WASHINGTON-A Supreme Court decision Jan. 25 that gives the FCC jurisdiction over setting
nationwide standards for interconnection could have implications beyond local telephone competition and wireless
entry into the local telephone market.
Indeed, the Supreme Court’s ruling gets to the heart of the issue of jurisdiction
of the local telephone market. In a 5-3 decision, the Supreme Court voted to give the Federal Communications
Commission interconnection jurisdiction. Justice Sandra Day O’Connor did not participate in the decision because of a
well-known conflict of interest involving stock interests in AT&T Corp.
The implications for the wireless industry
do not come directly from the decision. However, the FCC has been sitting on interconnection issues related to the
wireless industry-most notably paging interconnection-and it is now hoped the FCC will move on these items.
The
Personal Communications Industry Association, which represents the paging industry, issued a statement urging the
FCC to “immediately clear the hurdles to fair interconnection agreements for all wireless carriers. We’re thrilled
that there are no more obstacles, and we hope the [FCC] will play a strong and decisive role in
interconnection.”
The decision means there could be movement on a number of fronts because the decision
impacts both the wireless and wireline industries, said Thomas Sugrue, chief of the FCC’s Wireless
Telecommunications Bureau.
Sugrue also believes the decision “removes any doubt” about whether
wireless carriers are subject to federal or state jurisdiction. “This will put back on the federal sphere the
interconnection rules,” he said.
The paging industry also could benefit from the court’s affirmation of the
FCC’s pick-and-choose rule, said Wayne Markis of Handy Page.
The Cellular Telecommunications Industry
Association said in a report to its members that the dramatic shift in power to the FCC is “good news for wireless
carriers, which traditionally have benefited from federal pre-emption of state regulations, [however] it is tempered by
the potential risk that a strengthened FCC will be more inclined to assert its regulatory authority over [commercial
mobile radio services] carriers.”
CTIA specifically points out the shift in power could be good for its calling-
party-pays initiative, a view supported by Kevin Condon of Warburg Dillon Read. “With regulatory authority in
the hands of the states, who we believe are more prone to [incumbent local exchange carrier] influence than the FCC,
we did not expect CPP to be implemented anytime soon. We believe the Supreme Court’s recent bias toward federal
rather than state regulation for wireline may also apply to wireless and could help spur implementation of CPP,”
Condon said.
When the decision was announced, it was hard to tell the winner from the loser. Both sides in the
debate declared victory. “Today’s ruling on network elements is a smashing victory,” said William P. Barr,
executive vice president and general counsel of GTE Corp. “The ILECs must stop trying to avoid the inevitable
and open their local networks to new competitive entrants,” said H. Russell Frisby Jr., of the Competitive
Telecommunications Association.
FCC Chairman William Kennard called the ruling monumental, and said he was
“heartened that we are now ending a phase after the implementation [of the telecom act] where there was so much
uncertainty.”
