FCC to Punish Big Carriers Falling Short on Handset Mandate
The FCC is ready to act selectively against big wireless carriers for missing a Dec. 31, 2005, requirement that 95% of cellphones used by customers be location capable, sources said Tues. The extent of penalties is unclear. Carriers have been contacted by the Enforcement Bureau, sources confirmed.
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Chmn. Martin reportedly urged giving some carriers waivers but denying waivers to others “based on the severity of the problem,” a regulatory source said. “My sense is they looked at the penetration levels and then made a cut,” the source said: “All the denials are being pushed to enforcement.”
“Tier one carriers are anxious,” a 2nd source said, citing “rumors about forfeitures.” A 3rd source said: “The FCC looks like it may be lining up to get tough on this issue, especially since it hasn’t cut the smaller carriers a whole lot of slack.” Sources said a heavy wireless agenda at Wed.’s FCC agenda meeting means the orders, which began circulating early last week, still are getting Commission office review.
Martin told us last week the FCC likely will address petitions for waiver carrier by carrier, though he said he circulated the orders together since they present “similar issues” (CD April 6 p5).
Of the largest carriers, Verizon Wireless, Sprint Nextel, U.S. Cellular, and Alltel offer handset-based E-911 solutions, potentially rendering them subject to a notice of forfeiture for noncompliance. Carrier penetration is all over the board. Sprint Nextel still lags behind peers, remaining well below 95%. But Verizon Wireless will report to the FCC it hit a 94.6% penetration level at the end of March. Cingular and T-Mobile offer a network-based E-911 solution and wouldn’t be affected.
Though CTIA and the Rural Cellular Assn. (RCA) last summer asked the FCC for relief from the Dec. 31 deadline (CD July 5 p1), the Commission never responded formally. CTIA and RCA argued that when the FCC set the mandate it didn’t expect carriers to reduce churn to today’s low levels, meaning fewer subscribers than expected are trading in old handsets.
Older subscribers tend to keep familiar phones to avoid having to program numbers into new phones, CTIA officials said. And many cell users buy accessories, from charges to ear buds to car kits, left useless by new handsets. Carriers are limited in what they can tell customers about the advantages of buying new handsets. And some carriers have rural users on a legacy analog network who don’t want to upgrade because they believe they get better coverage via analog handsets in remote areas.