panel Composition
Phone Type
Feature
phone
79%
Race I Ethnicity Gender
72'y. ,
White Hispanic
9
i
.','tl
Black I.
5';{,
Other
'l nl
.... ' ill
A,sian 01
Pacific
Isian del'
1':'L
I\lative
,i\merican
oli\laskan
nati\.C'
Defining the potentially affected universe
How many people are
potentially affected by
overages?
Only 115 million once you
exclude pre-paid
subscribers, corporate
lines, individual lines on
family/group plans, etc.
Prepaid lines
Laptops on unlimited plans
Connected devices
Corporate lines (30% of lines)
Family plans (40% of lines)
Family accounts (2.3 lines per
account)
Potentially affected
consumer accounts
(61 million)
(16 million)
(15 million)
(60 million)
(56 million)
24 million
r115 million
How often are consumers affected by overages in
a year?
Distribution of Overage Incidents
03 '09 - 02 '10, Customer Value Metrics, National
100.0% j
90.0
%
~
80. 0% I
70.0% I
600% _1-=
50. 00/0 1..
Voice Overages
40.0%
Data Overages
30.00/0 1..
20. 0
0
/0
10.0
%
0.0
%
I f
-~
X X X X X X X X x x x x x
0
":""""
N
(Y)
~
t..[')
<.D r----
co 0) 0 ":"""" N
":"""" ":"""" ":""""
Wireless consumer bills collected: 78,633
The more often a consumer goes into voice
overage the higher the overage
Voice Overage by Percentile
03 '09 - 02 '10, Customer Value Metrics, National
$100
$80
95th Percentile
$60
75th Percentile
-.-Median
$40
-25th Percentile
Mean
...
$20
T$- r
1x 2x 3x 4x 5x 6x 7x 8x 9x 1Ox 11 x 12x
The more often a consumer goes into data
overage the higher the overage
Data Overage by Percentile
03 '09 - 02 '10, Customer Value Metrics, National
---Median
$15
$10
$5 ~~
$- . --
I
----'
1x 2x 3x 4x 5x 6x 7x 8x 9x 10x 11 x 12x
95th Percentile
75th Percentile
$25
$20
$40
$35
$30
~/5th Percentile
Mean
.~,.,. • ~ : • : ~
0.1%
Total sample: 78.633
Shock: A disturbance of equilibrium or
permanence of something*
Occur
rences
Dislri
butlon
n 95"'
"'olle
7511,
%i1a
Median 251~
%lIe
Mean
• Consumers who regularly or periodically
o
86.5%
6.5%
68056
5085 $ 101.62 $ 42.40 $ 17.89 $ 6.30 $ 30.16
go into overage are unlikely to be
surprised by their overages regardless
f th t Th d' t 'b t' f
0 e amoun . e IS n u Ion 0
2
2627 $ 92.48 $ 43.43 $ 20.93 $ 8.10 $ 30.55 overages is stable to increasing for both
3
3.3% 1238 $ 91.89 $ 45.30 $ 25.20 $ 10.35 $ 32.00 voice and data overages, indicating that
1.6%
811 $ 91.80 $ 44.10 $ 22.05 $ 8.89 $ 30.59 these consumers make a conscious
4
1.0%
choice.
327 $ 76.83 $ 46.80 $ 28.18 $ 16.63 $ 33.32
5
0.4%
162 $ 92.43 $ 52.20 $ 29.25 $ 16.20 $ 37.43
6 • 9.9% or 11.3 million wireless consumers
0.2%
7
92 $ 69.27 $ 42.43 $ 25.97 $ 11.46 $ 29.92 go into voice overage once or twice a
0.1%
year, signifying a rare event rather than
115 $ 100.13 $ 53.10 $ 29.25 $ 10.40 $ 37.64
8
0.1% a regular or recurring event.
38 $ 62.24 $ 35.85 $ 28.20 $ 15.90 $ 28.14
9
0.0%
20 $ 63.14 $ 49.76 $ 27.62 $ 17.01 $ 31.63
10/\
• Only 75
th
percentile (2.8 million) have
11/\
0.0%
1 $ 1.42 $ 1.42 $ 1.42 $ 1.42 $ 1.42 billed voice overages of the same
0.0%
magnitude or greater than their regular
61 $ 77.07 $ 47.23 $ 24.80 $ 11.33 $ 31.51
12
biU.
Data overages are a lot lower
Occurr
ences
Dlstrlb
utlon
n 95"'
%i1e
75
11
'
%i1e
II Median
25
111
%i1e
II Mean
• 11.6% or 13.3 million wireless
0
64503 consumers go into data overage
82.0%
6123 $ 36.62 $ 6.62 $ 2.00 $ 0.50 $ 7.71
once or twice a year
2
3
7.8%
3.8%
1.8%
3008
1439
$ 38.45
$ 31.81
$ 10.86
$ 11.32
$ 3.85
$ 5.40
$
$
1.13$
1.97 $
9.11
9.24
• The typical data overage (median)
of consumers that go only once or
twice into overage is $2 and $3.85
4
1.5%
1161 $ 31.53 $ 13.01 $ 5.68 $ 1.88 $ 9.31
respectively
5
0.8%
652 $ 32.59 $ 12.41 $ 5.96 $ 3.02 $ 9.82
• Only the 95% percentile (less than
6
0.5%
412 $ 25.35 $ 10.62 $ 5.93 $ 2.67 $ 8.54
700,000 customers) are incurring
7
8
0.4%
314
332
$ 28.66 $ 10.59
$ 30.08 $ 13.95
$ 5.70
$ 6.62
$
$
2.57$
2.58 $
8.65
9.95
overages that might come close to
or exceed twice their average total
9
0.4%
178 $ 27.99 $ 12.67 $ 7.73 $ 3.28 $ 9.70
monthly bill
0.2%
10
173 $ 31.54 $ 12.90 $ 7.31 $ 2.75 $ 10.26
0.2%
11
91 $ 19.67 $ 11.34 $ 3.69 $ 1.76 $ 6.79
0.1%
12
247 $ 31.25 $ 12.03 $ 6.14 $ 3.35 $ 10.53
0.3%
Total sample: 78,633
About 1% of Americans experience significant
overages in any given year, similar to their regular
bill
• "Shock," defined as a disturbance of equilibrium or permanence, occurs
when a rare event hits the customer and significantly alters their bill. Bill
"shock" does not occur when a customer periodically or even regularly
goes into overage and it de facto becomes part of their recurring
payment.
