What's in a phone number?

Tuesday, May 25, 2004

By Michael K. Powell

What's in a name? There was a time when the right name signaled status and good breeding. In today's high-tech society, a better question might be "What's in a phone number?"

Nobody knows the answer to that question better than America's business people -- from the smallest mom-and-pop organization to the largest corporations. Before a meeting can be set up or a sale made, the customer has to make that first call. That is why memorable numbers are sought after and millions are spent on advertising to drum phone numbers into the consumer consciousness.

As the use of mobile phones has increased, the inability to change carriers without changing phone numbers has emerged as a major problem. For a business user, making the change may involve anything from changing business cards, letterhead and directory listings to abandoning expensive branding campaigns and a reservoir of consumer good will to start from scratch in building customer associations with a new number. Faced with these costs, it is not at all surprising that some wireless users may have stayed with a carrier despite dissatisfaction with the service simply to avoid the expense and hassle associated with changing their telephone numbers.

All of this changed-- nationwide -- on Monday. Last fall, the FCC set a deadline for wireless carriers serving the country's 100 largest markets to upgrade their networks to make telephone numbers portable. Beginning Monday, that requirement applied to the rest of the country, extending to rural and small market enterprises the same benefits enjoyed by their urban counterparts.

Increasingly, we live in a world of virtual transactions where technology shrinks the space between buyer and seller. In this environment, the ability to retain a phone number while switching wireless carriers gives companies control over an increasingly important part of their corporate image -- their digital identity. Number portability benefits not only companies that switch carriers, but also those who remain loyal. Transferring control of a number from carrier to subscriber reduces the carriers' leverage in retaining customers tempted by the competition. Better yet, portability encourages carriers to take better care of their customers to ensure they are not tempted in the first place. That benefits everyone.

The new requirement has its roots in the Telecommunications Act of 1996, where Congress directed the FCC to adopt rules enabling consumers to keep their telephone number when they switch from one provider of traditional telephone service to another. Given the explosive growth of wireless communications, the commission put wireless carriers on notice six years ago that the rules would apply to them as well.

Where wireless number portability is already available, over 3 million people have taken advantage of it by switching from one wireless carrier to another. I am one of them -- and am happy to report a seamless transition. While it is difficult to predict whether the level of demand for portability in smaller markets, it is critical that rural and small market enterprises have this capability. Making a switch is not nearly as important as the freedom to do so, which strengthens the subscriber's ability to negotiate with service providers for things like lower prices, improved quality of service and better coverage.

Number portability does not change the fundamental business rules of the road. Wireless users will still have to pay their outstanding bills, even if they take their number to a new carrier, and those who have signed long-term contracts will have to honor them. It does, however, knock down a barrier that for too long has prevented businesses that rely on technology to give them a competitive advantage, from enjoying the full benefits of wireless services.

Michael K. Powell is the chairman of the Federal Communications Commission.

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