VERIZON WIRELESS CALLS FOR UNIFORM PRACTICES ON LNP

After the Nov. 24 deadline for implementing wireless LNP in the top 100 metropolitan statistical areas, Strigl told a Yankee Group conference in N.Y., the carrier would evaluate its costs and how it would recoup them. He said he didn’t anticipate that costs would be much higher than 10-15 cents per customer per month. Verizon Wireless said it wouldn’t block the transfer of a customer’s number to a rival carrier as a way to compel a subscriber to pay a remaining balance on a bill. Customers who leave a contract early would be liable for any unpaid balance or early termination fee, Strigl said, but it would appear on their last bill, which they would receive after moving to a new carrier. Customers coming from other carriers would be treated in the same time frames as is currently the case. Several industry observers said Verizon appeared to be taking a “Switzerland approach” on possible Hill action to delay the LNP deadline, meaning the carrier would neither support nor oppose such efforts.

“I encourage all service providers to adopt our straightforward plan for consumer-friendly porting, and for the FCC to give its stamp of approval immediately,” Strigl said: “It can only work well if all service providers agree to implement wireless LNP without artificial barriers.” Verizon Wireless and CTIA had mounted a court challenge last year, seeking to overturn an FCC decision to not exercise forbearance on the wireless LNP requirements. The U.S. Appeals Court, D.C., earlier this month rejected that challenge. Verizon wasn’t part of an industry group, which included Alltel, AT&T Wireless, Cingular Wireless and CTIA, that filed an expedited petition at the FCC last week urging the agency to rescind the rule. “Let’s -- as an industry -- stop moaning and groaning about it,” Strigl told the conference: “Our government has spoken, our customers tell us they want it. Let’s clear the decks and get it done.”

“This is something that NARUC has had a long-standing position to encourage them to do,” Neb. PSC Comr. Anne Boyle said. “This is a huge step in the right direction.” She said the extent to which other carriers followed Verizon in not imposing LNP surcharges remained to be seen, Boyle said. “This is clearly still an open issue,” she said. She said NARUC recently estimated that “regulatory fees” that carriers tacked on to wireless bills would provide the industry with more than $1.18 billion in the next year to implement LNP and Enhanced 911.

Verizon’s outline of what it wanted to see as common procedures for LNP came as the FCC considered a CTIA request for guidance on how wireless number porting actually should roll out. CTIA asked the FCC last month for guidance on how to resolve technical issues on implementing wireless LNP, saying it was focusing on “operating realities.” They included how porting between wireless and wireline carriers would work under the current rate-center system. CTIA also sought clarity on wireless-to-wireless porting, saying FCC rules for LNP covered wireline-to-wireline porting, and specific wireless rules were needed. CTIA also raised questions about the porting interval --the time it takes a carrier to port a number to a new service provider.

Verizon appeared to be trying to “take a leadership role in defining the rules of engagement among the carriers,” Legg Mason said in a research note. Strigl’s outline of a wish- list of industry procedures made the carrier’s views known as the FCC was attempting to evaluate the CTIA request by Labor Day, the firm said. “Even though we believe it is necessary to have common rules in place to ensure a level playing field, we view this announcement as a negative for the industry, if Verizon’s approach becomes the industry norm, and carriers may not be able to mitigate some of the WLNP costs with porting fees and it may hinder the carrier’s ability to create a less-than-seamless process,” Legg Mason wrote. Verizon said it didn’t plan to charge additional fees to customers who carried their numbers with them or to establish a “preporting” fee, which has ranged from 50 cents to $2 among some carriers. Noting that Verizon said it could charge up to 15 cents per month to recoup costs after implementation, Legg Mason said “this may impact carriers that have been charging preporting fees ability to collect ongoing WLNP expenses as they have already collected pre-WLNP reimbursements and may have to justify collections versus expenses.” Legg Mason said it expected Verizon’s approach to “serve as the baseline for how the FCC itself will approach the implementation issues.”

Sprint PCS said Verizon’s announcement was nothing new and that company should become the leadership of the Bell companies by allowing open competition for number porting between landline and wireless phones. “Some RBOCs are seeking to unilaterally impose limitations on the ability of their customers to port numbers to wireless,” Sprint and PCS Div. Pres. Len Lauer said: “Many wireline customers would port numbers if they could. As the largest carrier, Verizon needs to step up and address that need.” Lauer also called on the FCC to take action to ensure the market was open to competition, so customers could cut off their local landline for wireless service. He said that “for months” Sprint had been asking the Commission for wireless industry guidelines on LNP, stressing the need for consistency among carriers. “But it’s not the place of any one carrier to dictate the industry ground rules for the process -- that’s for the FCC to decide,” he said.

In reply comments on its petition at the FCC seeking guidance on LNP deployment, CTIA teed up questions that remain for the Commission, including: (1) Whether LECs must port numbers with wireless carriers if the customer isn’t located in the same rate center as the wireless provider. (2) Whether rural wireless providers must port numbers with larger carriers if they don’t share the same rate center. (3) Whether local wireline providers can delay porting numbers with wireless providers by as much as 4 business days. (4) Whether rural carriers must support nationwide roaming.

“While we continue to believe that number portability is not in consumers’ best interests, we will obey the law,” CTIA Pres. Tom Wheeler said. “Whether consumers find implementation to be smooth or painful is in the control of the FCC and its willingness to decide these key implementation issues. We anxiously await Labor Day.”

“Verizon Wireless breaking from the pack suggests that the LNP marketing wars may already have begun and it’s just an indicator of what’s coming,” Schwab Washington Research Group analyst Paul Glenchur said. With the courts and the FCC appearing unlikely to provide relief on the LNP deadline, carriers’ “best hopes seem to be on Capitol Hill, and even that seems to be a pretty difficult path. They are just running out of time because the November deadline is approaching.” The LNP requirement changes marketing costs and puts downward pressure on pricing, Glenchur said. “It seems that the industry is going to have to approach this in part with resignation and in part thinking about the opportunities that the requirement could bring,” he said.

Sen. Schumer (D-N.Y.), who vowed last week to fight industry efforts to delay wireless LNP, urged other carriers Tues. to follow Verizon’s lead and drop efforts to delay cellphone portability. “It’s my hope that Verizon’s decision is going to spur other wireless companies to get on board with portability and stop efforts to overrule the FCC in Congress,” Schumer said. He also said he hoped that Verizon’s announcement would compel the CTIA to withdraw a petition submitted last week in another effort to delay the LNP deadline.

Consumers Union Pres. James Guest praised the Verizon announcement, saying it would “make it hard for the rest of the carriers to keep up their campaign to further delay the November deadline. We applaud Verizon breaking ranks.” NARUC called Verizon’s position “a complete turnabout,” noting the carrier recently had led court and regulatory challenges seeking a delay in LNP implementation.