CLEC line share continues to decline

Competitive Local Exchange Carriers' share of end-user switched access lines in the United States declined throughout 2006, reaching a low not seen since 2004, the FCC reported this week.

According to the FCC, roughly 17.1% of the 167.5 million end-user switched access lines in the United States belonged to CLECs in December 2006, down from 17.9% in December 2005. The CLECs' share of switched access lines has been in decline since June 2005, when the CLECs reported owning a peak share of 19.1% of switched access lines. The CLECs' 17.1% share of lines is the lowest share reported since December 2003, when CLECs reported owning 16.3% of lines used by local telephone customers.

The FCC report, which was conducted by the Industry Analysis and Technology Division of the FCC's Wireline Competition Bureau, also showed that the incumbent carriers trounced the CLECs in the residential market, where they accounted for 88% of the 101.5 million switched access lines used by residential customers. The CLECs fared significantly better in the business market, where they accounted for about a quarter of the 66.1 million switched access lines used by businesses.

Overall, the CLECs owned 28.7 million of the switched access lines that delivered local telephone services in December 2006, vs. the 138.8 million lines owned by the incumbent carriers. The use of switched access lines to deliver phone services has been steadily declining since December 2000, when incumbents and CLECs reported a total of 192.4 million switched access lines. Since then, the total number of switched access lines has declined by more than 13% and now stands at 167.5 million. Subscriptions to mobile services, by contrast, have continued to rise, posting 229.6 million subscribers by December 2006, a 13% increase from December 2005 and an increase of over 127% since December 2000.

The past few years have been troublesome for many CLECs. Despite the promise of the 1996 Telecommunications Act, which mandated that incumbent carriers allow CLECs to use their existing infrastructure to provide last-mile connectivity to their customers, roughly one-third of all CLECs nationwide filed for bankruptcy between 2000 and 2003, leaving the incumbents firmly in command of most local telephone service markets.