**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of )

)

**AT&T EasyReach 700 Service** ) **NSD File No. W-P-D-439**

**)**

**and** )

**)**

**AT&T 500 Personal Number Service** ) **NSD File No. W-P-D-440**

**CERTIFICATE AND ORDER**

Adopted: April 10, 2000 Released: April 11, 2000

By the Chief, Network Services Division, Common Carrier Bureau:

1\. On September 17, 1999, AT&T Communications (\"AT&T\") filed two
applications requesting authority under section 214(a) of the
Communications Act of 1934,[^1] and section 63.71 of the Federal
Communications Commission\'s regulations,[^2] to discontinue AT&T
EasyReach 700 Service and AT&T 500 Personal Number Service, effective
November 15, 1999.[^3] In this Certificate and Order, the applications
to discontinue these services are granted, subject to conditions
requiring AT&T to give subscribers at least 60 days additional notice
before the services are discontinued and, if subscribers obtain new
numbers, requiring AT&T, for 60 additional days, to inform callers of
those numbers, as specified in this Certificate and Order.

**I. BACKGROUND**

2\. AT&T 500 Personal Number Service and AT&T EasyReach 700 Service,
respectively, permit calls to numbers in the 500 or 700 area codes.
Subscribers of 500 and 700 numbers may select a variety of features. For
example, calls to these numbers may be billed to the caller's home
telephone number, to a calling card, or to the subscriber. Calls may
also be forwarded to different telephone numbers as the subscriber
changes from location to location, sometimes referred to as a "follow
me" feature. AT&T provides these services to customers in the United
States Mainland and Hawaii. It introduced them in 1992 and, in 1995,
when services with 500 area codes were designated "personal number
services," AT&T grandfathered all 700 numbers and offered those
customers the option to obtain a 500 number. Thereafter, new AT&T
customers have been offered 500 numbers.[^4]

3\. Under section 214(a), a carrier must obtain from the Commission,
before it may discontinue service, "a certificate that neither the
present nor future public convenience and necessity will be adversely
affected thereby."[^5] Under section 63.71 of the Commission's
regulations, the carrier must submit to the Commission an application
for this authority.[^6] The carrier must also notify all affected
customers, at or before the time it files the application, that the
Commission will normally authorize the discontinuance unless customers
would be unable to receive substitute service or the public convenience
and necessity is adversely affected, and that customers may file
comments with the Commission about the impact of the discontinuance,
including any inability to acquire reasonable substitute service.[^7]
Finally, as applied in this instance, the regulations provide that an
application is automatically granted 31 days after the Commission
releases public notice of the application, without further Commission
action, unless the Commission notifies the applicant that it will not be
granted automatically.[^8]

4\. On September 22, 1999, the Commission released a Public Notice
seeking comments on AT&T's applications to discontinue its 500 and 700
services. The Public Notice reiterated that the Commission normally
authorizes proposed discontinuances of service unless it is shown that
customers would be unable to receive service or a reasonable substitute
from another carrier or that the public convenience and necessity is
otherwise adversely affected. Over 70 comments objecting to the
applications were received. On October 13, 1999, based on those
comments, the Commission released a second Public Notice, notifying AT&T
that its applications to discontinue the 500 and 700 services would not
be granted automatically but would be acted upon based on their merits,
following further examination of the comments received and any
responsive comments filed by AT&T.

5\. The comments generally indicated that there may be no reasonably
substitutable service and that the public convenience and necessity may
be adversely affected. As to substitute service, indicated that 500 and
700 numbers are not portable (to other carriers), that no other carrier
offers 500 or 700 service, that the only available alternative appears
to be toll free service (800, 888, and 877 access codes), and that,
unlike 500 and 700 service, toll free service does not permit
instantaneous re-routing of calls or enable the subscriber to pay only
for calls from selected persons, but requires the subscriber to pay for
all calls. As to public convenience and necessity, the commenters stated
that, when AT&T offered these services, it had warranted that 500 and
700 numbers would be "permanent" "lifetime" numbers, that customers
relied on those representations and have been able to change locations
and local carriers while retaining their 500 and 700 numbers, and that
discontinuance of AT&T's 500 and 700 services will now require them to
change their existing directory listings, business publications, and
other personal and residential uses.

