FCC GRANTS ADDITIONAL YEAR FOR WIRELESS LNP COMPLIANCE

In rejecting Verizon Wireless’s request for permanent forbearance, FCC said wireless LNP would be needed to preserve consumer choice and bolster competition between wireless carriers and between mobile and wireline sectors. Agency said extending LNP mandate by another year, which was 3rd time Commission had done so, outstanding issues could be resolved, including public safety coordination. “It will also reduce the burdens otherwise associated with the simultaneous implementation of number portability and thousand-block number pooling,” FCC said. Wireless carriers also face Nov. 24 deadline for implementing thousand-block number pooling, and several large companies had raised concerns that putting LNP in place as scheduled could jeopardize that pooling timetable. Agency stressed carriers would be expected to comply with new schedule “absent extraordinary circumstances.” It also stipulated that number pooling deadline for commercial mobile radio service carriers would remain Nov. 24. Wireless carriers in 100 largest MSAs are required to support LNP in areas in which another carrier has requested provision of LNP.

Abernathy said public interest would have been served by longer delay, which she said also was backed by record in proceeding. “Recent events in the capital markets and the Commission’s wireless competition report underscore the need for regulatory restraint,” she said. “Moreover, there is nothing in this record to indicate that there is a substantial risk of competitive harm if we grant a lengthier delay. That is why we should resist substituting our judgment for the market’s judgment of how best to serve consumers.” Abernathy said case for temporary forbearance on wireless LNP was even stronger now than in 1999, which was last time Commission granted industry additional time. “I find little record support for the conclusion that consumers would readily prefer LNP to better coverage, lower prices or more innovative services,” she said. Abernathy called capital “a zero-sum game” and resources spent meeting that mandate would affect other factors that benefited consumers, including price, coverage and mandates such as Enhanced 911. In 1999, FCC cited consistently high churn (wireless customer turnover) as evidence of lack of consumer harm from forbearance, she said. That trend hasn’t changed, she said: “Number portability cannot be justified based on a slow-down in churn due to increased customer identification with their numbers.”

Copps said shorter delay was warranted, but he preferred one-year extension to alternative of even longer delay or worse “to forbearance that would result from Commission inaction.” He said order “strongly reaffirms the necessity of LNP rules and states that carriers must meet this new schedule absent extraordinary circumstances.” He said he was “mindful” of state PUC arguments, including those that contended porting changes were likely to be less expensive than carriers depicted. Brief delay is warranted “to allow carriers and public safety answering points to coordinate so there are no negative effects on 911 emergency response,” he said.

Martin said one factor that convinced him of consumers’ interest in being able to keep their phone numbers when they switched wireless providers was interest among some at FCC in not switching to new service last fall because they would lose their phone numbers. While agreeing with one-year delay, Martin said he disagreed with order’s “implementation of the standard for assessing forbearance petitions.” He particularly singled out what he said was FCC’s “failure to give sufficient content to the term ‘necessary’ in Section 10 of the Communications Act.” That provision requires that forbearance be granted if enforcement of regulation is necessary to ensure that charges or practices are just and reasonable and enforcement of regulation isn’t necessary to protect consumers. “I am also troubled by the item’s failure to clarify that the burden of rejecting a forbearance petition rests with the Commission,” he said.

Reactions from both state govts. and wireless industry indicated extent to which neither side got exactly what it sought. “Today’s number portability decision is a step in the right direction, but the real destination is lifting the burden from consumers altogether, not just delaying it,” CTIA Pres. Tom Wheeler said. “The costs of this regulation outweigh the benefits for consumers today and they still will tomorrow. Number portability is another example of a government mandate that adds to the consumer’s bill and siphons away the cost reductions that have resulted from competition.” Verizon Wireless said it was “disappointed” that FCC didn’t follow conclusions of recent Commission wireless competition report that showed that sector was competitive. Instead, FCC “chose to intervene in that market by maintaining a costly and technically complex regulatory mandate,” carrier said. “Nonetheless, we appreciate the FCC’s recognition of the distinctions between number pooling and local number portability and the importance of deferring LNP to allow the industry to focus on pooling.”

NARUC Gen. Counsel Brad Ramsay said he was pleased “overall” at one-year delay. NARUC had urged FCC to provide little if any additional time, in part because of state PUC concerns that consumers be able to keep phone numbers. “I would have preferred to see less, I was figuring 9 months, honestly,” he said. “But overall I'm pleased because I know it was a hard thing for all of them.” NARUC hasn’t yet decided whether it will seek reconsideration of order, he said. Ramsay, referring to nomination of Jonathan Adelstein to FCC, said: “When Adelstein gets on, the texture of the vote could change.”