Voice Telephone Services: Status as of December 31, 2016 Industry Analysis and Technology Division Wireline Competition Bureau February 2018 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 December 31, 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 December 31, 2016 ............................ 3 Retail Service Relationships ................................................................................................................. 4 Figure 3 Interconnected VoIP Subscribership by Reported Service Features, Regulatory Status, and Customer Type as of December 31, 2016 ............................ 5 Figure 4 Retail Relationships of Wireline Voice Telephone Service with Internet Access Service by Regulatory Status as of December 31, 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 December 2015) - State-level Subscriptions table in Excel format (data back to December 2015) - State-level Number of Providers table in Excel format (data back to December 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 December 31, 2016 1 Voice Telephone Services: Status as of December 31, 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 December 31, 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 December 31, 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 December 2016, there were 58 million end-user switched access lines in service, 63 million interconnected VoIP subscriptions, and 341 million mobile subscriptions in the United States, or 463 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 12% per year.4 Figure 1 Retail Voice Telephone Service Connections, 2013-2016 (in Thousands) Some previously published data have been revised. • Of the 121 million wireline retail voice telephone service connections (including both switched access lines and interconnected VoIP subscriptions) in December 2016, 64 million (or 53%) were residential connections and 57 million (or 47%) 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 December 31, 2016 3 Figure 2 Wireline Retail Voice Telephone Service Connections by Technology, Regulatory Status, and Customer Type as of December 31, 2016 (in Thousands) Total Switched Access Interconnected Total Lines VoIP ILEC 45,270 13,084 58,355 Non-ILEC 12,896 50,080 62,976 Total 58,166 63,165 121,331 Residential ILEC 22,650 9,988 32,638 Non-ILEC 1,520 30,292 31,812 Residential Total 24,170 40,280 64,450 Business ILEC 22,620 3,096 25,716 Non-ILEC 11,375 19,788 31,164 Business Total 33,996 22,885 56,880 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 of the ILEC’s traditional service area (“study area) is a Non ILEC. U.S. Federal Communications Commission Voice Telephone Services: Status as of December 31, 2016 4 • Cross-classified by technology and the retailer’s regulatory status in Figure 2, the 64 million wireline residential connections in December 2016 were: 35% ILEC switched access lines, 47% non-ILEC interconnected VoIP subscriptions, 15% ILEC interconnected VoIP subscriptions, and 2% non-ILEC switched access lines. Similarly, the 57 million wireline business connections were: 40% ILEC switched access lines, 35% non-ILEC interconnected VoIP subscriptions, 5% ILEC interconnected VoIP subscriptions, and 20% 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 December 31, 2016 5 Figure 3 Interconnected VoIP Subscribership by Reported Service Features, Regulatory Status, and Customer Type as of December 31, 2016 (in Thousands) Total Over-the-Top All Other Total (OTT) VoIP ILEC 41 13,043 13,084 Non-ILEC 7,375 42,703 50,080 Total 7,416 55,746 63,165 Residential ILEC 38 9,950 9,988 Non-ILEC 2,619 27,673 30,292 Residential Total 2,658 37,622 40,280 Business ILEC 3 3,093 3,096 Non-ILEC 4,755 15,031 19,788 Business Total 4,758 18,124 22,885 Figures may not sum to totals due to rounding. U.S. Federal Communications Commission Voice Telephone Services: Status as of December 31, 2016 6 Figure 4 Retail Relationships of Wireline Voice Telephone Service with Internet Access Service by Regulatory Status as of December 31, 2016 (in Thousands) Total Sold to End Users