6\. On December 21, 1999, AT&T filed responsive comments to justify the
proposed discontinuances.[^9] It indicated that its 500 Personal Number
Service and its Easy Reach 700 services have not covered their costs or
been profitable since 1992, when AT&T introduced the services. AT&T
further indicated that substitute services exist for 500 and 700
services, most notably toll free service and wireless service, and that
customers have turned to those services instead so that subscriber use
of the services has declined steadily. For example between 1997 and
1999, the number of subscribers to the service fell from 42,000 to
26,000, and the minutes of use of the services fell from 25.9 million to
nine million. In each of six consecutive 6-month periods from October
1997 through March 1998, approximately 42 percent of AT&T's 500 and 700
subscribers did not generate any calls.[^10]

7\. In a letter dated February 16, 2000, the Montana State Bureau of
Business Ethics (Montana BBE) submitted a filing characterized as a
"Complaint Summary."[^11] Montana BBE describes several allegations of
consumer abuse and deception that it states it has verified. Among these
allegations are the following: some AT&T customers never received notice
of AT&T's proposed discontinuances; AT&T Customer Representatives are
refusing to provide new 500 service, despite the October 13, 1999 notice
informing AT&T the discontinuances were not granted automatically; AT&T
repeatedly informed customers after October 13, 1999 that their service
would be terminated on November 15, 1999; AT&T 500 lines have contained
a recording announcing the service would be terminated shortly; some
customers believed their service was disconnected and their accounts
went unpaid and into AT&T collections, resulting in demands for late
payment penalties; and AT&T has informed customers since January 5,
2000, that the Commission approved the disconnection of their 500 and
700 lines on February 1, 2000. Montana BBE also states that customers
have invested tens of thousands of dollars promoting their 500 numbers
in brochures, business cards, public relations, press releases, and
consumer awareness. Montana BBE therefore requests that either the
discontinuance applications be denied or AT&T be required to provide
proper notification.

8\. In a letter dated and filed February 18, 2000, AT&T submitted an
additional letter indicating steps it will take to alleviate customer
concerns. AT&T states that, if its applications are granted, it will
provide to its customers additional notice, in writing, 60 days in
advance of the discontinuance, informing customers that during the
60-day period they may obtain services to replace their 500 or 700
service and that AT&T will make their new replacement numbers available
to callers via a message when the 500 or 700 numbers are dialed.
Specifically, AT&T states that in its written notice it will explain how
customers may inform AT&T of their new replacement service numbers any
time up to the discontinuance date. Each new replacement number will
then be maintained in a data base by specially trained AT&T Customer
Care Representatives. After the service is discontinued, when callers
dial the customer's 500 or 700 number, they will hear a message
indicating that the number has been disconnected and that they may call
a toll free number connecting them to an AT&T Service Representative,
who will provide them with the subscriber's new number. AT&T states it
will continue to provide callers with replacement number information for
60 days after the 500 and 700 services are discontinued.

9\. In a letter dated and filed February 28, 2000, Power-Finder West
Communications (PFWC) submitted a filing indicating that PWFC, in
conjunction with certain other carriers, is prepared to offer a
toll-free service with similar call forwarding features in or about the
second quarter of 2000, thereby providing a reasonably substitutable
service to the public. In addition, PFWC states it will attempt to work
with AT&T regarding a transition of its 500 service customers, if
possible, to PFWC's service.

