Mobile phones may be re-regulated Cellular industry's practices outrage some legislators.

January 15, 1992|By David Conn | David Conn,Annapolis Bureau

ANNAPOLIS -- Del. Carolyn J. B. Howard was outraged when she got a letter from her cellular phone company that said her "unlimited time" would be limited and her "prime-time" hours would be trimmed. This happened three weeks after the Prince George's County Democrat signed up for a car phone.

Del. Leslie Hutchinson, D-Baltimore County, is incensed that her cellular company doesn't itemize charges on her monthly account. "To even dispute your bill is impossible," she said.

And Del. K. Bennett Bozman, D-Worcester County, is upset that his constituents in Worcester County have no choices when it comes to cellular service: Only one company reaches the Eastern Shore, or Western Maryland, for that matter.

"From my perspective," Del. Dana Lee Dembrow, D-Prince George's, said, "both Cellular One and Bell Atlantic [Mobile Systems] doubled their rates at the same time, which is why we're here today."

They were all at a hearing before the House Constitutional and Administrative Law Committee yesterday to consider a bill by committee member Mr. Dembrow to "re-regulate" the cellular phone industry and its two main players in Maryland.

If the bill passes, the industry would have to apply to the state's Public Service Commission for rate changes, just as the local phone company and utilities do. Cellular phone companies were regulated in Maryland for four years until 1988, when the General Assembly decided there was enough competition to preclude price gouging.

"Philosophically, I'd rather not see some bureaucracy get involved in setting rates," Mr. Dembrow said. "But when it comes to the point when they start ripping people off, and people come to see [a car phone] as a necessity," then what he called the two-company "duopoly" should be regulated, he said.

Lobbyists for the two cellular companies, or "radio common carriers" as they are officially known, countered that their product does not fit the criteria for a regulated service in Maryland: It must be a basic necessity, and there must be a lack of competition.

Although the Federal Communications Commission allows the use of only two frequencies for cellular telephones in the Baltimore-Washington area, that competitive barrier may drop as the technology advances, said Paul Tiburzi, a Baltimore lawyer who represents Cellular One, a division of Southwestern Bell Mobile Systems.

More than a dozen companies in the area buy air time from Cellular One and Bell Atlantic Mobile Systems, then resell it to customers, Mr. Tiburzi said, which allows for more competition.

He said that the resellers don't tend to offer real price competition because they must buy from the two major players in the market. "But don't forget that those two firms are in constant competition. We're fighting day to day" against Bell Atlantic and against the purveyors of pagers, beepers, pay phones and other personal communication services, Mr. Tiburzi said.

James J. Doyle Jr., a lobbyist who represents Bell Atlantic of Bedminster, N.J., said the complaint about unexpected price changes applies to just about every competitive product. "That happens to me every time my wife walks into a grocery store," he said. "The prices change without notice all the time."

The Public Service Commission declined to take a position on the bill. But its general counsel, Bryan G. Moorehouse, pointed out that the commission in 1990 studied the issue and concluded there was enough competition in the market and that regulation wasn't needed.

Frederick H. Hoover, an assistant people's counsel, said that his office, which represents consumers of regulated utilities, doesn't tend to receive many calls about cellular service.

But, Mr. Hoover added, People's Counsel John M. Glynn "does not feel that this industry is fully competitive."

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