The paging industry is gearing up for a fight over what one industry executive termed “one of the most important issues affecting our industry at this point.”
The comment refers to the Federal Communications Commission’s decision to adopt a per-call, carrier-pays compensation scheme for 800/888 number toll-free telephone calls.
On Oct. 7, a 28.4 cent charge per call was levied against owners of 800/888 numbers when such calls are made from a pay phone, to be paid to the appropriate pay-phone service provider.
Paging carriers and dispatchers prefer a caller-pays approach to this compensation order. Otherwise, they may have to raise the personal 800/888 number rates for everyone. Inexpensive service costs have been a mainstay for the paging industry. This new compensation scheme threatens to change all that.
Wayne Stargardt, vice president of marketing at PageMart Wireless Inc., summed up this concern.
“This is a major disruption of the level of service we’ve been able to provide our customers,” he said. “This significantly impacts our ability to deliver a low cost service, at least in the short term.”
AirTouch Paging alluded to a price increase as well. “Until we know what the options are, we have no plans at this point,” said Susan Rosenberg, manager of corporate communications at AirTouch Paging. “But if it’s implemented, we might have to revise our pricing structure.”
Much of this impact depends on the percentage of 800/888 number calls made from pay phones. The Personal Communications Industry Association said no real figures are available, but Rob Hoggarth, senior vice president of paging and narrowband personal communications services for the organization, said his industry sources tell him its “a significant portion of their 800 number business.”
Rosenberg called the rule “anti-consumer,” mainly because there is no way for paging carriers to block 800/888 number calls originating from pay phones. Paging carriers and industry groups insist call blocking technology is necessary for competition. They say that without call blocking, the 800/888 subscriber cannot negotiate for better rates with individual paging service providers.
Without the ability to block only certain 800/888 number calls, “the foundation of the FCC decision for a market-based rate doesn’t exist,” Hoggarth said. “Without targeted blocking, there’s no negotiating power.”
Because of this fact alone, Hoggarth believes the industry has a significant weapon with which to appeal, something PCIA is currently wielding. Since the new scheme went into effect Oct. 7, Hoggarth said PCIA is working on the most “expeditious course of action to see a response from the FCC.” As such, the organization is applying pressure at three fronts: the FCC, the courts and Capitol Hill.
The preferred scenario would be for the new FCC leadership to accept the industry’s petition to reconsider the rule, Hoggarth said. The deadline for filing that petition is Dec. 1. Also, the deadline to file an appeal to the rule in courts is in early January. Finally, the legislative lobbying effort at this point is focused on making connections with others affected by this ruling and together mount “a significant congressional campaign.”
At the very least, if the preferred calling-party-pays option is not accepted, Hoggarth said an acceptable alternative would be what he called a measured rate. The 28.4 cents per call is based on an average 5-minute 800 number phone call. Paging customers calling 800 numbers, however, use less than 2 minutes for an average paging-related call, Hoggarth said. “We would like it to reflect the amount of time people are actually using it.”
