Highlights from the National Consumers League’s Survey on

Consumers and Communications Technologies:

Current and Future Use

July 21, 2005

 

Service Gaps

  • Nearly all respondents (98 percent) have local telephone service, and most have long distance service (82 percent). Two-thirds have Internet access at home (67 percent) and wireless phone service (65 percent), while fewer have pay television service (55 percent have cable, 28 percent have satellite television).
  • Not surprisingly, income has a direct impact on which communications services consumers have. For example, 93 percent of respondents with incomes over $100,000 have Internet access at home, compared to 39 percent of those who make less than $25,000.
  • Three-quarters of those with incomes of at least $75,000 have Internet access, pay television (cable or satellite) and a wireless phone, while only 19 percent of those with incomes below $25,000 have all three services, and 33 percent of those with incomes between $25,000 and $50,000.
  • Age also plays a role in service uptake. Respondents aged 65 and older are much less likely to have Internet access (42 percent) than people who are 30-39 (79 percent).
  • People aged 65 and older are also less likely than the population overall to have a wireless phone (56 percent), or satellite TV (20 percent), though they are more likely to have cable (67 percent).
  • Forty-two percent of those who don’t have Internet access at home don’t have computers. Forty-eight percent with no Internet access at home said they don’t want or need it. Cost was cited as the reason by only 10 percent.

·         About the same number of consumers have high-speed Internet service (36 percent) and dial-up (31 percent) Internet service. Sixty-five percent of adults with incomes over $100,000 have high-speed Internet access compared to 14 percent of those who make less than $25,000 a year. Cost is a factor: 35 percent of those with dial-up service cited cost as the reason they didn’t have high-speed Internet service; only 20 percent said it wasn’t available in their area. Age is also a factor: 40 percent of those aged 18-24 have high-speed Internet access, while only 18 percent of people aged 65 and older do.

     

Awareness of Choice

  • Large majorities of respondents believe they have choices for long distance carriers (90 percent), wireless providers (86 percent), dial-up Internet providers (81 percent), satellite television service (74 percent), broadband Internet providers (72 percent), and local telephone service (71 percent). Far fewer, 46 percent, think they have a choice of cable television providers, but the reality is likely much lower, since head-to-head cable competition only exists in about two percent of communities.
  • Many consumers take advantage of their choices for telephone services. Three-quarters (76 percent) of respondents who have long distance service have switched their long distance carriers. Nearly half who have wireless service have switched providers (47 percent). Similarly, 45 percent who have local service have switched their local service providers.
  • People with incomes of less than $25,000 are less likely to have switched telephone service providers: 61 percent of respondents in that income bracket who have long distance service have switched long distance providers; 33 percent who have wireless have switched wireless providers, and 40 percent of those with local service have switched local service providers.
  • Most consumers (71 percent) are generally aware that some cable companies provide telephone service, but only about one third (35 percent) know if their cable companies offer it.
  • Four in ten survey respondents (38 percent) are interested in purchasing television service from a telephone company. Those who make more than $100,000 are more interested (47 percent) than those with incomes less than $25,000 (31 percent). Only 18 percent of people ages 18-24 and 29 percent of those aged 65 and older are interested in that option.
  • Half (52 percent) of respondents with Internet access at home are interested in purchasing telephone and Internet services from one provider, though only four percent actually have done so. Interest is lowest among people with incomes below $25,000 (32 percent) and those aged 65 or older (37 percent).

Customer Satisfaction

  • The survey found a clear link between the choices that consumers have for communications services and their satisfaction with the quality and value of those services. Ninety percent of survey respondents are aware that they have choices for long distance providers; of those who have long distance, 90 percent said they were satisfied with the service quality and 78 percent said the prices they paid were a good value for what they got. Eighty-six percent are aware of choices for wireless providers, and of those who have that service, 90 percent were satisfied with the service quality and 75 percent said it was a good value. Seventy-one percent are aware of choices for local service, and of those who have it, 92 percent were satisfied with the service quality and 77 percent said it was a good value.
  • Internet services also rated well. Eighty-one percent of survey respondents are aware of choices for dial-up Internet service, and of those who have that service, 87 percent were satisfied with the quality, 71 percent said it was a good value. Seventy-two percent are aware of choices for high-speed Internet service, and of those who have it, 87 percent were satisfied with the service quality and 71 percent said it was a good value.
  • Pay television services generally rated lower: 74 percent of respondents are aware of choices for satellite, and of those who have that service, 85 percent were satisfied with the quality, 64 percent said it was a good value. Forty-six percent believe there is a choice for cable providers, and of those who have cable service, 76 percent were satisfied with the quality, and only 49 percent said that it was a good value.
  • Generally, consumers are not as satisfied with how complaints are handled as they are with the value and quality of their services. About 2/3 said they were satisfied with complaint handling, and the level of satisfaction was similar for all services: 66 percent of those who have local telephone service were satisfied with the way complaints about that service were handled, 65 percent of those who have Internet, satellite television, or wireless telephone service were satisfied with how complaints about those services were handled, and 60 percent of those who have long distance telephone or cable television were satisfied with how complaints about those services were handled. The number of consumers who have had complaints is also similar; about one-quarter of those who have these services have never had a problem. 
  • Among the consumers who have these services, more said the cost of their pay television service had gone up than any other service, and that the cost of their telephone service has gone down. The top reason cited for cost increases in all categories was higher rates, rather than adding new services:

