01-3172. Numbering Resource Optimization

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document the Federal Communications Commission (FCC or Commission) continues to develop, adopt and implement a number of strategies to ensure that the numbering resources of the North American Numbering Plan (NANP) are used efficiently, and that all carriers have the numbering resources they need to compete in the rapidly expanding telecommunications marketplace.

DATES:

Section 52.15(f)(1)(vi) is effective December 29, 2000. Section 52.15(h) is effective May 8, 2001. All other amendments are effective March 12, 2001 except for §§ 52.15(g)(4) and 52.15(k)(1), which contain information collection requirements that have not been approved by the Office of Management and Budget. The Federal Communications Commission will publish a document in the Federal Register announcing the effective date of those sections.

ADDRESSES:

Federal Communications Commission, Secretary, 445 12th Street, SW, Room TW-B204F, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Sanford Williams, [phone] or email at [e-mail] or Cheryl Callahan at [phone] or [e-mail].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Second Report and Order, Order on Reconsideration in CC Docket No. 96-98 and CC Docket No. 99-200 (Second Report and Order), adopted on December 7, 2000, and released on December 29, 2000. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW, Washington, DC 20554. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center. The complete text may also be obtained through the world wide web, at http://www.fcc.gov/​Bureaus/​CommonCarrier/​Orders,, or may be purchased from the Commission's copy contractor, International Transcription Services, Inc., 1231 20th Street, NW, Washington, DC 20036.

Synopsis of the Second Report and Order, Order on Reconsideration in CC Docket No. 96-98 and CC Docket No. 99-200

1. With the rules adopted in the Second Report and Order, the FCC creates national standards to address numbering resource optimization. The Second Report and Order, among other things: (1) Establishes a utilization threshold for carriers; (2) clarifies the national framework for allocating numbers in blocks of 1,000, rather than 10,000 (“thousands-block number pooling”) and for thousands-block number pooling administration; and (3) sets forth a comprehensive audit program to verify carrier compliance with federal rules and orders and industry guidelines.

2. The Second Report and Order also adopts and clarifies administrative measures that will allow the FCC to monitor more closely the way numbering resources are used within the U.S. Specifically, the FCC clarifies certain numbering status definitions, the definition of Parent Operating Company Number (OCN), and the scope of access state commissions have to mandatorily reported data and numbering resource application information.

3. The rules adopted herein facilitate increased carrier accountability and incentives to use numbers efficiently, and promote the judicious conservation of numbering resources.

Final Paperwork Reduction Analysis

4. This Second Report and Order contains some new information collections, which will be submitted to OMB for approval, as prescribed by the Paperwork Reduction Act.

Final Regulatory Flexibility Analysis

5. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the Notice of Proposed Rulemaking (Notice). The Commission sought written public comment on the proposals in the Notice, including comment on the IRFA. In addition, pursuant to 5 U.S.C. 604, a Final Regulatory Flexibility Analysis (FRFA) was incorporated in the First Report and Order and Further Notice of Proposed Rulemaking, 65 FR 43251 (2000) (First Report and Order and Further Notice). Also in the First Report and Order and Further Notice, pursuant to 5 U.S.C. 603, was a second IRFA. The Commission sought written public comment on the proposals in the First Report and Order and Further Notice, including comment on the second IRFA. No comments specifically addressing the second IRFA are relevant to the matters addressed in this Second Report and Order; however, comments received concerning small business issues in general are summarized below. This present FRFA conforms to the RFA.

A. Need for, and Objectives of, the Second Report and Order

6. In the First Report and Order and Further Notice, we sought public comment on (a) what specific utilization threshold carriers not participating in thousands-block number pooling, should meet in order to request growth numbering resources; (b) whether state commissions should be allowed to set rate-center based utilization thresholds based on Commission-established criteria; (c) whether covered commercial mobile radio services (CMRS) carriers should be required to participate in thousands-block number pooling immediately upon expiration of the Local Number Portability (LNP) forbearance period on November 24, 2002, or whether a transition period should be allowed; and (d) how a market-based allocation system for numbering resources could be implemented. We also sought additional information regarding: (a) Cost studies that quantify the incremental costs of thousands-block number pooling; (b) cost studies that quantify shared industry and direct carrier-specific costs of thousands-block number pooling; and (c) cost studies that take into account the cost savings associated with thousands-block number pooling in comparison to the current numbering practices that result in more frequent area code changes.

7. In doing so, we sought to (1) ensure that the limited numbering resources of the NANP are used efficiently; (2) protect customers from the expense and inconvenience that result from the implementation of new area codes; (3) forestall the enormous expense that will be incurred from expanding the NANP; and (4) ensure that all carriers have the numbering resources they need to compete in the rapidly growing telecommunications marketplace.

