A matter of time: As the first number portability deadline passes, FCC delays and vendor problems cause major headaches for carriers-and force some to file for extensions

Of the 1996 Telecommunications Act's many mandates, number portability presents perhaps the greatest challenge for incumbent carriers.

Initially, carriers are required only to let customers keep their numbers when changing carriers. In the long term, however, they may need to implement geographic and service portability, which would enable customers to keep their phone numbers when moving to another area or changing from wireline to wireless service.

That would involve changing the way telephone numbers are allocated. Rather than specific specific carriers owning specific numbers, all numbers would be stored in regional databases, which contain carrier information for each number and are accessible to all carriers via the number portability platforms.

Those platforms are the first step to providing service provider portability, which incumbent wireline carriers are required to implement in the 100 largest metropolitan statistical areas (MSAs) by the end of 1998. The plan calls for the cities to come on-line in stages, and the first deadline passed last week on March 31.

Under the gun Carriers have been working with equipment and software vendors to prepare to offer number portability, but the aggressive plan to make the service a reality may be off track even before the service is available in the first cities.

The difficulties lie not with the carriers' efforts to prepare. Some have their systems and software in place and are ready to offer the service, but the FCC has yet to deliver a plan for the carriers to recover their initial capital investments, which run into the hundreds of millions of dollars. For others, a vendor's failure to deliver the requisite software has led carriers to file for extensions with the FCC while they find alternative software.

Ameritech falls into the first category. The Illinois Commerce Commission has long been a leader in moving to initiate number portability at the state level, and Ameritech's Chicago market became a test bed for the entire country to observe.

"We're ready to go," says David Pacholczyk, director of media relations at Ameritech. "The FCC had indicated that a cost recovery system would be in place by now. We're expecting it momentarily."

The FCC has outlined a cost recovery system for carriers performing database dips for other carriers that don't have their own systems but must deal with ported numbers. But those cost recovery systems aren't needed until the carriers begin offering the service, perhaps a case of putting the cart before the horse.

"What we're looking for is a cost recovery mechanism for the bulk of the investment-$300 million for Ameritech," Pacholczyk says. "The whole rationale is that the costs must be recovered in a competitively neutral fashion."

Cost recovery might be an issue for Ameritech, BellSouth and SBC Communications, but all have been forced to seek relief from the FCC's deadlines for getting their systems up and running. The tables on pages 20-24 outline the timetable for Bell companies to implement number portability in their markets.

The problem lies in Perot Systems' failure to deliver on its number portability administration center commitments. That has led carriers with regions committed to the Perot solution to terminate that relationship and seek a new one with Lockheed Martin (see story on page 28).

SBC has requested extensions of a few weeks in Houston, Dallas, St. Louis, Kansas City, Mo., and Fort Worth, Texas, in its Southwestern Bell territory, as well as similar extensions for several cities in its Pacific Bell territory, a spokesman says.

The extensions in the Southwestern Bell territory stem from software problems that cropped up in testing, and the company wants ensure that those problems are ironed out before making the service available.

"We want to be sure we're not jeopardizing the integrity of the network," the spokesman says.

The problems are more serious for BellSouth, which has filed for extensions in all 21 of its markets. The carrier will not have service available in Atlanta until October, and markets such as Fort Lauderdale, Miami and Orlando are now scheduled for service by the end of the year, a BellSouth spokesman says.

"I'd characterize this as a temporary hurdle to overcome," he says. "It's an issue we've encountered, and we must react to it."

U S West has 10 MSAs in its territories that are on the local number portability (LNP) agenda for 1998. Of those, seven likely will be affected, says Tommy Thompson, a product engineer in U S West's interconnection services organization. The markets are scheduled for service in five phases, beginning with Minneapolis/St. Paul by March 31 and ending with Albuquerque, N.M., Tacoma, Wash., and Omaha by Dec. 31.

"We intend to complete [the LNP deployments] by the end of 1998," Thompson says. "The last phase will be almost on schedule."

