Circumventing Roadblocks

U.S. carriers traditionally have shied away from calling party pays (CPP). Yet, the evidence suggests that if implemented, it could punch up their usage figures.

Consider Israel's experience with CPP. That country's wireless systems, which also are AMPS-based, have among the highest levels of usage per customer in the world.

CPP is desirable for several reasons. Its implementation results in a rebalancing of traffic from about 80% outgoing calls and 20% incoming to about 50:50 (the experience in most countries with CPP). More important, this change in the call ratio is not entirely due to rebalancing of existing traffic, but also significantly to an increase in incoming calls. Thus, CPP could act as a traffic stimulator in North America, as it has in other countries.

North American carriers only have dipped their toes in the CPP pool. They are offering the first-minute-free concept, regional CPP systems (with many restrictions) or calling number identification (which allows manual screening of incoming calls). Unfortunately, none of these alternatives is as productive as unfettered CPP.

Current Barriers CPP is not the norm in North America because of the high level of competition and the lack of distinct numbering for wireless systems. Competition in both wireless and wireline telecommunications has allowed a huge number of carriers to flourish. CPP requires a business agreement between every wireless carrier that wishes to support incoming CPP calls and every other carrier that could possibly originate calls.

A country with 10 telecommunications companies (such as a PTT and a handful of nationwide wireless licensees) would require fewer than 50 business agreements. However, a country with 100 carriers would require almost 5,000, and a country with 1,000 distinct carriers would require almost 500,000. Another characteristic of a market with a high level of competition, such as the United States, is the government's reluctance to mandate participation in a service such as CPP that requires multiple carriers to exchange real-time signaling and billing information.

The lack of distinct numbering for wireless phones makes it virtually impossible to identify that a number being dialed is destined for a wireless subscriber or to distinguish between wireless subscribers with and without CPP. Many countries have distinct dialing prefixes for each wireless carrier. However, wireless carriers in North America share area codes with competing wireless and wireline carriers. All of the North American CPP trials and commercial systems so far have been based on the allocation of distinct number blocks. Because the number blocks generally are based on an office code (digits 4 to 6 of a 10-digit number), not an area code (digits 1 to 3), these systems are restricted to working within an area code where 7-digit dialing provides an easily recognized prefix. At best, these systems can be extended to all calls originating from a single local exchange carrier. The North American Numbering Plan administrators have been reluctant to assign entire area codes to carriers. And, even if they were willing, it is unlikely that customers would want a separate area code for their wireless phones, which suggests to callers that long- distance charges would apply.

It is possible to develop a nationwide database of CPP prefixes (6-digit NPA-NXX codes), even though the management of this database would be cumbersome. However, this possibility has been crushed by the advent of local number portability. Some people with CPP numbers will want to port their phone numbers to other carriers (even if they lose the CPP service), but this will not be possible when CPP is based on a distinct dialing prefix.

Technical Difficulties CTIA has written a Standards Requirements Document to address some of CPP's technical issues. The first challenge is to recognize the type of calling party because some cannot be billed. Charges for a CPP call from a home or business line can be added to the monthly bill, but what about calls from pay phones or hotel rooms? In these cases, CPP calls either will have to be denied, or some alternate action will have to be taken (such as credit card billing). Before the wireless system can decide which action to take, it needs more information about the calling party than is currently made available. Consequently, the SS7 ISUP call setup protocol must be modified to identify whether CPP charges can be accepted by the originating carrier.

The second major technical challenge relates to billing. Wireless systems easily can calculate the charges for CPP calls. However, the difficulty arises when the charges ultimately must be paid by callers who are not their customers. Consequently, the wireless carrier must have the ability to send billing information to wireline carriers (as well as other wireless carriers). This may be as much a psychological hurdle as anything because wireless carriers generally use the CIBER format for billing record exchange, and wireline carriers use EMI/EMR. Perhaps the relatively new electronic call detail/billing record exchange standard, TIA/EIA/IS-124, will help.

A third challenge with a technical component is notification. Callers have to be informed that additional charges will apply to the call. Notification can be as simple as a distinctive tone or as complex as an interactive dialog that perhaps also allows alternate billing.

Beyond addressing the technical challenges, CTIA also is encouraging the FCC to promote CPP. It wants the FCC to pre-empt state regulation that could result in a variety of incompatible regulations (particularly regarding caller notification), which could make a nationwide CPP service impossible. The FCC also may need to mandate that all carriers provide the appropriate signaling information to wireless carriers and perform billing and settlement.

CPP is associated with high wireless phone usage in countries that have adopted it. The challenges in developing CPP in the United States are much greater than elsewhere, but a concerted effort by carriers could overcome these barriers, resulting in an increase in wireless phone usage by most customers. This may increase the number of people who are willing to rely on a wireless phone as their primary communications device.