Forecasts of Access Line Competition in the Local Exchange

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Report Cover

Description
Key findings
Who should be interested in this report?
Table of contents
List of exhibits
Featured Graph
Pricing/Ordering information
Sponsored by TTFG


Description  [back to top]

Competition is having a major impact on incumbent local exchange carriers (ILECs). For example, after years of high growth, the number of ILEC retail narrowband switched access lines peaked at 181.3 million lines in 1999 and has continuously declined since then, falling to 162.7 million lines by December 2002. This report documents TFI's latest forecasts of the future of competition in the local exchange and its impact on the ILECs.

Key Findings From This Latest TFI Report  [back to top]

  • Wireless, cable telephony, and broadband substitution is forecast to cause total ILEC narrowband switched access lines (including UNE and resale) to fall from 181 million at year-end 2002 to 100 million by year-end 2008 and to 50 million by 2013.
  • Broadband will make up for some, but not all, of this shortfall. Assuming that ILECs retain reasonable broadband market share, total ILEC lines (including broadband) are forecast to fall from 189 million at year-end 2002 to 135 million by year-end 2008, stabilizing at about 100 million by 2013.
  • In the long run, maintaining a reasonable share of the broadband market will require ILECs to offer very-high-speed broadband services (nominally, 24 Mb/s and above) in the 2006 timeframe.
  • The transition to very-high-speed broadband will require very significant investment in loop fiber, packet switches, and advanced circuit equipment between now and 2015.
  • The combined impact of technology substitution and competition on the depreciation lives (and value) of existing ILEC narrowband switching, copper cable, and conventional circuit equipment assets will be substantial.

Who should read this report?  [back to top]

  • Incumbent local exchange carriers
  • Competitive LECs
  • Interexchange carriers
  • Internet service providers
  • Telecom equipment manufacturers
  • Regulatory personnel
  • Depreciation professionals

Table of Contents  [back to top]

Chapter One: Introduction and Summary
Forecast Overview
Key Forecasts
Comparison to Previous Forecasts
Impact on Depreciation Lives
Forecasting Approach
Chapter Two: Depreciation Lives for Local Exchange Network Equipment
Metallic Distribution Cable
Switching Equipment
Circuit Equipment
Chapter Three: Residential Narrowband Competition
Impact of Broadband and Wireless on Residential Access Lines
Forecast of Competition from CLECs
Summary Impact of Competition on ILEC Residential Narrowband Access Lines
Chapter Four: Residential Broadband Competition
Forecasts for Residential Broadband
Cable Modem and DSL Market Shares of Wireline Broadband
Wireless Competition for Residential Broadband
Forecast for Fixed Wireless Residential Broadband
Transition to Very-High-Speed Broadband
ILEC Broadband Connections Summary
Chapter Five: Non-Residential Narrowband Competition
Impact of Broadband and Wireless on Non-Residential Access Lines
Forecast of Competition from CLECs
Summary Impact of Competition on ILEC Non-Residential Narrowband Access Lines
Chapter Six: Non-Residential Broadband Competition
Forecasts for Non-Residential Broadband
Forecasts for Non-Residential Broadband by Technology Type
Transition to Very-High-Speed Broadband
ILEC Broadband Connections Summary
Appendix A: Introduction to Technology Market Forecasting
Processes and Patterns of Technology Adoption
Mathematical Models for the Adoption of New Technology
Using Technology Market Adoption Models for Forecasting
Forecasting Quantities of Old and New Technologies
Using Substitution Models to Estimate Additions and Sales
Forecasting Growth Rates
Experience with Forecasting with Substitution Models
Conclusion
Appendix B: Forecast Details
Appendix C: Derivation of Historical Data

List of Exhibits with Featured Graph  [back to top]

