Cell Firms Challenge FCC Rule

A lawyer for the wireless industry asked a skeptical federal appeals court panel Tuesday to overturn a potentially costly Federal Communications Commission rule that would allow cellular subscribers to keep their existing phone numbers when switching carriers.

The FCC rule, which experts say probably will trigger widespread defections among subscribers seeking better rates or service from rival carriers, is similar to a so-called number portability requirement that was imposed on traditional wire-line carriers in the mid-1990s.

The wireless industry rule is scheduled to take effect Nov. 24, unless the U.S. Court of Appeals for the District of Columbia overturns it.

Although the questions from the three appellate judges focused mostly on technical and procedural issues, telecommunications analysts gave the edge to FCC lawyer John Ingle over Andrew McBride, who argued on behalf of Verizon Wireless and the Cellular Telecommunications and Internet Assn.

“I think the FCC is highly likely to get wide deference from the court on this issue,” said Rudy Baca, an analyst for Precursor Group, a Washington investment research firm.

Alarmed that the FCC number portability rule would spur more subscribers to drop their service when their contracts end, the cellular association and Verizon, the nation’s biggest mobile phone carrier, challenged the rule as “arbitrary and capricious.”

About 27% of the nation’s 144 million cell phone subscribers already drop their service each year, a percentage known as the churn rate.

“The FCC lacks the statutory authority to implement number portability,” said McBride, arguing that the FCC could not implement a rule based on agency speculation that it would confer “some future benefit.”

But the judges repeatedly interrupted McBride’s arguments and questioned whether they had jurisdiction even to hear the appeal, noting that the case was not filed in a timely manner.