Letter to CEO of Sprint Gary D Forsee
July 22, 2003
Gary D Foresee
CEO, Sprint
6200 Sprint Parkway
Overland Park, KS 66251
Dear Mr. Foresee:
I am writing to ask that Sprint reconsider its decision to raise its monthly wireless number portability (WNP) surcharge to $1.10 per month. While I understand that implementing WNP will result in wireless companies incurring certain expenses, it seems disingenuous to effectively raise consumer rates for a service that Sprint has yet to provide and which, in fact, Sprint is working actively to prevent.
WNP is required to break down artificial barriers to competition in the wireless marketplace. Without WNP, consumer choice is limited because when deciding between wireless plans, consumers must factor in the effective cost of adopting a new telephone number rather than simply considering wireless rates and service provisions of various wireless providers. A cell phone user's original provider derives a considerable competitive advantage from the "lock-in" created by the absence of WNP.
While Sprint's opposition to this innovation is disheartening, the company's decision to raise the surcharge it levies to pay for WNP appears to be a disturbing example of corporate opportunism. The surcharge increase will raise the amount of a consumer's monthly bill above the level agreed upon in the original contract, using a loop-hole in the contract to effectively raise rates in midstream. This increase also appears to be without any justification considering that WNP has yet to become a reality and Sprint's continued opposition to the plan.
In addition, it appears that funds raised by the new surcharge will significantly exceed the cost of implementing WNP.
According to filings with the Federal Communications Commission made in September 2001, Sprint estimated that WNP would cost $50 million per year. Yet according to estimates based on Sprint's share of the wireless market, the new $1.10 portability surcharge will earn the company $100 million in the final six months of 2003 alone.
Implementing WNP is an essential part of creating a better wireless industry through enhanced competition and I would encourage Sprint to embrace the initiative. At the very least, given that Sprint continues to oppose WNP and it appears that Sprint's new portability surcharge will significantly exceed the company's own WNP cost estimates, I strongly request that Sprint end its plans add the surcharge.
Sincerely,
Charles Schumer
U.S. Senator