THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Sunday, February 16, 1997 TAG: 9702150603
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 144 lines
It seems like a simple enough idea.
When you change telephone companies in the new competitive era of local phone service, you take your number with you.
Number portability, it's called.
Everyone agrees that it's key to ensuring that competition - and the benefits that flow from it - take hold in the local phone business.
``If you had to change your number every time you decided to change carriers, folks would not switch and new competitors would never get into the market,'' says MCI attorney Prince Jenkins.
Credit Congress for recognizing the importance of the issue. When it passed sweeping telecommunications-reform legislation last February, it directed federal regulators to make sure number portability happens.
But it left questions like ``how'' and ``when'' and ``how much'' were left for the regulators and the phone companies to resolve.
A year later, some of the answers are in, and they're not pretty.
Number portability is a technological and regulatory brain-twister. And it could cost billions of dollars - expenses that consumers ultimately will bear.
The story of number portability illustrates the complexity of the nation's telecommunications infrastructure.
But it also reveals that significant and, in some cases, costly hurdles remain on the road toward meaningful competition in the local telephone industry.
That such hurdles exist is no small matter. Collecting $90 billion a year in revenues, the local phone business is the largest and most important of the telecommunications-industry segments that Congress decided a year ago to pry open.
Few in the industry doubt that a free market will eventually develop in the local phone business - and that consumers will benefit from it through lower prices, better customer service, and more innovation.
In Virginia, MCI, AT&T and dozens of others are preparing to take on incumbents Bell Atlantic and GTE as early as mid-year.
But the enthusiasm that these challengers initially showed after the telecom bill's passage has been dimmed by the down-and-dirty difficulty of actually bringing about an open market. Some now worry that the promised torrent of benefits may turn out to be more like a moderate flow - or a trickle.
Earlier this month, Bell Atlantic, the state's largest local phone company, and would-be local provider MCI notified the Virginia commission that they had discovered another 40 unresolved differences between them on the terms of competition.
Commission staff members thought they had resolved the companies' differences through protracted arbitration last year.
``Working out the details is taking longer than anybody expected,'' says Kathleen Cummings, a senior telecommunications specialist with the commission.
Number portability promises to be one of the more divisive issues remaining.The sheer cost of implementing the technology ensures that.
Local phone companies such as Bell Atlantic and GTE have estimated a nationwide solution could run $20 billion. Would-be challengers like MCI and AT&T peg the number at half that - at most.
Assuming that companies passed on these costs to customers, the final price tag could run $60 or more per phone line.
The Federal Communications Commission has first crack at determining a permanent cost-recovery formula. But some industry officials say they wouldn't be surprised if the federal agency foists the decision onto state utility commissions.
In the interim, the FCC has given states this vague guidance: they are to apportion the cost of number portability among various telephone companies on a ``competitively neutral'' basis.
The one thing the federal agency has been firm about is a schedule for the permanent implementation of number portability. In an order last July, the FCC told the states and telephone companies to have a solution in place in the nation's 100 largest metropolitan areas by the end of 1998. In Hampton Roads, the deadline is June 30 of next year.
In the meantime, anybody who switches to a new competing local phone company will get to keep his or her number through a service known as remote call forwarding. Basically, the customer will be assigned a second number (unknown to him or her), to which calls will be forwarded.
Remote call forwarding is problem-plagued because it takes much-needed phone numbers out of circulation and makes inefficient use of telephone networks. But until a permanent solution is implemented, it's the best the nation's telecommunications engineers can devise.
In spite of the obstacles, industry representatives say they are making progress.
Over the last several months, telephone specialists and state regulators throughout the country have agreed on the on the ultimate technology that will be needed.
The solution involves something known as a Location Routing Number. Basically, it works this way: every time a number is dialed, an electronic signal will be sent to a central computer database into which all phone companies will be networked. The database will, in turn, generate an electronic query that will intercept the dialed number somewhere along the path of the call.
The query will determine whether the dialed number has been ``ported'' - in other words, switched from one local phone company to another. Then the call will be directed to the appropriate local phone-company switch for a final connection.
If it works as planned, all of this will be imperceptible to phone users - taking no more than a half-second to complete.
``It's really a major revamp of the system we have today,'' says Scott Cleaver, a senior product manager in GTE's local competition group. ``It's begun to bring to the surface the real complexity that exists in this industry.''
Within the mid-Atlantic region, Maryland is leading the drive for a permanent solution. That state's utility commission helped foster the creation of a special company, made up of many of the region's phone-service providers. This consortium is now seeking bids from computer-services companies interested in developing the database of all phone numbers within the mid-Atlantic.
MCI's Jenkins says Maryland envisions the utility commissions in Virginia, Pennsylvania, Delaware, West Virginia and the District of Columbia, all committing to the regional compact. Going together instead of alone could save each state's telephone companies and consumers tens of millions of dollars, he says.
The Virginia commission's Cummings says her agency is considering joining and is seeking public comment on whether to mandate the state's local phone companies to live by terms of a regional solution.
A regional approach does seem more likely to out the cost of number portability, she says. ``But no matter what happens, it will ultimately be picked up by the consumer,'' she says. ``Hopefully, it will be worth the cost.'' ILLUSTRATION: STILL TO COME
Changing local phone companies without changing phone numbers may
be just the beginning of number portability.
Some regulators and industry leaders advocate a far-wider
application of the feature. They'd like people to be able to
relocate anywhere in the country and keep their phone numbers, area
codes and all.
Though its appeal is obvious, such a freedom would be even more
costly - and introduce its own set of problems, says Bob Hirsch, an
AT&T telecommunications engineer.
Consider one problem created when someone who lives in area code
757 moves to California and keeps his or her number. Telemarketers,
going by the number and thinking it is 9 a.m. Eastern time, will
call at 6 a.m. California time instead.
Geographic number portability would also present problems for
employers who, trying to prevent unauthorized long-distance calls by
workers, block outgoing calls to distant codes. The employee may
actually just be trying to dial home.
To prevent mass confusion, any move toward geographic number
portability ought be debated thoroughly, Hirsch says. ``We've grown
up understanding that there is geographic information in the
telephone number.''
KEYWORDS: TELECOMMUNICATIONS