Federal telephone regulators are preparing to let wireless carriers charge people for making calls to cellular and PCS phones, hoping to boost competition with land-based local phone networks.
Although the use of mobile phones has risen dramatically, few people have fully replaced their land lines with cellular or PCS units -- in part because under current rules, the phone owner pays both for calls made and calls received. Mobile phone use in the United States lags behind Europe.
But Federal Communications Commission Chairman William Kennard said Tuesday that he had studied so-called 'calling party pays' system in use in Europe and was ready to move forward with a similar system for the United States.
"It's time for us to find a way to implement a calling party pays system in this country," Kennard said in a speech at the Cellular Telecommunications Industry Association's annual conference in New Orleans.
"Only 5 percent of all calls are now made on mobile phones. I think that number would increase dramatically with a calling party pays system."
The FCC is likely to issue proposed rules in May or June for allowing wireless carriers to implement calling party pays systems, an FCC staff person said. However, two major issues are yet to be resolved, the staffer added.
First, the agency needs to determine what notice a person calling a mobile phone customer would receive about the charges they are about to incur. Unlike calling another land-based number, which usually is covered by a customer's flat rate monthly charge, calling a wireless phone user could result in charges ranging anywhere from 10 cents to US$1 per minute.
Also to be determined is how billing and collection will be structured for calling party pays. Some wireless carriers want the FCC to require local phone companies to do billing and collection for calling party pays, but others are willing to rely on third-party billing companies.
"It's going to be a big proceeding, a difficult proceeding," the FCC staffer said.
Copyright© 1999 Reuters Limited.
