AT&T bringing 'milky minutes' and iPhones to Vermont

Vermont leaders in the economic development and consumer advocacy fields are enthusiastic about the pending arrival in the state of AT&T's wireless services, including the techie-touted iPhone. But some officials and activists are also worried that gaps in cell-phone coverage around the state could remain unfilled despite the prospect of heightened competition for wireless customers.

AT&T is awaiting federal approval of a deal whereby it would acquire a major portion of Unicel's operations in Vermont. Verizon Wireless last year purchased Unicel's 15-state mobile phone network for $2.7 billion but was told by the US Justice Department and Federal Communications Commission that it had to transfer some of Unicel's Vermont assets to another company in order to maintain competition for cell services in the state. AT&T announced last December that it had agreed to a swap of wireless assets with Verizon that included Unicel's licenses and customers in the Burlington, Montpelier and Rutland areas.

Vermont Public Service Commissioner David O'Brien says he doesn't know when federal regulators will act on the proposed Verizon-AT&T transaction. Kate MacKinnon, a spokeswoman for AT&T Wireless, says only that the company hopes the arrangement will be approved "expeditiously."

The affected Vermont holdings of the Rural Cellular Corp (RCC), Unicel's Minnesota-based parent company, remain for the time being in a trust administered by a Washington, DC, law firm.

The deal would have no impact on Verizon Wireless' own properties or customers in Vermont, notes Michael Murphy, the company's New England regional spokesman.

"It's business as usual for Verizon Wireless stores, employees and customers in Vermont before, during, and after any agreement to sell RCC's Vermont market," Murphy says.

Many Vermonters, including state officials, are eager for the transaction to take effect. The ability to use an in-state account to acquire an Apple iPhone, which operates only through the AT&T network, would be one big advantage of bringing the telecom giant to Vermont.

O'Brien says he's personally looking forward to getting an iPhone and is pleased, in his public capacity, by AT&T's potential to compete effectively with Verizon in Vermont. O'Brien notes that the companies rank as, respectively, the number-one and "number-one-A" wireless providers in the country. AT&T Wireless has 63 million customers in the United States, while Verizon serves 62 million.

Unicel had 140,000 accounts in Vermont. Verizon Wireless is the provider for most of Vermont's nearly 200,000 additional cell phone customers.

"This is just terrific for the state," O'Brien says of the anticipated competition between the two telecom titans. "We want to see Vermonters have access to all that technology makes possible in big cities, and this would bring us closer to that goal."

AT&T's advent in Vermont is "long overdue," adds David Bradbury, president of the non-governmental Vermont Center for Emerging Technologies. "We can finally end the stigma of being the only state in the country with no access to the iPhone and what it represents in terms of creativity and new services. As a person who's engaged in economic development and new technology, I look forward to the day when my peers step off a plane in Burlington and don't fall like they've fallen off the face of the Earth."

Bradbury further lauds the enhanced options in pricing plans and handsets that AT&T will likely offer Vermonters. Mary Evslin, chair of the Vermont Telecommunications Authority, also welcomes the improvements in the quality and cost of cell services that competition between Verizon and AT&T will likely produce for cell customers in the state. "I don't see this as anything but a plus," Evslin says.

But Senator Bernie Sanders, an early and outspoken opponent of Verizon's planned takeover of Unicel's Vermont operations, has not had his concerns entirely allayed by the proposed assets swap involving AT&T.

Federal approval of the deal "should be conditioned on enforceable commitments by Verizon Wireless and AT&T to meet the wireless needs of rural consumers," Sanders wrote in a July letter to the FCC. "AT&T's acquisition of Unicel's assets in Vermont does nothing to change the status quo for tens of thousands of Vermonters without reliable cell phone service. Those communities whose wireless needs have been ignored will continue to be ignored."

Sanders points out that the Vermont Telecommunications Authority was created last year with $40 million in bonding capacity to help ensure that the state reaches its goal of ensuring cell phone and broadband Internet services are available to all Vermonters by 2010.

Paul Burns, director of the Vermont Public Interest Research Group, agrees with Sanders that there's no guarantee such universal coverage will be in place two years hence.

"I'm not confident that will happen," Burns says. "There are still some large pockets of the state that don't have those services."

A federal go-ahead for AT&T Wireless to operate in Vermont would ensure that a widely used form of cell-phone technology remains in place in the state. AT&T and Unicel operate on a Global System for Mobile (GSM) network, while Verizon Wireless uses Code Division Multiple Access (CDMA). The Public Service Department and other parties had earlier feared that the phase-out of GSM, which would have occurred under the terms of Verizon's takeover of Unicel, would make it difficult and more costly for visitors to use their GSM-based cell phones in Vermont.

If Unicel were not replaced by AT&T or another user of that same technology, "there would have been no substantial GSM presence in Vermont," O'Brien notes. "We're a tourism state, and it would have been an economic development issue for us as well."

AT&T's presence in Vermont should enable the state to become more attractive, technologically, to businesses and entrepreneurs, adds Bradbury, the emerging- tech expert.

"Vermont used to be a leader in telecom back in the late '80s," he recalls. "We were one of the first states to lay down a fiber backbone," he notes, referring to the fiber-optic transmission system that carries signals at warp speed.

In the two intervening decades, however, the state gradually got consigned to the techno slow lane, Bradbury says, suggesting that it's now finally nearing an exit.

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