[Federal Register Volume 63, Number 237 (Thursday, December 10, 1998)]
[Rules and Regulations]
[Pages 68197-68208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32808]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 52
[CC Docket No. 95-116; FCC 98-275]
Telephone Number Portability
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document addresses database issues, location portability,
500 and 900 number portability, and wireless issues, all of which were
raised in petitions for reconsideration of the First Report and Order
in this proceeding, and not addressed in the First Order on
Reconsideration. We address these because their resolution will foster
deployment of number portability and promote competition in the local
telecommunications marketplace.
EFFECTIVE DATE: January 11, 1999.
FOR FURTHER INFORMATION CONTACT: Jonathan Askin, Attorney, Common
Carrier Bureau, Policy and Program Planning Division, (202) 418-1580,
or via the Internet at jaskin@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
adopted October 15, 1998, and released October 20, 1998. The full text
of this
[[Page 68198]]
Order is available for inspection and copying during normal business
hours in the FCC Reference Center, 1919 M St., NW, Room 239,
Washington, DC. The complete text also may be obtained through the
World Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/
fcc98275.wp, or may be purchased from the Commission's copy contractor,
International Transcription Service, Inc., (202) 857-3800, 1231 20th
St., NW, Washington, DC 20036.
Regulatory Flexibility Certification
As required by the Regulatory Flexibility Act, the Order contains a
Final Regulatory Flexibility Analysis on Reconsideration which is set
forth in the Order on Reconsideration. A brief description of the
analysis follows. Pursuant to section 604 of the Regulatory Flexibility
Act, the Commission performed a comprehensive analysis of the Order
with regard to small entities. This analysis includes: (1) a succinct
statement of the need for, and objectives of, the Commission's
decisions in the Order; (2) a summary of the significant issues raised
by the public comments in response to the initial regulatory
flexibility analysis, a summary of the Commission's assessment of these
issues, and a statement of any changes made in the Order as a result of
the comments; (3) a description of and an estimate of the number of
small entities to which the Order will apply; (4) a description of the
projected reporting, recordkeeping and other compliance requirements of
the Order, including an estimate of the classes of small entities which
will be subject to the requirement and the type of professional skills
necessary for compliance with the requirement; (5) a description of the
steps the Commission has taken to minimize the significant economic
impact on small entities consistent with the stated objectives of
applicable statutes, including a statement of the factual, policy, and
legal reasons for selecting the alternative adopted in the Order and
why each one of the other significant alternatives to each of the
Commission's decisions which affect small entities was rejected.
Synopsis of Second Memorandum Opinion and Order
I. Introduction
On June 27, 1996, the Commission adopted the First Report and Order
and Further Notice of Proposed Rulemaking, 61 FR 38605, July 25, 1996
(First Report and Order) in this docket, which implemented the
provisions of section 251 of the Communications Act of 1934, as
amended, that relate to telephone number portability. Specifically,
section 251(b)(2) requires that all local exchange carriers (LECs)
provide, ``to the extent technically feasible, number portability in
accordance with requirements prescribed by the Commission.'' Section
251(e)(2) provides that ``the costs of establishing . . . number
portability shall be borne by all telecommunications carriers on a
competitively neutral basis as determined by the Commission.'' The Act
defines ``number portability'' as ``the ability of users of
telecommunications services to retain, at the same location, existing
telecommunications numbers without impairment of quality, reliability,
or convenience when switching from one telecommunications carrier to
another.'' In the First Report and Order, the Commission determined,
among other things, that the Commission has authority under section 251
to promulgate rules regarding long-term and currently available number
portability, as well as to establish cost recovery methods for each.
2. Twenty-two parties filed petitions for reconsideration or
clarification of the First Report and Order; 19 parties filed
oppositions or comments on the petitions; and 16 parties filed reply
comments. On March 6, 1997, the Commission adopted a First Memorandum
Opinion and Order on Reconsideration, 62 FR 18280, April 15, 1997
(First Order on Reconsideration) in this proceeding, addressing a
number of issues. In this Second Memorandum Opinion and Order on
Reconsideration, we address all remaining issues raised by the
petitioners, except issues relating to cost recovery for currently
available number portability, which will be addressed in a future
order. We also address American Mobile Telecommunications' (AMTA)
petition for reconsideration of the First Order on Reconsideration,
which raises similar issues to those raised by AMTA in its petition for
reconsideration of the First Report and Order.
II. Background
3. In the First Report and Order, the Commission required all LECs
to begin implementing a long-term service provider portability solution
that meets the Commission's performance criteria in the 100 largest
Metropolitan Statistical Areas (MSAs) no later than October 1, 1997,
and to complete deployment in those MSAs by December 31, 1998, in
accordance with a phased implementation schedule. In the First Order on
Reconsideration, the Commission modified this schedule, extending the
completion dates for the first two phases of the implementation
schedule and clarifying that, within the 100 largest MSAs, LECs need
only provide number portability in switches for which another carrier
has made a specific request for the provision of portability.
4. In the First Report and Order, the Commission also required all
cellular, broadband personal communications services (PCS) and covered
specialized mobile radio (SMR) providers to have the capability of
delivering calls from their networks to ported numbers anywhere in the
country by December 31, 1998, and to offer service provider
portability, including the ability to support roaming, throughout their
networks by June 30, 1999. In the First Order on Reconsideration, the
Commission concluded that these commercial mobile radio service (CMRS)
providers need only deploy local number portability by the June 30,
1999, deadline in switches in the 100 largest MSAs for which they
receive a request at least nine months prior to the deadline. On
September 1, 1998, the Wireless Telecommunications Bureau extended the
deadline for implementation of number portability by CMRS providers to
March 31, 2000.
5. In the First Report and Order, the Commission concluded, inter
alia, that a system of regional number portability databases, managed
by independent local number portability administrator(s) (LNPA(s))
would serve the public interest. The Commission directed the North
American Numbering Council (NANC), an advisory committee established
pursuant to the Federal Advisory Committee Act, to recommend as local
number portability administrators one or more independent, non-
governmental entities that are not aligned with any particular
telecommunications industry segment within seven months of the initial
meeting of the NANC. The Commission also directed the NANC to make
recommendations regarding, inter alia, the duties of local number
portability administrator(s), the location of regional databases, and
technical specifications for the regional databases. In the Second
Report and Order, 62 FR 48774, September 17, 1997, the Commission
adopted, with minor modifications, the NANC LNPA Working Group Report,
containing the recommendations of the NANC regarding the selection of
LNPAs, the duties of LNPAs, the locations of regional databases, and
technical specifications for the regional databases.
[[Page 68199]]
III. Reconsideration Issues
A. Database Issues
1. Treatment of Industry Efforts to Implement Regional Databases Prior
to Issuance of NANC's Recommendations
a. Discussion
6. The Commission has adopted the NANC LNPA Working Group Report,
which contains NANC's recommendations with respect to regional database
implementation, in a separate order. In particular, in that order, the
Commission adopted the NANC's recommendation that Lockheed Martin serve
as local number portability database administrator for the Northeast,
Mid-Atlantic, Midwest and Southwest regions, and that Perot Systems
serve as the local number portability database administrator for the
Southeast, Western and West Coast regions.
