Western Wireless wins ETC status

Western Wireless could become the local service provider for some customers in Minnesota. The Minnesota Public Utilities Commission last week designated Western Wireless as an eligible telecommunications carrier, allowing the operator to receive universal service support in areas served by rural telephone companies.

"It's an important decision that gives a technology-neutral approach to universal service support," said Mark Zohar, senior analyst for Forrester Research.

But winning the right to universal service support doesn't equal winning customers. "Now the onus is on Western Wireless to convince customers that it offers a level of quality and features that match up with wireline," Zohar said.

Some customers may not want to rely only on wireless service, which may lack some features. For example, most wireless services won't be able to match the high-speed data connections of wireline for several years. Even then, many wireless operators say they won't deploy high-speed data capabilities in rural areas for many years, said Bill Gillis, commissioner for the Washington Utility and Transportation Commission.

Before granting companies such as Western Wireless eligible telecom carrier (ETC) status, state commissions consider if having a competitive operator is in the public interest. Although operators are not required by law to offer data services, many states consider data a shortcoming to wireless.

"They wouldn't want to have wireless squeeze out wireline when the customers don't have the bandwidth," Gillis said.

State commissions also consider if an area can support competition. "The thought is, in some locations it's a natural monopoly, and if you have more than one company, no one can survive," Gillis said.

Although Western Wireless clearly believes these rural markets can be lucrative, some aren't sure if wireless operators ultimately could make viable businesses there. Some believe a wireless carrier could reach a market more quickly and cheaply than a wireline operator. However, customers typically use their wireline phones twice as much as their wireless service. A wireless operator would incur added costs to support that extra use if the wireless phone became a customer's only phone.

Western Wireless could not be reached for comment.