Don’t ignore the IOCs

There are 1,300 independent operating companies in the U.S., according to Probe Research. While much attention in the telecom industry is placed on the regional Bell operating companies, Probe says these independent telcos – the non-Bell incumbent local exchange carriers – face many of the same issues as the Bells, and also a unique set of challenges.

There are 1,300 independent operating companies in the U.S., according to Probe Research. While much attention in the telecom industry is placed on the regional Bell operating companies, Probe says these independent telcos – the non-Bell incumbent local exchange carriers – face many of the same issues as the Bells, and also a unique set of challenges.

All IOCs exist within an environment characterized by a poor economy, falling access line counts and wireless substitution, Probe states. Many of these carriers serve rural areas with as few as 500 lines. They therefore also have to contend with longer loop lengths and low density of households, which increases the cost of delivering service and upgrades, the research firm reports.

They also have some advantages, however. The IOCs benefit from a lack of competition, as 42% of rural carriers do not face any broadband rivalry, Probe says.

They are also free from stringent regulation, as the FCC lifted its ban on nondominant carriers bundling customer premises equipment and service, the research firm states.

Growth among IOCs is likely, Probe says, as 10 million RBOC lines are expected to be divested to independents over the next several years.