Wireless partnership sparks suit

Anticipating an attempt to stop it from rolling out PCS service this summer, Roseville Telephone Co. last week filed suit against AirTouch Cellular.

AirTouch is the general, decision-making partner, and RTC is one of four limited partners in the Sacramento-Valley Limited Partnership, which provides cellular services in Northern California and portions of Nevada under the AirTouch brand.

Though AirTouch officials weren't talking, Mike Campbell, executive vice president and chief financial officer for RTC, said the suit is a precautionary measure to prevent AirTouch from interfering in RTC's plans to offer PCS in the Sacramento, Stockton, Modesto and Yuba City, Calif., areas. RTC has invested $16 million in the project to date and is pouring millions more into it every week. AirTouch opposes the plan, he said, because the areas fall within SVLP's cellular service area.

But Campbell maintained that PCS and cellular are separate services and said his company's PCS service should not have a big impact on AirTouch. "Our focus is on a wireless local loop application to neighborhoods that can't get second and third lines," he explained.

While acknowledging that there may be some overlap, he said RTC's geographic footprint concentrates on homes and businesses in underserved rural areas.

Upon forming SVLP in 1984, members agreed not to enter the non-wireline market, Campbell said, but all have continued to compete in other markets, including paging, pay phone and local telephone service.

After RTC acquired PCS licenses, however, AirTouch officials said the service would violate the 1984 pact and gave RTC two options, Campbell said: "Get out of PCS business or liquidate your holdings in the cellular business."

"If somebody threatens you, you can't wait until they actually follow up on that threat," he added.

Whether or not Roseville is violating the contract, AirTouch has reason to dispute the move. "Most carriers that have good market shares will usually try to deter any competition," said Larry Swasey, an analyst with Allied Business Intelligence.