Much Ado About Numbers

The telecommunications industry needs to become more disciplined about number conservation. But, just as it's difficult to resist a diet pill that magically leads to a fit and trim body, it also is difficult for the FCC to pass up enticing shortcuts to a fit and trim numbering system. The FCC has several tempting options, but the side effects of each could prove too costly. The telecom industry needs to give up on the easy fixes and choose the old-fashioned, common-sense approach: rate-center consolidation. Although such an approach would be easy for the wireless industry, it would be tough for LECs, the FCC and state regulators; therein lies the stumbling block.

When a call is billed using distance-sensitive billing, the location of the originating and terminating rate centers (usually telephone switch locations) are used to determine both the distance for rating purposes and the location names. Using the rate-center locations instead of the actual phone locations makes a small difference in the calculated distance but little if any difference in the cost of a call. It also avoids the need for the phone company to know the precise location of every phone line.

The rate center is determined from the first six digits of a North American 10-digit phone number, meaning that the smallest block of numbers that can be assigned to a rate center is 10,000. When there was only one phone company, such a system made sense, but today there can be many wireless and wireline competitors, and if they all use the rate-center paradigm, they could each chew up 10,000 numbers per rate center.

INEFFICIENCIESUsing 10,000 numbers for each competitor in each rate center would not be a problem if a rate center covered hundreds of thousands or millions of people, but often they do not. The largest rate center in the United States is Atlanta (about 3 million people), and one of the smallest is Midland, SD (less than 300 people). The fact that Atlanta has a single rate center is unusual; most other U.S. towns and cities have several.

Obviously, it is inefficient to assign numbers in blocks of 10,000 to each competitor in areas where rate centers are small. If several small rate centers merge, the fill level of number blocks can rise dramatically, even with many competitors in place. Furthermore, if each carrier can decide on its own boundaries, the boundaries can be customized to meet several objectives, including number conservation.

Wireless carriers generally pay only lip service to the rate-center concept. One reason is that they use larger local calling areas as a competitive advantage. Furthermore, for mobile-originated calls, carriers cannot determine billing from the first six digits of the originating mobile's phone number. Billing is determined from the actual location of the mobile at the time of the call. The "rate center" of the switch or base station handling the call generally is used to define that location for billing purposes.

Mobile-terminated calls do use the rate-center concept because wireline systems generally are responsible for billing these calls. Wireless phone numbers are allocated from a common pool throughout the local calling area; consequently, a call from a home in a suburb to a wireless phone in the same vicinity may be rated as a toll call to downtown if that is where the home wireless switch is located. This often has been hidden from callers to wireless phones because the wireless carrier has agreed to absorb these charges. However, a recent move by Pacific Bell in California will end such arrangements. This may have a negative effect on number conservation in wireless carrier operations because subscribers may demand wireless phone numbers that do not incur these charges, moving wireless carriers grudgingly toward the rate-center concept.

NUMBER POOLINGAnother reason wireless carriers may be forced to bow toward rate centers is to make number pooling work. Number pooling uses the same infrastructure as number portability, but it aims to achieve number conservation by sharing blocks of 10,000 numbers among carriers while maintaining the current rate-center boundaries. Number pooling would be much more expensive to implement than rate-center consolidation. It also would be less consumer-friendly, much harder to manage and much more error-prone. Another disadvantage is that it would only work between carriers that respect the same rate-center boundaries. This would burden wireless carriers with enormous costs and transition difficulties. Yet, number pooling is one of the most talked-about number-conservation approaches.

The battle between rate-center consolidation and number pooling is, from all appearances, a telecom version of David vs. Goliath. Number pooling comes with a high-tech armory of databases, rules, regulations and procedures, while rate-center consolidation only involves a reorganization of data that already is defined in the telecommunications industry's routing bible, the Local Exchange and Routing Guide. So, unless the FCC and other authorities aim to make carriers' lives more difficult, why does number pooling appear to have the upper hand? The answer is politics and power.

WINNERS & LOSERSIf rate centers are consolidated, there will be losers: the incumbent LECs and state regulators. LECs will lose because of the loss of intra-LATA toll revenue, which often is distance-billed (unlike inter-LATA long distance, which generally is billed at a fixed rate, regardless of the distance the call traverses) and may cost more than wide-area (inter-LATA) toll calls. State regulators will lose control over rate-center boundaries if the FCC decides to impose rate-center consolidation as a number-conservation measure. Along with loss of control will come a loss of tax revenue from reduced toll revenue. The fear of a power struggle with state regulators probably is one of the reasons why the FCC is avoiding rate-center consolidation.

Consumers generally will benefit from rate-center consolidation through extended local calling areas, which will reduce the cost of wireline telephone services. However, some confusion regarding billing may occur. Because the location name is based on the rate center, calls to a suburban town may be printed on the billing statement as the city with which the town's rate center has been consolidated. However, because this likely will not affect the cost of a call, consumers probably would accept this change after a period of some confusion. Or, perhaps bills are so confusing already that nobody would notice.

Rate-center consolidation would benefit wireless carriers significantly. If rate-center consolidation does conserve numbers, the need for area-code changes will be reduced dramatically. And, if number pooling is abandoned, the justification for the number-portability infrastructure will be gone, increasing the odds that the wireless industry may get permanent forbearance on number portability for competitive purposes.

If engineers ruled the world, rate-center consolidation would be implemented tomorrow. For better or worse, this is not the case. However, you can hope that common sense will prevail and that the FCC will muster the courage to try to persuade (or force) state regulators to act seriously to rationalize rate-center boundaries.