WASHINGTON-The Industrial Telecommunications Association Inc. and the Personal Communications Industry Association won their fights to become designated clearinghouses that will administer the Federal Communications Commission’s microwave-relocation cost-sharing plan.
“We are gratified that the FCC went the way it did,” said Fred Day, ITA’s executive director of government relations. “In this day and age, monopolies are anachronistic.” PCIA had scheduled a press release and a press conference following the release of the order, but canceled both; however, an association spokesman told RCR, “We knew there would be two clearinghouses; the whole thrust of Congress, the Telecommunications Act and the FCC is pro-competitive. We welcome competition.”
PCIA and ITA submitted significantly different outlines regarding how their clearinghouses would be funded and administered. PCIA’s plan entailed the formation of an independently incorporated subsidiary governed by a 15-member board and run by a staff of non-PCIA employees. Startup funding was promised from eight investors-American Personal Communications, American Portable Telecom Inc., BellSouth Corp., Cox Communications Inc., Omnipoint Corp., Pacific Bell Mobile Services, PCS PrimeCo L.P. and Sprint Spectrum L.P.-to offset a $1.1 million first-year cost projection. PCIA estimated its cost to drop to $467,000 during the fifth year. All information submitted by parties would be distributed only to those entities needing it for cost-sharing purposes, and all parties would be required to sign non-disclosure agreements. Disputes will be handled by clearinghouse staff or outside dispute-resolution methods.
ITA’s plan included a self-funded clearinghouse run by ITA employees; registrations and service fees would serve as the primary funding mechanisms, according to the commission’s summary. The association has devised a “microwave relocation cost report” to be completed by the relocator. ITA also will require its parties to file summaries of their relocation agreements. Prior to taking on any kind of dispute mediation, ITA will attempt “to have parties agree to have the disputed costs reviewed by an independent certified public accounting firm to verify and affirm the cost components for mutual acceptance.” If further informal meetings prove unsatisfactory, a mediator will be brought in.
Following the release of the commission’s public notice inviting comments on ITA’s and PCIA’s proposed business plans; according to a summary included in the text, ITA’s plan took the most heat, with eight of 10 commenters questioning the need for two clearinghouses, expressing concern regarding confidentiality issues and wondering how ITA would be able to self-fund such a venture. Commenters also were worried about internal ITA staff working the clearinghouse and with the lack of industry participation in ITA’s plan.
To assuage such concerns, the FCC stated that neither applicant had been required to submit financials, that the agency was convinced that all information traded between PCIA and ITA would remain confidential, that a choice of clearinghouses would promote competition and fair pricing and that the FCC would retain the right to review any problems at any time. As far as industry participation goes, the commission believes that both clearinghouses will receive input on an ongoing basis, regardless of whether such participation was built in at the front end.
“We don’t see any distinct differences in who will go with PCIA and who will come to us,” Day said, although he believes the larger A- and B-block personal communications services licensees probably will choose PCIA. “People will examine both plans to see which is more compatible with their business. We also think price and service will be factors.” ITA signed its first customer Aug. 15, but it declined to reveal the company.
Both clearinghouses must provide the FCC with progress reports at six-month intervals, beginning Feb. 1; information on number of links relocated, cost and revenue updates, and any fee-structure changes must be included.
