Commentary: Wireless: Answer the Call

New FCC rules could really expand cell-phone use -- if carriers play it right

In just two months, cell-phone carriers warn, the world of wireless could turn into pandemonium. Why? The Federal Communications Commission is expected to require service providers, starting on Nov. 24, to allow customers to take their phone numbers with them when they switch to another carrier. The fixed number was one of the few tools the companies had to retain customers. Now, the industry, already battered by competition, is girding for a free-for-all. "When one-third of subscribers already change carriers every year, you don't need this to spur competition," frets Tom Wheeler, president of the Cellular Telecommunications & Internet Assn. (CTIA).

No doubt the carriers will take a hit. But instead of agonizing over the extra competition, the cellular companies should follow the lead of Verizon Wireless and embrace the new rules as an opportunity. The pain could pay off if the change spurs carriers to fix deep problems.

Think of wireless as a moody teen, a powerful lunk brimming with potential -- but hardly reliable. Like that adolescent, consumers need to be able to count on this industry before users will be willing to trust it with important jobs. Half of all cell-phone users are dissatisfied, grousing about everything from network dependability and sound quality to phone selection, according to a Forrester Research (FORR ) Inc. survey done last year. If it can remedy those problems, wireless can enter the same league with regular phones or electric lights. Here's how:

SWITCHING. Today, 3.5% of U.S. households have abandoned their landline phones and rely solely on cellular -- vs. 5% of Western Europeans, says Forrester Research. The U.S. industry could speed the ascent of wireless -- and enjoy the resulting surge in cellular usage -- by pushing the feds to require the Baby Bells to let consumers take their landline phone numbers with them when they go completely wireless. The U.S. Telecom Assn., a local phone lobbying group, says it accepts the idea, mandated by the Telecommunications Act of 1996, but warns it will be extremely difficult to implement.

WHITE PAGES. Cellular operators have resisted offering a directory of wireless users' numbers for fear that competitors could call and poach their customers. But now, the CTIA is urging them to pool the numbers into one database, to be run by a third-party company. Only subscribers who consent will have their numbers listed. With adequate safeguards, directory assistance would make wireless calling more mainstream, and increase usage.

NETWORK UPGRADES. Capital investment by wireless carriers usually pays off. High-spending Verizon now leads the industry.

It would take anywhere from $50 billion to $100 billion to bring U.S. wireless infrastructure up to snuff, the Yankee Group says. While not every carrier can undertake the hefty investments to fill coverage holes overnight, they can come clean about weak spots, with detailed maps showing where phones will or won't work. Congress and the California Public Utility Commission may even require wireless carriers to make fuller disclosures about reliability, just as ice cream makers are forced to disclose the number of grams of fat in a scoop of vanilla swirl.

And who knows? If those reliability numbers get good enough, maybe companies will start advertising them. That's when we'll know that the cell-phone industry has arrived.

By Catherine Yang

With Roger O. Crockett in Chicago

— With assistance by Roger O Crockett

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