With prospects of a House floor fight over switched wireless resale fading, resellers and carriers have taken their fight to the Federal Communications Commission.
Cellular and personal communications services firms support an FCC proposal that would let market forces drive resale, roaming and wireless interconnection. The groups do not want states filling any regulatory void federal regulators may leave behind.
“The principle motivating commission action in this case should be that government intervention is warranted only by the existence of persistent, substantial market power and control over essential facilities,” said the Cellular Telecommunications Industry Association in public comments filed at the FCC.
The trade group added, “As the CMRS [commercial mobile radio service] is competitive and dynamic, and characterized by new entry and new PCS spectrum allocations that more than double the existing cellular allocation, the prerequisite showing cannot be made, thereby negating the need for commission intervention.”
Not so, say wireless resellers working with Rep. Joe Barton, R-Texas, a ranking majority member of the House Commerce Committee. Barton flirted with offering a switched resale amendment during subcommittee and committee consideration of telecommunications reform legislation but held back at the request of senior Republicans who, some say, wanted to avoid a messy fight among themselves and spare Barton a stinging defeat at the same time.
“Switched resale will check anti-competitive behavior in the CMRS market, and, in particular, the cellular industry and advance the commission’s interconnection policies,” said the National Wireless Resellers Association.
Commercial wireless carriers assert there is little need for mandated switched interconnection, which is more profitable than bulk resale of telephone numbers, given that the cellular duopoly in each market will be invaded by up to six PCS carriers in coming years.
Yet, American Personal Communications Inc., which will provide PCS services, warned the FCC that local telephone companies with commercial wireless subsidiaries could be inclined toward anti-competitive activity as a result of policies being considered.
While it is leaning toward market forces rather than regulation to govern wireless resale, roaming and interconnection, the FCC has a long history of promoting resale to encourage competition in monopoly markets.
The agency, however, said wireless carriers with constructed facilities should not be forced to resell services to other carriers in the same market once the latter have built out their networks.
Though the commission’s proposal is supported by the Baby Bells, AT&T Corp., GTE Corp., AirTouch Communications Inc. and other commercial wireless carriers, two telecommunications giants with substantial brand equity and existing infrastructures favor resale and interconnection requirements.
Both MCI Communications Corp. and Time Warner Telecommunications have opted to enter the wireless business through resale rather than by spending billions of dollars at auctions on wireless licenses.
MCI recently acquired Nationwide Cellular Service Inc., the nation’s top cellular reseller, and plans to announce major resale agreements with various Bell cellular operators.
MCI’s main competitor, AT&T Corp., the nation’s top provider of long-distance and cellular services, paid $1.68 billion for 21 PCS licensees earlier this year after spending $11.5 billion last year to acquire top-ranked McCaw Cellular Communications Inc.
Meanwhile, paging, specialized mobile radio and air-ground telephone firms cited market and technical considerations for wanting to be exempted from federal resale and interconnection obligations.
