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June 10, 1999

Separate Statement
Commissioner Susan Ness

Re: Calling Party Pays Service Offering in the Commercial Mobile Radio Services

Commercial mobile radio services ("CMRS") are one of the great success stories in communications. In the 1980s, cellular service brought a fundamental change to communications by adding the convenience of mobility. In the 1990s, Personal Communications Services ("PCS") have added the considerable benefits of competition and innovation.

Today, in most markets, consumers can choose among a variety of carriers, using several different technologies, and each carrier generally offers an array of service plans tailored to subscribers' diverse needs. There are plans that meet the unique needs of high-volume customers, and others that serve those who want a wireless phone only for use in emergencies. There are plans that offer free phones. There are plans that allow for nationwide "roaming." There are plans that provide Caller ID, voice mail, text messaging, and other vertical features. There are plans that eliminate all traditional usage charges. And on and on and on.

I have been delighted to see CMRS competition, innovation, and investment intensify substantially during my tenure as a Commissioner. Given these salutary developments, I firmly believe that any regulation in this market should be much more limited than in the case of markets where competition has not yet progressed to the same degree. I am inclined to give the industry wide latitude to experiment with additional features and options.

It is in this spirit that I support the Declaratory Ruling and Notice of Proposed Rulemaking that enables the industry to establish Calling Party Pays ("CPP"). I believe this may be a valuable option that will drive per-minute CMRS rates still lower, and CMRS subscribership still higher. But there are issues that need to be considered before we adopt any final rules. In particular, I hope commenting parties will address the question of how competition will constrain the charges imposed on calling parties. As we noted in the Access Reform docket, the ability to terminate a call is not necessarily subject to the same competitive pressures as originating access can be.(1) Will competition -- along with appropriate notification procedures -- nonetheless suffice to ensure that the rates charged to calling parties are reasonable?

Also, I hope parties will help us assess certain other issues. Will CPP enhance or diminish the substitutability of wireline and wireless services? Today, most local telephone service is unmetered; no additional charges are imposed for calls to local numbers. How will wireline customers react if they cannot complete a local call to a wireless customer except by agreeing to pay an additional charge? What is the relationship between any such charges and the charges the CMRS provider already collects from the calling party's carrier under our reciprocal compensation regime? How will CPP affect businesses and other institutions that use PBXs or Centrex services, where the individual who places the call may not be the one responsible for paying the charge?

Finally, we need to carefully consider the respective responsibilities of federal and state regulators. Although we have a special jurisdictional responsibility with wireless services, state regulators are closer than we are to consumers, and they have primary responsibility for local telephone services. As wireless services increasingly become a substitute for wireline services, we need to work closely and cooperatively with our state colleagues to make sure that their concerns are appropriately considered.

I look forward to reviewing the record on these and other issues, and to moving forward so that an industry that has served the American consumer extraordinarily well can continue to do so.

1. Indeed, after investigating the charges imposed on wireline calling parties, OFTEL, our counterpart regulatory body in the United Kingdom, ordered a 25 percent reduction in the prices that were charged consumers to terminate a call on a wireless carrier.