WIRELESS FIRMS FORM GROUP TO FIGHT REGULATIONS AND TAXES

Position New MyWireless.com as Champion of 'Consumer Rights'

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NEW ORLEANS (AdAge.com) -- In a maneuver that enhances its lobbying capabilities, the country's largest wireless industry trade organization has created a nonprofit "consumer group" to champion its cause with government policymakers.
30,000 attended the CTIA conference in New Orleans this week.
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The announcement was made yesterday at the CTIA Wireless conference in the Earnest M. Morial Covention Center here. CTIA: The Wireless Association, formerly known as the Cellular Technology and Internet Association, counts the top cellular service providers among its members and drew an estimated 30,000 attendees to this three-day event.

As part of its upbeat gathering, CTIA said the formation of a new lobbying group, MyWireless.org, was intended to give "wireless users the information and tools they need to make their voices heard with policymakers nationwide." Handouts explained that MyWireless.org was designed to counter the "powerful forces" that "are trying to shackle" wireless communications "with harmful regulations and heavy taxes."

Content and advertising
The conference and its issues have taken on new interest for the portion of the media, marketing and entertainment industries that believe wireless phone technology is evolving into a major new platform for the delivery of content and advertising to a vast and highly segmented new audience.

But the wireless industry faces a number of regulatory hurdles, some of which could impact how efficient it is as a marketing medium. In addition, some states such as California have proposed a consumer's "bill of rights" detailing, among other provisions, new regulations for billing consumers. The industry is fighting for federal regulation in order to prevent a morass of different state rules.

Additionally, the wireless industry is unhappy with the myriad state, local and federal taxes and fees that have been added to customers' bills, making the carriers, in effect, a "tax agency," as Stan Sigman, president-CEO of Cingular Wireless, put it.

Len Lauer, president-CEO of Sprint Corp., said, "We have bull's-eye on us," adding that "every time tax goes up, it hurts revenue."

At the same time, one of the key issues the industry fought last year has turned into something of a blessing, said Scott Ford, president-CEO of Alltel. The industry cringed at consumer demand for the ability of mobile phone customers to keep the same number when switching from one cellular service to another. Consumer groups complained that the cost and inconvenience of changing a telephone number -- for businesses and individuals -- discouraged consumers from taking advantage of better contract deals.

Improved customer service
"I was a No. 1 opponent of number portability," Mr. Ford said. However, he said its implementation did not result in a massive switching of customers or a carrier price war. Instead, the carriers concentrated on fixing their own problems. In fact, churn, or the movement of subscribers from one carrier to another, has stabilized. "I wonder if it ignited everybody" to improve customer service, Mr. Ford said.

Cingular's Mr. Sigman said carriers have not eliminated all their headaches. Consumers still have trouble understanding their phone bills and even using the features on their phones. Robert Dotson, president-CEO of T-Mobile USA, said carriers have a rush-to-market mentality he called the "Santa Claus factor," which puts shiny phones in customers' hands at holiday season each year without proper testing. "We're trying to be a little disciplined," he said.

During the session, Steve Largent, CTIA's president-CEO and once a congressman from Oklahoma, asked the five wireless leaders to explain "why consolidation is good for consumers." Mr. Dotson said it will result in "better networks and products across the board." Sprint's Mr. Lauer, whose company is in the process of a $35 billion acquisition of Nextel Communications, said that the acquisition of AT&T Wireless by Cingular is one of the elements enabling the industry to implement G3, or a next-generation wireless function that would allow for multimedia mobile phone capabilities, such as video.

Good year for wireless business
Overall, a new CTIA study released at the session reported a good year in 2004 for the industry. The number of U.S. wireless subscribers grew to 180 million, adding in 2004 as many subscribers as the total population of Texas. Americans' use of wireless devices exceeded 1 trillion minutes, up 33% from 2004. However, the average monthly wireless bill was $50.64, up only 1.5%, the CTIA study said.

During the conference, a number of attendees beamed with a bullishness about the wireless industry and a recent infusion of venture capital, comparing it to 1995, the year that marked the beginning of the dot-com boom. Wall Street analysts, however, are starting to become concerned about "creating another" Internet bubble in the telecommunications business, Sprint’s Mr. Lauer said.

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