Majority Statement

• Daniel K. Inouye

  Senator
  Read statement

  Majority Statement

  Daniel K. Inouye

  More than a decade ago, Congress sought to open our communications markets to competition. By removing barriers that impaired the ability of new entrants to compete, we sought to usher in a new era of pro-consumer telecommunications competition. 

   

  Number portability was one of these barriers. Without it, consumers would have been required to switch their telephone number whenever they switched their service provider.   

   

  To avoid this complication, Congress required the Federal Communications Commission (FCC) to implement number portability. As a result, consumers can take their phone number with them without the hassle, loss of identity, and cost that would otherwise come with changing numbers when changing providers.   

   

  New forms of competition like wireless and voice-over-IP services have predictably led to new portability challenges. These services raise important, and sometimes technically difficult questions about how we might streamline the porting process and provide consumers with a swift and glitch-free transition between service providers.

   

  Today’s hearing allows us to explore these issues and to get some answers. It also allows us to discuss legislation recently introduced by Vice-Chairman Stevens and myself that takes a small, yet important, step in directing the Commission to establish porting performance standards that will promote competition and make it easier for consumers to switch services.    

   

  I look forward to working on this issue and to hearing from today’s witnesses.    

Minority Statement

• Ted Stevens

  Senator
  Read statement

  Minority Statement

  Ted Stevens

  Stevens Calls for FCC to Revisit Number Portability Rules
  
  WASHINGTON, D.C. – Senator Ted Stevens (R-Alaska), Vice Chairman of the Senate Commerce, Science and Transportation Committee, today called for an expedited number portability process during a Senate Commerce Committee hearing on the issue.  The hearing focused on problems and delays that consumers face when taking their phone number to a new communications provider. 
  
  Senator Stevens made the following comments:
  
  “Advances in innovations and communications technologies are changing the communications marketplace. These changes are very good for consumers. One of the changes is increased competition for voice services. Eleven years ago when Congress passed the Telecommunications Act of 1996, the only service most consumers had was telecommunications from their local telephone company. Today, consumers have many choices for voice services including telephone companies, cable companies, wireless companies, and internet voice service companies. But consumers are less likely to take advantage of the new choices if they cannot keep their phone number. One problem is delay. We have heard instances of number ports taking ten to thirty days, and we have heard of some providers requiring more than 100 pieces of data to port a number. These are unnecessary hassles that consumers complain about, and providers are slow to correct.
  
  “Another problem is that not all types of providers are covered under the FCC rules. When the FCC first promulgated its number portability rules, there were far fewer choices. It is time for the FCC to revisit those rules and expand them to meet today’s new voice service market. Consumers should not be limited in their choices because they cannot risk losing key contacts or business as a result of having to change their phone numbers. Senator Inouye and I have introduced the “Same Number Act of 2007” (S.1769) to help consumers.
  
  “The bill requires the FCC to revisit its number portability rules and extend them to all applicable voice communications services, not just telecommunications service. It does not assist any one industry sector, but instead requires all services to port numbers. It also calls for notice to consumers so they will know what to expect when they change their services. We look forward to hearing from the panel, and trying to find out how we can shape this bill to help consumers take advantage of new choices and lower prices available in today’s communications marketplace.”

Testimony

• Mr. Ted Schremp

  Senior Vice President and General Manager

  Charter Telephone
  Read statement

  Testimony

  Mr. Ted Schremp

  TESTIMONY OF TED SCHREMP

  SENIOR VICE PRESIDENT AND GENERAL MANAGER

  TELEPHONE

  CHARTER COMMUNICATIONS, INC.

   

   

  on

   

   

  HEARING ON

  NUMBER PORTABILITY MATTERS

   

   

  before the

   

   

   

  UNITED STATES SENATE

  COMMITTEE ON COMMERCE, SCIENCE AND TRANSPORTATION

  WASHINGTON, D.C.

   

   

   

   

   

  July 12, 2007

  
  

  TESTIMONY OF TED SCHREMP

  CHARTER COMMUNICATIONS, INC.

