Key court date Tuesday in cell number portability battle Carriers oppose pending mandate to let users keep numbers when switching

For years, U.S. cell phone carriers have fought efforts to cureone of the nagging complaints of their customers: They can't keeptheir phone number if they switch to another service provider.

But as a key court date in the dispute approaches Tuesday, some ofthe cellular companies have adopted a tactic that puts them squarelyat odds with their land-line rivals. Now, these wireless carriers saythe Federal Communications Commission's pending requirement mandatingsuch "number portability" should also force land-line carriers to letcustomers switch their traditional home phone number to a cell phone.

If the FCC agrees, the new position by the CellularTelecommunications & Internet Association, the industry's tradegroup, could accelerate the trend of people dropping their wiredservice and going completely wireless.

Industry observers say the stakes couldn't be higher as the FCCworks to require cellular number portability by Nov. 24. Althoughcarriers are reluctant to acknowledge it, portability could cause adramatic increase in "churn," the rate at which customers ditch theircell service for a competitor. That would increase costs for thealready profit-challenged cellular industry and could spark anotherround of price wars.

"It's basically the nightmare before Christmas" for wirelesscarriers, said Roger Entner, an analyst with Yankee Group, a Bostontechnology consulting firm. He forecasts that increased churn broughton by number portability will cost the industry $3 billion in thefourth quarter this year and the first quarter next year due to sales-related expenditures such as increased commissions and phone-purchase subsidies.

The cellular industry is still fighting to prevent portability--which has already been delayed three times--from happening at all. Atnext week's hearing, industry lawyers are scheduled to appear beforethe U.S. Court of Appeals for the District of Columbia Circuit, wherethey will argue that the FCC doesn't have the legal authority toforce them to transfer numbers.

The cellular industry has long argued that implementing thetechnology to make portability possible is costly. But industryexperts say carriers have already spent a significant portion of themoney needed to make the changes. The real reason behind carriers'opposition--and their new attempt to spread the requirement totraditional carriers--is the fear of losing customers.

Keeping down customer defections is vital: It generally takesnearly a year for a carrier to earn its money back from the cost ofacquiring a customer. The average customer stays with a carrier forroughly three years, translating to two years of operating profit.But if monthly churn rises from its current level of 2.8 percent to,say, 6 percent, it means a carrier's profitable period could bereduced to as little as four months before the subscriber moves onand the carrier has to start the process all over.

Currently, land-line subscribers can switch their numbers to cellphones in only very limited instances when their land-line carrier's"rate center" is in the same location as their cellular carrier's.

Consumer groups want as much portability as possible to promotegreater choice. "We need wire-line-to-wireless portability, becausewireless services are the only real competition we're gong to haveagainst the wire-line monopolies in the near term," says ChrisMurray, legislative counsel for Consumers Union.

Wall Street Journal