TRA's 1999 Reseller Membership Survey and Statistics indicates that 41% of TRA company members are now offering local service, up 7% over 1998. However, over 50% of its membership still do not provide local service, although many are actively reviewing the option. When asked, ""what factor does your company view as the single greatest impediment to competitive local exchange market entry?"" 31% of TRA's members answer the uncertainty of viability and profitability in the local market. This conforms with TRA's belief that local resale discounts as currently set are still too low in most of the states to encourage entry into local service, at least as a stand alone business.

Ernest B. Kelly III, TRA's President offered the following observation: "In the first two years after the passage of the 1996 Telecommunications Act, the percentage of TRA members offering local service remained virtually stagnate. This shows that a certain core group of companies tried providing local services in the first few years while the majority decided to take a 'wait and see' approach. In the last year more companies have crossed the line. That's the good news. The bad news is that there are still too many that are unconvinced that they can make a living at this business." Additionally, TRA began asking its members this year if they offer prepaid local service. A full 11% of its membership indicated that they were offering prepaid local service, a business that has virtually been invented by resellers in the years following the passage of the Telecom Act.

Internet/Advanced Service Providers Continue To Increase Among other trends noted in the study was an increase in the number of TRA members providing Internet/advanced services, which rose by nearly 20% in the last year. ""This statistic further emphasizes that TRA members see the need to stay on the cutting-edge of telecom technology and have already identified, and are exploiting, the business opportunities in the exploding broadband market"", stated Kelly.

Finally, TRA has noted a gradual decrease in the number of members offering residential service since the passage of the act. Dial around, (10-10XXX) which had provided some competitive entry in this market for smaller companies appears to have reached a plateau in terms of the percentage of companies offering it. ""These trends seem to be a reflection of the margin squeeze in the brutally competitive long distance consumer market,"" stated Kelly. ""With the exception of certain companies utilizing an affinity group type approach, it is increasingly apparent that only the biggest, most robust companies can hold on in this market at this time,"" he said.

*Percent of TRA Members who: