WASHINGTON-The Federal Communications Commission left the few remaining independent wireless carriers twisting in the wind last week when it said that mobile-phone and long-distance carriers could not get access to unbundled network elements.
“If you allow long-distance or mobile carriers access to UNEs, they can convert from special access to UNEs in a situation where they don’t need access to UNEs,” said Jeffrey Carlisle, chief of the FCC’s Wireline Competition Bureau.
Carlisle said he did not believe the wireless decision was unfair. “We don’t believe there is a discriminatory effect,” he said.
T-Mobile USA Inc. has consistently fought for access to UNEs, but said Friday the wording of the staff presentation at last week’s open meeting leaves room for hope.
“What they said is ambiguous, but I am hopeful that the exclusion for mobile services only applies to the traditional wireless and our ability to acquire UNEs to compete in the fixed-wireless market remains an open issue,” said Thomas Sugrue, T-Mobile senior vice president of federal affairs and former chief of the FCC’s Wireless Telecommunications Bureau.
In a closely watched decision, the FCC-for the fourth time-re-wrote its local competition rules. Each time the FCC has tried to write regulations implementing the Telecommunications Act of 1996, the U.S. Court of Appeals for the District of Columbia Circuit has said it was wrong and returned the decision. At issue is what network elements incumbent local exchange carriers must make available to competitors and under what conditions.
During the last go around, the D.C. Circuit separated out the wireless piece. The D.C. Circuit said the FCC must look at the availability of special access before deciding that wireless carriers are so “impaired” that they must have access to transport at Telric rates-a regulated formula based on forward-looking costs.
Wireless carriers that do not have wireline affiliates often have “special-access” contracts with wireline companies to carry traffic between the base station and the mobile switching center. Special access is more expensive than UNEs.
“To say that a wireless carrier cannot have access to UNEs because the wireless industry is competitive ignores the fact the cost to the wireless carrier is going to go up,” said George Ford, chief economist at the Phoenix Center for Advanced Legal & Economic Public Policy Studies.
Acting on the precedent set in the recent acquisition of AT&T Wireless Services Inc. by Cingular Wireless L.L.C. where the FCC said that intermodal competition was not yet occurring, the commission affirmed this decision by saying that because the mobile-phone market is a separate, fully-competitive market, wireless is not entitled to the same benefits as wireline competitors.
Those who believe in traditional wireline competition also do not see intermodal competition.
“Wireless is not intermodal competition; it is an intermodal solution,” said Lawrence Spiwak, president of the Phoenix Center, at the Phoenix Center 2004 Annual U.S. Telecoms Symposium.
The Phoenix Center promotes the idea of traditional wireline competition. At Thursday’s event, Spiwak complained that this issue was losing its luster and said it was the Phoenix Center’s job to make sure that does not happen.
“Do wireless and wireline compete in the market? If they do not, then wireless does not limit the market power of wireline companies that control 90 percent of the residential market,” said John Mayo, professor of economics at Georgetown University, during one presentation.
Not everyone was unhappy with the FCC’s decision.
TowerStream, which provides wireless broadband to businesses in five cities, said the decision was helpful for wireless companies.
“The only way to avoid the impending rise in prices is to bypass wires altogether,” said TowerStream President Jeff Thompson. “Subsidies have been steadily declining and have now reached the point where ILECs will have no constraints to raise their prices in dense urban areas. TowerStream’s urban business model has successfully demonstrated that it is possible to provide facilities-based competition without reliance on the incumbent’s facilities. Most businesses don’t realize that there is a cheaper, faster, more reliable alternative to their phone company’s service that is available right now.”
DSL.net Inc. said the FCC decision confirmed its business plan.
“The latest FCC action permits us to continue to provide our full suite of broadband business services and validates our long-held strategic viewpoint about the importance of being a facilities-based provider. Because we have consistently positioned our business (in areas) without dependence on line sharing or local switching services, both of which have been severely and negatively impacted by recent FCC rulemaking activities, we believe the company is strategically well positioned to continue to be a competitive player in these markets,” said Keith Markley, DSL.net president and chief executive officer. “We are hopeful that such new rules will bring clarity to the telecommunications industry’s regulatory environmental for UNEs.”
