CPP loses importance: No longer the wireless savior, CPP becomes one of many tools to increase use.

Nearly a year and a half ago, wireless operators talked about calling party pays as if it could be the ultimate solution for increasing usage. Today, confidence in CPP has dwindled. Operators now view it as one of many offerings aimed at increasing minutes of use and balancing the ratio of incoming and outgoing calls.

What happened? "One thing that is different now from 18 months ago is that we have the introduction of PCS," said Steve Robertson, president of the telecom solutions group for Cincinnati Bell Information Systems. PCS operators introduced both first incoming minute free and bucket plans, encouraging users to leave their phones on, accept incoming calls and as a result, increase usage. With methods such as these achieving their goals, operators have begun to view CPP as less critical than before.

"Maybe CPP will never become important because it becomes a moot point with overall pricing declining," said Elliot Hamilton, director of U.S. telecom at The Strategis Group.

Operators also once considered overseas markets that realized significant success after introducing CPP as proof of the viability of the plan. For example, Pele-phone Communications in Israel switched to CPP in 1994 and increased memorandum of understanding from 450 to 500, according to The Strategis Group. Where only 25% of Pele-phone traffic was incoming, CPP raised that number to 50%.

However, the United States isn't like those markets. Landline callers here are accustomed to flat rates that seem like free local calling, said Dave Berndt, program manager for The Yankee Group. "It's a big hurdle mentally," he said.

In addition, carriers may be pricing CPP too high. Berndt cited AT&T Wireless, which recently introduced CPP in Minnesota, as an example. "We say it's too little, too late," he said. "If they would have come out with it two years ago, then the rate would have been in line with what we were seeing then." AT&T charges callers to CPP customers 39 cents a minute, which Berndt said is not competitive today.

AT&T's CPP service has some advantages over others launched in the U.S. The 39 cents rate includes roaming and long-distance. And the service works no matter where the call originates. In other implementations, CPP applies only to calls placed from within the home local exchange carrier's territory. These CPP offerings became "calling party pays sometimes," said Jeff Buck, manager of technology and planning for AG Communications.

One reason AT&T can offer its advanced form of CPP is because it requires customers to use or switch to a 500 number. When a landline caller dials a CPP customer's 500 number, the LEC recognizes the number as an AT&T 500 number and routes the call to AT&T. AT&T recognizes the number as a CPP customer and asks the caller to approve the charge before the call is completed.

Although AT&T does not refer to the Minnesota CPP offering as a trial, Berndt said, "they are sticking their toe in the water to see if the temperature is fine before they dive in."

AT&T executives have said the company plans to roll out CPP nationwide this year but Ann Guilford, product manager at AT&T Wireless, said only that the company might roll out in other markets.

For carriers without the advantages of AT&T's existing LEC relationships and nationwide network, some vendors are developing increasingly sophisticated CPP offerings. AG Communications offers a wireless network-based CPP platform that resolves some issues. The wireless intelligent network (WIN)-based system works on the end of the network, rather than where calls originate. When a call reaches the home mobile switching center, it determines whether the call is destined for a CPP customer. If so, it's routed to the service control point where the CPP service runs (see figure on page 200).

With AG's offering, customers would not have to change their phone number, and carriers with AG's WIN platform can easily implement CPP with a software upgrade. Because WIN triggers for CPP haven't been officially defined, AG has paid close attention to the development of WIN and said it can adjust its solution when the triggers are defined.

GTE TSI is developing what could be called second generation CPP on both the billing and infrastructure ends, said Manuel Maseda, manager of technology for GTE TSI. Rather than block calls that originate at a pay phone or other nonbillable source, carriers can offer the option of paying via a credit card or calling card. Maseda pointed to features such as override that allow callers to enter a personal identification number to place a call without paying. GTE TSI also is working on a feature that could allow calls placed from certain numbers to pass through automatically without a charge.

To date, no nationwide standard exists for implementing CPP, and the industry is clamoring for some guidelines.

"We don't think the FCC has to do much at all. In fact, we recommend they don't," said Tim Ayers, vice president for communications at the Cellular Telecommunications Industry Association. The CTIA recently filed with the FCC for a uniform national notification policy.

Sprint PCS will decide to implement CPP based on the notification policy. "A warning voice will continue the mentality of wireless as a premium service," a spokesman said. Unless a notification policy is set that makes callers feel comfortable, Sprint PCS is not interested in CPP, he said.

Despite some difficulties in implementing CPP and a decreasing emphasis on the service, many carriers likely will offer it. CPP may become particularly popular among cellular carriers striving to compete with low PCS prices, said Hilo Oltman, vice president of marketing for AG.

"As the cost of minutes comes down, wireless carriers look for consistency with wireline," said Ajit Sadarangani, senior product manager of CPP for AG. As the cost of wireless becomes comparable to that of wireline, operators will look to the CPP model next to bring wireless even closer to wireline, he said.

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