Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | CC Docket No. 99-200         |
|                                  | * |                              |
| Numbering Resource Optimization  | ) | CC Docket No. 96-98          |
|                                  | * |                              |
| Petition for Declaratory Ruling  | * |                              |
| and Request For Expedited Action |   |                              |
| on the July 15, 1997 Order of    | * |                              |
| the Pennsylvania Public Utility  | * |                              |
| Commission Regarding Area Codes  | ) |                              |
| 412, 610, 215, and 717           | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**SECOND REPORT AND ORDER, ORDER ON RECONSIDERATION IN CC DOCKET NO.
96-98 AND CC DOCKET NO. 99-200, AND SECOND FURTHER NOTICE OF PROPOSED
RULEMAKING IN CC DOCKET NO. 99-200**

**Adopted: December 7, 2000 Released: December 29, 2000**

Comment Date: February 12, 2001

Reply Comment Date: March 5, 2001

By the Commission:

**TABLE OF CONTENTS**

[Paragraph Number]{.underline}

I.  Introduction 1

II. Background AND Overview 4

III. UTILIZATION THRESHOLD 18

A. [Initial Utilization Threshold]{.smallcaps} 21

B. [Adjustments to the Utilization Threshold]{.smallcaps} 25

C. [Applicability of Utilization Threshold to Pooling
Carriers]{.smallcaps} 27

D. [Application of Utilization Threshold for Growth
Resources]{.smallcaps} 29

E. [Calculation of Utilization Level]{.smallcaps} 30

F. [Geographic Application of Utilization Threshold]{.smallcaps} 31

IV. Thousands-block number pooling 34

A. [Selection of Thousands-Block Number Pooling
Administrator]{.smallcaps} 34

1.  Pooling Administrator Term of Appointment 38

B. [State Pooling Trials -- California and Maine Petitions]{.smallcaps}
41

C. [Thousands-Block Number Pooling for Covered CMRS
Carriers]{.smallcaps} 47

V.  AREA CODE RELIEF and Pennsylvania Numbering Order Petitions for
    Reconsideration and Clarification 52

```{=html}
<!-- -->
```
A.  [Introduction 52]{.smallcaps}

B. [Background]{.smallcaps} 54

C. [Federal Guidelines for Area Code Relief]{.smallcaps} 56

D.  [Geographic Splits Versus All-Services Area Code Overlays
    62]{.smallcaps}

```{=html}
<!-- -->
```
1.  Reverse Overlays 71

2.  Expanded Overlays 73

E. [Pennsylvania Numbering Order Petitions for Reconsideration and
Clarification]{.smallcaps} 76

VI. other numbering resource optimization measures 81

```{=html}
<!-- -->
```
A.  [Audits 81]{.smallcaps}

```{=html}
<!-- -->
```
1.  Types of Audits 84

2.  Audit Responsibility 89

3.  Audited Information and Procedures 94

```{=html}
<!-- -->
```
B.  [Mandatory Nationwide Ten-Digit Dialing 100]{.smallcaps}

C.  [Expansion of the D Digit 105]{.smallcaps}

D. [Clarification of Definitions]{.smallcaps} 107

1.  Parent OCN 107

2.  Classification of Numbers Used for Intermittent or Cyclical Purposes
    110

```{=html}
<!-- -->
```
E.  [Reconsideration of Reserved Number Period 113]{.smallcaps}

F.  [Clarification of State Commissions' Access to Data 116]{.smallcaps}

```{=html}
<!-- -->
```
1.  State Commissions' Access to Mandatory Reporting Data 116

2.  State Commissions' Access to Numbering Resource Application
    Information 120

```{=html}
<!-- -->
```
VII. FURTHER NOTICE OF PROPOSED RULEMAKING 124

A. [Service-Specific and Technology-Specific Overlays]{.smallcaps} 124

B. [The Rate Center Problem]{.smallcaps} 144

C. [Liability of Related Carriers]{.smallcaps} 149

D. [State Commissions' Access to Mandatory Reporting Data]{.smallcaps}
151

E. [Fee for Number Reservations]{.smallcaps} 152

F. [Enforcement]{.smallcaps} 153

G. [State Commissions' Authority to Conduct "For Cause" and "Random
Audits" 155]{.smallcaps}

[H. Developing Market-Based Approaches for Optimizing Numbering
Resources]{.smallcaps} 156

1.  Commission Authority to Charge for Numbers 158

2.  The Need for a Market-Based Allocation System 161

3.  Structure of Markets 164

4.  Timing and Geographic Scope of Implementation 177

I. [Recovery of Pooling Shared Industry and Direct Carrier-Specific
Costs]{.smallcaps} 179

J. [Thousands-Block Number Pooling for Non-LNP-Capable
Carriers]{.smallcaps} 183

K. [Waiver of Growth Numbering Requirements]{.smallcaps} 186

VIII. PROCEDURAL MATTERS 190

IX. ordering clauses 199

Final Rules Appendix A

Final Regulatory Flexibility Analysis Appendix B

Initial Regulatory Flexibility Analysis Appendix C

List of Parties Appendix D

# INTRODUCTION

1.  In this Second Report and Order (*Second Report and Order)*, Order
    on Reconsideration in CC Docket No. 99-200, and Second Further
    Notice of Proposed Rulemaking (*Second Further Notice*), we continue
    to develop, adopt and implement a number of strategies to ensure
    that the numbering resources of the North American Numbering Plan
    (NANP)[^1] are used efficiently, and that all carriers have the
    numbering resources they need to compete in the rapidly expanding
    telecommunications marketplace. Less than nine months ago, we
    adopted a number of administrative and technical measures designed
    to allow us to monitor more closely and increase the efficiency with
    which numbering resources within the NANP are used, and sought
    further comment on refinements to, and implementation of, those
    measures.[^2] Primary among the measures we adopted was a roadmap
    for the assignment of numbers to carriers in blocks of 1,000 rather
    than 10,000, as has historically been the practice. At that time, we
    also made clear our intention to continue to examine other
    optimization measures not specifically addressed then, in
    furtherance of our national numbering resource optimization goals.

2.  In undertaking to develop national numbering resource optimization
    strategies, we seek to fulfill our statutory mandate under section
    251(e) of the Communications Act of 1934, as amended by the
    Telecommunications Act of 1996 (1996 Act or Act), which grants this
    Commission plenary jurisdiction over the NANP.[^3] In the *First
    Report and Order*, we concentrated our efforts on two of the major
    factors that contribute to numbering resource exhaust as identified
    in the Numbering Resource Optimization Notice of Proposed Rulemaking
    (*Notice*): the absence of regulatory, industry or economic control
    over requests for numbering resources, which failed to promote
    accountability or efficiency with which numbering resources were
    used and may even have led carriers to misuse the allocation system
    and build large inventories of numbers, and the allocation of
    numbers in blocks of 10,000, irrespective of the carrier's actual
    need for new numbers.[^4] We continue to focus on these two factors,
    and, in addition, examine several other measures raised in the
    *Notice* but not addressed in the *First Report and Order*.

3.  In the *Pennsylvania Numbering Order*,[^5] the Commission
    established guidelines for state commissions to follow in selecting
    area code relief options and, among other things, encouraged states
    to seek further delegated authority to implement number conservation
    plans. In this Order on Reconsideration in CC Docket No. 96-98, we
    address issues relating to the Commission's delegation of authority
    to state public utility commissions (state commissions or states) to
    undertake certain aspects of area code relief and to implement
    numbering resource optimization measures. We decline to amend the
    existing rules or implement additional rules for area code relief at
    this time. Rather, we find that the area code relief measures
    already in place are in accord with the numbering resource
    optimization measures under consideration in this proceeding.

# II. Background and overview {#ii.-background-and-overview .unnumbered}

4.  In the Communications Act of 1934, as amended by the 1996 Act,
    Congress gave the Commission plenary jurisdiction over the NANP
    within the United States.[^6] In discharging our authority over
    numbering resources, we seek to balance two competing goals. We must
    ensure that carriers have the numbering resources that they need to
    compete and bring new and innovative services to the consumer
    marketplace. At the same time, we must ensure that, to the extent
    possible, numbering resources are used efficiently. Inefficient use
    of numbering resources speeds the exhaust of area codes, imposing on
    carriers and consumers alike the burdens and costs of implementing
    new area codes. It also shortens the life of the NANP as a whole. In
    the *First Report and Order*, we described the alarming rate at
    which existing area codes were entering states of jeopardy and new
    area codes were being activated throughout North America.[^7] Recent
    reports by the North American Numbering Plan Administrator (NANPA)
    indicate that at least 37 additional area codes are scheduled for
    implementation by the end of 2001.[^8]

5.  Although it remains difficult to predict NANP exhaust with absolute
    precision, we know that exhaust could have occurred within ten years
    unless we took measures to increase the efficiency with which
    numbering resources are being used. As noted in the *First Report
    and Order*, the measures first examined were chosen because they
    could be implemented quickly and would produce immediate and
    measurable results.[^9] We recognize that it may be too soon to
    measure comprehensively the effectiveness of the measures we
    implemented last March in furtherance of numbering resource
    optimization. Nevertheless, we are confident that those steps, and
    the ones we implement in this order, will help us to achieve our
    goal of extending the life of the current NANP.[^10]

6.  *Optimization Measures Already Implemented.* The measures adopted in
    the *First Report and Order* marked a significant change in NANP
    administration. Most notably, all carriers in the United States that
    use NANP numbering resources now must closely monitor, track, and
    report on their number usage based on uniform definitions
    established by the Commission. Additionally, carriers must now
    demonstrate their need for additional numbering resources with more
    than their subjective forecasts. Carriers that fail to do so will be
    denied numbering resources. Other measures designed to increase
    discipline in numbering resource utilization practices include
    mandatory reclamation of unused numbering resources and a
    requirement that numbers be assigned by carriers to end-users
    sequentially to preserve the availability of unused blocks of
    numbering resources for other carriers.

7.  Among the measures adopted that appear to be the most promising is
    thousands-block number pooling.[^11] Thousands-block number pooling
    is a system for allocating numbers in blocks of 1,000 rather than
    10,000. It has been estimated that the nationwide implementation of
    thousands-block number pooling and other numbering optimization
    measures could potentially extend the life of the NANP by as many as
    25 years.[^12] Substantial benefit can be realized by
    thousands-block number pooling because it enables carriers to take
    fewer than 10,000 numbers at a time, which in turn leaves fewer
    numbers stranded and thus unavailable to be used by other carriers.
    By setting forth a framework for implementing thousands-block number
    pooling, we hope to remedy the inefficient allocation and use of
    numbering resources at the national level.

8.  *State Commission Involvement*. A major component of our overall
    numbering resource optimization strategy involves our commitment to
    continue developing and maintaining a partnership with the state
    commissions. We have enlisted states to assist us in numbering
    resource optimization efforts by delegating significant authority to
    them to implement certain measures. In addition to the authority to
    implement area code relief, we have responded to the requests of 25
    state commissions by conditionally granting them authority to
    implement the following measures: thousands-block number pooling
    trials; rationing for six months following implementation of area
    code relief; hearing and addressing claims of carriers seeking
    numbering resources outside of the rationing process; and auditing
    carriers' use of numbering resources. The grants of authority to the
    state commissions, however, were not intended to allow the states to
    engage in number conservation measures to the exclusion of, or as a
    substitute for, unavoidable and timely area code relief.[^13]
    Although we did not mandate rate center consolidation in the *First
    Report and Order*, we also believe that rate center consolidation is
    an attractive numbering resource optimization measure because it
    enables carriers to use fewer NXX codes and thousands blocks to
    provide service throughout a region, thereby reducing the demand for
    NXX codes and thousands blocks, improving number utilization, and
    prolonging the life of an area code. We strongly encourage the state
    commissions to proceed as expeditiously as possible to consolidate
    rate centers.

