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News Release
Telephone Competitors Make Additional Inroads in 2004
February 17, 2006 (2006 - 001)
Contacts:  Lee Beyer, Chairman, 503 378-6611; Ray Baum, Commissioner, 503 378-6611; John Savage, Commissioner, 503 378-6611; Bill Wordley, PUC Analyst, 503-378-5264; Bob Valdez, Public Information Officer, 503 378-8962
Salem, OR –The market share for small telephone competitors grew in 2004 as they achieved a significant presence in the business market but remain a relatively small player in the residential sector according to a just-released survey by the Oregon Public Utility Commission (PUC).
 “While we are still seeing competitors add more customers the survey indicates the rate of growth is showing signs of slowing somewhat,” PUC analyst Bill Wordley said. “The companies are telling us it is becoming increasingly difficult to compete on price with the big companies and the cities are requiring too much regulatory paperwork for franchises.”
According to the survey, competitors were supplying services to 33 percent of business customers—up from 31 percent.  Competition in the residential market remains relatively small.  It grew to 4 percent in 2004 from 2.8 percent a year earlier. 
The report notes the competitors have concentrated on providing service to business customers because the typical residential phone service is less profitable than typical business service.
“Fortunately, residential customers have other service options in the marketplace including cell phones, phone service from cable providers and internet phone calls,” Wordley added.
Competitive entry varies across different regions in Oregon. In Portland, the Willamette Valley, Central and Southwest Oregon competitors were providing between 12 to 42 percent of business lines.  By comparison, on the Coast and in Eastern Oregon, the number ranged from 2 to 5.4 percent.
Business service provided by the competitors by region:
  • Portland 42.4%
  • Willamette 28.6%
  • S.W. 12.6%
  • Coast 2.0%
  • East 5.4%
In 2004, Oregon’s telecommunications market was an $865 million industry. Industry wide revenues increased $39 million from 2003.
The 107 smaller companies, known as Competitive Local Exchange Carriers (CLECS), compete with the traditional local landline telephone providers in the state.  The traditional providers include the so-called big four: Qwest, Verizon, Sprint, and CenturyTel, in addition to 19 other telecommunications utilities and 11 cooperatives known as Incumbent Local Exchange Carriers (ILECS).
Technological change is the driving force in the telecommunications industry. Many different technologies and types of networks can provide voice telephone service, with new ones arriving seemingly every year. The relatively narrow bandwidth of traditional modems is being replaced by much faster alternatives such as cable modems, digital subscriber lines (DSL),  High-capacity T-1 lines, satellites, fixed or mobile wireless, and fiber optic cable.
The percentage of Oregonians (residential and business) having high-speed digital access is 11.9 percent as measured by revenue. 
Generally, the established carriers also noted that increased cell phone usage has decreased the demand for wire line and second-line services.
Full report available at link shown below:
http://www.puc.state.or.us/Pages/telecom/telerpts2.aspx (Link updated)