Written by EVE TAHMINCIOGLU and originally published in The New York Times on February 22, 2004.
MELANIE BROEMSEN, a technology specialist from Canton, Ohio, has moved several times over the last few years, and almost every time she has had to set up new land-line telephone service or change numbers. She did neither when she moved to another part of town in December.
Just a month before she got her new apartment, the federal government made it possible for her and other people who live in the 100 largest metropolitan areas to keep their land-line home numbers when they switch their regular phone service to a wireless carrier. ”I wanted the stability of keeping my home number for me, my family and friends,” Ms. Broemsen, 33, said. ”Changing my land-line into my cell number, and therefore only paying one bill, seemed like the perfect solution.”
It could also prove beneficial in the long term. Telecommunications experts predict that cellular service will improve significantly over the next few years as companies move toward consolidation. Last week, Cingular Wireless agreed to acquire AT&T Wireless for $41 billion; the deal would create the largest wireless company in the nation. Bigger players, the experts say, are likely to complete more network upgrades and service improvements, which ultimately could mean fewer dropped calls, clearer reception and larger coverage areas for customers. But they also warned that fewer competitors could mean fewer deals down the line.
For now, though, Ms. Broemsen sees financial benefits to going wireless. She said that disconnecting from a land line saved her about $30 a month. (It would have been more, she said, had she not decided to upgrade her wireless service by adding calling minutes to her plan. The extra minutes were needed because she would no longer have a land line.)
When the Federal Communications Commission announced its new policy on phone-number portability last year, most attention was focused on how consumers could transfer their cellphone numbers from one wireless carrier to another. Adam Guy, an analyst at the Yankee Group, a market research firm, said that happened because the federal government did not issue its ruling on the land-line number transfers until just before the portability rule took effect on Nov. 24.
Of the nearly 1.5 million numbers that have been transferred, only about 36,000 have been from land-line to wireless phones, the Federal Communications Commission said. But Mr. Guy and other analysts predict that more consumers will choose to keep their land-line phone numbers, which some have had for decades, and switch to wireless service altogether as the service improves and after realizing how much money they can save.
In the Telecommunications Act of 1996, Congress tried to foster competition by opening the regional Bell system to smaller competitors. But consumers still have few choices in land-line service. As of 2002, only 13.2 percent of the nation’s 188 million local phone lines were served by competing carriers, a 2003 report by the Federal Communications Commission said. The small amount of competition is evident in the cost of service, analysts say. The average cost for local services, including features like call waiting and caller identification, and excluding long distance, has risen 25 percent, on average, since the Telecommunications Act was passed, according to the Bureau of Labor Statistics, versus general inflation of 17 percent over the same period. Even customers who subscribe to bare-bones service had rate increases of 17 percent, on average. The F.C.C. report found that basic local monthly charges for residential phone service averaged $23.38 in 2002, up from $19.95 in 1996.
By contrast, the cost of cellphone services has fallen nearly 30 percent since 1998, when the Bureau of Labor Statistics began tracking such rates. Today, a cellphone user can get large ”buckets” of calling minutes in plans starting as low as $30 a month, and many include long-distance service and free calls at night and on weekends, noted Allan Keiter, president of MyRatePlan.com, a Web site that compares wireless plans. In most cases, he added, features like caller ID and voice mail are considered standard in wireless plans but as extras on local land-line service.
Wireless providers keep upping the ante. In late January, Verizon Wireless announced that it would allow unlimited calling between its subscribers. AT&T Wireless does the same. Cingular Wireless quickly introduced a similar plan, limiting the calls to 6,000 minutes a month.
Local phone companies, though, say they are not afraid that subscribers will cut their land lines en masse. And in many cases, the local companies have ownership stakes in wireless carriers anyhow.
Jim Smith, a spokesman for Verizon Communications, which owns a controlling stake of Verizon Wireless, said the number of customers who had transferred their home numbers to wireless was minuscule. Michael Coe, a spokesman for SBC Communications in San Antonio, agreed there had not been ”a noticeable impact.” (SBC and BellSouth own Cingular Wireless in a joint venture.)
STILL, a survey by the Yankee Group last year of nearly 2,500 wireless subscribers suggested that the all-wireless movement was gaining some momentum. Four percent of the respondents said they did not have a home phone in 2003, up from 3 percent in 2002, and 15 percent planned to replace their land-line phone within five years. (Mr. Guy estimated that 2 percent of all American households now have no home phone service and rely only on wireless.)
