New Telecom Quarterly Interconnection Rules for Wireless Telecommunications Vivian Witkind Davis, Ph.D. Dr. Vivian Davis is a senior policy analyst for telecommunications at the National Regulatory roviders of wireless services will be they affect state public service commissions Research Institute (NRRI). powerful participants in building an in their relationship with the Federal Com- She is the co-author of Pintermeshed “network of networks” munications Commission (FCC). the recently-released where all sorts of telecommunications Among the most important of these NRRI report, Wireless Telecommunications in companies and technologies have the issues is interconnection, where federal Local Markets: Policies opportunity to compete. Yet, policy deci- oversight has just been reaffirmed by the 8th for Inclusion. Vivian holds sions on the regulation of wireless telecom- Circuit Court of Appeals. While ruling that a doctorate in public munications have followed a different path states have authority over intrastate intercon- policy from The Ohio State University and a than wireline. nection rates for most carriers, the court B.A. in political science Section 332 of the Communications Act, excepted CMRS, like cellular and personal from Wellesley College. passed in 1993, provides for regulatory communications services, covered by section parity within the wireless industry but 332. distinguishes between wireless and wireline The states do have a role to play, carriers. The Telecommunications Act of however: They must approve (or disap- 1996, while explicitly preserving section 332, prove) interconnection agreements under calls for: the Telecommunications Act. CMRS provid- ers have been somewhat later overall than • Similar rules for similarly-situated other carriers in negotiating, so states can providers. expect to renew many more wireless/ • Steps toward deregulation that are landline agreements in the coming months. consistent and fair. It is encouraging that CMRS providers are • Technological neutrality. using the process provided under the act and appear, so far, to consider it workable Both traditional landline services and and fair. commercial mobile radio services (CMRS) Wireless providers are aided in their are common carriers under the law, which interconnection negotiations by their current means they must serve the general public classification as telecommunications carriers and cannot ordinarily refuse a customer. without the responsibilities of local ex- In a recent research report, the National change carriers (LECs). This FCC ruling is Regulatory Research Institute (NRRI) ana- helpful to wireless providers challenging lyzes the complex implementation issues incumbent LECs for customers, hastening the arising from policies that attempt simulta- time when they will be full competitors. neously to encourage new wireless entrants The FCC’s 1996 interconnection ruling into local markets and be consistent, fair, assures that wireless providers will have the and neutral. The report explores several opportunity to interconnect with the landline issues, including barriers to entry, universal network based on costs and technical service, and service quality, particularly as 2Q97 1070-3683/97/$5 © 1997 Technology Futures, Inc. Page 43 efficiency, a prospect that the CMRS industry Under the provisions of the Telecommu- considered lacking in the past. nications Act of 1996: The 1996 Act calls for categorization of providers of telecommunications services as • LECs may not forbid resale. telecommunications carriers, local exchange • They must provide number portability. carriers, or incumbent LECs. LECs have the • They must provide dialing parity responsibilities of telecommunications • LECs must permit non-discriminatory carriers, plus additional ones. Incumbent access. LECs are assigned obligations of telecommu- • They must afford access to rights-of-way. nications carriers and LECs, plus additional • They must establish reciprocal compensa- requirements (see figure). The act gave the tion agreements. FCC the choice of counting CMRS as LECs or not. The FCC chose not to, although it At first glance, it might appear that concluded that CMRS providers do provide being classified as telecommunications telephone exchange service, just like LECs. carriers, CMRS providers are being let off the All telecommunications carriers have the hook as full-fledged competitors. In fact, right to request interconnection and obtain the FCC has, to some extent, imposed LEC- The 1996 Act access to unbundled elements from an type duties on CMRS or is phasing them in. incumbent LEC. They must interconnect Resale—The FCC prohibits major types calls for cate- with other carriers, comply with require- of CMRS providers from unreasonably gorization of ments for interconnectivity, and comply with restricting