7. On February 20, 1998, the Chief of the Common Carrier Bureau
received a letter from the Chairman of the NANC informing him that the
Limited Liability Corporations (LLCs) for the Southeast, Western, and
West Coast regions reported to the NANC on local number portability
implementation. The LLCs for the Southeast, Western, and West Coast
regions reported that it was necessary to terminate their contracts
with Perot Systems, with whom they had experienced repeated performance
problems, and to enter into contracts with Lockheed Martin to serve as
the LNPA to expedite implementation of local number portability. The
NANC members supported unanimously the decision to change vendors as
``essential in successfully implementing [number portability] in these
regions.''
8. We adopt the NANC Perot Recommendation to replace Perot Systems
with Lockheed Martin as the LNPA in the Southeast, Western and West
Coast regions. The record indicates that the NPAC database and
associated facilities needed for long-term number portability in the
regions where Perot Systems was the database administrator were not
ready for intercompany testing as late as January 23, 1998, putting in
jeopardy the dates for which number portability was required to be made
commercially available in these regions. The record indicates that this
delay was specifically due to the failure of the designated LNPA, Perot
Systems, to provide a stable software and hardware platform. We find
that NANC Perot Recommendation supports timely implementation of local
number portability.
9. We find it unnecessary to authorize expressly or approve
automatically carriers' actions implementing regional database
solutions that were taken prior to the issuance of the NANC LNPA
Working Group Report or the Commission's order acting on the NANC LNPA
Working Group Report. We conclude that the concerns raised by BellSouth
and U S WEST in this area have become moot in light of subsequent
industry actions to implement local number portability. Carriers, both
on their own and through the regionally-based LLCs, have successfully
worked with the NANC to implement regional SMS database solutions.
2. Scope of the NANC's Responsibilities
a. Discussion
10. We find moot BellSouth's request that the NANC should address
only SMS database administration. The recommendations contained in the
NANC LNPA Working Group Report, adopted by the Commission in the Second
Report and Order, address technical specifications related to SMS
database administration only and do not address SMS/SCP pairs.
11. In addition, we find moot BellSouth's request that carriers,
and not the NANC, propose standards for interfaces between regional SMS
and downstream SCP databases. In the Second Report and Order, the
Commission adopted the NANC's recommended standards for interfaces
between regional SMS and downstream SCP databases. The carriers sharing
in the costs of developing, establishing and maintaining the regional
databases had ample opportunity, through the NANC, to participate in
the development of interface recommendations.
12. Finally, we find moot Pacific's request that we direct an
industry group other than the NANC to address operational and technical
issues that will arise as number portability is implemented. In the
Second Report and Order, the Commission found that the NANC represents
a broad cross-section of the industry, has developed substantial
expertise in number portability issues, and provides a valuable forum
in which carriers are able to consider, at the national level, possible
ways to resolve the issues that arise as number portability is deployed
within each number portability region. As a result, the Commission
charged the NANC with the task of addressing technical and operational
issues related to local number portability that may arise in the
future.
3. Effect of Implementation of Long-Term Number Portability on Interim
Number Portability Methods
a. Discussion
13. We clarify that all LECs must discontinue using transitional
number portability methods in areas where a long-term number
portability method has been implemented. In the First Report and Order,
the Commission concluded that the Act ``contemplates a dynamic, not
static, definition of technically feasible number portability
methods.'' Based on this finding, the Commission required LECs to offer
number portability, as soon as reasonably possible upon receipt of a
specific request, through remote call forwarding (RCF), direct inward
dialing (DID) and other comparable methods, because these are the only
methods that currently are technically feasible. Because transitional
number portability methods do not meet the performance criteria
established for long-term number portability, LECs may not continue to
utilize such measures once long-term solutions have been implemented.
This conclusion is consistent with the Commission's finding in the
First Report and Order that the Act ``clearly contemplates that
[currently available] methods should serve as only temporary measures
until long-term portability is implemented.''
14. We also wish to clarify that, under the rules adopted in the
First Report and Order, RCF and DID are not the exclusive methods of
providing number portability that LECs are obligated to provide today.
As the Commission stated in the First Report and Order, ``LECs are
required to offer number portability through RCF, DID, and other
comparable methods because they are the only methods that currently are
technically feasible.'' In specifically identifying RCF and DID as
technically feasible number portability methods, the Commission did not
imply that RCF and DID are the only methods through which LECs must
port numbers until a permanent number portability solution is
implemented. Clearly, the references to RCF and DID were illustrative
of the types of measures that LECs must provide on a transitional
basis. The Commission's rules require that LECs must provide, on a
transitional basis, any technically feasible method of number
portability comparable to RCF and DID.
15. In the two years since adoption of the First Report and Order,
a number of state commissions have ordered carriers to provide Route
Indexing--Portability Hub (RI-PH) and Directory Number Route Indexing
(DNRI), based on
[[Page 68200]]
findings of technical feasibility. To date, LECs in more than half the
states have either agreed or been ordered to provide RI-PH and DNRI as
technically feasible methods of providing number portability prior to
deployment of a database method. We therefore conclude, consistent with
the Commission's prior findings in this docket and with the rules and
policies established in the Commission's Local Competition Order, 61 FR
45476, August 29, 1996, that RCF, DID, DNRI and RI-PH are comparable
and technically feasible transitional methods of providing number
portability. We conclude that state commissions may determine that
additional methods are comparable and technically feasible, as well.
16. In adopting the requirements for transitional number
portability in the First Report and Order, the Commission relied on the
fact that no network modifications would be necessary in order to
provide number portability on a transitional basis, prior to
implementation of a long-term database solution. In particular, in
adopting section 52.27, the Commission concluded that it is not unduly
burdensome for LECs to provide number portability through RCF and DID
because these methods are offered as retail services in a number of
states today.
17. Since adoption of the First Report and Order, certain new
entrants have sought other transitional methods of number portability
that are better suited, in their view, to their particular business
needs. A number of carriers make available other transitional methods
of number portability, such as RI-PH and DNRI, only if requested by a
competing carrier. We conclude that it is not per se unreasonable for a
LEC to make available transitional number portability methods only upon
request, provided that the LEC does not deliberately use the request
process to delay competitive entry. We would expect a LEC to respond
expeditiously to a request for a particular method of transitional
number portability.
18. The First Report and Order did not address the issue of which
carrier has the right to select the particular transitional method of
number portability to be provided when there is more than one
technically feasible method. We amend the Commission's rules, on our
own motion, to clarify that a LEC is required to furnish the specific
method of currently available number portability that a competing
carrier requests, provided that provision of the requested method is
not unduly burdensome. We believe that the burden of fulfilling a
competing carrier's request for a specific method of providing number
portability will be minimal if the functionality described by a
requested currently available method already exists in the network. As
the Commission noted in the First Report and Order, the capability to
provide number portability through currently available methods, such as
RCF and DID, already exists in most networks, and no additional network
upgrades should be necessary in order to provide number portability in
this manner. We clarify this finding by adding that, to the extent no
network upgrades are necessary in order to provide number portability
through methods other than RCF or DID, a LEC must make such methods
available upon request as well.
