The battle to offer cellular radio systems in the Washington area reflects the intensity of competition nationwide for this revolutionary new telephone service.
Two telephone companies -- American Telephone & Telegraph Co. and Continental Telephone Co. of Virginia -- are jointly seeking the government license to operate one of the two cellular systems to be permitted in this area. Under their agreement, Continental will have a 35 percent share of the operation, while AT&T, with a 65 percent share, will run the system.
Meanwhile, five nontelephone companies are vying for the rights to offer the only other cellular system in the area.
The companies are:
* American Radio Telephone Service Inc., a radio paging company, which is already offering cellular service here on an experimental basis.
* Cellular Mobile Systems of D.C. Inc., a wholly owned subsidiary of the fast-growing telecommunications company Graphic Scanning, which has applied for licenses in the nation's 60 largest cities.
* Metro Phone Associates, a partnership of Metrocall of Virginia Inc. -- one of the area's largest radio paging companies--and Metromedia Telecommunications, one of the nation's largest communications companies and owner/operator of WTTG-TV and WASH-FM radio in Washington.
* Metropolitan Radio Telephone Systems Inc., a 4-year-old Kensington consulting firm that specializes in cellular radio.
* The Washington Post Co.'s Cellular Telecomunications Inc.
The same five companies are also vying for cellular rights in Baltimore.
Fearful that AT&T and Continental, having reached an agreement to offer one system here, will have a head-start in setting up its cellular system, these five companies have been trying busily to narrow the competition, in the hopes that a single firm may emerge to begin offering cellular service as soon as possible.
Failure to reach an agreement would mean that the five would have to face lengthy and costly hearings before the Federal Communications Commission, which would have to determine which company was the best qualified to offer cellular service.
"It's really necessary for everybody to talk," says Bernard J. Cravath, vice president of MRTS.
If an agreeement is reached, notes ARTS President Wayne Schelle, "it could mean a year- to two-year jump on the telephone side," because it would take only a few months to convert the experimental ARTS system into a commercial one. It would take AT&T considerably more time to erect a system from scratch. "That's worth a lot of money," Schelle said.
Consequently, agreements among the companies are now emerging. MRTS and Metro Phone Associates reached a preliminary agreement last month to merge their applications and fight as one company for the license.
MRTS and Metro Phone say their merger gives them a leg-up in winning the government license for cellular here because it combines a company with significant local involvement in the community and a broad-based communications company that has significant experience in operating telecommunications systems.
The agreement was announced shortly after ARTS and The Washington Post agreed to merge their applications, with ARTS supplying the technical know-how and The Post the financial backing. The companies had hoped that this merger would give them a comparative advantage if any FCC hearings were required. However, in an order handed down by the FCC earlier this month, the commission said ARTS and The Post Co. would not receive any credit for reaching the first settlement in the area.
Now, both of the merged companies are discussing the possibility of a further settlement among the four. But so far, Graphic Scanning has not been an active participant in the talks. If comparative hearings are to be avoided, this company will ultimately have to be included.
Even so, ARTS' Schelle is hopeful an agreement can be reached. "I don't know how easy it is going to be, but I'm optimistic that we are on the right pathway."