1 Includes network compensation fees.Source: U.S. Census Bureau, Annual Survey of Communication Services.

http://www.census.gov/svsd/www/ascs.html****************************************************************************************ANNUAL SURVEY OF COMMUNICATION SERVICES

PURPOSE

To provide estimates of revenue and expenses for the communication services industries. The United States Code, Title 13,authorizes this survey and provides for mandatory responses.

COVERAGE

All firms with payroll that provide telephone communication, radio and television broadcasting, cable television and othercommunication services (SIC 48). Coverage reflects 1987 SIC classifications definitions beginning in 1991. In 1994,domestic communication industries had some 40,000 employer establishments and estimated revenue of more than $264billion.

CONTENT

Data collected include: total revenue and revenue by source; total expenses and expenses by type; number of locations bykind of business; and industry specific inquiries such as telephone communication revenue by type of user and number ofcable subscribers. In the first year of a new sample, participants report data for both the current and preceding year. Insubsequent years, only current year data are requested.

FREQUENCY

Annually since 1990; reported data are for activity taking place during the calendar year. Data collection begins about 4months after the close of the reporting year, and continues for about 4 months. Samples are reselected every 5 years andupdated annually; use of latest sample began in 1991.

METHODS

A mail-out/mail-back survey of about 2,000 selected employer firms. The sample was constructed from communicationsfirms listed in the Standard Statistical Establishment List (SSEL). The SSEL contains Federal Identification Numbers (EINs)for establishments with payroll, and locations for listed businesses. EINs may represent one or more establishments andcompanies with payroll may have one or more EIN.

Firms are first stratified by payroll and kind of business group. All companies with total revenue (estimated from payroll)above applicable size cutoffs are included in the survey and report for all their industry EINs. In a second stage, unselectedEINs are stratified by kind of business group and revenue, and a simple random sample is taken from each stratum.

The sample is updated for employer business "births" and "deaths" in an annual procedure. Companies and EINs that are notactive in a survey year are dropped from the sample. New EINs are identified in a birth selection procedure and included inthe survey.

*Definition of Terms

Revenue

Operating Revenue. Billings for services rendered andany sales of merchandise during the survey year, eventhough payments may be received at a later date. Excludesincome from interest, investments, gifts, loans, contributionsor grants; the sale of securities, real estate, etc.; salestaxes or other taxes collected from customers and remitteddirectly by the firm to a local, State, or Federal tax agency;revenue from the sale of merchandise and equipment fromretail establishments; and revenue from a domestic parentorganization, or from franchise locations owned by othersand any franchise or license fees.

Total Revenue. For tax-exempt firms, it includes all governmentsubsidies used to offset operating or capitaldeficits, private gifts, loans, contributions or grants, and allother non-operating receipts such as income from invest-ments,the sale of securities, and real estate. Total revenuealso includes any operating revenue incurred by the tax-exemptfirm.

Radio and Television Broadcasting

Network compensation. Revenue from the sale of sta-tiontime to networks. Excludes compensation paid tostations owned by the network.

National/regional advertising revenue. Revenue fromthe sale of station time to national and regional advertisersor sponsors. This includes trade-outs and barter, andpolitical advertising revenue. Commissions paid to agencyrepresentatives and brokers are excluded.

Local advertising revenue. Revenue from the sale ofstation time to local advertisers or sponsors. This includestrade-outs and barter, and political advertising revenue.Commissions paid to agency representatives and brokersare excluded.

Network time sales: Advertising revenue (networksonly). Network revenue from advertising sales. Commis-sionspaid to agency representatives and brokers areexcluded.

Other operating revenue. Includes revenue from retrans-missionconsent; the use of talent services, and technicalfacilities; management fees; and revenue from the produc-tionand/or distribution of programs, except when theproduction/distribution is provided by separate establish-mentsof the company. Also includes satellite truck rentalrevenue. Excludes tower rental revenue.

Operating Expenses

Costs incurred during the survey year even thoughpayment may be made at a later date. Exceptions areannual payroll and employer contributions for employeebenefits, which are reported on a cash basis. Excludesinterest on loans and sales taxes and other taxes collectedfrom customers and paid directly to a taxing authority.

Annual payroll. All salaries, wages, commissions, bonuses,and allowances for vacation, holiday, and sick leave paid toemployees during the survey year. For corporations, itincludes amounts paid to officers and executives; forunincorporated businesses, it does not include paymentsto proprietors or partners. Annual payroll is reported on acash basis before employee deductions for Social Security,withholding taxes, insurance, union dues, etc.

