Voice Telephone Services: Status as of June 30, 2016 Industry Analysis and Technology Division Wireline Competition Bureau April 2017 This report is available for reference in the FCC’s Reference Information Center, Courtyard Level, 445 12th Street, SW, Washington, DC. Copies may be purchased by contacting Best Copy and Printing, Inc., 445 12th Street, SW, Room CY-B402, Washington, DC 20554, telephone (800) 378-3160, or via their website at www.bcpiweb.com. The report can also be downloaded from the Voice Telephone Services Reports webpage at https://www.fcc.gov/general/iatd-data-statistical-reports. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 i Table of Contents Introduction ........................................................................................................................................... 1 Comparison to Local Telephone Competition Report ....................................................................... 1 Retail Voice Telephone Service Connections ...................................................................................... 2 Figure 1 Retail Voice Telephone Service Connections, 2013-2016 ........................................ 2 Figure 2 Wireline Retail Voice Telephone Service Connections by Technology, Regulatory Status, and Customer Type as of June 30, 2016 ..................................... 3 Retail Service Relationships ................................................................................................................. 4 Figure 3 Interconnected VoIP Subscribership by Reported Service Features, Regulatory Status, and Customer Type as of June 30, 2016 ..................................... 5 Figure 4 Retail Relationships of Wireline Voice Telephone Service with Internet Access Service by Regulatory Status as of June 30, 2016 ........................... 6 Detailed Voice Telephone Services Data ............................................................................................ 7 Table 1 Voice Subscriptions – Total for US ........................................................................... 8 Table 2 Number of Providers Reporting Voice Subscriptions – Total for US .................... 10 Technical Notes ................................................................................................................................... 12 Glossary ............................................................................................................................................... 13 SUPPLEMENTAL MATERIALS AVAILABLE ON FCC WEBSITE - Table 1 and Table 2 in Excel format (national-level data back to June 2015) - State-level Subscriptions table in Excel format (data back to June 2015) - State-level Number of Providers table in Excel format (data back to June 2015) - County-level Subscriptions information in Excel format (data back to June 2014) - CSV-format file of consistent data series published for 2008-2016 - Crosswalk to the report Local Telephone Competition: Status as of December 31, 2013 in PDF format U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 1 Voice Telephone Services: Status as of June 30, 2016 Introduction The Commission has used FCC Form 477 to collect subscribership information from providers of voice telephone services – the incumbent local exchange carriers (ILECs), competitive local exchange carriers (CLECs), and mobile voice providers – since December 1999. The Commission has required interconnected Voice over Internet Protocol (“interconnected VoIP”) service providers to report subscribership information since December 2008 because the use of VoIP technology is growing rapidly and it increasingly is used to provide voice telephone service.1 Also, starting with the data reported for 2014, Form 477 has been modified to distinguish “over-the-top” (colloquially, “bring your own broadband”) interconnected VoIP subscriptions from other interconnected VoIP subscriptions.2 This report summarizes the information collected about telephone services as of June 30, 2016. It demonstrates continued growth in subscribership to interconnected VoIP and mobile voice services and continued decline in subscribership to traditional wired telephone services.3 Comparison to Local Telephone Competition Report This report previously was titled Local Telephone Competition. Reports under the earlier title summarized Form 477 data through December 31, 2013. Reports under the current title provide much of the summarized data as supplemental spreadsheet files, available at https://www.fcc.gov/voice-telephone- services-report. A crosswalk between data elements in this report and data elements in the Local Telephone Competition report is available at that page. 1 The FCC’s rules (at 47 C.F.R. § 9.3) state: An interconnected Voice over Internet Protocol (VoIP) service is a service that: (1) Enables real-time, two-way voice communications; (2) Requires a broadband connection from the user’s location; (3) Requires Internet protocol-compatible customer premises equipment (CPE); and (4) Permits users generally to receive calls that originate on the public switched telephone network and to terminate calls to the public switched telephone network. We note that the current interpretation of element (4) of the definition excludes the VoIP services that Skype offers in the United States, and subscribers to those services are not reported on Form 477. 