A Number Game

Imag­ine an indus­try where cus­tomers are leav­ing more quickly than they are join­ing. If you were part of that indus­try, would you:

• try to increase your level of cus­tomer sat­is­fac­tion ? or
• fight any pro­vi­sion that would increase com­pe­ti­tion in your industry?

If you are the wire­less phone indus­try, you will go for the latter.

The issue at hand is num­ber portability.

What is num­ber portability?

Well, put quite sim­ply, it is a way to be able to use the same phone num­ber regard­less of which ser­vice provider you are using. It is essen­tially what now allows us to change long dis­tance ser­vice or local ser­vice car­ri­ers from our incum­bent bell oper­at­ing com­pany (for exam­ple, Ver­i­zon in New York) to another ser­vice provider (fol­low­ing the same exam­ple, one could now go to AT&T or RCN for phone service).

Tech­ni­cally, and from the con­sumer stand­point, it’s a really great idea that fos­ters choice and increases com­pe­ti­tion. To the exist­ing phone monop­o­lies, it’s a night­mare because it means that they now must be offer­ing bet­ter ser­vice or face los­ing their cus­tomers to the competition.

The his­tory

In 1996, under sec­tion 251(b)(2) of the Telecom­mu­ni­ca­tions Reform Act, the US gov­ern­ment spec­i­fied that all phone car­ri­ers, whether they were offer­ing wired lines or wire­less ser­vices, should offer to their cus­tomers a chance to change providers with­out hav­ing to change their phone num­bers. The FCC later reit­er­ated the government’s posi­tion to increase com­pe­ti­tion in the wire­less space by requir­ing num­ber porta­bil­ity to be com­pleted in the wire­less indus­try by 1998. A later report by the FCC pushed that date back to 2000. After some fur­ther lob­by­ing, providers like Ver­i­zon man­aged to get that date pushed to a later time.

So far, no prob­lems. A lit­tle delay seem to be OK but that wasn’t enough for the indus­try. Now that there has been a change of admin­is­tra­tion, Ver­i­zon is try­ing to get rid of the wire­less num­ber porta­bil­ity require­ment altogether.

The argu­ments

Maybe they have a point. Today, we look at the argu­ments they are mak­ing and will see if any of them makes sense or whether it is just FUD that will allow them to hang on to oth­er­wise unhappy customers.

The indus­try says

: Cus­tomers don’t care. It is a ser­vice they do not really want.

Cus­tomers reply

: One of the argu­ments the wire­less indus­try is mak­ing is that cus­tomers don’t really care much about being able to keep their phone num­ber. Yet, it seems that every story on the sub­ject shows that a num­ber of peo­ple want to be able to change providers with­out chang­ing their num­ber. Every day, a lot of peo­ple are forced to send mes­sages to their con­tact list about their new phone number.

The indus­try says

: It’s too expen­sive to pro­vide this ser­vice. Cus­tomers would not be will­ing to pay for it.

Cus­tomers reply

: Cell phone ser­vices already have a num­ber of extra charges tacked on to this. As a result of this being imple­mented, com­pe­ti­tion in the wire­less space would increase even more, putting fur­ther pres­sure on the over­all price of pack­ages that the wire­less providers would offer. Nowa­days, most wire­less providers offer plans for $30–40 to most cus­tomers. Tack­ing on an extra dol­lar to sup­port this fea­ture (along with sup­port­ing the E911 ini­tia­tive that also needs to be imple­mented to allow 911 oper­a­tors to pin­point cell-phone users) would not rep­re­sent a tremen­dous leap in the over­all bill given to a cus­tomer. When you spread the cost across sev­eral hun­dreds of mil­lions of cus­tomers, the ini­tial invest­ment to imple­ment num­ber porta­bil­ity would end up cost­ing the cus­tomers about $2 a year, or an aver­age of less than twenty cent per monthly bill. Hard to say but does it look too expen­sive to you? To me, it looks like some­thing I would be will­ing to pay if it gave me a chance to switch provider when they fail to deliver on over­all cus­tomer support.

Fur­ther­more, if such thing is too expen­sive, why are wire­less phone com­pa­nies in that busi­ness in the first place and why are they rolling out new ser­vices like 3G (high speed access) when the busi­ness model behind such ser­vice has yet to be proven. It seems that the indus­try is using the price issue only when it is convenient.

The phone com­pa­nies say that the require­ment is unnec­es­sary, will dis­tract them from improv­ing ser­vice and will raise prices. Ana­lysts and con­sumers say that the car­ri­ers want to keep subscribers.

The indus­try says:

It can’t be done on the exist­ing time line.

Cus­tomers reply

: Since 1996, the FCC has issued tech­ni­cal guide­lines and require­ments as to what the providers would have to do in order to com­ply. The guide­lines are very clear as to what needs to be done in order to accom­plish this. Sev­eral providers are already offer­ing the capa­bil­ity as part of the tele­com equip­ment they sell. And, unless the Amer­i­can mar­ket is extremely dif­fer­ent from any other, it seems that the argu­ment is disin­gen­u­ous at best as other peo­ple have already proven that it is doable.

So when all is said and done, there doesn’t seem to be a sin­gle argu­ment made by the wire­less indus­try that holds any water. The bot­tom line is that this pro­vi­sion was pre­sented as a fact of law in 1996 (now 6 years ago) and the indus­try has dragged its feet on it. Why did it do so? Because, quite sim­ply, it is not in ITS best eco­nomic inter­est to let cus­tomers have choice.

Out­raged yet? Here’s what you can do.

This is not an issue that the wire­less indus­try want to make very pub­lic. How­ever, the FCC is here to pro­tect con­sumers and as such, must hold for­mal request for com­ments when the indus­try wants to quash some­thing like this. While it has not be widely reported in the main­stream press, the best way to deal with this is to make one­self heard on this issue.

You can first con­tact your con­gress­man or con­gress­woman and tell them that you believe that wire­less num­ber porta­bil­ity is an impor­tant issue and that you are in favor of it. This will start gen­er­at­ing a debate on the Con­gres­sional end of things.

Mov­ing beyond that, you can con­tact the FCC wire­less telecom­mu­ni­ca­tions bureau and tell them that you are in favor of wire­less num­ber porta­bil­ity. If enough of us do it, we may yet prove to the wire­less com­pa­nies that there are cus­tomers out there who watch out for the cus­tomers’ best inter­est and won’t stand for tricky moves to sub­vert exist­ing laws.