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No $1.5 billion subsidy for Verizon
For roughly 10 years, Verizon Wireless has been the only wireless provider to offer service in underground Metro stations. To what did Verizon owe that honor? An investment of $18.4 million in 1997 to construct its network in the Metro system, for starters. Verizon also shares its revenue from that service with Metro. For that, Verizon enjoys a monopoly on underground Metro service. Riders with other cell phone providers pay roaming charges, or wait until they get above ground.
Rep. Henry Waxman is trying to change that. The chairman of the House Committee on Oversight and Government Reform affixed a rider to Metro funding legislation that would require the transit agency to “ensure that customers … have access within the rail system to services provided by any licensed wireless service provider” in at least 20 Metro stations in one year, and the others within four years. Rep. Tom Davis, who introduced the $1.5 billion funding bill for the “teetering” Metro system, cosponsored the amendment.
The amendment is being couched in terms of rider safety and security. While that’s an appealing argument, it doesn’t address this requirement: that Metro be held responsible for ensuring that the upgrades happen. Metro couldn’t receive federal funding until wireless service from all providers was made available underground. The return on Verizon’s investment is that its underground service is an undeniable selling point among commuters who regularly ride the rails.
It’s not that Verizon is especially entitled to its monopoly — it shouldn’t be — but rather that it isn’t Metro’s burden to see that all cell phone customers have service in its stations. At least Metro would be permitted to charge a “reasonable and customary” fee to other wireless providers.
The bill was approved last week by a voice vote in committee. The same measure was approved in the House by a wide margin in July, but the Senate failed to vote on it. Approval on Capitol Hill may not be the toughest challenge the legislation faces. In order for Metro to receive the $1.5 billion in federal funding, D.C., Maryland and Virginia must all commit $500 million and agree to dedicated funding for the system. In the past, that’s been a tough sell in Maryland and Virginia.
On the whole, the legislation smacks of an excessive outlay for a system that needs to generate more revenue on its own. While the bill does have meritorious provisions, such as creating an independent inspector general, the Waxman rider is not one of them.
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