If you’re like a majority of Americans, a 10-digit number is integral to your identity. No, not your Social Security number—it’s your cellphone number (or, for some, your home phone number). It’s a number that is immensely troublesome to change if, for example, you want to switch to a cheaper or more reliable telecom carrier.
It used to be expensive, too. Years ago, high switching costs motivated Congress to require a system of local telephone number portability. Since 1997, consumers have been able to keep their phone numbers when changing telephone service providers. Roughly one in 20 phone numbers are moved between telecom carriers each year. This makes it far easier for consumers to switch providers, thereby improving competition and consumer choice. But now that right is in jeopardy.
Like net neutrality (at least, before John Oliver showed up), number portability appears to be an arcane and technical issue that can’t possibly be all that relevant to consumers on a day-to-day basis. In fact, seamless and neutral number porting between the nation’s roughly 2,000 telecom carriers is not merely a great convenience for consumers, but also a pillar of competition policy. T-Mobile’s “un-carrier” campaign would not be exerting nearly as much downward pressure on mobile phone prices if consumers couldn’t keep their longtime phone number when they switched carriers.
One economist recently estimated that number portability has resulted in $8 billion to $10 billion in consumer benefits. This system—the Number Portability Administration Center, or NPAC—is currently run by Neustar, a company operating under strict neutrality requirements to prevent any conflicts of interest when customers switch from one telephone provider to another. The same NPAC system is used by law enforcement and public safety agencies to trace calls from criminal suspects, locate emergency callers, and reroute calls during disasters.
But the future neutrality and reliability of the NPAC system have suddenly been cast into doubt. On March 26, the Federal Communications Commission is set to approve a proposal to switch the NPAC contract to a subsidiary of Ericsson, a Swedish telecom equipment manufacturer with deep commercial ties to the largest telephone carriers. Although Ericsson may have bid lower than Neustar, it remains unclear whether its bid includes the services that small- to mid-size carriers and law enforcement agencies consider essential. If it does not, these entities will need to either pay additional fees or find an alternative source.
Smaller carriers have raised concerns about the disproportionate costs and risks of disruption they face during an NPAC transition. They are also worried about how the switch could affect their ability to compete, thereby raising public interest implications for consumers and other stakeholders.
Local public safety and law enforcement agencies, as well as members of Congress, have registered concerns about losing current number-porting services they rely on today. For example, law enforcement agencies access the NPAC database approximately 4 million times per year, often to track suspects whose phone numbers have been ported. That tracking service is provided at the NPAC administrator’s discretion. Meanwhile, federal agencies have noted national security concerns about transitioning to a foreign-owned vendor.
I don’t know which entity the FCC should select to operate the NPAC. But in some ways, that’s less important than the process the commission will go through. Before approving a vendor, the FCC should reconsider the future role of the number portability system and of the NPAC administrator with respect to market competition, public safety, and the IP technology transition.
The NPAC should operate impartially with a focus on serving the public interest—in other words, to be neutral. Smaller carriers argue that appointing Ericsson would threaten competition, and they have a point. Ericsson’s largest customers are the dominant telecom operators, which obviously aren’t eager for their customers to be able to easily switch providers.
Getting number portability right is of heightened importance in the midst of the nation’s ongoing transition to IP-based telephone networks, like Vonage and Skype, rather than the traditional routing through a telephone company’s switching facility. With the shift to Web-based voice calling already underway, some phone companies are asking the FCC for the permission to transition their networks. But Ericsson seems intent on replacing the NPAC with third-party registries for IP-based networks. Private registries might lead to a proliferation of less secure and more costly registries after the IP transition.
If the FCC votes to approve Ericsson as the new NPAC vendor, it should at least adopt two safeguards: First, the commission should appoint an independent overseer for the transition to certify that costs for small- and mid-size carriers are reasonable and that the carriers are receiving the same services as now and of the same quality. Second, the FCC should put the negotiated contract and scope of work out for public comment before final approval, since most people have no idea what is in the contract.
Finally, the FCC should address one of the biggest number portability challenges that hinders regional and rural carriers from competing, which is the inability to allow new customers from outside their service area to effectively compete against national providers. For more on this situation, read this report that I authored for New America’s Open Technology Institute. (Disclosure: New America is a partner with Slate and Arizona State University in Future Tense.)
Rather than moving forward based on an incomplete record, the FCC should take the time needed to fully evaluate the future role of the local number portability administrator, and the implications of awarding the NPAC contract to a new company, through a public notice and comment rulemaking proceeding. Like network neutrality, a neutral and comprehensive number portability system is critical to maintain competition and consumer choice in telecom services.