Released November 25, 2014
An updated USTelecom analysis of residential voice competition data reaffirms previous research showing that an overwhelming majority of consumers are dropping traditional switched telephone landlines from incumbent local exchange carriers (ILECs) in favor of modern mobile and Internet Protocol (IP) options. By the end of 2013, 43 percent of households were wireless only while 30 percent were using non-switched services and less than 27 percent were using traditional landlines (see Chart 1). Based on trends, by the end of 2014, 47 percent of telephone households will be wireless-only and that figure will exceed 50 percent by the end of 2015. Traditional landlines are now approaching 20 percent of households and this figure will drop toward 15 percent over the next couple of years. Based on trends, from 2000 to 2015 ILECs will have lost a projected 72 percent of switched access lines and 82 percent of switched retail residential access lines (see Chart 2) due to facilities-based competition from wireless and cable. By the end of 2015, ILEC switched connections will represent 11 percent of U.S. voice connections, 14 percent if ILEC VoIP is included (see Chart 3). Moreover, if trends continue, by 2015 or 2016 there will be more non-ILEC lines than ILEC switched plus VoIP lines. These projections showing continuing declines in ILEC telephony provide support for USTelecom’s October 2014 petition for regulatory modernization, which asks the Federal Communications Commission (FCC) to forbear from applying outdated rules that act as barriers to competition and investment in broadband. The data also provide ongoing support for quick resolution of IP transition issues and for USTelecom’s December 2012 petition seeking an FCC declaratory ruling that ILECs should no longer be subject to dominant carrier regulation. In particular, as detailed in USTelecom’s December 2012 petition to the FCC, the mounting evidence of non-dominance undermines the core rationale for much legacy regulation of ILEC switched residential voice services.