   

  Introduction

  Good morning Chairman Inouye, Vice Chairman Stevens, and members of the Committee.  My name is Ted Schremp and I am Senior Vice President and General Manager of Telephone at Charter Communications, Inc. (“Charter”).  From the company’s headquarters in St. Louis, Missouri, I direct and oversee all operational and business matters concerning Charter’s provision of residential and commercial voice services. 

  Thank you for the opportunity to appear before you to testify on an issue of real importance to millions of consumers and businesses across the United States, and one which is central to the continued viability of competition in the local voice services market.  As explained in greater detail below, Charter believes that clear and consistent, as well as improved, number porting policies are essential to ensuring greater competition among providers of local voice services.  For that reason, Charter greatly appreciates the Committee’s efforts to review these issues in this hearing, and its ongoing efforts to enhance competition in the marketplace.

   

  Background on Charter and Its Voice Service Offerings

  Charter is a broadband communications company with over sixteen thousand (16,000) employees and approximately 5.7 million customers in twenty-nine (29) states.  Our broadband network passes 11.7 million homes, to which we offer a full range of advanced broadband services, including digital cable programming, broadband Internet access, advanced broadband cable services and telephone service.  Charter Telephone® is delivered via Charter’s subsidiary, Charter Fiberlink, primarily utilizing an Internet Protocol-enabled platform run over the cable company’s privately managed hybrid fiber coax network. 

  As of our last public filing, Charter Telephone® served nearly six hundred thousand (600,000) primarily residential customers in eighteen (18) states, including nine (9) before this committee: California, Massachusetts, Minnesota, Missouri, Nevada, South Carolina, Oregon, Texas, and Washington.  Charter will continue to roll out our competitive voice service in additional markets this year.  Expanding the reach and scope of our voice offerings throughout our service area is one of our highest priorities, and we have invested hundreds of millions of dollars to date.  As a result, Charter Telephone® is currently available to over 7.3 million homes within our service territory, and we expect that number to continue to increase over the next 18 months.

  Our customers are different than those of most of the other major cable operators, but as Senators on this Committee, you know them well.  They are predominantly located in less densely populated regions of the country, including many suburban, exurban, and rural areas.  Accordingly, many of the largest markets for Charter’s voice services are what some people in the industry classify as “Tier II” and “Tier III” markets, for example: Worcester Massachusetts, Kennewick Washington, St. Cloud and Mankato Minnesota, Greenville/Spartanburg South Carolina, and Slidell Louisiana.  Charter also offers service in eastern Missouri, including the greater St. Louis metropolitan area, the location of our corporate headquarters.

  In these markets, we are aggressively rolling out voice services in competition with the incumbent local exchange carriers; often providing the first real facilities-based competitive alternative to many residential consumers.  And, because many of these markets are in less densely populated regions, Charter is often the only competitive alternative.  

   

  Across all of our markets, the response to our offerings has been very positive, as consumers are attracted to Charter by the innovative product offering, cost savings, and the convenience of obtaining all of their communications services from a single provider.  Our research indicates that we save the average consumer 20% or more on their monthly telephone bill.  New customers can sign up for Charter’s unlimited nationwide service for as low as $29.99 per month, which provides substantial savings to our customers as compared to most traditional telephone service providers.  In addition, Charter provides meaningful value added services such as call waiting, caller ID, call forwarding, etc.  And, of course, Charter’s service has always provided full E911 calling functionality.  The savings and value of our service can be further enhanced by bundling with Charter’s digital cable and broadband Internet services, for as low as $99.97 per month.

  Because Charter is aggressively deploying its voice communications service to tens of thousands of potential new customers in new markets it relies heavily on the number porting process to compete with the incumbent providers in those markets.  In fact, Charter engages in approximately thirteen thousand (13,000) number porting transactions every week.  Unfortunately, in the course of those porting transactions Charter experiences a fall out rate of over fifteen percent (15%).  This rate translates to over 150 rejected orders every day where the customer is at risk of losing dial tone when a port cannot be cancelled or rescheduled as a result of lack of carrier cooperation.  As such, Charter is acutely aware of the value of efficient and effective porting procedures, and the very real costs incurred (including operational costs, loss of revenue, and particularly customer frustration and dissatisfaction) when porting procedures are undermined or disregarded by other providers.

