Sept. 12 (Bloomberg) -- AT&T Inc., Verizon Wireless and other mobile-phone companies may need costly equipment upgrades to comply with new rules aimed at helping 911 emergency operators locate callers.

The U.S. Federal Communications Commission voted late yesterday to make wireless carriers test their 911 location systems at the local level, instead of statewide, within five years. FCC rules require systems to identify a caller's location within 150 or 300 yards (137 or 274 meters) 95 percent of the time, depending on the type of technology used.

The new rule would require ``major, but as yet unknown, new investments,'' by wireless providers, said Stifel Nicolaus & Co. analyst Blair Levin. The carriers ``may have a fighting chance'' if they challenge the rule in court, Levin said today in a note.

AT&T, Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc., the four biggest U.S. mobile-phone companies, say it isn't technically feasible to test their systems within all local areas.

The new rule is procedurally flawed and may lead to ``unrealistic and potentially harmful consumer expectations,'' Steve Largent, president of the wireless-industry group CTIA, said today in an e-mailed statement.

AT&T rose 5 cents to $39.86 at 4:03 p.m. in New York Stock Exchange composite trading. Verizon Communications Inc., which owns Verizon Wireless with Vodafone Group Plc, was unchanged at $41.87. Sprint lost 17 cents to $17.77. Bonn-based Deutsche Telekom AG, which owns T-Mobile, gained 11 cents to 13.57 euros in Frankfurt.

Five-Year Deadline

Wireless carriers have used multistate or statewide averaging methods to measure their compliance with emergency- location rules. Under the new requirements, the companies would instead have to meet the 95 percent target within more than 6,000 local 911 dispatch areas by Sept. 11, 2012.

Statewide averaging ``does not provide public safety with the information that it needs to do its job effectively,'' FCC Chairman Kevin Martin said yesterday.

The new rule will provide more accurate data on carriers' 911 compliance, especially outside of urban areas, he said.

The requirements will ``dramatically impact'' 911 dispatchers' ability to locate mobile callers, the Association of Public-Safety Communications Officials International Inc. said in a statement. The group represents more than 15,000 police, fire and emergency medical-dispatch officials.

The FCC's action may be good news for network equipment makers, Levin said, since the upgrades will probably boost their sales. Still, handset makers including Motorola Inc. and chip makers such as Qualcomm Inc. fought the new requirements.

``This could reflect in part their being good soldiers for their carrier customers, but likely also reflects the uncertainty over prospects for developing a solution,'' Levin said.

To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net

Last Updated: September 12, 2007 16:13 EDT