19. Given that a number of states have ordered LECs to provide RI-
PH and DNRI, we presume that RI-PH and DNRI are not unduly burdensome
to provide. We conclude that the burden should be on the LEC providing
number portability to overcome this presumption. In particular,
consistent with the pro-competitive goals of the Act, we conclude that
the LEC shall bear the burden of demonstrating that a particular
requested transitional number portability method is unduly burdensome,
and therefore should not be provided to a requesting carrier. In
determining whether a specific method is unduly burdensome, relevant
factors are the extent of network upgrades needed to provide the
requested method, the cost of such upgrades, the business needs of the
requesting carrier, and the timetable for deployment of a long-term
number portability method in that particular geographic location.
4. Issues Related to Performance Criteria
a. Discussion
20. We reject Nextel's request that the Commission establish an
industry committee to develop a single, nationwide number portability
methodology. As a threshold matter, we disagree with Nextel's
underlying premise that number portability methodology decisions will
be made on a state-by-state basis. In the First Report and Order, the
Commission specifically concluded that regionally deployed databases
best serve the public interest. Because the harm that Nextel raised in
its petition (i.e., the deployment of a different number portability
plan in each state resulting in dramatically increased costs for multi-
state providers) has not occurred and is not likely to occur, we
conclude that it is unnecessary to grant Nextel's request.
21. In addition, we note that, to a great extent, the NANC already
has served the function that Nextel asserts is necessary. The NANC was
charged with developing recommendations regarding the implementation of
number portability, in large part, ``to ensure consistency and to
provide a national perspective on number portability issues, as well as
to reduce the costs of implementing a national number portability
plan.'' Further, the NANC includes representatives from each of the
constituencies that Nextel identifies: state and federal officials,
service providers, and equipment manufacturers. Moreover, we point out
that, to date, the industry and state/regional workshops have chosen
the Location Routing Number (LRN) methodology as the preferred method
of number portability, and carriers have proceeded to implement LRN. As
such, it would appear that states have chosen the same number
portability method, rather than several incompatible methods, as Nextel
feared.
22. We grant AirTouch's request for clarification that carriers may
arrange with other carriers to perform database dips and other routing
functions. Contrary to AirTouch's claims, we have not assumed, nor do
we require, that all carriers must satisfy their number portability
obligations by upgrading their networks to perform database dips. In
the Second Report and Order, the Commission concluded that, although
the carrier in the call routing process immediately preceding the
terminating carrier shall be responsible for ensuring that number
portability database dips are performed, that carrier can meet this
obligation by either querying the number portability database itself or
by arranging with another entity to perform database dips on its
behalf.
B. Location Portability
1. Discussion
23. We decline to adopt SBC's proposal that the Commission decide
now that we will not consider location portability until service
provider number portability is successfully deployed in the 100 largest
MSAs. The Commission concluded in the First Report and Order that the
requirement that all LECs provide local number portability (i.e.,
service provider portability) pursuant to section 251(b)(2) does not
include location portability because the Act's number portability
mandate is limited to situations when users remain ``at the same
location'' when switching from one telecommunications carrier to
another. Although we did not require LECs to
[[Page 68201]]
provide location portability when the First Report and Order was
issued, we nevertheless concluded that nothing in the Act would
preclude us from mandating location portability if, in the future, we
determine that location portability is in the public interest.
24. The Commission has no current plans to address location
portability at this time. We need not and do not address the issue of
whether it may be in the public interest to require the implementation
of location portability at some point in the future.
C. 500 and 900 Number Portability
25. In the First Report and Order, the Commission concluded there
was insufficient evidence in the record to determine whether it is
technically feasible for LECs to make their assigned 500 and 900
numbers portable. The Commission directed the Industry Numbering
Committee (INC) to examine this issue and to file a report of its
findings with the Commission within twelve months of the effective date
of the First Report and Order. The Commission stated that ``[u]pon
receipt of this report, we will take appropriate action under the * * *
Act.'' The INC released its report on July 2, 1997.
1. Provision of 500 and 900 Number Portability By Carriers Other Than
LECs
a. Discussion
26. The number portability requirements of section 251(b)(2) apply
only to LECs. Specifically, section 251(b)(2) imposes a duty on ``each
local exchange carrier * * * to provide, to the extent technically
feasible, number portability in accordance with requirements prescribed
by the Commission.'' Thus, we cannot rely on section 251 for authority
to require IXCs or other non-LECs to provide number portability for 500
and/or 900 number service. We therefore affirm the Commission's
conclusion in the First Report and Order that IXCs are not required
under section 251(b)(2) to make their assigned 500 and 900 numbers
portable to any other carrier offering 500 and 900 number service.
27. We, however, may possess independent authority under sections
1, 2 and 4(i) of the Act to require other carriers to provide number
portability for 500 and/or 900 number service to the extent that such
portability is in the public interest. Section 1 requires the
Commission to make available to all people of the United States ``a
rapid, efficient, Nation-wide, and world-wide wire and radio
communication service.'' Section 1 of the Act thus gives the Commission
jurisdiction to ensure that the portability of all telephone numbers
within the United States, including 500 and 900 numbers, is handled
efficiently and fairly. 500 and 900 number portability would promote
this mandate. 500 and 900 number portability also would promote the
efficient and uniform treatment of numbering that is essential to the
efficient delivery of interstate and international telecommunications.
Section 2 gives the Commission authority to regulate interstate common
carriers, including those that provide 500 and 900 number services.
Section 4(i) grants the Commission authority to ``perform any and all
acts, make such rules and regulations, and issue such orders, not
inconsistent with [the Act], as may be necessary in the execution of
its functions.'' The conclusion that we may possess independent
authority to require all carriers to provide number portability for
their assigned 500 and 900 numbers would be similar to the Commission's
decision in the First Report and Order to rely on its general
rulemaking authority to order number portability for CMRS providers,
and to reserve the Commission's authority to require service and
location portability, even though the Commission concluded that these
types of number portability are not specifically required by section
251(b)(2). This result would also be consistent with our exercise of
authority under sections 1, 2 and 4(i) to require the Bell Operating
Companies and GTE to provide number portability for 800 numbers even
prior to enactment of the 1996 Act.
28. As the Commission noted in the First Report and Order, most
users of 500 and 900 number services today have obtained their numbers
from IXCs. Thus, ``as a practical matter, portability for the vast
majority of 500 and 900 numbers can occur only if the IXC releases to
the new carrier management of the 500 or 900 number that is to be
ported.'' If only LECs were required to make their 500 and 900 numbers
portable, the vast majority of 500 and 900 numbers would not be
portable, and competing 500 and 900 service providers would face a
significant impediment in persuading customers to switch carriers.
Imposing portability obligations on all 500 and 900 service providers
would make it possible for all customers of 500 and 900 services to
switch providers without changing their numbers. This, in turn, would
promote competition in the 500 and 900 services markets.
