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Alliance of rival carriers bashes AT&T-Verizon 'duopoly'

At a confab hosted by the newly branded Competitive Carrier Association, rival wireless operators say AT&T and Verizon are stifling competition and call on regulators to adopt policies to preserve a level playing field.

CNET's Marguerite Reardon moderates a panel discussion at the Competitive Carrier Association's 2012 conference.
Competitive Carrier Association

LAS VEGAS -- Competitive wireless carriers say a AT&T-Verizon Wireless "duopoly" is threatening mobile competition in the U.S., and they want regulators in Washington, D.C., to "level the playing field."

At a conference here Tuesday hosted by the newly branded Competitive Carrier Association, nationwide carriers T-Mobile USA, Sprint, and Clearwire joined forces with more than 100 smaller rural carriers that formerly made up the Rural Carrier Association to sharpen their talking points and organize their lobbying efforts to promote policies that will encourage and safeguard competition in the wireless market.

The message these carriers wanted to deliver to regulators is that they are not looking for special handouts to keep their businesses afloat but rather policies that will ensure that the two biggest players in the market are not given an unfair advantage when it comes to getting access to additional wireless spectrum or when it comes to other policies governing the wireless industry.

"Telecom is an infrastructure business," said Michael Prior, CEO of Atlantic Tele-Network, a rural carrier with networks in the U.S. and the Caribbean. "Consolidation can introduce business efficiencies. But government has a role in making sure that infrastructure is used in a way that works for the entire country.... All we're asking the FCC to do is to make sure there is a level playing field."

Prior, who participated in a panel discussion that I moderated here at the conference compared the wireless industry to the early days of the railroad industry when several providers were building infrastructure that crisscrossed the country.

"There used to be dozens of railroad companies," he explained, but government policy reduced their number. The argument that Prior and other executives on the panel were trying to make is that the government needs to be sure its policies foster as much competition as possible so that it could actually regulate less.

"It's not a bad thing to be big," Hu Meena, CEO of regional carrier C Spire, said during the panel. "The problem is that we have the two largest carriers blocking other players."

Earlier, Meena addressed his fellow competitive carrier executives at the CCA's annual business meeting, where he called on lawmakers and regulators to take a stand in supporting policies that encourage competition.

"At some point -- and that time is coming -- regulators and politicians are going to have to acknowledge they have a choice to make: They are going to have to decide whether the communications industry, the fundamental driver of the information economy, is going to be regulated by true, healthy competition or by the government," he said.

Meena described in his speech how consolidation in the wireless market over the past several years has resurrected the old Bell monopoly of the 1980s and created it anew in the wireless industry through AT&T and Verizon Wireless, which together control more than 70 percent of the wireless subscribers in the U.S.

"Humpty Dumpty has been put back together again," he said. "And while the identical twins sometimes agree to meet and discuss industry issues with other industry players, they seldom, if ever, support action that might better the industry as a whole."

One of the main issues for these carriers is ensuring that competitive carriers get access to wireless spectrum. Network roaming and device interoperability are also important matters for these carriers. Smaller carriers such as C Spire have complained that they've been shut out of the 4G LTE market since some of their valuable spectrum is not compatible with spectrum used by AT&T and Verizon for their 4G LTE build-outs.

Executives on the panel acknowledged that the Federal Communications Commission appears to be open to addressing some of their competitive concerns. For example, in the agency's recent review of the spectrum deal between Verizon Wireless and a consortium of cable operators, the agency encouraged Verizon to sell some spectrum to a competitor.

But the executives said the agency could have done more. Specifically, Linda Martin, COO of Immix Wireless, said she had hoped the FCC would have forced Verizon to accept interoperability device requirements. And Atlantic Tele-Network's Prior said he wanted the FCC to go further in requiring Verizon to divest more of its spectrum holdings.

"It was good that Verizon voluntarily divested some of its wireless spectrum," he said. "And that benefited one of the CCA members (T-Mobile). But why didn't the FCC force them to give up spectrum to some rural carriers? The big two carriers are sitting on large amounts of spectrum [in] some markets that they aren't using, while smaller players are scraping by."

But how far should the FCC go in ensuring competition? And how many competitors are needed in any market? The competitive carrier executives didn't have definitive answers to these questions.

"We need to have a level playing field before we can say how many are enough," C Spire's Meena said. "We know what happened in the first 20 years of the industry where we have had many healthy competitors."

Indeed, the U.S. has evolved into the largest and most robust wireless market in the world. Meena and his fellow executives say they want to make sure that momentum continues for the next 20 years and beyond.

"There remains a false hope among too many carriers that the duopoly will one day become reasonable," he said during his speech at the annual meeting. "But we all know, whether we choose to admit it or not, that until all competitive carriers become fully committed to work together for open competition, the wireless industry playing field will remain harmfully tilted toward the duopoly. They will never give an inch unless and until they have to do so."