9.  *Additional Activities.* In the interim period since the release of
    the *First Report and Order*, we have continued to implement
    measures in furtherance of our numbering resource optimization
    goals. On July 15, 2000, the Common Carrier Bureau (Bureau) released
    a Public Notice in response to several questions the Bureau had
    received relating to the *First Report and Order*.[^14] On July 20,
    2000, the Bureau released an order delegating to 15 states the
    authority to implement number conservation measures.[^15] In
    response to numerous requests from parties, on July 31, 2000, we
    released an order staying the mandatory utilization and forecast
    reporting requirements until September 15, 2000, and extending the
    deadline for compliance with the 45-day reservation limit until
    December 1, 2000.[^16] In addition, on August 30, 2000, the Bureau
    released a Public Notice seeking comment on the California Public
    Utilities Commission and the People of the State of California
    (California Commission) and the Maine Public Utilities Commission
    (Maine Commission) petitions for waiver of the requirement that
    state commissions conform their thousands-block number pooling
    trials to the national pooling rules set forth in the *First Report
    and Order* by September 1, 2000.[^17] We also released an order on
    August 31, 2000, staying the compliance of the national pooling
    rules for California and Maine until we rule on the merits of the
    petitions or December 31, 2000, whichever date is sooner.[^18]

10. *Overview.* We sought comment on several matters relating to our
    findings in the *First Report and Order* in an accompanying Further
    Notice of Proposed Rulemaking (*Further Notice*). In the *Further
    Notice*, we sought comment on the level at which the utilization
    threshold for non-pooling carriers should be established. In this
    *Second Report and Order*, we establish a utilization threshold of
    60% that carriers must meet before receiving additional numbering
    resources in a given rate center; this threshold will increase by 5%
    per year to a maximum of 75%. We also reconsider our decision not to
    apply a utilization threshold to pooling carriers. We conclude that
    application of a utilization threshold to pooling carriers will
    further our numbering resource optimization goals, and therefore
    establish a utilization threshold of 60%, to increase by 5% per year
    to a maximum of 75% for pooling carriers as well. Those states
    already using a utilization threshold that exceeds our established
    utilization threshold may continue to use their higher threshold (up
    to 75%) only where it is currently in use until it no longer exceeds
    the mandated threshold, at which time they must conform to the
    federally mandated threshold.

11. Furthermore, we address our national framework for thousands-block
    number pooling administration, and conclude that the term of the
    Pooling Administrator will be five years rather than coterminous
    with the current NANPA term. We also rule on the merits of petitions
    for waiver filed by the California Commission and the Maine
    Commission, and conclude that California and Maine, as well as other
    state commissions conducting thousands-block number pooling trials,
    may continue to use their utilization thresholds subject to
    parameters set forth in this order.

12. In the *Further Notice*, we also sought comment on whether covered
    CMRS carriers should be required to participate in pooling upon
    expiration of the local number portability (LNP) forbearance period
    on November 24, 2002.[^19] Based on the record before us, we decline
    to adopt a transition period between the time that covered CMRS
    carriers must implement LNP and the time they must participate in
    any mandatory number pooling.

13. We also address several issues proposed in the *Notice* concerning
    area code relief. Specifically, we consider whether we should amend
    the existing federal rules or develop additional federal guidelines
    for area code relief. At the present time, we decline to amend the
    existing federal rules for area code relief or specify any new
    federal guidelines for the implementation of area code relief. We
    recognize the integral role state commissions play in our numbering
    resource optimization policies and continue to rely on them to
    implement timely area code relief. We also address the advantages
    and disadvantages of geographic splits and all-services overlays,
    and the approaches most commonly used by states to implement area
    code relief. We decline to state a preference for either
    all-services overlays or geographic splits as a method of area code
    relief. Moreover, we encourage state commissions to consider the use
    of reverse overlays and expanded overlays, as well as boundary
    realignments, as a means of allocating new numbering resources to
    areas facing exhaust.

14. We also set forth a comprehensive audit program to verify carrier
    compliance with federal rules and orders and industry guidelines. We
    conclude that our comprehensive audit program will consist of "for
    cause" and random audits performed by an auditor designated by the
    Bureau.[^20] Moreover, we direct the auditor to provide a
    comprehensive audit plan, including a proposal for specific
    enforcement measures against those carriers that are found to have
    violated our numbering guidelines and rules. We also conclude that
    the costs of designated agents involved in conducting audits will be
    allocated and recovered through the NANP administration fund
    administered by the North American Billing and Collection Agent
    (NBANC).

15. Regarding nationwide mandatory ten-digit dialing, we decline to
    adopt this measure at the present time. Furthermore, because
    implementation issues remain unresolved, we decline to adopt
    nationwide expansion of the "D digit" (the "N" of an NXX or central
    office code) to include the digits 0 or 1, or to grant state
    commissions the authority to expand the D digit as a numbering
    resource optimization measure at the present time.

16. In this *Second Report and Order*, we also clarify certain aspects
    of the administrative measures adopted in the *First Report and
    Order*. First, we address certain elements of our new requirements
    for monitoring carrier number usage, including the definition of
    Parent Operating Company Number (OCN), and addressing how numbers
    used for intermittent and cyclical purposes should be categorized
    under the uniform definitions established in the *First Report and
    Order*. We also address issues raised in several petitions for
    reconsideration of the 45-day period for reserved numbers. Next, we
    clarify the scope of access that state commissions have been granted
    to mandatorily reported data and numbering resource application
    information.

17. We also seek comment on several matters relating to our findings in
    the *Numbering Resource Optimization* proceeding in the attached
    *Second Further Notice*. The issues addressed include: our current
    prohibition on service-specific and technology-specific overlays,
    and whether we should modify the prohibition and permit states to
    implement service-specific and technology-specific overlays subject
    to certain conditions; the rate center problem, particularly what
    policies could be implemented at the federal level to reduce the
    extent to which the rate center system contributes to and/or
    accelerates numbering resource exhaust; and a proposal for a
    market-based approach for optimizing the use of numbering resources.

# III. Utilization Threshold {#iii.-utilization-threshold .unnumbered}

18. *Background.* In the *First Report and Order*, we concluded that
    carriers not participating in thousands-block number pooling would
    be required to show that they had used a certain percentage of their
    existing inventory of numbers before receiving additional resources
    in a given rate center.[^21] We also concluded that pooling carriers
    should not have to meet such a utilization threshold to receive
    additional numbering resources in a rate center.[^22] In the
    *Further Notice*, we sought comment on several issues related to
    establishing a utilization threshold for non-pooling carriers.[^23]
    Although we determined that non-pooling carriers should be required
    to meet a utilization threshold, we had no basis on which to
    establish a specific utilization threshold because the parties
    provided very little empirical data. In response to the *Notice*,
    parties had suggested utilization thresholds within the 60%-90%
    range. The utilization thresholds proposed by the parties, however,
    apparently were based on a calculation that included categories of
    numbers in addition to *assigned* *numbers* in the numerator (such
    as *administrative*, *aging*, and *reserved* numbers). We recognized
    that these differences in calculating utilization would result in
    different utilization levels and, therefore, tentatively concluded
    that a nationwide utilization threshold for growth numbering
    resources should be set initially at 50%, and increased by 10%
    annually until it reaches a maximum of 80%.

19. Additionally, we tentatively concluded that a carrier should be
    required to meet a rate center-based utilization threshold for the
    rate center in which it is seeking additional numbering resources.
    We sought comment on whether the rate center-based utilization
    should be used in combination with NPA-based utilization thresholds.
    Finally, we sought comment on whether state commissions should be
    allowed to set the rate-center based utilization threshold within a
    range and based on criteria that we establish.

20. In the *First Report and Order*, we recognized that some states were
    in the process of conducting utilization studies, and we hoped to
    examine those studies to learn what actual utilization levels
    carriers are now achieving. Several state commissions have since
    adopted utilization thresholds pursuant to delegated authority.[^24]
    Connecticut, Florida, Massachusetts, New York, and Ohio, for
    example, have applied utilization thresholds to carriers that do not
    participate in thousands-block number pooling. California, New
    Hampshire, and Maine have applied utilization thresholds to both
    pooling and non-pooling carriers.[^25]

## Initial Utilization Threshold

21. *Discussion.* We agree with those commenting parties that suggest
    that allowing carriers that have used only one-half of their
    existing inventories to receive additional numbering resources does
    not reasonably encourage meaningful number optimization.[^26] The
    record suggests that carriers are able to achieve utilization levels
    above 50% before needing more numbering resources.[^27] Moreover,
    parties that support a 50% utilization threshold have provided no
    credible basis for adopting this level.[^28] Although setting the
    utilization threshold is not an exact science, we agree with those
    commenters who state that allowing carriers to assign only one-half
    of the numbers in their inventory before asking for more numbers
    undermines our efforts to optimize the use of existing numbering
    resources. In other words, we believe that carriers with lower
    utilization levels do not need additional numbering resources.
    Rather, they can serve customers from their current inventory.
    Commenters have presented no persuasive evidence to contradict this
    reasoning; they offer no evidence that they (especially those with
    lower utilization rates) are technically or otherwise precluded from
    using more of their existing inventory before requesting more
    numbering resources. We also believe that a 50% utilization
    threshold provides no incentive for carriers to use numbers more
    efficiently, and that such a low initial utilization threshold may
    cause us to lose some of the momentum gained from the strategies
    adopted in the *First Report and Order*.[^29]

22. Instead, we adopt a 60% initial utilization threshold. We find that
    60% is an appropriate initial utilization level for several reasons.
    First, sound numbering resource optimization policies should
    encourage carriers to use as many numbers as possible from their
    existing inventory before obtaining additional numbers from the
    NANPA or the Pooling Administrator. Also, state commission studies
    and our preliminary assessment of data carriers reported to the
    NANPA indicate that the average industry utilization levels range
    from approximately 45%-65%.[^30] The data reported to the NANPA
    suggests that the average industry-wide utilization is approximately
    50%.[^31] Thus, it appears that an initial threshold of 60% is high
    enough to encourage carriers to use numbers from their existing
    inventory before seeking more resources, yet low enough to be
    achievable by carriers that truly need additional resources. In
    addition, states have used utilization thresholds in this range with
    success.[^32] Furthermore, this initial threshold level, because it
    is demonstrably achievable,[^33] will give carriers an opportunity
    to make an orderly transition to the higher thresholds we adopt
    below without compromising their ability to obtain numbering
    resources to serve customers in the short term.

23. The industry commenters differ from the public interest
    commenters[^34] as to what role, if any, state commissions should
    play with respect to establishing utilization thresholds. The
    industry commenters argue that state commissions should not be
    allowed to deviate from the utilization threshold that we
    establish.[^35] The public interest commenters contend that state
    commissions should be allowed to set specific utilization thresholds
    within a range established by us.[^36] We agree with those
    commenters that argue disparate utilization thresholds may be more
    difficult to administer and may increase the difficulty of
    monitoring compliance.[^37] We therefore decline to delegate
    additional authority to state commissions to set different
    utilization thresholds, with one exception. State commissions that
    are currently using a utilization threshold pursuant to delegated
    authority that exceeds 60% may continue to use their utilization
    threshold in those areas as long as it does not exceed the
    Commission's established ceiling of 75%.[^38] States exercising this
    authority must ensure that utilization is being calculated in the
    manner established in the *First Report and Order*; that is, only
    *assigned numbers* are included in the numerator. This limited
    exception allows states to continue their forward progress already
    achieving success with higher utilization thresholds. The
    utilization thresholds that we adopt herein shall otherwise be
    applied on a uniform nationwide basis.

24. We also find it appropriate to allow a brief transition period for
    carriers to make appropriate adjustments to the way in which they
    manage their numbering resource inventories. We conclude, therefore,
    that all carriers shall have until three months after the effective
    date of this *Second Report and Order* to meet the initial
    utilization threshold before applications for growth numbering
    resources will be denied because of failure to meet the
    threshold.[^39] In the interim, however, carriers shall continue to
    be required to meet the months-to-exhaust (MTE) requirement before
    receiving growth resources.

## Adjustments to the Utilization Threshold 

25. *Discussion*. In the *Further Notice*, we tentatively concluded that
    the initial utilization threshold should be increased annually by
    10% to a maximum of 80%.[^40] We are persuaded that an annual
    increase in the utilization threshold is appropriate, but conclude
    that the utilization threshold should be increased by 5% annually
    instead of 10%, until it reaches 75% rather than 80%. We gradually
    increase the utilization level by 5% because we seek to give
    carriers sufficient time to increase the efficiency with which they
    use numbering resources above current levels and to use numbers
    currently in their inventories before they obtain more resources. We
    remain concerned that many carriers may be doing little if anything
    to groom their numbering inventories to minimize waste of these
    important resources; this mandate should make all carriers take
    significant and measurable steps to improve their utilization.
    Moreover, we strongly believe that as carriers become accustomed to
    the numbering resources optimization measures we have adopted, the
    efficiency with which they use numbering resources will increase.

26. The initial utilization threshold of 60% shall be effective three
    months after publication of this *Second Report and Order* in the
    Federal Register. The utilization threshold shall be increased by 5%
    on June 30, 2002, and annually thereafter until the utilization
    threshold reaches 75%.[^41] The 75% threshold is a reasonable
    compromise between the 60% ceiling recommended by some industry
    commenters[^42] and the 80% ceiling recommended by other
    commenters,[^43] particularly since carriers are successfully
    meeting 75% utilization thresholds established by some state
    commissions.[^44] In fact, some carriers are able to reach
    utilization levels as high as 80% before they need additional
    numbering resources.[^45] This threshold balances our goal of
    encouraging the efficient use of numbering resources with carriers'
    need to retain some flexibility in managing their inventories. In
    the future and as the market matures, however, carriers may be able
    to achieve greater efficiencies in their use of numbering resources
    and, therefore, a higher utilization threshold may be appropriate.
    We urge carriers to develop strategies and procedures to increase
    their utilization levels beyond the required thresholds in
    furtherance of our numbering resource optimization goals, and in
    anticipation of any future adjustments.