  In addition, when ports take an unreasonably long time to complete,  it is extremely difficult for Charter to compete  in those carriers’ service territories because a subscriber wishing to move to Charter’s service, and port its numbers to Charter, must sometimes wait for as long as two weeks before they can switch providers.  When faced with the response that “it will take two weeks before we can begin to provide you service using the same phone number” many subscribers simply decline to continue the process and remain with the incumbent provider. 

  Even despite these hurdles, our experience demonstrates that consumers are craving voice competition.  Market research bears this out.  For example, one recent study by Microeconomic Consulting and Research Associates, Inc. (“MICRA”) estimates that 23.7 million households will subscribe to cable digital phone services by the year 2011.  In addition, the MICRA study demonstrates that based on the competitive rates offered by many cable-telephony providers, the provision of competitive cable-provided voice services could result in annual benefits to the economy of $1.3 billion in 2007, climbing to $3.2 billion in 2011.  The sum of these potential benefits, according to the MICRA study, for the five year period is $11.2 billion.[1]  And according to a 2006 J.D. Power report, cable voice customers are saving over $10 a month on their bills.[2]  In short, cable-provided voice services are fulfilling Congress’ original vision of a robust and competitive residential voice services market.  It is no surprise, then, that the cable industry trade association, the NCTA, estimates that as of the first quarter of 2007 the cable industry is providing digital phone service to 10.8 million customers.

   

   

   

  Number Portability is Vital to the Continued Expansion of Competitive Voice Service Offerings

   

  But as our daily experience demonstrates, this progress could be so much better.  Indeed, the emergence of a truly competitive market for local voice services is conditioned, in large part, on the continued development and implementation of a national number porting policy that is clear, effective, and applied consistently to all covered providers. 

  This is, of course, a well established fact that Congress has long recognized.  But the devil is in the implementation details.  Indeed, during its work leading up to enactment of the pro-competitive Telecommunications Act of 1996, Congress noted that the inability of consumers to retain their telephone numbers when changing local service providers undermines the development of local competition.  Thus, by specifically imposing the statutory obligation on all local exchange carriers to “provide … number portability in accordance with requirements prescribed by the Commission”[3] in the 1996 Act, Congress has already recognized the critical importance of establishing a fundamental number porting duty on all LECs, both incumbents and new entrants.

  As a result, Congress removed a significant barrier to competition by ensuring that consumers can change carriers without having to give up their existing telephone numbers.  That simple function –the ability to retain your telephone number when moving from one provider to another—is a key feature for most consumers and an essential tool to any competitive provider.  The FCC itself has noted that the absence of number portability functionality “likely would deter entry by competitive providers of local service because of the value customers place on retaining their telephone numbers.”[4]  In implementing its rules to effectuate Congress’ mandate of uniform number porting obligations, the FCC specifically cited evidence that customers would be reluctant to switch carriers if they were required to change telephone numbers.  Specifically, the FCC found that to the extent that customers are reluctant to change service providers due to the absence of number portability, demand for services provided by new entrants will be depressed.  That, in turn, would discourage entry by new competitive providers and thereby frustrate the pro-competitive goals of the 1996 Act.[5]

  These findings illustrate the fact that effective number porting is critical because the ability to retain telephone numbers gives customers greater flexibility in evaluating the quality, price, and variety of services they choose to purchase.  As a result, customers are empowered to respond to competitive price and service changes without having to change their telephone numbers.

   

  Porting Principles That Will Enhance Competition and Further Benefit Consumers

   

  While the policies established by Congress and the FCC to date have been beneficial, the implementation of additional principles would further enhance the competitive landscape, and ultimately benefit consumers.  These principles revolve around the goal of ensuring timely and efficient porting processes for all providers.  Specifically, Charter believes that implementation of the following principles would be critical steps to achieve that goal: (1) ensure that number porting occurs as quickly and efficiently as possible, based upon the delivery of only that information which is absolutely necessary to complete a porting request; (2) require all wireline providers to continue providing dial tone service if a port request is not, or cannot be, completed at the scheduled time; and (3) reaffirm that wireline providers may not recover any number portability costs via interconnection charges, administrative service order fees, port fees, or other “add-ons” to interconnection charges to other providers. 

