WASHINGTON-Sen. John McCain (R-Ariz.), chairman of the Commerce Committee, has added his voice to those who believe that wireless, specifically personal communications services, is a substitute for wireline.
Indeed, McCain said, “Congress intended that PCS networks could satisfy the requirements of Track A,” referring to a long-distance entry test that regional Bell operating companies must pass before offering service to consumers in their regions.
BellSouth Corp. has applied to offer long distance in Louisiana based on the strength of the PCS market there. The Federal Communications Commission is slated to make a final decision on BellSouth’s application Oct. 13. BellSouth based its application on evidence that a majority of PCS customers in Louisiana said they use their PCS phone to make or receive calls at home.
The Baby Bells, including BellSouth, were prohibited from offering long distance until they met the local competition checklist contained in Section 271 of the Telecommunications Act of 1996. Congress said if no one wished to compete in a given market, the Bells were relieved of meeting the checklist. This is known as Track B. AT&T pre-empted that move, however, by applying to offer local service in every market. The only option left for the RBOCs is Track A, which is facilities-based competition.
The application is BellSouth’s second try to offer long distance in Louisiana. The FCC turned down its original attempt in February. In its latest attempt to change the commission’s mind, BellSouth included a survey concluding that 65 percent of Louisiana PCS customers make or receive calls at home. A similar survey filed with the company’s first attempt stated 56 percent. of PCS subscribers use the service at home.
McCain seemed to be urging that the FCC accept this argument by saying the FCC “should be focused on implementing the [1996 Telecom] Act to encourage competition, not maintain the status quo.”
The PCS argument was decried by would-be competitors in Louisiana who said PCS equipment and service were not on equal par with wireline because they are more expensive.
This argument may hold weight with FCC Chairman William Kennard who said in a letter to Sen. John Breaux (D-La.) in July that if “the competing service is not yet a substitute for traditional wireline serviced offered by the [BOC] because of differences in price and quality, the [BOC] is less likely to be constrained by, or respond to, the entry of such a service and consumers, therefore, will not receive the benefits of competition. It is this circumstance that would weigh heavily on our deliberations.”
McCain is the second leading policy maker to endorse the BellSouth Louisiana long-distance bid. Rep. Billy Tauzin (R-La.), chairman of the House telecom subcommittee, has said that customers choosing PCS instead of wireline qualifies as competition. “As the [FCC] determined in the Ameritech Michigan Order, the number of customers using any service, including PCS, offered by a carrier other than a [BOC], is relevant evidence in determining whether the requirements of Track A have been satisfied,” Tauzin said.
BellSouth, however, received a rejection from the Department of Justice which said that BellSouth has not yet opened up its markets sufficiently enough to offer long distance in Louisiana.