## Applicability of Utilization Threshold to Pooling Carriers

27. *Discussion.* Petitioners and commenters sought reconsideration of
    our decision to exempt pooling carriers from the requirement to meet
    a utilization threshold to obtain growth numbering resources.[^46]
    They argue that both non-pooling and pooling carriers should be
    required to satisfy the utilization threshold in addition to the MTE
    requirement. California asserts that the utilization threshold it
    established for carriers participating in its pooling trials has
    increased numbering efficiency in its pooling trials.[^47]

28. We are encouraged by the results achieved in pooling trials using a
    utilization threshold, and are persuaded that our national numbering
    resource optimization goals can be met more quickly and efficiently
    if we require all carriers, including pooling carriers, to meet a
    utilization threshold to obtain growth numbering resources.[^48] We
    agree with Maine that applying the utilization threshold to pooling
    carriers helps ensure that only those thousands blocks that are
    needed are assigned.[^49] Thus, the rationale we applied in
    establishing a utilization threshold for non-pooling carriers, we
    believe, applies equally in a pooling environment. Further,
    utilization rates provide an objective, uniform means of determining
    when carriers are in need of additional numbering resources. We
    therefore conclude that pooling carriers, also, shall be subject to
    meeting the utilization thresholds established herein to obtain
    growth numbering resources.

## Application of Utilization Threshold for Growth Resources

29. *Discussion.* Several petitioners and commenters disagreed with our
    decision to require carriers to meet a utilization threshold in
    addition to MTE criteria to receive growth numbering resources,[^50]
    generally asserting that the MTE calculation is sufficient to
    determine carriers' need for numbering resources. [^51] Nextel
    opposes utilization thresholds for growth numbering resources and
    asserts that an MTE calculation more accurately reflects a carrier's
    numbering resource demands.[^52] As we stated in the *First Report
    and Order*, using MTE as the sole criterion for evaluating need for
    numbering resources is inadequate, primarily because much of the MTE
    data cannot be verified until after the carrier has already obtained
    the numbering resources. Also, the MTE forecast is highly subjective
    and dependent on good faith projections by each carrier. Moreover,
    there is no retrospective accountability for carriers'
    forecasts.[^53] In contrast, the utilization threshold provides a
    more objective measure of carriers' need for numbering resources.
    We, thus, affirm our conclusion that carriers must meet both the MTE
    and the utilization threshold requirements to receive growth
    numbering resources.

## Calculation of Utilization Level

30. *Discussion.* Some carriers have asked us to reconsider the manner
    in which we calculate the utilization levels.[^54] We determined in
    the *First Report and Order* that utilization for a given geographic
    area (rate center or NPA) must be calculated by dividing all
    *assigned numbers* by the total numbering resources assigned to the
    carrier in that geographic area and multiplying the result by
    100.[^55] Some commenting parties suggest that the utilization
    calculation should include *administrative*, *aging*,
    *intermediate*, and *reserved numbers* in the numerator, or that the
    utilization threshold should otherwise be reduced because carriers
    have very little or no control over numbering resources in these
    categories.[^56] These arguments are unpersuasive. As we stated in
    the *First Report and Order*, basing the utilization calculation on
    *assigned numbers* provides a more accurate representation of the
    percentage of numbers being used to serve customers, which we
    believe is the proper analysis for furthering our numbering
    optimization goals.[^57] Moreover, the utilization thresholds that
    we adopt herein take into consideration that only *assigned numbers*
    are used in the numerator to calculate utilization.[^58] In
    establishing them, we have considered available data on carrier
    utilization and experience with utilization thresholds in several
    states. Therefore, there is no need to alter the definition of
    utilization or to include *administrative*, *aging*, *intermediate*
    or *reserved numbers* in the numerator.

## Geographic Application of Utilization Threshold

31. *Discussion.* In the *First Report and Order*, we determined that
    the utilization threshold should be calculated and applied per rate
    center because numbering resources are assigned per rate
    center.[^59] Most commenters agree with this conclusion,[^60] and
    very few commenters support an NPA-wide utilization requirement.

32. Some ILECs suggest, however, that the utilization threshold should
    be calculated on a per-switch basis in rate centers that have
    multiple switches, particularly where they have not deployed LNP
    capability.[^61] According to BellSouth, in the absence of
    thousands-block number pooling, numbers cannot be shared easily
    among multiple switches in the same rate center.[^62] They assert
    that there are technical constraints on their ability to share
    numbering resources among multiple switches within the same rate
    center and that a low utilization rate in one or more switches could
    prevent it from meeting the rate center utilization threshold.[^63]
    SBC argues in its comments that the utilization threshold should be
    calculated at the "lowest code assignment point" -- the rate center,
    where there is only one switch, or the switch, where there is more
    than one in a rate center.[^64]

33. We are not persuaded at this time that we should adopt a
    switch-based utilization or "lowest code assignment point"
    utilization as suggested by SBC.[^65] We are concerned that allowing
    carriers to receive additional numbering resources when they have
    not reached the overall rate center utilization threshold will
    increase the likelihood that numbering resources will become
    stranded in underutilized switches. We also believe that
    switch-based utilization undermines our policy of encouraging rate
    center consolidation, which allows numbering resources to be used
    over a wider geographic area. Switch-based utilization calculation
    would represent, in essence, rate center de-consolidation. We urge
    carriers to pursue intra-rate center and intra-company porting of
    numbers and other strategies to share numbers among switches, both
    to minimize stranded numbers and to alleviate the need to get
    additional numbering resources without meeting the established
    utilization threshold in each rate center. Because a number of
    parties have indicated that they are unable to port numbers between
    switches until they have implemented pooling,[^66] we seek comment
    in the attached *Second Further Notice* on the need, and specific
    criteria to be used, for a "safety valve" for carriers that do not
    meet the utilization threshold for a given rate center, but have a
    demonstrable need for additional numbering resources. In the
    interim, until an alternative "safety valve" process is established,
    carriers that do meet the utilization threshold in a given rate
    center may continue to seek waivers from the Commission to obtain
    additional numbering resources.

# IV. Thousands-block number pooling {#iv.-thousands-block-number-pooling .unnumbered}

## A. Selection of Thousands-Block Number Pooling Administrator {#a.-selection-of-thousands-block-number-pooling-administrator .unnumbered}

34. In the *First Report and Order*, we determined that implementation
    of thousands-block number pooling is essential to extending the life
    of the NANP by making the assignment and use of NXX codes more
    efficient.[^67] We therefore mandated nationwide thousands-block
    number pooling in the 100 largest metropolitan statistical areas
    (MSAs), and set forth requirements and a national framework for
    implementation. Specifically, we required participation in pooling
    by carriers that are required to be LNP-capable, either because they
    provide service in one of the largest 100 MSAs, or pursuant to a
    request from another carrier,[^68] and directed that thousands-block
    number pooling be deployed first in NPAs that are located in the
    largest 100 MSAs.[^69] We also directed covered Commercial Mobile
    Radio Service (CMRS) providers to implement thousands-block number
    pooling after the forbearance from the LNP requirements expires on
    November 24, 2002.[^70] In addition, we required states that have
    implemented their own pooling trials under delegated authority to
    bring these trials into conformity with the national framework set
    forth in the *First Report and Order*.[^71] Finally, we adopted
    certain technical requirements to ensure a consistent nationwide
    pooling architecture.[^72]

35. We also concluded that thousands-block number pooling should be
    administered by a single national Pooling Administrator, but delayed
    implementation of pooling on a nationwide basis until the national
    Pooling Administrator is selected through a competitive bidding
    process.[^73] We delegated authority to the Commission's Office of
    the Managing Director (OMD), with the assistance of the Common
    Carrier Bureau and the Office of the General Counsel, to prepare the
    necessary bidding information and to develop an evaluation process
    for the Commission to use in soliciting bids for a national Pooling
    Administrator.[^74] We also directed the North American Numbering
    Council (NANC)[^75] to make revisions to its proposed
    Thousands-Block Pooling Administrator Requirements Document to
    specify the technical requirements for national pooling
    administration.[^76] On September 5, 2000, the Common Carrier Bureau
    released a Public Notice seeking comment on the technical
    requirements recommended by the NANC.[^77] After reviewing the
    comments received from several parties,[^78] OMD, with the
    assistance of a technical consultant, MITRE Corporation,[^79]
    developed a Request for Proposal (RFP) to be used in the selection
    of the national Pooling Administrator. To facilitate an expeditious
    implementation of national thousands-block number pooling, OMD
    determined that a limited competitive bidding process is
    appropriate, and thus identified and is inviting bids from three
    potential bidders known for having experience in numbering
    administration: Mitretek Systems, NeuStar, Inc., and Telcordia
    Technologies, Inc. The procurement of a national Pooling
    Administrator is being conducted in accordance with the requirements
    of the Federal Acquisition Regulation (FAR).[^80]

36. We note that as a consultant to the Commission for pooling
    administration, MITRE's fees are part of the cost of establishing
    pooling administration. MITRE's services have been an integral
    aspect of the Commission's establishment of pooling administration.
    Therefore, MITRE's fees will be borne by carriers in a competitively
    neutral manner in the same way that the direct costs of pooling
    administration are borne.

37. Of particular concern with this procurement is the fairness of the
    bidding process, in light of the NANC's earlier interactions with
    NeuStar in its capacity as NANPA and for several state pooling
    trials.[^81] Telcordia, for example, stated its belief that as a
    Pooling Administrator, NeuStar would have an advantage in the
    bidding process,[^82] and asked the Commission to be vigilant to
    ensure that NeuStar did not use its NANPA and Number Portability
    Administrator Center (NPAC) administrator positions to gain an
    unfair competitive advantage in bidding to provide national pooling
    administration.[^83] In response to these concerns, we have taken
    affirmative steps to structure the procurement process to ensure
    that no party has an unfair competitive advantage. First, we asked
    the NANC to "scrub" its proposed Requirements Document, and ensure
    that its technical requirements are competitively neutral and do not
    favor any particular party. We then solicited comments from the
    public on the proposed technical requirements to ensure that all
    interested parties had an opportunity to voice any concerns or
    issues about the content of the technical requirements.[^84] Next,
    we hired a neutral third party consultant to help us evaluate and
    further refine the technical requirements, develop an RFP, and
    assist us with the evaluation of competitive bids to facilitate an
    equitable process. We believe that the technical expertise of the
    consultant, coupled with its status as a neutral third party, adds
    safeguards to the procurement process and helps to eliminate any
    perceived or actual advantages for any one party. Moreover, we
    ensured that no potential bidder had access to any information
    pertaining to the RFP or the selection process, unless all potential
    bidders had access to such information. We also ensured that all
    potential bidders obtained any non-proprietary information relevant
    to the RFP or the selection process that they requested. It is
    anticipated that the national Pooling Administrator selection will
    be made in the first quarter of 2001.

### Pooling Administrator Term of Appointment

38. *Background*. In the *First Report and Order*, we indicated our
    intent to have the national Pooling Administrator serve until the
    completion of the current NANPA's term.[^85] This would effectively
    give the national Pooling Administrator an initial term of less than
    two years. Several commenters, including Telcordia, opined that the
    proposed term is too short.[^86] Telcordia asserts that the length
    of the award cycle makes it difficult for a Pooling Administrator
    bidder to recoup its start up costs.[^87] Telcordia states that,
    like the NANPA contract, the national Pooling Administrator award
    period should be set at five years.[^88] Other parties
    disagree.[^89] WorldCom, for example, states that the Commission
    should not reconsider its decision to make the initial Pooling
    Administrator term coterminous with the current NANPA term, so as
    not to foreclose potential synergies between the NANPA and the
    Pooling Administrator.[^90]

39. *Discussion*. We conclude that the term of the thousands-block
    number Pooling Administrator will be five years. Thus, the Pooling
    Administrator's initial contract will not be coterminous with the
    NANPA's term. We agree with Telcordia's assertion that the Pooling
    Administrator contract need not be tied to the NANPA's
    contract.[^91] We believe that a five-year award cycle will better
    enable the Pooling Administrator to recoup its startup costs,
    because it allows the Administrator to spread its startup costs over
    a longer period of time.[^92] We note that a five-year contract
    should enhance competition by allowing bidders to offer a more
    attractive annual contract price, thus increasing the interest of
    bidders in the contract.[^93] A longer term will also benefit
    carriers, who will be able to spread their costs associated with
    thousands-block number pooling administration over a longer period
    of time. Moreover, we note that if the Pooling Administrator term
    were coterminous with the NANPA term, by allocating up to nine
    months of the Pooling Administrator term to preparation for the
    national rollout, the Pooling Administrator would have less than a
    year of operation before the term would end.[^94]

40. We nevertheless agree with WorldCom that it may be desirable in the
    future to link the thousands-block number pooling administration and
    central office code administration duties to take advantage of any
    synergies that may be achieved by one entity serving in both
    capacities.[^95] We however are cognizant that vendor diversity for
    number administration services may have advantages for the industry
    and the public.[^96] We therefore intend to revisit the question of
    whether the NANPA's and the Pooling Administrator's contract terms
    should be coterminous in the future.

