WASHINGTON-Although oral arguments regarding the stay of the Federal Communications Commission’s interconnection pricing plan are not scheduled until sometime in January, sparring on the issue continues between those who are benefiting from the stay and those who think they will be hindered.
“The telecom act was explicitly designed to bring full competition to the market as expeditiously as possible,” said MCI Communications Corp. Chairman Bert Roberts last week at the National Press Club. “Local monopolies are trying to stop the introduction of competition with every instrument at their disposal. The only Bell practicing true competition is Taco Bell.”
“Telcos are willing and ready to compete; it is in our best interests to compete,” countered Roy Neel, president and chief executive officer of the U.S. Telephone Association. “The stay will jumpstart negotiations that had been stalled prior to Aug. 8.” According to Neel, more than 250 interconnection agreements involving USTA members exist, with 35 of them signed since the commission adopted its interconnection and local competition order; another 178 agreements are in the arbitration stage.
While those numbers sound impressive, none of the signed or pending agreements involve wireless companies; they only involve competing wireline companies and not wireless carriers that are negotiating monetary issues. Neel also admitted that many local exchange carriers will be going to court because they don’t like the way arbitration worked out for them.
Roberts, who said he has spent his career busting monopolies, brought up monetary issues in his blasting of stay-believers by saying that LECs want new entrants, of whom wireless carriers will be a part, to foot the bill for past inefficiencies by holding firm to rates based on historical rather than forward-looking costs. “LECSs have the highest cash flows because they have had no competition for the past 75 years,” he added.
The stay has not affected MCI much in the last few weeks, except it has made the company focus its negotiations on states that are “forcefully moving toward a competitive environment,” Roberts said.
To remind the public about the role the phone companies have taken in state and local matters, Neel introduced a $7 million consumer-education print campaign that focuses on telcos’ role in changing public policy. The ads first ran in The Wall Street Journal; other newspapers will follow. USTA also will produce a competition scorecard detailing where and when interconnection agreements have been signed.
It is Neel’s opinion that competitors may not make the commitment to serve rural areas and that they only want to cream-skim new prospects from more populous areas. Roberts admitted that MCI’s role in rural areas will be predicated on economics; he also believes that wireless and/or satellite operators will be better equipped to serve those locations.
When the questioning moved away from the court stay, Roberts reiterated MCI’s decision not to dabble in any of the personal communications services, saying that the high prices paid in the past and current auctions made their resolution stronger. “We look to buy services from those competitors to repackage and resell them,” he said.
The future of personal satellite phones garnered two thumbs down from Roberts, who has no faith in either Iridium Inc. or Teledesic Corp. “Much of their services already will be offered by wireless carriers on the ground long before a satellite network becomes viable,” he said. Roberts also questioned the wireless industry’s adoption of technical standards that are incompatible with those available in other industrialized countries. “I want to get to a time when you don’t have to switch phones when you cross the ocean,” he concluded.
