SCHUMER PREDICTS STEVENS WILL PUSH FOR LNP DELAY, VOWS FIGHT

However, while Stevens is “discussing the problems and costs” of LNP with the wireless industry, he hasn’t filed an amendment to the media ownership bill, a Stevens spokeswoman said. Stevens’s 35% ownership bill is one of several scheduled for markup today (Thurs.) by the Senate Commerce Committee (CD June 18 p1, June 16 p1). One rumored possibility that industry observers have been watching is that a manager’s amendment that Stevens could offer to a media ownership measure would push back implementation of LNP to 2005, instead of the current Nov. 23 date.

Even if Stevens doesn’t use the media ownership measure to advance the LNP delay, Schumer said there were several other vehicles that could be used to delay LNP. The FCC Reauthorization Bill (S-1264) is one potential vehicle, he said, and Stevens could use his position as Appropriations chmn. to advance the delay. S-1264 is scheduled for markup June 26.

Schumer has been a critic of the wireless industry, charging poor service quality, and has introduced a “cellphone user bill of rights” (S-1216) that would require the industry to meet the LNP deadline, as well as publicize dead zones. “I feel so strongly about this I will do everything I can to block” LNP delay legislation, he said.

Schumer released Wed. the results of a national survey that said 1/3 of cellphone users would switch their service if they could take their number with them. The survey by the TMNG research firm said 42 million users would switch, and many consumers were concerned about billing practices and poor customer service. “From number portability to customer service to billing practices, the cellphone industry is the proverbial bad boy of the telecom sector and that’s got to change,” Schumer said: “Unfortunately, that message doesn’t seem to be getting through to the lobbyists who represent the wireless companies. They must be stuck in a cellphone dead zone.”

The survey said 70% of the 2,261 respondents said keeping their number was somewhat or very important. Other findings included: (1) 29% would change carriers solely on the ability to take their number with them. (2) 27% would leave for a better offer if they could take their number with them. (3) 16.7% would move their wireline number to wireless if they had the ability. (4) Billing is the 2nd biggest complaint, after call quality, and customer care is the “Achilles heel” of the industry.

Schumer praised FCC Chmn. Powell for his firm commitment to the deadline, saying “he’s been strong on this issue,” discounting industry arguments that LNP would sap resources and efforts away from E911 deployment. Schumer said the industry’s claim that the requirement would cost nearly $1 billion wasn’t an excuse, and cited NARUC numbers that said the industry would collect $1.8 billion this year on LNP fees carriers already were charging consumers. He also cited Nextel’s recent announcement that it would sponsor NASCAR. “They have more than enough money and the technical ability,” he said: “They want to avoid competition on service.”

Stevens will oppose Sen. Dorgan’s (D-N.D.) proposed amendment to the media ownership bill that would restore the broadcast-newspaper and broadcast-radio cross-ownership bans that the FCC relaxed June 2. Dorgan said he was hopeful the amendment would be adopted. The Senate Commerce Committee meeting is scheduled for 9:30 a.m. today (Thurs.), Rm. 253, Russell Bldg. Other issues scheduled for markup include spectrum relocation trust fund, antispam legislation and FTC reauthorization.

CTIA countered Schumer’s comments on LNP, with Pres. Tom Wheeler saying an April 2003 General Accounting Office (GAO) report on wireless consumer service found “number portability has not been a barrier to consumer choice.” He said: “Time and again, consumers tell us their first priorities are lower prices and better service. Number portability threatens both.” CTIA said the GAO report found only 11% of respondents to a separate survey cited having to change phone numbers when switching providers as very important or “somewhat important.” The group also pointed to a 2002 Yankee Group survey that concluded consumers were more interested in lower prices and better coverage.

FCC Releases LNP Order

Meanwhile, the FCC released an order Wed. that reaffirmed that carriers must implement LNP in switches in the 100 largest metropolitan statistical areas (MSAs) for which another operator had specifically asked for LNP. One of the questions that had been teed up in the order was whether LNP rollout for a carrier should hinge on bona fide requests from other carriers in an MSA. Several industry observers said the issue had become somewhat less relevant since earlier this year when all the major national carriers said they had submitted bona fide requests in top markets. Some telcos had asked the Commission to retain the bona fide request requirement, saying it let them target expenditures to places where there was actual demand for number porting. The FCC order (adopted May 28) delegated authority to state PUCs “to require carriers operating within the largest 100 MSAs that have not received a specific request for LNP from another carrier to provide LNP, under certain circumstances and on a case-by-case basis.” The Commission updated an earlier further notice that had reversed a “clarification” in a 2001 order that said bona fide request requirements extended to all carriers in the top 100 MSAs regardless of whether they had received a request for LNP.