U S West also is expecting the cost recovery plan to be passed down from the FCC before its markets are due for service, especially if its petition for extensions is approved. Once those wrinkles are ironed out, U S West should be well-prepared to deliver LNP.

"Everything else appears to be in order and moving along as scheduled," Thompson says.

Not all the incumbents are facing difficulty rolling out the service. Bell Atlantic completed installation ahead of schedule in Philadelphia, one of its markets scheduled for completion by March 31. The company also expects early completion for its Baltimore and Washington territories, and the rest should fall right on schedule, says Frank Saletel, LNP implementation director for Bell Atlantic's mid-Atlantic area.

"We're not having the difficulties with the [number portability administration centers]," Saletel says. And as for cost recovery, the delay in the FCC ruling won't slow down delivery of the actual service to customers.

"We're anxiously waiting on [the FCC ruling]," Saletel says. "We'd very much like for cost recovery to be settled, but we're proceeding."

Vendors wait impatiently Although wireline carriers are facing difficult decisions and deadline pressure in offering the services, the companies that have provided the equipment and software are eager to see their systems put to the test in public deployment. Equipment vendors also are looking to tap the wireless carriers as their June 30, 1999, deadline for deployment approaches. They also hope to sell to the competitive carriers that are not required to deploy number portability systems but likely will do so as more numbers are ported.

Tandem Computers has deployed solutions with carriers and is waiting for service implementation to prove its product in a real-world network test.

It's not that Tandem isn't confident that its solution will deliver as promised, but the sooner its installed base is up and running, the sooner it can use its success as a selling point for carriers that will be deploying LNP after 1998.

"The impending delay in service deployment doesn't allow us to prove the flexibility and scalability of our platform," says Tony Brinkman, Tandem's LNP program manager.

Delays in wireline deployment may be a minor aggravation for vendors that already have deployed solutions in the networks, but for others, delays may mean slowing a business return on their investments in developing LNP products.

Software vendor IEX, along with partners Stratus and Evolving Systems, is ready to deliver an LNP solution but hasn't won any customers. The solution came too late to ride the first wave of carriers into the market. And it may be some time before wireless carriers and competitive local exchange carriers are forced by the FCC or market influences to make final decisions on LNP vendors, says Micaela Giuhat, intelligent networks product marketing director for IEX.

"We haven't sold any LNP," she says. "We don't see LNP as big as we might have a year ago."

The delay isn't terribly damaging financially to IEX. "It's a pretty easy solution from a technical perspective," Giuhat says. But others may be more eager to move ahead with testing and deployment than the market will allow.

"For somebody who's done a lot of advertising, put a lot of money into rolling it out, it's going to be much harder," she says.

Different vendors have different perspectives on the marketplace, though. Quintessent Communications just this year introduced its QConnect operations support system (OSS) interconnection platform, which includes an LNP module. The company also is primarily targeting CLECs and wireless carriers.

Quintessent expects its first LNP deployment in about a month, and several other accounts are lined up, says Dale Quick, Quintessent's executive vice president of marketing and business development.

"The key is the work we've done prepositioning the CLECs we've talked to to be ready for an integrated solution," Quick says. "LNP is part of a bigger picture."

The big picture seems to be preoccupying other LNP vendors. The prevailing wisdom is that although LNP is a service that regulators have mandated, there's no reason it should be treated as a bolt-on application and separated from other functions in the network.

An intelligent approach Lucent Technologies' LNP solution is based on the company's existing intelligent network services and applications platform. That link to the intelligent network, which enables other features such as 911, call waiting and prepaid calling, helps smooth LNP integration.

Lucent's intelligent network platform and LNP module are designed to work with either wireless or wireline systems. There are several key advantages to deploying LNP as an integrated intelligent network element, says Goutaam Sinha, Lucent's wireless intelligent network offer manager.

The intelligent network connection lets carriers extract analytical data regarding number porting and develop revenue-generating ideas from that data. An intelligent network-based solution allows for centralized control and monitoring of LNP functions, and if a carrier isn't using the full capacity on the LNP module, spare capacity can be used to develop other applications.

