Mobile phone companies are making a last stand to block a regulation that would allow subscribers to keep their telephone numbers when they switch wireless carriers.
Who retains control over the numbers is the latest test of government policy governing competition in telecommunications. Consumer advocates claim that wireless subscribers often are reluctant to switch carriers because changing forces them to inform friends, family members and acquaintances of their new numbers. They are lobbying the Federal Communications Commission to honor its Nov. 24 deadline for implementing the rule.
Wireless companies say the mandate will increase their costs and do little to promote competition in an industry already battered by a price war. Traditional phone companies, meanwhile, have joined the fight out of concern that the new rules could allow wireless companies to take customers from their wired networks.
The wireless industry's trade group, the Cellular Telecommunications and Internet Association, will square off Tuesday against the FCC in the U.S. Court of Appeals for the District of Columbia, where it will argue that the agency overstepped its authority when it approved the requirements.
Lawyers for the CTIA and Verizon Wireless claim the rule is unnecessary because competition for the nation's 144 million wireless subscribers remains robust. About 24 percent of all wireless subscribers switched companies last year.
"Wireless is competitive enough," said Michael O'Connor, director of federal regulatory policy and planning for Verizon Communications Inc.
The court challenge is not expected to be decided until this summer, lawyers involved in the case said. In the meantime, wireless companies continue their fight against the rule at the agency, despite statements from FCC Chairman Michael K. Powell indicating that he will stand by the deadline.
The FCC has already delayed the rule three times after the industry complained about how much it would cost them.
Mobile phone companies say the requirement will cost the industry $1 billion at a time when it is trying to meet other FCC mandates. Cell-phone companies, for example, are updating their networks to allow emergency workers to find 911 callers by tracing the signals from their phones.
"I would rather see our resources devoted to safety of life and protection of property rather than addressing regulations of convenience," said Brian Fontes, vice president for federal regulations for Cingular Wireless.
He said Cingular has spent $250 million to prepare for the rule and will comply with it if it is not postponed further.
In a little-noticed provision of the new rule, mobile phone companies are pitted against wired rivals over a requirement that would allow customers to transfer their wired phone numbers to a wireless service.
The major wired telephone companies, including SBC Communications Inc. and Verizon Communications Inc., are beginning to lose customers who give up wired lines for wireless phones.
The Yankee Group, a Boston-based research firm, estimated that about 3 percent of cellular customers have no phone at home connected to telephone wires.
Adam Guy, an analyst with InfoTek Research, said even more could abandon land lines if they could transfer their numbers to wireless phones. "It just makes it that much more attractive," he said, noting that some cell phone companies already market themselves as alternatives to wired phone service.
Douglas I. Brandon, vice president of federal affairs at AT&T Wireless, said the business can be truly competitive only if his company can lure customers from their wired competitors.
"Part of our business plan, obviously, is to get minutes from the residential land-line provider and the only way we can do that is if we are able to [transfer] their numbers," Brandon said.
In filings with the FCC, SBC has said the requirement to transfer wired phone numbers to wireless customers should apply only to about 10 percent of all telephone lines -- those used by customers who live near the central telephone offices that handle their wireless calls. The company said in a prepared statement that such a condition would be the regulatory equivalent of the current rules governing the transfer of numbers between wired carriers.
"SBC believes that [transferring numbers] between and among all carriers should be as competitively neutral as possible and fair to all carriers in the marketplace," a company spokesman said in an e-mailed statement.