November 24, 2003, 11:06 AM — Customers of wireless telephone services, and some landline services, in major U.S. metropolitan areas will be able to take their telephone numbers with them when they switch vendors when new Wireless Local Number Portability (WLNP) rules go into effect Monday. The result may be major cost-savings for enterprises wanting to switch wireless services.
The impact on wireless and wireline carriers is still up in the air, with estimates varying wildly, but wireless carriers have generally embraced the change, while an association representing landline phone carriers continues to object to the new policy, which requires number portability among wireless carriers and most wireline carriers in the 100 largest metropolitan areas in the U.S. The U.S. Federal Communications Commission (FCC) will require number portability in most of the rest of the U.S. by May 24, 2004.
Enterprise wireless customers are now in the driver's seat when negotiating wireless contracts, said Randy De Lorenzo, vice president of wireless services for Telwares Communications LLC, a consultancy that helps Fortune 1000 companies negotiate telecom services. Before number portability, enterprises were reluctant to change wireless carriers because it would have meant a "relocation nightmare" of changing hundreds or thousands of phone numbers, De Lorenzo said.
"For the first time, we're talking about real competition in the wireless industry," De Lorenzo added. "The time's right to do something about it."
Large enterprises may almost be able to name their price for wireless service, De Lorenzo said. He expects significant cost savings for large businesses as they renegotiate contracts, although he cautioned telecom managers to be careful when making the change. With some wireless carriers predicting that switching numbers from one carrier to another could take up to 24 hours, enterprises will not want to make the change in the middle of a week, and they may want to wait until next year to see how number portability is working, De Lorenzo said.
Martin Dunsby, vice president of sales and operations for inCode Telecom Group, a consultancy to many U.S. wireless operators as well as corporations, also sees large enterprises winning. Portability will make it easier for them to consolidate contracts made by different departments and in different regions, giving them greater bargaining power for volume discounts, Dunsby said.
The wireless carriers generally aren't objecting to number portability. On Thursday, the FCC rejected a petition from the United States Telecom Association (USTA) and CenturyTel of Colorado Inc., asking that number portability requirements for wireline carriers be delayed pending a judge's review of the FCC order. But the USTA continued its objections to the number portability rules Friday, turning to the U.S. Court of Appeals for the District of Columbia Circuit. That court set out an expedited briefing schedule for the case under which the FCC must respond by the afternoon of Nov. 26.
USTA, along with landline-based carriers such as Qwest Communications International Inc., argue that the number portability order, which requires landline carriers to allow customers to switch their landline telephone numbers to a wireless account, isn't fair because the order does not force wireless carriers to allow their customers' phone numbers to switch to landline service. The FCC order requires landline-to-wireless portability if the service area of the wireless vendor the customer wants overlaps with the landline service area.
The FCC order should take a "platform-neutral approach that leaves the choice to consumers and gives all companies an equal shot at competing for their business," Walter McCormick Jr., USTA's president and chief executive officer, said in a statement Friday. "In the past, the FCC repeatedly has expressed its commitment to portability rules that are efficient and fair, so they are not a source of competitive advantage for one platform or another. By rushing out a one-sided rule that encourages only landline to wireless transfers, that promise was broken."
Qwest is ready to comply with the order, but still objects to the "one-way" portability from landline to wireless service, said Skip Thurman, a company spokesman. "We hope the FCC will do something that's consumer friendly," he added.
Research company IDC believes there are cases in which wireless customers will want to port their numbers to a wired phone. For example, customers who move into older buildings where wireless coverage is poor, and who get a cell phone from their employers, may want to move a personal cell phone number to a wired home phone, said Keith Waryas, an IDC analyst. However, the carriers' arguments may be just as much motivated by a desire to hold off the portability requirement.
