It looks like the local Bell companies, long-distance telephone carriers and cable TV operators are one step closer to being able to compete in each other’s backyard, as the House Commerce Committee passed telecommunications reform legislation. The bill is set to go befoe the full House sometime in July.
But despite all the hoopla from the GOP about letting competition rule the marketplace, an amendment that could be offered on the House floor by GOP Rep. Joe Barton of Texas seems to detract from the very deregulation the Republican party has been touting.
Barton’s initiative would let firms, with only a minimal investment in a switch, have interconnected access to mobile telephone systems and resell the same services as the cellular operators who’ve spent nearly $19 billion investing in infrastructure.
Needless to say, cellular and personal communications services operators -which have already bet $7 billion in PCS auctions for the right to become players in the wireless game-are not happy about the amendment.
Barton doesn’t seem to have that much support for the amendment, either. He has withdrawn it from the committee twice to avoid getting it voted down.
Barton contends there is no competition in the cellular marketplace. And in some instances (namely price), he may have a point.
But the whole idea behind issuing PCS licenses was to bring competition to the wireless arena. PCS operators (and granted, many of them also are cellular operators) collectively have put their monies where their mouths are; betting they can bring competition to the wireless marketplace.
It is unfair to give resellers the same advantage as those PCS operators without the resellers having to sustain the same financial risk.
And competition aside, it just seems wrong to let resellers have access to the same infrastructure as the cellular companies that 10 years ago were willing to bet wireless telephone service would be a commodity people wanted and that have continually been reinvesting in their networks.
Resale has its place in the wireless arena and that fact was showcased last month when MCI Communications Corp. announced plans to pay $190 million cash for Nationwide Cellular Services Inc., the nation’s largest reseller. MCI has tried several times under many different guises to become a wireless contender and obviously believes reselling wireless service under the MCI name is a valid way to get there.
Although an MCI official said the company liked Barton’s amendment, he noted with or without the amendment, buying Nationwide is a good idea. MCI is willing to put its money where its mouth is.
I’m not so sure about the entire resale industry, however. You’d think if resellers were serious about a wireless play, they would have consented to a restriction imposed on cellular carriers that was to be included in Barton’s amendment; the restriction basically says one carrier in a given market can’t sell out to the other. The limitation makes sense because if carriers in given markets could sell out to each other, the other carrier would have a monopoly. Unless someone can explain why that was such a bad requirement, I’m left to believe that wireless resellers want to be able to have their cake and eat it too.
