WASHINGTON-A wireless resale amendment dividing cellular carriers and resellers is headed to the House floor. This follows the Commerce Committee’s decision to sidestep the politically sensitive matter prior to passing landmark telecommunications reform legislation late last month.
Rep. Thomas Bliley, R-Va., chairman of the panel and chief sponsor of the bill, said he expects the House to vote on the legislation in July. The House Rules Committee must decide how to handle a competing-albeit secondary-bill sponsored by House Judiciary Chairman Henry Hyde, R-Ill., which gives the Justice Department a role otherwise absent in the Bliley measure.
The Clinton administration also believes vigilant antitrust oversight is needed during the transition from regulation to competition in the telecommunications industry, and has criticized GOP legislation as bad for consumers and competition.
Three days of debate on a companion telecommunications bill, authored by Senate Commerce Committee Chairman Larry Pressler, R-S.D., are scheduled to begin today. House and Senate bills would allow local Bell telephone companies, long-distance carriers and cable TV operators to compete against each other and would exempt commercial wireless carriers from common carrier regulations crafted for local Bell telephone monopolies. In doing so, the 1982 consent decree that broke up AT&T and created the seven Baby Bells would fall by the wayside.
“Everyone is for competition, provided they have a fair advantage, and it’s our job to make sure they don’t get that advantage,” said Bliley, referring to fierce lobbying among telecommunications firms.
The legislation’s deregulatory wireless focus, which builds on 1993 reforms, could be limited by a wireless resale amendment that Rep. Joe Barton, R-Texas, will pursue when Bliley’s bill reaches the House floor for debate next month.
“Is there price competition in that [cellular] marketplace?” asked Barton. “The answer is no, there is not.”
Barton’s initiative would let firms, with a minimal investment in a switch, have interconnected access to mobile telephone systems so they can resell the same services as the cellular operators who’ve spent hundreds of millions of dollars on network facilities.
In the case of personal communications services, 99 auction winners spent $7 billion on spectrum alone for next-generation, digital pocket telephone licenses and will pay millions more to build infrastructures.
Barton’s original amendment mandated interconnected resale and subjected wireless carriers to other common carrier regulations applicable to the Baby Bells, but it was withdrawn during subcommittee markup at the request of House telecommunications subcommittee Chairman Jack Fields, R-Texas. The amendment was revised after intense negotiations to require interconnected resale only where the Federal Communications Commission found it beneficial to competition and consumers.
But carriers and resellers failed to strike a deal after resellers refused to abide by a requirement imposed on cellular licensees prohibiting either from selling out to the other in the same market.
Barton offered the amendment anyway, without the buy-out restriction requested by cellular carriers, at the end of two long days during which more than 30 amendments were considered in full committee.
After two freshman Republicans, Dan Frisa of New York and Rick White of Washington, spoke out against Barton’s amendment, Fields once again intervened to block the vote and urged parties to return to the bargaining table. Frisa, in whose state cellular service is resold, was an early supporter of resellers before changing his mind in reaction to the hard-line position taken by resellers against the buy-out limitation sought by carriers.
White, whose district includes what was McCaw Cellular Communications Inc. before being acquired by AT&T Corp. last year for $11.5 billion, told Fields fundamental policy differences made a settlement unlikely and pushed for a vote.
Bliley then spoke up in support of further negotiation between cellular carriers and resellers and asked Barton to pull the amendment. Barton complied.
Observers speculate Bliley and Fields were reluctant to vote against a fellow senior GOP committee member and wanted to avoid a bitter and embarrassing fight within their ranks.
Resale historically has been an effective tool to force competition on monopoly service providers. Wireless resellers say the policy should be applied to cellular, PCS and other commercial wireless services. Today, firms resell wireless telephone numbers only. Wireless interconnected resale would yield far higher profit margins.
Commercial wireless carriers and some lawmakers insist the Barton amendment is unfair because the two cellular firms in each market will face competition from as many as six PCS firms in coming years. Barton’s opponents also point out that interconnected resale might undercut the value of PCS licenses already purchased and those yet to be sold.
Thomas Wheeler, president of the Cellular Telecommunications Industry Association, called the postponed vote “a massive disappointment.” Visibly angry and disappointed after Barton withdrew his amendment a second time, Wheeler said the committee would have easily voted down the proposal. Had that happened, Barton would have had a difficult time offering the amendment on the House floor.
“We will continue to point out that giving a special deal to people who didn’t pay for spectrum or didn’t build out infrastructures is bad public policy,” Wheeler said.
Language was added during subcommittee markup of the Bliley telecommunications bill establishing national antenna siting guidelines based on future recommendations from industry groups as well as state and local government agencies.
In addition, the bill has a provision to protect AirTouch Communications, a top domestic and international paging and cellular company, from being subject to Baby Bell prohibitions.
The Justice Department in January said AirTouch, which was spun off from Pacific Telesis Group in April 1994, is not immune from prohibitions that have kept the regional Bells out of long distance and manufacturing since the AT&T divestiture a decade ago. AirTouch has taken the matter to U.S. District Judge Greene for a ruling.
