WASHINGTON-Despite uneven progress of fixed wireless broadband carriers in recent years, the ability of newcomers to the local market-small and large alike-to offer voice, data, video and Internet services competitively hinges on key policy decisions confronting regulators, the courts and the Bush administration.
2001 will be a critical year-perhaps even a make-or-break year-for fixed wireless carriers whose business models are predicated on cracking a local market long dominated by the Baby Bells and other landline monopolies. The 1996 telecom act was supposed to prompt local competition, the kind of competition Teligent Corp., Winstar Communications Inc., XO Communications Inc., WorldCom Inc., Sprint Corp. and others are battling to provide via fixed wireless technology.
It has not been easy for competitive fixed wireless carriers, and it will only get harder.
The high-tech-fueled economy has slowed to a stop, and fixed wireless firms are being punished by Wall Street as a result.
The new Bush White House is considering whether to move forward with a Clinton administration plan that could force fixed wireless carriers off the 2500 MHz band in order to make room for third-generation mobile-phone systems. Meanwhile, Canada, Mexico and South America appeared committed to that band for fixed wireless Internet services.
Elsewhere, fixed wireless firms face resistance from Baby Bells that want to protect local turf; from landlords who have long-standing relationships with Baby Bells and who believe there is a constitutional problem with mandated roof-top access; and from local regulators who want to tax competitive fixed wireless carriers that need public rights-of-way.
More recently, the real estate industry has alleged that fixed wireless devices could pose a health risk because of radiation that is emitted.
The allegation drew a swift rebuke from the fixed wireless and mobile-phone industries.
“Given the clearly adequate protections against harm from RF [radio-frequency] emissions provided under the commission’s rules, the possibility of harm from extending the OTARD (over-the-air-reception-devices) rules to fixed wireless is neither actual nor imminent,” AT&T Wireless Services Inc. told the Federal Communications Commission.
Meanwhile, the Baby Bells-which dominate local telecom markets-are merging with each other and becoming all the more formidable every day.
“The trend is toward more activity in Congress, in the states, in the international arena and in the courts,” said Andrew Kreig, president of the Wireless Communications Association International.
The FCC last year took initial steps to promote local competition from fixed wireless carriers and others, outlawing exclusive contracts between building owners and telecom service providers. But the issue is far from resolved. Just last week, the FCC was hit with petitions to reconsider last October’s ruling. Other FCC-proposed rule changes designed to pry open local telecom markets have recently come under attack from the real estate industry and the Baby Bells.
Where the FCC goes from here is unclear. Last year, lawmakers pulled back legislation that would have mandated nondiscriminatory telecom access to commercial and government buildings after it appeared the FCC would settle the matter. But that has not happened. In fact, this year’s fight over nondiscriminatory rooftop access could escalate far beyond last year’s battle.
Fighting again has heated up at the FCC over fixed wireless access to multi-tenant buildings.
“The commission has embarked on making a simple, market-driven process needlessly complex and difficult,” stated the Real Access Alliance, a coalition of real estate associations. “Building owners are in the business of pleasing tenants. Owners who meet the demands of their tenants for services of all kinds-including access to competitive telecommunications-succeed, and those who do not, fail. It is that simple. We have repeatedly shown the commission that property owners are advancing competition, not hindering it. Commission regulation of building access is unnecessary.”
The RAA insists that local competition is occurring and that building owners are opening their doors to wireless carriers and others.
Given the posturing at this stage, there is every reason to expect that final FCC rules on rooftop access ultimately will be challenged in federal appeals court. Indeed, the U.S. Supreme Court has agreed to review a lower court ruling that said the FCC was wrong to extend utility pole attachment rights to wireless carriers. Now, there is talk of renewed activity on Capitol Hill on the combustible rooftop access issue.
A big variable at play is the new administration, one that is highly sympathetic to deregulation and free markets.
President Bush’s pick to chair the FCC, Michael Powell, appears to be in lock step with this hands-off approach to regulating American business. For fixed wireless companies still waiting for Baby Bells to cede control of open markets as mandated in the 1996 telecom act, this is not a pretty picture.
The fifth anniversary of the telecom act on Feb. 8 was marked by yet another round of criticism from consumer groups and others who believe the landmark legislation has not led to the kind of local residential and business local competition that lawmakers envisioned.