ILEC Non-ILEC Total Switched Access Lines 45,270 12,896 58,166 Over-the-Top VoIP 41 7,375 7,416 All Other VoIP 13,043 42,703 55,746 Total 58,355 62,976 121,331 Internet Also Sold Switched Access Lines 16,971 4,334 21,305 Over-the-Top VoIP 0 0 0 All Other VoIP 13,007 37,937 50,944 Both Sold Total 29,978 42,271 72,249 Internet Not Also Sold Switched Access Lines 28,299 8,562 36,861 Over-the-Top VoIP 41 7,375 7,416 All Other VoIP 36 4,766 4,802 Only Voice Total 28,377 20,705 49,082 Figures may not sum totals due to rounding. U.S. Federal Communications Commission Voice Telephone Services: Status as of December 31, 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 December and June 2016, and also for December 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 December and June 2016, and also for December 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 December 2015) • State-level Number of Providers table in Excel format (data back to December 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 Dec 2016 June 2016 Dec 2015 1 Mobile telephony 341,352 337,788 334,589 2 Directly-billed or prepaid 302,534 306,380 295,632 3 Not directly-billed or prepaid 38,818 31,408 38,958 4 Wireline End-User Switched Access Lines and Interconnected VoIP Subscriptions 121,331 123,174 123,671 5 Incumbent LECs 58,355 61,538 63,678 6 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 62,976 61,636 59,993 7 Consumer-grade service 64,450 66,202 67,524 8 Incumbent LECs 32,638 34,366 35,900 9 Other (Non-ILECs) 31,812 31,836 31,624 10 Business & Government-grade service 56,880 56,972 56,147 11 Incumbent LECs 25,716 27,171 27,778 12 Other (Non-ILECs) 31,164 29,801 28,369 13 Local exchange telephone service (Switched Access Lines) 58,166 61,894 64,559 14 Incumbent LECs 45,270 48,635 51,073 15 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 12,896 13,259 13,487 16 Consumer-grade service 24,170 25,939 27,564 17 Incumbent LECs 22,650 24,288 25,807 18 Other (Non-ILECs) 1,520 1,651 1,757 19 Business & Government-grade service 33,996 35,955 36,995 20 Incumbent LECs 22,620 24,347 25,265 21 Other (Non-ILECs) 11,375 11,608 11,730 22 Interconnected VoIP Subscriptions - Note: Includes both Over-the-top (OTT) and All Other sub-categories. 63,165 61,280 59,112 23 Incumbent LECs 13,084 12,903 12,605 24 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 50,080 48,377 46,507 25 Consumer-grade service 40,280 40,263 39,960 26 Incumbent LECs 9,988 10,078 10,093 27 Other (Non-ILECs) 30,292 30,185 29,868 28 Business & Government-grade service 22,885 21,017 19,152 29 Incumbent LECs 3,096 2,825 2,512 30 Other (Non-ILECs) 19,788 18,192 16,639 31 Over-the-top interconnected VoIP 7,416 6,624 6,101 32 Incumbent LECs 41 35 36 33 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 7,375 6,589 6,065 34 Consumer-grade service 2,658 2,767 2,788 35 Incumbent LECs 38 33 34 36 Other (Non-ILECs) 2,619 2,733 2,754 37 Business & Government-grade service 4,758 3,858 3,313 38 Incumbent LECs 3 2 2 39 Other (Non-ILECs) 4,755 3,855 3,311 40 All Other interconnected VoIP 55,746 54,656 53,011 41 Incumbent LECs 13,043 12,867 12,569 42 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 42,703 41,789 40,442 43 Consumer-grade service 37,622 37,497 37,172 44 Incumbent LECs 9,950 10,045 10,058 45 Other (Non-ILECs) 27,673 27,452 27,113 46 Business & Government-grade service 18,124 17,160 15,839 47 Incumbent LECs 3,093 2,822 2,510 48 Other (Non-ILECs) 15,031 14,337 13,328 49 Local exchange telephone service by last-mile delivery medium 58,166 61,894 64,559 50 Fiber-to-the-premises 6,121 6,156 5,561 51 Incumbent LECs 3,803 3,617 3,457 52 Other (Non-ILECs) 2,318 2,540 2,104 53 Coaxial cable 886 1,292 1,058 54 Incumbent LECs 60 56 50 Table 1. Voice Subscriptions (in Thousands) - Total for US Reference Data element Dec 2016 June 2016 Dec 2015 Table 1. Voice Subscriptions (in Thousands) - Total for US 55 Other (Non-ILECs) 826 1,237 1,007 56 Terrestrial fixed wireless 510 527 540 57 Incumbent LECs 501 516 523 58 Other (Non-ILECs) 9 11 17 59 Copper local loop 50,649 53,918 