Carriers Aim to Kill Number Portability
Millions of fed-up cell phone users think about dumping their carriers every year but then abandon the thought--largely because switching carriers also means changing their mobile phone numbers.
It’s a frustrating obstacle that was supposed to have been eliminated 2 1/2 years ago under a 1996 federal mandate requiring cell phone companies to allow customers to keep their phone numbers regardless of which carrier they used.
The nation’s largest mobile service providers have fought the requirement for years and won a series of delays from the Federal Communications Commission. Now Verizon Wireless and its brethren are quietly moving to quash the mandate.
In a petition filed in July with the FCC, Verizon Wireless asked federal regulators to scrap the “local number portability” requirement. After months of debate, federal regulators are expected to make a decision on the issue in coming weeks.
The impending decision has sparked a flurry of activity, drawing supporters and opponents into a war of words and prompting a flood of lobbying at the FCC.
Consumer groups also have gotten involved, labeling Verizon’s petition the ultimate insult from an industry rife with customer complaints over spotty service coverage, overloaded networks, billing errors and all manner of fine-print “gotchas.”
Helen Mickiewicz, the California Public Utility Commission’s deputy general counsel, is one of many state officials vehemently opposed to any move to vacate or further delay the number portability mandate.
Removing the requirement “would permanently limit the amount of competition in the market,” Mickiewicz said. “The FCC has to be convinced that there would be a price to pay for granting this [waiver], whether it’s heat from the states, Congress, the public, or any combination of those.”
Consumer advocates point out that traditional phone companies already have complied with a similar local number portability rule that required costly changes to their networks.
Once wireline and wireless companies can swap numbers, regulators say, customers can more readily “cut the cord” and replace their home phone with a mobile device.
But cell phone companies counter that the idea of portability should be scrapped because customers aren’t demanding it. They argue that implementing portability, which involves retooling the software of each carrier’s computerized call-routing system, would be expensive and technically complicated.
“The cost to be able to move numbers from one carrier to the other is significant, and it would be significant for the customer too,” said John Scott, deputy general counsel for Verizon Wireless. “Our argument is that it’s not necessary to promote competition.”
Under current rules, U.S. mobile phone carriers must have their networks ready to swap numbers by Nov. 24. AT&T; Wireless Services Inc., Sprint PCS, Cingular Wireless, the wireless industry’s main trade group and other companies also want the mandate revoked.
Many smaller mobile phone companies, who hope to steal customers from their bigger rivals, are not behind the Verizon petition. Some of them, including Leap Wireless International Inc., have been openly critical of the industry’s technical and cost arguments.
“These are all red herrings,” said Dan Pegg, an executive at San Diego-based Leap Wireless.
“The only people who think it can’t be done [and shouldn’t be done] are the people who will find it to their economic disadvantage to do it.”
Leap and others opposed to revoking the mandate say the real reason behind the effort is that the status quo helps the big companies hold on to dissatisfied customers. They say it’s harder for unhappy consumers to “vote with their feet” and change carriers if their mobile numbers are held hostage.
Philadelphia attorney Kevin Weinstein is one of the many mobile phone users who would switch providers in an instant--and gladly pay a contract termination fee--if he could take his phone numbers with him.
“I’m not happy with the carrier that I have, but I have four phone numbers that were selected by me, are easy to remember and that I would lose if I switched,” he said. “So I’m married to my carrier ... I’m trapped unless those numbers become portable.”
Verizon Wireless, the nation’s largest provider with nearly 30 million customers, says that the U.S. cell phone market is fiercely competitive, prices are dropping steadily and that more than 20 million customers change companies every year despite having to surrender their phone numbers in the process.
Many cell phone companies, including Verizon, lose 2% to 4% of their subscribers every month--or between 30% and 40% a year, according to Telephia Inc., a wireless industry research firm.
Those customers are making the switch despite the number issue, the need to pay a penalty for breaking service contracts and the fact that moving to a new carrier forces customers to buy a new phone because of technological differences.
“That’s an extremely high churn rate compared to other industries,” said John Dee Fair, Telephia’s vice president of research and development.
The Telephia survey shows that turnover rate could be an even greater problem for cellular carriers if customers were allowed to keep their phone numbers. In December, 40% of the survey customers who didn’t change carriers said they mainly stayed put to keep their cell phone number--up from 29% six months earlier.