**II. DISCUSSION**

10\. We find that subscribers to AT&T's 500 Personal Number Service and
Easy Reach 700 Service will be able to receive substitute services, and
that proper conditions can mitigate adverse effects on the public
convenience and necessity caused by the discontinuances. Therefore,
pursuant to section 214(e) of the Communications Act and section 63.71
of our Rules, AT&T\'s applications to discontinue providing these
services will be granted, with the conditions that AT&T must provide the
notice to its customers and the new-number information to callers
specified in this Certificate and Order. With those conditions, on
balance, the harm to customers resulting from discontinuance of the 500
and 700 service will not outweigh the economic harm to AT&T that would
result if AT&T were required to continue providing those services at a
financial loss.[^12]

11\. The record shows that there are substitute services for 500 and 700
services, principally toll free service, wireless service, calling card
service, or a combination thereof, which, as discussed below, largely
mitigate the harm to customers resulting from loss of the services. The
conditions imposed in this Certificate and Order, also discussed below,
will further mitigate harm to customers resulting from their reliance on
AT&T's initial promises of permanent, lifetime numbers, and from any
failure by AT&T, as Montana BBE alleges, to provide adequate notice of
the discontinuances to subscribers. Those conditions will require AT&T
to provide additional notice to customers, giving customers time to
obtain replacement services, and then to inform callers of the
subscribers' new numbers. Accordingly, we find that the public
convenience and necessity will not be adversely affected by the
discontinuance of AT&T's 500 and 700 services, subject to the conditions
required in this Certificate and Order.

**A. Substitute Service**

12\. It appears from PFWC's comments that PFWC may soon offer service
with features similar to those of AT&T's 500 and 700 service. In
addition, it also appears that PFWC and AT&T may be negotiating a
transfer of AT&T's 500 service customer base to PFWC, although PFWC does
not offer further information on these proposals. If successful,
provision of 500 service by PFWC could be a complete substitute for the
service currently being provided by AT&T. In any event, the record
demonstrates that other reasonable substitutes currently exist for all
of the features offered in AT&T's 500 and 700 services, as described
below.

13\. [Reverse Billing (called party pays)]{.underline}. AT&T's 500 and
700 services enable subscribers to choose which incoming calls to pay
for - subscribers may provide PINs to select callers for that purpose.
Approximately 70 percent of the minutes billed to 500 and 700
subscribers are billed by reverse billing, which indicates that most
subscribers are using this feature as a toll free service.[^13] Personal
toll free service is therefore a reasonable substitute for this feature
because it may be used in the same way - that is, a subscriber can
simply provide his or her toll free number to select callers only.[^14]

14\. AT&T itself offers AT&T Easy Reach 800 Service, and AT&T states
that if it is granted authority to discontinue the 500 and 700 services
if will make its 800 service available to former 500 and 700 subscribers
at special rates. Those customers will be eligible to receive the
service with no monthly fee and a \$0.15 per minute promotional rate for
incoming calls placed within the U.S. and they may enroll from March 1,
2000, through September 1, 2000.[^15] Toll free numbers are offered by
providers known as Responsible Organizations,[^16] and AT&T identifies
several specific firms that offer personal 800 service, including
StarTouch International, Call Home America, Wildfire, Gener Magic's
Portico, Linx, Webley, Sprint, and MCI.

15\. [Place a Call]{.underline}. Approximately 20 percent of billed 500
and 700 minutes is billed via the Place a Call feature, by which the
subscribers dial into the platform from wherever they are located, and
then make outbound calls. Substitute services enabling comparable
capabilities are available through calling card services, which provide
essentially the same service, either pre-paid or per call. A number of
firms offer calling card services, including AT&T, Sprint, MCI, and
Qwest. Prepaid cards are also available directly from many carriers and
also from retailers such as convenience stores and gas stations.

