June 6, 2003 at 5:06 PM CDT - Updated June 21 at 10:33 PM
by David Ho Associated Press Writer
Consumers should be allowed to keep their phone numbers when they switch cellular providers, a federal court ruled Friday in rejecting an appeal by wireless companies.
Consumer advocates say the inability to retain numbers is one of the biggest barriers preventing more cell phone users from switching in search of better service and prices. The Federal Communications Commission is requiring wireless carriers to provide "number portability" by Nov. 24.
In April, attorneys for Verizon Wireless and the Cellular Telecommunications and Internet Association, an industry group, told a three-judge panel of the U.S. Court of Appeals for the District of Columbia that the FCC overstepped its authority by imposing the requirement. They said it will raise costs while doing little to increase competition.
The court rejected that challenge, calling the FCC's action "permissible and reasonable." The court also said the cell phone companies waited too long to object to the rule.
"It is obvious that any regulation that frees consumers from staying with carriers with whom they are dissatisfied affords them protection," the court said. "It was reasonable for the FCC to conclude that wireless consumers would switch carriers at even higher rates if they could keep their phone numbers."
CTIA President Tom Wheeler said he was disappointed by the decision. He said the FCC hasn't provided enough guidance on how number portability will work.
"There are only 24 weeks between now and the portability deadline, but the basic 'how tos' have yet to be addressed," he said. "The FCC must announce final rules by Labor Day or consumers will find chaos in the market."
Congress decided in 1996 that people can keep their traditional local phone numbers when they change phone companies. The FCC decided soon after that wireless carriers should offer that ability to people in the largest 100 U.S. cities by June 1999.
The FCC extended that deadline three times, most recently granting a yearlong extension last summer after Verizon Wireless asked the commission to eliminate the requirement.
Most wireless companies argue that their industry is competitive enough and doesn't need a regulatory boost. They say there are about 146 million U.S. cell phone subscribers and about a third of them change carriers each year.
The wireless industry estimates that number portability will cost more than $1 billion in the first year and $500 million each year thereafter. The industry says that expense will make it harder to provide better cell phone coverage and cheaper phones.
Many cell phone users outside the United States, in places such as Britain, Australia and Hong Kong, already have the option of keeping their numbers when they switch carriers.