resale during a transitional period. providers of tele- the requirements of the Americans with The resale rule sunsets five years after the Disabilities Act. last group of initial licenses for broadband communications services as tele- communications Figure 1 carriers, local Classification of Providers under the Telecommunications exchange Act of 1996 (Section 251) carriers, or incumbent LECs. INCUMBENT LOCAL EXCHANGE CARRIERS Must: ➤ Negotiate in good faith LOCAL EXCHANGE CARRIERS Must: ➤ Provide ➤ interconnection with Not prohibit resale a requesting carrier TELECOMMUNICATIONS ➤ Provide number ➤ CARRIERS portability Provide nondiscriminatory ➤ Must: Provide dialing parity access to unbundled ➤ Interconnect with other ➤ Permit nondiscriminatory network elements carriers access ➤ Offer all retail ➤ ➤ Comply with requirements Afford access to rights of services at wholesale for access by persons with way prices to carriers disabilities and for ➤ Establish reciprocal interconnectivity ➤ Provide for physical compensation collocation agreements Source: Davis & Clements Page 44 2Q97 New Telecom Quarterly PCS spectrum is awarded. The commission Like the FCC’s distinction between fixed and reasoned that, once broadband PCS licens- mobile offerings by CMRS providers, the ees build out their networks and are com- differing obligations of LECs and non-LECs peting with cellular, explicit regulations on may make it more difficult to see similarities resale will be unnecessary. of wireline and wireless providers in the Number Portability—Wireless carriers development of a network of networks. Just In the inter- are required to implement number portabil- like landline service through the public connection order, ity, but on a different schedule from wireline switched network, wireless offers voice and providers. Wireless carriers must be able to data communications, but with a valuable the FCC noted deliver calls from their networks to ported extra selling point—mobility. that wireless numbers anywhere in the United States by We are used to viewing cellular as a providers of December 31, 1998. This corresponds to the high-end service, but the trend is toward date wireline carriers must provide service cheaper, mass market wireless. Further- commercial provider portability in the 100 largest more, wireless and wireline services show services may metropolitan statistical areas. Wireless signs of increasing complementarity both as become LECs carriers have until June 30, 1999 to provide business ventures and technologies. It service provider portability. would not, in fact, be much of a stretch to over time, but did Dialing Parity—Since CMRS providers consider CMRS providers as LECs right now. not choose to are not classified as LECs, dialing parity does As the network of networks develops, delve into what not apply to them. Dialing parity permits special protections for some telecommunica- consumers to choose different carriers tions carriers will be unnecessary, and CMRS might make this without having to dial extra digits to com- providers as well as others can be called on happen. plete a call. By reducing distinctions to meet such obligations as dialing parity between incumbent LECs and new market and non-discriminatory access. The FCC entrants, dialing parity can facilitate greater and the states will need to work together to competition. assure that all the goals of the Telecommuni- Non-discriminatory Access—Section cations Act are met for this means of bring- 332(c) includes a prohibition against equal ing new communications opportunities to access requirements, and CMRS providers customers. are not required to provide non-discrimina- tory access. However, CMRS providers are entitled to receive non-discriminatory access Author’s Note—The complete NRRI research report is available by calling the NRRI Publications Office at from LECs. (614) 292-9404, through the Web site at http://nrri.ohio- Access to Rights-of-Way—LECs must state.edu or by writing to NRRI, 1080 Carmack Road, provide access to their rights-of-way, not Columbus, Ohio 43210. Ask for Wireless Telecommuni- vice versa. cations in Local Markets: Policies for Inclusion, by Vivian Witkind Davis and Michael Clements (82 pages; Reciprocal Compensation—In the 1996 $25.80) interconnection order, the FCC concluded that CMRS providers are not obliged to provide requesting telecommunications carriers with reciprocal compensation. LECs must, however, offer reciprocal compensa- tion to CMRS providers. For the FCC, one thing to begin to consider is a decision rule for when a telecommunications carrier takes on the responsibility of a LEC. In the interconnec- tion order, the FCC noted that wireless providers of commercial services may become LECs over time, but did not choose to delve into what might make this happen. 2Q97 Page 45.