  Based upon the practical experience Charter has gained by competing in multiple residential voice services markets, we are confident that these principles, if implemented, would further Congress’ goal of reducing barriers to entry and accelerating competitive entry to the business and residential voice marketplaces.  For that reason, Charter has already filed comments with the FCC urging the Commission to take actions necessary to implement these principles.

  First, incumbent telephone companies often require requesting providers, including Charter, to complete complicated service “order forms” that require numerous data points, many having little –if anything– to do with the processes necessary to port a telephone number.  This creates barriers to efficient porting and, by extension, obstructs facilities-based competition by entities like Charter.  By requiring competitors to provide data that is often unrelated to porting, the incumbents have created a process which leads to an increase in the number of port requests that are rejected, not completed, or that require rescheduling.  There is no reasonable explanation or justification for requiring all of the information in these order forms.  Accordingly, when incumbent providers request such information it raises the question of whether they are simply using the porting process to delay, or deny, port requests by competitors in order to delay market entry by competitors like Charter.  If so, such activity raises competitor and consumer costs, creating real barriers to effective facilities-based competition.  For these reasons Charter believes that port requests must be validated, and completed, after the competitive provider supplies the minimum necessary information to complete the port, generally the name, address, and phone number of the subscriber.

   

  In addition, although the FCC has established that all wireline providers must complete port requests within four business days, many providers do not.  Those providers that are unable or unwilling to complete the porting interval within that window are often CLECs, non-RBOC incumbents, or CLECs associated with ILECs that operate in less densely populated areas of the country.  Many carriers in this group take well over four days to return a firm order commitment date resulting in a time line of anywhere between five and twelve business days to complete a port request.  Therefore, another important principle that could benefit competitors and consumers is that all wireline carriers, no matter their size or position in the market, must complete wireline-to-wireline ports within four business days, when requested by another provider, consistent with existing FCC rules.

  Second, there are some instances when a port request is scheduled to occur, but for one reason or another the request can not be completed because of an operational or customer issue.  When a port request can not be completed before 5 P.M. on the day of the scheduled port, some providers will simply terminate service to the subscriber rather than wait for the port to be completed at a later time.  When this happens Charter is able to provide service on an emergency basis to make sure that the subscriber will continue to have access to voice services while the port is completed; however, a new number must be assigned to that customer and dial tone is typically interrupted for one or more days.  This policy of simply terminating service upon the scheduled port date, regardless of whether the number has actually been ported, and even with an emergency installation of service using an alternate phone number, creates significant problems for the affected subscribers.  This entire process leaves the customer with the impression that Charter (rather than the incumbent who caused the issue) is to blame for a loss of service, and unnecessarily puts the subscriber in harms way by denying consumers access to basic local voice services for a period of time.  Thus, all providers should adopt a policy of not terminating numbers from their switch for at least forty-eight (48) hours after the scheduled port request is completed.  This would ensure that customers do not lose service, or access to their telephone number, in the event that a port can not be completed on the scheduled date.

  Finally, in addition to the practices described above, several carriers continue to attempt to impose carrier-to-carrier charges, fees, or “add-ons” to such charges, for completing customer requests to port a number from the carrier’s network to Charter’s network.  Although the FCC has repeatedly ruled that carriers must recover the costs of number portability via tariffed end user charges, rather than via charges on competing carriers, several incumbent carriers continue to ignore those rulings and act in blatant disregard of the FCC’s directives. Some providers attempt to mask these charges, and claim that they are associated with the recovery of “administrative costs” related to porting, despite the fact that these actions clearly cover costs associated with completing port requests.  Accordingly, another principle essential to continuing the competitive benefits of efficient number porting is the notion that incumbent LECs may not recover any costs associated with porting via any charge, fee, or add-ons to interconnection charges to other providers.

  In conclusion, implementation of these principles would further the establishment of fair and efficient number porting processes for competitive providers.  Such processes are necessary because there are essentially no market forces in place to provide incentives to incumbent providers to develop efficient porting practices.  Because incumbent providers are currently losing far more customers than they are gaining, they have no market-based incentive to implement efficient processes to port numbers to competitive providers such as Charter. 

   

  Implementation of these principles will further enable competitive providers like Charter to increase existing efforts to provide competitive voice services in many smaller, and more rural markets, to the benefit of both consumers and businesses in such markets.    

