98-32808. Telephone Number Portability  

  • [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
    
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    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
    
    
    

Document Information

Effective Date:
1/11/1999
Published:
12/10/1998
Department:
Federal Communications Commission
Entry Type:
Rule
Action:
Final rule.
Document Number:
98-32808
Dates:
January 11, 1999.
Pages:
68197-68208 (12 pages)
Docket Numbers:
CC Docket No. 95-116, FCC 98-275
PDF File:
98-32808.pdf
CFR: (3)
47 CFR 52.21
47 CFR 52.27
47 CFR 52.31