2 The Technical Notes and the Glossary that appear at the end of this report provide more-detailed information about the current Form 477 and the meaning of terms used in this report. To be consistent with modifications to Form 477 that were adopted in 2013 (to be effective for reporting June 2014 and later data), and to avoid confusion, this report no longer uses the terms “standalone VoIP” and, by contrast, “broadband bundle.” Standalone VoIP in the earlier, Local Telephone Competition, reports has a different meaning from “over-the-top” VoIP in this report. In particular, subscriptions reported as standalone VoIP for December 2013 and earlier dates included over-the-top subscriptions as defined in this report and also video-plus-VoIP service subscriptions sold by cable TV system operators and other entities that own last-mile facilities to end-user premises. We note that, accordingly, 13% of total interconnected VoIP subscriptions were categorized as standalone VoIP in December 2013 and, by contrast, 10% of total interconnected VoIP subscriptions were categorized as over-the-top VoIP in December 2014. 3 The presentation of mobile wireless telephone subscriber counts in this report does not constitute, or imply, Commission analysis of the extent to which wireline and mobile wireless telephone services are demand substitutes or complements in general or in any particular situation. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 2 Retail Voice Telephone Service Connections Retail voice telephone service customers are served by two wireline technologies – “end-user” switched access lines and interconnected VoIP “subscriptions” – and by mobile wireless subscriptions. ? In June 2016, there were 62 million end-user switched access lines in service, 60 million interconnected VoIP subscriptions, and 338 million mobile subscriptions in the United States, or 460 million retail voice telephone service connections in total. See Figure 1. ? Over the three-year period presented in Figure 1, interconnected VoIP subscriptions increased at a compound annual growth rate of 10%, mobile voice subscriptions increased at a compound annual growth rate of 3%, and retail switched access lines declined at 11% per year.4 Figure 1 Retail Voice Telephone Service Connections, 2013-2016 (in Thousands) Some previously published data have been revised. ? Of the 123 million wireline retail voice telephone service connections (including both switched access lines and interconnected VoIP subscriptions) in June 2016, 66 million (or 54%) were residential connections and 56 million (or 46%) were business connections.5 See Figure 2. 4 The compound annual growth rate (CAGR) is a smoothed rate of growth calculated in three steps. First, divide the ending value by the beginning value. Second, raise the result of that division to a power equal to one divided by the number of years in the period (in this case, 3 years, so the power is 1/3). Third, subtract the number one from the result of the second step. 5 FCC Form 477 does not distinguish between residential and business subscribers to mobile voice service. The information that Form 477 collects about mobile broadband service is summarized elsewhere; see Internet Access Services: Status as of June 30, 2016, available at https://www.fcc.gov/reports-research/reports/internet-access- services-reports/internet-access-services-reports. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 3 Figure 2 Wireline Retail Voice Telephone Service Connections by Technology, Regulatory Status, and Customer Type as of June 30, 2016 (in Thousands) Total Switched Access Interconnected Total Lines VoIP ILEC 48,633 12,903 61,535 Non-ILEC 13,643 47,440 61,083 Total 62,276 60,343 122,619 Residential ILEC 24,286 10,078 34,364 Non-ILEC 1,652 30,184 31,835 Residential Total 25,938 40,262 66,200 Business ILEC 24,346 2,825 27,171 Non-ILEC 11,991 17,256 29,248 Business Total 36,338 20,081 56,419 Figures may not sum to totals due to rounding. ILEC = Incumbent local exchange carrier. A voice-service affiliate of an ILEC that is operating outside the ILEC’s traditional service area (“study area”) is a Non-ILEC. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 4 ? Cross-classified by technology and the retailer’s regulatory status in Figure 2, the 66 million wireline residential connections in June 2016 were: 37% ILEC switched access lines, 46% non- ILEC interconnected VoIP subscriptions, 15% ILEC interconnected VoIP subscriptions, and 2% non-ILEC switched access lines. Similarly, the 56 million wireline business connections were: 43% ILEC switched access lines, 31% non-ILEC interconnected VoIP subscriptions, 5% ILEC interconnected VoIP subscriptions, and 21% non-ILEC switched access lines. Retail Service Relationships The revised Form 477 program collects two types of information about retail service relationships. ? Interconnected VoIP service retailers distinguish over-the-top (“OTT”) interconnected VoIP subscriptions—which, in the revised Form 477 program, means that the VoIP service end user has purchased (or has use of) a broadband connection from an entity that is not affiliated with the VoIP service retailer—by contrast to all other interconnected VoIP subscriptions. See Figure 3. ? Retailers of switched access lines and retailers of interconnected VoIP service distinguish between sales to end users who do not also purchase Internet access from them (including affiliates) and sales to end users who do purchase both these services. See Figure 4. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 5 Figure 3 Interconnected VoIP Subscribership by Reported Service Features, Regulatory Status, and Customer Type as of June 30, 2016 (in Thousands) Total Over-the-Top All Other Total (OTT) VoIP ILEC 35 12,867 12,903 Non-ILEC 6,588 40,852 47,440 Total 6,624 53,720 60,343 Residential ILEC 33 10,045 10,078 Non-ILEC 2,733 27,450 30,184 Residential Total 2,767 37,495 40,262 Business ILEC 2 2,822 2,825 Non-ILEC 3,855 13,402 17,256 Business Total 3,857 16,225 20,081 Figures may not sum to totals due to rounding. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 6 Figure 4 Retail Relationships of Wireline Voice Telephone Service with Internet Access Service by Regulatory Status as of June 30, 2016 (in Thousands) Total Sold to End Users ILEC Non-ILEC Total Switched Access Lines 48,633 13,643 62,276 Over-the-Top VoIP 35 6,588 6,624 All Other VoIP 12,867 40,852 53,720 Total 61,535 61,083 122,619 Internet Also Sold Switched Access Lines 18,106 4,674 22,780 Over-the-Top VoIP 0 0 0 All Other VoIP 12,836 37,337 50,174 Both Sold Total 30,942 42,011 72,954 Internet Not Also Sold Switched Access Lines 30,527 8,969 39,496 Over-the-Top VoIP 35 6,588 6,624 All Other VoIP 31 3,515 3,546 Only Voice Total 30,593 19,072 49,665 Figures may not sum totals due to rounding. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 7 Detailed Voice Telephone Services Data The remainder of this document consists of national information, technical notes, and a glossary of terms. ? Table 1 summarizes national-level voice telephone service subscription data for June 2016, and also for December and June 2015, for individual data elements collected by FCC Form 477. ? Table 2 shows the number of entities that reported the national-level subscription data for June 2016, and also for December and June 2015. Table 1 and Table 2 are available in Excel format at https://www.fcc.gov/voice-telephone-services-report. Also available at that page are: ? State-level Subscriptions table in Excel format (data back to June 2015) ? State-level Number of Providers table in Excel format (data back to June 2015) ? County-level Subscriptions information in Excel format (data back to June 2014) ? CSV-format file of the consistent data series that are available back to December 2008, when interconnected VoIP retailers were first required to report subscription information on Form 477. Earlier data, back to December 1999, are available in the Local Telephone Competition reports at https://www.fcc.gov/general/local-telephone-competition-reports. However, researchers who consider using the complete data series for trend analysis should recall the discontinuities in the data that arise from Form 477 modifications over time. ? Between December 1999 and December 2004, Form 477 collected state-by-state data only from local exchange carriers with at least 10,000 end-user switched access lines in service in the state, and from facilities-based mobile voice carriers with at least 10,000 mobile voice subscriptions in service in the state. ? Prior to December 2008, interconnected VoIP service retailers were not required to submit Form 477, but an unknown amount of interconnected VoIP service was included along with the switched access lines reported by some Form 477 filers. ? As discussed earlier in this report, the category standalone interconnected VoIP that was reported from December 2008 to December 2013 is different (that is, includes more subscriptions) than the category over-the-top interconnected VoIP that is reported starting with the June 2014 data.6 6 See footnote 2, above. Reference Data element June 2016 Dec 2015 June 2015 1 Mobile telephony 337,789 334,589 326,591 2     Directly-billed or prepaid 306,275 295,632 286,565 3     Not directly-billed