  Thank you Mr. Chairman for the opportunity to appear before you today.  I will be happy to answer any questions you or the other committee members may have

  
  

  ---

  [1] See http://www.micradc.com/news/publications/pdfs/MiCRA_Report_on_Consumer_Benefits_from_Cable.pdf.

  [2] Press Release, J.D. Power and Associates Reports: Cable Companies Dominate Customer Satisfaction Rankings

  for Local and Long Distance Telephone Service (July 12, 2006).

  [3] 47 U.S.C. § 251(b)(2).

  [4] In re Telephone Number Portability, First Report and Order & Further Notice of Proposed Rulemaking, 11 FCC Rcd. 8352, 8367-68 (1996).

  [5] Id.

• Mr. Jonathan Banks

  Senior Vice President, Law and Policy

  United States Telecom Association
  Download Testimony (19.37 KB)

• Mr. Chris Guttman-McCabe

  Vice President, Regulatory Affairs

  CTIA - The Wireless Association
  Download Testimony (39.13 KB)

• Mr. Tony Clark

  Commissioner, North Dakota Public Service Commission

  Chairman, Telecommunications Committee, National Association of Regulatory Utility Commissioners (NARUC)
  Read statement

  Testimony

  Mr. Tony Clark

   

  Testimony of the Honorable Tony Clack

  Commissioner, North Dakota Public Service Commission

   

  on behalf of the

   

  National Association of Regulatory Utility Commissioners (NARUC)

   

  before the

   

  Committee on Energy and Commerce

  of the

  United States Senate

   

  Hearing on Number Portability

                                                                                     

  July 12, 2007

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  National Association of

  Regulatory Utility Commissioners

  1101 Vermont Ave, N.W., Suite 200

  Washington, D.C.  20005

  Telephone (202) 898-2200, Facsimile (202) 898-2213

  Internet Home Page http://www.naruc.org

   

   

  INTRODUCTION

   

              Chairman Inouye, Vice Chairman Stevens and members of the Committee, as always, we are extremely grateful to each of you for the opportunity to testify today on Number Portability. 

   

              I am Tony Clark, commissioner with the North Dakota Public Service Commission and a member of the National Association of Regulatory Utility Commissioners (NARUC).  I serve as chairman of NARUC’s Committee on Telecommunications. NARUC represents State utility commissioners in each of your States and the U.S. territories that have oversight responsibilities over telecommunications, energy, water and other utilities. 

   

  State Commissions Share Your Concerns and are a Valuable Source of non-biased Expert Advice on the Impact of Any Policy Choices on Constituents in your Respective States.

   

              Some State commissioners, like me, stand for election as each of you do.  Others are appointed by our governors.  But every single State Commissioner, as a leader in each of your States, is, like you, ultimately accountable to the voters.   Your State commissioners share your commitment to assuring that each of your constituents receives the benefits of broadband convergence, new wireless technologies and competitive markets. In almost all cases, the Commissioners on your State commission will have an intense and almost complete identity of interest with you on policy goals for your respective States. Perhaps of more significant to each of you, they will have a firm grasp on the markets in your State and informed and non-biased expert opinions on how your policy choices may impact constituents in your State. Many of you know your State commissioners and all of us have worked hard, not just at our day jobs, but to be honest brokers on how national policies impact each of our States.

   

              I know it is difficult to sort through the myriad of policy questions Congress routinely faces, but I would respectfully suggest that a continuing partnership with State-level colleagues that share your interests is key. And it’s a key that both Congress and various federal agencies have employed repeatedly and successfully in the past to address difficult policy issues.[1]    Certainly seeking the opinions of similarly situated, non-biased experts from your respective States can only assist you in addressing these problems.  That’s only one of the reasons why we commend you and the committee for holding this hearing on number portability – which ultimately protects competition and area codes from premature exhaust – both goals States share with Congress and the Federal Communications Commission.  We particularly appreciate your setting aside time to hear from your “beyond the Beltway” colleagues. 

   

   

  An Efficient Porting Process is Critical to Competition

  An efficient Number Portability process is critical to both efforts to enhance intermodal and intramodal competition and also NARUC’s State member efforts to constrain State-specific area code exhaust.  There is at least one open and pending Federal Communications Commission proceeding on this issue.  