29. We decline to rule at this time, however, on our authority to
require all carriers to offer 500 and 900 number portability. We will
first determine whether 500 and/or 900 number portability by all
carriers is technically feasible. In the event that it is determined
that 500 and 900 number portability by all carriers is technically
feasible, we will address our authority to impose the same number
portability requirements on all carriers that provide 500 and 900
services.
2. Implementation of 500 and 900 Number Portability
a. Discussion
We decline to determine at this time whether we have independent
rulemaking authority to require number portability for 500 and 900
numbers assigned to all carriers, if that would serve the public
interest. In its report, the INC expressly limited its analysis to the
technical feasibility of porting numbers assigned to LECs between LECs;
it did not address the technical feasibility of LEC-to-non-LEC, non-
LEC-to-LEC, or non-LEC-to-non-LEC portability for 500 or 900 numbers.
In order to evaluate whether the public interest would be served by
mandating 500 and 900 number portability for all carriers, we must
first determine whether number portability for the entire 500 and 900
number resource is technically feasible. We therefore conclude that we
should expand the scope of the inquiry that the Commission previously
delegated to the INC. We direct the NANC, which may refer the issues to
the INC, to examine the following questions:
1. Is it technically feasible for all 500 number service providers
to implement 500 number portability using existing network and
administrative database capabilities?
2. If the answer to Question #1 is ``No,'' is technology available
to develop the appropriate network and administrative database
capabilities to deploy 500 number portability in the future?
3. If the answer to Question #2 is ``Yes,'' how long would it take
to develop and deploy the necessary network infrastructure for 500
number portability, upon receipt of a regulatory directive?
4. Is it technically feasible for all 900 number service providers
to implement 900 number portability using existing network and
administrative database capabilities?
5. If the answer to Question #4 is ``No,'' is technology available
to develop the appropriate network and administrative database
capabilities to deploy 900 number portability in the future?
6. If the answer to Question #5 is ``Yes,'' how long would it take
to
[[Page 68202]]
develop and deploy the necessary network infrastructure for 900 number
portability, upon receipt of a regulatory directive?
31. The NANC is directed to file a report addressing the questions
referred to it in this Second Memorandum Opinion and Order on
Reconsideration within twelve months of the effective date of this
order. Upon receipt of the NANC's report, we will take appropriate
action.
32. We decline to rule at this time on SBC's request that we
consider economic feasibility, as well as technical feasibility, in
evaluating the provision of 500 and 900 number portability. As a
practical matter, we believe that it is premature to determine what
factors may be appropriate to consider with respect to the possible
implementation of portability for such numbers, if we ultimately
conclude we have jurisdiction to order portability of those numbers for
all carriers.
D. Wireless Issues
33. In the First Report and Order, the Commission concluded that
number portability must be provided by cellular, broadband PCS, and
covered SMR providers.
34. With respect to wireless carriers, the Commission concluded
that number portability will facilitate the entry of new service
providers, such as broadband PCS and covered SMR, into CMRS markets
currently dominated by cellular providers, and competition from these
new entrants will provide incentives for incumbent cellular providers
to lower prices and increase service choice and quality. The Commission
also noted that number portability will promote competition between
CMRS and wireline service providers as CMRS providers offer comparable
local exchange and fixed commercial radio services. The Commission
determined that it would not adopt a number portability schedule for
other categories of CMRS providers (including SMR operators that do not
fit the definition of ``covered SMR'') because these other providers
offer services that ``currently will have little competitive impact on
competition between providers of wireless telephony service or between
wireless and wireline carriers.''
1. Definition of ``Covered SMR''
b. Discussion
35. The term ``covered SMR'' was intended to include SMR licensees
that offer services that compete, or potentially compete, with services
offered by cellular and broadband PCS licensees. The Commission
concluded that because cellular, broadband PCS, and certain SMR
providers will compete directly with one another, and potentially will
compete in the future with wireline carriers, number portability was
sufficiently important to the development of competition that it should
be required for these carriers. Within the SMR service, however, it was
clear that some providers would be offering mass market, two-way, real-
time, interconnected voice services that compete with the offerings of
traditional cellular and broadband PCS providers, and others would not.
The definition of covered SMR is intended to distinguish between these
two groups of SMR providers.
36. We agree with the petitioners that the existing definition of
``covered SMR'' imperfectly accomplishes its intended purpose.
37. We note also that it may be infeasible, from a technical
standpoint, to require SMR providers whose systems lack an in-network
switching capability to provide number portability.
38. For the foregoing reasons, we adopt, with some modification,
the definition suggested by the petitioners:
``Covered CMRS systems offer real-time, two-way switched voice
service that are interconnected with the public switched network, and
utilize an in-network switching facility which enables the provider to
reuse frequencies and accomplish seamless hand-offs of subscriber
calls.''
With this change, number portability must be provided by ``covered
CMRS'' providers, which may hold licenses in cellular, PCS, SMR or any
other services.
39. We also clarify, in response to Nextel's petition, that the
definition of covered CMRS should be applied on a system-by-system
basis. That is, an entity may hold more than one CMRS license, but the
entity is required to provide number portability only with respect to
licenses that satisfy the definition of covered CMRS.
40. In addition, we reject AMTA's proposal that the covered SMR
definition apply only to systems serving 20,000 or more subscribers
nationwide. The approach we adopt above is a functional one, which is
based on whether the provider offers a certain type of service. We find
that determining whether an SMR system is required to provide number
portability based on how many subscribers it serves would be arbitrary,
and could discourage SMR providers from expanding their systems.
41. Further, we dismiss SBT's petition for reconsideration as
untimely. Public notice in this case was given on July 26, 1996, the
date on which the First Report and Order was published in the Federal
Register. Therefore, petitions to reconsider that decision were due on
or before August 26, 1996. Because the time period for filing petitions
for reconsideration is prescribed by statute, the Commission may not,
except in extraordinary cases, waive or extend the filing period. SBT
has not demonstrated that its late-filed petition fits into this narrow
exception; indeed, SBT has not even moved for leave to file its
petition. As such, we dismiss SBT's petition.
42. Finally, we dismiss AMTA's petition for reconsideration of the
First Order on Reconsideration as moot. By amending, in this Order, the
Commission's rules to ensure that only those CMRS carriers that compete
in the market for two-way, interconnected, real-time voice services are
subject to the Commission's number portability requirements, we grant
the relief that AMTA requests. Moreover, because we have clarified that
CMRS licensees providing primarily dispatch service with a non-cellular
type of system are exempt from the Commission's number portability
requirements, there is no need to extend the implementation period for
such licensees.
2. Geographic Scope of Number Portability for Wireless Carriers
a. Discussion
43. Requiring service provider portability in a wireless
environment, without imposing any geographic boundaries, could
theoretically result in de facto nationwide location portability, which
the Commission explicitly declined to adopt in the First Report and
Order. Conversely, limiting number portability in a wireless
environment to those carriers already serving the NPA of the ported
wireless number may thwart the pro-competitive goals of the Act. A
single geographic area may now have multiple NPAs due to area code
overlays. Typically, wireless carriers provide their customers with the
choice of NPAs when they have more than one switch in the geographic
market, but some new entrants may only have one or two switches with
all numbers coming out of the same NPA. Limiting number portability in
a wireless environment to those carriers already serving the NPA of the
ported wireless number may discourage customers from switching wireless
carriers if they cannot port their number to a different NPA even
though the number continues to be used in the same geographic
[[Page 68203]]
market. As noted, wireless carriers are not obligated to port numbers
until March 31, 2000. Furthermore, the NANC is currently examining the
myriad of complex issues surrounding wireless number portability.
Consequently, we defer a decision on this matter pending further
analysis by the NANC. We encourage AirTouch to participate in the
NANC's standards development process to ensure consideration of
AirTouch's concerns.
3. Preemption of State Number Portability Requirements for CMRS
Providers
a. Discussion
44. We reject the request for preemption of state number
portability requirements for CMRS carriers. While, under certain
circumstances, the Commission has authority to preempt state law, the
record is devoid of any evidence that such action is warranted at this
time. Pursuant to the Supremacy Clause of the U.S. Constitution,
Congress has the power to preempt state laws or regulations.
45. The petitioners have failed to identify any specific state
number portability requirements that apply to CMRS carriers that
conflict with federal number portability mandates or objectives. Nor is
there a basis in the current record for concluding that it will be
impossible for carriers to comply with federal and state CMRS number
portability requirements. Thus, we decline to consider the preemption
of state number portability requirements for CMRS carriers based on the
record before us.
46. In addition, despite the conclusory assertions of the
petitioners to the contrary, the record does not indicate that there
are, or will be, state number portability requirements applicable to
CMRS carriers that will conflict with the requirements of any other
state, such that CMRS carriers will be required to accommodate multiple
portability architectures and/or service requirements. Indeed, the
framework for implementing number portability is designed, in part, to
minimize such burdens. For example, in the First Report and Order, the
Commission directed one entity--the NANC--to develop recommendations
for technical and operational standards with respect to regional number
portability databases. Accordingly, we expect there will be a high
degree of national uniformity in this regard. Moreover, as discussed
above, the industry and state/regional workshops chose a single method
as the preferred method for number portability. In short, it is
unlikely that CMRS systems that span state lines will be required to
accommodate multiple portability architectures that differ
significantly from one another.
IV. Ordering Clauses
47. It is ordered that, pursuant to the authority contained in
sections 1, 4(i), 4(j), 201-205, 218, 251, and 332 of the
Communications Act as amended, 47 U.S.C. 151, 154(i), 154(j), 201-205,
218, 251 and 332, and 47 CFR 52 is amended.
48. It is further ordered that the Petitions for Reconsideration
and/or Clarification are granted to the extent indicated herein and
otherwise are denied.
49. It is further ordered that the policies, rules, and
requirements set forth herein are adopted, effective 30 days after
publication of a summary of this Second Reconsideration Order in the
Federal Register.
50. It is further ordered that the Petition for Reconsideration of
Small Business in Telecommunications is hereby dismissed.
51. It is further ordered that the Petition for Reconsideration
filed by the Ameritech Mobile Telecommunications Association, Inc. on
May 15, 1997, is dismissed as moot.
52. It is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this
Second Memorandum Opinion and Order on Reconsideration, including the
Second Supplemental Final Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
List of Subjects in 47 CFR Part 52
Communications common carriers, Telecommunications, Telephone
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Final Rules
Part 52 of Title 47 of the Code of Federal Regulations (CFR) is
amended as follows:
PART 52--NUMBERING
1.The authority citation for Part 52 continues to read as follows:
Authority: Sec. 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 U.S.C.
151, 152, 154, 155 unless otherwise noted. Interpret or apply secs.
3, 4, 201-05, 207-09, 218, 225-7, 251-2, 271 and 332, 48 Stat. 1070,
as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 218, 225-7,
251-2, 271 and 332 unless otherwise noted.
2. Section 52.21 is amended by revising paragraphs (c) and (q) to
read as follows:
Sec. 52.21 Definitions.
* * * * *
(c) The term covered CMRS means broadband PCS, cellular, and 800/
900 MHz SMR licensees that hold geographic area licenses or are
incumbent SMR wide area licensees, and offer real-time, two-way
switched voice service, are interconnected with the public switched
network, and utilize an in-network switching facility that enables such
CMRS systems to reuse frequencies and accomplish seamless hand-offs of
subscriber calls.
* * * * *
(q) The term transitional number portability measure means a method
that allows one local exchange carrier to transfer telephone numbers
from its network to the network of another telecommunications carrier,
but does not comply with the performance criteria set forth in 52.3(a).
Transitional number portability measures are technically feasible
methods of providing number portability including Remote Call
Forwarding (RCF), Direct Inward Dialing (DID), Route Indexing--
Portability Hub (RI-PH), Directory Number Route Indexing (DNRI) and
other comparable methods.
3. Section 52.27 is revised to read as follows:
Sec. 52.27 Deployment of transitional measures for number portability.
(a) All LECs shall provide transitional number portability
measures, as defined in section 52.21(q) of this chapter, 47 CFR
52.21(q), as soon as reasonably possible upon receipt of a specific
request from another telecommunications carrier, until such time as the
LEC implements a long-term database method for number portability in
that area.
(b) A LEC must provide the particular transitional number
portability measure requested by a telecommunications carrier, except
as set forth in paragraph (c) of this section.
(c) A LEC that does not provide a requested transitional number
portability measure must demonstrate that provision of the requested
transitional number portability measure either is not technically
feasible or if technically feasible, is unduly burdensome.
(1) Previous successful provision of a particular transitional
number portability measure by any LEC constitutes substantial evidence
that the particular method is technically feasible.
[[Page 68204]]
(2) In determining whether provision of a transitional number
portability measure is unduly burdensome, relevant factors to consider
are the extent of network upgrades needed to provide that particular
method, the cost of such upgrades, the business needs of the requesting
carrier, and the timetable for deployment of a long-term number
portability method in that particular geographic location.
(d) LECs must discontinue using transitional number portability
measures in areas where a long-term number portability method has been
implemented.
4. Section 52.31 is amended by revising paragraphs (a), (b), and
(e) as follows:
Sec. 52.31 Deployment of long-term database methods for number
portability by CMRS providers.
(a) By March 31, 2000, all covered CMRS providers must provide a
long-term database method for number portability, including the ability
to support roaming, in compliance with the performance criteria set
forth in section 52.23(a) of this chapter, 47 CFR 52.23. A licensee may
have more than one CMRS system, but only the systems that satisfy the
definition of covered CMRS are required to provide number portability.
(b) By December 31, 1998, all covered CMRS providers must have the
capability to obtain routing information, either by querying the
appropriate database themselves or by making arrangements with other
carriers that are capable of performing database queries, so that they
can deliver calls from their networks to any party that has retained
its number after switching from one telecommunications carrier to
another.
