WASHINGTON-In a stunning move with perhaps more symbolism than substance, Ameritech Cellular Services left the Cellular Telecommunications Industry Association last week because the trade group’s aggressive wireless agenda clashed with the Midwest regional Bell telephone company’s business plans.
“Over time it has become clear to us that the CTIA does not or cannot recognize the diverse interests of its members and particularly of Ameritech Cellular,” said John E. Rooney, president of Ameritech Cellular and Paging Services in a written statement. “Frequently, CTIA’s positions have been inconsistent with Ameritech Cellular’s and the Ameritech corporation’s strategic goals and directions.”
Specifically, Ameritech and CTIA quarreled over numbering, interconnection (bill and keep), and other issues that pitted wireless companies against wireline firms in general, and Bell cellular units against parent firms, in particular.
Many issues that divide wireless and wireline firms today are rooted in deregulatory, pro-competitive policies of 1993 legislation and the telecommunications reform bill President Clinton signed Feb. 8.
“The association was having a difficult time recognizing the diverse nature of some of its members; some are just wireless and some have broader telecom holdings and are more difficult to deal with,” Rooney told RCR. “The company did not feel that it could support the organization. In a competitive environment, [CTIA] favored one type of company over another.”
With regard to numbering and interconnection, Congress and the Federal Communications Commission have acknowledged that current policy discriminates against wireless carriers.
Thomas Wheeler, president of the CTIA, expressed disappointment with Rooney’s departure from the board in a Sept. 12 fax letter to Rooney-the same day Ameritech announced its decision-but he made no apologies for taking positions that benefit wireless members and antagonize regional Bells.
“The mission of CTIA is to promote the welfare of the industry as determined by the decisions of its board of directors,” said Wheeler, who has played a major role in getting the wireless industry deregulated at the state, local and federal levels.
When asked whether Ameritech’s move signals a bigger membership problem in CTIA regarding wireless-wireline issues, Wheeler pointed to his comment to Rooney that “all decisions of the board (including the initial bill and keep advocacy) are, if not unanimous, then by overwhelming majorities.”
While Ameritech’s pull-out is a major blow to CTIA more in public relations terms than in monetary terms, it reflects in a narrow sense Ameritech’s corporate culture. But, in the big picture, the episode is a sign of the times bespeaking volumes about the competitive nature evolving in the telecommunications industry.
Put another way, Ameritech’s strong reaction can be seen as a statement of the potential threat with which wireline carriers view wireless carriers, even their own. Perhaps it’s just more evidence that Baby Bells are going to be dragged-kicking and screaming-to the competitive marketplace. What are regional Bell holding companies telling their wireless arms, “Be successful, but not to successful. And never forget who’s boss?”
For Ameritech, which made little effort to low-key the feud, it appears clear what is important. Ameritech is one of the few RHCs without an outside wireless or wireline partner. In addition, prior to the breakup of AT&T, Bell operating companies in Ameritech’s region were the spawning ground of AT&T management hierarchy, and the wireline philosophy is deeply ingrained.
Ameritech’s wireless strategy is conservative, an irony considering it ushered in the cellular industry by piloting the first commercial system in 1983. More recently, Ameritech went its own way by being the only Bell wireless subsidiary to file for reconsideration of the hybrid radiofrequency radiation exposure guideline adopted Aug. 1 by the FCC.
Through spokesman Jim Gerace, CTIA Chairman Dennis Strigl, who heads Bell Atlantic Nynex Mobile and who formerly occupied Rooney’s seat, said he was “a little disappointed” at Ameritech’s departure. Gerace acknowledged that CTIA has been forced to make “some very tough decisions” recently. He also mentioned that CTIA has supported several issues that have been helpful to local exchange carriers, such as shielding Bell cellular firms from long distance equal access requirements much to the chagrin of non-Bell cellular carriers.
“The difference [between BANM and Ameritech] is that we’ve always kept our parent companies well-informed about what was happening at CTIA, so they never were surprised by the decisions that were made,” Gerace said.
Ameritech plans to continue its membership in PCIA on the paging level, where it has met with its competitors many times over the table. It will not increase its participation in the group, and Rooney said he would not be seeking a board position.
Other associations have members who face the same issues, but they have not lost members due to hard policy decisions. Jay Kitchen, president of the Personal Communications Industry Association, said, “Certainly there have been those instances where members have had to step back and say `this is a position in which we cannot participate.’ With our diverse membership, we work very hard to build consensus.”
During the 1980s, PCIA (then Telocator) went through gut-wrenching times because of a wireline membership ban that was later overturned but not before the trade group lost would-be wireline cellular carriers to a new trade group in 1984 named CTIA.
More recently, PCIA got caught in the middle of the paging application freeze when local and regional paging operators accused association of not fighting harder to get the freeze lifted because of pressure from nationwide paging members, which were not subject to the freeze. A number of PCIA members joined forces to lobby the issue on their own, but still retained membership in the association.
Similarly, the American Mobile Telecommunications Association has experienced internal strife involving disagreement between small and large specialized mobile radio operators over auction licensing. Only after several years of wrangling has that rancor died down.
