VERIZON WIRELESS FIGHTS LNP, DESPITE REQUESTS, SCHUMERS’ PRAISE

Schumer’s nod to bona fide LNP requests by 2 carriers marked first public disclosure that carriers were making formal LNP requests of each other. He said both carriers told him Mon. they were filing portability requests and would meet Nov. 24 deadline. Carriers aren’t required to disclose such requests to FCC, which is expected to act soon on whether they should have to make such formal requests of each other or just be bound by Nov. 24 deadline. Verizon Wireless, along with CTIA, will maintain its suit against FCC challenging its LNP requirements. Suit argues that FCC hasn’t proved that LNP is necessary and appeals agency’s rejection of Verizon Wireless forbearance request. Oral argument is scheduled April 15 in U.S. Appeals Court, D.C. Verizon Wireless spokesman said pursuing LNP didn’t change disagreement with FCC on authority to impose LNP. “We're making a play for their customers,” company spokesman said. “That doesn’t change our disagreement with the FCC. They don’t have the authority to impose LNP.” If Verizon Wireless wins suit, LNP requests would be void because regulation requiring them would be struck down, spokesman said.

Schumer bill also would require marketing materials and contracts of wireless carriers to clearly lay out terms and conditions of service plans. Legislation proposes requiring all wireless contracts and marketing materials to place on bills box with standardized information on rates, including monthly base charge, per-min. charges for time not included in base plan, including roaming and night and weekend min. Termination and start-up fees, trial periods, taxes and surcharges would have to disclosed. Measure would authorize FCC to monitor service quality on industrywide basis, with data collected to be made available publicly so consumers could compare signal strength among providers, examine carrier’s record for dropped calls, compare dead zones in individual networks.

At NARUC meeting, Schumer praised Verizon Wireless for commitment to LNP “because they could try to cement the status quo.” He said support from large carrier such as Verizon Wireless usually led to followers. “Once one of the big guys does it, others will do it as well,” he said. Schumer spokesman told us that, despite court challenge, senator still was encouraged by its bona fide requests. His goal is to see LNP in place and bona fide requests are step toward that goal, spokesman said. “Our goal is to see portability in place as quickly as possible.”

Schumer bill on LNP would require wireless carriers to stick to Nov. 2003 deadline. If legislation were passed after deadline, bill would establish new deadline 6 months after passage. Schumer said LNP and cellphone bill of rights both were proconsumer because they were procompetitive. He cited economist Adam Smith several times in speech to NARUC. Most of problems with wireless service “can be cured through competition,” he said. “Too many people are locked into their old company” and that “raises costs.”

Meanwhile, FCC still is expected to act on order on whether to make LNP rollout for carrier hinge on bona fide requests from other carriers. Some companies had urged FCC to retain requirement, arguing it would ensure that deployment expenditures targeted areas of actual demand. NARUC last year had urged its elimination by FCC, saying bona fide request mandate could give carriers loophole for avoiding full implementation. Schumer himself wrote to FCC Chmn. Powell last year, contending that bona fide request requirements of LNP rules would allow carriers to avoid compliance with Nov. 24 deadline.

Expected FCC action to decide whether LNP should hinge on one carrier making formal request of another involved further notice that agency adopted last March. It covered issues such as scope of 100 largest Metropolitan Statistical Areas (MSAs) and obligations of carriers to support 1,000- block number pooling if their coverage area partly overlapped one of those top markets. Of particular note, notice reversed “clarification” in Dec. 2001 order that had said those requirements extended to all carriers in 100 largest MSAs regardless of whether they had received specific request from another carrier to provide LNP. At that time, notice acknowledged FCC had reached that conclusion in Dec. 2001 order without providing opportunity for comment on issue. So further notice sought feedback on such issues, including whether Commission should stand behind earlier stance of extending LNP requirements to all carriers in top 100 MSAs, regardless of whether formal request had been made.

Some industry observers had expected FCC to act on bona fide request issue by Feb. 24. Under current rules, wireless carrier in one of largest MSAs that received porting request by Feb. 24 from another carrier must be capable of doing so by Nov. 24. One possibility is that Commission will eliminate bona fide request requirement altogether and just hold carriers to Nov. 24 deadline, several sources said. Industry source expressed view that FCC would eliminate bona fide request rule, which is seen as creating significant paperwork trail compared with keeping overall deadline for wireless LNP intact and expecting everyone to meet it.

While industry awaits FCC decision, buzz at NARUC meeting was that some states were interested in putting in place their own bona fide request requirements. “Some states are getting the idea they should be able to do BFRs if FCC wouldn’t,” source said. At NARUC conference earlier this week, consumer affairs staff subcommittee resolution praised wireless carriers that had made requests for LNP and urged FCC to either change portability rules to eliminate BFR mandate or allow states to make requests to implement wireless LNP before Nov. 24 deadline (CD Feb 25 p7). Decision along those lines would be equivalent to extending ability to make bona fide requests to states, rather than just between wireless carriers. Consumer Affairs Committee of NARUC is set to take up issue.

Not surprisingly, Schumer bill won immediate plaudits from NARUC, along with AARP, Consumers Union, Consumer Federation of America. NARUC Telecom Chmn. Robert Nelson said: “For 6 years, NARUC has encouraged the FCC to implement wireless local number portability as soon as possible so that consumers can respond to price and service changes in the marketplace without changing their telephone numbers. This important step will help to alleviate number shortages. It is long overdue.”

Cal. PUC Comr. Carl Wood likened Schumer bill to similar wireless consumer rules he had been backing at state level, which had sparked angst from large wireless carriers over potential burdens of new rules and their associated costs. “Both contain basic safeguards for consumers that should already be expected from cellular carriers, including receiving understandable bills and complete disclosure of terms and conditions of cellular plans, and the disclosure of areas in which each cellular carrier can and cannot provide coverage,” Wood said.

Responding to Schumer bill, CTIA Senior Vp-Govt. Affairs Steve Berry touted competitiveness of wireless industry and raised concerns about some of steps proposed: “Comparing the competitive wireless industry to monopolistic landline services is simply ridiculous. Adam Smith would turn over in his grave to hear that consumers would be better served by poisoning the competitive wireless market with unnecessary government regulations. More government monitoring will not fix dead zones. More wireless antennas will fix dead zones. The correct solution is stopping the government obstruction, red tape and foot-dragging that continue to prevent wireless carriers from placing antennas where consumers need them most.”