* * * * *
(e) The Chief, Wireless Telecommunications Bureau, may establish
reporting requirements in order to monitor the progress of covered CMRS
providers implementing number portability, and may direct such carriers
to take any actions necessary to ensure compliance with this deployment
schedule.
Second Supplemental Final Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated into the Notice
of Proposed Rulemaking in this docket (NPRM). The Commission sought
written public comment on the proposals in the Notice, including
comment on the IRFA. The comments received on the IRFA were discussed
in the First Report and Order's Final Regulatory Flexibility Analysis
(FRFA-First Report and Order), which was incorporated as Appendix C to
the First Report and Order in this docket. The FRFA-First Report and
Order conforms to the RFA. On reconsideration of the First Report and
Order, parties commented on the FRFA-First Report and Order. The
comments received on the FRFA-First Report and Order were discussed in
the Supplemental Final Regulatory Flexibility Analysis (Supplemental
FRFA) incorporated into the First Order on Reconsideration in this
docket. The Supplemental FRFA conforms to the RFA. This Second
Supplemental Final Regulatory Flexibility Analysis (Second Supplemental
FRFA) is incorporated as an appendix to the Second Order on
Reconsideration in this docket. This Second Supplemental FRFA also
conforms to the RFA.
A. Need for and Objectives of Second Order on Reconsideration
2. The need for and objectives of the requirements adopted in this
Second Order on Reconsideration are the same as those discussed in the
Final Regulatory Flexibility Analysis in the First Report and Order.
The Commission, in compliance with sections 251(b)(2) and 251(d)(1) of
the Communications Act of 1934, as amended by the Telecommunications
Act of 1996 (the Act), adopts requirements and procedures intended to
ensure the prompt implementation of telephone number portability with
the minimum regulatory and administrative burden on telecommunications
carriers. These requirements are necessary to implement the provision
in the Act requiring local exchange carriers (LECs) to offer number
portability, if technically feasible. In implementing the statute, the
Commission has the responsibility to adopt requirements that will
implement most quickly and effectively the national telecommunications
policy embodied in the Act and to promote the pro-competitive,
deregulatory markets envisioned by Congress. Congress has recognized
that number portability will lower barriers to entry and promote
competition in the local exchange marketplace.
B. Summary of Significant Issues Raised By Public Comments in Response
to the IRFA, FRFA-First Report and Order, and Supplemental FRFA
3. The comments received on the IRFA were discussed in the FRFA-
First Report and Order incorporated into the First Report and Order.
The comments received on the FRFA-First Report and Order were discussed
in the Supplemental FRFA incorporated into the First Order on
Reconsideration. No additional comments were sought or received for
purposes of this Second Supplemental FRFA.
C. Summary of the FRFA-First Report and Order
4. In the FRFA-First Report and Order, we concluded that incumbent
LECs do not qualify as small businesses because they are dominant in
their field of operation, and, accordingly, we did not address the
impact of the Commission's requirements on incumbent LECs. We noted
that the RFA generally defines the term ``small business'' as having
the same meaning as the term ``small business concern'' under the Small
Business Act. A small business concern is one that (1) is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the Small Business
Administration (SBA). According to the SBA's regulations, entities
engaged in the provision of telephone service may have a maximum of
1,500 employees in order to qualify as a small business concern. This
standard also applies in determining whether an entity is a small
business for purposes of the Regulatory Flexibility Act.
5. We did recognize that the Commission's requirements may have a
significant economic impact on a substantial number of small businesses
insofar as they apply to telecommunications carriers other than
incumbent LECs, including competitive LECs, as well as cellular,
broadband personal communications services (PCS), and covered
specialized mobile radio (SMR) providers. Based upon data contained in
the most recent census and a report by the Commission's Common Carrier
Bureau, we estimated that 2,100 carriers could be affected. We also
discussed the reporting requirements imposed by the First Report and
Order.
6. Finally, we discussed the steps we had taken to minimize the
impact on small entities, consistent with the Commission's stated
objectives. We concluded that our actions in the First Report and Order
would benefit small entities by facilitating their entry into the local
exchange market. We found that the record in this proceeding indicated
that the lack of number portability would deter entry by competitive
providers of local service because of the value customers place on
retaining their telephone numbers. These competitive providers, many of
which may be small entities, may find
[[Page 68205]]
it easier to enter the market as a result of number portability, which
will eliminate this barrier to entry. We noted that, in general, we
attempted to keep burdens on local exchange carriers to a minimum. For
example, we adopted a phased deployment schedule for implementation in
the 100 largest MSAs, and then elsewhere upon a carrier's request; we
conditioned the provision of currently available measures upon request
only; we did not require cellular, broadband PCS, and covered SMR
providers, which may be small businesses, to offer currently available
number portability measures; and we did not require paging and
messaging service providers, which may be small entities, to provide
any number portability.
D. Summary of the Supplemental FRFA
7. Implementation Schedule. In the First Report and Order, we
required local exchange carriers operating in the 100 largest MSAs to
offer long-term service provider portability, according to a phased
deployment schedule commencing on October 1, 1997, and concluding by
December 31, 1998, set forth in Appendix F of the First Report and
Order. In the First Order on Reconsideration, we extended the end dates
for Phase I of our deployment schedule by three months, and for Phase
II by 45 days. Thus, deployment will now take place in Phase I from
October 1, 1997, through March 31, 1998, and in Phase II from January
1, 1998, through May 15, 1998. We also clarified that LECs need only
provide number portability within the 100 largest MSAs in switches for
which another carrier has made a specific request for the provision of
portability. LECs must make available lists of their switches for which
deployment has and has not been requested. The parties involved in such
requests identifying preferred switches may need to use legal,
accounting, economic and/or engineering services.
8. In the First Order on Reconsideration, we reduced the burdens on
rural and smaller LECs by establishing a procedure whereby, within as
well as outside the 100 largest MSAs, portability need only be
implemented in the switches for which another carrier has made a
specific request for the provision of portability. If competition is
not imminent in the areas covered by rural/small LEC switches, then the
rural or smaller LEC should not receive requests from competing
carriers to implement portability, and thus need not expend its
resources until competition does develop. By that time, extensive non-
carrier-specific testing will likely have been done, and rural and
small LECs need not expend their resources on such testing. We noted
that the majority of parties representing small or rural LECs seeking
relief asked that we only impose implementation requirements where
competing carriers have shown interest in portability. Moreover, our
extension of Phases I and II of our deployment schedule may permit
smaller LECs to reduce their testing costs by allowing time for larger
LECs to test and resolve the problems of this new technology.
