Data & Technology
How Outdated Tech Is Draining Billions in American Small Business Profits
Data & TechnologySomewhere in America, a dentist’s office is paying $200 a month for a phone line that exists for one reason: to send and receive faxes.
The office manager knows it is expensive. She has mentioned it more than once. But the insurance companies they work with still require faxed claims, and the oral surgeons they refer patients to still send records by fax, and nobody has had time to figure out what the alternative would actually look like.
So the bill gets paid again, the toner gets replaced again, and the paper tray gets refilled again.
Call it the triple tax.
Obsolete technology. Rising costs to keep it running. And the rising cost of the paper, ink and toner it demands.
Multiply that across millions of American small businesses and the numbers get very large, very fast. eFax®, a cloud fax and data transformation solutions provider, analyzed the data to estimate what legacy fax equipment is really costing American small businesses. What comes into focus is a growing expense that most owners never see clearly, because it never shows up in one place.
A Phone Line That Keeps Getting More Expensive
The story starts with a regulatory decision that most small business owners never heard about.
In 2019, the FCC told the big phone carriers they no longer had to keep selling affordable copper phone lines, the kind the telecom industry calls POTS (Plain Old Telephone Service). Carriers had been pushing for this for years. Copper networks are expensive to maintain, and fewer customers were using them every year. The FCC gave providers three years to make the switch. That window closed in August 2022.
What happened next was predictable. With the price floor gone, carriers raised rates on the customers who stayed. Before the change, a single POTS line typically cost a business $30 to $40 a month. Today, standalone analog lines commonly run $65 to $200 a month, with some carriers charging north of $250. A small business keeping one dedicated fax line is now paying $780 to $2,400 a year just for the phone connection, before a single page goes through the machine.
And the timeline keeps accelerating. In March 2025, the FCC gave carriers permission to shut down copper lines faster, cutting the required notice period in half. By July, the commission proposed dropping the remaining paperwork requirements altogether. Carriers would only need to give “reasonable public notice” before pulling the plug.
For businesses still on these lines, the writing is on the wall.
The Bills That Hide in Plain Sight
The phone line is not the only cost. It is just the most visible one.
Fax machines eat through paper, ink and toner at rates that add up quietly over the course of a year. Those supplies run about $20 per 1,000 pages. A small business running four machines at fairly light volume, roughly 1,000 pages per machine per month, spends an estimated $6,700 a year just keeping them fed. That does not include maintenance, the space needed to store printed records, or the hours employees spend handling and filing paper.
And the price of paper keeps pulling away from everything else. The cost of printing and writing paper has more than doubled since the early 1980s, far outpacing general inflation. It is one of the few basic office supplies that has consistently gotten more expensive, not less.
Meanwhile, 17 million tons of paper and cardboard still end up in American landfills every year, even after recycling.
Then there is the cost nobody tracks at all: labor. The average paper fax takes an employee 8 to 30 minutes once you count printing, walking to the machine, dialing, waiting, dealing with busy signals and paper jams, and filing the hard copy.
At the median hourly wage for professional services ($43.40 as of December 2024), that works out to $5.79 per fax on the low end and $21.70 on the high end. A business processing 1,000 faxes a month could be spending $5,800 to $21,700 in labor alone, and none of it shows up on an invoice.
That is what makes these costs so stubborn. The phone bill goes under utilities. The toner goes under office supplies. The machine lease sits under equipment. The labor disappears into the workday. No single line item is big enough to make anyone stop and add it all up.
Why Fax Will Not Go Quietly
If fax were truly obsolete, none of the economics would matter. Businesses would just stop using it. But for millions of organizations, fax is not optional.
In healthcare, roughly seven in ten hospitals still use fax or mail to share health information, even as electronic health records have become standard. The reason is simple: every clinic, lab, pharmacy and specialist in the country already has a fax number. A hospital can spend months and tens of thousands of dollars building a digital connection to one partner, and that connection only works with that one partner. Fax works with everyone, immediately, without any setup on the other end. In a healthcare system where thousands of organizations need to exchange records with thousands of others, fax is the only channel where every party is already reachable.
It is a similar story in law, finance and government. Law firms fax court filings because a fax confirmation page holds up as proof of delivery in ways an email read receipt does not. Banks fax wire transfer authorizations because regulators expect a documented trail. Government agencies keep fax lines open because many of the people and organizations they serve simply are not set up to receive documents any other way.
