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Wireless would rather fight than switch

Cell phone companies argue the FCC's upcoming mandate that would allow customers to keep their phone numbers when they change carriers.

Cell phone companies on Tuesday asked an appeals court to overturn a requirement that cell phone subscribers be allowed to keep the same telephone number when changing carriers.

Number portability, as the Federal Communications Commission calls its mandate, will take effect Nov. 24--barring any court orders to the contrary.

The Court of Appeals in Washington D.C. will likely publish its much-anticipated decision several weeks from now, industry insiders say.

The court's decision may end up being "one of the most important decisions the industry will face this year," Tom Wheeler, president of the Cellular Telecommunication and Internet Association, said in an earlier interview. Members of the CTIA, the cell phone?s leading lobbying group, were among the observers at Tuesday?s hearing.

What U.S. carriers fear most about number portability is a dramatic increase in "churn," or the percentage of customers who change carriers when their contracts end. They cite evidence from Hong Kong, where wireless carriers made number portability available beginning in 1999. Churn, which is measured by percentage of customers leaving in a month, soared to about 10 percent when number portability first became available. The typical churn is about 3 percent per month.

Various surveys back up carrier claims. Anywhere between 15 percent and 45 percent of U.S. wireless subscribers say they would more readily change carriers if they could keep their own cell phone numbers.

In court Tuesday, lawyers for the carriers argued that the regulation creates an unfair financial burden on them and that the FCC doesn't have the legal authority to enforce it. Both are familiar refrains for carriers, which have used the same arguments against other FCC requirements, including enhanced 911.

But attorneys for the FCC, supported by consumer groups, argued that not only does it have the authority but that the regulation itself will help bring about more competition in the cellular industry as carriers try to retain customers with newer and better services.

The FCC also argued that number portability is part of a one-two punch of requirements to help conserve the shrinking pool of 10-digit phone numbers assigned to North American wireless users. Billions of telephone numbers are assigned to the continent, and new ones are due to run out by 2012.