Some local phone companies have been offering incentives to keep customers. SBC, through Cingular Wireless, recently introduced FastForward service, which reroutes all cellular calls to the subscribers’ home numbers whenever they drop their mobile handset into a $40 cradle that doubles as a phone charger. The service costs $2.99 a month or is free with some packages.
Some people may be reluctant to cut the cord, however, after hearing about other consumers’ problems in doing so. Since number portability began, nearly 5,000 consumer complaints have been filed with the F.C.C. Five percent had to do with land-line-to-wireless number transfers, it said.
Although Ms. Broemsen said she was happy she went wireless, she said it took several weeks and many phone calls to switch her home phone number from SBC to Nextel Communications, her wireless carrier.
Neither company took responsibility for the delays. Dennis Koenig, a spokesman for SBC, said it had never received an order request from Nextel concerning Ms. Broemsen’s service. Nextel said only that transferring a land-line number to a wireless phone could take four weeks ”due to system processing with land-line telephone carriers.”
Besides dealing with delays, consumers should consider other factors before disconnecting their land lines, according to telecommunications industry experts:
Although consolidation is likely to improve service, land-line service still beats wireless in quality and reliability. The experts suggest testing a cellphone service to make sure it works throughout a home before signing up. Most wireless providers offer 15- to 30-day money-back guarantees to test coverage; usually, customers are liable only for the minutes used.
Future mergers may bring headaches, at least initially. Consumer groups are already warning customers of AT&T Wireless and Cingular to brace for problems — like billing errors and difficulties in reaching customer service representatives — that typically occur when two large companies combine operations.
Internet connections may be affected. Those who get access to the Internet via a phone modem or D.S.L. may have to find an alternative like a cable modem or a satellite Internet connection.
Cellphone batteries need recharging. Cellphones with color screens, for example, may require recharging after about 90 minutes of talk time, said Scott Ellison, an analyst at IDC, a research firm in Framingham, Mass.
Wireless plans often require a contract. Most cellphone providers make customers sign one- or two-year agreements to get the best deals on plans and phones, with penalties for canceling early. Land-line phone service usually requires no contracts.
Land-line phones are generally better for emergencies. Police and fire departments can pinpoint a caller’s location when an emergency call is made on a land line. While wireless phone companies have been required to adopt a similar service across their networks, Mr. Guy of the Yankee Group said that it would be a year or so before the service was rolled out nationally.
One cellphone may not be enough for a household. Buying a wireless phone for everyone at home may be too expensive. An increasing number of plans, though, offer free phones and a large amount of minutes that can be shared by family members.
Land-line service is better for local calling. Despite the high numbers of calling minutes that wireless companies are promoting in their plans, most land-line plans offer unlimited local phone calls — the bulk of the calls made by most consumers. Wireless companies typically charge local calls as part of the minutes used. The average consumer makes 700 to 800 minutes of local and long-distance calls a month, according to industry estimates. Industry analysts suggest that consumers who are considering going wireless keep a log of all their local and long-distance calls for one or two months to calculate how many minutes they use. That will help determine which plan is best for them, since it can be expensive for wireless customers who go over their allotted minutes. (And remember that incoming calls on wireless phones are typically charged as minutes used.)
JORDAN J. BALLOR, 25, a theology student from Kentwood, Mich., said he understood the drawbacks of going totally wireless. He was told by T-Mobile that the transfer of his home phone number to his mobile phone could take up to 90 days before it was completed. But his decision, he added, came down to dollars and cents. He said his wife, Amy, 23, an administrative assistant for a publishing company in Grand Rapids, wanted a high-speed Internet connection at their home but could not afford that service on top of their home phone and cellular bills. So when number portability became an option, the couple started the process of switching to wireless phone service and getting a cable modem for the Internet.
The couple had spent about $45 a month for land-line service and $25 a month for cellphone service, for a total of $70. (They did not subscribe to an Internet service.) They signed up for a family cellphone plan from T-Mobile at $49.99 and added cable modem service at $42. So, for $20 more a month, they will add high-speed Internet to their mix of telecommunications services.
”We will be able to keep our home phone number,” Mr. Ballor said, adding, ”We are getting a lot more now for spending a comparable amount of money.”