LANSING – The number of telephone lines continued to decline in Michigan last year, but the proportion of those controlled by competitors increased slightly, the Public Service Commission said in its annual report on competition in the industry released Monday.

The report said there were 4.9 million telephone lines in the state in 2007, down from 5.26 million in 2006 and continuing a steady slide from peak market of 7 million lines in 2001.

Federal Communications Commission data showed, meanwhile, that there were 7.33 million wireless phones operating in the state in 2007, up some 400,000 from 2006. The commission still found, however, that wireless was not a competitor to wireline service because of the lack of service in many rural areas.

“Only if adequate wireless coverage is available to Michigan customers, can wireless be a truly competitive substitute for wireline phone service,” the report said.

The report noted an FCC study that showed the eastern half of the Lower Peninsula, including Detroit, Pontiac, Lansing and Midland, had the most wireless penetration at about 96 percent. Second highest was the Western Upper Peninsula at 72 percent. The lowest is the northern tip of the Lower Peninsula and the Eastern Upper Peninsula at 56 percent.

The commission said voice over Internet protocol is also growing in the state, but did not have accurate data on how many customers had that service.

AT&T retained its status as the state’s largest carrier, with 63.5 percent of the market. Competitive local exchange carriers collectively were second with 20.7 percent and Verizon cover 11.8 percent.

Most of the competitor lines, 57.1 percent, were in Detroit. Grand Rapids was second with 26.9 percent. And though most of the competitors were in AT&T territory, the report said competition in Verizon’s territory doubled over 2006.

The 1 million lines controlled by competitors was a slight increase from the 961,460 in 2006, but still down from the peak of 1.68 million in 2004. But more of those lines, about 250,000, were actually owned by the competitors rather than leased from the incumbent provider, up from just under 150,000 in 2006.

The report noted that the largest number of competitors, 52, had no customers in 2007. And 46 of the 146 companies that responded to the PSC’s survey had fewer than 1,000 lines. Only 15 competitors reported having more than 10,000 active lines.

But the number of competitors with at least some customers, 94, was the highest since the PSC began collecting statistics in 1999. And the year tied with 2004 for third most number of licensed competitors: 202.

The report did not include any recommendations for legislative change.

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