POLICY BATTLES CONTINUE AS WIRELESS LNP GETS UNDER WAY

The rural carriers’ petition complained that the Nov. 7 order created unintentional technical problems for rural carriers located within the top 100 MSAs. The groups argued that the FCC, in setting the Nov. 24 deadline for carriers in the top 100 MSAs to support wireline-to-wireless porting, didn’t take into consideration the fact that some 2% carriers also were located in those areas. The order extended the deadline for carriers outside the top 100 MSAs because many of them were smaller companies, the petition said. The petitioners argued that small carriers within the top 100 MSAs would have a hard time meeting porting requirements because, unlike bigger companies, they hadn’t been required to provide number porting in the past and thus didn’t have the hardware and software on hand.

The carriers also complained that the FCC order didn’t take into consideration how their networks worked and interconnected with wireless carriers. Instead, they said, it would require them “to invest limited resources in otherwise unnecessary efforts to comply with technical aspects of the order that disregard the operational realities of the interconnection arrangements that wireless carriers have generally established with the networks of the 2 percent carriers.” For example, they said, wireless carriers usually don’t have direct connections to the 2% carrier networks. Instead, calls from their wireline networks to a point of interconnection with a wireless carrier outside those networks generally are transported by interexchange or intraLATA toll carriers, they said. The petition also questioned whether the FCC “may have inadvertently signaled an attempt to preempt the rights of state commissions” by saying state regulatory oversight under Sec. 251 of the Telecom Act wasn’t necessary to determine whether the deployment of number portability was in the public interest.

In other LNP developments, the FCC turned down a waiver petition by Western Wireless to extend the thousands-block number pooling and LNP deadlines. In a bureau order adopted Fri. and released Mon., the agency said “Western has not demonstrated that special circumstances exist for an extension of the porting and pooling deadlines until May 24, 2004, or that such an extension is in the public interest.” But the agency said it wouldn’t enforce the carrier’s LNP and pooling obligations until 60 days after the order was released, to give Western Wireless enough time to implement those requirements. The Commission also turned down arguments by Western Wireless that it wasn’t required to pool or port in rural service areas that overlapped the top 100 markets. The company had sought a 6-month extension of the Nov. 24 deadline, in part because “the small numbering resource optimization benefits to be gained will be far outweighed by the significant costs and burdens of implementing these obligations by a rural carrier that has a smaller customer base for spreading out these costs,” the FCC said. Western Wireless also had argued that implementing pooling in RSAs that contained counties located in the top 100 Metropolitan Statistical Areas would impose significant costs on it.

Meanwhile, in the face of better-than-expected LNP uptake, Verizon Wireless confirmed Mon. that it was increasing its monthly regulatory surcharge on customer bills to 45 cents in early 2004, from 5 cents per month now. The regulatory charge covers the costs of number porting, pooling and Enhanced 911, a spokesman said. The increase is higher than Verizon Wireless CEO Denny Strigl forecast earlier this year. He had said Verizon Wireless didn’t plan to impose surcharges for LNP before the service rolled out, but that when it did, it could charge up to 15 cents per month to recoup costs after implementation (CD June 24 p1). “We have assessed what we expect to be a ramped-up scenario for costs with porting and that is largely reflected in the incremental increase,” the spokesman said: “We expect much more porting than we initially anticipated.”

Verizon Wireless officials said they saw a huge influx of customers coming into its stores and via telesales who wanted to change their number to Verizon. A Verizon Wireless spokesman said the carrier wasn’t releasing figures on the volume of customers, but it wasn’t close to the 1 million ports in the first day that some analysts had predicted. John Comisky, vp-operations, said that some Verizon Wireless stores opened at 7 a.m., with people already lined up in some cases. Phone sale volumes were up 300% compared to this time last year, with sales at some Verizon Wireless locations up 500% to 600% compared to the same time last year, he said. “It’s been a good day,” he said. Wireless ports have been making it through the system along the lines of an industry standard of 2.5 to 3 hours, he said. Comisky said that based on observations of foot traffic at competitors’ stores: “It does look like a normal day for the rest of the market.”

As of mid-Mon. afternoon, Verizon Wireless was getting 2 to 3 times the normal volume of customers in its stores, “wholly attributed to number portability,” the spokesman said. Some stores have been getting calls about long lines and some are setting up appointments to meet with sales staff to manage the traffic flow, he said. One issue that emerged in the initial rollout was that one carrier manually set incoming porting times several days from when a customer made a request to switch a number, the spokesman said. That hasn’t been the case with every incoming ported number from that carrier, “but it is with many,” he said. Verizon Wireless is investigating the issue further and is letting the FCC know about it, the spokesman said.

Separately, Telecom Services Inc. (TSI), which handles the “preporting coordination process” for several major wireless carriers, said it had hired 200 more people to handle the increased traffic load from wireless LNP. A spokeswoman said Mon. the company hadn’t determined whether it would release figures on first-day volumes related to LNP.

Among the regulatory questions in the LNP debut was how telemarketers could be notified of when a wireline number had changed to wireless and therefore was protected from solicitation calls. NeuStar described for the FCC several alternatives for telemarketers to access information about wireline numbers that were ported to wireless phones. The Direct Mktg. Assn. last week raised concerns at the FCC that telemarketers hadn’t been able to obtain data from NeuStar that would let them determine when a wireline number had been ported to a wireless plan to enable the suppression of autodialed solicitation calls to such numbers (CD Nov 20 p1). The Telephone Consumer Protection Act (TCPA) bars autodialed telemarketing calls to wireless phones. DMA asked that the FCC not enforce that part of the TCPA until the issue had been resolved. NeuStar, the 3rd-party administrator of the Number Portability Administration Center (NPAC), told the FCC Fri. that authorized NPAC users had been limited to telecom carriers. Any change in that operation would require a green light from the N. American Portability Management Inc., NeuStar said. It suggested as one option that with NAPM’s permission, NeuStar could create a secure Web site for telemarketers to access daily updates on wireless numbers. Another option would be for a telecom carrier to offer telemarketers the updated information, NeuStar said.

In a letter to the DMA released late Mon., FCC Consumer & Governmental Affairs Bureau Chief Dane Snowden pointed out the scenarios outlined by NeuStar for telemarketers to obtain updated information on wireless numbers. They included interpreting the existing agreements to which NPAC users were subject so that the FCC’s TCPA order was “read into an exception allowing the disclosure” of such information. NeuStar had told the FCC that would “enable telemarketers to contract with any of the hundreds of NPAC users to access the requisite data without compromising the confidentiality that is crucial to the successful administration of local number portability.”

Snowden told the DMA that the options outlined by NeuStar weren’t presented to telemarketers at the time they started to voice their concerns to the FCC. But he said NeuStar indicated that under the options it had outlined, telemarketers could obtain the information they needed. “A telemarketer may make appropriate arrangements with a user to obtain the data in a manner that best meets its business needs,” Snowden said.

One source said industrywide LNP activity on the first day appeared to be lower than some high-end estimates. UBS said in a note to investors Mon. that wireless profitability probably would be affected, “but we do not think it will be as severe as many anticipate. The U.S. wireless market is already very competitive and the cost to acquire a new customer is already very high.” Churn on the wireless side is likely to increase by 30 basis points, UBS said. “From a wireline perspective, we think the hype has been overhyped,” it said: “The rule is an incremental negative for the wireline operators but wireless substitution is already occurring at a rapid clip.”

FCC Comr. Abernathy said: “Today’s implementation of the FCC’s wireless local number portability ushers in a new era of consumer choice.” She said the start of wireless LNP was “the advent of truly intermodal competition.”