WASHINGTON-Senate Democrats last Thursday released their version of telecommunications reform that was much kinder to the independent wireless industry than the version released in early May and passed by the House Commerce Committee.
Independent wireless carriers-those carriers that are not affiliated with incumbent wireline carriers-would gain more negotiating power over special access if the Senate Democratic draft is passed. In addition, the Senate Democrats sent a strong signal that wireless carriers should continue to receive universal-service subsidies when they serve customers in rural America.
Special access is a catch-all phrase for dedicated lines to carry traffic. Wireless carriers use these lines to transmit calls from base stations to mobile switching centers.
“Sprint Nextel applauds the provisions in the Senate Democratic staff draft legislation that works to correct the market failure that exists today in the special-access services marketplace. The lack of competition in the provision of these services-services that are critical to the operation of competitive networks-has resulted in the outrageous prices charged by the regional Bell operating companies,” said Robert Foosaner, senior vice president of government affairs for Sprint Nextel Corp.
Under the draft, incumbent local exchange carriers would apply a “price index that ensures that productivity gains are not only realized, but shared with customers and would be prohibited from conditioning contracts on volume and term agreements that do not relate to the cost reductions from purchasing on a volume and term basis,” according to a staff summary of the bill.
In addition, those seeking special access, including independent wireless carriers, would be able to renegotiate their contracts if these prohibitions exist.
The Senate bill is also clear on universal service. “Competitive neutrality means that universal-service support mechanisms and rules neither unfairly advantage nor disadvantage one provider over another, and neither unfairly favor nor disfavor one technology over another.”
The universal-service provisions also change some anti-wireless ideas being pushed by rural local exchange carriers, such as requiring wireless carriers to allow their customers the opportunity to choose their own long-distance provider. The wireless industry has long fought against any “equal-access” requirement.
The draft also puts in place the criteria to receive universal-service subsidies established by the Federal Communications Commission in its Virginia Cellular order that require wireless carriers to make certain buildout commitments. One change from Virginia Cellular: the buildout plans need only to be for two years.
“I think it’s pretty clear from the latest staff draft that Congress expects the Federal-State Joint Board on Universal Service and the FCC to treat all eligible telecommunications carriers fairly when it comes to the distribution of universal-service high-cost support,” said a wireless industry source.
The Senate Commerce Committee is expected to mesh together this draft with comments from other members of the committee and release a revised bill June 5. A hearing is scheduled to be held on the revised bill June 13 with full committee consideration June 20.
Sen. Ted Stevens (R-Alaska), chairman of the Senate Commerce Committee, released a 135-page bill May 1. The Democratic draft is 96 pages. The top Democrat on the Senate Commerce Committee, Sen. Daniel Inouye (D-Hawaii), has said he supported the Stevens bill out of a belief that telecommunications is not partisan, but that he believed there were areas that needed significant improvement.