or prepaid 31,514 38,958 40,026 4 Wireline End-User Switched Access Lines and Interconnected VoIP Subscriptions 122,619 123,671 124,836 5     Incumbent LECs 61,535 63,678 66,872 6     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 61,083 59,993 57,964 7     Consumer-grade service 66,200 67,524 68,857 8         Incumbent LECs 34,364 35,900 37,888 9         Other (Non-ILECs) 31,835 31,624 30,969 10     Business & Government-grade service 56,419 56,147 55,979 11         Incumbent LECs 27,171 27,778 28,983 12         Other (Non-ILECs) 29,248 28,369 26,995 13 Local exchange telephone service (Switched Access Lines) 62,276 64,559 68,088 14     Incumbent LECs 48,633 51,073 54,639 15     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 13,643 13,487 13,450 16     Consumer-grade service 25,938 27,564 29,766 17         Incumbent LECs 24,286 25,807 27,915 18         Other (Non-ILECs) 1,652 1,757 1,851 19     Business & Government-grade service 36,338 36,995 38,323 20         Incumbent LECs 24,346 25,265 26,724 21         Other (Non-ILECs) 11,991 11,730 11,598 22 Interconnected VoIP Subscriptions - Note:  Includes both Over-the-top (OTT) and All Other sub-categories. 60,343 59,112 56,747 23     Incumbent LECs 12,903 12,605 12,233 24     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 47,440 46,507 44,514 25     Consumer-grade service 40,262 39,960 39,091 26         Incumbent LECs 10,078 10,093 9,974 27         Other (Non-ILECs) 30,184 29,868 29,117 28     Business & Government-grade service 20,081 19,152 17,656 29         Incumbent LECs 2,825 2,512 2,259 30         Other (Non-ILECs) 17,256 16,639 15,397 31 Over-the-top interconnected VoIP 6,624 6,101 5,346 32     Incumbent LECs 35 36 37 33     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 6,588 6,065 5,309 34     Consumer-grade service 2,767 2,788 2,649 35         Incumbent LECs 33 34 33 36         Other (Non-ILECs) 2,733 2,754 2,616 37     Business & Government-grade service 3,857 3,313 2,697 38         Incumbent LECs 2 2 3 39         Other (Non-ILECs) 3,855 3,311 2,694 40 All Other interconnected VoIP 53,720 53,011 51,401 41     Incumbent LECs 12,867 12,569 12,196 42     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 40,852 40,442 39,205 43     Consumer-grade service 37,495 37,172 36,442 44         Incumbent LECs 10,045 10,058 9,940 45         Other (Non-ILECs) 27,450 27,113 26,502 46     Business & Government-grade service 16,225 15,839 14,959 47         Incumbent LECs 2,822 2,510 2,256 48         Other (Non-ILECs) 13,402 13,328 12,703 49 Local exchange telephone service by last-mile delivery medium 62,276 64,559 68,088 50     Fiber-to-the-premises 6,247 5,561 5,387 Table 1. Voice Subscriptions (in Thousands) - Total for US             U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 8 Reference Data element June 2016 Dec 2015 June 2015 Table 1. Voice Subscriptions (in Thousands) - Total for US 51         Incumbent LECs 3,617 3,457 3,394 52         Other (Non-ILECs) 2,631 2,104 1,993 53     Coaxial cable 1,294 1,058 1,416 54         Incumbent LECs 56 50 59 55         Other (Non-ILECs) 1,238 1,007 1,357 56     Terrestrial fixed wireless 527 540 545 57         Incumbent LECs 516 523 536 58         Other (Non-ILECs) 11 17 9 59     Copper local loop 54,207 57,402 60,741 60         Incumbent LECs 44,444 47,043 50,650 61         Other (Non-ILECs) 9,763 10,359 10,091 62 All Other interconnected VoIP by last-mile delivery medium 53,720 53,011 51,401 63     Fiber-to-the-premises 6,798 6,952 7,012 64         Incumbent LECs 5,341 5,306 5,163 65         Other (Non-ILECs) 1,457 1,645 1,849 66     Coaxial cable 34,193 33,416 32,285 67         Incumbent LECs 6 7 5 68         Other (Non-ILECs) 34,187 33,409 32,280 69     Terrestrial fixed wireless or satellite 86 69 68 70         Incumbent LECs 0 1 1 71         Other (Non-ILECs) 86 68 67 72     Copper local loop 12,643 12,575 12,036 73         Incumbent LECs 7,521 7,255 7,027 74         Other (Non-ILECs) 5,122 5,320 5,008 75 Non-Incumbent LEC local exchange telephone service by means of provisioning 13,643 13,487 13,450 76         Provided over owned last-mile facilities 4,873 4,551 4,661 77         Provided over UNE-L obtained from unaffiliated entity 2,590 2,503 2,368 78         Provided over other services obtained from unaffiliated entity 6,180 6,433 6,420 79 Incumbent LEC local exchange telephone service provided to unaffiliated carriers for resale 5,767 6,063 6,091 80         Wholesale lines 3,546 3,608 3,667 81         UNE-L 2,221 2,455 2,424 82 Local exchange telephone service and long-distance service 62,276 64,559 68,088 83     Consumer-grade service 25,938 27,564 29,766 84         Incumbent LEC is preferred long-distance carrier for its local exchange service customer 15,841 16,847 18,117 85         Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 8,445 8,960 9,798 86         Non-ILEC is preferred