Wireless Carriers Wrestle With Local Number Portability Issues

The ins and outs of local number portability (LNP) can get pretty confusing. Sit in on just about any conference session that addresses this topic and you'll find baffled attendees trying to make sense of location routing numbers, global title translations, NPA-NXXs, database dips and other technical conundrums. The puzzle becomes more perplexing when wireless networks enter the picture.

Wireless carriers aren't required to provide number portability to their subscribers until June 30, 1999, but they do have to be able to deliver calls to ported numbers on wireline networks by December 31, 1998. This may seem like enough time to prepare, but it isn't. Delivering wireless calls to ported numbers raises a host of complex issues, involving everything from query charges to bill verification to roaming agreements. In terms of number portability, cost recovery is one of the biggest concerns for any wireless carrier. It doesn't help that the FCC is already about a year and a half past its deadline for providing LNP cost recovery guidelines. Wireless carriers are therefore handcuffed because they don't know how to recover the costs brought about by recent mandates.

Query Charges, Evolving Systems and Reality

Picture this scenario: A wireless customer calls a wireline number that has been ported. The wireless carrier doesn't have its own number portability database yet because its deadline for supplying number portability to its customers is 21 months after the LEC deadline; more than a year away. Instead the wireless carrier relies on the LEC to provide the necessary queries and call routing instructions. The wireless call is delivered to a LEC access tandem that makes the necessary database query, or dip, and figures out where to connect the call. The fee for supplying this query, called a query charge, is stirring up some controversy.Evolving Systems released a white paper in August 1997 that was supposedly intended to warn wireless carriers about the costs they would face due to query charges. Evolving Systems made a "conservative estimate" of 3 cents per database dip for every wireless call coming across a wireline network regardless of whether or not the dialed number is ported. The LNP software vendor estimated that wireless carriers could face costs of around 21 cents per subscriber per month to support LNP. For a carrier with even just 500,000 subscribers, the additional costs could mean about $2.2 million in query charges for the 21 month gap between wireless and wireline number portability implementation deadlines.

While Evolving's warning holds merit, its estimates are questionable. Evolving refused to disclose the source of its data, and its numbers are off the mark. Bell Atlantic reports a standard database query charge of $.0026, or about two and a half tenths of a cent. "I don't think the regulators would let us get away with a rate of 3 cents per query," says John Rudden, product manager for local number portability with Bell Atlantic South. Similarly, the FCC approved Ameritech's request for $.004069 per dip, or about four tenths of a cent. These charges would apply to the scenario above, when a wireless call is delivered to a tandem switch and relies on the LEC network for the query.

One exception

Wireless calls aren't always delivered to access tandems. Sometimes they're delivered directly to end-offices, particularly in the case of a LEC's own wireless arm. If a wireless call is delivered to an end-office, but is intended for a number that has been ported onto a CLEC switch, then the charge to deliver that call would be 1.3 cents according to Bell Atlantic and 2.8 cents according to Ameritech. The higher charge results because the LEC would not only have to provide the database dips and routing information, but would also have to reoriginate the call from the end-office. This scenario is the exception, however, and not the rule. "The vast majority, if not all, wireless carriers are delivering traffic to a tandem," explains Rudden.

Some validity

Evolving's whitepaper claims that any wireless call to a wireline number will be hit with a query charge, regardless of whether or not the dialed number has been ported. These details have not yet been worked out, but some wireless carriers claim that if universal charges are approved, they will challenge the issue in the courts.

It is the case that any call targeted for an NPA-NXX that has been opened for number portability will be subject to a query charge. In other words, if just one number out of 10,000 in any NPA-NXX is ported, then any call into that NPA-NXX will require a query, even if the call isn't intended for a ported number. If a large wireless carrier delivers a million calls a day, even at three tenths of a cent, the cost could add up to $3,000 per day; a sum that can't be ignored. "When we look at our costs and try to plan for 1998, as much as half of our number portability costs could be in query tariffs," says Catarina Wylie, Director of Corporate Communications for PCS PrimeCo.

