1999 OUTLOOK: CONGRESSIONAL OVERSIGHT MAY MEAN WIRELESS CHANGES

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WASHINGTON-With a panoply of prickly issues tied to major telecom policies of local competition, disability access, spectrum management and digital wiretap compliance, the future could not be cloudier for the wireless industry in 1999.

Besides the fact wireless policy is in flux and wireless management at the Federal Communications Commission is in transition, the nation is on the verge of a constitutional crisis that could tie up the GOP-led Congress for the first half of 1999 on the impeachment of President Clinton. That is further complicated by the possibility of another scrap with Iraq.

The United States could be waging battle on another front if the European Union locks out American-made Code Division Multiple Access mobile phone technology in the future.

On top of it all, next year will see posturing as the 2000 presidential election moves into high gear. Its impact wireless on policy making in 1999 is unclear.

The FCC factor

While Congress is expected to grapple with only a handful of wireless bills next year, the House and Senate’s heavy emphasis on FCC oversight will give disenchanted wireless carriers and private wireless licensees the best venue to work for change.

As such, the FCC will be staring down the gun barrels of Senate Commerce Committee John McCain (R-Ariz.) and House telecommunications subcommittee Chairman Billy Tauzin (R-La.). McCain is particularly unhappy with the FCC’s Wireless Telecommunications Bureau.

But this is not entirely a Republican thing. Rep. John Dingell (D-Mich.) is on the warpath too, and sounds as if he would like to flatten the FCC in 1999.

Perhaps Big John is miffed at the FCC for not going easier on financially distressed C-block personal communications services firms and for supporting an amendment that would have forced bankrupt wireless companies to immediately surrender licenses to the FCC.

Then there is the 1996 telecom act implementation-the Democratic-led FCC could get an earful on that next year.

Wireless carriers are at odds with federal regulators over local number portability, universal service, E911 rollout, strongest signal, text telephone for the deaf, calling party pays, spectrum cap, truth-in-billing and antenna-siting issues.

Interconnection policy, meanwhile, is not being enforced until the FCC hears from the Supreme Court.

Fixed-mobile spectrum flexibility, a pet initiative of FCC Chairman Bill Kennard, remains on the back burner as wireless carriers and federal regulators await market developments and mull an appropriate regulatory response that doesn’t energize state regulators. Congress in 1993 pre-empted most state regulation of commercial wireless carriers.

Paging, mobile phone and specialized mobile radio operators want more FCC deregulation. They don’t want federal, state and local regulators taxing them out of competition, or worse, out of business.

Carriers are unhappy with wireless policy under Kennard. They say the FCC should be promoting competition instead of trying to be a consumer protection agency when the Federal Trade Commission already exists.

“The wireless industry-as the first segment of telecommunications to be fully competitive-is a painful example of how policy makers oftentimes just don’t get it when it comes to government’s role in a competitive market,” said Thomas Wheeler, president of the Cellular Telecommunications Industry Association, in a recent letter to House Commerce Committee Chairman Thomas Bliley (R-Va.)

The wireless industry-commercial and private licensees alike-want the wireless bureau to be a better advocate for their interests. Kennard is counting on Thomas Sugrue, who takes over the bureau Jan. 19 as the successor of Daniel Phythyon, to fill the bill.

“I wait with bated breath to see what my new boss has in mind. But I am here to assure you that the trains will keep running,” said Rosalind Allen, deputy WTB chief, at a conference here earlier this month.

In other words, onward spectrum auctions!

Allen said spectrum cap, disability access, E911, creation of a public safety advisory committee (to set technical parameters for reallocated TV channels 60-69) and the FCC’s commercial mobile radio service report to Congress will be among bureau priorities in 1999.

“The wireless bureau is no different from other bureaus with [too many]priorities and not enough staff,” said Allen. “It was helpful when Congress reminds us what their constituents consider priorities … We have to adjust our priorities and some people may be upset at the result.”

