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Cellular South to quit CTIA, citing favoritism for bigger companies

Cellular South, a small wireless service provider in the South, has left CTIA, the wireless industry's main trade group, after years of what the company describes as favoritism toward its biggest and highest-paying members.

That favortism has turned up on issues that impact small carriers most, said Eric Graham, Cellular South’s vice president of strategic and government relations. On issues like handset exclusivity, data roaming, spectrum allocation and special access, CTIA has either been quiet or appeared to favor the Verizon Wireless or AT&T, the two largest carriers represented by CTIA, he said.

As a result, Graham said, AT&T and Verizon Wireless have only gotten bigger while other companies are struggling to maintain their monthly subscribers, with many losing customers.

The Federal Communications Commission is currently investigating whether the wireless industry is competitive enough. The agency is considering a range of issues, including roaming charges, the exclusive partnerships between handset makers and carriers and how much phone companies charge wireless providers for using their landlines to connect calls.

“The writing has been on the wall for a few years now and we are convinced the voice of the smaller carrier is being ignored,” Graham said. Cellular South chief executive Hu Meena had served on the CTIA's executive board but gave up his seat last year out of frustration. The carrier remains a member of trade group the Rural Cellular Association.

CTIA has argued that competition within the cellphone industry is healthy and that consumers have a wide range of choices. Citing FCC statistics, the group says that 95 percent of U.S. cellphone users are able to choose from at least three carriers. There are also more than 650 devices offered by 32 companies for customers.

CTIA is a nonprofit whose members include network operators such as Sprint Nextel and T-Mobile USA, device makers such as Motorola and Internet content companies such as Google. The group charges membership fees based on the revenues of the companies.

"We have active and meaningful dialogue with carriers of all sizes," said John Walls, vice president of public affairs for CTIA. "They are represented on our executive committee and our board of directors and we have opportunities for them to voice their specific concerns that we take quite seriously."

Cellular South has argued that CTIA’s data points belie other data that show smaller carriers are struggling while the two biggest carriers continue to grow. In the first three quarters of last year, AT&T added 3.4 million monthly subscribers and Verizon added 3 million. Sprint Nextel, the nation’s third-largest wireless provider, lost 3 million customers and T-Mobile USA gained about 100,000 customers.

“When a carrier goes to the capital markets to expand or upgrade their networks, the banks or bank groups look to the post paid customers for signs of health in that business,” Graham said.

He wouldn’t reveal the how many subscribers have left or joined Cellular South last year, saying it is a private company that doesn't reveal such statistics. Overall, it has 800,000 customers in Mississippi, Tennessee and Alabama.


graphic: from Cellular South, gathered from Securities and Exchange filings

By Cecilia Kang  |  January 19, 2010; 4:31 PM ET
Categories:  AT&T , Early Termination Fees , FCC , Mobile , Sprint Nextel , T-Mobile , Verizon  
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Comments

As usual, Cecilia Kang prints yet another story supporting Google's agenda -- in this case, Google's claims that the telecommunications industry is not competitive and therefore must be regulated in a way that would suit Google. CTIA may favor the large carriers, but this does not mean that competition is not healthy.

Posted by: squirma | January 19, 2010 7:58 PM | Report abuse

Yes, but Cecilia is correct in the larger picture. The U.S. does not have healthy competition in the wireless space.

We'd all be better off if someone well funded like a Google really "upset the apple cart". Because we don't have choice of features, handsets. And we pay too much for a little bit of service.

If we had real competition, you'd see prices decline in monthly bills, but carriers have never competed on price. Just the opposite. They compete on how little they can provide for as high a rate as they can muster.

Posted by: Ombudsman1 | January 20, 2010 6:23 AM | Report abuse

Brett Glass (aka squirmy), your obsession with Cecillia has risen to a level of stalking. Has it never crossed your bald-head that she has not a care in the world what Google thinks? Have you met her? Perhaps you should speak with her, in order to realize she is a human being.

Your disgusting slanderous accusations against her reflect a bizarre threatening attitude. You really should stop dehumanizing Cecillia, and should stop dehumanizing people who really believe we need an open Internet and more competition in our broadband markets. Yes, you don't agree with them and they may be misguided, but the level of hatred you aim at them indicates a deep psychological problem. Get some help honey.

Posted by: AmyBandini | January 20, 2010 10:22 AM | Report abuse

Ombudsman1 says that we won't see prices declining, yet...

Communications Daily is reporting today that both AT&T and US Cellular are unveiling lower cost packages in order to better compete against Verizon's new low-cost plans.

So who's right here?

Posted by: Eric12345 | January 20, 2010 10:58 AM | Report abuse


Verizon is the new "Ma Bell"... The FCC should bust it up, again. Verizon is just the reincaranation of Bell Atlantic...

Posted by: demtse | January 20, 2010 1:02 PM | Report abuse

demtse - Verizon is nowhere near as big as the original "Ma Bell". Actually, Verizon has gotten much smaller over the recent years and is trying to do so even as we speak. It sold it's line in ME, NH and VT a year or so ago to a smaller company and is trying to sell it's lines in 14 other states to a different smaller company. The only thing standing in the way of this sale is the regulators and labor unions who oppose the sale.

There's no need to bust up Verizon. It's doing it on its own.

Posted by: Eric12345 | January 20, 2010 1:42 PM | Report abuse

Eric,

The new rates by VZ and ATT are a sham; plans designed to push customers into higher cost plans that they may not need. Journalists who reprinted the press releases (like CommDaily, who is terrible at multi-sourcing most of their articles) got fooled into believing there is a price war, but other journalists are starting to wise up to it. Like this one:

http://news.cnet.com/8301-30686_3-10437595-266.html

Posted by: AmyBandini | January 20, 2010 1:47 PM | Report abuse

Amy - Thanks for the information. This is good to know.

Eric

Posted by: Eric12345 | January 20, 2010 3:47 PM | Report abuse

Look at the stats. The US has more cellular competition and lower prices per minute than any other country. (And, yes, to say otherwise *is* to push Google's political agenda, as Cecilia -- who is funded by Google -- always does.) Prices are not going down because users are demanding more expensive services -- especially more data -- and this is forcing providers to maintain prices so as to have money to roll out infrastructure.

The main constraint on cellular competition in the United States is the continuing failure of the FCC and Congress to act on the issue of "special access" price gouging -- that is, price gouging by the big wireline carriers on the lines that are needed to connect cell phone towers. This does give AT&T and Verizon an edge, but that edge could be eliminated with a stroke of Julius Genachowski's pen.

Posted by: squirma | January 21, 2010 11:39 PM | Report abuse

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