Telecommunications providers on increase in Michigan

June 25, 2012
| By Pete Daly |
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Michigan continued to experience a decrease last year in the number of landline telephones in use, according to a new state report, but the Michigan Public Service Commission continues to license new telecom providers, and as of the end of 2011, companies that came on the scene since 1996 were providing a larger-than-ever share of those remaining landlines.

The most important conclusion one can draw from the Status of Telecommunications Competition in Michigan is that “we still have good levels of competition in Michigan,” although that is not necessarily true in remote rural areas where wireless reception is hard to get, said Robin Ancona, director of the Telecommunications Division of the MPSC.

“But there are still high levels of competition in Michigan and it’s changing because competition is now coming from Voice over Internet Protocol and cell phones. You can see that people have choices and that they are taking advantage of that,” added Ancona.

The report describes the status of competition in telecommunications service in Michigan, including, but not limited to, the toll calls and local exchange markets in the state. The report includes information on the traditional landline industry in Michigan, as well as information specific to Michigan on mobile wireless, VoIP and broadband.

The data for 2011 shows the total number of landlines (or what the MPSC calls “wirelines”) provided in Michigan was 3,344,139, which reflects a decrease of about 283,000 lines from 2010 — typical of the average annual loss of lines over the past 13 years.

AT&T Michigan, an “incumbent” company, saw a decline in its share of the wireline market. The report states that was 54.4 percent at the end of 2011, a decrease of 2.7 percent from the previous year.

However, the commission continues to license new providers, and as of the end of 2011, competitive providers (defined as those companies that entered the Michigan market after 1996) were providing 30.7 percent of the landlines in Michigan. This not only represents an increase from last year and continues the trend of increasing competitive market share over the last three years, but it also was a new high for the competitive wireline market share in Michigan, according to the MPSC.

“There are more identified companies providing services in Michigan,” said Ancona, adding that telecommunications is “still a business where we get applications all the time to be licensed. Obviously, these folks feel there is a market for their services and they are still entering (Michigan).”

The trend now is for “facilities-based competition” to be more active in providing residential lines, according to the MPSC report. This refers to companies that do own some infrastructure, such as fiber-optic cables between regions, although their service may be delivered to the customer over terminal lines owned by the “incumbent” companies such as AT&T, which was active in Michigan under various other names prior to 1996.

Some competitors are non-facilities-based, meaning they are simply resellers of blocks of service time delivered over other companies’ lines and equipment.

Federal Communications Commission data shows that the number of wireless subscriptions in Michigan continues to grow. As of Dec. 31, 2010, the FCC’s most recent data, there were 8,861,000 wireless subscribers in Michigan.

While the MPSC does not have jurisdiction over most communication services that are not traditional telephone landline communications, it does monitor those other markets via existing sources of public data. Based on those other sources, the MPSC concludes that VoIP, along with wireless services, are an increasing portion of the telecommunications market in the state. According to the FCC data, as of Dec. 31, 2010, Michigan had 81 providers of interconnected VoIP serving just more than 1.2 million interconnected VoIP lines.

Ancona said some Michigan residents are cancelling their home landlines “because they can get everything they need on their (wireless) phone,” including Internet service.

She noted, however, that there is still a need for landlines, especially in remote rural areas where there are no cable Internet providers and where trees and hills prevent effective wireless transmission. People operating businesses are less likely to give up the reliability of landlines, in any case, and landlines are also needed by alarm companies and individuals using medical alert devices.

Broadband Internet service provides customers not only with the opportunity to use VoIP service, but numerous additional benefits as well, according to economic development experts throughout the state. While the MPSC does not have authority over broadband, the MPSC said the state does seek ways to support the availability and adoption of broadband technology, one way being a partnership with the federally funded, nonprofit Connected Nation on the Connect Michigan project, which is online at connectmi.org.

Connect Michigan is engaged in a comprehensive broadband planning and technology initiative as part of a national effort to map and expand broadband service. The program began by gathering provider data to form a statewide broadband map and performing statewide business and residential technology assessments, but has since progressed to working with Michigan communities on community plans.

The Connect Michigan project has made available an interactive broadband availability map, launched May 20, 2010. Individuals can use the connectmi.org website to find sources of broadband service where they live.

Connect Michigan also offers research results on broadband adoption and barriers to adoption specific to both Michigan residences and businesses.

Michigan continues to see growth in the number of high speed Internet connections, with 4,665,000 such connections reported to the FCC as of Dec. 31, 2010, according to the MPSC. Each technology platform continues to see growth in the number of lines served, though the most dramatic increase is in the number of high-speed Internet access lines provisioned with mobile wireless, the number of which increased by almost 250 percent between December 2008 and December 2010, according to the FCC.

The 2011 annual report, Status of Telecommunications Competition in Michigan, is available on the MPSC website at www.michigan.gov/mpsc

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