16\. [Sent Paid]{.underline}. Approximately 10 percent of 500 and 700
bill minutes is billed via the Sent Paid option, which are long distance
calls to 500 and 700 numbers paid for by the callers. This is
essentially the same as making an outbound toll call. AT&T's rate to
call a 500 or 700 number on a Sent Paid basis is \$0.20 per minute.
Substitute services are offered by many competitive long distance
providers - many of them offer domestic residential long distance rates
lower than \$0.20 per minute, some as low as \$0.05 per minute.[^17]

17\. [Call Forwarding/Sequencing]{.underline}. Three percent of the
calls to 500 and 700 numbers terminate via call forwarding, and another
3 percent terminate via call sequencing, both of which enable a
subscriber to be reached as he or she changes locations throughout the
day.[^18] Call sequencing enables subscribers to have incoming calls
sent to three different numbers in sequence, to locate or "follow" the
subscriber.[^19] Many local phone companies offer different call
forwarding options, and AT&T offers personal 800 service that includes
call forwarding.[^20] In addition, wireless telephone service is a
substitute service for both of these services.

**B. Other Public Interest Concerns - Imposition of Conditions**

18\. Section 214(c) provides that the Commission may attach to a
certificate of public convenience and necessity such terms and
conditions as in its judgment the public convenience and necessity may
require.[^21] As described below, such conditions are warranted in this
instance. Before describing those conditions, however, it should be
noted that the availability of the replacement services described above
for the features offered by 500 and 700 service that most of the other
public interest concerns raised by commenters objecting to AT&T's
application will also be satisfied. Those other concerns pertain to
emergency situations, ease of use, ability to contact persons oversees,
and the need for callers to carry pocket change. To be reached in
emergency situations, wireless and paging services are at least as
effective, and arguably superior to, 500 and 700 services.[^22]
Similarly, it is well-recognized that wireless and paging services are
reasonably easy to use; they also enable subscribers to contact family
and friends abroad, and along with both prepaid phonecards and toll free
service, they obviate the need for callers to carry pocket change.[^23]

19\. The additional public interest concerns raised in comments that
were submitted. Included that some customers did not receive adequate
notice; and some commenters have objected that more advance notice of
the proposed discontinuances was needed than AT&T provided; that AT&T'
had initially represented to them that their 500 or 700 numbers would be
"permanent" "lifetime" numbers, and that callers had long relied on such
permanent numbers; so that losing 500 or 700 service will necessitate
incurring costs and inconvenience of changing business cards,
stationery, and directory listings. The conditions to be imposed will
ensure that 500 and 700 subscribers will have adequate time to make
these changes and find replacement services, and that callers will be
informed of subscribers' new phone numbers. No further conditions are
warranted, however, to mitigate the costs of these changes, because it
is reasonable that consumers must commonly incur such expenses,
sometimes unexpectedly, whenever it is necessary to replenish supplies
or change addresses, phone numbers, and other identifying information.

20\. Accordingly, the discontinuance applications will be granted,
subject to the following conditions:

> \(1\) The notice must inform customers that during the 60-day period
> they may obtain other services to replace their AT&T 500 or 700
> services. If customers do not retain the same 500 or 700 numbers under
> service from another carrier, then, for those customers who inform
> AT&T of their new numbers, AT&T must make the customers' new numbers
> available to callers who dial their 500 or 700 numbers. AT&T must
> explain in its notice how customers may inform AT&T of their new
> numbers any time up to the discontinuance date.
>
> \(2\) After AT&T's 500 and 700 services are discontinued, AT&T must
> ensure that callers dialing a customer's 500 or 700 number hear a
> message informing them that AT&T's 500 and 700 services have been
> discontinued[^24] and that they may obtain the subscriber's new number
> by dialing a specified toll free number. AT&T must provide this
> service for at least 60 days after the 500 and 700 services are
> discontinued.
>
> \(3\) AT&T must notify its customers of the discontinuances, in
> writing, 60 days in advance of the discontinuances, informing them of
> the discontinuances and of the benefits of these conditions.

**III. ORDERING CLAUSES**

21\. IT IS ORDERED, pursuant to authority delegated in Sections 0.91 and
0.291 of the Commission\'s rules, 47 C.F.R. §§ 0.91, 0.291, that the
applications to discontinue AT&T EasyReach 700 Service and AT&T 500
Personal Number Service, ARE GRANTED SUBJECT TO THE CONDITIONS DESCRIBED
IN THIS CERTIFICATE AND ORDER.

