Consumers OK With Wireless, VoIP Instead of Landlines, Despite Reliability Issues, FPSC Says
Reliability in traditional landline networks is no longer insured, especially since states such as Florida have eliminated service quality standards, said a report on the status of competition in the telecom industry by the Public Service Commission. The report, which looks at voluntarily reported data from incumbent LECs in Florida as of December, focuses on the status of competition in the telecom industry, as required by the General Assembly since 1996, said a PSC spokeswoman. The reliability of alternatives such as interconnected VoIP and wireless service seem to be acceptable to consumers, the report said. Mobility, pricing and the demand for data-based services are consumer preference factors that may be changing how consumers view reliability, the spokeswoman said.
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The report said 50 percent of wireline customers use VoIP rather than traditional wireline services, with 80 percent of those customers buying VoIP from their cable company rather than the ILEC. Competition from wireless, VoIP and broadband services drove the telecom market in 2014, the report found. “Telecommunications competition in Florida is flourishing and that benefits consumers,” said PSC Chairman Art Graham. “We’re on track for continued healthy competition in this industry as well as a growing Florida economy.”
AT&T, CenturyLink and Verizon remained the largest ILECs providing traditional wireline service in Florida, and all three reported decreases last year in wireless services provided. National Regulatory Research Institute Principal Researcher Sherry Lichtenberg said it will be interesting to see how Frontier Communications' proposed acquisition of Verizon’s Florida properties affects the numbers, particularly in terms of the number of wireline customers moving from traditional service to FiOS. Over the past decade, residential wirelines have dropped by 78 percent or by about 6 million lines, the report found. Businesses also are moving to wireless -- carriers report a 17 percent decline in wireline service last year. Frontier also is buying Verizon landline assets in other states (see 1508040041">1508040041).
Lichtenberg will release a paper later this month on “Examining the Role of State Regulators as Telecommunications Oversight is Reduced,” which delves into what states should really explore in terms of competition. Lichtenberg said states should identify the number of competitors that are providing service by wire center; study competition in the residential, small- and large-business segments separately; identify the requirements for moving from one carrier to another; and study how customers define competition and product substitution. Studies about competition should evaluate consumer stand-alone broadband options and the number of competitors offering voice service in the relevant market, she said. “As part of their response to the IP transition, states may wish to explore the actual level of competition in their states, that is examine the list of competitors to determine whether they are indeed offering service and to whom.”
Wireless subscribers in Florida reached more than 18.9 million, meaning there are nearly as many wireless handsets in Florida as there are people, the PSC said. Last year, participation in the federal Lifeline phone discount program by eligible Florida customers increased almost 3 percent, it said. The FCC reports a Florida phone penetration rate of 94 percent, suggesting the overwhelming majority of residents can afford phone service, the report concluded.