• Less than 3.5 million Americans experience their bill roughly doubling
once or twice per year due to overages.
• The more often a consumer goes into overage the higher the overage
amount.
• I he typical consumer who accidentally goes into overage pays $18 to
$21 for voice overages and $2 to $4 for data overages, while generally
enjoying the lowest rates for voice and data in the industrialized world.
Connectivity overages stay constant the more often a
consumer goes into overage whereas messaging
overage steadily increase
Components of Recurring Data
Overage Charges
- TolJ I DJ l<l OvcrJge - rvlcssJgl nil, Over<lgC'
- VVei) Overage
• T
lUllll%
Penetrati
OlJI D<ll<l OvcrJgc'
on of Recurring Data
Overages
LI rvlcssJp,ing OvcrJgc • Web OVC'rJge
$12.00
SO o'Yo:,
$1000
$8.00
GO.O~{,
$600
40.0~/l:1
S400
20.0%
SlUU
$000 A."L_
U.U%
o 1 2 3 4 ~ G 7 B ') 10 11 12
o 1 2 3 4 S G 7 8 ') 10 11 12
Regardless of overage occurrences, web
overages remain below $, while texting overages
.
Increase
$0.00 83.3% 86.0% 96.0% 65706
0
1 4163
$0.78 $0.56 $0.22 5.5% 4.4% 2.1%
2 1869
$1.29 $0.94 $0.36 2.6% 2.0% 0.9%
3 2007
$2.34 $1.92 $0.42 2.8% 2.4% 0.5%
4 1514
$3.02 $2.55 $0.47 2.2% 1.8% 0.3%
5 715
$3.86 $3.48 $0.38 1.0% 0.9% 0.0%
6 243
$5.48 $4.65 $0.83 0.4% 0.3% 0.0%
7 355
$4.72 $4.28 $0.44 0.5% 0.5% 0.0%
8 460
$6.99 $6.28 $0.70 0.7% 0.7% 0.0%
9 196
$7.07 $6.49 $0.58 0.3% 0.3% 0.0%
10 78
$7.34 $7.07 $0.27 0.1% 0.1% 0.0%
11 80
$5.97 $5.63 $0.34 0.1% 0.1% 0.0%
12 303
$9.11 $0.87 0.4% 0.4% 0.0%
People who incur overages receive larger credits
than those who never go into overage
Average Total Credits Given by Average Total Credits Given by
Voice Overage Incidents Data Overage Incidents
52500 52500
•
52000 520.00
51500 / \ - 51500
51000 I~ \ -- 510.00 / ~ V -\-----
5500 5500 ~
5000 5000
o 1 2 3 4 5 6 7 8 ') 10 11 12 012345678')101111
Consumers who go into data or voice overage
receive approximately the same amount as credit
Voice I
Data
Overa esCredit N
Overa es redit
$6.54 68697
$6.13 65706
0
0
1 3540
1
$7.38
$8.92 4163
2 1664
2
$7.54
$11.41 1869
3 1734
3
$8.84
$9.58 2007
4 1111
4
$9.02
$10.16 1514
5 371
5
$11.82
$13.11 715
6 160
6
$16.03
$9.71 243
7 109
7
$11.00
$11.34 355
8 178
8
$6.42
$11.29 460
9" 37
9
$2.62
$6.49 196
10" 18
10
$18.97
$4.20 78
11" 5
11
$0.69
$8.81 80
12 65
12
$21.94
$7.49 303
__
Domestic and international roaming combined with
internationally calling are an insignificant factor on
wireless phone bills for vast majority of Americans
International & Roaming Charges
by Voice Overage*
"~T"-
• •
IDomestic >
International Callin
S100
$0.'30
0 $0.15
S080
1 $0.11
$0.70 2 $0.29
3 $0.41
S060
4 $0.26
S050
,. n I
5 $0.35
S040
6 $0.35
SO 30
7 $0.08
5020 8 $0.47
9/\
$0.04
SO 10
10/\
$0.14
SOOO
11/\
$0.06
o 1 2 3 4 5 6 7 8 ') 10 11 12
12 $0.40
_Domesllc> InlC'rnalional Calling ROJlIllng Chc)rge
• ...r.
!!
$0.18 68697
$0.18 3540
$0.17 1664
$0.19 1734
$0.14 1111
$0.13 371
$0.44 160
$0.22 109
$0.22 178
$0.00
$0.09
$0.00
$0.34
...
.!~
II
'. ~ -
37
18
5
65
*Nielsen does not classify non-package
transactional calls as overage