Subject: [NEXTEL-1] Number Portability Pits Cell-Phone Users vs. Industry

From: [email-masked]
Date: Thu, 15 May 2003 01:44:21 -0400

Number Portability Pits Cell-Phone Users vs. Industry

By Yuki Noguchi
Thursday, May 15, 2003; Page E01

Tom Makmann has a long-distance relationship with his cell-phone
number. He's kept the number, with its Boston area code, for six
years, even though he's since moved to New Hampshire, California
and Virginia.

In some areas he suffered poor service, but he couldn't dream of
changing his cell-phone number -- the only constant he's had amid
a series of changing e-mail addresses and home and office numbers.

"I was willing to live with the dropped calls and all that to keep
my number," said Makmann, president and chief executive of Network
Storage Solutions, a Chantilly-based software company that earlier
this month was acquired by California-based IQ Biometrix.

Now, Makmann is excited about a change in federal regulations
that, if implemented as scheduled this fall, would require
cell-phone and local phone companies to allow customers in the 100
largest U.S. markets to keep their numbers when they switch
carriers, even if it costs a little more.

"I think the carriers are going to have to compete for my
business," Makmann said. The rules permit customers to transfer
their traditional land-line phone numbers to a cell phone, and
phone companies are worried that this could accelerate the so-far
modest trend of consumers going all-wireless. It could also mean
wireless companies will slash prices even more to win or keep
their customers.

Wireless companies, including Verizon Wireless and Cingular
Wireless, lobbied hard against the Federal Communications
Commission's requirement and succeeded in delaying for four years
the deadline to make this happen. But industry watchers don't
expect them to be able to put it off past the latest, Nov. 24
deadline any longer.

Most of the larger wireless carriers argue that the estimated $1
billion industry-wide cost to revamp systems is money not well
spent. The industry argues it is already consumer-friendly (about
half of the U.S. population owns a cell phone) and
price-competitive (price wars have driven down the cost of a
cell-phone call 80 percent in the last eight years). Wireless
companies opposed to it still have a wild card: The Cellular
Telecommunications & Internet Association, the cellular carriers'
Washington-based trade group, challenged the so-called "wireless
number portability" requirement in the U.S. Court of Appeals for
the District of Columbia. The CTIA argued that the FCC does not
have the authority to issue the requirement. A ruling on that case
is expected this summer.

Separate from its lawsuit, the CTIA filed a petition Tuesday with
the FCC asking regulators to establish a standard procedure that
all carriers can follow to properly transfer numbers, said Thomas
Wheeler, president and chief executive of the CTIA. Current rules
aren't clear enough, and that could gum up the transfer of a phone
number from a land line to a wireless carrier, he said.

"If the FCC can't meet the deadline, neither can we," he said,
adding that if the FCC does not clarify those issues by Labor Day,
the CTIA will seek to delay the November deadline for wireless
carriers. Sen. Charles E. Schumer (D.-N.Y.) plans to introduce a
bill this summer that, among other things, would block any attempt
by the wireless industry to put off the rule said Phil Singer,
Schumer's spokesman.

"What the FCC's working for is a smooth and efficient process, so
that consumers know what to expect on November 24," said John
Muleta, chief of the commission's wireless bureau, which has been
working on the issue since 1997.

Consumers may have to pay an additional monthly fee of about $1 so
cell-phone carriers can pay for the infrastructure changes. And
not everyone will have wireless portability, although customers in
area codes 202, 301, 240, 703 and 571 and parts of 540 will (that
covers the District, parts of Maryland and Virginia, and two West
Virginia counties). Officials at Reston-based Nextel
Communications believe Nextel -- the nation's fifth-largest
wireless carrier -- is prepared to meet the deadline, but the
company has gripes about the cost and the complexity of altering
its systems. Nextel last year started tacking on $1.55 to its
consumers' bills to recoup costs of updating its network to meet
this and other federal mandates, said Audrey Schaefer, a
spokeswoman for Nextel.

"We don't believe a federal mandate is necessary for this. After
all, 90 percent of our new customers are coming from other
carriers anyway," Schaefer said. "These programs are enormously
expensive, and we think customers are best served with our using
our resources for other things, like increased network capacity
and new applications."

Chris Murray, a policy expert at Washington-based advocacy group
Consumers Union, said  "From a consumer's perspective, this is the
best outcome: lower prices, and better service" because wireless
companies will have to compete harder to retain their customers.

Jeremy Grant, for one, can't wait to call his wireless provider to
inform it of his defection. He signed up for cell-phone service in
1998 and has loved his number, which spells something memorable.

"Friends would move away from D.C., but they'd always remember my
phone number," said Grant, a director of business development for
a technology consulting firm based in Reston. "I'm enthusiastic
about the opportunity to change phones. I'd love to call . . .
[his current wireless provider] and say, 'Your service is
terrible, and I am taking my number with me.' "

Carriers are already preparing strategies to deal with the influx
of calls like Grant's, said Brian T. Belforte, senior manager at
Acumen Solutions, a Vienna-based telecom consulting firm.

"It's a paradigm shift in the sense that the biggest barrier to
changing carriers is being taken away," he said. Companies are
combating this by touting features like camera phones,
walkie-talkie options and wireless Internet applications to try to
lure customers in, he said.

Carriers are also trying out more creative pricing plans, like
family sharing options, to retain customers. Others are
considering locking in customers with longer contracts or slapping
on bigger fines if they try to terminate service before the end of
the contract terms.

As consumers consider changing their wired phones to wireless
service, carriers can be expected to try to keep them tethered to
land lines by bundling caller-identification services,
digital-subscriber-line Internet access and wireless options, all
in one bill.

http://www.washingtonpost.com/wp-dyn/articles/A56982-2003May14.html

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