YOU ARE AT:Archived ArticlesWATCH FOR BATTLE BETWEEN LECS, WIRELESS AS COMPETITION MOUNTS

WATCH FOR BATTLE BETWEEN LECS, WIRELESS AS COMPETITION MOUNTS

WASHINGTON-While competition intensifies in wireless telecommunications with the licensing of new carriers throughout the nation, the industry’s biggest foe in 1996 and beyond could be local landline telephone companies.

There already are signs of the impending battle.

The Federal Communications Commission last Friday was expected to propose rules reforming interconnection between commercial mobile radio service carriers and local exchange carriers. The action will energize the issue through next summer, when final rules are adopted.

Other issues on the table that could pit wireless carriers against LECs include selecting an entity to oversee the North American Numbering Plan and establishing a process for issuing telephone numbers, area codes and specialty codes.

Potential complications could arise insofar as determining the division of jurisdiction between state and federal regulators where numbering issues are involved.

The wireless telecommunications industry has not wasted time making its views known.

The industry asserts the current system of financial compensation governing CMRS-to-LEC interconnection discriminates against wireless carriers and hurts their ability to expand into the local loop market.

“There is simply no more important issue affecting the delivery of low cost, competitive wireless telecommunications to all Americans,” said Thomas Wheeler, president of the Cellular Telecommunications Industry Association, in a Nov. 20 letter to FCC Chairman Reed Hundt.

Wheeler, advocating a reciprocal termination system whereby each party keeps revenue from calls it generates and terminates calls without charge, said that because a minimum three-cents-per-minute charge for airtime goes to LECs, it will be difficult to lower wireless prices.

The co-carrier status that is supposed to exist between wireless telephony firms and their landline counterparts, he claims, does not exist in practice.

Cellular carriers say they pay inflated access charges-a “hidden subsidy”-to LECs to terminate wireless calls, but do not receive compensation for terminating calls that originate on the landline network. Most cellular calls are received by landline customers.

“I think it’s a very high profile issue,” said Mark Golden, vice president of industry affairs at the Personal Communication Industry Association.

The industry appears to have a strong advocate in new Wireless Telecommunications Bureau Chief Michele Farquhar.

“It is important to recognize that the level to which the commission is able to realize the results of the auction process in fully competitive telecommunications services will be affected to a large degree by the commission’s willingness to establish clear interconnection policies,” said Farquhar earlier this month at an industry conference.

“Competing wireless providers,” she noted, “will play a fundamental role in the effort to open cellular markets, as well as local exchange markets in general, to competition.”

Local competition is a key theme of telecommunications reform legislation that’s nearing passage, if not this year, then perhaps next year.

The policy implications for wireless carriers are significant.

It means that as competition among cellular, personal communications services and specialized mobile radio operators increases (causing market share to shrink even while a larger, mass market evolves), wireless carriers may now have a chance to tap into a new market heretofore closed off for the past century: local exchange.

And it represents the arrival of a truly revolutionary development in the history of communications: the day when consumers can tell their local landline telephone company-one of the seven Baby Bells or GTE Corp. or someone else-to discontinue service. Someone else can now do the job.

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