What It Adds Up To
For a small business owner who only clears $35,000 a year in profit on $500,000 in revenue, a single fax line at today’s rates can eat 3% to 7% of that profit. For the smallest firms, the math is even worse. The average one-person business brings in about $48,000 a year, leaving roughly $3,360 in profit. One analog phone line can swallow more than a third of it.
Now multiply that across the country’s 6.3 million employer firms. The total annual cost of legacy fax to American small businesses runs more than $4.7 billion, conservatively, and closer to $9 billion at mid-range pricing according to eFax®‘s analysis. Neither figure includes one-person businesses, labor or equipment upkeep, so the real number is almost certainly higher.
Large companies generally have the leverage and the IT staff to move off these systems. Small businesses are far more likely to just keep paying.
Running Out of Time
The carriers have already started pulling the plug.
AT&T, the country’s largest legacy phone provider, plans to shut down its entire copper network by 2029. The company spends roughly $6 billion a year keeping that system running, and only 5% of its home customers still use it. As of October 2025, AT&T stopped taking new orders for copper services entirely.
Verizon has been pulling out copper in areas with fiber since 2016, converting 4.5 million lines and shutting down dozens of switching offices along the way. Lumen, which took over the CenturyLink network, stopped taking new POTS orders in 14 states last spring. For businesses still running fax machines or on-site fax servers, the window to switch to cloud-based alternatives is getting smaller fast.
The United States is losing landlines about three times faster than the rest of the world. U.S. lines are declining at nearly 18% a year, compared to a global average of about 6%. Worldwide, landline subscriptions have fallen from a peak of 1.2 billion in 2006 to about 407 million today.
An estimated 43 million fax machines are still connected to phone lines around the world. For the millions of American small businesses counting on them, the question is no longer whether the old system will disappear.
It is how much the wait will cost.
The fax market itself tells the story of where this is heading. It was worth $3.3 billion in 2024 and is projected to reach $4.5 billion by 2030, and the growth is not coming from anyone buying new fax machines. It is coming from cloud-based services that let businesses keep their fax numbers without the phone line, the hardware, or the paper.
The distinction matters. The problem is not fax itself. It is the physical equipment that fax has historically required. A cloud fax service bypasses the expensive copper line, eliminates the $6,700-a-year supply drain, and turns a 20-minute trip to the machine into something that takes a few seconds from a computer or a phone. The “triple tax” does not apply when there is no machine to feed.
For a small business paying $2,400 a year just for the copper connection, the economics of that switch are not complicated.
Methodology
eFax® analyzed data from the following federal and industry sources to estimate what legacy fax equipment costs U.S. small businesses each year.
The total number of U.S. small businesses (36.2 million, including 6.3 million employer firms) comes from the SBA Office of Advocacy’s 2025 Small Business Profile, based on U.S. Census Bureau data. POTS line costs ($780 to $2,400 per year) reflect what carriers have been charging since the FCC’s transition period ended in August 2022. The conservative estimate uses $1,200 per year; the mid-range estimate uses $1,800 per year.
Supply costs (paper, ink and toner at about $20 per 1,000 pages) are based on standard office supply pricing. Yearly supply estimates of $300 (conservative) to $500 (mid-range) per machine assume a few hundred to a few thousand pages per month.
The conservative total of $4.7 billion assumes 50% of employer firms (3.15 million businesses) keep at least one POTS fax line at $1,200 per year, plus $300 in supplies. The mid-range estimate of $9 billion assumes 62% adoption at $1,800 per year plus $500 in supplies. Neither figure includes one-person businesses (28.5 million), labor costs, or equipment wear and tear.
POTS line decline rates (17.8% per year, 2021 to 2024) come from the FCC’s Voice Telephone Services report. Global landline data is from TeleGeography’s GlobalComms Database. Paper pricing references the BLS Producer Price Index for Writing and Printing Papers (series WPU091301). Waste data is from the EPA’s 2018 Facts and Figures report. Healthcare fax usage data is from ONC Data Brief No. 54, based on the 2019 AHA Annual Survey IT Supplement. Fax market projections are from Arizton Advisory and Intelligence.
Labor cost estimates (8 to 30 minutes per fax transaction) and fax server total cost of ownership figures are drawn from eFax®‘s analysis of on-premise fax costs and cloud transition economics, referencing a 2019 study cited in the American Journal of Managed Care and BLS median hourly earnings for professional services as of December 2024.
