WASHINGTON-The Federal Communications Commission, fearful of anticompetitive activity against wireless phone firms, will require the Baby Bells, GTE Corp. and other local landline telcos to set up separate subsidiaries to provide commercial wireless services within their regions.
The ruling stems from a 1995 federal appeals court decision that directed the FCC to revisit rules that, at that time, required structural safeguards for Bellcos that provide cellular service but allowed them to offer broadband personal communications service without such safeguards.
The FCC said it “believes that incumbent LECs (local exchange carriers) and broadband CMRS (commercial mobile radio service) operators are increasingly likely to be direct competitors.”
“The competitive pressure brought to bear on the local exchange market by broadband CMRS providers,” the agency said, “could increase the incentive for incumbent LECs to engage in anticompetitive practices, such as discriminatory interconnection, cost-shifting and anticompetitive pricing practices.”
At the same time, the FCC carved out an exemption for rural telephone companies, though a competing carrier that is interconnected with a rural carrier may petition the commission to remove the separate subsidiary exemption.
Similarly, firms serving less than 2 percent of the country’s subscriber lines may ask the FCC to suspend or modify the separate subsidiary requirement.
The FCC kept intact a requirement that Bellcos not provide to their wireless subsidiaries any customer proprietary network information unless that information is available to the public on the same terms and conditions.
Regarding the 1996 telecom act’s permission for Bells to jointly market wireless and wireline services, the FCC said local wireline telcos covered by the new, in-region separate subsidiary rule must comply with affiliate transaction rules, reduce their agreements to writing, and make copies of such agreements available to the public.