## B. State Pooling Trials -- California and Maine Petitions {#b.-state-pooling-trials-california-and-maine-petitions .unnumbered}

41. *Background*. As we enunciated in the *First Report and Order*,
    uniform standards for thousands-block number pooling are necessary
    to minimize the confusion and additional expense related to
    compliance with inconsistent regulatory requirements.[^97] We
    recognized in the *First Report and Order* that pooling trials
    already underway might not conform to the standards set forth in the
    national framework.[^98] Thus, we required state commissions to
    bring their pooling trials into conformity with the national
    framework by September 1, 2000.[^99] Our goal in establishing the
    September 1, 2000 deadline was to give state commissions time to
    bring their pooling trials into conformity with the national
    framework, and to facilitate uniformity in the implementation of
    thousands-block number pooling on a nationwide basis.[^100]

42. On August 4, 2000, the California Commission requested a waiver from
    compliance with the Commission's directive in the *First Report and
    Order* to conform their thousands-block number pooling trial to the
    Commission's national pooling rules by September 1, 2000.[^101] On
    August 14, 2000, the Maine Commission sought similar relief.[^102]
    Specifically, both petitioners seek to continue applying their
    utilization thresholds until the national pooling rollout
    begins.[^103] Maine also specifically seeks relief from our
    sequential numbering rules.[^104] California and Maine seek waivers
    from complying with the September 1, 2000 deadline so that they may
    continue to require pooling carriers to meet a utilization
    threshold, which they assert has proven integral to the success of
    their number pooling trials.[^105] Although both petitioners request
    relief from the national pooling rules in general, their petitions
    enumerate specific arguments supporting only their requests to
    continue to apply a utilization threshold for pooling
    carriers.[^106] California and Maine further assert that conforming
    to national pooling rules would be detrimental to their efforts to
    delay the exhaust of area codes.[^107] Both California and Maine
    state that they will conform to national number pooling rules when
    national pooling implementation begins.[^108]

43. In support of its waiver request, Maine states that uniformity is
    the exception and not the rule in telephone regulation.[^109] Maine
    believes that each state's circumstances are different and "that if
    it must bear the responsibility of area code relief, it should be
    given the flexibility to implement conservation measures which meet
    its specific needs."[^110] California and Maine are also concerned
    about the possibility that, under the Commission's national rules,
    pooling carriers will be allowed to acquire more new numbers than
    they need by submitting a months to exhaust calculation based upon
    completely subjective projections of future numbering needs.[^111]
    On August 31, 2000, the Commission released an Order granting
    California and Maine a stay of the requirement to comply with
    national pooling rules until December 31, 2000, or until we ruled on
    the merits of the petitions, whichever date is sooner.[^112]

44. *Discussion*. In applying utilization thresholds to pooling carriers
    as discussed above, we grant California and Maine the primary relief
    sought in their petitions. Specifically, they and all other states
    that have commenced pooling trials in which they apply a utilization
    threshold to pooling carriers may continue to use their thresholds
    if the thresholds meet or exceed the 60% utilization threshold
    established herein for all other carriers, using our methodology for
    calculating utilization.[^113] States using a utilization threshold
    that exceeds the currently established initial threshold of 60% in
    an active pooling trial need not decrease their threshold in that
    area, but may continue to use their threshold up to a maximum level
    of 75%. When the national Pooling Administrator takes over the
    administration of these pooling trials, states will have the option
    of maintaining the higher utilization threshold rather than lowering
    the threshold to conform to the national level.[^114]

45. Maine also seeks relief from our sequential numbering rules.[^115]
    Maine states that the *First Report and Order* implements a standard
    for sequential numbering that provides little guidance to carriers
    and provides them with ample room to avoid strict compliance.[^116]
    Maine describes neither what its sequential numbering rules are, nor
    how its sequential numbering rules differ from the national rules.
    Moreover, Maine proffers no reason why it cannot comply with the
    national rules. Also, contrary to Maine's assertions, we have not
    received other comments that our rules do not provide enough
    guidance. Moreover, we believe that the national rules should
    address Maine's concerns about sequential numbering. We also believe
    the benefit of having a uniform requirement outweighs the potential
    inconvenience and confusion from the existence of disparate
    requirements. We therefore conclude that all service providers must
    assign numbers in accordance with the sequential numbering rules we
    established in the *First Report and Order*.[^117]

46. Finally, we conclude that all states must conform all other aspects
    of their pooling trials to the national framework. They will be
    given a transition period of three months from the date of
    publication of this *Second Report and Order* in the Federal
    Register to make any necessary adjustments. Both the California and
    Maine Commissions are to be commended for their stewardship of
    numbering resources in their respective states. Moreover, we
    recognize the need for state commissions to have some flexibility in
    rendering numbering administration decisions pursuant to their
    delegated authority. We agree, however, with AT&T that "state
    commissions have long been on notice that their interim pooling
    authority would be superseded by national standards, and they
    presumably established their pooling trials with that fact in
    mind."[^118] We find that national requirements sufficiently support
    our numbering resource optimization goals, while ensuring that
    service providers are subject to the same rules and requirements for
    each state in which they operate. We also find that compliance with
    a national, uniform framework for thousands-block number pooling
    will permit service providers to avoid having to conform with
    different requirements for every jurisdiction in which they operate,
    which would be unwieldy and inefficient for service providers from
    both a regulatory and a financial perspective. Moreover, a lack of
    uniformity would harm consumers, who would likely incur the costs
    imposed on service providers operating under disparate pooling
    regimes.

## Thousands-Block Number Pooling for Covered CMRS Carriers

47. *Background*. In the *Further Notice*, we sought comment on whether
    covered CMRS carriers should be required to participate in pooling
    by the LNP forbearance period on November 24, 2002.[^119] In the
    alternative, we sought comment on whether we should allow a
    transition period between the time that covered CMRS carriers must
    implement LNP and the time they must participate in pooling, and if
    so, what the minimum reasonable allowance for such a transition
    period would be. We noted that by determining, in the *First Report
    and Order*, that CMRS carriers would be required to participate in
    pooling once they have acquired LNP capability, we were providing
    more than two years of lead time for carriers to perform the
    necessary preparations.[^120]

48. State commissions generally oppose granting any additional time to
    CMRS carriers, arguing that, because carriers have been on notice
    for over two years that they would be required to implement pooling,
    they should not require additional time to make the necessary system
    changes.[^121] Carriers, on the other hand, assert that they need
    additional time to make changes to their systems to implement
    pooling. For example, VoiceStream states that to implement pooling,
    carriers must modify their local service management systems (LSMSs),
    service control points (SCPs), service order administration systems
    (SOAs), and operations support systems (OSSs).[^122]

49. *Discussion*. In the *First Report and Order*, we found that
    implementation of thousands-block number pooling in major markets is
    essential to extending the life of the NANP by making the use of NXX
    codes more efficient.[^123] In determining that CMRS carriers would
    be required to participate in pooling once they acquired LNP
    capability, we noted that CMRS providers would be able to contribute
    meaningfully to the numbering efficiencies to be gained by
    thousands-block number pooling.[^124]

50. Based on the record before us, we decline to adopt a transition
    period between the time that covered CMRS carriers must implement
    LNP and the time they must participate in any mandatory number
    pooling. While carriers will have to modify some of their systems to
    implement pooling, we agree with states that, because carriers are
    on notice that they will be required to participate in pooling, and
    because pooling and LNP involve substantially similar technical
    modifications, carriers should be able to implement pooling in the
    same time frame that they achieve LNP capability.[^125] Carriers
    have not provided us with sufficient evidence demonstrating that
    they will not be able to implement pooling by the deadline for
    implementation of LNP.[^126]

51. We are not persuaded by carriers' assertions that a brief transition
    period is necessary to allow them time to troubleshoot any problems
    that may occur after LNP deployment.[^127] Carriers have not
    identified sufficiently any specific additional risks of
    implementing LNP and pooling at the same time. For instance, by the
    time wireless carriers begin to participate in pooling, number pools
    will be well established in many areas of the country, and many of
    the initial implementation problems will have previously been worked
    out. Moreover, carriers have not explained why any potential risks
    could not be anticipated and addressed prior to the LNP
    implementation deadline. In declining to adopt a transition period,
    we note that the fundamental administrative and technological
    elements for thousands-block number pooling are currently, or will
    soon be, available. For example, there already are guidelines for
    the administration and assignment of thousands blocks to LNP-capable
    service providers required to participate in thousands-block number
    pooling.[^128] In addition, NPAC Release 3.0, which is LNP software
    that includes efficient data representation (EDR) for number
    pooling, is currently being tested.[^129] EDR allows a location
    routing number (LRN) to be associated with a block of one thousand
    numbers as a single record.[^130] Because EDR allows one thousand
    numbers to be downloaded and stored as a single record, instead of
    one-thousand records, it is expected to significantly extend a
    carrier's SCP capacity for thousands-block number pooling.[^131] The
    availability of the Thousands-Block Pooling Administration
    Guidelines, as well as the NPAC Release 3.0 software, should help
    CMRS carriers implement pooling by the LNP implementation deadline.

# V. Area code relief and pennsylvania numbering order petitions for reconsideration and clarification {#v.-area-code-relief-and-pennsylvania-numbering-order-petitions-for-reconsideration-and-clarification .unnumbered}

## Introduction

52. In the *First Report and Order*, we set forth a number of
    administrative and technical measures that focus on conservation of
    numbering resources within each NPA or area code. By maximizing
    efficient use of numbers within area codes, we reduce the need to
    introduce new area codes, which protects consumers from the expense,
    trouble and dislocation that area code relief entails and also can
    help prevent premature exhaust of the existing NANP. We recognize,
    however, that the adoption of these numbering optimization measures
    does not eliminate the need for states to continue to implement area
    code relief in area codes that are approaching depletion. Therefore,
    in the *Notice*, we considered what action we could take to assist
    states in implementing area code relief in a manner that is
    consistent with other numbering resource optimization measures that
    we may adopt in the *Numbering Resource Optimization* proceeding.

53. In this section, we address whether we should amend the existing
    federal guidelines or develop additional federal guidelines for area
    code relief. We also address the advantages and disadvantages of
    geographic splits and all-services overlays, the approaches most
    commonly used by states to accomplish area code relief, and whether
    area code overlays are preferable to geographic splits from a
    numbering resource optimization perspective. Moreover, we examine
    the possible uses of reverse overlays and expanded overlays as area
    code relief options. Furthermore, we reexamine our current
    prohibition on service-specific and technology-specific overlays.
    Finally, we address related petitions for clarification or
    reconsideration that were filed in response to the *Pennsylvania
    Numbering Order*.[^132]

## Background

54. Traditionally, when the supply of numbers available within an area
    code is estimated to exhaust during the planning horizon, some form
    of area code relief must be implemented so that customers in that
    area can continue to obtain the services they desire from the
    carrier of their choice. The implementation of new area codes has
    been the primary relief measure employed in geographic areas
    experiencing numbering resource shortages brought on by the rapid
    growth in demand for central office codes or NXX codes. Pursuant to
    Section 251(e)(1) of the Act, the Commission has delegated to state
    commissions the authority to direct the form of area code relief, to
    perform the functions associated with initiating and planning area
    code relief, and to adopt final area code relief plans, subject to
    Commission guidelines for numbering administration.[^133]

55. On September 28, 1998, we released the *Pennsylvania Numbering
    Order*, delegating additional authority to state commissions to
    order NXX code rationing in conjunction with area code relief
    decisions, in the absence of industry consensus.[^134] The order
    further approved a mandatory thousands-block number pooling trial in
    Illinois.[^135] The order provided that state commissions could
    order voluntary pooling trials,[^136] but in view of our efforts to
    develop national pooling standards, we declined to delegate to state
    commissions the general authority to order mandatory number
    pooling.[^137] The *Pennsylvania Numbering Order*, however,
    encouraged state commissions to seek limited delegations of
    authority to implement other number conservation measures.[^138]

## Federal Guidelines for Area Code Relief

56. *Background*. As discussed above, state commissions were delegated
    the authority to direct the form of area code relief, to perform the
    functions associated with initiating and planning area code relief,
    and to adopt final area code relief plans, subject to the
    Commission's guidelines for numbering administration.[^139] In the
    *Notice*, we sought comment generally on whether we should amend the
    existing federal guidelines or develop additional federal guidelines
    for area code relief, to facilitate the optimization of numbering
    resources.[^140]

57. *Discussion*. We decline to amend the existing federal rules for
    area code relief or to specify any new federal guidelines for the
    implementation of area code relief at the present time. State
    commissions may continue to authorize area code relief in accordance
    with previous Commission rulings. We continue to believe that state
    commissions are uniquely positioned to determine when, and in what
    form, to implement area code relief.[^141]

58. Some commenters suggest that the Commission should impose limits on
    the time state commissions may take to complete the implementation
    process for new area codes.[^142] We decline to do so at this time.
    We agree that timely implementation of area code relief is
    critically important to telecommunications carriers' ability to
    compete in the telecommunications marketplace. We are also, however,
    sensitive to the states' desire to minimize the consumer impact of
    area code relief by not implementing new area codes any sooner than
    necessary. Recent experiences have revealed how difficult it is to
    balance both of these concerns.

