FCC Reports Continuing Decline in Telephone Subscribership
May 25, 2005. The Federal Communications Commission's (FCC) Wireline Competition Bureau's (WCB) Industry Analysis and Technology Division (IATD) released its latest report [50 pages in PDF] titled "Telephone Subscribership in the United States".
In March 2005 the telephone penetration rate in the U.S. was 92.4%. It was 93.5% in November of 2004. This is a drop of over 1% in four months. The penetration rate was 95.5% in March of 2003. The FCC's figure has decreased in each of the last six reports. The report does not explain the cause of this trend. Nor does the FCC staff have an understanding of the cause. See also, FCC release [1 page in PDF]
The FCC issues this report three times per year. It provides extension data on penetration levels for March, July and November of each year.
These reports contain detailed data on penetrations rates, including breakdowns by income level, race, and state. This report does not, however, offer an explanation for this steady decline over the past two years.
The report also lacks data that might enable readers to develop their own hypotheses regarding the cause of the decline. For example, there is no data in this report on fungible services that consumers might substitute for telephones. There is no data in the report on e-mail, instant messaging, broadband internet access, VOIP applications, pagers, blackberries, or other wireless devices with internet access.
The FCC has been revising the wording of its survey question, in an effort to make sure that it is not undercounting various types of phone service other than traditional land line POTS service, such as cell phones and VOIP service. (See, footnote 2 of the report.) However, despite the tinkering with the survey questions, the downward trend continues.
One possible explanation would be that despite the changes in wording of the question, some consumers still consider that their cell phone service is not phone service. Although, the trend did not begin until two years ago, well after the trend towards cell phone only consumers. A related explanation would be that some VOIP users do not consider their service to be phone service, and answer the FCC's question in the negative.
Another possible explanation would be an increase in the use of non phone
substitutes, such as instant messaging, blackberries, and e-mail. Yet another
explanation would be that consumers are responding that their home does not have
a phone even though they use devices and services provided by their employers
for voice and other communications.