Trisha Rosbash wants to dump her cellular-service provider, but she has two problems: breaking the contract will cost US$200 and she wants to keep her number.
Rosbash is likely stuck on the first point, but she might get a break on the second later this year.
PHOTO: NY TIMES
That is, if the feds enforce a mandate allowing wireless customers to hang onto their phone numbers as they change providers.
With the US Federal Communications Commission's (FCC) deadline for "wireless number portability" less than three months away, the wireless industry is girding for its biggest upheaval in years.
The Nov. 24 deadline has several wireless companies clamoring for yet another postponement. It has the Baby Bells and their wireless competitors squabbling over turf, and the largest US wireless carrier in a tiff with the rest of its industry.
Meanwhile, wireless number portability, or WNP, promises to help many of the US' 150 million wireless customers change providers like shoes.
"For me, it would be highly attractive to take my number with me, and it would give me more of an impetus to change providers," said Rosbash, a Denver-area real estate agent. "And I think that's what the providers are scared of."
First, the deadline must stick.
The FCC initially proposed WNP in 1997 to be enforced in 1999. However, numerous objections and requests for delays from wireless companies pushed the deadline to 2001 and then to this year.
Even now, wireless companies are seeking to keep the deadline at bay. The FCC seems unlikely to relent.
"I think [the deadline] can be achieved," FCC Chairman Michael Powell said this month. "And I think the commission is not in a charitable mood about changing it."
Controversy has surrounded WNP since the FCC first proposed it. The Telecommunications Act of 1996 mandated that so-called land-line providers -- the Baby Bells that supply copper phone lines -- allow customers to keep their phone numbers when they make short moves.
The catch is that a land-line phone number can transfer, or "port," with a customer only if the customer stays in a small area served by the same switch. That usually encompasses no more than several city blocks.
After setting number portability for the Bells, the FCC opted to require it for the wireless industry. The agency's intent: to bolster wireless competition and convenience for customers. Its mandate: wireless carriers must provide WNP in the 100 largest US markets by the deadline.
The wireless industry saw things differently, arguing that the FCC had overstepped Congress' intent and its own authority. What's more, wireless companies contended, the industry doesn't lack competitors.
"If this set of rules was created to bring about competition, then the wireless industry doesn't need competition, because we have six to eight competitors in each market," Clay Owen, a spokesman for No. 2 wireless carrier Cingular, said last week.
Indeed, FCC data shows that 270 million Americans, or 95 percent of the country's population, live in counties served by three or more wireless companies.
The FCC argues that the Telecom Act, as passed by Congress, does allow it to extend regulations to the wireless industry. The fight has lasted seven years.
Despite pleas for another delay, most wireless carriers anticipate the FCC will enforce the Nov. 24 deadline. The industry is striving for a turnaround time of two-and-one-half to three hours after a request for a transfer is made.
Paying the price
Most wireless carriers have spent tens or hundreds of millions of dollars to prepare to port phone numbers. And many already are assessing their subscribers monthly fees to cover the costs.
Technology isn't a problem. Companies such as Evolving Systems in suburban Denver have long provided software and services for cataloging, distributing and porting phone numbers.
"The technology has been solid now for five years," Evolving Systems chief executive George Hallenbeck said.
Cost-cutting, a year of profitability and the onset of WNP have spurred a 36-fold rise in Evolving Systems' stock in the past year, to nearly US$9.
Wireless companies are loading up on that technology and other necessities for WNP. US Cellular, the Chicago-based wireless carrier, estimates it spent US$50 million in the past 20 months on WNP. Sprint PCS spent "tens of millions of dollars," a spokesman said.
"There's a huge range of projected costs out there," said Travis Larson, a spokesman for the Cellular Telecommunications & Internet Association.
"All we know is that it's an expensive mandate," he said.
Expensive for wireless customers, too. Among the companies that already levy monthly charges on their subscribers to cover the costs of WNP are Cingular (US$0.32 to US$0.75 a month), AT&T Wireless (US$1.75 for costs of several regulatory mandates), Sprint PCS (US$1.10), and US Cellular (US$0.55 for WNP and E-911).
Verizon Wireless, the largest US wireless company, said it will not charge subscribers for WNP before it goes into effect.
"In an industry this competitive, any time additional costs are forced on the industry, those costs are passed on to consumers in one form or another," Larson said.
As the wireless industry anticipates the WNP deadline, squabbling between the industry and the FCC and among wireless carriers has heated up. Of note is the about-face made by Verizon Wireless.
For years, Verizon Wireless led the industry's charge against WNP, demanding and winning a delay of the 2001 deadline. Yet, this summer, Verizon Wireless changed its tune.
In June, Verizon Wireless announced it would embrace WNP and support the Nov. 24 deadline in the name of customer convenience. In the middle of this month, it pushed further, lambasting its peers for proposing "schemes" to the FCC that would "create new barriers" to WNP.
"It's time to move on," Verizon Wireless chief executive officer Dennis Strigl said last week. "We, along with the rest of the industry, have debated this long and hard. We argued it in front of the FCC. We fought it in the courts.
"The FCC and the courts have decided now that it is time to move on," he said. "It troubles me that the rest of the industry is acting the way it is."
Other wireless companies see a less altruistic motive in the giant's new methods than purported customer convenience. Industry analysts predict the winners after WNP will be the wireless carriers with reliable, national networks and strong brands.
... and the losers
To wit, in a report from last year, industry-research firm The Yankee Group tabbed Verizon Wireless and T-Mobile as gainers under WNP. Labeled as WNP losers by Yankee are Cingular, AT&T Wireless, Sprint PCS, Nextel and small, regional carriers.
Industry insiders describe Strigl as a reformed sinner who suddenly got religion only because it served his interests.
"They suddenly saw the light about six weeks ago," said William Daley, president of San Antonio-based Baby Bell SBC Corp, which owns 60 percent of Cingular.
"They've been fighting it as long as everyone else has been fighting it. And [they] decided that, for their purposes businesswise, this was a good move," he said.
The telecom and Internet group chided Verizon Wireless for pushing the WNP debate toward "a competitive slugfest rather than a search for solutions."
Strigl, for his part, makes no apologies.
"One of the criticisms of our position has been that we are doing this because we expect to win in the marketplace," he said. "The only thing I can add to that is, I hope they're right."
When the wireless industry isn't fighting Verizon Wireless on WNP, it's fighting the FCC.
In May, the telecom and Internet group submitted to the FCC eight issues it said must be resolved before wireless carriers can enact WNP. The group requested answers by September.
Among the issues the telecom and Internet group wants resolved: Can a wireless company deny a departing customer's request to keep a number if that customer still owes the company money?
Perhaps the most contentious issue involves customers moving their land-line, home-phone numbers to wireless phones. The Baby Bells argue such moves are technologically infeasible for all but 10 percent to 15 percent of the populace. The wireless carriers allege the Bells are simply trying to protect their turf from wireless competitors by holding home-phone numbers hostage.
"Nothing's technically impossible; it just comes down to money," said Laurie Itkin, director of government affairs at Leap Wireless, also known as Cricket.
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