59. NANP administration must reflect sensitivity to the growth and
    dynamic nature of the telecommunications industry. The ready
    availability, and use, of numbering resources by communications
    service providers is essential to the public receiving the
    communications services it wants and needs. Unavailability of
    numbers, or an inefficient allocation of available numbers, could
    prevent or discourage consumers from taking new services.[^143]
    Thus, the timely implementation of area code relief is essential if
    new providers are to enter and new services are to appear in the
    telecommunications marketplace. We continue to believe that we must
    rely on state commissions to make area code relief decisions because
    of their unique position to ascertain and weigh the very local and
    granular information inherent in area code relief decision making.
    In addition, no commenter has proposed a workable federal rule or
    "trigger" to require area code relief if states fail to implement it
    in what they believe to be a timely manner. Because of the
    importance of this issue to competition, however, we emphasize that
    we will continue to monitor area code relief carefully, and reserve
    the right to take a stronger role in this process should
    circumstances warrant. We acknowledge that the decision of when to
    implement area code relief is difficult, and that consumers can be
    harmed if new area codes are implemented too early or too late. The
    implementation of new area codes before they are necessary forces
    consumers to go through the expense and dislocation of changing
    telephone numbers or dialing patterns earlier or more often than
    necessary. On the other hand, delayed implementation of necessary
    area code relief can leave carriers without the numbering resources
    they need to provide consumers with the services they are
    demanding.[^144] Long term rationing and other restrictions on
    access to numbers poses an insidious threat to competition, as it
    can cause carriers to move their business to where numbers are more
    readily available, robbing consumers of competitive choices.

60. In general, numbering administration should promote entry into the
    communications marketplace by making numbering resources available
    on an efficient and timely basis, should not unduly favor or
    disadvantage a particular industry segment or group of consumers,
    and should not unduly favor one technology over another.[^145] In
    applying these principles, state commissions must take all necessary
    steps to prepare an NPA relief plan that may be adopted by the state
    commission when numbering resources in the NPA are in imminent
    danger of being exhausted.[^146] Furthermore, the implementation of
    any numbering resource optimization measures adopted in this
    proceeding does not eliminate the need for states to continue to
    implement area code relief in those area codes that are approaching
    depletion.[^147]

61. We also reaffirm our commitment to the guidelines enumerated in the
    *Pennsylvania Numbering Order* regarding the rationing of NXX codes.
    In prior orders, we have declined to grant state commissions
    authority to adopt NXX code rationing procedures prior to adopting
    an area code relief plan, except in the most extreme
    circumstances.[^148] Some commenting parties suggest, nonetheless,
    that more and more states are relying on rationing as a means to
    defer area code relief.[^149] As determined in the *Pennsylvania
    Numbering Order*, the rationing of NXX codes should only occur when
    it is clear that an NPA will run out of NXX codes before timely
    implementation of a relief plan.[^150] Rationing may only be used to
    ensure that an area code does not exhaust completely before the
    state commission, acting expeditiously, can implement a new area
    code. Specifically, a state commission may order rationing only if
    it has ordered a specific form of area code relief and has
    established an implementation date, and the industry is unable to
    agree on a rationing plan.[^151] If the state commission has not yet
    chosen a relief method and established a relief date, the NANPA, as
    central office code administrator, and the industry should devise
    the jeopardy conservation or rationing measures, consistent with the
    current industry practice. We also emphasized in the *Pennsylvania
    Numbering Order* that state commissions may not use rationing as a
    substitute for area code relief.[^152] We intend to closely monitor
    situations where states may be using central office code rationing
    in lieu of timely area code relief and may take appropriate action
    if we deem it necessary to ensure our rules are followed.[^153]
    Under no circumstances should consumers be precluded from receiving
    telecommunications services of their choice from providers of their
    choice for a want of numbering resources. For consumers to benefit
    from the competition envisioned by the 1996 Act, it is imperative
    that competitors in the telecommunications marketplace face as few
    barriers to entry as possible.

## Geographic Splits Versus All-Services Area Code Overlays

62. *Background.* A geographic split occurs when the geographic area
    served by an area code is split into two or more geographic regions
    and one region maintains the old area code and one (or more) receive
    one (or more) new area codes.[^154] An all-services area code
    overlay occurs when a new area code is introduced to serve the same
    geographic area as an existing area code.[^155] The Commission has
    concluded that, if a state commission chooses to implement an
    all-services overlay, the all-services overlay plan must include
    mandatory ten-digit local dialing by all customers between and
    within area codes in the area covered by the new code.[^156] NANPA
    data reveal that state commissions implement new area codes through
    the implementation of geographic splits significantly more often
    than through the use of overlays.[^157] In the *Notice*, we sought
    comment on the advantages and disadvantages of all-services overlays
    and geographic splits from a numbering resource optimization
    perspective, and whether there is a need for additional rules or
    guidelines at the federal level with respect to the implementation
    of geographic splits by state authorities.[^158] We also sought
    comment on whether there is a need to modify our existing guidelines
    with respect to the implementation of all-services overlays.[^159]

63. *Discussion*. Several commenting parties identified a number of
    disadvantages of geographic splits as a measure of area code relief
    when compared with overlays.[^160] For example, SBC states that,
    from a numbering resource optimization perspective, geographic
    splits result in the less efficient use of NPA resources, especially
    where carriers stand in line on one side of the geographic split
    while resources sit unused and unusable, on the other side.[^161]
    Geographic splits also require approximately half of the subscribers
    in the existing NPA to change to the new NPA. As a result, these
    subscribers may incur additional cost, including disruption to users
    due to the need for reprogramming Customer Premises Equipment (CPE)
    and changes made to stationery and advertising.[^162] Because
    geographic splits require approximately half of the subscribers in
    the existing NPA to change to a new NPA, successive geographic
    splits create substantial costs for subscribers, thus increasing the
    consequences associated with inaccurately forecasting growth versus
    non-growth areas. Splits can also often create dialing confusion by
    requiring customers to use one dialing pattern for some calls (seven
    digits) and another dialing pattern for others (ten digits).[^163]

64. Other commenters identified a number of advantages of geographic
    splits as a measure of area code relief. For example, the Ohio
    Commission states that geographic splits can be implemented in many
    NPAs with minimal effects on the vast majority of callers'
    seven-digit local calling patterns.[^164] Thus, with the
    implementation of geographic splits, any given customer's premises
    will be served by one NPA, and customers maintain seven-digit
    intra-NPA dialing.[^165] Geographic splits also allow customers the
    ability to associate an NPA with a unique geographic area.[^166]
    Moreover, geographic splits allow for equal availability of
    unassigned NXXs in both the new and the old NPA to all industry
    segments.[^167] Other commenters suggest that splits are
    competitively neutral and offer the benefits of increased
    competition.[^168]

65. Although we recognize that there are advantages and disadvantages to
    geographic splits as a form of area code relief, we decline to
    follow the recommendations of parties urging that we enumerate
    additional rules or guidelines at the federal level with respect to
    the implementation of geographic splits. We agree with the North
    Carolina Commission that state commissions continue to need the
    flexibility to make decisions regarding area code relief and to set
    the boundaries of a geographic split in the most appropriate way,
    considering the technical implications for carriers' networks, the
    local circumstances, consumer preferences, and communities of
    interest.[^169] Although we do not establish additional rules or
    guidelines regarding the implementation of geographic splits at the
    present time, we require the state commissions to abide by the same
    general requirements that this Commission has imposed on the NANPA
    with regard to numbering administration. Thus, state commissions
    that choose to implement geographic splits must ensure that
    numbering resources are made available on an equitable basis; that
    numbering resources are made available on an efficient and timely
    basis; that relief not unduly favor or disfavor any particular
    telecommunications industry segment or group of telecommunications
    consumers; and that the relief not unduly favor one
    telecommunications technology over another.

66. Several commenting parties also identified a number of advantages of
    all-services overlays as a measure for area code relief. From a
    numbering optimization perspective, an all-services overlay creates
    a new numbering resource that is available for use throughout the
    entire geographic area covered by the old NPA code,[^170] allowing
    resources to follow demand throughout an area receiving area code
    relief. As a result, the consequences associated with inaccurately
    forecasting growth versus non-growth areas may be reduced. Other
    commenters note that all-services area code overlays are the least
    disruptive means of providing numbering relief because overlays only
    affect the assignment of new numbers; existing consumers are not
    required to change their telephone numbers, in contrast to
    geographic splits.[^171] Businesses avoid the expense of reprinting
    stationery and business cards, and they will not lose any business
    opportunities or goodwill due to missed calls.[^172] This advantage
    is particularly significant in high-demand areas where there is a
    need for more frequent area code relief, because prospective
    all-services overlays can be implemented without requiring existing
    consumers to change their telephone numbers, in contrast to
    geographic splits. Moreover, some commenting parties suggest that
    area code overlays can be implemented quickly and are perhaps less
    expensive to implement than splits because no customers are forced
    to change their numbers.[^173]

67. Some commenters identified a number of disadvantages of all-services
    overlays.[^174] First, customers must use ten-digit dialing for
    calls in their own area, both to call numbers that use the overlay
    area code and, pursuant to the Commission's mandate, to call numbers
    within their own area code.[^175] Thus, although an overlay does not
    require existing customers to change their own telephone numbers, it
    leads to additional costs associated with ten-digit dialing and it
    reduces the ability of customers readily to identify geographic
    areas with specific NPAs.[^176] Second, from a numbering
    optimization perspective, if an all-services overlay is implemented
    on a prospective basis (*i.e*., no existing customers are reassigned
    to the new NPA), it does not free up new numbering resources within
    the existing NPA. Thus, new entrants in a market are less likely to
    be able to obtain numbers in the existing NPA, and therefore may be
    less able to compete effectively against incumbents for customers
    desiring numbers in the existing NPA. Furthermore, Cox contends that
    there is no inherent benefit to all-services overlays because
    all-services overlays do not increase the total numbering resources
    throughout the NPA.[^177]

68. Some commenting parties state that all-services overlays should be
    the preferred method of choice for area code relief at the present
    time.[^178] SBC, for example, urges the Commission to adopt a
    presumption in favor of all-services overlays in the largest 100
    MSAs and require all-services overlays where either an exhausting
    area code has failed to last for the recommended interval in the
    Industry Numbering Committee's (INC's) NPA relief planning
    guidelines or the new area code is projected to last less than the
    recommended interval in the guidelines.[^179] At this time, we
    decline to adopt a presumption in favor of all-services overlays as
    a method of area code relief. We believe that state commissions are
    singularly situated to determine the best available relief plan
    among the alternatives presented based on local geography, local
    needs, the public interest, and carrier compatibility. State
    commissions are uniquely positioned to evaluate the best relief plan
    on a case-by-case basis and, therefore, the determinations of
    appropriate relief should be left to state commissions.[^180] We
    also believe that specific circumstances and considerations in each
    relief area should determine which option---geographic split or
    all-services overlay---would best suit the area.[^181] Thus, state
    commissions may continue to make decisions regarding the relative
    merits of area code splits and overlays so long as they act
    consistently with the Commission's guidelines.[^182] In addition to
    these two options, state commissions should consider whether a third
    option, boundary realignments, would better serve their area code
    relief needs.

