NEW ORLEANS-The outlook for adoption of rules for calling party pays is now seen as murky by many of those who attended last week’s CTIA Wireless 2000 conference.
Calling party pays is similar to long-distance toll calling where the person placing the call to a wireless subscriber pays for the call rather than the wireless subscriber. CPP is the norm in Europe, while American carriers have traditionally required the subscriber to pay all charges related to mobile phone use. The Cellular Telecommunications Industry Association petitioned the Federal Communications Commission to allow for nationwide CPP, claiming it would increase competition and wireless phone use.
The industry believes the FCC needs to step in with definitive rules on such things as notification and billing so that state regulators-who generally do not control wireless-don’t set up 50 sets of rules.
Chris Gent, chief executive officer of Vodafone AirTouch plc, threw down the gauntlet during the opening session of the conference by proclaiming “the government is going to have to [do more for CPP to] force the time pace.”
John Zeglis, president of AT&T Corp. and chairman and chief executive officer of the AT&T Wireless Group, whose company has in the past said that its CPP trial was not successful, agreed with Gent that CPP could be useful for the industry.
“We haven’t been held back by the lack of calling party pays, [but] it will in different places help our penetration along,” Zeglis said.
A federal regulator, who must vote to adopt the rules the industry wants, however, is not so sure.
“We don’t have a market failure with calling party pays …,” said FCC Commissioner Susan Ness. “Hopefully it will evolve with adequate notification … so an intelligent decision can be made, but that does not take government mandate … The notion that just because Europe has CPP is a notion that has come and gone … We might want to think of a different approach rather than saying it works in Europe so it ought to work over here … There are ways to have [everyone] work together, and one way is to have the wireless industry come up with a system that works for the American consumer … [T]here are solutions if the marketplace really wants to do CPP … [D]o it in a consumer friendly way, and you won’t have the [FCC] imposing its will.”
Ness made her statements last Tuesday at the federal policy maker chat with CTIA President Thomas Wheeler.
Following Wheeler’s chat, it became increasingly clear there are simply not enough votes among the commissioners to adopt the industry’s rules. The five wireless legal advisers to the commissioners each laid out where his boss was coming from. The vote was two for and two against, with Adam Krinsky of FCC Commissioner Gloria Tristani’s office indicating his boss had serious concerns.
“We are hearing that there are benefits to CPP; we need to ensure there are not any harms … Europe has a different system than we do,” Krinsky said.
Surprisingly, FCC Chairman William Kennard and Commissioner Harold Furchtgott-Roth seem to agree that the proposed rules could be helpful and deregulatory.
“Write this down: The Chairman’s office actually agrees with Commissioner Furchtgott-Roth’s office,” joked Ari Fitzgerald, Kennard’s wireless legal adviser, noting that Furchtgott-Roth often opposes Kennard’s initiatives.
Peter Tenhula, senior legal adviser to FCC Commissioner Michael Powell, said that polling family and friends did not seem to show a great deal of support, and couple that with state pre-emption and ancillary jurisdiction-there just didn’t seem to be a need.
“In that case we asked ourselves and our loved ones and our friends …,” Tenhula said. “When you look at the potential benefits … it ends up we have to pull out of our quivers pre-emption and ancillary jurisdiction … We didn’t see a compelling case for using pre-emption and ancillary jurisdiction to promote a service that consumers are protesting.”
The battle is not lost, however.
Thomas Sugrue, chief of the FCC’s Wireless Telecommunications Bureau, when asked whether he would advise Kennard to announce the failing vote, indicated that with some “tweaking” some of the votes could possibly be changed.
Spectrum cap
CPP wasn’t the only regulatory issue discussed at the CTIA show. Also discussed were issues such as elimination of the spectrum cap-both generally and in the context of the upcoming re-auction of personal communications services C- and F-block licenses.
The caps limit the amount of spectrum a carrier can control to 45 megahertz in urban areas and 55 megahertz in rural areas.
While Fitzgerald suggested that incumbent cellular operators still control “the vast majority” of the wireless phone market, Tenhula indicated his boss was ready to lift the cap.
Bryan Tramont, Furchtgott-Roth’s wireless legal adviser, was even more strident.
“Whatever had been the utility of the spectrum cap in the past as well as the [local multipoint distribution service] cross-ownership rules should be burned and thrown out forever.”
The industry is not leaving the spectrum-cap issue solely in the hands of the FCC. This week, Bell Atlantic Mobile is expected to be in town to lobby Capitol Hill for the elimination of the spectrum cap.
A key stop may be at the office of Sen. Sam Brownback (R-Kan.), who has introduced legislation to eliminate the spectrum cap for all future auctions.
“Congress needs to force the reexamination of the spectrum cap issue … There just isn’t the capacity to sustain the current subscriber base and move into those new services … the capacity limits … the ability to really have high-speed … would really push the limits of current spectrum licenses … If we want carriers to be innovative, we can’t allow governments to stand in the way … we perceive the current spectrum cap of standing in the way … We need to get government out of the way in spectrum policy … We see a need to seek legislation to lift the spectrum cap,” said Howard Waltzman, general counsel to Brownback.
This is the second go-around for Brownback on the spectrum cap issue. Last year he contemplated amending the FCC spending bill to either relax the spectrum cap or eliminate it for future auctions.
Denver Bureau Chief Lynnette Luna contributed to this report.