   

  Even if Congress is unable to move legislation on this issue, we recognize that this hearing alone will undoubtedly provide additional impetus for FCC action in that and any related dockets.

  NARUC has been an Early and Persistent Advocate for Portability

  In 1996, Congress added 47 U.S.C. § 251(b)(2) to the Communications Act.  That section requires all local exchange carriers (“LECs”) to offer number portability in compliance with FCC rules.  That same year, the Commission determined that the public interest would be served by extending the portability requirement to wireless carriers as well as the incumbent LECs.[2]  NARUC strongly supported this FCC initiative.  We filed numerous pleadings agreeing with the FCC’s assessment that the competition resulting from portability “should foster lower local telephone prices and, consequently, stimulate demand for telecommunications services and increase economic growth.”[3]

   

   

   

  Some Porting Issue Require Immediate Attention

  As this hearing suggests, there are some outstanding issues that need resolution.  Most recently, on January 9, 2007, the FCC noticed for comment a December 20, 2006, T-Mobile USA, Inc. (“T-Mobile”), and Sprint Nextel Corporation (“Sprint”) Petition for Declaratory Ruling asking the FCC to end an ongoing controversy regarding the Commission’s requirement that only “necessary” validation procedures be utilized in the porting process.[4]  The  Petitioners, citing unwarranted delays in the process,  seek a ruling “…that all carriers obligated to provide number portability may not obstruct or delay the porting process by demanding from the porting-in carrier information in excess of the minimum information needed to validate the requesting customer.” 

   

              While portability generally has worked well to stave off exhaust and promote competition, some concerns raised by that petition highlight some problems with the current process and seem particularly relevant to the draft legislation we understand may be introduced on this issue.

   

  NARUC Endorses Uniform Simple Porting Process

              On February 21, 2007, NARUC responded to the notice by passing a resolution addressing the Sprint-T-Mobile proceeding that specifically endorses a porting process that is uniform throughout the industry and relatively simple to implement.   A copy of that resolution is submitted with my testimony.   Several individual NARUC members, including the California, Nebraska, and Iowa commissions also filed comments encouraging the FCC to establish “…a simple and uniform porting process.”

   

  The Time Frame for Porting

  The ability of any carrier to effectively “port in” a customer is directly tied to the practices of the carrier that will be “porting out” the customer.  Sprint and T-Mobile have told the FCC that some carriers have adopted practices which complicate and prolong the “porting out” process, thus hindering the effectiveness of competition.  They point out that these practices, in fact, delay a competitor’s ability to activate the number often for weeks or months “…resulting in a frustrating customer experience, an unnecessarily high port cancellation rate, and ultimately, a barrier to competition.” 

   

  Two undisputed facts from the T-Mobile-Sprint petition suggest some immediate action is warranted with respect to at least LEC porting procedures.

   

  First, T-Mobile-Sprint argue that the inefficiency of the incumbent LEC validation process is starkly highlighted when it is compared to the intramodal wireless porting mechanism in use today.  For simple wireless-to-wireless ports, according to these carriers, numbers are usually ported in a matter of hours with a nominal amount of information exchanged by the carriers.  In such ports, wireless consumers are generally unable to detect any difference between changing providers with porting and changing carriers without porting. 

   

   

   

  The Need for a Uniform Process

   

             

              The second, pointed out later in the petition, is the fact that wireless carriers initially required nine data fields to port a customer, then, because that made the process less efficient and the additional fields were not needed to protect customers’ choices, cut it to four, then three, data fields.

   

              This is clear evidence that a less burdensome and uniform process can work quickly to protect consumers and competition in a commercial environment.  

   

              T-Mobile and Sprint also told the FCC that some LECs are insisting on “outdated and unnecessarily arduous procedures, such as completion of port request forms with more than 100 data fields.” To back of the allegation, they attached to their filing a sample form with more than 100 data fields, including fields requiring input of “additional engineering,” “additional forms,” “additional labor,” and “account regrade.”

   

  It is difficult to understand how this much information could be required to port a customer from one carrier to another.  If these allegations are true, they certainly support their argument that some LECs are imposing onerous and burdensome porting requirements simply to slow their churn rates by rendering the porting process complicated and time-consuming. 

