Products and Services Revenues

12 Months Ended

Dec. 31, 2019

Products and Services Revenue

We are an integrated communications company engaged primarily in providing an array of communications services, including local voice, broadband, private line (including business data services), Ethernet, network access, information technology and other ancillary services. We strive to maintain our customer relationships by, among other things, bundling our service offerings to provide our customers with a complete offering of integrated communications services.

We categorize our products, services and revenue among the following six categories:


•	IP and Data Services, which include primarily VPN data networks, Ethernet, IP and other ancillary services;


•	Transport and Infrastructure, which include broadband, private line (including business data services) and other ancillary services;


•	Voice and Collaboration, which includes primarily local voice, including wholesale voice, and other ancillary services;


•	IT and Managed Services, which include information technology services and managed services, which may be purchased in conjunction with our other network services;

•

Regulatory Revenue, which consist of Universal Service Fund ("USF") and Connect America Fund ("CAF") support payments and other operating revenue. We receive federal support payments from both federal and state USF programs and from the federal CAF program. These support payments are government subsidies designed to reimburse us for various costs related to certain telecommunications services including the costs of deploying, maintaining and operating voice and broadband infrastructure in high-cost rural areas where we are not able to fully recover our costs from our customers; and


•	Affiliate services, which are telecommunication services that we also provide to our external customers. In addition, we provide to our affiliates computer system development and support services, network support and technical services.

From time to time, we may change the categorization of our products and services.

Our operating revenue for our products and services consisted of the following categories for the years ended December 31, 2019, 2018 and 2017:



	Years Ended December 31,
	2019		2018	2017
	(Dollars in millions)
IP and Data Services	$	624	615	634
Transport and Infrastructure	2,829		2,925	3,006
Voice and Collaboration	1,639		1,798	1,980
IT and Managed Services	3		6	—
Regulatory Services	189		214	211
Affiliate Services	2,873		2,935	2,719
Total operating revenue	$	8,157	8,493	8,550

We do not have any single external customer that provides more than 10% of our total consolidated operating revenue. Substantially all of our consolidated revenue comes from customers located in the United States.

We recognize revenue in our consolidated statements of operations for certain USF surcharges and transaction taxes that we bill to our customers. Our consolidated statements of operations also reflect the offsetting expense for the amounts we remit to the government agencies. The USF surcharges are assigned to the products and services categories based on the underlying revenue. We also act as a collection agent for certain other USF and transaction taxes that we are required by government agencies to bill our customers, for which we do not record any revenue or expense because we only act as a pass-through agent.

The following table provides the amount of USF surcharges and transaction taxes:



	Years Ended December 31,
	2019		2018	2017
	(Dollars in millions)
USF surcharges and transaction taxes	$	125	124	134

Our operations are integrated into and reported as part of the consolidated segment data of CenturyLink. CenturyLink's chief operating decision maker ("CODM") is our CODM, but reviews our financial information on an aggregate basis only in connection with our quarterly and annual reports that we file with the Securities and Exchange Commission. Consequently, we do not provide our discrete financial information to the CODM on a regular basis. As such, we believe we have one reportable segment.