In other areas, the FCC: (1) Concluded that all carriers, except those otherwise exempted, must participate in thousand-block number pooling in line with the national rollout schedule, regardless of whether they were required to provide LNP. It said that also covered wireless operators that weren’t required to roll out LNP until Nov. 24. (2) Exempted from the pooling requirement rural carriers and the smallest, or “Tier 3,” wireless providers that hadn’t received a request to provide LNP. The agency also set a pooling exemption for carriers that were the only service providers receiving numbers in a particular rate center. The FCC sought feedback on whether such exemptions should be expanded to include carriers where there were only 2 service providers receiving numbers in the rate center. (3) Concluded that an AT&T challenge of the FCC’s decision to allow LECs to recover the costs of thousands-block number pooling through access charges was untimely. AT&T had contended that carriers should bear their own pooling costs. It said that allowing recovery of such costs through access charges would allow ILECs to shift costs to IXCs.

“Since all of the major carriers have already filed their bona fide requests, this is a good measured response to the issues that were presented,” NARUC Gen. Counsel Brad Ramsay said. “We're very happy that they were responsive to the concerns that we expressed in our filings. Giving the states authority in certain circumstances to require a major carrier to provide LNP is a neat solution to a difficult problem.”

The FCC said state commissions could require carriers operating within the largest 100 MSAs to provide LNP, even if they hadn’t received a specific request from another carrier, “if doing so would be in the public interest because there is evidence of meaningful consumer demand for LNP.” The Commission said it didn’t find it necessary to expand LNP to all carriers in the 100 largest MSA’s regardless of whether a request had been made. But it said that delegating authority to state PUCs under certain conditions would give them the flexibility to accommodate areas of specific LNP demand. State PUCs using that delegated authority must conclude there was “actual, meaningful consumer demand” for LNP as shown by consumer requests. PUCs also must find that consumer demand and numbering considerations justify the cost of providing LNP.

Comr. Copps said in a separate statement that he believed states would closely monitor carrier requests and not hesitate to use their newly delegated authority. “I, for one, urge state commissions to step in and set new rules if there is evidence of consumer demand for local number portability that is not being met through carrier requests. As in any other competitive market, consumers who are unhappy or dissatisfied with a provider should be able to pack up and bring their business elsewhere.” Copps said he expected the rules to provide such consumer benefits, but added that he stood “willing to revisit the principles we adopt here today if time proves they do not.”

Meanwhile, CTIA, Cingular Wireless, AT&T Wireless and Alltel this week filed an “expedited petition” at the FCC (CD June 18 p9), again urging the Commission to rescind the rule. They argued that the Commission had no statutory authority to impose LNP on wireless carriers because the Communications Act language on LNP applied only to LECs. The latest challenge came after the U.S. Appeals Court, D.C., denied part of an industry challenge to the FCC decision to retain LNP and dismissed part of the challenge as untimely (CD June 9 p1). The court said part of the litigation was a challenge to the underlying LNP rules, which made it a petition for review to challenge an FCC final order, which should have been filed within 60 days of the order’s July 1996 entry. The petition was filed in Aug. 2002. The carriers said in their latest challenge at the FCC: “Nevertheless, the court held that a challenge to the Commission’s statutory authority over wireless LNP could be raised by filing a petition to rescind the rule and appealing a denial of that petition.” The pending challenge asked the Commission to rescind the rules “on the grounds that the FCC did not have delegated authority from Congress to adopt the wireless LNP requirement.”

NARUC’s Ramsay called that challenge “a late-filed petition for reconsideration, which is barred by statute.” The D.C. Circuit, on the industry’s challenge to the FCC decision to not forbear from enforcement of wireless LNP, said the Commission had interpreted the forbearance provisions of the Act in a “reasonable” way.