Wireless remains unsettled in D.C.

WASHINGTON, D.C. – While the weather this time of the year in Washington, D.C., can only be described as oppressive, the mood of the telecommunications community in the nation’s capital can best be described as ambitious.
That ambition is being directly led by the Federal Communications Commission, which under the leadership of Chairman Julius Genachowski has laid out an ambitious plan of reforming the current telecommunications landscape that is susceptible to change following any of the elections that keeps this place hoping.
One of the most controversial initiatives undertaken by the FCC is the National Broadband Plan, which is looking to expand the availability of broadband services across the country. While many in the wireless industry were disappointed that the initial recommendations of the NBP did not include a greater emphasis on wireless services, the FCC’s audacious plan to unlock up to 300 megahertz of new spectrum over the next five years and 500 megahertz over the next 10 years has drawn considerable interest.
Ruth Milkman, bureau chief for the FCC’s Wireless Telecommunications Bureau, agreed that the target is an ambitious one and that the commission it will face challenges in freeing up much of that spectrum, which the commission hopes to wrestle from the hands of commercial television broadcasters. To do so the FCC is looking at changes to the current law that require proceeds from spectrum auctions be deposited into the national treasury so that it may instead use some of the proceeds to reimburse broadcasters for giving up their precious spectrum assets.
“We have to have a goal and we know that the 300 megahertz goal is ambitious, but we think it’s achievable,” Milkman said.
Milkman did add that the commission is comfortable with the current route in which spectrum is auctioned to interested telecom providers, a route that has seen nearly $35 billion in proceeds deposited into the national treasury over the past five years.
Differences brewing
One change that does appear to be brewing is a possible crack in the traditionally strong regulatory front pursued by the industry’s nationwide operators and spearheaded by wireless trade association CTIA. A number of people we spoke with noted that the growing market share difference between the nation’s No. 1 and No. 2 operators Verizon Wireless and AT&T Mobility and the No. 3 and No. 4 operators Sprint Nextel Corp. and T-Mobile USA Inc. has started to cause a riff amongst the interest of carriers.
One analyst noted that Sprint Nextel and T-Mobile USA have recently begun to side more with the interest of rural operators that for years have struggled to compete against the industry’s nationwide operators.
“The wireless industry is still united on most issues,” explained Charles McKee, VP for state and federal regulatory issues at Sprint Nextel. “But, there are also some areas of tension that need to be acknowledged. … Trade associations have the difficult job of trying to reconcile amongst its members, but our goal is to promote our agenda that is beneficial to the wireless industry and not to the ILEC industry.”
Nearly all agreed that while there is competition on the commercial side of the wireless industry, they questioned the same level of competition when it comes to the behind-the-scenes aspects, including special access and certain legacy government programs. Those targeted for having an advantage in these regards included both large companies like Verizon Communications Inc. and AT&T Inc., as well as regional and rural wireline players.
“When it comes to issues like special access we have to look hard to find competition in that space,” said Kathleen O’Brien Ham, VP of Federal Regulatory Affairs for T-Mobile USA.
Telecom Act redux?
One topic no one seemed willing to broach was the possibility of a rewrite of the 1996 Telecom Act that has been mentioned by some lawmakers. While there was acknowledgement that the telecommunications, and more specifically the mobile industry, is vastly different today than it was 14 years ago, the thought of trying to revamp that overarching document would be a tall order.
Sprint Nextel’s McKee noted that any talk of a rewrite is fraught with peril, but acknowledged that the telecommunications industry today is vastly different from the one in 1996 when the act was passed.
“The Telecom Act did a lot to change the industry and in a very positive way,” McKee said. “But there is no way we could have predicted how much the industry has changed and where we are now. Rewriting the Telecom Act? Talk about a huge undertaking.”