Figure 1.1 Forecast Narrowband Access Lines by Carrier Type
Figure 1.2 Forecast ILEC Narrowband Access Lines and Broadband Connections
Figure 1.3 Additional Residential Narrowband Access Lines per Wireline Household
Figure 1.4 Forecast Households Using Only Wireless or Broadband for Voice
Figure 1.5 Forecast CLEC Percentage of Residential & Small Business Access Lines
Figure 1.6 Forecast CLEC Percentage of Other Non-Residential Access Lines
Figure 1.7 Cable Telephony Share of Residential Wireline Access Lines
Figure 1.8 Forecast Residential and Small Business Broadband Connections
Figure 1.9 Forecast Total Broadband Connections by Access Technology
Figure 1.10 Comparison to 2002 Forecast: ILEC Access Lines and Broadband Connections
Figure 2.1 Substitution of Fiber for Metallic Distribution Cable
Figure 2.2 Survivor Curves for Metallic Distribution Cable
Figure 2.3 Substitution of ATM/IP for Local Circuit Switching
Figure 2.4 Forecast Resale/UNE Access Lines, ILEC/UNE Switched and CLEC-Switched
Figure 2.5 Survivor Curves for Digital Switching
Figure 2.6 Substitution of Very-High-Speed Broadband Circuit Equipment for DLC Equipment
Figure 2.7 Survivor Curves for DLC Circuit Equipment
Figure 3.1 Forecast Residential Wireline Narrowband Access Lines by Carrier Type
Figure 3.2 Forecast Additional Residential Access Lines
Figure 3.3 Forecast Households Using Only Wireless or Broadband for Voice
Figure 3.4 Forecast CLEC Residential Access Lines, Percentage of Total Residential Wireline Access Lines
Figure 3.5 Forecast CLEC Residential Access Lines (Millions)
Figure 3.6 Forecast Access Lines Served by Cable Telephony, Percentage of Total Residential Wireline Access Lines
Figure 3.7 Forecast Access Lines Served by Cable Telephony
Figure 3.8 Forecast CLEC Residential Access Lines, Facilities-Based and Resale/UNE
Figure 3.9 Forecast ILEC Provided Residential Access Lines, Retail and Resale/UNE
Figure 4.1 Forecast Broadband Households, Percentage of Households
Figure 4.2 Forecast Broadband Households by Access Technology
Figure 4.3 Forecast Market Shares by Access Technology
Figure 4.4 Forecast of DSL Market Share of Standard Broadband
Figure 4.5 Forecast Fixed Wireless Residential Standard Broadband
Figure 4.6 Broadband Households by Nominal Data Rate
Figure 4.7 Trend in Residential Access Data Rates
Figure 4.8 Forecast Adoption of Standard and Very-High-Speed Broadband
Figure 4.9 Forecast ILEC Residential Broadband Connections
Figure 5.1 Forecast Non-Residential Narrowband Wireline Access Lines by Carrier Type
Figure 5.2 Forecast Non-Residential Wireline Access Lines
Figure 5.3 Forecast Small Business Average Access Lines per Location
Figure 5.4 Percentage of Small Business Peak Access Lines per Location Displaced by Wireless and Broadband
Figure 5.5 Percentage of Other Non-Residential Peak Access Lines per Location Displaced by Wireless and Broadband
Figure 5.6 Forecast Other Non-Residential Average Access Lines per Location
Figure 5.7 Forecast CLEC Market Share of Small Business Access Lines
Figure 5.8 Forecast CLEC Market Share of Other Non-Residential Access Lines
Figure 5.9 Forecast CLEC and ILEC Small Business Access Lines (Millions)
Figure 5.10 Forecast CLEC and ILEC Other Non-Residential Access Lines
Figure 5.11 Forecast Facilities-Based Market Share of CLEC Non-Residential Wireline Access Lines
Figure 5.12 Forecast Non-Residential Access Lines Served by Facilities-Based CLECs
Figure 5.13 Forecast ILEC Provided Non-Residential Narrowband Access Lines
Figure 6.1 Forecast Non-Residential Broadband Connections
Figure 6.2 Forecast Adoption of Small Business Broadband Connections/Locations
Figure 6.3 Forecast Adoption of Other Non-Residential Broadband Connections
Figure 6.4 Forecast Small Business Broadband Connections by Access Technology
Figure 6.5 Forecast Other Non-Residential Broadband Connections by Access Technology
Figure 6.6 Forecast Small Business Broadband Connections by Access Technology, Percentage of Standard Broadband Connections
Figure 6.7 Forecast of DSL Market Share of Standard Broadband, Percentage of Wireline Standard Small Business Connections
Figure 6.8 Forecast Fixed Wireless Broadband to Small Businesses, Percentage of Small Business Locations
Figure 6.9 Forecast Adoption of Very-High-Speed Broadband by Small Businesses
Figure 6.10 Forecast Adoption of Very-High-Speed Broadband by Other Non-Residential Locations
Figure 6.11 Forecast ILEC Small Business Broadband Connections
Figure 6.12 Forecast ILEC Other Non-Residential Broadband Connections

Pricing Information  [back to top]

December 2003, 180 pages, Sponsored by the TTFG, ISBN 1-884154-21-2

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