57,402 60 Incumbent LECs 40,907 44,446 47,043 61 Other (Non-ILECs) 9,742 9,472 10,359 62 All Other interconnected VoIP by last-mile delivery medium 55,746 54,656 53,011 63 Fiber-to-the-premises 7,448 7,288 6,952 64 Incumbent LECs 5,424 5,341 5,306 65 Other (Non-ILECs) 2,024 1,947 1,645 66 Coaxial cable 34,626 34,193 33,416 67 Incumbent LECs 5 6 7 68 Other (Non-ILECs) 34,621 34,187 33,409 69 Terrestrial fixed wireless or satellite 95 86 69 70 Incumbent LECs 0 0 1 71 Other (Non-ILECs) 95 86 68 72 Copper local loop 13,578 13,089 12,575 73 Incumbent LECs 7,614 7,521 7,255 74 Other (Non-ILECs) 5,964 5,568 5,320 75 Non-Incumbent LEC local exchange telephone service by means of provisioning 12,896 13,259 13,487 76 Provided over owned last-mile facilities 4,480 4,782 4,551 77 Provided over UNE-L obtained from unaffiliated entity 2,309 2,611 2,503 78 Provided over other services obtained from unaffiliated entity 6,107 5,866 6,433 79 Incumbent LEC local exchange telephone service provided to unaffiliated carriers for resale 5,606 5,766 6,063 80 Wholesale lines 3,483 3,545 3,608 81 UNE-L 2,123 2,221 2,455 82 Local exchange telephone service and long-distance service 58,166 61,894 64,559 83 Consumer-grade service 24,170 25,939 27,564 84 Incumbent LEC is preferred long-distance carrier for its local exchange service customer 14,804 15,842 16,847 85 Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 7,846 8,446 8,960 86 Non-ILEC is preferred long-distance carrier for its local exchange service customer 1,259 1,390 1,491 87 Non-ILEC is not preferred long-distance carrier for its local exchange service customer 262 261 265 88 Business & Government-grade service 33,996 35,955 36,995 89 Incumbent LEC is preferred long-distance carrier for its local exchange service customer 12,172 12,998 13,567 90 Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 10,448 11,349 11,698 91 Non-ILEC is preferred long-distance carrier for its local exchange service customer 8,129 7,041 8,639 92 Non-ILEC is not preferred long-distance carrier for its local exchange service customer 3,247 4,567 3,091 93 End user buys local exchange telephone service and Internet access service from same entity 21,305 22,780 22,807 94 End user buys both services from incumbent LEC or affiliates 16,971 18,106 18,578 95 End user buys both services from Non-ILEC or affiliates 4,334 4,674 4,230 96 End user buys interconnected VoIP and Internet access service from same entity 50,944 50,607 48,965 97 End user buys both services from incumbent LEC or affiliates 13,007 12,836 12,536 98 End user buys both services from Non-ILEC or affiliates 37,937 37,771 36,429 Reference Data element Dec 2016 June 2016 Dec 2015 1 Mobile telephony 123 127 130 2 Directly-billed or prepaid 120 126 126 3 Not directly-billed or prepaid 23 23 25 4 Wireline End-User Switched Access Lines and Interconnected VoIP Subscriptions 1,691 1,669 1,644 5 Incumbent LECs 736 741 739 6 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 1,251 1,210 1,178 7 Consumer-grade service 1,240 1,239 1,243 8 Incumbent LECs 735 740 738 9 Other (Non-ILECs) 780 760 759 10 Business & Government-grade service 1,586 1,562 1,539 11 Incumbent LECs 731 737 736 12 Other (Non-ILECs) 1,144 1,103 1,070 13 Local exchange telephone service (Switched Access Lines) 1,016 1,028 1,026 14 Incumbent LECs 733 738 736 15 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 521 515 514 16 Consumer-grade service 910 922 921 17 Incumbent LECs 733 738 736 18 Other (Non-ILECs) 403 398 400 19 Business & Government-grade service 999 1,007 1,005 20 Incumbent LECs 729 735 734 21 Other (Non-ILECs) 502 493 491 22 Interconnected VoIP Subscriptions - Note: Includes both Over-the-top (OTT) and All Other sub-categories. 