Subject: [NEXTEL-1] Wireless Providers Lobby For Leg Up Against Bells.html

From: [email-masked]
Date: Fri, 31 Jan 2003 18:48:01 -0500

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Wireless Providers Lobby For Leg Up Against Bells
Friday January 31, 4:55 pm ET

By Mark Wigfield, Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--Some wireless companies are angling for a leg up in
phone competition rules despite a strong deregulatory wind blowing from the
Federal Communications Commission.
T-Mobil International AG (G.TMO), AT&T Wireless and the wireless
industry's trade association have asked the FCC to grant them cheap access to
certain Baby Bell lines. Called "special access transport," these lines carry
bulk mobile phone traffic from "cell-site" receivers to mobile phone switching
centers that complete the call.

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Their angle: FCC Chairman Michael Powell himself has credited mobile phones as
an important source of competition to the dominant regional Bell companies.
Their argument: wireless could provide even more competition for consumers if
prices to Bell "bottleneck" facilities were regulated.
"The commission must address the serious issue of special access monopoly
pricing," wrote AT&T Wireless in a filing with the FCC. The company reported
spending $300 million for transport in 2001, and said that Sprint Corp.
considers the expense its single largest network operating cost.
Transport "is an essential facility," says Harold Salters, a lobbyist for T-
Mobile. "It should be priced appropriately."
Without help from regulators, the price of transport "has a definite impact on
us and our ability to compete," he said.
The FCC has lumped the wireless companies' appeal into the same proceeding
that is trying to determine the degree to which the agency can justify, for
legal, competitive and economic reasons, current policies requiring the Bells to
cheaply lease elements of their networks to wireline competitors. Those elements
are known as "unbundled network elements," or UNEs.
The cheap leases benefit upstart local competitors, like Z-Tel Technologies
Inc. (NasdaqSC:ZTEL - News) and the local phone service divisions of AT&T Corp. and WorldCom
Inc. .
The FCC is seen as likely phasing out some UNE discounts. That's due in part
to a court order demanding that the agency prove that its rules are needed to
remove real impairment to competition in the marketplace.
Despite the FCC's apparent deregulatory bent, T-Mobile lobbyist Salters says
he's encouraged by what he's heard during his visits to the agency.
"We've gotten very good feedback," Salters says. "I'm impressed by the
willingness of the commission to listen to our point of view."
But Robert Blau, lobbyist for BellSouth Corp. (NYSE:BLS - News) , believes the wireless
industry's chances of winning are low.
"These guys have demonstrated that they haven't been impaired in the
competitive sense," Blau says. "They want to have transport declared a UNE
because there is a big discount. The price is below water and everybody
understands it."
With even the mighty Bell companies struggling in the current telecom market,
"the last thing the industry needs right now is another arbitrage setup that
will squeeze another billion or two out of the revenue stream," Blau said.
The wireless industry says that wireless substitution for wireline phones "is
in its infancy," citing a July FCC report finding that only about 3% to 5% of
wireless customers use their wireless phones as their only telephone. But there
is "growing evidence" that consumers are substituting wireless service for
traditional wireline communications, the FCC also found.
One study cited by the FCC found that wireless had displaced 10 million access
lines, primarily by consumers choosing wireless over installing additional
telephone lines.
The Bells served 167 million lines in June 2002, compared with the 128 million
wireless subscribers reported in December 2001, according to the FCC.
While wireless growth has slowed, it still outpaces the 7.7% decline in the
number of telephone lines served by the Bells between December 1999 and June
2002. The number of wireless subscribers rose by 42% through December 2001.
The FCC is expected to complete its proceeding next month.
-By Mark Wigfield, Dow Jones Newswires; 202-828-3397; [email-masked]

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