WASHINGTON-With the idea of wireless communications as a complement to traditional wireline residential and business service still fresh in the public’s mind, the move toward wireless as a purveyor of local-loop service is closer than most people think.

With some areas of Illinois, New York and Connecticut now fully open to competition between entrenched Bell companies and newcomers such as competitive access providers-coupled with the possibility of cable companies providing phone service just around the corner-other states are crafting guidelines for those seeking to enter the telco arena.

Late last month, the Maryland Public Service Commission released its conditions governing competitive local exchange services. Wireless companies were not figured into the order as potential competitors because wireless services currently are regulated by the Federal Communications Commission and not by individual states. Yet these companies could be subject to the same restrictions in the event pending telecommunications reform is signed into law or if major cellular, personal communications services or enhanced specialized mobile radio carriers become even more aggressive in the marketplace.

In fact, the PSC said in its opening comments that “local exchange competition is occurring in the state already in the form of cellular and other radio-based technologies over which we have no jurisdiction. Restricting [other wireline carrier] operations, we found, would favor radio-based technologies, an unnecessary market distortion.”

Current competitors to Bell Atlantic in Maryland include MFS Intelenet, MCImetro and TCG America Inc. The PSC will consider AT&T Corp.’s petition to enter the local loop later this month. With that company’s and MCI Communications Corp.’s ties to wireless communications, it can only be a matter of time before their wireless arms become active providers of residential and business dialtone.

The Maryland order establishes new interconnection rates that incumbent Bell Atlantic and new entrants will pay each other to complete calls on each other’s networks. It also establishes terms by which carriers can buy customers’ dialtone lines from Bell Atlantic; new entrants can buy the entire dialtone line or just those segments that are needed.

The order also ensures that consumers will have access to 911 service, directory assistance and number portability, and that they will remain in the same service area, no matter which provider they choose.

Keith Davis, vice president/law for Cellular One in Maryland, said, “If we entered the local loop, these rules would be applicable. Some of our affiliations in Rochester [N.Y.] and Chicago have gotten permission to do this. At some point, we will, too, but not imminently. Southwestern Bell [Cellular One’s parent] has not decided how aggressive it will be outside of its traditional service area.”

According to Mark Golden of the Personal Communications Industry Association, the potential impact of wireless entry into the local loop will be “phenomenal at the state and federal level.”

Potential wireless local-loop providers should note the parts of the Maryland order that deal with interconnection. PSC staff adopted a rate structure for potential Maryland entrants that will allow Bell Atlantic to charge one rate for co-carrier interconnection at a Bell Atlantic end office and another for interconnection at a Bell Atlantic tandem switch. Business and residential interconnection rates will be the same. To encourage competitors to build their own networks, Bell Atlantic will pay an interconnection rate to co-carriers equal to what co-carriers will pay for interconnection with Bell Atlantic’s end offices.

To this end, the PSC adopted a rate of 0.5 cents per minute of use for interconnection to Bell Atlantic’s tandems and 0.3 cents per minute of use for interconnection at its end offices. Bell Atlantic will pay new entrants 0.3 cents per minute of use for terminating calls on their networks. Carriers also will have the option of determining the number of ports sufficient to provide busy-hour interconnection capacity with a competitor’s system, paying a flat rate per port as an alternative to the minute-of-use-based rate.

Regarding equal access, new entrants will not be allowed to bundle long-distance services with their local service because Bell Atlantic is unable to do so at this time. This could be a sticking point for AT&T and even Sprint, which presumably would want to bundle all of its services to provide a customer with one-stop shopping. New entrants also must offer unbundled elements for resale when unbundling is requested by a co-carrier, reseller or interconnector or when it is technically feasible to do so without damaging network integrity.


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