PUCs AND RESELLERS BALK AT WAIVING WIRELESS NUMBER PORTABILITY

Assn. of Communications Enterprises (ASCENT) also urged FCC to reject Verizon request, saying forbearance would hinder competition. Mobile carriers continued to make case for forbearance, saying lack of LNP wouldn’t hamper already competitive wireless market and drawing distinction between porting and pooling mandates. Pooling is critical to address numbering crisis in U.S. and ensure carriers have access to adequate supply of numbers, AT&T Wireless (AWS) said. However, it said, imposing wireless LNP “will pose risks to network reliability and customer service.”

Number pooling and LNP are linked because both involve substantially similar technical modifications, Verizon Wireless said. It told FCC in petition that complex technical issues and expenses needed to implement wireless LNP weren’t justified by competitive benefits given high degree of competition already facing wireless industry. LNP capability isn’t needed for wireless carriers to participate in thousand-block number pooling, wireless operators said. “The Commission has recognized estimates that LNP implementation would cost industry up to $1 billion, and an expenditure of this magnitude will necessarily divert finite capital from being invested in capabilities that the public wants,” VoiceStream Wireless and U.S. Cellular said in joint comments, citing examples of wireless Internet and 3G applications.

Aside from objections of PUCs and resellers represented by ASCENT, WorldCom strongly opposed Verizon Wireless petition. WorldCom, largest reseller of postpaid wireless services with 2 million customers, called petition “nothing more than an untimely, unauthorized and unsubstantiated petition for further reconsideration.” Wireless LNP is needed to give customers flexibility in changing service providers and is particularly important in regard to Nov. 24, 2002, sunset date of mandatory resale requirement for carriers, WorldCom said. It said commercial mobile radio service (CMRS) operators had had 5 and a half years to implement LNP and FCC twice had extended original deadline of June 1999. “Those CMRS carriers which have avoided compliance should not be rewarded for their dilatory efforts by a grant of forbearance,” WorldCom wrote.

ASCENT told FCC number portability was becoming more important because consumers had started to substitute wireless phones for wireline service. Group criticized Verizon Wireless’s contention that levels of competition in wireless industry and between mobile and wireline providers already were significant. “Verizon’s view of competition is far too limited in both scope and degree,” ASCENT said. Group said: (1) Four largest carriers now control more than 70% of market, up from below 40% less than one year ago. (2) Prices continue to drop, but average monthly revenue per subscriber has started to rise after more than 10 years of decline. (3) Twenty largest resale carriers now serve fewer than 3% of wireless subscribers, pointing to “continued existence of resale restrictions.” ASCENT assailed what it described as lack of specific data provided by Verizon to back up contention that forbearance was warranted. “Simply asserting that implementing service provider number portability would interfere with other activities falls well short of the showing necessary to satisfy this burden,” ASCENT said. FCC has estimated wireless industry will spend up to $1 billion to implement LNP, including software and network upgrades. ASCENT said that represented 1% of “cumulative capital invested by CMRS providers in their systems.”

Several state PUCs disagreed with extent to which wireless carriers had made distinction between LNP and pooling. “Although the Texas [Public Utilities] Commission acknowledges and believes strongly in LNP as a competitive tool, it does not view LNP in the context of competition alone,” Tex. PUC wrote. “Instead, the Texas Commission also sees the number conservation potential of LNP and therefore fully supports its deployment throughout the nation.” In Tex., 7.6 million numbers are assigned to mobile carriers and at any one time 2.3 million are churning from one provider to another, Tex. PUC said. That means 2.3 million numbers “are stranded and the wireless provider winning the customer must assign a new number to that customer,” Tex. PUC said. “If the wireless provider could port all or even some of the telephone numbers it would conserve a huge number of telephone numbers.”

State Coordination Group (SCG), which includes PUC staffers involved with number conservation, raised similar issues that Verizon request wouldn’t be in public interest. SCG represents PUCs in Cal., Ind., Md., Me., Neb., Ohio, Tenn., Tex. “The FCC should see this filing for what it is: yet another attempt to forestall the development of competition in the telecommunications marketplace,” it said. Other PUCs that objected to Verizon Wireless petition included N.H. and N.Y.

VoiceStream and U.S. Cellular, underscoring comments of other wireless carriers, told FCC their ability to implement thousands- block number pooling would be “seriously jeopardized” unless LNP requirement were deferred. They said FCC imposed LNP mandate without conducting cost-benefit analysis and it was done after Congress “determined that LNP was not necessary for competitive CMRS markets.” LNP and pooling both require location routing number network architecture, in which call routing uses that infrastructure rather than dialed digits, carriers said. But LNP is more complex and costly to implement, meaning more new systems have to be implemented, they said. LNP is not prerequisite to pooling, even though they share common network architecture, carriers said, expressing concern about requirement they would have to “flash-cut” systems to those capabilities on same date.

Cingular Wireless backed Verizon’s petition, saying it met statutory requirement that public interest be met before forbearance was granted. “This test is clearly met,” Cingular said. Number portability will cost Cingular more than $250 million over next 5 years “and will not provide the public with better coverage, lower rates or improved service quality,” carrier said. Cingular said it would have to spend $50 million in 2002 to implement LNP. Sprint PCS reiterated its call that FCC act on forbearance petition by year-end. It said Commission never had considered costs of LNP, estimating it would spend at least $26 million by Nov. 2002 on number portability and “minimum of $50 million extra each year in order to operate in an LNP environment.”