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Witness Testimony
The Honorable Steve Largent
An Examination of Wireless Directory Assistance Policies and Programs
Chairman Upton, Ranking Member Markey and members of the Subcommittee, thank you for your invitation to testify this morning regarding, "An Examination of Wireless Directory Assistance Policies and Programs." I welcome the chance to provide CTIA's views on this issue, and specifically, the development of a wireless 411 service. Let me preface my remarks by acknowledging the legislation that Congressmen Pitts and Markey have put forward, H.R. 3558, and their well-intentioned efforts. However, I sincerely believe that this bill is not needed and does have unintended consequences. The wireless industry has a proven track record of protecting our customers' privacy, and we have made a concerted effort while developing this directory assistance service to safeguard our subscribers' personal information. Moreover, the service is still in the planning stages. It is extremely premature for Congress to issue a government mandate on a service that has yet to be made available to our customers. If there are wireless customers who have serious reservations about this service or who just do not want to be bothered with the choice of opting-in, they have the option to switch to a carrier that is not participating in the wireless 411 service. The wireless industry has a great story to tell and I feel fortunate to be here today to tell it. Currently, there are more than 168 million wireless customers in this country as compared to roughly 33 million when the 1996 Telecommunications Act was signed. This represents a phenomenal growth rate of 425 percent. And why has our industry enjoyed such a dramatic growth rate? Because of intense competition among service providers, a growing number of service options, technological advancements, and prudent, forward-looking government policies that allowed the market to determine the fate of the industry rather than government mandates. However, with success, be it athletic, political, or business, comes greater scrutiny. It has become apparent to me over the past 11 months that the wireless industry is not being viewed as the hyper-competitive industry that we are. To set the record straight there are currently more than 180 wireless service providers who compete in the U.S. An impressive 93 percent of Americans live in markets served by four or more operators, and a nearly ubiquitous 98 percent of Americans live in a market served by three or more operators. Whether urban or rural, American wireless consumers have choice and the power to exercise it. Clearly, wireless customers have a multitude of service providers to choose from in the wireless market, and as a result, receive more value for their wireless dollars. Last year, consumers increased their individual usage of voice minutes by 22 percent while paying 13 percent less per minute according to data released last week by the FCC's latest report on competition in the wireless industry. And wireless customers are now using their phones for a multitude of new purposes - to take pictures, play games and music, and to exchange more than two billion text messages each month. Customers not only have carrier choice, but also choice among service features. Accordingly, another potential choice we want to offer our customers is a wireless 411 service, but only for those customers who want their number listed. Many wireless customers, particularly those in small businesses who spend most of their workday away from an office and a landline phone, rely upon their wireless phone as their primary business line. We believe these customers would welcome the option of having their wireless numbers be made available in a 411 service. A survey conducted by the Small Business Administration in March of this year entitled "A Survey of Small Businesses' Telecommunications Use and Spending" confirms that wireless services are now used by 73% of small businesses, and 25% of all small businesses spend more for wireless services than they do for local and long distance telephone services combined. Unfortunately, those small businessmen and women who use their wireless phones as their primary business line currently have no other choice but to pay to have their number listed in the wireline phone directory if they have that option at all, which many do not. Seeing this void in the marketplace, in February 2002, the wireless industry first contemplated the concept of providing its customers with a wireless directory assistance service. During the past two and a half years, CTIA serving in the role of a coordinator and six of the seven largest carriers: AT&T Wireless, Cingular, Sprint PCS, Nextel, T-Mobile, and Alltel have proceeded with a thoughtful approach to provide a service that our customers want and currently cannot receive. Over 8 million Americans have "cut the cord" and use their wireless phone exclusively; many have no way to have their numbers listed and those that do must incur a cost. Unlike the traditional landline directory, which lists all customers by default, the wireless 411 service being developed will only include consumers who affirmatively choose to participate. Participating wireless carriers will ask their customers if they want their number included. If they do, these numbers can be added to the existing directory assistance database and be made available by the 411 operator to customers who specifically ask for it. If a customer chooses not to be included, they will not have to do anything - the wireless 411 database will only include numbers that customers affirmatively add to the list - all other numbers are automatically excluded. The only way a number will be listed is if the customer specifically asks that it be made available. In addition, unlike the current wireline directory system, all of the national wireless carriers have indicated they will not charge customers who elect to remain unlisted. A mutual concern of both the sponsors of H.R. 3558 and the wireless industry is the issue of a published directory. Let me put to rest any misperception that there will be a published directory associated with this service. Wireless numbers from this database will not be published in a directory. Additionally, the aggregated database of wireless numbers will not be sold to any third-party, nor will it be available anywhere on the Internet. The wireless industry has historically advocated for strong privacy measures for its customers such as prohibiting the use of automated systems to dial wireless phone numbers and encouraging its subscribers to register their wireless number on the Federal Trade Commission's "Do Not Call" list. Likewise, privacy concerns are paramount in this initiative. We have attempted to make every assurance that there is no invasion to a customer's privacy as a result of their inclusion in this database. Moreover, consumers who choose to be listed will have an added protection against telemarketers because of the current restrictions on the use of automated dialers calling wireless numbers. It is envisioned that the wireless 411 system will operate by having participating carriers contact their customers and offering them the choice of participating in the service. If they choose to opt-in, their wireless contact information will be confirmed by the carrier and sent to the database aggregator, Qsent, at which point Qsent will integrate that information with the opt-in listings provided by wireless customers of all of the carriers who support this service. By providing a single aggregated database for opted-in wireless listings, operators can make a single query to the Qsent database when a customer calls 411 (from either a wireline or wireless phone) to request a wireless listing. While in Congress, I was privileged to serve on this Committee and worked on several privacy-related bills dealing with spamming, slamming, cramming, Do-Not-Call, and the privacy title of the Gramm/Leach/Bliley Act. All of those bills were introduced as a result of bad corporate behavior. With the legislation we are discussing today, there has been no bad behavior; in fact, the behavior has been exemplary, as the wireless industry has sought to fashion the service in a manner most protective of customer privacy. Moreover, as I keep making the point, the wireless industry is such a hyper-competitive business that if any carriers that choose to participate in a wireless 411 system betray the confidence of their customers, as sure as I am sitting here, those customers will vote with their feet and switch to another service provider. We believe the wireless 411 service is yet another example of the efforts of wireless companies to provide their customers with choice. It will be opt-in only and participating carriers indicate there will be no charge for opting out. There will be no published directory, no Internet access to the numbers, nor will there be any third-party sale of the numbers. The multitude of service and feature options and calling plans, better service for lower prices, free voicemail, caller ID, and 3-way calling are all competitive responses undertaken to satisfy consumer demand. Wireless 411 is one more attempt to provide a service to a growing number of wireless customers. We know the service may not be for everyone, but many have asked for it and we urge you to allow these ultra-competitive companies to offer the wireless 411 service as they propose. Customers truly are the ultimate regulators in a competitive market and they are capable and willing to decide for themselves whether a service is viable. In closing, as someone who used to sit on the other side of this dais, I know the importance that your constituents place on protecting their privacy. I also know that the wireless industry has a proven track record of supporting legislation to protect its customers' privacy. My concern with H.R. 3558 is that it offers no more privacy protection than the wireless industry's own proposed 411 service, but if enacted, the legislation may deter future innovation and industry initiatives for fear government mandates will step in even before new services get off the ground. I welcome any questions you may have. |