This category covers establishments primarily engaged in furnishing telephone voice and data communications, except radiotelephone and telephone answering services. This industry also includes establishments primarily engaged in leasing telephone lines or other methods of telephone transmission, such as optical fiber lines and microwave or satellite facilities, and reselling the use of such methods to others.

1. Comweb - Telephone Communications, Except
Radiotelephone
This category covers establishments primarily engaged in
furnishing telephone voice and data communications, except
radiotelephone and telephone answering services. This
industry also includes establishments primarily engaged in
leasing telephone lines or other methods of telephone
transmission, such as optical fiber lines and microwave or
satellite facilities, and reselling the use of such methods to
others.

2. Since the invention of the telephone in 1877, the demand for telecommunication
services has steadily expanded. Even when competition from wireless systems
increased during the 1980s, wireline service sales grew at a rate of more than 5
percent annually, and long distance calling volume expanded by 12 percent. In
2000, total local service revenue exceeded $120 billion, and toll service revenues
topped $108 billion, according to figures from the Federal Communications
Commission (FCC).
Establishments primarily engaged in furnishing radiotelephone
communications are classified in SIC 4812: Radiotelephone
Communications, and those furnishing telephone answering services are
classified in SIC 7389: Business Services, Not Elsewhere Classified.

3. The Telecommunications Reform Act of 1996 made the most sweeping changes in
the industry in 62 years. Aimed at reducing segmentation between local phone
service, long distance service, wireless service, and cable television, the act sought
to lower prices, improve services, drive greater technological innovation, and
create new business and jobs for the United States. By the early 2000s, one of the
most obvious results of the reform was the rapid pace of mergers and acquisitions
in the industry. For example, by 2002 only four of the seven regional Bell holding
companies created by the breakup of AT&T in 1984 remained: Verizon
Communications, Inc.; SBC Communications, Inc.; BellSouth Corp.; and Qwest
Communications International, Inc.

4. The wireline telecommunication services industry includes firms that provide
electronic communications using wire networks or fiber optic lines. The massive
U.S. wireline infrastructure incorporates 750,000 miles of aerial wire, 3.5 million
miles of cable, and, following massive infrastructure build-outs during the 1990s,
some 90 million miles of optical fiber. The Federal Communications Commission
(FCC) reported that by the mid-1990s all the telephone companies together served
nearly 94 percent of U.S. households.
Although the Telecommunications Act of 1996 removed legal barriers in general,
the industry is still largely divided into long distance carriers and local telephone
companies (telcos). Local telcos provide basic telephone services. They bring
telephone access lines into homes, hook up new customers, and service local
lines and equipment. Telcos also connect customers to long distance carriers, and
sometimes handle intrastate toll calls that are considered long distance.

5. In addition to basic services, many local telcos also publish phone directories, offer
operator assistance, and provide numerous add-on services. Examples of such
services are: voice mail, caller identification, call-waiting, touch-tone dialing, wide
area telephone service (WATS), separate digital lines, 1-900 billing services, and
video conferencing.
By far the majority of local telephone lines are serviced by the Bell Operating
Companies (BOCs)—called "Baby Bells" because they are the offspring of the 1984
American Telephone and Telegraph Company (AT&T) divestiture. At the time of the
breakup there already were a few established independent local phone companies,
notably GTE. Together these companies and the BOCs are referred to as
Incumbent Local Exchange Carriers (ILECs), as opposed to new local carriers, called
Competitive Local Exchange Carriers (CLECs).

6. In addition to the BOCs and independents,
competitive access providers (CAPs) offer local
telephone services. Started in 1992, CAPs typically
furnish dedicated fiber optic telephone lines that
connect corporations and long distance carriers.
Because CAPs are not subject to the same pricing
regulations with which the BOCs must comply, they
can often deliver service to high-volume corporate
customers at reduced rates. Early on some
observers feared that these companies would
siphon off debilitating amounts of high margin
business, but the telcos have not suffered greatly
from their presence. The terms CAP and CLEC are
now often used interchangeably.
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