8. In this Second Report and Order, we continue to develop, adopt and implement a number of strategies to ensure that the numbering resources of the NANP are used efficiently, and that all carriers have the numbering resources they need to compete in the rapidly expanding telecommunications marketplace. In particular, we finalize plans implementing thousands-block number pooling, and also seek comment on additional strategies to increase further the efficiency with which numbering resources are used.

B. Summary of Significant Issues Raised by Public Comments

9. Commenters expressed support and opposition to several issues addressed in this Second Report and Order that concern small entities. Their opinions are summarized below and, where applicable, discussed in Section E. Other comments filed by small entities which are not addressed in this Second Report and Order, such as those relating to carriers' cost recovery mechanisms for thousands-block number pooling and developing markets for numbering resources, will be addressed at a later date.

10. Geographic Splits and All-Services Area Code Overlays. One commenter, Small Business Alliance for Fair Utility Regulation (Small Business Alliance), described geographic splits as harmful for small businesses because the phone number plays a critical role in the identity of the business. Geographic splits may cause small businesses to lose customers who are unaware of the phone number change as well as incur additional costs on advertising materials as a result of an area code change. Thus, all-services area code overlays are strongly preferred by commenters because small businesses would not be exposed to such costs.

11. Audits. Commenters generally support “for cause” and random audits. The Small Business Alliance strongly supports “for cause”, scheduled and random audits given the rapid depletion of numbering resources. Another commenter, PrimeCo Personal Communications, supports “for cause” audits, but not random audits.

12. Mandatory Nationwide Ten-Digit Dialing. Commenters representing small businesses support mandatory ten-digit dialing. For example, the Organization for the Promotion and Advancement of Small Telecommunications Companies believes that ten-digit dialing would be less disruptive for customers, and technical modifications would be less expensive.

C. Description and Estimate of the Number of Small Entities to Which Rules Will Apply

13. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. 5 U.S.C. 603(b)(3). The RFA defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 5 U.S.C. 601(6). The term “small business” has the same meaning as the term “small business concern” under the Small Business Act, unless the Commission has developed one or more definitions that are appropriate for its activities. 5 U.S.C. 601(3). Under the Small Business Act, a “small business concern” is one which: (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). 15 U.S.C. 632.

14. The most reliable source of information regarding the total numbers of certain common carrier and related providers nationwide, as well as the number of commercial wireless entities, appears to be data the Commission publishes in its Trends in Telephone Service report and the data in its Carrier Locator: Interstate Service Providers Report. These carriers include, inter alia, local exchange carriers, wireline carriers and service providers, interexchange carriers, competitive access providers, operator service providers, pay telephone operators, providers of telephone service, providers of telephone exchange service, and resellers.

15. The SBA has defined establishments engaged in providing “Radiotelephone Communications” and “Telephone Communications, Except Radiotelephone” to be small businesses when they have no more than 1,500 employees. 13 CFR 121.201.

16. We have included small incumbent local exchange carriers (LECs) in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” 5 U.S.C. 601(3). The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on FCC analyses and determinations in other, non-RFA contexts.

17. Total Number of Telephone Companies Affected. The U.S. Bureau of the Census (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, covered specialized mobile radio providers, and resellers. It seems certain that some of these 3,497 telephone service firms may not qualify as small entities or small incumbent LECs because they are not “independently owned and operated.” See generally 15 U.S.C. 632(a)(1) For example, a personal communications services (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 is reasonable to conclude that fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent LECs that may be affected by the proposed regulations, herein adopted.

D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

18. Audit Program. The Second Report and Order approves the Commission's proposal to supplement the need verification measures and data collection requirements, adopted in the First Report and Order, with a comprehensive audit program. The audits, which include “for cause” and random audits, will be used to verify carrier compliance with federal rules and orders and industry guidelines. In addition, the Commission declines to provide a specific cost recovery mechanism for carrier-specific auditing costs, including costs related to providing documentation to the Auditor. We believe that such costs are minimal and do not significantly affect a carrier's ability to compete. Nevertheless, even if such costs impose a burden on small carriers, the benefits of monitoring numbering resource use, thereby enabling us to predict accurately exhaustion of numbering resources, would far outweigh those costs.

19. “For Cause” Auditing Requests. To request a “for cause” audit, the North America Numbering Plan Administrator (NANPA), the Pooling Administrator or a state commission must submit a written request to the Auditor stating the reason for the request, such as misleading or inaccurate data, as well as supporting documentation evidencing such grounds for the audit. The audits will be performed by the Commission's auditors in the Audits Branch of the Accounting Safeguards Division in the Common Carrier Bureau, or other designated agents.