Databases, Cost Recovery and the FCC

As of today, most wireless carriers are still in the general strategic planning phase when it comes to LNP. There is a great deal of confusion about what the charges actually will be, much of which may have been exacerbated by Evolving Systems' report. Wireless carriers know they will have to recover the costs, but don't know what the FCC will allow. Congress originally specified that the FCC had until August 8, 1996 to deliver LNP cost recovery guidelines, but the August 8 interconnection order didn't address number portability. In October 1997, US West asked the US Court of Appeals in Denver, the court in charge of LNP issues, to require the FCC to move on the guidelines. The FCC still hasn't acted and there are no cost recovery guidelines established for either wireless or wireline carriers.

Wireless carriers must also decide how to provide number portability to their own customers. They basically have three options: build, outsource or just pay. A wireless carrier could build its own database to support LNP; however, this would be extremely expensive and currently few are considering the option. Existing roaming databases, however, could be loaded with specialized LNP software as a short-term alternative to building a new system. Lucent Technologies recently released a product that will allow users of its SCP and switch hardware to do just that.

A wireless carrier can also choose to hire a third party, such as Illuminet, to provide database services for them, but such a service would likely also carry a per-query charge so cost recovery issues do not change. Finally, a wireless carrier can rely upon LECs to provide the service and just pay the fees. The decision should be based upon what a carrier determines is most cost effective.

Right now, the cellular industry, led by CTIA, is challenging the mandate that requires wireless carriers to provide LNP to their own subscribers. Many carriers don't believe they should be required to provide the service at all because competition in wireless is strong. It's also argued that subscribers aren't attached to their wireless numbers in the same way they are to their wireline numbers, often preferring to keep them a secret.

Some wireless carriers also believe that they should not be responsible for paying for wireline carriers to implement LNP, and they didn't think they would face any charges at all until their December 31, 1998 deadline. "We've taken the position that it's not appropriate for us to be paying [for LNP] if we're not going to be playing in that portability environment right now," says AT&T Wireless.

The Future: Billing Headaches

Once query charge and cost recovery issues are cleared up, will wireless carriers be out of the woods? Absolutely not. There are still some serious billing issues to settle. For example, what happens when a wireless user roams onto a foreign network and places a call to a ported wireline number? The carrier that delivers the call gets charged for the queries, but can the carrier bill that back to the roamer's home carrier? And if it can, how is the information tracked, collected and billed? Lengthy negotiations may follow to rebuild existing roaming agreements, not to mention billing system changes and upgrades and the possible need for further investment in new data collection equipment.

Next, wireless carriers are required to negotiate with each LEC individually in order to hammer out billing and interconnection agreements. This will be a lengthy process, and lengthy means costly. "We've seen very little from the RBOCs in terms of concrete proposals as to how [LNP] is going to work... We have contracts with all of the major RBOCs and GTE and hundreds of small companies. Out of all those... the only thing we've seen on letter head has come from two of them, so we've got a long way to go," says AT&T Wireless.

Finally, there's billing verification. How can wireless carriers make sure that LECs are billing them correctly for database queries? Also, wireless carriers are concerned about ported NPA-NXXs. How do they know which NPA-NXXs have been opened to portability so that they know whether or not a call should be exposed to a query charge? How can they be sure that LECs aren't charging them for calls made to NXXs which may be ready for portability but from which no numbers have been ported?

Most of these issues should be cleared up once cost recovery guidelines are set, but from there begins the paperwork, both in and out of the courts. This is all piled on top of universal service contributions, 911 taxes and other new cost factors which have stemmed from the act. Wireless carriers, in general, are frustrated with the lack of regulatory guidance and fear the negative impact many of these unsettled problems may impose on their subscribers and their business. "We don't want to end up in a situation where we start to curtail usage," says AT&T Wireless.

