WASHINGTON – Rep. Joe Barton, R-Texas, chairman of the House Commerce subcommittee on oversight and investigations, said he may offer a switched wireless resale bill next year unless this week’s hearing on cellular telephone competition and subsequent industry developments convince him otherwise.
“If it can be factually show, and by consensus agreement, that there is not price competition in wireless resale then there are a number of policy options you can take to create price competition – one of which is a mandatory (switched) resale requirement,” said Barton, in an interview with RCR.
Barton said no action will be taken until a full record is developed, but added he is prepared to move forward next spring or summer with legislation if he concludes more competition is needed above and beyond what new personal communications services are supposed to bring to the cellular duopoly.
The GAO, FCC and Justice Department say the cellular industry is not fully competitive, but policymakers have shied away from regulating the industry with more vigor and chosen instead to create more competition via PCS.
Barton is more skeptical. “I’m not so sure adding two more players gets us where we want to be, but maybe it will,” said Barton, referring to the two PCS licenses in each market that AT&T Corp., Sprint Corp., the Baby Bells and others paid $7 billion for earlier this year.
The FCC requires cellular carriers to sell only airtime to resellers and is disinclined to force carriers to provide unbundled interconnection to resellers or to guarantee resellers the right to install their own switches. Not a single firm offers switched cellular resale today, but excess channel capacity from PCS could give big firms with marketing and technological prowess sufficient leverage with start-up PCS companies to secure huge volume discounts on telephone numbers or even switched/interconnection resale.
By interconnecting with a wireless carrier’s switch or by installing one of their own, resellers say they gain greater freedom and flexibility to offer cost-based calling features and thereby increase competition, not to mention their own profits.
The cellular industry, pointing to dropping monthly bills and approaching competition from PCS, argues switched resale will hurt system operators who have invested $22 billion on networks and $7 billion on spectrum.
While supporting mandatory resale as a wireless policy, the cellular industry claims switched resale swings the pendulum too far the other way in favor of resellers and gives them a free ride.
Still, Barton is suspicious of excessive concentration of pocket phone licenses held by a handful of large telecom firms, who may be the only ones able to survive and thrive at a time when the two entrenched cellular franchises in each city give phones away and are lowering service charges more and more.
“My concern is, whether you’ve got a monopoly, duopoly or oligopoly, if you’ve got big interests-big companies that collectively dominate, what you tend to get is market sharing, not real price competition,” said the soft-spoken Barton. The 46-year-old conservative lawmaker represents Texas’ sixth district of Dallas-Fort Worth.
Barton concedes he’s fighting a David and Goliath battle pitting 125 mostly small resellers against a powerful cellular telephone lobby. But if this mismatch gives telecommunications giants comfort or confidence as the wireless resale controversy re-ignites, they’d better know who their dealing with.
Barton’s demure manner belies a feisty and iron-willed lawmaker who will relentlessly pursue an issue. He’s a crafty politician in a powerful position both as head of the House oversight and investigations subcommittee and as a high-ranking member of the parent Commerce Committee.
Barton knew exactly when to fold his cards when it appeared he didn’t have the votes for his switched wireless resale amendment during subcommittee and full committee markups of House telecommunications reform legislation in late May.
Since then, the sound and fury of the wireless resale issue has subsided even though there was speculation Barton might offer a switched wireless resale amendment when telecommunications reform legislation reached the House floor en route to passage in August.
Barton didn’t exercise that option, but considered it. “If I’d wanted to do it in a sneaky way, I could have done it and probably won,” he stated. “But I told Chairman Bliley and subcommittee Chairman Fields … that I would do this hearing in October because I may be wrong on the facts. I don’t think I’m going to be proven wrong, but I could be.”
Why did Barton take up the unenviable cause of wireless resellers? Two reasons: high monthly cellular phone bills addressed to him and a soft spot for small business.
But it took a visit from William Booher, an old Texas friend who worked as chief of staff to Janice Obuchowski at the National Telecommunications and Information Administration and later as deputy assistant secretary for technology policy in the Commerce Department’s Technology Administration until early 1993, to put the issue on the political radar screen.
Booher, now a consultant who represents the National Wireless Resellers Association, brought the matter to Barton’s attention in early February. Sparks have been flying ever since. “When Joe believes he’s philosophically right on an issue, then he stays with it,” said Booher.