FEDERAL COMMUNICATIONS COMMISSION

L. Charles Keller

Chief, Network Services Division

#########  Common Carrier Bureau

[^1]: 47 U.S.C. § 214(a).

[^2]: 47 C.F.R. § 63.71.

[^3]: AT&T stated in its applications that it also notified all affected
    customers by letter of its plans to discontinue the services, as
    required by 47 C.F.R. § 63.71.

[^4]: AT&T December 21, 1999, comments at 1-2, *infra.*

[^5]: Section 214(a) requires a carrier to obtain a certificate of
    public convenience and necessity from the Commission either to
    construct, acquire, operate, or engage in transmission over lines of
    communication or to discontinue, reduce, or impair service to a
    community. Section 214(a) provides:

    No carrier shall undertake the construction of a new line or of an
    extension of any line, or shall acquire or operate any line, or
    extension thereof, or shall engage in transmission over or by means
    of such additional or extended line, unless and until there shall
    first have been obtained from the Commission a certificate that the
    present or future public convenience and necessity require or will
    require the construction, or operation, or construction and
    operation, of such additional or extended line\... . No carrier
    shall discontinue, reduce, or impair service \... unless and until
    there shall first have been obtained from the Commission a
    certificate that neither the present nor future public convenience
    and necessity will be adversely affected thereby\....

[^6]: 47 C.F.R § 63.71(b).

[^7]: 47 C.F.R § 63.71(a).

[^8]: 47 C.F.R § 63.71(c). The 31-day period applies to service by
    non-dominant carriers. The Commission has found AT&T to be
    non-dominant. *See* Motion of AT&T Corp. to be Reclassified as a
    Non-Dominant Carrier, *Order*, 11 FCC Rcd. 3271 (1995), *recon.
    pending*.

[^9]: Prior to filing its December 21, 1999, comment, AT&T had submitted
    on November 4, 1999, an ex parte notice indicating that, on November
    3, 1999, it had presented information to Commission staff to justify
    the proposed discontinuances. AT&T also submitted on November 4,
    1999, an additional ex parte notice requesting confidential
    treatment of certain charts containing privileged commercial or
    financial information for the 500 and 700 services, under sections
    0.457 and 0.459 of the Commission's rules.

[^10]: AT&T December 21, 1999 comments at 2-3.

[^11]: Letter from Sara Robertson - Director, John Donovan - IPIU Unit,
    Bureau of Business Ethics, to Secretary of the FCC, dated February
    16, 2000, stamped received February 22, 2000.

[^12]: *See, e.g., Colorado v. United States*, 271 U.S. 153 (1926)
    (application of the public convenience and necessity standard to a
    discontinuance of common carrier service requires the agency to
    balance the harm to customers that would result from discontinuance
    against the economic harm to the carrier that would result from
    continued provision of service).

[^13]: AT&T December 21, 1999 comments at 4.

[^14]: AT&T December 21, 1999 comments at 7.

[^15]: AT&T December 21, 1999 comments at 4.

[^16]: Information on these toll free number providers may be found at
    www.sms800.com, the internet site of the toll free number database
    administrator

[^17]: AT&T December 21, 1999 comments at 4-5.

[^18]: AT&T December 21, 1999 comments at 5.

[^19]: AT&T December 21, 1999 comments at 6.

[^20]: AT&T December 21, 1999 comments at 5.

[^21]: 47 U.S.C. § 214(c).

[^22]: AT&T December 21, 1999 comments at 7.

[^23]: AT&T December 21, 1999 comments at 8.

[^24]: This condition, requiring AT&T to inform callers that AT&T's [500
    and 700 services]{.underline} have been [discontinued]{.underline}
    differs from the statement in AT&T's February 18, 2000, letter that
    AT&T would inform callers that "the number as been disconnected."