Portable wireless numbers debated

Court grills opponents of letting customers take cell identity with them

April 16, 2003|By Andrew Ratner | Andrew Ratner,SUN STAFF

What if you could take your cell phone number with you if you switched companies?

It's a prospect that worries cell phone executives, cheers consumer groups and may have moved a step closer to reality yesterday when a U.S. Court of Appeals panel in Washington grilled industry attorneys who are fighting the Federal Communications Commission's support of "wireless number portability."

The court is not expected to rule for months. For now, the date that looms over the issue is Nov. 24, the deadline by which the FCC has ordered wireless providers to allow their 145 million subscribers to take their cell phone numbers with them if they switch carriers.

The largest wireless providers, led by Verizon Wireless, are trying to stall or defeat the FCC mandate.

The stakes are enormous, measured in billions of dollars, because wireless carriers already lose about 30 percent of their customers a year to competitors and would stand to lose more if customers didn't have to weather the inconvenience of changing their phone number if they switch.

Federal lawmakers realized that having to change a phone number was an enormous impediment to phone competition when they approved the 1996 law that furthered the deregulation of the industry that had begun in 1984.

Consumers may not realize it, but they already pay a few cents every month on their wireline phone bills to finance the administration of a system that allows them to transfer their number if they change companies. But that provision hasn't extended to wireless phones.

Representatives of the cell phone industry argue that the FCC has overstepped its authority by trying to extend so-called LNP - Local Number Portability - to wireless.

The ability to keep one's phone number might have been a necessary aid to dismantle the moribund phone monopoly, but the wireless segment has already proved itself very fractious and feisty, they say. Consumers will have to pay more to administer a portability system for wireless even if they don't want to switch, the executives caution.

The industry estimates that such a system could cost more than $1 billion in the first year and $500 million a year after that.

"Requiring wireless number portability in the name of increasing competition is as realistic as a fish on a bicycle. The wireless industry is already hyper-competitive," Tom Wheeler, president and chief executive officer of the Cellular Telecommunications & Internet Association, said in a statement yesterday.

The association points to Australia as a cautionary example. There, they say, the advent of number portability increased costs for companies without adding revenues, killed off providers and furthered consolidation, said Michael Altschul, a senior vice president and general counsel for the wireless industry lobby group.

"The main reason for imposing number portability in the landline world is already a foregone conclusion," said John Johnson, a spokesman in the Baltimore-Washington region for Verizon Wireless. It is a joint venture of Verizon and the British Vodafone Group, and the top wireless provider in the United States with 32.5 million customers.

But the appellate court appeared to take a dim view yesterday of the industry argument - a striking turn from the court's past rebukes of the federal agency for failing to adequately justify its phone book-thick regulations.

"Oh man, they got crucified," said James Bradford Ramsay, general counsel for the National Association of Regulatory Utility Commissioners, a trade group of state regulators, of his industry counterparts. "The whole argument that they've got enough competition is not an argument that you make to a commission charged with ensuring competition."

"The three judges seemed more sympathetic to the FCC position," said Laura Phillips, a Washington attorney who specializes in telecommunications and who represents a wireless company that was not a party to the petition. "It just did not look as if this turned out to be the wireless carriers' day in court."

One part of the pending change the wireless companies do favor would allow people to transfer their home phone numbers to their cell phones - perhaps an enticement for people to drop their wireline phone altogether.

Although attorney Phillips described the provision as the "`Hail Mary' pass of the wireless industry," even supporters outside the industry say it could make wireless communication as ubiquitous in the United States as it is in parts of Europe and Asia.

Great Britain, Australia and Hong Kong are among the countries where cell phone users can keep their numbers if they switch carriers.

One wireless carrier siding with the FCC in expanding number portability is Leap Wireless International Inc. of San Diego. A quarter of its customers have only a cell phone, encouraged by Leap's $40-a-month flat pricing scheme that does charge extra for peak hours or incoming calls.

But Leap is also striving not to leap backward, having filed Sunday for Chapter 11 bankruptcy protection.

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