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- 09-08-2003, 04:01 PM #1Thomas T. VeldhouseGuest
http://www.chron.com/cs/CDA/ssistory...siness/2047155
Now, isn't this interesting. It appears that the articles author was not
aware that Sprint is actually charging $1.10 / line, not $0.63 / customer.
Ouch .. this make Sprint the worst offender of them all.
Tom Veldhouse
› See More: Number Portability -- Sprint cited
- 09-08-2003, 05:53 PM #2W0KIEGuest
Re: Number Portability -- Sprint cited
Fees to cover cell number switching may earn carriers profits
Associated Press
08/14/03
NEW YORK (AP) Some cell phone companies appear poised to profit off a
new
fee that covers the cost of enabling customers to switch wireless
services
without giving up their phone numbers.
The fee, permitted by the federal government, is already being levied
by
four national carriers and is generally less than $1 per month. But
that
adds up quickly when multiplied across the millions of subscribers each
carrier serves.
And in certain cases, the money being collected appears to exceed the
actual cost of meeting a November deadline set by the Federal
Communications Commission for "number portability" which will let
people
keep their cell numbers when switching wireless providers.
Sprint PCS, for example, has about 17.9 million customers who began
paying
an additional 63 cents per month in July, generating $11.3 million per
month for "cost recovery."
Over the course of a year, Sprint's fee would bring in about $135
million
at current subscriber levels though that amount likely will be even
higher since Sprint and other carriers are signing up hundreds of
thousands
of new customers per quarter.
Sprint refused to quantify its expense for enabling number portability
beyond a rough estimate of "hundreds of millions of dollars" an
amount
several times larger than more specific estimates disclosed by rivals
Verizon Wireless and Cingular Wireless. Similarly, Nextel
Communications
says it has spent about twice the costs estimated by Verizon and
Cingular.
Although costs surely vary among the different companies, government
officials and industry analysts say there is little reason to expect
those
expenses to vary widely as the carriers upgrade systems and create
verification processes similar to those that long-distance phone
companies
use when a customer switches from one service to another.
"A reasonable person would say that carriers of similar size, serving
the
same markets, providing the same level of service, would have similar
cost
structures," said John Muleta, the chief of the FCC's wireless telecom
bureau. In fact, he added, almost all wireless carriers are using the
same
software vendor to implement number portability.
Other carriers lump their fee for the changeover in with other charges
related to regulatory mandates, such as providing enhanced 911
capabilities
so a cell phone can be pinpointed in an emergency.
Nextel has been charging $1.55 per month since October; Since the
spring,
AT&T Wireless has been charging some customers what it calls a
temporary
fee of $1.75. Since April, Cingular has been charging from 32 cents to
$1.25 per month depending on the state. Verizon says it has not yet
decided
whether to levy a number portability fee.
Beyond a general requirement under federal law that such fees be "just
and
reasonable," there is no specific cap. Likewise, the FCC does not
require
the companies to report their actual expenses and the agency is not
monitoring the fees.
But other government officials, and consumer advocates, have criticized
the
new fees as excessive.
"Sprint is just asking for regulation, and we'll bring tougher
regulation
on them if they do things like this," said Sen. Charles Schumer,
D-N.Y.
Sprint stood firm in asserting it has already spent "hundreds of
millions
of dollars" to prepare for number portability. That figure contrasts
sharply with public estimates from Verizon, which has irked its rivals
by
breaking ranks with the industry's long-standing opposition to wireless
number portability.
Verizon says it has spent about $60 million on preparations, and
estimated
its ongoing costs to facilitate number portability at 10 or 15 cents
per
subscriber per month.
With 34.6 million subscribers, Verizon's estimate suggests that it
expects
monthly portability expenses of up to $5.2 million, or less than half
the
amount Sprint will be collecting per month.
Verizon's figures are consistent with the estimates provided by
Cingular,
which told The Associated Press that setup expenses have totaled about
$50
million so far, while ongoing costs are expected to be about $50
million
per year.
As such, if Sprint's fee is generating $11.3 million per month, the
company
will have collected at least $55 million by the time portability is
supposed to go into effect Nov. 24, an amount that would be enough to
defray all or most of the set-up costs indicated by Verizon and
Cingular.
Thereafter, if Sprint's ongoing expenses for number portability are
similar
to those indicated by Verizon and Cingular, Sprint's "recovery" fee may
generate more than $5 million in extra monthly revenue.
Nextel, which has already collected more than $200 million to cover
various
regulatory costs, said it has spent "more than $100 million" in
preparation
for portability, but has declined to quantify its E911 expenditures.
Cingular's average fee of 50 cents for all regulatory-related costs
approximates what Sprint collects for number portability alone.
AT&T Wireless, which declined to quantify its costs related to number
portability or E911, is currently collecting the $1.75 from "less than
a
third" of its 21.5 million customers. Collection totals will increase
as
the company adds new customers and as service contracts for existing
customers come up for renewal.
However, Doug Brandon, AT&T Wireless' vice president for federal
affairs,
said most of the costs for number portability stem from the
preparations.
Once those expenses are covered, "we will eliminate or substantially
reduce
the fee to cover the ongoing administrative costs."
Neither Nextel, Cingular nor Sprint indicated any plan to stop charging
for
number portability.
--
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