1,043 995 952 23 Incumbent LECs 101 97 89 24 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 1,002 958 917 25 Consumer-grade service 523 500 494 26 Incumbent LECs 50 48 43 27 Other (Non-ILECs) 491 472 467 28 Business & Government-grade service 943 900 857 29 Incumbent LECs 93 92 85 30 Other (Non-ILECs) 908 866 825 31 Over-the-top interconnected VoIP 590 557 529 32 Incumbent LECs 18 20 17 33 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 581 547 520 34 Consumer-grade service 163 150 155 35 Incumbent LECs 10 8 8 36 Other (Non-ILECs) 156 144 149 37 Business & Government-grade service 541 515 484 38 Incumbent LECs 13 17 14 39 Other (Non-ILECs) 537 507 478 40 All Other interconnected VoIP 650 623 605 41 Incumbent LECs 94 90 81 42 Other (Non-ILECs) - Note: ILEC voice-service affiliate operating outside ILEC's study area is included here. 612 590 574 43 Consumer-grade service 415 394 388 44 Incumbent LECs 44 42 38 45 Other (Non-ILECs) 388 370 365 46 Business & Government-grade service 578 555 539 47 Incumbent LECs 87 85 78 48 Other (Non-ILECs) 545 525 510 49 Local exchange telephone service by last-mile delivery medium 1,016 1,028 1,026 50 Fiber-to-the-premises 708 680 677 51 Incumbent LECs 560 540 530 52 Other (Non-ILECs) 326 300 304 53 Coaxial cable 89 93 90 54 Incumbent LECs 19 20 21 Table 2. Number of Providers Reporting Voice Subscriptions - Total for US Reference Data element Dec 2016 June 2016 Dec 2015 Table 2. Number of Providers Reporting Voice Subscriptions - Total for US 55 Other (Non-ILECs) 78 81 79 56 Terrestrial fixed wireless 74 69 76 57 Incumbent LECs 44 42 44 58 Other (Non-ILECs) 41 37 43 59 Copper local loop 847 859 872 60 Incumbent LECs 628 634 639 61 Other (Non-ILECs) 353 360 371 62 All Other interconnected VoIP by last-mile delivery medium 650 623 605 63 Fiber-to-the-premises 379 345 339 64 Incumbent LECs 76 68 62 65 Other (Non-ILECs) 348 319 315 66 Coaxial cable 214 212 219 67 Incumbent LECs 9 8 9 68 Other (Non-ILECs) 212 210 214 69 Terrestrial fixed wireless or satellite 200 197 182 70 Incumbent LECs 12 11 8 71 Other (Non-ILECs) 191 188 175 72 Copper local loop 217 230 215 73 Incumbent LECs 45 49 41 74 Other (Non-ILECs) 193 205 192 75 Non-Incumbent LEC local exchange telephone service by means of provisioning 521 515 514 76 Provided over owned last-mile facilities 370 362 356 77 Provided over UNE-L obtained from unaffiliated entity 123 128 129 78 Provided over other services obtained from unaffiliated entity 216 216 226 79 Incumbent LEC local exchange telephone service provided to unaffiliated carriers for resale 47 50 42 80 Wholesale lines 45 47 41 81 UNE-L 12 13 10 82 Local exchange telephone service and long-distance service 1,016 1,028 1,026 83 Consumer-grade service 910 922 921 84 Incumbent LEC is preferred long-distance carrier for its local exchange service customer 672 668 677 85 Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 678 692 681 86 Non-ILEC is preferred long-distance carrier for its local exchange service customer 372 371 372 87 Non-ILEC is not preferred long-distance carrier for its local exchange service customer 280 274 271 88 Business & Government-grade service 999 1,007 1,005 89 Incumbent LEC is preferred long-distance carrier for its local exchange service customer 669 667 675 90 Incumbent LEC is not preferred long-distance carrier for its local exchange service customer 655 670 658 91 Non-ILEC is preferred long-distance carrier for its local exchange service customer 451 446 442 92 Non-ILEC is not preferred long-distance carrier for its local exchange service customer 331 319 321 93 End user buys local exchange telephone service and Internet access service from same entity 903 917 903 94 End user buys both services from incumbent LEC or affiliates 712 716 711 95 End user buys both services from Non-ILEC or affiliates 417 417 406 96 End user buys interconnected VoIP and Internet access service from same entity 589 571 567 97 End user buys both services from incumbent LEC or affiliates 88 83 74 98 End user buys both services from Non-ILEC or affiliates 550 537 538 U.S. Federal Communications Commission Voice Telephone Services: Status as of December 31, 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 December 31, 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 December 31, 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. 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