How Will LECs Bill For Queries?

When it comes to query charges, LEC billing processes are pretty straightforward. Bell Atlantic says that it will do most of its data collection at the switch. "We have the ability, in our switched minute of use record, to recognize when a query needed to be done and it's through our normal AMA processing that we pick that up," says Rudden. Once the data is collected it's billed through a normal CABS billing process enabled by some minor modifications to existing billing systems. Wireless carriers will be provided, according to Bell Atlantic, with detailed usage bills. Again, though LECs would like to suggest that their bills are generally accurate, how a wireless carrier can verify this is still up in the air.

Bell Atlantic will also offer LNP database connectivity to any carrier that wants it. In other words, Bell Atlantic will provide SS7 links into their database so that a wireless carrier could query its own calls. In this case, Bell Atlantic North is using a Hewlett Packard AcceSS7 link monitoring system to collect SS7 data. The data is then fed to CABS for processing. Bell Atlantic South also plans to install such equipment if there is significant demand for this database service.

When it comes to cost recovery, LECs are in a similar position to wireless carriers in that they haven't received any guidelines from the FCC. In the meantime, their costs, to some extent, are passed on to wireless carriers. "I'm sure the wireless industry felt that they didn't have to pay this until '99 when they were required to provide number portability. But, since number portability is required for us, there are charges associated... and those charges, under the guidelines of the FCC, will be passed on [to wireless carriers and IXCs]," says Ameritech spokesperson Frank Mitchell.

So What's a Wireless Carrier to Do?There isn't much a wireless carrier can do until the FCC explains all of the rules. The more time that passes, however, the more wireless carriers will be exposed to interim arrangements and increased costs with no way to compensate. Raising subscriber rates isn't a popular option, but wireless carriers fear it could become necessary. Local number portability was intended to improve competition, but so far it has caused headaches and cost problems. If costs are passed on to subscribers, wireless carriers feel their growth may be impeded, contrary to Congress' intention when it passed the act. Most major wireless carriers point at the FCC's lack of action as their biggest stumbling block and they just want to get on with the business of providing mobile phone service.

Most Common LNP Concerns Among Major Wireless Carriers

Query Charges:

What's the real story: 3 cents? No, more like .3 cents for calls delivered to tandems, maybe as much as 3 cents for more uncommon calls, delivered to end-offices, which must be reoriginated and delivered to a ported number.
Will wireless carriers be charged for all calls delivered to wireline numbers? For calls to ported numbers only? Or for calls to numbers within an NPA-NXX that has been opened for portability? The latter looks most likely, but beware the loopholes! Concerns abound that LECs will open NPA-NXXs for portability before any numbers in a block are actually ported. This would mean excess query charges that aren't technically required.

How can wireless carriers verify bills for query charges to detect billing inaccuracies and/or to insure that query charges aren't being tacked onto calls that don't actually require queries?

Roaming and Negotiation Issues:

How does a wireless carrier treat roamers on its network who place calls that trigger query charges? Will FCC guidelines cover roaming scenarios, or will it be left to individual negotiations among roaming partners?

Wireless carriers already must negotiate interconnect agreements with each LEC individually to accommodate LNP, and the process is slow.

Cost Recovery:

Frustrated! Until the FCC establishes guidelines, wireless carriers are forced to wait with little knowledge of how they will be allowed to recover growing LNP costs. Wireline carriers face the same ordeal. Wireless carriers do not want to be forced to pass costs on to subscribers. Fears of escalating rates, slowed growth, and possible customer retention problems are common.

Regulations:

Will wireless carriers indeed be required to provide LNP to their own subscribers? The decision is still pending in court. Wireless carriers are dependent upon LECs and are thus exposed to query charges with no cost recovery mechanism in place.
Wireless carriers also face 911 taxes, and universal service contributions at the same time as LNP. Again, there are escalating cost problems but no help from the FCC.