WASHINGTON-With industry consolidation increasing and prospects for greater facilities-based competition diminishing, new life has been breathed into the wireless resale debate.
Most recently, San Francisco-based AirTouch Communications Inc. has come under fire for a new wireless resale program that critics call illegal, anti-consumer and anti-competitive.
AirTouch’s Reseller Gold Program would “have the practical effect of restricting resellers’ choice of underlying carrier, restricting price competition at the wholesale and retail levels, and inhibiting the ability of PCS (personal communications services) and other new CMRS (commercial mobile radio service) entrants to compete against entrenched cellular carriers,” said WorldCom, the fourth-largest long-distance carrier and a top wireless reseller.
WorldCom is among a host of resellers that oppose AirTouch’s request for regulatory approval of an optional exclusivity wireless resale plan. Wireless carriers, meanwhile, support AirTouch’s petition.
“Allowing carriers the option of entering into exclusive resale arrangements can promote a more robust competitive environment,” stated the Cellular Telecommunications Industry Association.
CTIA recommended the Federal Communications Commission “should clarify that neither the Communications Act nor the commission’s rules or policies precludes optional arrangements in which facilities-based carriers provide additional discounts in return for greater service commitments.”
The AirTouch petition is only one of the battle fronts where wireless resale policy is being fought.
The FCC’s wireless resale policy, which sunsets mandatory resale in five years, is being challenged by resellers at the FCC and by Cellnet Communications Inc.-a Detroit-based reseller-in the U.S. Court of Appeals for the Sixth Circuit.
And this week, public comment is due on a petition by the Personal Communications Industry Association to, among other things, further rein in wireless resale.
The FCC, for its part, is standing firm.
“The commission’s prediction that competition will be sufficient to obviate the need for the resale rules within five years after the award of the last broadband PCS license is not only reasonable, but is precisely the type of predictive judgment that an expert agency is supposed to make,” the FCC told the court in the Cellnet case.
Trouble is, the FCC’s forecast may turn out wrong.
Start-up PCS firms and even some established pocket phone companies, which were supposed to compete against the two cellular operators in each market, are strapped with financial and operational problems.
Federal regulators are bending over backward to help entrepreneurial PCS firms struggling to repay government loans for wireless licenses. Moreover, officials have been inclined to grant pardons to big spenders, like NextWave Telecom Inc. (which bid nearly $5 billion for licenses last year), that exceed foreign-ownership restrictions.
In addition, the FCC and Congress are trying to the break the construction gridlock caused by the 200 antenna siting moratoria and delays around the country for reasons ranging from health concerns to worries about aesthetics and property values.
The wireless resale industry supports FCC efforts in this regard, believing resale is doomed if PCS startups fail.
Indeed, NextWave’s business plan relies on massive resale and marketing by MCI Communications Corp. and others.