69. Several commenters in this proceeding also suggest suspending or
    eliminating the ten-digit dialing requirement for all-services
    overlays.[^183] Ameritech, for example, contends that suspending the
    ten-digit dialing requirement will provide the incentive for states
    to implement all-services area code overlays.[^184] SBC states that
    developments since the *Local Competition Second Report and Order*
    have eliminated the need for the ten-digit dialing
    requirement.[^185] The North Carolina Commission states that,
    although the ten-digit dialing requirement mitigates dialing
    disparity resulting from the implementation of an overlay that could
    be conceived as a competitive disadvantage, it does not justify the
    inconvenience of ten-digit dialing being forced upon citizens who
    are not yet enjoying any benefits of a competitive
    marketplace.[^186] Other commenters, however, support the retention
    of the mandate that calls placed both within and outside of the
    subscriber's NPA use ten digits when an overlay is
    implemented.[^187] The Small Business Alliance, for example, notes
    that ten-digit dialing is so common in many areas that customers
    automatically give their area code and number when leaving a message
    on voice mail or on an answering machine.[^188]

70. We continue to believe that imposing the ten-digit dialing
    requirement on the implementation of all-services overlays will
    ensure that competitors, including small entities, do not suffer
    competitive disadvantages.[^189] We therefore retain the mandatory
    ten-digit dialing requirement when all-services overlays are
    implemented.[^190] Thus, "no area code overlay may be implemented
    unless there exists, at the time of implementation, mandatory
    ten-digit dialing for every telephone call within and between all
    area codes in the geographic area covered by the overlay area
    code."[^191] We require mandatory ten-digit dialing for all calls in
    areas served by overlays to ensure that competition will not be
    deterred in overlay area codes as a result of dialing disparity. We
    believe that local dialing disparity would occur absent mandatory
    ten-digit dialing, because all existing telephone users would remain
    in the old area code and dial seven digits to call others in that
    area code, while new users with the overlay code would have to dial
    ten digits to reach any customers in the old code.[^192] Requiring
    ten-digit dialing for all calls avoids the potentially
    anti-competitive effect of all-services area code overlays.

### Reverse Overlays

71. *Background*. A "reverse overlay" involves the creation of a single
    area served by two or more existing NPAs when a previously
    established NPA boundary is eliminated.[^193] The Public Utility
    Commission of Texas (Texas Commission) has deployed reverse overlays
    in the Dallas area (214/972) and the Houston area (713/281).[^194]
    In the *Notice*, we sought comment on the use of reverse overlays as
    a method for area code relief.[^195]

72. *Discussion*. We find that reverse overlays can be useful tools to
    allow the use of otherwise "stranded" numbering resources, and
    encourage the industry and state commissions to consider their use.
    According to SBC, reverse overlays have all of the advantages of
    all-service overlays, and they also eliminate inefficiencies created
    by a previous, erased geographic split line.[^196] GTE states that
    the reverse overlays deployed in Dallas and Houston were handled
    easily with few customer problems.[^197] Such an overlay plan can be
    especially useful in areas where the NPAs from the previous split
    are exhausting unevenly and relief is necessary in one but not the
    other.[^198] Reverse overlays can also be very useful where a
    slow-growing NPA is adjacent to a fast-growing NPA that is nearing
    exhaust. Rather than using a new NPA to relieve the area code that
    is nearing exhaust, the state could turn the adjacent, slow-growing
    NPA into an overlay, thereby freeing up NPA-NXXs in the
    slower-growing code that might otherwise have continue to lie fallow
    for years. This approach, if widely deployed, could significantly
    extend the life of the supply of NPAs in the NANP. We therefore
    strongly encourage states and the industry to consider it.

### Expanded Overlays

73. *Background*. The NANC has identified an "expanded overlay" proposal
    that would implement an overlay covering a region that is larger
    than an existing NPA.[^199] The "expanded overlay" proposal would
    not replace or change assignment boundaries for existing NPAs, but
    rather permits the allocation of numbering resources over a
    potentially larger geographic region.[^200] In the *Notice*, we
    sought comment on the feasibility of expanded area code overlays as
    a means of allocating new numbering resources to areas facing
    exhaust of existing NPAs.[^201] In particular, we sought comment on
    the practicality of this approach in light of its potential effect
    on rating and billing of calls between the overlay NPA and
    underlying NPAs.[^202] We also sought comment on whether there are
    any practical limits to the size of overlay NPAs.[^203]

74. *Discussion*. We encourage state commissions to consider the use of
    expanded overlays as a means of allocating new numbering resources
    to areas facing exhaust. There is no requirement that overlay area
    codes be implemented to use the same geographic boundaries as the
    underlying area codes. Potentially, use of such expanded overlay
    area codes could have significant numbering resource optimization
    benefits, because it would allow for use of a single area code to
    provide relief to multiple existing codes. Furthermore, as Cox
    asserts, an expanded NPA overlay could provide ways to improve
    efficiency of NXX code usage within densely populated areas.[^204]

75. Allocating new numbering resources over a larger geographic region
    than existing NPAs would give states enhanced flexibility to
    accommodate demand for numbers in high-growth areas that may not
    correspond to existing area code boundaries. Thus, the relative
    benefits of an overlay are maximized when the overlay covers the
    greatest area possible.[^205] We note that the creation of expanded
    area codes may also raise complex rating and billing issues,
    however, because the overlay NPA would have a larger coverage area
    than the underlying NPAs it overlaps.[^206] We therefore encourage
    the state commissions and the telecommunications industry to work
    together to solve these issues if an expanded overlay is implemented
    in a certain area.

## E. Pennsylvania Numbering Order Petitions for Reconsideration and Clarification {#e.-pennsylvania-numbering-order-petitions-for-reconsideration-and-clarification .unnumbered}

76. We also address petitions for clarification or reconsideration that
    were filed in response to the *Pennsylvania Numbering Order*.[^207]
    In the *Pennsylvania Numbering Order*, the Commission delegated
    additional authority to state commissions to order number rationing
    in jeopardy situations and encouraged state commissions to seek
    further limited delegations of authority to implement other
    innovative number conservation methods. The Commission, however,
    clarified that state commissions do not have the authority to order
    the return of NXX codes or thousand number blocks to the code
    administrator.[^208]

77. Several parties filed petitions for clarification or reconsideration
    of the *Pennsylvania Numbering Order* as it relates to states'
    authority to order the return of central office codes or thousand
    number blocks.[^209] In the *First Report and Order*, we recognized
    that state commissions may be able to resolve certain issues more
    quickly and decisively than an industry consensus process. In this
    regard, we granted authority to state commissions to direct the
    NANPA to reclaim unactivated or unused NXX codes.[^210] Similarly,
    we gave the same authority to the states to direct the Pooling
    Administrator in state pooling trials, as well as the national
    thousands-block number Pooling Administrator once national
    thousands-block number pooling has been established, to reclaim
    unactivated or unused thousands-blocks.[^211] In light of the
    delegation of authority to the states, the requests that the
    Commission clarify the *Pennsylvania Numbering Order* or reconsider
    the state commissions' authority to reclaim unused and reserved NXX
    codes and thousand-number blocks are moot. Accordingly, we dismiss
    as moot this aspect of the petitions for clarification or
    reconsideration that were filed in response to the *Pennsylvania
    Numbering Order*.

78. Several parties also request clarification or reconsideration of the
    *Pennsylvania Numbering Order* restricting state commissions from
    imposing number conservation methods (*e.g.*, NXX code rationing)
    until after a final decision is made regarding the implementation of
    area code relief.[^212] As discussed above,[^213] we reaffirm our
    commitment to the guidelines enumerated in the *Pennsylvania
    Numbering Order* that the rationing of NXX codes should only occur
    when it is clear that an NPA will run out of NXX codes before timely
    implementation of a relief plan.[^214] We emphasize that state
    commissions may not use rationing as a substitute for area code
    relief.[^215] In prior orders, the Commission and Bureau have also
    declined to grant state commissions authority to adopt NXX code
    rationing procedures prior to adoption of an area code relief plan,
    except in the most extreme circumstances.[^216] Because of the
    difficulty in getting needed numbering resources experienced by some
    carriers in areas subject to rationing, we are not persuaded that
    Commission precedent should be changed at this time. Thus, we
    decline to alter this aspect of the *Pennsylvania Numbering Order*.

79. We believe that the authority the Commission and the Bureau
    delegated to several state commissions to implement other relief
    measures will provide them with the tools they need to address the
    inefficiencies of numbering use in their states. For example, the
    Commission and the Bureau have granted several state commissions the
    authority to maintain pre-NPA relief NXX code rationing measures for
    six months following implementation of area code relief.[^217] The
    Commission and the Bureau reasoned that a continuation of rationing
    after area code relief neither contradicts the *Pennsylvania
    Numbering Order*,[^218] as the requisite area code relief has been
    implemented, nor has the potential---in contrast to rationing prior
    to area code relief---to forestall area code relief indefinitely. In
    addition, state commissions were also granted the authority to hear
    and address claims for an extraordinary need for numbering resources
    in an NPA subject to a rationing plan.[^219] This grant of authority
    empowers the state commissions to ensure that carriers in dire need
    of numbering resources can obtain the numbering resources they need
    to continue to provide service to their prospective customers, if
    the rationing plan will not ensure that the carriers will have
    adequate and timely access to numbering resources.

80. The California Commission also requests reconsideration of the
    *Pennsylvania Numbering Order* to the extent that it restricts state
    commissions from initiating mandatory number pooling.[^220] With the
    release of the *First Report and Order*, we adopted a nationwide
    system for allocating numbers in blocks of one thousand, rather than
    ten thousand, wherever possible, and announced our intention to
    establish a plan for national rollout of thousands-block number
    pooling. The Commission and the Bureau have also granted several
    state commissions the authority to initiate thousands-block number
    pooling trials.[^221] In fact, the California Commission was
    delegated authority to initiate thousands-block number pooling
    trials in California on September 15, 1999. Accordingly, we dismiss
    as moot this aspect of the California Commission's petition for
    reconsideration.

# VI. Other numbering resource optimization measures {#vi.-other-numbering-resource-optimization-measures .unnumbered}

## A. Audits {#a.-audits .unnumbered}

81. *Background*. In the *Notice*, we opined that auditing is the only
    comprehensive method for verifying the validity and accuracy of
    utilization data submitted by users of numbering resources.[^222] We
    stated that audits could also be used to verify compliance with
    non-quantitative rules or guidelines.[^223] We further stated that
    audit requirements may independently serve as a deterrent to carrier
    noncompliance or self-serving behavior, such as hoarding of
    numbers.[^224] Consequently, we proposed that any data collection
    and need verification measures proposed should be supplemented with
    a comprehensive audit program that verifies carrier compliance with
    federal numbering rules and industry numbering guidelines.[^225]

82. *Discussion.* We adopt our proposal to supplement the need
    verification measures and data collection requirements, adopted in
    the *First Report and Order*, with a comprehensive audit program to
    verify carrier compliance with federal rules and orders and industry
    guidelines. In addressing need verification measures in the *First
    Report and Order*, we adopted a more verifiable, needs-based
    approach to allocating initial and growth numbering resources
    predicated on proof that carriers need numbering resources when,
    where, and in the quantity requested. We find that an audit program
    is an important adjunct to these measures.

83. A comprehensive auditing program can serve many useful purposes.
    First, it can provide a level of confidence in the accuracy of data
    reported by carriers. Our ability to monitor numbering resource use
    and accurately predict NPA and NANP exhaust is dependent on the
    quality of the data submitted by the carriers. Auditing provides a
    way of verifying the accuracy of these data. Auditing also helps
    ensure that carriers are complying with our rules promoting
    efficient number usage because it serves as a deterrent. The mere
    possibility of an audit, we believe, will prevent behavior that is
    contrary to numbering resource optimization goals, such as
    stockpiling of unneeded resources. Finally, auditing will allow us
    to identify inefficiencies in the manner in which carriers use
    numbers, such as excessive use of certain categories of numbers such
    as administrative, aging, or intermediate numbers.

