PURC Telecom Policy Roundtable
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1 PURC Telecom Policy Roundtable Competitive Trends in the Telecommunications Industry in Florida October 30, 2006 Greg Shafer, Public Utilities Supervisor, Florida Public Service Commission (850)
2 Trends in Florida Telecommunications Markets Wireline Markets Wireless VoIP Internet & High-speed Data Service 2
3 Wireline Market -- Total Wireline competitive carriers account for 17% of total wireline access lines in 2005, a decrease of 1% from
4 Figure 1 Florida CLEC Market Share 20% 16% 17% 18% 17% 15% 13% 10% 5% 0% S ource: Responses to FPSC data requests. 4
5 Wireline Market Residential vs. Business Competitive carriers residential market share decreased to 7% in 2006 from 9% in 2005 (a decline of 177,000 access lines). Business market share for competitors decreased to 33% in 2006, a decrease of 1% from 2005 (a decline of 39,000 access lines). 5
6 Figure 2 40% Florida Residential & Business CLEC Market Share 35% 30% 25% 26% 30% 30% 34% 33% 20% 15% 10% 7% 9% 10% 9% 7% 5% 0% Residential Business S ource: Responses to FPSC data requests. 6
7 Wireline Market Total wireline access lines are declining. Total residential access lines are declining. Total business access lines continue to grow but at a slower rate than in
8 Figure 3 9 Florida Access Line Trends Access Lines (millions) Total Residential Total Business S ource: Responses to FPSC data requests. 8
9 Wireline Access Line Loss Wireless substitution for primary and secondary lines Centers for Disease Control estimates wireless substitution at 6.7% as of June In-Stat survey results indicate 9.4% of wireless customers have wireless only telephone service. 9
10 Wireline Access Line Loss VoIP Facilities-based providers (cable & CLECs) High-speed Internet Over-the the-top top VoIP providers (Vonage, Packet8, Lingo, etc.) and instant messaging substitution 10
11 Wireless vs. Wireline Number of wireless handsets in service (12.5 million as of December 2005) exceeds number of wireline access lines in Florida. In-Stat reports that as many as 15%-17% 17% of wireless subscribers have two or more phones. 11
12 Figure 4 18,000,000 FL Local Exchange Access Lines v. FL Wireless Subscribership 12,000,000 12,030,592 8,937,063 11,766,826 9,482,349 11,738,465 10,855,430 13,169,278 11,715,986 12,521,686 10,942,018 6,000, FL Local Exchange Company Access Lines FL Wireless Subscribership S ource: Responses to FPSC data request & FCC Report on Local Telephone 12
13 VoIP Over-the the-top top VoIP Vonage, Lingo, Packet8, etc. Facilities-based VoIP providers Cable companies CLEC providers 13
14 VoIP National subscribership estimates TeleGeography estimates 6.9 million U.S. over-the the-top top and cable VoIP subscribers. Telephia estimates 2.9 million U.S. over- the-top top VoIP subscribers by 2Q In-Stat estimates 4.4 million U.S. cable- based VoIP subscribers by year end
15 Florida VoIP Bright House Networks reports 300,000 digital cable telephony subscribers FDN offers VoIP services to residential and business customers Comcast, Mediacom, Cox and other CLECs also offer VoIP digital voice service in some Florida service areas Vonage reported nearly 150,000 subscribers with Florida addresses as of September 1,
16 Broadband Market High-speed Internet Access Digital Subscriber Line (DSL) Cable Modem Service Wireless (Wi-Fi, Wi-Max, fixed wireless, satellite) Broadband Over Power Lines (BPL) 16
17 Cable Modem vs. DSL DSL subscribership has a slight edge over cable modem subscribership with 58% of the combined market in Florida. Since 1Q 2005 DSL subscribership has equaled or exceeded cable modem subscribership in Florida. Cable modem and DSL account for 98% of the total residential broadband market in Florida. 17
18 Figure 5 DSL v. Cable Modem Market Share in Florida 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 39% 43% 42% 43% 46% 49% 49% 49% 53% 50% 55% 57% 58% 58% 61% 57% 58% 57% 54% 51% 51% 51% 47% 50% 45% 43% 42% 42% 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q Cable Modem S hare DSL Share S ource: BEBR Consumer Survey s on behalf o f FP S C. 18
19 High-speed Access Florida vs. U.S. Florida broadband subscription is consistent with national trend. Approximately 70% of Florida Internet subscribers have broadband access as of 2Q Approximately 27% of Florida residents do not have any type of Internet access in the home. 19
20 Figure 6 Florida and U.S. High-Speed Lines (Residential & Small Business) FL lines (x 1000) 3,500 3,000 2,500 2,000 1,500 1, Dec ' Jun '01 Dec '01 Jun '02 1,218 Dec Jun '02 '03 Florida 1,387 1,760 2,032 Dec Jun '03 '04 U.S. 2,438 Dec '04 2,603 2,997 Jun '05 Dec '05 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 U.S. lines (x 1000) S ource: FCC Data on Hig h-speed Services, Table
21 Changing How We Communicate Persons vs. Places Mobility Voice Data and instant messages Demographic factors Age Gender Ethnic background 21
22 Questions? 22
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