AT&T Wireless drops cell phone plan
Last Update: 0:54 AM ET Sep 22, 1999
NewsWatch
NEW ORLEANS (AP) -- Want whoever calls your cellular phone to pay
the bill? It's not likely to happen in this country unless billing rules change
dramatically, industry experts and executives say.
AT&T Wireless tested the idea in Minneapolis over the summer, but got
so few takers that it quietly dropped plans for a national rollout.
In Europe and Asia, the caller generally pays, and
cell phones are almost extensions of home and
office phones.
Here, people who don't have pricey "big bucket"
plans that include hundreds or thousands of minutes
often keep the phones off to avoid paying for calls
they don't want.
"Of course, the calling party pays everywhere else
in the world. I don't know if that means there's
something wrong here or something right here,"
Sprint PCS vice president Jon Chambers told
about 100 people at a Personal Communications
Showcase panel discussion on caller-pays issues
Tuesday.
Douglas Brandon of AT&T Wireless, which had
announced in February that it planned to have a
caller-pays system nationwide by the end of the
year, was in the audience.
He told the group that when AT&T Wireless started the test in
Minneapolis, it charged callers 39 cents a minute, then cut it down to 25
cents a minute to try to attract more customers.
It did, but not enough.
"We have not rolled it out anywhere else. You can draw your own
conclusions from that about how profitable we think it would be," he said
in an interview after the session.
A few companies do have limited caller pays options, such as billing
long-distance fees to people who call from outside the receiver's local
area. But the systems have gaps and sometimes they can't identify the
caller.
The intense competition in the business is both the reason many
companies want caller-pays and part of the reason it won't be easy to get.
Most other countries either have telephone monopolies or a limited
number of companies.
Here, there are too many to count, said Alfred Boschulte, part owner and
CEO of a management consulting and engineering firm based in Reston,
Va.
Solving the billing problems this presents is "not impossible, but an
extraordinary challenge," said Boschulte, whose Detecon Inc. is a
subsidiary of a German consulting firm.
Customers won't use caller pays if it means they'll get a blizzard of bills,
and companies cannot afford that kind of billing, he said. It costs $1.25 to
$3 just to create, send out and process a bill, he said. "You cannot render
a bill for a 15-cent, 20-cent, 25-cent call."
Adding a line to an existing bill is much less expensive, he said.
In every country he's looked at, he said, local exchange companies work
with cellular companies on the billing. That isn't the case here.
"We have a large bottleneck," said J.G. Harrington, a partner in the New
York law firm Dow, Lohnes & Albertson.
Southwestern Bell, with tens of millions of customers in some of the
nation's biggest cities, will not bill for other companies, and other
companies seem likely to follow suit, he said.
They can do this because the Federal Communications Commission ruled
15 years ago, when the long-distance business was splintering, that it was
not supposed to regulate billing.
But Harrington said the question was very different then because
consumers had alternatives. He said the FCC found that people who
couldn't get a call billed to their home number could always use credit
cards.
But it would be impractical to require people to give their credit card
number every time they called a cell phone number - especially since
people often don't know they're calling cell phones, he said.
And if you're trying to collect on a 20- or 35-cent call, it doesn't make
sense to pay the 15 to 20 cents per line charged by telephone bill clearing
houses, Chambers said.
The FCC just began collecting phone companies' suggestions for
caller-pays rules, said James Schlichting, deputy chief of the FCC's
wireless bureau.
Wireless companies are equally divided about whether local phone
companies should be involved in billing, he said. Companies offering only
wireless want local exchanges to bill for caller-pays; companies offering
both wireless and standard service don't.
Schlichting said other key issues for the FCC to consider are establishing
a standard recording to notify callers that they will be charged and how
much; what wireless contracts should say about billing of such calls; and
whether rates on receiving calls should be standardized.
AT&T (T: news, msgs) shares dropped 9/16 Tuesday to 44 1/2.
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