Face-off: Ameritech stalls as LNP deadline approaches

Ameritech reiterated last week that it would hold off on implementing local number portability until it has a state or federal tariff guaranteeing cost recovery.

Analysts predict the Federal Communications Commission will devise adequate LNP tariff procedures by the March 1998 deadline.

"[The FCC] will probably come up with a formula rather than an exact cost," said an Ameritech spokesman.

Failure to provide a ruling on LNP could be an embarrassment to the new FCC and undermine its attempts to create a competitive framework for local phone service as mandated by the Telecommunications Act of 1996.

The FCC had ordered that LNP be offered in seven metropolitan areas by March 1998. But Ameritech and other regional holding companies want a tariff agreement before they roll out LNP-enabling technologies that will help competitive local exchange carriers compete.

The FCC has delayed its ruling on LNP because of the difficulty in assessing the true implementation cost. Expenses vary by RHC and intra-region territory.

Cost estimates for upgrading RHC switches and operations support range from Bell Atlantic's $256 million to SBC's $1.5 billion. Proposals to recover long-term costs range from each carrier taking responsibility for its upgrades as a cost of doing business to SBC's request that it collect 74 cents each month from its subscribers for five years.

"This is uncharted territory, and it is extremely complicated to reach even internal [RHC] consensus as to what LNP is going to cost," said Boyd Petersen, an analyst with Boston-based Yankee Group.

On Nov. 4, Ameritech filed a tariff request with the Illinois Commerce Commission of 39 cents a month per subscriber over three years. This would roughly generate the $150 million Ameritech has already spent on LNP.

The development of an acceptable LNP framework is one of many obstacles that regulators have placed in front of RHCs before they can enter the lucrative long-distance market.