WASHINGTON-For the wireless telecom industry, 1998 will be a pivotal year.
A continuation next year of this year’s policy retreats and defeats at the Federal Communications Commission, on Capitol Hill and in the courts could make the wireless industry even more wobbly on Wall Street and Main Street.
The industry and policy makers cannot afford to let that happen. Too much is at stake and the world is changing too fast for the kind of missteps and indecision that dominated 1997.
Darwinian market forces being unleashed at the dawn of the New Millennium have no mercy. Policy snags left untangled could make wireless road kill on the information superhighway in 1998 and beyond.
Leadership, in short supply this year, needs to make a comeback in 1998. That leadership must be inspired; it must shed the tired and myopic Inside-the-Beltway mindset of the past and be willing to plead its case to a larger universe: America and the world.
Attempts to shout down the opponent-city mayors, county commissioners, soccer moms, environmentalists, organized labor and the FBI-went nowhere in 1997. In fact, hardball strategy polarized the debate and created a torrent of resentment like nothing the wireless industry had ever seen.
Capitol Hill-for years the easy answer to industry woes-will not come to the rescue in the face of hostility from hordes of prospective voters. Politically, as they say in this town, it’s a non-starter.
Who wins, when after three years of crossfire between industry and FBI over the implementation of the digital wiretap act, frustrated carriers face stiff fines for noncompliance and law enforcement remains outgunned by high-tech crooks?
“We think the PCS industry has been singled out,” said Jay Kitchen, president of the Personal Communications Industry Association. Yet, he acknowledges the FBI has a job to do, too.
Congress, so fed up with both sides, will not fund the Communications Assistance for Law Enforcement Act, until the food fight ends.
Without more clarity in wireless policy, wireless might miss a once-in-a-generation opportunity. Take a look. The world is now the battleground-the new market-for this rapidly growing, multibillion dollar industry that is being deregulated right into the frenetic world of consumer electronics. There is as much to gain as there is to lose.
To make it work will be a daunting challenge.
As 1997 closes, policy uncertainty hovers over antenna siting, universal service, E-911, resale, digital wiretap, numbering, encryption, product safety, auctions and bankruptcies, public-safety spectrum relief, high-tech securities litigation, regulatory reform, small business opportunities and ownership diversity, spectrum budget policy, pay-phone compensation, international satellite reform and other issues.
Why, it’s not even clear where the FCC will be housed next year.
This year was not a complete flop. Anti-cloning legislation sponsored by Sen. Jon Kyl (R-Ariz.) and Rep. Bill McCollum (R-Fla.) progressed in 1997 and should become law next year.
Likewise, strengthened wireless privacy legislation is poised to win approval by Congress and disapproval by radio scanner manufacturers next year.
But the big picture still remains murky. The present state of affairs in wireless policy exists against a backdrop of unfulfilled promises for domestic and global telecom competition, new FCC leadership and the unrelenting surge of technology. The interrelationships are complex and not fully understood.
It’s unclear what new FCC Chairman Bill Kennard’s mantra of community, competition and common sense will mean in 1998 for the wireless industry.
“We feel pretty good with his priorities because many of our items fit into to them,” said Dan Phythyon, chief of the Wireless Telecommunications Bureau. But already, as he rolls up his sleeves and begins to work with Commissioner Susan Ness and new Commissioners Gloria Tristani, Michael Powell and Harold Furchtgott-Roth, Kennard is burdened with congressional queries and investigations into matters that have their roots in the previous Hundt regime, when the new FCC chairman served as general counsel.
From all indications, policy makers haven’t quite figured out how wireless technology fits into a new deregulatory regime designed to foster competition but instead led to massive consolidation since the 1996 telecom act.
The wireless industry, with an aggressive lobbying campaign, barely won FCC acceptance and approval of pro-competitive interconnection rules. Now, it will take another herculean effort in 1998 to fix what Cellular Telecommunications Industry Association President Tom Wheeler calls “the hidden mandate” in the rate base of wireless consumers. It goes by the name of universal service contribution.
Wheeler says that tax is lethal for wireless carriers in a competitive environment. He also said the government needs to offer more guidance on the E-911 issue.
While the FCC insists on a national overlay for implementing the 1996 telecom act, the agency has a laissez faire approach to wireless E-911.
“It’s one thing to give lip service to competition and another to enable competition,” said Wheeler.
As the 1998 mid-term congressional elections near, Wheeler predicts lawmakers will get off the dime and be much less gun shy about tinkering with the telecom act. For the time being, lawmakers-while decrying all the telecom mega mergers-won’t touch the telecom act with a 10-foot pole.
Another variable, no less important in the mix, is the industry message. It is garbled, confusing and ultimately contrary to industry’s best interests.
Take antenna siting, the No. 1 issue that industry lost ground on this year after a nationwide grassroots revolt by environmentalists, property owners, soccer moms and organized labor forced industry sympathizers in Congress-like House telecom subcommittee Chairman Billy Tauzin (R-La.) and Senate Commerce Committee Chairman John McCain (R-Ariz.)-to back down on plans to broaden federal pre-emption of local and state antenna siting laws.
The vacuum they left was filled by a bipartisan handful of lawmakers from the Northeast: Sens. Patrick Leahy (D-Vt.) and James Jeffords (R-Vt.) and Reps. Bernie Sanders (I-Vt.) Christopher Shays ( R-Conn.). Their mission is quite different than was Tauzin and McCain’s: It is to return full jurisdiction over antenna siting to local and state officials and to bar federal pre-emption of that authority in 1998.
On top of the legislation, the wireless industry has to deal with three federal appeals court challenges to the FCC’s 1996 radio-frequency radiation exposure safety standard.
Today, under the 1996 telecom act, federal pre-emption is limited to RF safety compliance by carriers. A local zoning board cannot deny a antenna application on health grounds if the carrier meets the RF standard.
What happened? Why does the industry find itself in such a defensive posture on antenna siting?
“Some went a little to far and pushed for full pre-emption and it produced a backlash,” commented PCIA’s Kitchen.
The not-so-oblique reference is to CTIA’s aggressive push for federal pre-emption of local antenna siting regulation and excessive taxation of wireless carriers.
On any given issue, whether it be antenna siting, CALEA, universal service or wireless privacy, Capitol Hill can be treated to two or more views from the wireless industry. It’s a problem.
Some differences are inherent and necessary, given that the wireless industry is heterogeneous. While paging, mobile phone, dispatch radio and mobile satellite carriers share issues because their spectrum is the driver of those sectors, their issues are different from noncommunications firms that use spectrum only as tool for profit.
There is also the use of private wireless spectrum by police, firemen, emergency medics and other service providers in state and local governments.
However, there is one shared
belief to give the wireless industry cohesion and strength in 1998 and for years to come: disgust for the broadcast industry.