20. Numbering Resource Application Materials. State commissions should request copies of carriers' applications for initial and growth numbering resources directly from the carriers, instead of NANPA or the Pooling Administrator. Such an approach avoids a costly burden on the national numbering administrator while placing only a minimal burden on carriers because small and large carriers merely need to duplicate applications previously submitted to the NANPA. Carriers receiving numbering resources must comply with state requests and will be denied numbering resources for noncompliance.

E. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

21. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. 5 U.S.C. 603(c).

22. Utilization Threshold. We require carriers to utilize 60% of their existing inventory of numbers before receiving additional resources within a particular rate center. We find that 60% is an appropriate threshold level because, for example, according to the data reported to NANPA, average industry utilization levels range from approximately 45%-65%. We considered adopting a 50% threshold as an alternative, however, we believe that a 60% utilization threshold will more successfully encourage carriers to use numbers from existing inventories while making such utilization achievable for carriers that need additional numbering resources. The threshold will increase by 5% each year starting June 30, 2002, to a maximum threshold of 75%. We establish these small yearly percentage increases in order to allow carriers, especially small carriers, sufficient time to maximize their utilization levels.

23. Thousands-Block Number Pooling for Covered CMRS Carriers. CMRS carriers will be required to participate in thousands-block number pooling once the LNP forbearance period expires on November 24, 2002. No transition period between the CMRS carriers' LNP implementation and participation in mandatory number pooling will be granted because such carriers have almost two years' advance notice of the pooling requirement, and technical modifications for pooling and LNP are largely similar. We believe that given the deadline date for compliance, carriers, including small businesses, should have ample time to prepare for these changes without the need for a transition period.

24. Geographic Splits and All-Services Area Code Overlays. We considered whether to impose additional rules on state commissions or to leave the development of any rules to the states. We have decided that additional rules or guidelines will not be enumerated at the federal level with regard to geographic splits or all-services overlays. We believe that state commissions should be allowed to choose an appropriate measure, including geographic splits or overlays, for area code relief. However, state commissions must ensure that, in implementing area code relief, carriers receive numbers on an equitable basis and that such numbers are available in a timely and efficient manner. Such an approach allows state commissions to consider the surrounding local circumstances, including the needs of small, local businesses, in deciding whether or how to provide area code relief.

25. In the alternative, we could have mandated state commissions to impose all-services area code overlays as the primary method for area code relief. As discussed in Section B, small businesses that incur additional costs related to geographic splits may have benefited from this alternative proposal. However, the Commission believes that states should have the flexibility to determine the best method for area code relief given their unique knowledge of their geographic region.

26. In addition, we will continue to require ten-digit dialing within and throughout the geographic area covered by an all-services overlay. Such a requirement ensures that no dialing disparity exists to disadvantage competitors, including small businesses.

27. Audits. A comprehensive audit program will be established to verify carriers' actual need for numbering resources, in accordance with federal rules and industry guidelines. As discussed in Section B, small entity commenters generally support audits. This audit program, which will consist of “for cause” and random audits, should help to determine whether carriers accurately record data or inconspicuously stockpile numbers. Failure to comply with auditor requests will result in penalties. For small carriers, audits will help to ensure that large businesses are not hoarding numbers or otherwise preventing small carriers from gaining access to numbering resources. In addition, costs should not impose a significant burden on small or large carriers. However, the benefits of being able to rely on carrier data in order to monitor numbering resource use and to predict accurately exhaustion of numbering resources would far outweigh any significant costs incurred by small carriers.

28. Mandatory Nationwide Ten-Digit Dialing. At the present time, we decline to adopt nationwide mandatory ten-digit dialing as a method of area code relief. Although commenters, including small entities, supported the adoption of this measure, the burdens of implementation at this time outweigh the benefits. Such a transition would require technical modifications by both large and small carriers, at a potentially expensive cost. In addition, ten-digit dialing adds to consumer inconvenience and confusion. At this time, the need for area code relief does not outweigh these burdens on carriers.

29. Reconsideration of Reserved Number Period. In this Second Report and Order, we extend the period for reserving numbers from 45 days to 180 days. We considered extending the period to 12 months, but we believe that, at the present time, 180 days is a sufficient time period to allow small and large carriers to address their customers' needs while mitigating the effects of such reservations on the depletion of numbering resources. It also allows small and large business customers to plan for implementation and/or expansion of telephone service. For carriers requesting more time to reserve numbers, we are considering a proposal by the North American Numbering Council to charge a fee for extending the reservation period and are seeking comment on this proposal in the Second Further Notice.

Report to Congress

30. The Commission will send a copy of this Second Report and Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of this Second Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA.

Ordering Clauses

31. Pursuant to Sections 1, 3, 4, 201-205, 251 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, and 251, the Second Report and Order is hereby adopted and part 52 of the Commission's rules are amended and adopted as set forth in the attached Rule Changes.