long-distance carrier for its local exchange service customer 1,391 1,491 1,576 87         Non-ILEC is not preferred long-distance carrier for its local exchange service customer 261 265 275 88     Business & Government-grade service 36,338 36,995 38,323 89         Incumbent LEC is preferred long-distance carrier for its local exchange service customer 12,998 13,567 14,330 90         Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 11,348 11,698 12,394 91         Non-ILEC is preferred long-distance carrier for its local exchange service customer 7,980 8,639 8,845 92         Non-ILEC is not preferred long-distance carrier for its local exchange service customer 4,011 3,091 2,754 93 End user buys local exchange telephone service and Internet access service from same entity 22,780 22,807 23,561 94         End user buys both services from incumbent LEC or affiliates 18,106 18,578 20,002 95         End user buys both services from Non-ILEC or affiliates 4,674 4,230 3,559 96 End user buys interconnected VoIP and Internet access service from same entity 50,174 48,965 46,755 97         End user buys both services from incumbent LEC or affiliates 12,836 12,536 12,169 98         End user buys both services from Non-ILEC or affiliates 37,337 36,429 34,586             U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 9 Reference Data element June 2016 Dec 2015 June 2015 1 Mobile telephony 127 130 140 2     Directly-billed or prepaid 126 126 138 3     Not directly-billed or prepaid 23 25 26 4 Wireline End-User Switched Access Lines and Interconnected VoIP Subscriptions 1,668 1,644 1,616 5     Incumbent LECs 740 739 741 6     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 1,210 1,178 1,132 7     Consumer-grade service 1,236 1,243 1,239 8         Incumbent LECs 739 738 740 9         Other (Non-ILECs) 758 759 745 10     Business & Government-grade service 1,563 1,539 1,506 11         Incumbent LECs 736 736 735 12         Other (Non-ILECs) 1,105 1,070 1,025 13 Local exchange telephone service (Switched Access Lines) 1,028 1,026 1,026 14     Incumbent LECs 737 736 738 15     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 516 514 506 16     Consumer-grade service 921 921 918 17         Incumbent LECs 737 736 738 18         Other (Non-ILECs) 398 400 392 19     Business & Government-grade service 1,008 1,005 1,000 20         Incumbent LECs 734 734 733 21         Other (Non-ILECs) 495 491 483 22 Interconnected VoIP Subscriptions - Note:  Includes both Over-the-top (OTT) and All Other sub-categories. 994 952 903 23     Incumbent LECs 97 89 85 24     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 957 917 867 25     Consumer-grade service 498 494 485 26         Incumbent LECs 48 43 45 27         Other (Non-ILECs) 470 467 458 28     Business & Government-grade service 900 857 803 29         Incumbent LECs 92 85 80 30         Other (Non-ILECs) 866 825 770 31 Over-the-top interconnected VoIP 559 529 470 32     Incumbent LECs 20 17 17 33     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 549 520 462 34     Consumer-grade service 151 155 147 35         Incumbent LECs 8 8 9 36         Other (Non-ILECs) 145 149 140 37     Business & Government-grade service 517 484 421 38         Incumbent LECs 17 14 14 39         Other (Non-ILECs) 509 478 416 40 All Other interconnected VoIP 620 605 604 41     Incumbent LECs 90 81 79 42     Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 587 574 572 43     Consumer-grade service 391 388 386 44         Incumbent LECs 42 38 40 45         Other (Non-ILECs) 367 365 364 46     Business & Government-grade service 553 539 537 47         Incumbent LECs 85 78 75 48         Other (Non-ILECs) 523 510 506 49 Local exchange telephone service by last-mile delivery medium 1,028 1,026 1,026 50     Fiber-to-the-premises 680 677 656 Table 2. Number of Providers Reporting Voice Subscriptions - Total for US             U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 10 Reference Data element June 2016 Dec 2015 June 2015 Table 2. Number of Providers Reporting Voice Subscriptions - Total for US 51         Incumbent LECs 539 530 518 52         Other (Non-ILECs) 301 304 290 53     Coaxial cable 94 90 91 54         Incumbent LECs 20 21 23 55         Other (Non-ILECs) 82 79 77 56     Terrestrial fixed wireless 69 76 69 57         Incumbent LECs 42 44 46 58         Other (Non-ILECs) 37 43 33 59     Copper local loop 857 872 884 60         Incumbent LECs 633 639 654 61         Other (Non-ILECs) 359 371 363 62 All Other interconnected VoIP by last-mile delivery medium 620 605 604 63     Fiber-to-the-premises 344 339 320 64         Incumbent LECs 68 62 60 65         Other (Non-ILECs) 318 315 292 66     Coaxial cable 211 219 215 67         Incumbent LECs 8 9 10 68         Other (Non-ILECs) 209 214 211 69     Terrestrial fixed wireless or satellite 196 182 177 70         Incumbent LECs 11 8 8 71         Other (Non-ILECs) 187 175 171 72     Copper local loop 230 215 214 73         Incumbent LECs 49 41 40 74         Other (Non-ILECs) 205 192 195 75 Non-Incumbent LEC local exchange telephone service by means of provisioning 516 514 506 76         Provided over owned last-mile facilities 363 356 345 77         Provided over UNE-L obtained from unaffiliated entity 128 129 133 78         Provided over other services obtained from unaffiliated entity 216 226 226 79 Incumbent LEC local exchange telephone service provided to unaffiliated carriers for resale 51 42 40 80         Wholesale lines 48 41 38 81         UNE-L 13 10 11 82 Local exchange telephone service and long-distance service 1,028 1,026 1,026 83     Consumer-grade service 921 921 918 84         Incumbent LEC is preferred long-distance carrier for its local exchange service customer 668 677 666 85         Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 691 681 689 86         Non-ILEC is preferred long-distance carrier for its local exchange service customer 372 372 357 87         Non-ILEC is not preferred long-distance carrier for its local exchange service customer 273 271 279 88     Business & Government-grade service 1,008 1,005 1,000 89         Incumbent LEC is preferred long-distance carrier for its local exchange service customer 667 675 661 90         Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 669 658 662 91         Non-ILEC is preferred long-distance carrier for its local exchange service customer 448 442 430 92         Non-ILEC is not preferred long-distance carrier for its local exchange service customer 319 321 315 93 End user buys local exchange telephone service and Internet access service from same entity 917 903 900 94         End user buys both services from incumbent LEC or affiliates 715 711 710 95         End user buys both services from Non-ILEC or affiliates 418 406 397 96 End user buys interconnected VoIP and Internet access service from same entity 568 567 553 97         End user buys both services from incumbent LEC or affiliates 83 74 70 98         End user buys both services from Non-ILEC or affiliates 534 538 522             U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 11 U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 12 Technical Notes General Detailed information about the current Form 477 reporting requirements is available at https://www.fcc.gov/general/form-477-resources-filers#block-menu-block-4. See Glossary for definitions of terms used in this report. Counting lines and subscribers ? Form 477 counts both switched access lines and interconnected VoIP subscriptions as the maximum number of calls that may be active, simultaneously, from the end user’s location under the purchased service plan. All VoIP subscriptions discussed in this report are interconnected VoIP subscriptions. ? Form 477 data may not count all VoIP phone connections to Internet Protocol Private Branch Exchange (IP PBX) equipment that is owned by business end users because of the variety of ways the IP PBX may connect to the public switched telephone network. Holding company-subsidiary relationships ? When counting service providers that report voice telephone service in a particular geography, we count a holding company or common-control entity no more than once in any specified sub- category of total providers. ? Nationwide counts of providers are unique counts for any specified sub-category of total providers (for example, all non-ILECs or all interconnected VoIP providers); an entity operating in multiple states is counted only once. ILEC-CLEC affiliations ? If a CLEC is affiliated with an ILEC and reports some end-user switched access lines or interconnected VoIP subscriptions in the ILEC’s service area in the state, then the switched access lines or interconnected VoIP subscriptions reported by the CLEC are allocated between the ILEC and non-ILEC categories based on staff estimates. Mobile voice subscriptions ? Commercial mobile radio service (CMRS) carriers that own or operate wireless networks report both their retail voice service subscriptions and the retail subscriptions of the mobile voice service resellers that use their network. Mobile voice service resellers do not file Form 477. UNE-Platform lines replaced by commercial agreements ? UNE-Platform (UNE-P) was the combination of ILEC loop UNE, switching UNE, and transport UNE. The Commission directed CLECs to migrate their retail customers served by UNE-P to an alternative arrangement within 12 months of the effective date of the Triennial Review Remand Order, that is, by March 11, 2006. See C.F.R. § 51.319(d)(2)(ii). Such lines are reported on Form 477 as ILEC wholesale lines provided to unaffiliated providers for resale. