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Number's Up for Local Phone Companies

November 11, 2003
The Federal Communications Commission isn't considered a very exciting agency but it sent telephone company executives' blood pressure into the stratosphere when it issued new rules that would allow consumers to disconnect their home phones and transfer their number to cell phones.

Local phone companies have been losing millions of customers per year as consumers increasingly add cell phones instead of extra phone lines. But completely abandoning wireline service is still relatively rare, at least partly because customers don't want to give up their numbers.

The FCC's ruling may change all that. The agency ruled yesterday that beginning Nov. 24, local telephone companies must allow any customer in the top 100 markets to transfer their home number to a cell phone carrier who operates in the same local calling area.

Nov. 24 is also the day on which cell phone customers in the top 100 markets can take their number with them when switching to a new cell phone carrier. Smaller markets get the number portability, both wired and wireless, by May 24, 2004.

Under the rule, phone companies will have four days to switch customers' home numbers to cell phones, compared with the 2.5 hours that wireless carriers have to switch a number to another carrier.

The United States Telecom Association, which represents local carriers, lobbied against the change and is expected to go to court to try to overturn it.

Local phone companies lost about 6 percent of their local lines last year, while cell phone carriers experienced strong growth. The wireline losses were expected to increase next year, even before yesterday's FCC action.

One recent study found that 15 percent of mobile phone users planned to ditch their home number sometime in the next five years.

Many consumers who maintain a landline do so as a way to dial up the Internet or send faxes. But with high-speed cable connections, Internet faxing and steadily growing wireless Internet connectivity, those anchors aren't as solid as they once were.

Wireline service is highly profitable for the established carriers -- the so-called Bell companies -- and is being used to finance the companies' build-out of DSL and other high-speed circuits. If too many customers forsake the plain old telephone, it could lead to higher prices or spotty service in the broadband arena, the phone companies warn.

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