   

  The churn statistics cited in that proceeding seem to bear this out.  They point out that while the consumer cancellation rate for intramodal (i.e., wireless-to-wireless) ports is about five percent, the cancellation rate for intermodal ports is approximately 30 percent.  They also argue that onerous non-standard ILEC validation procedures are the root cause for the disparity in rates.     

   

  NARUC has taken the position that, at a minimum, the FCC must investigate to see if a more streamlined process, like the one that works in the wireless-to-wireless environment can work in intermodel ports.

   

  The petition before the FCC also presents a simple solution for the Commission’s consideration and suggests no new rules are needed.  According to the T-Mobile- Sprint Petition, the FCC “ . . .  need only further clarify that porting-out carriers may not demand information from requesting providers beyond that required to validate the customer request and accomplish the port.”  The Petition suggests, based on the practices of the wireless industry, that LECs, should validate ports using no more than four customer validation fields, limiting the validation to those fields “necessary” to the process.   

   

  Conclusion

              NARUC has urged the FCC to immediately act to prohibit onerous and non-standard porting practices as anti-competitive and anti-consumer.  The statistics on porting cited in this open docket suggest both the Commission’s and Congress’s primary purpose in establishing portability obligations is being frustrated.  Something must be causing almost a third of customers to cancel their wireline-to-wireless ports.   We have urged the Commission to, at a minimum, clarify its 2003 ruling that carriers may not impose “restrictions on porting beyond necessary validation procedures”  and, while we took no specific stance on the T-Mobile-Sprint specific proposal, we also urged the FCC to establish a uniform industry porting process to assure that ALL service providers comply with uniform industry porting guidelines and work cooperatively with other carriers in resolving disputes.  We hope Congress’ interest in this issue will, at a minimum, provide additional information and incentives for FCC action.

              Thanks again for the opportunity to testify.  I look forward to your questions.    

  
  

  APPENDIX – February 21, 2007 Resolution Concerning Local Number Portability

   

  WHEREAS, The National Association of Regulatory Utility Commissioners (“NARUC”) has strongly supported the implementation of Local Number Portability (LNP) as an important vehicle for consumer choice; and

   

  WHEREAS, LNP provides the opportunity for consumers to easily move service between LNP-capable providers while retaining their telephone number; and

   

  WHEREAS, Competition in all voice services has increased the need for LNP to realize customer choice between service providers; and therefore porting of telephone numbers used by all carriers, including LECs, CLECs, wireless carriers and VoIP service providers should comply with uniform industry porting guidelines; and

   

  WHEREAS, NARUC supports policies which encourage the continued advancement of competition in telecommunications markets and the ability of consumers to take their telephone number with them when they opt for a new or different provider’s products and services regardless of the type of service; and

   

  WHEREAS, A simpler and more convenient process of porting numbers should be considered for adoption as the uniform industry porting process in order to accommodate further consumer ease, increase the rate of successful port completions and facilitate the further advancement of competition; and

   

  WHEREAS, Various technical industry groups and bodies responsible for the setting of industry standards, such as the Alliance for Telecommunications Industry Solutions (ATIS), have been unable to resolve diverse order processing formats between providers for number porting; and

   

  WHEREAS, The North American Numbering Council (NANC) has examined the wireless number portability issues on several occasions over the past eight years, most recently, in response to a request from the FCC, including forming an Intermodal Porting Issue Management Group (IMG) that produced a report and recommendation in May 2004 setting forth a streamlined confirmation and activation process; however, its effective implementation has been hindered by the requirement to submit an “error-free” port request; and

   

  WHEREAS, The ATIS Ordering and Billing Forum (OBF) has been unable to develop a more efficient and uniform process for porting between wireline and wireless providers through their approval process since assignment of the issue in July of 2005; and

   

  WHEREAS, The challenges regarding number portability for VoIP service providers have become increasingly common recently and have been raised before a number of bodies including State commissions, both for the porting in of a number to a VoIP provider and the porting out of a number from a VoIP provider; and

   

  WHEREAS, The adoption of a simple and uniform industry porting process will facilitate consumer choice by improving customers’ ability to switch carriers when desired, as well as creating a uniform understanding, by all parties, of the steps required to port numbers; and