32. Section 52.15(f)(1)(vi) is effective December 29, 2000. Section 52.15(h) is effective May 8, 2001. All other amendments are effective March 12, 2001 except for §§ 52.15(g)(4) and 52.15(k)(1), which contain information collection requirements that have not been approved by the Office of Management and Budget. The Federal Communications Commission will publish a document in the Federal Register announcing the effective date of those sections.

33. The establishment of a five year term for the Thousands-Block Pooling Administrator is effective on December 7, 2000, the date of adoption of the Second Report and Order.

34. The Commission's Consumer Information Bureau, Reference Information Center, SHALL SEND a copy of the Second Report and Order and Further Notice of Proposed Rulemaking, including the Initial and Final Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of Small Business Administration.

35. The Final Regulatory Flexibility Analysis for this Second Report and Order, pursuant to the Regulatory Flexibility Act, 5 U.S.C. 604, is contained herein.

List of Subjects in 47 CFR Part 52

• Communications common carriers
• Telecommunications
• Telephone

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Rule Changes

PART 52—NUMBERING

1. The authority citation for part 52 continues to read as follows:

Authority: Sections 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, 201-205, 207-09, 218, 225-7, 251-2, 271 and 332 unless otherwise noted.

2. In § 52.15, revise paragraphs (f)(1)(vi), (f)(3)(ii), (g)(3)(iv) and add paragraphs (g)(4), (h) and (k) to read as follows:

§ 52.15

Central office code administration.

* * * * *

(f) * * *

(1) * * *

(vi) Reserved numbers are numbers that are held by service providers at the request of specific end users or customers for their future use. Numbers held for specific end users or customers for more than 180 days shall not be classified as reserved numbers.

* * * * *

(3) * * *

(ii) Reporting shall be by separate legal entity and must include company name, company headquarters address, Operating Company Number (OCN), parent company OCN, and the primary type of business in which the reporting carrier is engaged. The term “parent company” refers to the highest related legal entity located within the state for which the reporting carrier is reporting data.

* * * * *

(g) * * *

(3) * * *

(iv) The NANPA shall withhold numbering resources from any U.S. carrier that fails to comply with the reporting and numbering resource application requirements established in this part. The NANPA shall not issue numbering resources to a carrier without an OCN. The NANPA must notify the carrier in writing of its decision to withhold numbering resources within ten (10) days of receiving a request for numbering resources. The carrier may challenge the NANPA's decision to the appropriate state regulatory commission. The state commission may affirm or overturn the NANPA's decision to withhold numbering resources from the carrier based on its determination of compliance with the reporting and numbering resource application requirements herein.

(4) State access to applications. State commissions shall have access to service provider's applications for numbering resources. State commissions should request copies of such applications from the service providers operating within their states, and service providers must comply with state commission requests for copies of numbering resource applications. Carriers that fail to comply with a state commission request for numbering resource application materials shall be denied numbering resources.

(h) National utilization threshold. All applicants for growth numbering resources shall achieve a 60% utilization threshold, calculated in accordance with paragraph (g)(3)(ii) of this section, for the rate center in which they are requesting growth numbering resources. This 60% utilization threshold shall increase by 5% on June 30, 2002, and annually thereafter until the utilization threshold reaches 75%.

* * * * *

(k) Numbering audits. (1) All telecommunications service providers shall be subject to “for cause” and random audits to verify carrier compliance with Commission regulations and applicable industry guidelines relating to numbering administration.

(2) All telecommunications service providers shall be prepared to demonstrate compliance with Commission regulations and applicable industry guidelines at all times. Service providers shall be prepared to demonstrate compliance with Commission regulations and applicable industry guidelines at all times. Service providers found to be in violation of Commission regulations and applicable industry guidelines relating to numbering administration may be subject to enforcement action.

3. In § 52.16, revise paragraph (a) to read as follows:

§ 52.16

Billing and collection agent.

* * * * *

(a) Calculate, assess, bill and collect payments for all numbering administration functions and distribute funds to the NANPA, or other agent designated by the Common Carrier Bureau that performs functions related to numbering administration, on a monthly basis;

* * * * *

4. In § 52.20, revise paragraph (c) to read as follows:

§ 52.20

Thousands-block number pooling.

* * * * *

(c) Donation of thousands-blocks. (1) All service providers required to participate in thousands-block number pooling shall donate thousands-blocks with ten percent or less contamination to the thousands-block number pool for the rate center within which the numbering resources are assigned. (2) All service providers required to participate in thousands-block number pooling shall be allowed to retain at least one thousands-block per rate center, even if the thousands-block is ten percent or less contaminated, as an initial block or footprint block.

* * * * *