Why, wireless carriers ask, should the FCC impose a one-size-fits-all common carrier regulatory approach on competitive wireless carriers and local monopoly Baby Bells alike? The 1996 telecom act, wireless lobbyists argue, authorizes the FCC to forbear from regulating wireless where deemed appropriate.

“The policies and regulatory models applied to wireless operators should be tailored to the competitive nature of facilities-based wireless services; participants in the robustly competitive wireless marketplace should not be subject to regulatory requirements derived from a monopoly-based environment … The FCC should not extend outdated regulatory requirements to new competitors in the name of `regulatory parity,’ ” Personal Communications Industry Association President Jay Kitchen wrote Bliley in response to his request for feedback on local telco competition and 1996 telecom act implementation.

PCIA said it would like to see more emphasis on long-term spectrum management at the FCC.

Wireless carriers made limited progress on some issues, backtracked on others and, spun wheels on still others in 1998.

Legislative initiatives

On Capitol Hill, only a handful of bills directly affecting the wireless industry are expected to move in the 106th Congress. Tauzin and McCain are expected to reintroduce a bill to promote wireless E911 and foster antenna siting on federal land.

Though the bill’s chances for passage in 1999 look good, the industry will continue to face opposition from cities and states, trial lawyers, environmentalists and lawmakers aligned tied to one or more of the groups.

Battles over congressional jurisdiction could complicate the bill as well.

A bill to curb antenna siting by solidifying local oversight of antenna siting and preventing any federal pre-emption is likely to resurface with the backing of the Vermont congressional delegation-Sens. Patrick Leahy (D) and James Jeffords (R) and Rep. Bernie Sanders (I)-and Rep. Christopher Shays, a moderate Republican from Connecticut.

Wireless carriers also will again push for legislation to extend the Jan. 1, 1995, carrier compensation grandfather date in the 1994 Communications Assistance for Law Enforcement Act to match the new June, 30, 2000, compliance date set by the FCC. The industry will try to find folks in the House and Senate Judiciary Committees to champion CALEA. House Speaker-designate Bob Livingston (R-La.) could be a big help as the telecom industry butts heads one more time with the FBI on digital wiretap implementation.

Bliley is expected to resume his push to privatize the International Mobile Satellite Organization and the International Telecommunication Satellite Organization.

Alan Shark, president of the American Mobile Telecommunications Association, will continue pushing the FCC to be friendly to small business. That means giving small SMRs cover from many CMRS regulations.

Private wireless users, led by Industrial Telecommunications Association President Mark Crosby, plan to go to war with the FCC’s wireless bureau over plans to auction private wireless spectrum as allowed by the 1997 budget act.

Not to be overlooked is FCC consideration of pending mega-mergers between Ameritech Corp. and SBC Communications Corp., between
Bell Atlantic Corp. and GTE Corp., and between AT&T Corp. and Tele-Communications Inc.

“The FCC is often the place where well-mean
ing individuals will attempt to bring a number of well-meaning problems … But a drop of communications policy does not transform something into a communications issue,” said FCC Commissioner Michael Powell recently. In other words, Powell does not believe the FCC should look for an excuse to block the mergers.

Commissioner Harold Furchtgott-Roth, for his part, remains perplexed over why the FCC even reviews telecom mergers when the Justice Department already conducts antitrust analyses.

As for the Democratic majority of Kennard and commissioners Susan Ness and Gloria Tristani, the public interest standard still has a place in merger review specifically and telecom law generally.

Larry Strickling, chief of the Common Carrier Bureau, said access reform and universal service will be top priorities for the first two quarters of 1999. The bureau also plans to review telecom mergers, Bell applications to enter the long-distance market, enforcement, numbering, Y2K and deregulation.

Regina Keeney, chief of the International Bureau, said the focus in 1999 will be global competition, global telecom privatization and development and spectrum management.

Reporter Heather Forsgren Weaver contributed to this report.

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