Cellular One in the Washington, D.C., area has suspended roaming services temporarily in New York City while the company tackles an enormous cellular cloning problem.

Cellular fraud has been a major concern of the U.S. cellular industry for quite some time. The problem has mounted steadily and now costs the industry about $1 million a day, according to the Cellular Telecommunications Industry Association.

Cellular One in Washington, D.C.-Baltimore, a subsidiary of SBC Communications Inc., recently initiated a fraud management system to search for such suspicious use. New computer programs introduced this year helped operators analyze cellular calling signals for unusual usage patterns.

The results were overwhelming, according to the company. Cellular One discovered an especially high number of fraudulent calls originating from the New York metro area as well as northern New Jersey.

The company said it is shutting down roaming in the New York area for about three weeks to catch up on the backlog of cases.

“We’re being aggressive about fraud. This new system allows us to be proactive and detect the fraud before bills go out. It protects customers who don’t know their phone is cloned,” said Julie Rosenthal, a Cellular One spokeswoman. The company won’t say how many calls have come into question.

Using computer tools, thieves can capture and clone electronic serial numbers and mobile identification numbers. Criminals position themselves near bridges or highways and use an ESN reader to capture the numbers. The stolen numbers are cloned onto another phone, which is sold to someone who generally uses it until the theft is discovered and the number disconnected.

Customer billings generated by McCaw Cellular Communications Inc. in New York-with which Cellular One has a roaming agreement-went up nearly 300 percent in the past two months, according to Cellular One.

Until the company can get a handle on the problem, Washington customers roaming in the New York City area cannot receive incoming calls, which will instead be forwarded to voice mail or a recorded message. Outgoing calls can be made from New York, but only through an operator. Set-up charges and a higher per-minute rate will apply. Emergency 911 calls will continue to be free.

Rosenthal said the company’s fraud management program doesn’t use personal identification numbers, a method used by Cellular One’s Washington competitor, Bell Atlantic Mobile, in trying to stop fraud. Bell Atlantic customers key in a PIN number that is sent over a separate voice channel from the ESN-MIN number. For thieves to be successful, they would have to pair the two.

With the help of a special investigative staff, Bell Atlantic claims to have successfully brought down fraud by 35 percent.

American law enforcement has become aggressive, saying that counterfeit wireless phones are used in narcotics trafficking and in other illegal endeavors that require a communications network.

A New Jersey man was arrested earlier this year for allegedly programming legitimate cellular phone numbers and electronic serial numbers into other cellular phones. Undercover police in New York busted a cloning operation in Yonkers this summer and confiscated six computers and other devices used to clone. A San Francisco computer hacker was arrested this fall for allegedly creating counterfeit “lifetime” phones, which allow thieves to reprogram a cellular phone through its own key pad.

Proponents say a significant victory in the war against cellular fraud was won recently when Congress passed the Communications Assistance for Law Enforcement Act, which updated the legal language of the law to include important technological terms such as “electronic serial number” and “mobile identification number.”

________________________________________________________________________________________________Bidders and payments for Dec. 5 PCS auction QUALIFIED BIDDER UPFRONT PAYMENT

ALAACR Communications Inc. $32,965,000

AT&T Wireless PCS Inc. $78,376,043

American Portable Telecommunications Inc. $20,400,000

Ameritech Wireless Communications Inc. $4,777,935

BellSouth Personal Communications Inc. $6,884,538

Boston PCS Venture $5,671,628

CCI Data Inc. $18,000,000

Centennial Cellular Corp. $2,174,308

Century Communications Corp. $2,328,383

Cleveland PCS Venture $2,967,450

Comcast Telephony Services II Inc. $1,364,960

Communications International Corp. $28,200

Continental Cablevision Inc. $3,672,686

Cox Cable Communications Inc. $3,309,290

Data Link One Inc. $28,200

GCI Communication Corp. $1,129,364

GTE Macro Communications Corp. $50,000,000

Micro Lithography Inc. $2,000,000

PCS America L.P. $5,790,000

PCS PrimeCo L.P. $54,666,431

Pacific Telesis Mobile Services $56,000,000

PhillieCo L.P. $5,356,649

Poka Lambro Telephone Cooperative Inc. $1,791,915

Powertel PCS Partners L.P. $16,676,206

Satellite Broadcast Network Inc. $330,026

South Seas Satellite Communications Corp. $28,200

Southwestern Bell Mobile Systems Inc. $17,156,458

Western PCS Corp. $10,000,000

Windsong Communications Inc. $28,200

WirelessCo L.P. $118,437,865

Total $522,339,935


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