Freedom to switch: FCC hopes new cell phone rules benefit customers.

When Lounise Williams, a student at Baruch College in New York City, wanted to replace the prepaid cell phone plan that she had with T-Mobile, she turned to AT&T Wireless. With no existing credit, AT&T was the only carrier to offer her a contract without a down payment. As her year long contract for $39.99 a month (600 anytime minutes and unlimited nights and weekends) draws to an end, Williams is considering taking her business back to T-Mobile.

"I travel and when I go into another state, I don't want to pay roaming foes," says Williams, who was never advised that AT&T had better service plans. Williams also complains about error messages and the difficulty in paying her bill online. With higher rates and subpar service behind her, she's happy to make the switch. "Besides I get to keep my number," she says.

Since it's inception Nov. 24, 2003, at least 1 million wireless subscribers have taken advantage of the Federal Communications Commission's Local Number Portability (LNP) rules. This entitles subscribers, under Section 251 of the Telecommunications Act of 1996, to change service providers while retaining the same phone number, provided it's in the same geographic area. Previously, the act only mentioned transferring numbers between wire line companies, but FCC policy now includes switching between wireless carriers: wire line carrier to wireless carrier; and, in some cases, from a wireless carrier to a wire line carrier.

"A lot of people--about 150 million--have a significant investment in their phone numbers. It's the way many people [conduct] business," explains John B. Muleta, chief of the FCC's Wireless Telecommunications Bureau in Washington, D.C. (http://wireless.fcc.gov), about the ruling that was delayed for seven years due to technical difficulties and opposition from some wire line and wireless carriers.

"The carriers were uniformed in their opposition. Afraid that [the transition] would be chaotic, they didn't want to implement it. So it took a couple of years back and forth in the courts, as well as here at the FCC before they changed their minds and became supporters of LNP," he adds.

As of the end of February, the FCC has received more than 5,400 informal consumer complaints, mostly about delays in porting numbers from one carrier to another. Many of the problems were due to slow software or erroneous account information. Muleta states that such a large endeavor requires a transition period. "For a couple of carriers, this was more of a problem because of the technology that they were using to do number portability. These issues have either been solved or are on their way to being resolved," says Muleta. The pace of the complaints has since dropped by 50%.

The cell phone companies also made claims that this endeavor would cost millions. In anticipation of the LNP upgrades some carriers have passed on the cost to the consumer as a line item fee on their monthly bill, charging as little as a few cents to more than a dollar. "What we have are seven nationwide carriers with very different strategies on how they pass on these charges. Some of these carriers believe this is a competitive advantage to them. They think they're going to win more customers as a result of LNP, so their strategy is not to charge you because this is a huge win. Other carriers who are more afraid of losing customers are very defensive about it," observes Muleta.

Iron clad contracts and unregulated foes aside, the FCC's goal is to put the ball in the consumer's court. "It really is to permit the carriers to fight for your business. If they feel like you're going to walk away with this investment and move over to another carrier, then they're going to do more to make sure your happy with their service," says Muleta. The idea is, without the tedious task of notifying family, friends, and business contacts of a phone number change, there will be greater competition incited among those in the industry for consumer patronage.

And it might be working. "AT&T is trying to get me to stay," Williams says. "They've offered me a new phone every year if I sign a two-year contract with them." However, some are more skeptical.

"The FCC is enchanted with this theory, but it doesn't always [transfer] well into realty," says Michael Shames, executive director for Utility Consumers' Action Network, a consumer advocacy group based in San Diego. "Don't get me wrong. I think it's a good thing. However, the carriers are coming up with strategies to counter this plan. They are increasing the amount of early termination penalties when consumers sign contracts and getting customers to commit to longer term deals ... and not informing them about all of their options," says Shames. He points to Cingular Wireless "pulling advertising featuring one-year contracts" as an example. "Now you have to ask the carriers about one-year contracts or they'll immediately try to give you a two-year." Shames also cites what he deems as irony between the FCC's attempt to promote competition in the industry as rumors loom of carriers consolidating because the marketplace is getting too competitive. Only time will tell who will be the true winner.

Additional information about local number portability is available on the FCC Website at www.fcc.gov, or you can register a complaint at 888-CALL-FCC. Log on to www.blackenterprise.com/cellphone for a look at some of the top wireless plans being offered.

WHAT YOU NEED TO KNOW BEFORE YOU SWITCH

Compare rates and coverage. To locate the best rates and coverage, wireless carrier brochures, Websites, promotions and advertising are all a good place to start.

Review your current contract. If you exit before your contract expires, you may be obligated to pay early termination fees anywhere from $150 to $450. The good news is carriers must transfer your number even if there is an outstanding fee or balance.

Read carefully before you sign. It seems most people sign on the dotted line without reading the contract. There is a voluntary consumer code issued by the Cellular Telecommunications & Internet Association (www.wow-com.com/consumer/issues), to make sure you really understand the terms and conditions that apply.

Know when you can get out of your contract. It's nearly impossible to get out of these binding contracts, but Michael Shames, of the Utility Consumer's Action Network, has seen some success. Some consumers who have filed lawsuits against carriers that have added LNP charges to their bill have been able to cancel their service without a termination fee. "If they add a fee or make any change to the terms of your contract in any way without your agreement, the carrier has breached the contract," says Shames. Keep in mind that it often takes pursuing a court date to prove your case.

Do not cancel existing service. After you choose a new carrier, it will handle the details of the transfer and start the process of porting by contacting your current carrier, "If you terminate your existing service on your own, you will lose your number," warns Muleta. Also, forward a copy of a recent phone bill to the new carrier so that the account information will appear exactly as it does in the current carrier's records.

Be prepared. During the transition, you will be able to send and receive calls while your number is being transferred, however certain features may not work. For example, during this period, 911 may not be able to detect the location or the phone number from which you are calling.

--L.A.J.