Lucent has deployed its LNP solution with numerous existing intelligent network customers, but the company also wants to attract new customers in the CLEC and wireless markets, where new networks are being developed. Those networks are smaller than many of Lucent's existing accounts, Sinha says, but the Lucent solution is scalable. The challenge is convincing the smaller carriers that it's worth the extra up-front expense to build an intelligent network platform for LNP rather than install a stand-alone LNP solution.

"Smaller carriers would look more at a point solution," Sinha says. "We believe it's best for them to build an [intelligent network] infrastructure and use it to the best advantage they can."

Tandem's Brinkman agrees that the intelligent network is a key element in LNP, especially for carriers that end up performing database dips, particularly for wireless-to-wireline calls.

"The [dipping] network must handle extraneous SS7 messages that it shouldn't have," Brinkman says. "Problems could come if [carriers] don't have enough SS7 facilities to support the extra traffic."

Tying LNP to the OSS simplifies the application, especially internetwork communication.

"An LNP module that's not tightly integrated to the OSS connection makes for a two-step process," Quick says. "A system that's able to interface tightly with the [incumbent LEC] and CLEC OSS makes available a number of different message adapters on either side of the equation."

It appears carriers that have yet to select LNP platforms will have many vendors to choose from. And with the variety of similar solutions out there, salesmanship will certainly play as large a role as products.

Lucent's tactic will be to get carriers to think of LNP as something more than an element required by law to help open local competition.

"Is it a mandate, or is it a [revenue-generating] opportunity?" Sinha asks.

LNP equipment vendors are ready to sell heavily to the next wave of customers, especially because many are looking to sell not just LNP but an entire intelligent network platform with an LNP module as part of the package. Carriers may be eager to implement their installed solutions or to make decisions on future installations, but everything hinges on the crucial FCC decisions on cost recovery and deadline extensions.

Wireless carriers are petitioning the FCC to delay their 1999 rollout dates across the board. IEX's Giuhat expects the extensions will be granted.

"There's a whole slew of things that aren't working as they are supposed to be working," she says.

Marty Langion, LNP consultant for Quintessent, says there are valid reasons some wireless carriers won't be ready or able to implement LNP by the scheduled dates.

"Wireless carriers are focused on their rollouts," she says. "They must spend a lot of money on base stations and national roaming. It's hard to pull their attention away from that."

As difficulties crop up for the carriers, more work shifts back to the FCC. Anna Gomez, deputy chief of the agency's network services division, says 15 petitions for delays have been filed in Phase 1 markets. In a conversation 11 days before the March 31 deadline for the first markets, she says the agency hopes to issue rulings on all the filings before the rollout deadline. However, the work won't end there.

"We also are getting petitions for extensions for Phase 2 and Phase 3," Gomez says. "Some companies that have filed in Phase 1 went ahead and said, 'We're not going to make Phase 1, and we'll also need extensions for 2 and 3.'" Initially, carriers are required only to let customers keep their numbers when changing carriers. In the long term, however, they may need to implement geographic and service portability, which would enable customers to keep their phone numbers when moving to another area or changing from wireline to wireless service.

ISSUE NO. 1 The FCC must present carriers with a cost recovery plan for the hundreds of millions of dollars the carriers have spent on equipment and software. The plan was supposed to have been unveiled in February, but the FCC has not yet delivered. Bell Atlantic is forging ahead with offering LNP service to customers without the plan, but Ameritech says that, despite technical readiness, it will not proceed until cost recovery is addressed.

ISSUE NO. 2 Perot Systems was one of the vendors for regional number portability administration centers. The West and South regions committed to Perot Systems' solution, but the company was unable to deliver the software in time to meet the 1998 deployment deadlines. BellSouth, Southwestern Bell, Pacific Bell and U S West have been forced to petition the FCC for 1998 extensions while Lockheed Martin takes over for Perot Systems.