Employer contributions for employee benefit plans(REPORTED ON A CASH BASIS)

Plans required under Federal and State legislation. Theemployers cost for all legally required programs, such asSocial Security and Medicare (FICA), workers compensa-tioninsurance, unemployment tax, State disability insur-anceprograms, etc.

Other fringe benefit plans. The employers cost for pro-gramsnot required by law such as pension plans, stockpurchase plans, union-negotiated benefits, life insurancebenefits, insurance premiums for hospital and medicalplans, etc.

Broadcast rights (radio and television broadcastingfirms only). The cost of broadcast rights to feature films,syndicated programming, sport events, etc.

Music license fees (radio and television broadcastingfirms only). The cost of music license fees payable tomusic licensing organizations.

Network compensation fees (radio and television networksonly). The cost of programming time purchasedfrom affiliated and independent stations. Excludes the costof programming time purchased from stations owned bythe network.

Depreciation. Depreciation charges on assets owned bythe company. Includes depreciation on assets rented orleased to others by the company under an operating leaseagreement. Also includes depreciation against assets ownedby the company within leaseholds and assets obtainedthrough capital lease agreements. Excludes depreciationon intangible assets and assets leased to others by thecompany under a capital lease agreement. These chargesare not adjusted for the value of depreciable assets sold ortraded for replacement purposes.

Buildings, offices, and structures. Depreciation charges onbuildings, offices, and structures owned by the company(except those included as part of communication or trans-missionsystems defined below).Vehicles, machinery and equipment, and other tangibleassets. Depreciation charges on vehicles, machinery andequipment, and other tangible assets.

Lease and rental. Payments made to other companies forthe rental and leasing of assets owned by them. Excludespayments to a parent company or organization or any of itssubsidiaries, and installment payments for assets obtainedthrough capital lease agreements.

Buildings, offices, and structures. Payments made to othercompanies for the rental or leasing of buildings, offices, andstructures (except those included as part of communicationor transmission systems defined below).

Transmission systems (except telephone firms). Paymentsmade to other companies for the rental or leasing oftransmission systems, including towers, antennas, cables,wires, transmitters, transmission lines, converters, tap offs,power supplies, microwave equipment, master control equipment,and other transmitting equipment.

Vehicles, machinery and equipment. Payments made toother companies for the rental or leasing of vehicles andother machinery and equipment.

Purchased repairs. Payments made to other companiesfor repairs. Excludes repair costs included as part of alease or rental agreement, improvements for which depreciationaccounts are maintained, and repairs performed byemployees of the company or its subsidiaries.

Buildings, offices, and structures. Payments made to othercompanies for repairs (including charges for parts andlabor) to buildings, offices, and structures (except thoseincluded as part of communication or transmission systemsdefined below).

Transmission systems (except telephone firms). Paymentsmade to other companies for the repair of transmissionsystems, including towers, antennas, cables, wires, transmitters,transmission lines, converters, tap offs, powersupplies, microwave equipment, master control equipment,and other transmitting equipment.

Vehicles, machinery and equipment. Payments made toother companies for the repair of vehicles and othermachinery and equipment.

Insurance. The cost of all commercial insurance used toprotect the company against losses or damages to buildings,structures, and machinery and equipment caused byfire, flood, wind, boiler explosion, or any other cause. Alsoincludes premiums on fidelity bonds of employees, insuranceto protect against liability for deaths or injuries ofpersons, and damages to property of others. Excludes costof premiums for workers compensation.

Telephone and other purchased communication services.The cost of nonrevenue-generating purchased communicationservices such as telephone, telex, telegraph,teletype, etc.

Purchased utilities. The cost of purchased utilities, includingelectricity; fuels consumed for heat, power or generatingelectricity; water; sewer; and refuse removal. Excludespayments for these utility services if included as part of alease or rental agreement.

Purchased advertising. The cost of purchased advertisingincluding payments to other firms for printing, media,and other services and materials used for advertising.Taxes and licenses. The cost of taxes and licenses,including business license fees, real estate and personalproperty taxes (such as taxes on motor vehicles, machinery,equipment, and inventories), and special assess-ments.Also includes FCC license fees. Excludes income,sales, payroll, excise taxes, and other taxes collected fromcustomers and paid to local, State, or Federal governmentagencies.

Other operating expenses. All other operating expensesnot reported above, including billing services; news gatheringservices; rating services; travel expenses; dues andsubscriptions; accounting and legal fees; office supplies;and data processing expenses, including the cost of computersoftware purchased under licensing agreements.Excludes interest on loans, income taxes, and local salesand excise taxes.

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