Md. cellular-phone industry needs no regulation, PSC concludes

December 08, 1990|By Leslie Cauley

The cellular-telephone industry in Maryland is becoming increasingly competitive -- indicated by price wars between providers and rapidly improving services -- and does not need to be regulated, a new report from the Public Service Commission has concluded.

"Evidence confirms that the cellular-telephone providers operating in Maryland are acting competitively by improving services and lowering prices," said the report, which was prepared by the PSC's division of rate research and economics.

Maryland is one of 26 states that does not regulate cellular services. That means cellular companies operating in the state do not have to file their prices for approval by the commission or advise the commission when they want to offer a new service or change an existing service.

A number of states are loosening regulations on cellular operations, the report noted, which the Cellular Telecommunications Industry Association views as encouraging,

"We have been gratified by the number of states like Maryland to conclude that cellular is a competitive service and something that does not need regulating," said Norm Black, a spokesman for the national trade group.

Cellular One, the cellular arm of Southwestern Bell, and Bell Atlantic Mobile, the cellular unit of Bell Atlantic Corp., are the two cellular providers operating in the Baltimore-Washington market.

Both companies recently began stepping up marketing efforts aimed at wooing non-business users, offering cut-rate packages for subscribers who use cellular-phone services during evening and weekend hours.

That marketing push is a departure from traditional efforts, which have concentrated primarily on business users, who still constitute the majority of cellular subscribers.

The push for consumer customers is being helped along by dropping prices. A cellular phone that cost $1,500 just five years ago can be purchased today for as little as $200. Service charges, however, have remained relatively high compared with those for regular phone service -- more than $1 a minute during peak daytime hours.

The cellular industry, which started out with no customers in 1983, has about 2 million today.

The September report, prepared for the Maryland Legislature, noted that cellular services compete with a variety of communication devices, including paging, answering machines, voice mail and pay phones.

The next generation of cellular phones -- personal communication devices, which are small, hand-held phones that can be used for short-distance calls -- also will present a challenge for providers of conventional cellular service, the report said.

Given the of choices for subscribers and the level of competition among existing cellular providers, the PSC said it saw "no compelling need for regulating the industry."

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