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Largent warns against treating wireless as just another utility

By Tricia Duryee
Seattle Times technology reporter

Steve Largent

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Steve Largent, best known here as a star of the Seattle Seahawks, returned to Seattle for a visit this week in his new role: president and chief executive of the Cellular Telecommunications & Internet Association (CTIA), the wireless industry's main trade group.

Largent, also a former congressman from Oklahoma, delivered the keynote address last night at the WSA's Wireless Conference and Tradeshow at the Westin Hotel in Seattle.

Today, the industry celebrates its 21st anniversary after deploying the first commercial wireless service Oct. 13, 1983, in Chicago. Here is an excerpted conversation with Largent.

Q. Were you in town for Sunday's Seahawk's game?

A. I was watching it on TV, agonizing over it before I had to catch a plane. I was sad to hear the final outcome. [The Seahawks lost 33-27 in overtime to the St. Louis Rams, who made a stunning 17-point comeback.]

Q. What ties do you currently have with Seattle?

A. Just lots of friends and lots of fans. It's still my second home and I love the Northwest and I love Washington state. My best friends live here.

Steve Largent Title: President and chief executive, Cellular Telecommunications & Internet Association, the wireless-industry trade association., based in Washington, D.C. Age: 50. Sports: Seattle Seahawks wide receiver, 1976-89. Set six career records and participated in seven Pro Bowls. Inducted into Pro Football Hall of Fame in 1995. Politics: Served in U.S. Congress, representing Oklahoma's 1st Congressional District, 1995-2001. Was vice chairman of the Energy and Air Quality Subcommittee and also served on the Telecommunications Subcommittee. Ran unsuccessfully for governor of Oklahoma in 2002. Business: Consulted for Washington, D.C.-based Wiley Rein & Fielding, traveling the country as a motivational speaker before entering his current job at CTIA. Also served as Midwest chapter executive director of The Wheelchair Foundation. Following his retirement from professional football, he managed his own advertising and marketing consulting firm, working with companies around the country.

My other connection to the Northwest is my son Kramer, who is a freshman at Seattle Pacific University. He started this fall. He is 18. We have yet another reason to come back to the Northwest.

Q. Since taking over as president and CEO of CTIA last year, what have you learned?

A. I started my job a year ago at the end of this month. My break into the industry was local-number portability [the ability of consumers to keep their phone numbers when changing carriers].

Q. That ended up not being as big of a deal as predicted.

A. We do a semiannual survey of metrics for the industry, and you are right; it was much ado about nothing. The overall churn rate [the rate at which customers leave carriers] didn't increase or decrease compared to the previous three years.

I think that is what I may take away from the industry. I have been watching my own reaction to my first year on the job and what's interesting to me is that everyday I drive to work, I have a big smile on my face. I love what I'm doing, I love the industry I am representing. It is highly competitive and innovative and cutting edge. The only thing predictable is that it is unpredictable.

Q. The topic of your WSA keynote: the future of wireless. What is the future?

A. It is interesting to look back at where we've come from. The industry is 21 years old [today]. On Oct. 13, wireless service rolled out in Chicago in 1983. It is a nascent industry. We are very young by any standard.

In the last 10-year window of time, it has gone from 16 million subscribers to 163 million; from 13,000 cell towers to 163,000. And 830 billion minutes were used last year, surpassing landline for voice.

Look at the new services in the wireless industry. Once it was primarily used for voice, and now you've got the ability to text message, access the Internet, download ringtones. ... It's amazing.

And I might add that there are two most amazing statistics: The first is the average [monthly bill] was $60 10 years ago. Now it's under $50, and people are using their phones four times as much. The reason why all of that has occurred is because of competition — 97 percent of Americans have three choices [of carriers] and 87 percent have at least five carriers to choose from. That's what is driving innovation and consumer benefits.

Q. You speak a lot about how the industry is hyper-competitive. Why is it important for people to understand this?

A. Because what I think happens is that too many folks, especially regulators, look at us like a utility, like a landline phone company. The [wireless] business model is the furthest thing from a utility....

When there's that mindset and wireless is treated like another utility, a patchwork of regulations begin state by state. That's one of the two things that could be a serious impediment to growth.

Q. What's the second impediment?

A. The second is taxes. The problem is the wireless industry is taxed on a national average of 15 percent of your total bill. There are actually five states where it's over 20 percent of your bill.

Q. With the impending closing of Cingular's acquisition of AT&T Wireless for $41 billion, how do things change both from an industry perspective and from the perspective of a carrier leaving the Seattle area?

A. On an overall basis, we are trying to move towards ubiquitous service — where people have great service wherever they are in the country. This Cingular and AT&T Wireless merger signals a movement towards that, towards the same service quality for all customers everywhere. With that move, you'll see the other national carriers begin to upgrade systems through mergers or additional networks.

Specifically about Seattle, I think with every merger, there is the fear of job losses, but in my opinion, the perception of consolidation is always worse than reality.

Q. You see more consolidation coming as a result of the merger?

A. I don't know about that. It could be happening, but I'm not privy to any discussions going on. That doesn't mean that there aren't any. It's hard to predict. There have been people predicting a merger for three to four years. Now it's finally happening. Whether there's another or not, it's anyone's guess.

Q. Is the industry still hypercompetitive with the elimination of AT&T Wireless?

A. Yes, there's talk — even with the pending merger — that AT&T [the wireline company] was getting right back into the wireless industry in a short period of time. The only thing predictable is unpredictability. That's what keeps it exciting.

I think it's tough for anyone to argue that with just five national carriers, it's not competitive. There are 183 national, regional and local carriers in this country. That's pretty significant. That's a very diverse industry. It doesn't look anything like a monopoly or regulated utility.

Q. There are a lot of startups locally that are getting funded in the wireless business, from companies selling ringtones and games to companies rolling out Wi-Max or wireless broadband. Is that a national trend?

A. Yes, but I think it's particularly strong in the West Coast and is unique to Seattle. You are seeing a lot of third-party vendors that are getting involved in the industry. There's a tremendous potential upside with 168 million customers today and it continues to grow.

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com

Copyright © 2004 The Seattle Times Company

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