June 1, 2004
Freedom to Switch
When Lounise Williams, a student at Baruch College in New York City, wanted to replace the prepaid cell phone plan that she had with T-Mobile, she turned to AT&T Wireless. With no existing credit, AT&T was the only carrier to offer her a contract without a down payment. As her year-long contract for $39.99 a month (600 anytime minutes and unlimited nights and weekends) draws to an end, Williams is considering taking her business back to T-Mobile.
“I travel and when I go into another state, I don’t want to pay roaming fees,” says Williams, who was never advised that AT&T had better service plans. Williams also complains about error messages and the difficulty in paying her bill online. With higher rates and subpar service behind her, she’s happy to make the switch. “Besides I get to keep my number,” she says.
Since it’s inception Nov. 24, 2003, at least 1 million wireless subscribers have taken advantage of the Federal Communications Commission’s Local Number Portability (LNP) rules. This entitles subscribers, under Section 251 of the Telecommunications Act of 1996, to change service providers while retaining the same phone number, provided it’s in the same geographic area. Previously, the act only mentioned transferring numbers between wire line companies, but FCC policy now includes switching between wireless carriers; wire line carrier to wireless carrier; and, in some cases, from a wireless carrier to a wire line carrier.
“A lot of people — about 150 million — have a significant investment in their phone numbers. It’s the way many people [conduct] business,” explains John B. Muleta, chief of the FCC’s Wireless Telecommunications Bureau in Washington, D.C. (http://wireless.fcc.gov), about the ruling that was delayed for seven years due to technical difficulties and opposition from some wire line and wireless carriers.
“The carriers were uniformed in their opposition. Afraid that [the transition] would be chaotic, they didn’t want to implement it. So it took a couple of years back and forth in the courts, as well as here at the FCC before they changed their minds and became supporters of LNP,” he adds.
As of the end of February, the FCC has received more than 5,400 informal consumer complaints, mostly about delays in porting numbers from one carrier to another. Many of the problems were due to slow software or erroneous account information. Muleta states that such a large endeavor requires a transition period. “For a couple of carriers, this was more of a problem because of the technology that they were using to do number portability. These issues have either been solved or are on their way to being resolved,” says Muleta. The pace of the complaints has since dropped by 50%.
The cell phone companies also made claims that this endeavor would cost millions. In anticipation of the LNP upgrades some carriers have passed on the cost to the consumer as a line item fee on their monthly bill, charging as little as a few cents to more than a dollar. “What we have are seven nationwide carriers with very