Nov. 4 action: FCC to vote on VZW-Alltel, Sprint-Clearwire, TV white spaces and more
AWS-3 auction likely won’t be up for discussion
October 15 2008 - 12:39 pm ET | Jeffrey Silva | RCR Wireless News
Election Day 2008 is shaping up as monumental for the wireless industry.
The Federal Communications Commission is poised to vote Nov. 4 on the Sprint Nextel Corp.-Clearwire Corp. and the Verizon Wireless-Alltel Communications L.L.C. tie-ups as well as on wireless operations in TV white spaces, according to an agency source. The commission also will likely consider approval of reforms to rural wireless subsidies and the multi-billion-dollar regime governing what telecom carriers pay each other to complete calls.
FCC Chairman Kevin Martin is expected to outline his proposed agenda for the Nov. 4 meeting at a 1 p.m EST news briefing today.
There was some indication Martin may have wanted to include on the agenda his free national wireless broadband plan — currently subject to intense debate in the advanced wireless service-3 (AWS-3) proceeding — but he apparently has been unable to get sufficient feedback from other commissioners on possible options for going forward.
The $28.1 billion Verizon Wireless-Alltel deal and, to a lesser extent, the Sprint Nextel-Clearwire transaction have become magnets for controversy through such issues as antitrust, voice and data roaming, broadband spectrum consolidation and open access. The Verizon Wireless-Alltel also still needs Department of Justice approval.
Regarding the two major wireless transactions, Martin would condition the Verizon Wireless-Alltel and Sprint Nextel-Clearwire deals on the merged entities adhering to a proposed enhanced 911 location accuracy standard — based on county-wide measurement — that major carriers and public-safety groups endorse.
Martin said he also supports Verizon Wireless having to divest a handful of markets in addition to the 85 markets the No. 2 wireless carrier agreed to sell after consultation with the Department of Justice. Verizon Wireless recently identified 15 more markets it would put up for sale as part of the Alltel acquisition.
As for rural wireless subsidies, the FCC will vote on whether to eliminate the identical support rule for the universal service fund (USF). Such an action would lower the amount of funds a rural wireless carrier could get as compared with a rural wireline carrier.
The TV white spaces vote centers on whether to open up that spectrum to wireless uses, which Google Inc. and others have been pushing for.
Martin also wants the agency to grant a nationwide collection of regional C Block open-access licenses purchased for more than $4.7 billion by Verizon Wireless at the 700 MHz auction earlier this year. Other licenses picked up for $6.6 billion by the other big 700 MHz auction winner — AT&T Mobility — remain pending at the FCC.
Finally, the FCC’s vote on inter-carrier compensation could essentially reform the payments carriers make to one another in an attempt to bring more parity and less complexity to the system. Wireless trade group CTIA argues that, in the current structure, the fees are weighted heavily in favor of wireline carriers. In 2003, CTIA estimated wireless carriers paid $3 billion to $4 billion in interconnection costs alone.
Thus, the changes sought at the Nov. 4 meeting by Martin, who likely will step down as chairman early next year when a new administration settles in, have immense financial, competitive and policy implications for the wireless industry.
October 26, 2008 09:40 am
I am a alltel a.a. and am a little nervous. Im in a region that verizon is exclusive aswell. I have a verizon corporate store down the street from me. I think i am gonna get shafted after this transition. I dont see verizon caring about anyone but thereselves.
October 17, 2008 04:18 pm
This USF/intercarrier compensation decision, the biggest action the FCC has taken on these complex matters, probably ever, will be done under cover of night. Our best guess as to what wireless would get under this proposal is (as Obama said to McCain) "Zero, Joe!" So with all of the dead zones in rural America, and no profitable business plan to fill them in, the new plan is to give wireless zero AND require wireless to deliver broadband to boot!! In the meantime, since 1999, our federal universal service mechanism has paid $28 BILLION to wireline carriers to just provide fixed voice service. The total amount paid out to wireless during that time has been only $3 billion. With so much work that needs to be done to improve wireless service in rural areas, shouldn't the FCC be increasing funding for wireless so consumers can get the health and safety benefits of wireless? Especially since wireless contributes over $3 billion per year INTO the fund!Worse yet, if the wireless carriers take customers away from wireline carriers, the rules allow wireline carriers to keep getting the same amount of funding! Can you imagine it - as people keep cutting the cord and wireline carriers lose half their customers, they still get $3 billion per year!! Of course, the FCC's proposal includes a statement that consumers don't view wireless as a substitute. I swear I am not making this up. In the middle of the greatest financial crisis since the Great Depression, we have an FCC proposing to reduce investment in modern infrastructure in rural areas. These investments mean jobs and economic development for small communities. By cutting as much as $1 billion per year in new wireless infrastructure investment from rural areas, consumers are the big losers. In rural areas where wireless service is poor, consumers are forced to hang on to their wireline phones much longer than they otherwise would - increasing their financial burdens further.I sincerely hope someone confronts the presidential candidates about this before the election. Rural consumers, who pay into the fund, deserve much better than this - and the candidates should speak to this proposed "midnight run" by the FCC. This really is terrible public policy and it would be a disgraceful exit for this Chairman and any Commissioner who signs on to this proposal.
October 17, 2008 06:04 am
Press in states and local markets should be jumping on this story. The outgoing administration makes it virtually impossible (through high cost benchmarks and other means) for independent rural wireless companies to keep getting universal service support for rural operations. Who does that benefit -- customers? Or the older landline carriers, whose costs are high enough that they can meet the benchmarks? The FCC's estimates of the number of carriers in rural areas are wildly optimistic -- many areas are still being built out with wireless. (The industry is only about 20 years old.) To stop supporting rural wireless buildout means there will not be mobile phone service in many rural areas. If it maybe gets offered by an existing landline phone company, there will be a monopoly, which time and again has been proven to often result in high prices and low service quality.This Chairman has been attacking rural wireless for months. His parting shot is a killer.
October 16, 2008 04:07 pm
I am a Alltel employee and I am anxious to get this merger over with also. I am sure that things will change quite a bit for the employees after the merger. Alltel is not a "family-oriented" company, and the turnover is very high. I bet 1-2 people a week are let go. They do not work with the employee at all. Everyone is treated the same no matter what. They do not use seniority to assign schedules or vacations. It is all based on productively, then they will change the rules on that whenever. It is a terrible place to work. It use to be very good work environment when I started 3 years ago, but it is more like a sweatshop now. VZW is a wonderful company from past experience, and as a present customer (6 years now).
October 16, 2008 06:11 am
I like how the FCC is going to sneak these votes in on Election Day, when the rest of the country is paying attention to other things and a day before they become lame ducks. Taking USF support away from rural wireless really gets me...doesn't it make more sense to invest in wireless rather than landline? If we live in a "communications age" shouldn't we focus on modern communications, like the kind that offer mobility and the ability to call for help if you have an accident on a country road?
October 16, 2008 06:02 am
As a retailer for Alltel, I can say that I'm concerned with possible changes to the Alltel Circle. Many of my customers have subscribed with Alltel specifically because they can call to pretty much any number they want, without using minutes. Whereas, Verizon offers IN Calling which allows you to talk for an unlimited time to other Verizon Wireless customers. This is already an option with Alltel to Alltel calls. I can't see any reason, other than profits, for Alltel to sell out to Verizon.
October 16, 2008 06:02 am
The wait is almost over! As an alltel employee I know that I am ready to find out about the legistics of what is going to happen to existing employees. Im sure that Verizon Wireless will take care of us to the best of their abilities but the unknown makes me a tid bit nervous.