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More Americans are dropping their landlines, according to reports in Ars Technica and USA Today. One in every six US households have no landline service:

Even among households that had both landlines and mobile phones, 22.3 percent received “all or almost all” calls on mobile phones. So-called “wireless-mostly” account for 13.1 percent of all households.

This is just more bad news for the ILECs and RBOCs, as well as Hawaiian Telcom.

It’s possible to use DSL or a cable modem to keep a landline number at home, of course. Eat Our Brains wrote an article on this back in 2006. Ars Technica mentioned naked DSL, which helps smart consumers reduce their telecom costs by getting DSL service without a landline voice number.

Meanwhile, a recent survey indicates that 20% of Americans have never sent an email message. Half of these respondents were over 65. Also, 56 percent had no schooling beyond high school.

The poll indicated that 18% of American households do not have Internet access in the homes.

See this PC World article for more details.

Related posts on billso.com

• 22 February 2008: Customer lock-in
• 18 August 2007: HawTel to offer naked DSL and faster downloads

Hawaiian Telcom, commonly referred to as HawTel, is the state of Hawaii’s ILEC and the succesor of several companies, including Verizon Hawaii, GTE, and the Hawaiian Telephone Company.

The Carlyle Group purchased Verizon’s Hawaiian units, except for its mobile phone service, in 2005.

• 25 July 2008: Fixing the DNS security hole with OpenDNS
• 5 February 2008: HawTel replaces CEO with turnaround specialist.
• 11 June 2007: HECO tests smart electric meters
• 7 June 2007: PC Magazine: HawTel, Time Warner Oceanic provide slow Internet connections
• 21 March 2007: About e-commerce 3: The broadband connection
• 16 November 2006: HawTel claims that system problems are consultants’ fault

On 31 March 2008, Hawaiian Telcom’s Cliff Miyake published an article in the Honolulu Star-Bulletin on how to find business contacts in Google. It’s not that hard to do, especially with the growing acceptance of social networking by professionals.

LinkedIn is another good way to track down contacts. The free service is limited, but most users find that it’s enough to get the job done. I like LinkedIn because its user interface is much cleaner that other social networking sites. No music or video players, no flashy graphics - LinkedIn seems like a better way to make a good impression on professionals.

Have you revealed too much?

As I’ve mentioned before, some people and companies need to address security concerns. Many social networking sites want users to reveal their lives in detail, to create compelling profiles and additional links among users.

But what if a user inadvertently reveals their password on their profile? it can happen. I’ve met people who use their children’s names and birthdays as passwords. Place of birth is a common security question that banks and financial services companies ask as part of a multiple authentication scheme. Social networks also ask for that information - as part of user profiles.

Related posts on billso.com

• 4 April 2008: Get LinkedIn with billso.com
• 14 March 2008: Social media in action
• 3 January 2008: Impression management and Facebook
• 10 August 2007: Forty-somethings flock to Facebook
• 2 July 2007: CXOs face malware email attacks
• 20 June 2007: Facebook vs MySpace
• 11 January 2007: How to create a secure password

One strategy that telecommunications companies have adopted is bundling, or selling a combination of services at a reduced price. The goal is customer lock-in, a situation in which the buyer is more or less trapped in their purchase. In many cases, lock-in happens when the customer satisfices or compromises to gain value or convenience. Customers might grow dissatisfied over time, but they are unlikely to leave because alternative services are not available, or their perceived switching costs are too high.

A variety of US cable television and telecommunication companies have offered bundling programs. The usual items include television service and broadband Internet.

Companies that offer cable modems usually offer these services through the same “pipe” or connection – the coaxial cable drop found in many homes.

Local exchange carriers (LECs) offer POTS (traditional or “plain old telephone service”), and the final connection to the home is the familiar RJ-11 modular phone jack found in most US homes. Some LECs also offer mobile phone plans in their bundles.

Landline connections may be offered through VoIP or POTS, depending upon the carrier’s technology.

Agonizing over savings

Alina Tugend of the New York Times provided a great example of this decision-making process in her article last week. Customers sometimes obsess over lock-in when their friends brag about how much they saved by switching. Yes, lock-in also works well for insurance companies, too!

In Honolulu, Oceanic Time Warner, Clearwire and Hawaiian Telcom each offer bundles. Oceanic has a standard cable television package that includes cable modem service, long distance calling and VoIP calling plans. Oceanic staff can connect the customer’s RJ-11 telephone jacks to the company’s network, so customers can continue to use their existing landline handsets and equipment.

Clearwire offers broadband Internet service, long distance calling and VoIP telephone numbers through its WiMax network. Customers can hook their landline phone into Clearwire’s modem. The Clearwire service does not require an installation visit, but the coverage areas are somewhat limited. This article at DailyWireless.org has several interesting diagrams of business telephone systems.

Hawaiian Telcom keeps struggling

The HawTel package includes a POTS landline, long distance calling and DSL. HawTel is still working on its IPTV offering, which has been delayed by implementation problems. IPTV would let HawTel offer television service through the same RJ-11 telephone drop used by its landline and DSL offerings.

As a side note, I hated HawTel’s obnoxious “Savers Unite” advertising campaign, and am glad that it has been replaced. Was the tagline a call to action or an insult? It was hard for me to tell. The radio and television ads reinforced a stereotype of the “thrifty local” who clips coupons, hoards travel-size toiletries and wears old clothes to pay the “price of paradise”. Then again, telecom marketing campaigns usually strive for the “common touch”, in an effort to hold the average customer.

Telecom bundles are subject to a host of Federal, state and local regulations. Pricing is often controlled by government agencies and franchise agreements. On 18 August 2007, I discussed HawTel’s naked DSL option, which let consumers order DSL service without a voice landline. HawTel was late to act, as thousands of subscribers adopted mobile phones and dropped their landlines. These customers switched to Oceanic, Clearwire, or other broadband Internet services.

Customer lock-in is difficult to achieve when companies fail to implement their industries’ key success factors well. On 16 November 2006, I discussed HawTel’s billing problems after the company was purchased from Verizon. Mike Ruley never overcame these earlier issues and lost his post as HawTel’s CEO earlier this month, as I mentioned on 5 February 2008.

Hawaiian Telcom CEO Mike Ruley was dismissed yesterday. His replacement is Stephen Cooper, co-founder or Kroll Zolfo Cooper, a New York City-based interim management firm. Cooper is best known as the Enron’s CEO during the company’s bankruptcy. Today’s Star-Bulletin article has a brief biography of Cooper. Kevin Nystrom, a senior director at KZC, will join HawTel as COO.

While Cooper stated in today’s Honolulu Advertiser that HawTel is not a “distressed company”, it’s now clear that the Carlyle Group is unhappy with their acquisition’s performance. HawTel has lost thousands of subscribers to mobile carriers and Time Warner Oceanic’s VoIP services, leading to US$137 million in financial losses since 2006. I mentioned some of the operational issues on my old blog on 16 November 2006, and last week BusinessWeek discussed how market forces have affected the US telecom industry overall.

The Advertiser noted that Ruley put his Kahala home on the market in early January, which is a possible indication that changes were coming at HawTel. The company has eliminated over 100 management positions since October 2007.