CTIA, RCA Asks for Relief of E-911 Handset Deadline

Even though carriers are meeting another requirement that all new handsets be location-capable, they need more time to make their entire networks 95% capable, CTIA and RCA said in a joint filing late last week. The problem is the FCC’s estimates of customer churn and handset replacement rates were higher than actual marketplace experience, the filing said. Since fewer customers change carriers or buy new handsets than the commission originally estimated, it’s harder to meet the overall compliance deadline, the filing said.

“For a variety of reasons, many consumers are reluctant to change out their handsets for a new location- capable device,” CTIA said in a news release, noting that carriers will find it difficult “to achieve 95% penetration by the end of 2005 without overriding consumer preferences.” The CTIA-RCA petition asked the FCC to suspend the 95% penetration rule for those carriers who have met the other requirement that 100% of new digital handsets activated be location-capable. As an alternative, the associations offered the FCC criteria it could follow in considering individual carriers’ waiver requests.

“Carriers are meeting the FCC requirements for new activations, but we believe enforcing the [broader] deadline for handset conversions disadvantages consumers by forcing them to replace equipment they are satisfied with and aren’t ready to replace for a variety of reasons,” said CTIA Pres. Steve Largent.

The waiver is being filed now because the FCC needs time to consider the issue before the deadline, which is only 6 months away, said CTIA General Counsel Mike Altschul. Altschul said carriers have already made clear in progress reports to the FCC that they will have difficulty meeting the deadline. Largent met last week with FCC Chmn. Martin to lay out the industry’s concerns, Altschul said. “Certainly the rural carriers in the waiver petitions they filed last year raised these concerns and the FCC acknowledged the concerns,” he said. In April, the FCC granted waivers to some but not all of the smaller Tier 3 carriers.

Altschul said the FCC made a number of assumptions when it looked at this issue more than 5 years ago before GPS-capable handsets were commercially available. “One assumption is correct -- that if carriers are relying on handset technology to meet their 911 obligations to activate 100% new handsets, the entire installed base is going to have advanced 911 capabilities,” he said. The other assumption was that customer churn and the desire for customers to buy new handsets would lead to relatively rapid replacement. That assumption isn’t proving as true, Altschul said: “As the industry has become even more competitive through number portability and competition, they have had do a much better job satisfying their customers, so the churn rates have gone down, which slows handset replacement. He said there’s also the consideration that, although the average customer changes a handset every 18-24 months, “that doesn’t mean every customer.”

Convincing the FCC to grant carriers more time could be a hard case to make, especially given the tough deadline imposed on VoIP carriers to make their systems 911 compatible, an FCC source said. The Dec. 2005 deadline was a backstop put in place after carriers said they would have difficulty meeting earlier deadlines, the source said. One question the FCC will likely ask is whether carriers have tried to encourage conversion through lower prices for location-compliant handsets, the source said.