The FCC predicted the effects of a delayed PSAP implementation in a 1999 rule revision, which said: “The benefits of ALI (automatic location identification) to public safety will be realized only to the extent that PSAPs upgrade their systems to receive and use the additional information ALI provides for 911 calls.” What
no one foresaw was the crisis in PSAP funding. CTIA’s request to the FCC contends that the lack of widespread Phase II E911 capability in so many U.S. communities is one of the primary reasons the public has failed to exchange old wireless handsets for new GPS enabled equipment as quickly as expected.
The primary hurdle to handset exchanges is that Phase II E911 service is not yet available in most U.S. communities. According to Michael Altschul, CTIA’s Senior Vice President and General Counsel, the lack of PSAP deployment constrains carriers’ ability to convince customers to exchange their old handset for a
new model with advanced location capabilities. Even if wireless customers go to the
trouble to acquire location-capable handsets, they know that many PSAPs will not be able to use the data the handset generates. Absent that threshold incentive, many users are satisfied with their trusted older cell phones and are reluctant to change.
Happy to Stay Put
There are other factors in the E911 mix that are preventing carriers from meeting the 95 percent deadline by the end of the year. In 1999, when the FCC established the December 31, 2005 deadline, it was based on the wireless industry’s average customer churn rate at that time. The Commission found that with an admittedly optimistic churn estimate of 24 percent per year (i.e., 2 percent per month),
and with high projections of new sales and retrofits, 100 percent of handsets would be ALI-capable within three years, “without extraordinary measures being taken by carriers.” The Commission also cited another report estimating 25.63 percent annual churn leading only to a 73 percent penetration level over four years. As befits a competitive industry, the wireless industry has focused on increasing customer satisfaction (and lowering churn) below the rates estimated by the Commission. In fact, the churn rate has decreased, indicating customers are more satisfied with their carrier’s service and staying with them, and their wireless devices, much longer than anticipated. There is also a reluctance among many wireless subscribers in rural areas to turn in their 3-watt analog handsets in favor of less powerful digital devices that might not provide them comparable coverage. An additional complication is so-called “peace-of-mind” subscribers, consumers who use their devices sparingly and don’t want to learn the functionalities of a new handset nor have to cope with such tasks as the transfer of frequently called numbers or other contact information.
