When a small state retains a multimillion-dollar tax break for the nation’s largest telephone company out of sympathy and concern about attacks on the landline carrier’s subscriber base by mobile-phone carriers, you know the wireless industry has arrived.
Indeed, wireless competition was cited as a rationale for passage of a bill in the New Hampshire legislature that extends for two years a property tax exemption on poles owned by telephone companies.
Proponents of the bill-signed into law April 23 by GOP Gov. Craig Benson following heated debate and heavy lobbying by the $67 billion company that is Verizon Communications Inc.-claimed consumers’ monthly phone bills would rise if the pole tax exemption was not extended. Opponents argued wireline carriers should not be entitled to a free ride on poles when electric, gas and other utilities have to pay for being on big sticks of their own.
The debate, for reasons other than the obvious, bordered on the ridiculous.
The Union Leader quoted Sen. Bob Odell (R) as lamenting, “This is really an issue of those who have options … and people who have no choice because they are stuck with landlines.” Boo hoo. Not fair. In other words, mobile-phone carriers, like say, top-ranked Verizon Wireless, would have an unfair advantage if its parent company had to absorb the pole tax.
Here in D.C., Verizon Wireless is busy kicking in doors in hopes the Federal Communications Commission can be persuaded not to give valuable spectrum to Nextel Communications Inc. as part of a plan to remedy interference to 800 MHz public-safety systems.
No doubt Verizon CEO Ivan Seidenberg wants it both ways, doing anything and everything to salvage the legacy landline business while fending off competition to his wireless unit that just keeps adding subscribers, making money and otherwise embarrassing its parent company.
The same is true for other Baby Bells with major wireless holdings, namely SBC Communications Inc. and BellSouth Corp. The two companies jointly own No. 2 Cingular Wireless L.L.C., which is seeking government approval to acquire No. 3 AT&T Wireless Services Inc. The merger would make Cingular Wireless the top mobile-phone operator in the land. More importantly, the transaction would lay the foundation for Cingular Wireless perhaps one day to become the top telecom firm in the country.
No, landline telephone carriers are not headed out to pasture just yet. But there’s no denying the disruptive effect of mobile-phone and Internet communications on the century-old wired universe. Wireless and Internet technologies are cutting into the Baby Bells’ core business and reeking havoc for long-distance carriers as well. The trend line has wired access lines in free fall, while the masses embrace wireless in the new century.
It is a revolution in substitution.
