Support needed to protect the future
The recent announcement of the AT&T/BellSouth merger once again proves the vision of Yogi Berra — its déjà vu all over again.
We’re getting very close to the recreation of Ma Bell. The significant difference between the era of Ma Bell and Judge Greene — who orchestrated the breakup in the early 1980s — is that the Internet, wireless and cable sectors are now serious players in the telecommunication industry. Of course, there’s also consolidation and/or “affiliations” in those markets, including with traditional local exchange carriers (LECs). Add the desire of cable companies to provide telephone service, and LECs to provide cable television, and we have a very few, very large players fighting over a very significant piece of pie.
Every time the telecom industry has faced too few competitors, with little need to provide additional or advanced services, innovators have created new ways of sending voice, bits and bytes, pictures and intelligence to each other. MCI was created with such a vision. Do you remember the “Hush-A-Phone?” The cable television industry was born from a desire to have access to more than just three television stations. More recently, voice over IP (VoIP) has shaken the traditional telephone business to its core, forcing traditional LECs to seek other revenue streams (or hiking their prices) and ensuring that VoIP providers are as heavily regulated as the LECs.
The land mobile radio (LMR) industry has not been short on innovation to overcome monopoly. The Carterphone was LMR’s answer to the inability to interconnect two-way radio systems with landlines without paying exorbitant fees. The invention of the non-profit cooperative system was designed to work around common carrier charges. Morgan O’Brien’s creation of Nextel was a means to create a competitive (at that time) third cellular company with a semi-dispatch twist (see story on page 52).
Where will the innovation come from this time in the LMR industry? Has the wholesale movement of the traditional “base and two” customers to the cellular industry left the LMR industry without its visionary creators? Can sufficient capital be brought to the LMR industry to enable a forward-thinking pioneer to replicate the industry-shaking work of our predecessors?
Certainly, the reduction in size of the LMR industry has had one significant impact: the reduction in financial strength of formerly industry-leading trade associations, which work to ensure that innovation is not inhibited — or prohibited — by regulation. With fewer members left to pay dues (particularly those of significant size) and a large reduction in the revenue that used to be generated by frequency coordination activities, the traditional LMR industry trade associations have been significantly weakened.
Unfortunately, it appears that too few of those companies that remain in the industry are willing to pay the amount of money needed to support a trade association that could help ensure the member’s own long-term survival. Thus, in my opinion, a spiral has begun from which I fear it may be difficult, if not impossible, to recover.
But, it doesn’t have to happen. There is an unprecedented amount of money flowing into the public-safety radio industry at a time when many public-safety agencies no longer have RF experts in house. These agencies must increasingly turn to outside radio dealers and engineers to provide them with needed services. I increasingly hear of radio dealers who serve the public-safety community complaining that they don’t have enough time to keep up with all of the work those agencies provide. Yet, these same dealers refuse to spend $500 per year to ensure their long-term survival and favorable regulatory treatment.
We must do a better job of convincing these dealers that there is value to protecting their interests at a national level. And at a national level, we must ensure that small business innovators are in the position to innovate.
Alan Tilles is counsel to numerous entities in the private radio and Internet industries. He is a partner in the law firm of Shulman Rogers Gandal Pordy & Ecker and can be reached at [email protected].
