The decision by the U.S. Court of Appeals to stay the proxy pricing rules for interconnection rates until oral arguments can be heard is a setback to the wireless industry, even as it continues to lay groundwork to bring legitimate telecommunications competition to this nation’s consumers.
In their ruling, the three judges presiding over the case strongly hinted that they believe the Federal Communications Commission overstepped its bounds in setting national pricing rules for interconnection.
Legal matters like these scrutinize the letter of the law and whether it has been violated. But the greater questions that must be answered are of fairness and vision.
As it waits to hear oral arguments on the issue, the court in effect laid aside Congress’ ambition to bring competition to the local marketplace. Multistate PCS operators-already facing formidable competition from cellular carriers-now have another uncharted factor to build into their equation when deciding in which markets they initially should build. Do they build in states where interconnection fees seem appropriate or in states where interconnect agreements may be steeper, but where they may be able to get a faster return on their investment?
Whatever state commissioners say about competition in their own states-Georgia, for example, has 24 competitors to BellSouth-there is little local competition today. It is wireless service that eventually will bring competition to the local exchange market.
Competitive access companies do not offer anything unique to customers. The sad truth is in many cases it is a faceless, nameless company that cannot offer as much to the customer as can the long-established regional Bell company. Wireless service, with its mobility and its varied pricing structures, will offer tomorrow’s customer a valid alternative.
Whether it is a cellular or PCS or SMR or messaging or wireless local loop offering, wireless service is the only real threat to the LEC monopoly. And that is why this fight is being fought. If the FCC set the interconnection default rate at $1, no LEC would argue whether the FCC overstepped its bounds. And LECs wouldn’t be so quick to throw their weight behind the states that petitioned the court.
For this very reason, the federal government should preside over proxy pricing. It is the American consumer who is supposed to benefit from the 1996 Telecommunications Act. And tomorrow’s competition to local service will come from the wireless community.