Service

Cost Same in Past 5 Years

Increased

Decreased

Internet

 

60 percent

31 percent

  6 percent

Telephone

 

35 percent

52 percent

11 percent

Pay TV

26 percent

70 percent

  3 percent

 

 

 

 

 

 

 

 

Understanding Phone Bills

  • Three-quarters of survey respondents (73 percent) said it is very or somewhat easy to understand the charges and fees on their phone bills; 26 percent said that it was very or somewhat difficult.
  • Younger people seem to have the least difficulty; only 14 percent of respondents ages 18-24 said it was somewhat or very difficult to understand their phone bills, compared to 28 percent of those aged 65 or older.  

 

Interest in Using New Communications Technologies

  • In situations where people could make calls using either wireless or landline phones, two-thirds (65 percent) have used a wireless phone often or occasionally to make a local call, three quarters (73 percent) to make a long distance call.
  • While only five percent of respondents said they use only a wireless phone at home, 46 percent said they know someone who does, and 39 percent of those who currently do not said that within the next two years it is likely that they will use only a wireless phone at home instead of a landline.
  • People aged 65 and older are less likely to know someone who uses only a wireless phone at home (29 percent) and less likely to believe that they themselves will do so within the next two years (26 percent).
  • Fourteen percent of people with wireless phones have used them to access the Internet. Again, age is a factor; more than a third (38 percent) of people age 18-24 who have wireless phones have used them to access the Internet, compared to one percent of those aged 65 or older. 
  • While only 29 percent of respondents have heard of Voice over Internet Protocol (VoIP) and only 13 percent have made a call over the Internet, nearly half (46 percent) of those who had heard of it, said it is likely that they will use VoIP instead of traditional landline phone service in the next two years. People aged 65 and older are less likely to think that they will make this switch, but more than a third (36 percent) think they will. People with incomes over $100,000 are much more likely to think they will switch to VoIP (57 percent) than those making less than $25,000 (29 percent).
  • One in five (19 percent) respondents have used WI FI, wireless Internet technology, mostly at home (58 percent), at a hotel (40 percent) or at work (40 percent). More than a third (35 percent) of people with incomes over $100,000 have used WI FI compared to eight percent of those who make less than $25,000, and nearly a third (30 percent) of respondents ages 18-24 have used it compared to only seven percent of those aged 65 and older.  

 

Shopping for Services

  • Ease of comparison shopping is fairly comparable for all services: 71 percent of respondents said it is very or somewhat easy to comparison shop for local telephone service, 70 percent for wireless and Internet services, 68 percent for long distance service, and 60 percent for cable and satellite television services.
  • But older people find it more difficult than younger people, especially for certain services. For example, only 47 percent of those aged 65 or older said it is very or somewhat easy to shop for Internet access services, compared to 92 percent of those ages 18-24.
  • Respondents are split about the ease of comparing bundled packages of services; 48 percent said it is very or somewhat easy and 46 percent said it is very or somewhat difficult. Again, older people find it harder; 56 percent of those aged 65 and older said it is very or somewhat difficult, compared to 19 percent of those ages 18-24.
  • Two-thirds (66 percent) of respondents said that advertisements don’t provide all of the information they need to understand and compare offers for communications services.
  • Among consumers who have these services, they pay an average each month of $70 for telephone services, $51 for television, and $29 for Internet.
  • Two-thirds of respondents think that purchasing bundled services will get them a better deal than buying services separately – but they want a really good deal. Only one-third (35 percent) of respondents are willing to spend $100 or more per month. The average amount consumers said they would be willing to spend per month for a package combining all telephone services, Internet access, and pay television is about $97.

 

911 and Lifeline Services

  • Nearly all respondents (98 percent) said that it is important to be able to reach 911 emergency services, regardless of the type of telephone services they are using. Ninety-three percent said it is very important.
  • Eighty-five percent of respondents feel that Lifeline phone service, which is provided to low-income houses through a subsidy that is supported by a charge on people’s phone bills, is important, though only half (51 percent) said that it was is important. More people with incomes under $50,000 said Lifeline service is very important than those with higher incomes, perhaps because they or someone they know has benefited from this subsidy.

 

 

Methodology

Harris Interactive® conducted this survey for the National Consumers League by telephone between February 28 and March 6, 2005 among 1,000 U.S. adults (aged 18+). Figures for age, sex, race, education, number of adults, number of voice/telephone lines in the household, region and size of place were weighted where necessary to align them with their actual proportions in the population. Sampling error for the overall sample results is +/- 3 percentage points. Sampling error for the various sub-sample results is higher and varies.