### 1. Types of Audits  {#types-of-audits .unnumbered}

84. *Background.* In the *Notice*, we identified the three commonly used
    types of audits: "for cause" audits, regularly scheduled audits, and
    random audits.[^226] "For cause" audits are conducted if there is a
    reason to believe that the information a carrier provided is
    inaccurate or misleading, or that a carrier has violated the
    Commission's rules or orders or applicable industry
    guidelines.[^227] Regularly scheduled audits, for our purposes,
    would be conducted on a fixed schedule for all entities that obtain
    numbering resources.[^228] Random audits are unscheduled audits of
    users of numbering resources selected at random.[^229] We sought
    comment on whether and, if so, how, all three types of audits should
    be employed as part of a comprehensive audit program to monitor
    carrier compliance with number allocation and administration rules
    and guidelines.[^230] We also sought comment on the comparative
    costs and benefits associated with performing each type of
    audit.[^231]

85. *Discussion.* After careful consideration, we conclude that our
    comprehensive audit program will consist of "for cause" and random
    audits. Given that we have strengthened our rules concerning need
    verification measures and data collection, we believe that we can
    better accomplish our goals with the use of these two types of
    audits. We agree with Omnipoint that regularly scheduled audits
    would be "exorbitantly expensive" to the industry, which includes
    thousands of code-holding carriers, or valueless due to the extended
    period of time between audits.[^232]

86. We observe that there is broad agreement among commenters that "for
    cause" audits should be included in our comprehensive audit program.
    "For cause" audits may be initiated based on information drawn from
    a variety of sources. For example, "for cause" audits could be
    triggered by the Bureau, the NANPA or the Pooling Administrator, or
    a state commission that has reason to believe that a service
    provider may have violated the Commission's rules or orders, or
    applicable industry guidelines. "For cause" audits could also be
    triggered by inconsistencies or anomalies, including inaccurate or
    misleading data, identified by the NANPA or the Pooling
    Administrator in reported mandatory utilization and forecast
    data,[^233] or by the Bureau or a state commission conducting its
    own review of submitted utilization and forecast data.[^234]

87. To request that a "for cause" audit be conducted for any of the
    above stated reasons, the NANPA, the Pooling Administrator or a
    state commission must make a written request to the entity
    designated by the Commission to conduct audits (the Auditor). Such
    request shall state the reason for which a "for cause" audit is
    being requested and shall include documentation of the alleged
    anomaly, inconsistency, or violation of the Commission rules or
    orders or applicable industry guidelines. The Auditor shall
    determine from the application whether a "for cause" audit is
    warranted. Also, the Auditor may, as an additional deterrent, and at
    its own discretion, conduct a "for cause" audit and follow-up audits
    of service providers that previously were subject to "for cause"
    audits.[^235]

88. Because "for cause" audits are conducted only if there are specific
    allegations of non-compliant or inappropriate conduct on the part of
    a carrier, we conclude that we should also monitor carrier
    compliance with our rules and orders and applicable industry
    guidelines through the use of random audits. We decline to employ
    only "for cause" audits in our program, as suggested by some
    commenters,[^236] because we believe it would weaken our ability to
    effectively monitor compliance with all rules, orders, and
    applicable guidelines. In conjunction with the use of "for cause"
    audits, we find that random audits will provide our comprehensive
    audit program with more flexibility to accomplish our auditing
    goals. Since random audits are not necessarily triggered by
    allegations of non-compliant or inappropriate conduct, they can
    serve as a strong deterrent to any carrier who might misuse
    numbering resources.[^237] We agree with the Texas Commission that
    random audits are particularly important to ensure continuous
    compliance with applicable rules and regulations.[^238] We disagree
    with Level 3 that random audits will expose a company to the
    arbitrary application of a costly process.[^239] All carriers should
    be prepared at any time to show their compliance with our
    requirements; the use of random audits will spare the vast majority
    of carriers from having to do so while providing a similar deterrent
    effect.

### 2. Audit Responsibility  {#audit-responsibility .unnumbered}

89. *Background*. We identified the NANPA, the Commission, and the state
    commissions in the *Notice* as possible candidates to conduct
    numbering resource audits.[^240] We sought comment on whether we
    should direct the NANC to select an entity to audit carrier number
    utilization and forecast data using a competitive bidding process
    subject to our approval.[^241] We acknowledged that the NANPA may
    not be the best choice to audit code holders because the NANPA, in
    its capacity as central office code administrator, would be subject
    to periodic audits for related issues.[^242] We also sought comment
    on who should conduct audits, and on whether audit responsibility
    should be apportioned among these or other neutral third
    parties.[^243]

90. *Discussion*. Although numerous commenters, including some state
    commissions, supported selecting NANPA as the auditor for our
    program, we decline to do so. We recognize, as do some commenters,
    that the selection of the NANPA as the auditor could pose a
    potential conflict of interest since the NANPA is subject to similar
    audits for numbering compliance.[^244] Instead, the Commission will
    ensure, by using auditors in the Audits Branch of the Accounting
    Safeguards Division in the Common Carrier Bureau or other designated
    agents, that "for cause" and random audits are properly and promptly
    conducted. We disagree with AirTouch that federal regulatory
    agencies do not have the necessary resources to conduct audits of
    the breadth that is needed.[^245] Since auditors are already
    employed by the Commission, we expect that only minimal costs will
    be incurred in implementing the auditing program. In addition, the
    Commission may designate agents under section 251(e)(1) to conduct
    audits or otherwise assist in the comprehensive numbering audit
    program.

91. Many of the state commissions responding to the *Notice* proposed
    that we delegate authority to the states to conduct their own audits
    in addition to the audits prescribed herein.[^246] We decline to
    delegate authority to the states to conduct the audits prescribed
    herein at the present time. We are concerned that some states may
    not, as indicated by the California Commission, have the resources
    to properly conduct the audits that we require.[^247] In addition,
    we are concerned that states may employ different standards in
    performing the audits. Many carriers operate in multiple states, and
    one of our goals in adopting a national auditing framework is to
    prevent carriers from having to comply with differing demands in
    different states. In declining to delegate authority to states to
    perform audits under the national program, we do not intend to
    preempt any state authority to perform audits under state law.

92. Nevertheless, we do believe that a certain level of state
    participation in our auditing program is desirable. Thus, we have
    granted states the ability to request "for cause" audits, as noted
    above.[^248] In the attached *Further Notice*, we seek comment on
    whether and under what circumstances state commissions should be
    given the independent authority to conduct "for cause" and "random"
    audits either in lieu of, or in addition to, the national audit
    program established herein.[^249] In addition, we will permit states
    that have the resources to do so to participate on Commission audit
    teams if they wish to do so.[^250] We note that the state
    commissions, through resolutions adopted by the National Association
    of Regulatory Utility Commissioners (NARUC), have encouraged such
    joint audit efforts.[^251]

93. Although not selected to perform the audits in our comprehensive
    program, the NANPA, in its capacity as code administrator, will
    continue to have audit-type responsibilities. Specifically, it must
    examine the data it receives from service providers for anomalies
    and inconsistencies. This audit-type responsibility is distinct from
    the audit program that we are establishing. Thus, our actions in
    establishing an audit program do not relieve NANPA of its
    responsibility to examine and verify data submitted by service
    providers. To the contrary, we require NANPA to continue to
    discharge these responsibilities, which will alert it to any
    information that may lead to the initiation of a "for cause" audit
    by the Auditor.

### 3. Audited Information and Procedures  {#audited-information-and-procedures .unnumbered}

94. *Background.* We sought comment on the process by which specific
    auditing procedures should be established, as well as on the
    development of statistical and analytical approaches that would be
    required to evaluate the quality and validity of reported
    data.[^252] We asked parties to comment on how we may structure an
    audit process that is flexible enough to focus on new problems or
    issues as they arise.[^253] We noted that the NANC and the INC have
    been working to develop a comprehensive audit process, and we
    directed the NANC to provide a progress report regarding this work
    effort to the Common Carrier Bureau on or before the deadline for
    initial comments in this proceeding.[^254] We also sought comment on
    the best method for soliciting the input of state commissions,
    recognizing that state commissions should have a major role in the
    development of this framework and procedures.[^255]

95. *Discussion.* On July 18, 2000, the NANC submitted a progress report
    to the Common Carrier Bureau regarding its work with the INC in
    developing a comprehensive audit process.[^256] Although we do not
    adopt the report in its entirety, we do adopt several of its
    proposals. In this regard, we delegate authority to the Chief of the
    Common Carrier Bureau to develop a comprehensive audit plan
    including detailed analytical audit procedures for both "for cause"
    audits and random audits. The plan should identify compliance issues
    based on risk assessment and should include a schedule of audits
    that focuses audit resources on the critical issues pertaining to
    numbering resource optimization.

96. We also adopt the NANC's proposal that the Auditor provide standard
    audit reports. Specifically, we require draft audit reports, no
    later than 30 days after the completion of an audit, that contain a
    summary of the auditor's results. Based on the final audit report,
    to the extent the Common Carrier Bureau finds evidence of potential
    violations, it shall refer the matter to the Enforcement Bureau for
    possible enforcement action, which may include, for example,
    monetary forfeitures, revocation of interstate operating authority
    and cease and desist orders. In the *Further Notice* attached to
    this *Second Report and Order*, we seek comment on whether and how
    numbering resources should be denied as an additional enforcement
    mechanism.

97. *Auditing Costs.* Based on our assessment in the *Notice* that
    auditing and other administrative solutions for allocating and
    administering numbering resources appear to involve changes in the
    manner in which these resources are overseen and managed, we
    tentatively concluded that the costs for our proposed solutions
    should be allocated and recovered through the existing NBANC
    fund.[^257] In addition, we tentatively concluded that section
    251(e)(2)[^258] requires that the costs of the administrative
    solutions be borne by all telecommunications carriers on a
    competitively neutral basis and that including the costs in the
    NBANC fund would result in the allocation and recovery of costs from
    all telecommunications carriers on such a basis.[^259]

98. We conclude that the costs associated with our comprehensive
    auditing program are numbering administration costs and, as such,
    they should be borne by all telecommunications carriers on a
    competitively neutral basis. Although we intend that the audits will
    be conducted by auditors in the Bureau's Audits Branch, [^260] to
    the extent that designated agents other than Commission staff are
    used to perform the work related to our comprehensive audit program,
    we conclude that the costs associated with such work performed by
    designated agents should be allocated and paid for through the NBANC
    fund.[^261]

99. Finally, we decline to provide a specific cost recovery mechanism
    for carrier specific auditing costs, including those associated with
    providing requested documentation or information needed by the
    Auditor to conduct the audit. We believe that these costs will be
    minimal since the carrier's primary responsibility when being
    audited is to provide the Auditor with requested information.
    Moreover, we believe that these costs will not significantly affect
    a carrier's ability to be competitive in the marketplace.

## B. Mandatory Nationwide Ten-Digit Dialing {#b.-mandatory-nationwide-ten-digit-dialing .unnumbered}

100. *Background*. Currently, the standard dialing pattern is
     seven-digit dialing within an NPA, and ten-digit dialing (or one
     plus ten digit) between NPAs. Ten-digit dialing is required in both
     the relieved and the new NPA when all-services overlays are
     implemented as area code relief. In the *Notice*, we sought comment
     on whether we should adopt nationwide ten-digit dialing, (*i.e*.,
     the dialing of ten digits for all calls, regardless of whether they
     are inter-NPA, intra-NPA, or toll) or whether we should encourage
     states to implement ten-digit dialing.[^262] We recognized that
     mandatory ten-digit dialing increases the supply of numbers
     available for use, through the reclamation of protected
     codes,[^263] and potentially through permitting the use of either 0
     or 1 as the first digit of an NXX code (the fourth, or "D digit, of
     a ten-digit telephone number).[^264] We also sought comment on any
     technical problems and costs associated with ten-digit
     dialing.[^265]

101. *Discussion*. We decline to adopt nationwide mandatory ten-digit
     dialing at the present time as a numbering resource optimization
     measure. As discussed above, we also continue to require that,
     where all-services overlays are used, ten-digit dialing is required
     not only between the original NPA and the overlay NPA, but also
     within each NPA, to prevent anti-competitive impacts on new
     entrants that may have few or no numbers in the original NPA.[^266]

102. Several commenting parties support mandatory nationwide ten-digit
     dialing.[^267] Commenters support the conversion to ten-digit
     dialing as a numbering resource optimization measure, particularly
     in densely populated areas with NPAs that are projected to exhaust
     shortly.[^268] Airtouch, for example, contends that mandatory
     ten-digit dialing will eliminate the need for protected NXX codes,
     thereby significantly increasing the number of NXX codes that can
     be assigned in an area, and will permit expanded use of the D
     digit.[^269] Other commenters, however, explicitly reject the
     adoption of this measure.[^270] Several commenting parties state
     that mandatory ten-digit dialing would allow future area code
     relief projects, particularly all-services overlays, to be less
     disruptive to consumers,[^271] and might foster new and different
     uses for NPA overlays.

103. It appears, however, that at the present time, the numbering
     resource optimization benefits of ten-digit dialing are
     limited.[^272] Protected codes, which enable seven-digit dialing
     across area code boundaries, may be reclaimed without regard to
     whether mandatory nationwide ten-digit dialing is implemented. In
     fact, the NANC recommends that protected codes should be eliminated
     in all instances.[^273] Also, the record in this proceeding reveals
     that expansion of the D digit to optimize the effectiveness of
     ten-digit dialing raises significant implementation concerns.[^274]
     SBC, for example, states that D digit expansion would require
     substantial time and effort, as well as modification of all
     switching systems and networks to allow the "unblocked" "0" or "1"
     D digit to be recognized as the fourth digit of a ten-digit
     number.[^275] Perhaps an advantage that could be realized at this
     time from implementing mandatory ten-digit dialing is that it might
     liberate state commissions from having to face dialing pattern
     questions as they make area code relief decisions, perhaps allowing
     them to focus more sharply on numbering resource optimization
     concerns. We have concluded, however, that we should leave area
     code relief decisionmaking with the states at the present
     time.[^276]

104. In addition, the record in this proceeding indicates that a
     nationwide transition to ten-digit dialing would require some
     technical modifications to switches, operations support systems,
     and customer premises equipment. The NANC Report states that,
     although the industry cost of implementing ten-digit dialing will
     vary according to each geographic area and service provider, some
     carriers could experience substantial costs associated with
     modifications to switch translations and OSS, directory publishing,
     changes to announcement systems, and customer education.
     Implementation of ten-digit dialing will also require upgrades to
     the Public Safety Answering Point (PSAP) systems used to respond to
     911 calls. More importantly, mandatory ten-digit dialing does
     present some disruptive effects, particularly for consumers.
     Consumers often object to the inconvenience and confusion
     associated with having to remember and dial three extra
     digits.[^277] For the foregoing reasons, we decline to require
     mandatory nationwide ten-digit dialing at the present time.

