WASHINGTON-The American novelist Edith Wharton once noted the only thing that distinguishes vice from virtue is point of view. Some might say her comment is an apt description of the current debate about whether the U.S. wireless market should adopt Calling Party Pays (CPP) as a nationwide billing option.
CPP so far has been implemented or trialed on a very limited basis in the United States. And according to a July 1997 white paper from the Cellular Telecommunications Industry Association (CTIA), “CPP appears to be available only as an intraLATA service, and not effective between different [local exchange carriers]. In other words, a CPP call can originate on a given LEC’s network, but cannot transmit to another LEC’s network and thus to a [wireless] subscriber.”
Advocates argue that CPP, which is the billing norm in most European and Latin American wireless markets, would stimulate the growth of wireless service in the United States. If CPP were a nationwide option, they say, subscribers would give out their wireless phone numbers more readily and leave their phones on. Consequently, minutes of use would climb, and wireless service would get a lot closer to achieving its objective of delivering “anytime, anywhere” communications.
Other people, while not necessarily opposing the concept of CPP, question whether it can work in the U.S. market. Relative to Europe and Latin America, they say, the United States is a much more complex arena, with its dual layers of state and federal regulations and its huge mix of wireless and wireline carriers, technologies and marketing strategies.
In addition, they point to the entrenched American perceptions of how wireless service operates. Ever since cellular first became available in the early 1980s, both wireless and wireline customers have been accustomed to the “mobile party pays” practice. The marketing challenge to reverse that, the doubters argue, would be enormous.
Managers at BellSouth Cellular Corp. are among those uncertain of CPP’s chances for success in the United States. Although BellSouth offers CPP in all nine of its Latin American operations, it currently does not offer it in any of its domestic markets. Chris Mangum, senior manager of strategic development and CPP project manager, said the carrier did try the CPP billing option in Honolulu.
“When we finally shut it down, we had about eight subscribers. It was not successful at all,” he said.
For wireless subscribers concerned about cost control, Mangum pointed out that CPP is not the only way to go. He said they can use “the first-incoming-minute-is-free” option, as well as Caller ID and programmable call-blocking to help decide whether to accept-and pay for-incoming calls.
Yet in at least some U.S. markets where wireless customers started out with CPP, it has proven to be a resounding success.
Southwestco Wireless, a Bell Atlantic Mobile subsidiary, has offered CPP as an option in the cities of Phoenix and Tucson, Arizona; and Albuquerque, New Mexico; for more than 10 years.
Although company President Greg Klimek declined to reveal the percentage of his customers that have chosen CPP, he does say the numbers are material.
“As wireless service became more popular, CPP became a generally accepted business practice,” he said. “[Wireless] customers want this service, and [landline] callers want this service,” primarily because it gives both landline and wireless subscribers a choice.
For wireless subscribers, CPP is a way to manage costs. Landline users, on the other hand, can opt to call someone’s landline phone, leave a voice mail and wait for a return call-or they can choose to pay for a call to that person’s cell phone and reach him or her right away.
Klimek said he thinks CPP would succeed on a national basis if the Federal Communications Commission (FCC) were to establish a national service standard, similar to the current wireless roaming standard.
“I think CPP could be managed much in the same way as roaming is, and I think that as long as customers have the choice of whether to place that call and whether to be billed, this will grow tremendously in popularity,” he said.
Currently, the FCC is looking into whether and how CPP should be implemented nationally in the United States. As part of that inquiry, CTIA argues the FCC needs to do only two things:
Establish a uniform nationwide process for notifying callers they will be billed for calls to wireless phones; and
Assert federal jurisdiction over CPP, which, of course, often will cross state lines.
Bob Roche, CTIA assistant vice president for policy and research, emphasized the association has tried to build an industry consensus on the regulatory question. “Some [member companies] think the market provides enough flexibility so that they will be able to do [CPP],” he said. “Others think that more aggressive FCC action is needed. We as an association are kind of in the middle.”
Mangum of BellSouth countered that “there really is no clear-cut industry consensus on whether CPP is a viable billing option,” so the FCC should let the market decide. Although BellSouth continues to evaluate CPP, Mangum said the “window of opportunity” in the United States “is closing fast-and it may have closed already.”
In the long run, given that most Americans are accustomed to the mobile-party-pays approach, he said that asking the United States to switch to CPP “may be a bit like asking the British to drive on the right-hand side of the road.”
