NCPA - National Center for Policy Analysis

Small, Independent Phone Companies Find Their Niche

March 9, 2000

Not all phone companies are industry giants. More than 1,000 small, independently-owned phone companies are still in business, usually in rural areas across the country. Many are family-run companies dating from the early 1900s that were never part of the Bell System, were never bought out by competitors and were left to their own devices over the years.

However, through mergers and consolidations -- mostly during the 1950s -- their numbers dwindled. Now, as phone service becomes an increasingly important economic factor to even the most rural of places, small telephone companies find themselves in demand by new businesses.

  • Some 100 years ago, there were around 6,000 small, independent companies.
  • Each incumbent, as they are known in the business, handles as few as 60 access lines or as many as 50,000.
  • Altogether they serve nearly five million customers.
  • Only about 20 to 30 of the companies are sold each year -- usually when no one can be found to assume the helm of the family business.

The small companies serve an important purpose for the Baby Bells: they demonstrate that the market is open to competition.

Many rural telephone companies are finding that they can branch out into neighboring towns without much added expense.

Source: Julie Flaherty, "Out There in Never-Bell Land," New York Times, March 9, 2000.


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