PacBell’s Animosity Over Wireless Technology Licenses Smells of Monopoly to Cox

I took great interest in Pacific Bell’s self-serving comments in “19 Companies Pay $7 Billion in FCC Sale of Wireless Rights” (March 14).

As president and CEO of Cox Communications, I take great pride in our innovative, groundbreaking work in development of a new wireless digital technology known as Personal Communications Services (PCS). We spent five years and many millions of dollars on research, testing and development of cable television-based PCS, and we were justly rewarded with a PCS Pioneer’s Preference license for the Southern California Major Trading Area. As a condition of this process, we were obligated to file regular reports with the FCC that placed what would otherwise have been proprietary information in the public domain.

The license was originally awarded by the FCC for free, but frantic lobbying by PacBell and other regional Bell operating companies intent on holding on to their longstanding monopolies resulted in the government reneging on that award. In December, 1994, Congress approved the General Agreement on Tariffs and Trade, which included a provision requiring the Pioneer’s Preference holders--Cox, Omnipoint Communications and American Personal Communications--to pay 85% of the winning PCS auction prices in the Top 20 markets, excluding pioneer markets.

As your article stated, this price “break” was “blasted” by Pacific Bell as a public giveaway to the three firms. It takes only a cursory look at PacBell’s history in the cellular business to see the hypocrisy of the company’s complaints. To wit:

* PacBell received its cellular licenses for free pursuant to an FCC-mandated set-aside for which only telephone companies were eligible. At the end of last year, PacBell spun off its cellular business for $11 billion, a value based primarily on those free licenses. PacBell also received its FCC paging licenses for free.

* PacBell supported the Pioneer’s Preference policy that was adopted by a Republican-appointed FCC three years ago. It even supported APC’s Pioneer’s Preference application. PacBell itself applied for a Pioneer’s Preference award. Only when its application was denied, and Cox’s was awarded--a decision that was initially made by a Republican-appointed FCC--did PacBell begin to oppose the Pioneer Preference awards.

In light of its own record, PacBell’s argument that the Pioneer’s Preference licenses are public giveaways is indefensible and entirely motivated by its anti-competitive agenda. PacBell has a huge wire-line, government-granted telephone monopoly for which PCS could provide the first real competition. It has every incentive and desire to hobble new entrants, and it will stop at nothing to stifle the pioneers who have created, expedited, financed and facilitated these new services.

JAMES O. ROBBINS

Cox Communications

Atlanta