New Report Shows Small Firms Face...

Thomas Sullivan ...High Telecom Costs Sound small business telecommunications policy grounded in solid research is now possible because of survey results released in March by the Office of Advocacy. The new report details small business telecommunications use and spending and offers a wide range of data previously unavailable to policymakers.

”Intense legislative and regulatory debates surround telecommunications policy,” said Thomas m. Sullivan, chief counsel for advocacy. “On issues like competition and broadband service the discussion has focused on individual consumers. But small businesses are major consumers of telecommunications services, too. This report will help policymakers understand how their decisions will affect innovative and job-generating small businesses.”

The new and much needed data in A Survey of Small Businesses’ Telecommunications Use and Spending, written by TeleNomic Research and funded by the Office of Advocacy, shows that small businesses spend on average $543 per month on telecommunications services.

The report finds that the smallest of businesses pay the most per employee for local and long distance phone service. Firms with zero to four employees face a monthly cost per employee of $82.81, while small firms with 10 to 499 employees face a monthly cost of $20.99 per employee.

The report also found that 73 percent of small businesses use Internet access services: of these, 38 percent use dial-up, 26 percent use cable modems, 21 percent use DSL, 4 percent use satellites, 4 percent use T-1 lines, and 3 percent use wireless broadband.

More Telecom Findings

  • Small businesses’ use of wireless services is substantial, particularly in construction. Some small businesses appear to rely on wireless services to the exclusion of local and long distance wireline services. The survey found that 6 percent of the small businesses that use wireless services reported no long distance spending, and 4 percent reported no local telecom spending. In addition, 25 percent of the firms surveyed spent more on wireless telecommunication services than on local and long distance services combined.
  • Voice-over-Internet protocol (VOIP) is a fairly new technology which converts voice communications into packets that are transmitted over the Internet and then converted back into voice communications. The survey found 3.3 percent of small businesses using VOIP technology.
  • For more information, visit the Office of Advocacy website at

    Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. Appointed by the President and confirmed by the U.S. Senate, the Chief Counsel for Advocacy directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Economic research, policy analyses, and small business outreach help identify issues of concern. Regional Advocates and an office in Washington, DC, support the Chief Counsel’s efforts. For more information on the Office of Advocacy, visit, or call (202) 205-6533.

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