Cities tackle soaring cell phone bills
- By Sarah Bailey
- Aug 25, 2003
When Philadelphia's mayor discovered that city employees had chatted up a wireless phone bill of nearly $1 million last year, he responded like any parent of a talkative teenager.
He cut their privileges.
Mayor John Street wasn't alone among officials trying to handle wireless telephone costs as the number of minutes used skyrockets and budgets tighten, especially at the state and local levels.
In April, Street ordered all city departments to eliminate 90 percent of their wireless phones, nearly 3,000 in all.
By July, 75 percent of the city's wireless phones were gone, said Laurie Jones, chief of staff at the mayor's office. "We think that by announcing such an aggressive program people are going to start paying attention," Jones said.
Wireless phones for office workers were the first to go. "Sometimes people are in their office, but they're just too lazy to go to a landline," Jones said. "We need to eliminate those problems."
Philadelphia is not the only city feeling the pain. Cities from Seattle to Miami are struggling with soaring wireless phone costs.
"The bills are just so astronomical in some places that you just think that people did absolutely nothing but talk" on their wireless phones, said Pete Sepp, vice president for communications at the National Taxpayers Union, a watchdog group. "Among employee benefits, this one needs much more attention than it has received."
When the phones became popular, city officials moved quickly to equip workers because they liked the ability to reach employees at any time. But the rising bills are straining city budgets, causing many cities to search for ways to control costs. Some are using their bulk purchasing power to negotiate favorable rates. Others have turned ownership of phones over to employees, and one city is experimenting with adding "cell phone allowances" into employee paychecks.
Abusers Lose 'em
Dallas officials are also trying to cut wireless phone costs to make up some of the city's budget shortfall. They began looking to reduce their $1.5 million bill after an audit in 2002 revealed widespread employee abuse of wireless phones.
The audit reports that one city worker spent 3,984 minutes on his wireless phone in one month, racking up more than $1,100 in charges. That's nearly three days of nonstop phone use. Another called directory assistance 47 times in a month, at a cost of more than $60. One employee racked up $686 in roaming charges in November 2001.
After newspaper articles exposed the abuse, city officials looked for ways to cut costs. More than a year ago, Dallas' Computer and Information Services Department reviewed its wireless phone distribution to determine how many of its 13,000 employees needed the phones. They decided that employees who were frequently out of the office, such as police officers, needed the phones the most.
"We have an employee population of 13,000," said Pete Oppel, a Dallas city spokesman. "So there is always someone who is trying to beat the system. We're trying to stop that."
Officials took phones away from people who usually work from their offices or who had abused the service. By July, 13,039 Dallas employees had wireless phones, down from 21,050 in 2002, said a computer department spokesman.
Cingular Wireless worked to accommodate the needs of people who had lost their wireless phone privileges. After the review, the company gave those workers good rates that allowed them to keep and personally pay for their phones.
Last year, Seattle's employees rang up a wireless phone bill of nearly $2 million. Multiple providers were servicing the city's 3,377 wireless phones, which created a flood of bills from many companies and complicated tracking and controlling costs.
The city solved the problem by joining with the King County government. In 2002, the two governments' employees used about 8 million minutes, equal to 15 years of constant conversation. Together, officials had more power to negotiate a contract that was a better deal for both governments.
Under the old plans, Seattle and King County spent an average of 23 cents per minute on calls. The goal was to use the combined buying power that would let them get a deal that would offer more minutes for less money.
Cingular won the contract. Seattle was spending a lot of money on free-minute plans, and employees were not using all of their minutes. So the company offered Seattle and King County a flat rate of 11 cents per minute — a 52 percent savings.
The 2,177 Seattle and King County employees who now use AT&T and Verizon Communications will switch to Cingular.
Laws mandate that people get a new wireless phone number when they change carriers. In June, however, the Federal Communications Commission affirmed rules that require wireless providers to upgrade their networks by November to allow customers to keep their numbers when they change carriers. Many employees want to wait for that requirement to take effect before switching phone companies.
Because Seattle officials must buy new Cingular phones for employees, savings will not begin until sometime in 2004, said Melody Mociulski, Seattle's purchasing director. City officials hope to save $1 million over the next three years.
Miami officials are tackling employees' wireless phone abuse and high bills by holding employees accountable for their own bills.
Beginning this summer, city employees were issued a wireless phone allowance in their paychecks. Officials require employees to have wireless phones, which the city may not buy.
Employees will be billed personally and are expected to pay their phone bills from their allowances, said Elaine Buza, Miami's telecommunications administrator. Any extra costs for personal conversations are the employees' responsibility.
"In the midst of tight budgets, cities look all the more foolish for spending money on things like cell phone bills," Sepp said. "They cannot possibly ask one penny more from their citizens until they fix these problems."