9. In the First Order on Reconsideration, we rejected several
alternatives put forth by parties that might impose greater burdens on
small entities and small incumbent LECs. We rejected requests to
accelerate the deployment schedule for areas both within and outside
the 100 largest MSAs. We also rejected the procedures proposed by some
parties that would require LECs to file waiver requests for their
specific switches if they believe there is no competitive interest in
those switches, instead of requiring LECs to identify in which switches
of other LECs they wish portability capabilities. The suggested waiver
procedures would burden the LEC from whom portability is requested with
preparing and filing the petition for waiver. In addition, a competing
carrier that opposes the waiver petition would be burdened with
challenging the waiver. In contrast, under the procedure we establish,
the only reporting burden on requesting carriers is to identify and
request their preferred switches. Carriers from which portability is
being requested, which may be small incumbent LECs, only incur a
reporting burden if they wish to lessen their burdens further by
requesting more time in which to deploy portability. Finally, we
clarified that CMRS providers, like wireline providers, need only
provide portability in requested switches, both within and outside the
100 largest MSAs.
E. Description and Estimates of the Number of Small Entities Affected
by This Second Order on Reconsideration
10. Consistent with our prior practice, we shall continue to
exclude small incumbent LECs from the definition of a small entity for
the purpose of this Second Supplemental FRFA. Accordingly, our use of
the terms ``small entities'' and ``small businesses'' does not
encompass ``small incumbent LECs.'' Nevertheless, we include small
incumbent LECs in our Second Supplemental FRFA. We use the term ``small
incumbent LECs'' to refer to any incumbent LECs that arguably might be
defined by SBA as ``small business concerns.''
11. Total Number of Telephone Companies Affected. Many of the
decisions and rules adopted herein may have a significant effect on a
substantial number of the small telephone companies identified by SBA.
The United States Bureau of the Census (``the Census Bureau'') reports
that, at the end of 1992, there were 3,497 firms engaged in providing
telephone services, as defined therein, for at least one year. This
number contains a variety of different categories of carriers,
including local exchange carriers, interexchange carriers, competitive
access providers, cellular carriers, mobile service carriers, operator
service providers, pay telephone operators, PCS providers, covered SMR
providers, and resellers. It seems certain that some of those 3,497
telephone service firms may not qualify as small entities or small
incumbent LECs because they are not ``independently owned and
operated.'' For example, a PCS provider that is affiliated with an
interexchange carrier having more than 1,500 employees would not meet
the definition of a small business. It seems reasonable to conclude,
therefore, that fewer than 3,497 telephone service firms are small
entity telephone service firms or small incumbent LECs that may be
affected by this Order on Reconsideration.
12. Wireline Carriers and Service Providers. SBA has developed a
definition of small entities for telephone communications companies
other than radiotelephone (wireless) companies. The Census Bureau
reports that, there were 2,321 such telephone companies in operation
for at least one year at the end of 1992. According to SBA's
definition, a small business telephone company other than a
radiotelephone company is one employing fewer than 1,500 persons. All
but 26 of the 2,321 non-radiotelephone companies listed by the Census
Bureau were reported to have fewer than 1,000 employees. Thus, even if
all 26 of those companies had more than 1,500 employees, there would
still be 2,295 non-radiotelephone companies that might qualify as small
entities or small incumbent LECs. Although it seems certain that some
of these carriers are not independently owned and operated, we are
unable at this time to estimate with greater precision the number of
wireline carriers and service providers that would qualify as small
business concerns under SBA's definition. Consequently, we estimate
that there are fewer than 2,295 small entity telephone communications
companies other than radiotelephone companies that may be affected by
the decisions and rules
[[Page 68206]]
adopted in this Order on Reconsideration.
13. Local Exchange Carriers. Neither the Commission nor SBA has
developed a definition of small providers of local exchange services
(LECs). The closest applicable definition under SBA rules is for
telephone communications companies other than radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of LECs nationwide of which we are aware appears to be the data that we
collect annually in connection with the Telecommunications Relay
Service (TRS) Worksheet. According to our most recent data, 1,347
companies reported that they were engaged in the provision of local
exchange services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of LECs that would qualify as small business
concerns under SBA's definition. Consequently, we estimate that there
are fewer than 1,347 small incumbent LECs that may be affected by the
decisions and rules adopted in this Order on Reconsideration.
14. Interexchange Carriers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies. The most reliable
source of information regarding the number of IXCs nationwide of which
we are aware appears to be the data that we collect annually in
connection with the TRS Worksheet. According to our most recent data,
130 companies reported that they were engaged in the provision of
interexchange services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of IXCs that would qualify as small business
concerns under SBA's definition. Consequently, we estimate that there
are fewer than 130 small entity IXCs that may be affected by the
decisions and rules adopted in this Order on Reconsideration.
15. Competitive Access Providers. Neither the Commission nor SBA
has developed a definition of small entities specifically applicable to
providers of competitive access services (CAPs). The closest applicable
definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies. The most reliable
source of information regarding the number of CAPs nationwide of which
we are aware appears to be the data that we collect annually in
connection with the TRS Worksheet. According to our most recent data,
57 companies reported that they were engaged in the provision of
competitive access services. Although it seems certain that some of
these carriers are not independently owned and operated, or have more
than 1,500 employees, we are unable at this time to estimate with
greater precision the number of CAPs that would qualify as small
business concerns under SBA's definition. Consequently, we estimate
that there are fewer than 57 small entity CAPs that may be affected by
the decisions and rules adopted in this Order on Reconsideration.
16. Operator Service Providers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
providers of operator services. The closest applicable definition under
SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies. The most reliable source of
information regarding the number of operator service providers
nationwide of which we are aware appears to be the data that we collect
annually in connection with the TRS Worksheet. According to our most
recent data, 25 companies reported that they were engaged in the
provision of operator services. Although it seems certain that some of
these companies are not independently owned and operated, or have more
than 1,500 employees, we are unable at this time to estimate with
greater precision the number of operator service providers that would
qualify as small business concerns under SBA's definition.
Consequently, we estimate that there are fewer than 25 small entity
operator service providers that may be affected by the decisions and
rules adopted in this Order on Reconsideration.
17. Pay Telephone Operators. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to pay
telephone operators. The closest applicable definition under SBA rules
is for telephone communications companies other than radiotelephone
(wireless) companies. The most reliable source of information regarding
the number of pay telephone operators nationwide of which we are aware
appears to be the data that we collect annually in connection with the
TRS Worksheet. According to our most recent data, 271 companies
reported that they were engaged in the provision of pay telephone
services. Although it seems certain that some of these carriers are not
independently owned and operated, or have more than 1,500 employees, we
are unable at this time to estimate with greater precision the number
of pay telephone operators that would qualify as small business
concerns under SBA's definition. Consequently, we estimate that there
are fewer than 271 small entity pay telephone operators that may be
affected by the decisions and rules adopted in this Order on
Reconsideration.
18. Wireless (Radiotelephone) Carriers. SBA has developed a
definition of small entities for radiotelephone (wireless) companies.
The Census Bureau reports that there were 1,176 such companies in
operation for at least one year at the end of 1992. According to SBA's
definition, a small business radiotelephone company is one employing
fewer than 1,500 persons. The Census Bureau also reported that 1,164 of
those radiotelephone companies had fewer than 1,000 employees. Thus,
even if all of the remaining 12 companies had more than 1,500
employees, there would still be 1,164 radiotelephone companies that
might qualify as small entities if they are independently owned are
operated. Although it seems certain that some of these carriers are not
independently owned and operated, we are unable at this time to
estimate with greater precision the number of radiotelephone carriers
and service providers that would qualify as small business concerns
under SBA's definition. Consequently, we estimate that there are fewer
than 1,164 small entity radiotelephone companies that may be affected
by the decisions and rules adopted in this Order on Reconsideration.
