Local Loopy Precedent

By eweek  |  Posted 2003-04-18 Print this article Print

The FCC counters that it has the authority to regulate because portability is offered in landline phone systems; the regulation was enacted in order to encourage competition in the local phone market. However, this move has had no material effect on local telco competition, which is as dominated today by incumbent Baby Bells as its ever been. So, the power of the precedent doesnt hold much sway. The bottom-line issues are whether this will help consumers now and whether that "public interest" is enough to justify regulation from what has been a fairly laissez-faire FCC. The main differences between landline and wireless portability: Because of the nature of wireless, carriers wouldnt be as subject to geographic limitations, and the big boys would be butting heads with each other instead of mom-and-pop phone companies. The carriers have a good case that they could be adversely affected by number portability, but the FCC also has a stronger argument that it would help competition. Indeed, with the mandatory extension of phone numbers to include the area code while dialing, phone numbers are now 43 percent more of a hassle to remember.
Carriers argue that they will have to invest in new equipment to support the standard, but if their legal arguments are accurate and the industry is already competitive, they could gain substantially. Consumers comfort in knowing theyll be able to keep their cell-phone number for life would go a longer way toward "one-number" nirvana than any of the "follow-me" forwarding schemes hatched in the past 20 years. (Paradoxically, the landline telcos may have more to lose in cellular number portability than they did in landline number portability!)
Cellular number portability also most benefits dissatisfied customers; are these really the customers cellular companies want locked into a contract and spreading bad word of mouth? As Security Supersite editor Larry Seltzer argues this week, sometimes companies work to lose the war in winning a legal battle. Then theres the opportunity-cost argument. Carriers claim that money spent on implementing portability will come at the expense of investment in data networks. In the short term, budget allocations will likely have to shift. Is there really a tradeoff, however? While phone numbers are associated with SMS, their main value is in driving voice calling. Removing the barriers to switching voice traffic will force carriers to invest in data networks to rely more heavily on data tie-ins to prevent churn anyway. Theyre not going to keep customers with better voicemail. If the FCC succeeds, it might make up for hampering data standards by its past lack of regulation by encouraging more advanced data services in the open market. As for the legal fight, CTIA should tread carefully here. It isnt on the public-relations train-wreck ride the RIAA has taken with its anti-piracy campaigns. However, carriers will have a harder time selling consumers on the notion that wireless is all about freedom if they keep trying to lock them into a 10-digit jail. Wireless Supersite Editor Ross Rubin is a senior analyst at eMarketer. He has researched wireless communications since 1994 and has been covering technology since 1989. More from Ross Rubin:


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