   

  WHEREAS, There is pending before the Federal Communications Commission (“FCC”), in Docket CC 95-116, a Petition for Declaratory Ruling regarding LNP seeking clarification that carriers obligated to provide number portability may not obstruct or delay the porting process by demanding information from requesting carriers beyond that required to validate the customer request and accomplish the port (“Portability Petition”); now, therefore, be it

   

  RESOLVED, That the Board of Directors of the National Association of Regulatory Utility Commissioners convened in its 2007 Winter Meetings in Washington, D.C. expresses its support for the adoption of a simple and uniform industry porting process; and be it further

   

  RESOLVED, That NARUC staff shall file comments with the FCC in CC 95-116, consistent with this resolution, encouraging the FCC to establish a uniform industry porting process; and be it further

   

  RESOLVED, That NARUC also conveys its concerns to the FCC in the Number Portability Docket regarding the challenges created by having different types of service providers porting numbers to each other, and the need for all service providers to comply with uniform industry porting guidelines and to work cooperatively with other carriers in resolving disputes.          

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  Sponsored by the Committees on Telecommunications and Consumer Affairs.

  Adopted by the NARUC Board of Directors, February 21, 2007

   

  
  

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  [1]  Indeed, Congress has frequently recognized in legislation the importance of Federal Agencies working in tandem with NARUC member commissions. See 47 U.S.C. § 410(c) (1971) (NARUC nominates members to FCC Joint Federal-State Boards which consider universal service, separations, and related concerns and provide formal recommendations that the FCC must act upon); Cf. 47 U.S.C. § 254  (1996) (describing functions of the Joint Federal-State Board on Universal Service). Cf. NARUC, et al. v. ICC, 41 F.3d 721 (D.C. Cir 1994) (where the Court explains “…Carriers, to get the cards, applied to…(NARUC), an interstate umbrella organization that, as envisioned by Congress, played a role in drafting the regulations that the ICC issued to create the "bingo card" system.)  There are also numerous examples of successful collaborations between the Federal Communications Commission (FCC) and NARUC’s members on slamming, truth-in-billing, operator service requirements, telemarketing, customer privacy/Caller ID issues, and related consumer protection issues.  Most reveal the same key elements. NARUC’s July 2005 Resolution Supporting FCC Slamming Rules provides a perfect case study illustrating the practical benefits of leveraged/more effective enforcement and reduced consumer confusion inherent in this cooperative approach.  That CC Docket No. 97-129 proceeding was premised on specific authority in 47 U.S.C. § 258 (1996).  In its First Order on Reconsideration (FCC 00-135), the FCC recognized States should have the ability, if they choose, to mediate slamming complaints received from consumers within that State.  It also acknowledged individual States have unique processes, procedures and rules regarding slamming complaints.  Pursuant to the revised rules, States are now able to “opt-in” to become the primary forums for administering the slamming liability rules and resolving consumer’s slamming complaints. Although Congress limited the FCC’s flexibility somewhat, the agency did not take a “cookie cutter” approach to slamming regulations.  Rather the FCC has provided needed flexibility to the States to address unique fraudulent activities by establishing the regulatory floor and allowing the States to establish more stringent rules or the regulatory ceiling—particularly in the area of enhanced penalties.  Thirty-seven States opted-in to the FCC’s approach.  There is no question oversight of slamming issues has been enhanced through collaborative Federalism as evidenced by: (i) more extensive information sharing on market practices and trends, (ii) decreases in complaints, (iii) better coordinated enforcement efforts, and (iv) the creation of a “common front” in opposition to abusive practices affecting consumers of telecommunications services established via the FCC’s actions.  Any other framework effectively removes cops from the beat.

   

  [2]               See Telephone Number Portability, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 8352 ¶ 153 (1996) (“First Porting Order”).

  [3]               First Porting Order ¶ 30.

  [4]  “PLEADING CYCLE ESTABLISHED FOR COMMENTS ON T-MOBILE USA, INC. AND SPRINT NEXTEL CORPORATION’S PETITION FOR DECLARATORY RULING REGARDING NUMBER PORTABILITY”, DA 07-39, (Jan. 9, 2007) Available online at: <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-07-39A1.doc>.