19. Cellular Service Carriers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
providers of cellular services. The closest applicable definition under
SBA rules is for radiotelephone (wireless) companies. The most reliable
source of information regarding the number of cellular service carriers
nationwide of which we are aware appears to be the data that we collect
annually in connection with the TRS Worksheet. According to our most
recent data, 792 companies reported that they were engaged in the
provision of cellular services. Although it seems certain that some of
these carriers are not independently owned and operated, or have more
than 1,500 employees, we are unable at this time to estimate with
greater precision the number of cellular service carriers that would
qualify as small business concerns under SBA's definition.
Consequently, we estimate
[[Page 68207]]
that there are fewer than 792 small entity cellular service carriers
that may be affected by the decisions and rules adopted in this Order
on Reconsideration.
20. Mobile Service Carriers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
mobile service carriers, such as paging companies. The closest
applicable definition under SBA rules is for radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of mobile service carriers nationwide of which we are aware appears to
be the data that we collect annually in connection with the TRS
Worksheet. According to our most recent data, 138 companies reported
that they were engaged in the provision of mobile services. Although it
seems certain that some of these carriers are not independently owned
and operated, or have more than 1,500 employees, we are unable at this
time to estimate with greater precision the number of mobile service
carriers that would qualify under SBA's definition. Consequently, we
estimate that there are fewer than 138 small entity mobile service
carriers that may be affected by the decisions and rules adopted in
this Order on Reconsideration.
21. Broadband Personal Communications Service (PCS). The broadband
PCS spectrum is divided into six frequency blocks designated A through
F and the Commission has held auctions for each block. The Commission
defined ``small entity'' for Blocks C and F as an entity that has
average gross revenues of less than $40 million in the three previous
calendar years. For Block F, an additional classification for ``very
small businesses'' was added and is defined as an entity that, together
with their affiliates, has average gross revenues of not more than $15
million for the preceding three calendar years. These regulations
defining ``small entity'' in the context of broadband PCS auctions have
been approved by the SBA. No small businesses within the SBA-approved
definition bid successfully for licenses in Blocks A and B. There were
90 winning bidders that qualified as small entities in the Block C
auctions. A total of 93 small and very small business bidders won
approximately 40% of the 1,479 licenses for Blocks D, E, and F.
However, licenses for blocks C through F have not been awarded fully,
therefore there are few, if any, small businesses currently providing
PCS services. Based on this information, we conclude that the number of
small broadband PCS licensees will include the 90 winning C Block
bidders and the 93 qualifying bidders in the D, E, and F blocks, for a
total of 183 small PCS providers as defined by the SBA and the
Commission's auction rules.
22. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission
has defined ``small entity'' in auctions for geographic area 800 MHz
and 900 MHz SMR licenses as a firm that had average annual gross
revenues of less than $15 million in the three previous calendar years.
This definition of a ``small entity'' in the context of 800 MHz and 900
MHz SMR has been approved by the SBA. The rules adopted in this Order
on Reconsideration. may apply to SMR providers in the 800 MHz and 900
MHz bands that either hold geographic area licenses or have obtained
extended implementation authorizations. We do not know how many firms
provide 800 MHz or 900 MHz geographic area SMR service pursuant to
extended implementation authorizations, nor how many of these providers
have annual revenues of less than $15 million. We assume, for purposes
of this Supplemental FRFA, that all of the extended implementation
authorizations may be held by small entities, which may be affected by
the decisions and rules adopted in this Order on Reconsideration.
23. The Commission recently held auctions for geographic area
licenses in the 900 MHz SMR band. There were 60 winning bidders who
qualified as small entities in the 900 MHz auction. Based on this
information, we conclude that the number of geographic area SMR
licensees affected by the rule adopted in this Order on Reconsideration
includes these 60 small entities. No auctions have been held for 800
MHz geographic area SMR licenses. Therefore, no small entities
currently hold these licenses. A total of 525 licenses will be awarded
for the upper 200 channels in the 800 MHz geographic area SMR auction.
However, the Commission has not yet determined how many licenses will
be awarded for the lower 230 channels in the 800 MHz geographic area
SMR auction. There is no basis, moreover, on which to estimate how many
small entities will win these licenses. Given that nearly all
radiotelephone companies have fewer than 1,000 employees and that no
reliable estimate of the number of prospective 800 MHz licensees can be
made, we assume, for purposes of this FRFA, that all of the licenses
may be awarded to small entities who, thus, may be affected by the
decisions in this Order on Reconsideration.
24. Resellers. Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to resellers. The
closest applicable definition under SBA rules is for all telephone
communications companies. The most reliable source of information
regarding the number of resellers nationwide of which we are aware
appears to be the data that we collect annually in connection with the
TRS Worksheet. According to our most recent data, 260 companies
reported that they were engaged in the resale of telephone services.
Although it seems certain that some of these carriers are not
independently owned and operated, or have more than 1,500 employees, we
are unable at this time to estimate with greater precision the number
of resellers that would qualify as small business concerns under SBA's
definition. Consequently, we estimate that there are fewer than 260
small entity resellers that may be affected by the decisions and rules
adopted in this Second Order on Reconsideration.
F. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
25. There are no significant reporting, recordkeeping or other
compliance requirements imposed on small entities by this Second Order
on Reconsideration on other entities.
G. Steps Taken to Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered
26. The Commission's actions in this Second Order on
Reconsideration will benefit small entities by facilitating their entry
into the local exchange market. The record in this proceeding indicates
that the lack of number portability would deter entry by competitive
providers of local service because of the value customers place on
retaining their telephone numbers. These competitive providers, many of
which may be small entities, may find it easier to enter the market as
a result of number portability which will eliminate this barrier to
entry.
27. In general in this docket, we have attempted to keep burdens on
local exchange carriers to a minimum. The regulatory burdens we have
imposed are necessary to ensure that the public receives the benefit of
the expeditious provision of service provider number portability in
accordance with the statutory requirements. We believe that the Second
Order on Reconsideration furthers our commitment to minimizing
regulatory burdens on small entities. Based on the record before us, we
do not find that any of the recommendations we adopt in the Second
Order on Reconsideration will have a
[[Page 68208]]
disproportionate impact on small entities.
28. Report to Congress: The Commission will send a copy of the
Second Order on Reconsideration, including the Second Supplemental
FRFA, in a report to be sent to Congress pursuant to the Small Business
Regulatory Fairness Act of 1996. A copy of the Second Order on
Reconsideration and this Second Supplemental FRFA (or summary thereof)
will also be published in the Federal Register and will be sent to the
Chief Counsel for Advocacy of the Small Business Administration.
[FR Doc. 98-32808 Filed 12-9-98; 8:45 am]
BILLING CODE 6712-01-P