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 13 Glossary Term Definition All Other interconnected VoIP Interconnected VoIP service other than OTT interconnected VoIP. (See the definition of OTT VoIP, below.) Circuit switching A method of completing electronic communications in which a transmission path is established for dedicated use by a communication; the basis of the public switched telephone network (PSTN). Coaxial cable The technology widely used by cable system operators to terminate their services at the end user’s premises. Copper local loop The technology widely used by telephone companies to terminate their service at the end user’s premises. CLEC Competitive Local Exchange Carrier: A local exchange carrier (LEC) that operates within the traditional service area of an unaffiliated incumbent LEC. End users Residential, business, institutional, or government entities that use services for their own purposes and who do not resell such services to other entities. Fixed wireless service A radio communication service between specified fixed points. FTTP or FTTH Fiber to the Premises (Home): A network access architecture in which optical fiber is deployed all the way to the customer’s premises (home). Internet access service Service that provides end users access to the Internet. ILEC Incumbent Local Exchange Carrier: A company or cooperative that was providing telephone service in a localized area, typically on a monopoly basis, prior to enactment of the Telecommunications Act of 1996. Internet protocol or IP A language and set of formal rules that govern how packets transit the Internet. Interconnected VoIP or iVoIP A service that enables real-time, two-way voice communications; requires a broadband connection from the user’s location; requires Internet- protocol compatible customer premises equipment; and permits users generally to receive calls that originate on the public switched telephone network and to terminate calls to the public switched telephone network. LEC Local Exchange Carrier: A company that provides telephone service within a localized area and access services that connect its customers to long-distance (Interexchange Carrier) networks. Local loop The physical connection between the customer’s premises and the telephone company’s local switching office, typically provided using copper, fiber, or a combination of copper and fiber facilities. Mobile wireless service A radio communication service between mobile and fixed stations, or between mobile stations. U.S. Federal Communications Commission Voice Telephone Services: Status as of June 30, 2016 14 Non-ILEC Any provider of communications services who does not have ILEC regulatory status. A voice-service affiliate of an ILEC that is operating outside the ILEC’s traditional service area (“study area”) is a Non-ILEC. OTT interconnected VoIP Over-the-top interconnected VoIP: Service delivered to the end-user customer’s premises over a high-capacity connection that the customer obtains (that is, buys), or has the use of, from an entity not affiliated with the interconnected VoIP service provider. (Colloquially, “bring-your- own-broadband.”) PBX Private Branch Exchange: A communications switch that is owned or leased by the service provider’s end-user customer and generally located on the customer’s premises. Packet switching A method of completing electronic communications in which the information is disassembled into discrete packets that are transmitted independently and later reassembled; IP is an example. Retail wireline voice telephone service Switched access lines and interconnected VoIP subscriptions for which an end user is the customer. Switched access line A service connection between an end user and the local telephone company’s switch; the basis of plain old telephone service (POTS). UNE Unbundled Network Element: A physical or functional element of an ILEC network that must be provided to a CLEC at a cost-based price, as provide for in the Telecommunications Act of 1996. UNE-L UNE-Loop: An ILEC unbundled local loop provided to a CLEC at a cost-based price. Wholesale switched access lines Local telephone service provided to an unaffiliated telephone company, which resells the service to end users; typically provided by an ILEC to a CLEC. Customer Response Publication: Voice Telephone Services: Status as of June 30, 2016 You can help us provide the best possible information to the public by completing this form and returning it to the Industry Analysis and Technology Division of the FCC's Wireline Competition Bureau. 1. Please check the category that best describes you: ____ press ____ current telecommunications carrier ____ potential telecommunications carrier ____ business customer evaluating vendors/service options ____ consultant, law firm, lobbyist ____ other business customer ____ academic/student ____ residential customer ____ FCC employee ____ other federal government employee ____ state or local government employee ____ Other (please specify) 2. 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