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Published Friday, June 11, 1999, in the San Jose Mercury News
'Caller-pays' bill system on wireless phones backed
FCC sees its proposal as a way to increase access by low- income users
BY DEBORAH KONG
Mercury News Staff Writer
If you're tired of paying for all those incoming mobile phone calls, you
could soon make your friends foot the bill.
Federal regulators Thursday moved to let wireless phone users make those
who call them pick up the tab, in an attempt to promote competition and
make wireless phone service more accessible to lower-income families.
Under the current system, most mobile phone subscribers now pay to place
and receive calls. The Federal Communication Commission's proposal,
which is supported by a major wireless industry group, would remove
regulatory obstacles to offering customers the new billing structure.
For instance, billable minutes that would have appeared on the cell
phone user's bill for incoming calls could instead appear on the
caller's bill.
FCC Chairman William Kennard said the new system could make wireless
service available to a whole new category of customers, including
families who are on tight budgets and can't afford mobile phones, and
people who turn off their phones to avoid paying for incoming calls. But
the change could mean higher bills at home for people accustomed to
calling mobile phone users without cost.
The new plan would also spur competition between wireless carriers and
incumbent local phone companies, helping to ''hasten the day when our
wireless phone might very well be our only phone (and) wireless is a
real substitute for wireline,'' Kennard said in a statement Thursday.
Industry analysts say traditional, wired telephones currently have an
advantage because consumers prefer predictable billing. Even users who
sign up for wireless plans with a large number of minutes per month run
the risk of using their phone more -- and having to pay extra for it.
San Jose resident Jeff Spector said he might be more likely to give out
the number of his personal mobile phone under the new plan.
''It's always in the back of my mind, 'I'm liable for this airtime,' ''
said Spector, who mostly uses his phone to speak with his wife and
children. ''This is my personal phone, not my work phone. Obviously I'm
a little more concerned about the bill.''
No details settled
The FCC is clearly interested in such a pricing system, but didn't
settle any details on Thursday and will now turn to seeking comments and
setting rules. It's expected to make a final decision late this year or
early 2000.
But Tom Wheeler, president of the Cellular Telecommunications Industry
Association, said the plan could open the door to new schemes of pricing
that allow some wireless customers to select a service that would
require callers to pay, others to specify which callers would pay, and
still others to continue paying for their wireless calls.
Bay Area wireless carriers said Thursday that they were open to the idea
of the new system, but still had some questions about how it would be
carried out.
''It could be a good option for some customers . . . that may be a
little apprehensive about signing up for service because of their
bills,'' said Cellular One spokeswoman Erin Eggleton.
But Eggleton also said the new pricing structure may not be the best
option for some users.
One might be Himanshu Sanghavi of Fremont, who said most wireless users
carry phones because they want to stay in touch and are willing to pay
the airtime charges to do so and that the new rules could confuse
people.
''For me personally, this plan would be of no use,'' said Sanghavi, who
gives his phone number mostly to friends and family. ''In most of those
cases, I think it would be impolite to ask them to pay for airtime
charges on my wireless phone.''
A key question is how people who made calls to a wireless customer would
be notified they have to pay. The FCC proposes a notification
requirement that would tell callers they are responsible for airtime
charges, the rates they'll pay and that they can terminate the call
before incurring charges.
But Sprint PCS spokesman Tom Murphy said he's opposed to something that
could put off customers. ''We absolutely do not want to see some ominous
recording come on that takes five minutes to explain what's going on,''
he said.
''We'd prefer to see something a little less obtrusive, a little more
user-friendly,'' such as a tone that indicates a customer is paying for
the call, he said.
Brad Hartfield of San Francisco, who uses his phone to talk with clients
of his technology and telecommunications consulting business, said he'd
hesitate to use the service for that reason.
''I have this phone to make it more convenient for people that need to
reach me and I don't want to add something that is either cumbersome,
because of an extra message they need to hear, or suddenly puts them in
a position of having to decide whether they want to pay for this call,''
he said.
What'll it cost?
Another issue is how much callers should have to pay. Wheeler said the
prices would probably be set by individual wireless companies, whose
rates can't be limited by the states and haven't been regulated by the
FCC.
A third issue is who would bill callers. Most carriers said the
responsibility should fall to the dominant local phone company -- in
California, that's Pacific Bell or GTE.
Wireless subscribers in the United States, who now number 75.2 million,
have been drawn by rates as low as 10 cents a minute and pricing plans
that charge the same rate for all calls, whether they're local or
long-distance.
The new ''caller pays'' system, widely used in Europe, could increase
the number of users, said David Kerr, Vice President of Wireless
Services at Strategy Analytics, Inc.
Kerr said the plan also would allow people to control their mobile phone
bills more easily. ''This opens up the market to all of the segments
with under $30,000 of income who are really struggling to justify
expenditures of $40 a month on cellular telephones,'' Kerr said. ''This
would cut their bill significantly. They can select when and how many
outgoing calls to make, but they will be free to circulate their
numbers.'' |