## C. Expansion of the D Digit {#c.-expansion-of-the-d-digit .unnumbered}

105. *Background*. In the *Notice*, we recognized that expansion of the
     fourth digit of a ten-digit telephone number, the so-called "D"
     digit (the "N" of an NXX or central office code),[^278] would
     increase the quantity of NXXs available within an NPA by
     approximately 25% if accompanied by the implementation of ten-digit
     dialing.[^279] Accordingly, we sought comment on the costs and
     benefits of expanding the D digit, and on whether we should mandate
     the adoption of this measure at the national level to ensure its
     effectiveness or on a statewide or NPA-wide basis.[^280]
     Furthermore, we sought comment on whether states should
     independently implement the expansion of the D digit as a numbering
     optimization measure.[^281]

106. *Discussion*. We decline to adopt nationwide expansion of the D
     digit to include 0 or 1, or to grant state commissions the
     authority to implement the expansion of the D digit as a numbering
     resource optimization measure at the present time. We agree with
     commenting parties that D digit expansion raises some
     implementation concerns.[^282] The record in this proceeding
     reveals that implementation of this measure will require some
     technical modifications to switches, operations support systems,
     and customer premises equipment.[^283] For example, since service
     providers may be using NXXs that begin with "0" or "1" for
     intra-network use, they will need to develop an alternate technical
     solution.[^284] In addition, several commenting parties contend
     that D digit expansion must be done simultaneously by all
     participants in the NANP because otherwise calls can not be
     completed to exchanges where carriers continue to retain the D
     digit for internal use.[^285] The INC also states that this
     modification is expected to be a multi-year process for carriers to
     implement, and therefore, expansion of the D digit would need to be
     implemented as the final phase of the measures associated with
     ten-digit dialing.[^286] For the foregoing reasons, we decline at
     this time to adopt nationwide expansion of the D digit to include 0
     or 1, or grant state commissions the authority to implement the
     expansion of the D digit as a numbering resource optimization
     measure at the present time.[^287] We recognize that the current
     use of 0 or 1 as the D digit is extensive and therefore steps must
     be taken to identify and eliminate all such uses prior to any
     release of the D digit. We therefore direct carriers to begin
     identifying and eliminating specialized uses of 0 or 1 as the D
     digit in anticipation of the eventual expansion of the D digit.

## D. Clarification of Definitions {#d.-clarification-of-definitions .unnumbered}

### 1. Parent OCN {#parent-ocn .unnumbered}

107. In the *First Report and Order*, we mandated that all carriers that
     receive numbering resources from the NANPA, or that receive
     numbering resources from a Pooling Administrator, report forecast
     and utilization data to the NANPA.[^288] We also required carriers
     that receive numbering resources from another carrier to report
     forecast and utilization data for such numbers in their
     inventories.[^289]

108. We required the NANPA to develop a reporting form for both
     utilization and forecast data.[^290] To ensure that the NANPA has a
     means for associating each carrier's reported data with carrier
     identification information, we required that the reporting forms
     for utilization and forecast information include company name,
     company headquarters address, OCN, parent company OCN, and the
     primary type of business in which the numbers are being used.[^291]
     We stated that carriers should report their utilization and
     forecast information by separate legal entity, identifying each
     entity by its OCN.[^292] We also directed the NANPA to withhold
     numbering resources from any United States carrier that fails to
     provide its utilization and forecast information as mandated in the
     *First Report and Order* until such information has been
     provided.[^293]

109. We directed reporting carriers to identify a parent OCN to enable
     us to determine the relationships among them and to monitor number
     usage for corporations and groups of companies as well as
     individual carrier entities.[^294] We are aware that, because of
     varying and complex corporate structures, reporting carriers may
     have more than one entity that could be deemed its "parent." For
     example, if a reporting carrier is a subsidiary of company A, which
     is in turn a subsidiary of company B, both companies A and B could
     be deemed the parent of the reporting carrier. We therefore clarify
     that the reporting carrier should identify as its parent, and
     provide the OCN for, the highest related legal entity located
     within the state for which it is reporting data. Thus, in the
     example above, the appropriate parent would be company B, provided
     that company B is located within the relevant state. In the
     attached *Second Further Notice*, we seek comment on whether
     additional data regarding corporate relationships should be
     reported with carriers' mandatory number utilization and forecast
     reports, and whether or how that information should be used to
     ensure the widest possible compliance with our number usage
     monitoring and optimization efforts, without unduly burdening
     reporting entities.[^295]

### 2. Classification of Numbers Used for Intermittent or Cyclical Purposes {#classification-of-numbers-used-for-intermittent-or-cyclical-purposes .unnumbered}

110. Numbers used for intermittent purposes are numbers designated for
     use by a particular customer that may be "working" in the Public
     Switched Telephone Network (PSTN) periodically, but that remain
     designated for the customer's use even if they are not "working" at
     other times. These may include numbers contained in blocks assigned
     to Centrex or Private Branch Exchange (PBX) users, or to large
     corporations that require an inventory of spare numbers to
     accommodate internal usage on short notice. These customers
     typically use all or a portion of a block of numbers at any given
     time. Numbers used for cyclical purposes are similarly designated
     numbers that are typically "working" for regular intervals of time.
     Customers with numbers used for cyclical purposes typically wish to
     retain the same number even when the numbers are not "working." A
     customer's summer home telephone number that is in service for six
     months out of the year, or a college student's telephone number
     that is in service only for the school year are examples of numbers
     used for cyclical purposes.

111. To the extent that these numbers are "working" on the mandatory
     reporting date, they should be reported as *assigned
     numbers*.[^296] It is less clear how these numbers must be reported
     when they are not "working." We note that many commenters assumed
     that numbers used for intermittent or cyclical purposes must be
     reported as *reserved numbers* during the period in which they are
     not "working," and that this assumption has prompted several
     parties to seek reconsideration of our decision to limit the
     reservation period to 45 days. In the *First Report and Order*, we
     defined *reserved numbers* as "numbers held by service providers at
     the request of specific end use customers for their future
     use."[^297] We also determined that after the 45-day reservation
     period, carriers have to treat these previously "reserved" numbers
     as "available." Our purpose in establishing *reserved numbers* and
     limiting the reservation period to 45 days was to allow carriers
     the ability to set aside numbers for specific customers' use in the
     near term. We did not intend, however, to prevent carriers from
     maintaining the same telephone number or block of numbers for
     customers that activate service to particular lines on an
     intermittent or cyclical basis.

112. We affirm that numbers used for intermittent or cyclical purposes
     that are not "working" on the mandatory reporting date should be
     reported as *reserved numbers*. We nevertheless agree that
     customers should not be subject to losing these numbers when they
     are turned off for short periods of time. On the other hand, we are
     concerned that some of these numbers that remain unused
     indefinitely could be used to provide service to other customers.
     We therefore address concerns that the 45-day reservation period is
     too short to accommodate the needs of end user customers to retain
     numbers used for intermittent or cyclical purposes in the next
     section. Specifically, in the next section, we increase the maximum
     reservation period to 180 days. We believe that this approach
     strikes an appropriate balance between carriers' legitimate need to
     provide numbers for intermittent or cyclical uses to their
     customers, and our responsibility to ensure that scarce numbering
     resources do not lie fallow for unlimited periods of time. We also
     seek comment in the attached *Second Further Notice* on whether we
     should allow carriers to extend the reservation period for
     numbering resources, for a fee, which could further alleviate the
     concerns raised by carriers regarding numbers used for intermittent
     or cyclical purposes.

## E. Reconsideration of Reserved Number Period {#e.-reconsideration-of-reserved-number-period .unnumbered}

113. In the *First Report and Order*, we concluded that *reserved
     numbers*, defined as numbers held by service providers at the
     request of specific end use customers for their future use, may be
     held in reserve status for a maximum of 45 days.[^298] In petitions
     for reconsideration[^299] of the *First Report and Order*, as well
     as numerous *ex partes*,[^300] several parties have asserted that
     the 45-day reservation period is a major departure from current
     business practices and should be increased to enable them to meet
     specific customer needs.

114. We conclude that the maximum period for reserving numbers should be
     increased to 180 days. In deciding how much additional time to
     allow, we considered suggestions that the reservation period be
     increased to as much as 12 months.[^301] We are persuaded by
     commenters and petitioners that 45 days does not adequately address
     the needs of many customers who need to know their telephone
     numbers for a period of time before telephone service is
     activated,[^302] but remain cautious about extending the period too
     much because of the potential for accelerating the exhaust of some
     NPAs.[^303] Given the need for customers, especially business
     customers, to plan for implementation and/or expansion of telephone
     service, print stationery and business cards prior to commencing
     business, and have their telephone numbers printed in telephone
     directories, we find it reasonable to extend the reservation period
     to 180 days. This provision shall be effective upon release of this
     *Second Report and Order*.

115. We also note that we are considering a proposal from the NANC on
     the issue of charging fees to extend the number reservation
     period.[^304] In the attached *Second Further Notice*, we seek
     comment on the NANC's proposal to allow unlimited reservations on a
     month-to-month basis in exchange for a fee.[^305] If we choose to
     mandate a reservation extension fee in the future, we will
     reconsider whether the 180-day period remains appropriate.

## F. Clarification of State Commissions' Access to Data {#f.-clarification-of-state-commissions-access-to-data .unnumbered}

### 1. State Commissions' Access to Mandatory Reporting Data {#state-commissions-access-to-mandatory-reporting-data .unnumbered}

116. In the *First Report and Order*, we granted all state commissions
     access to the semi-annually reported mandatory forecast and
     utilization data, subject to appropriate confidentiality
     protections.[^306] We recognized that, with access to the data,
     states would be better able to meet their obligations regarding the
     implementation of area code relief and to act on their delegations
     of additional numbering authority. We declined, however, to
     delegate authority to the state commissions to impose additional
     regularly scheduled reporting requirements on carriers because of
     our belief that such authority would undermine the purpose of
     establishing regularly scheduled, uniform federal reporting
     requirements.[^307]

117. We granted state commissions access to mandatorily reported
     forecast and utilization data to eliminate the need for them to
     require carriers to report separately and duplicatively,
     utilization and forecast data that they are already reporting to
     the NANPA on a regular basis. In doing so, we considered the need
     for states to have this information as well as the considerable
     burden such requests could place on carriers. We also considered
     the burden on the NANPA in responding to excessive individual state
     requests for information. We recognize, however, that some state
     commissions may desire to have access to carrier-specific data on
     file with the NANPA more frequently or in different formats. For
     example, states might wish to receive data at frequent intervals,
     per individual or class of carrier, per geographic area, or they
     could request all data collected on all reporting carriers within
     their state.

118. We clarify that our grant of access to mandatorily reported
     forecast and utilization data includes all such data, as submitted
     semi-annually by reporting carriers. The NANPA shall provide
     mandatorily reported forecast and utilization data to any
     requesting state twice per year, consistent with its collection of
     such data twice per year.[^308] Commencing with the second
     collection of mandatorily reported data, currently scheduled for
     February 1, 2001, a state may request a single report containing
     disaggregated data reported by carriers operating in its state
     beginning 30 days after each deadline for collection of the data,
     up to the next deadline for reporting. Because state commissions
     have emphasized the need to receive the data in a format that would
     enable them readily to perform their own data analyses, we require
     that the NANPA provide the data via secured electronic transfer,
     which may include e-mail, or on a computer disk. NANPA shall, in
     the alternative upon request from a state commission, provide the
     data in paper copy form without any cost to the state.

119. In the event state commissions wish to receive the data in
     different formats involving processing or culling of the data, such
     as customized reports that provide data by carrier or class of
     carrier, geographic area, or other categories, the NANPA may create
     and provide such customized reports to requesting states as an
     enterprise service.[^309] We emphasize, however, that the NANPA may
     only charge a fee for enterprise services that is reasonable; that
     is, based on the cost of processing and compiling the data from its
     existing database, preparing the customized report, and providing
     it to the state commission. Once the NANPA's proposal for providing
     customized reports as an enterprise service is approved,[^310]
     state commissions are free to negotiate with the NANPA a reasonable
     price for the customized reports. We also emphasize that states are
     free to take the data that the NANPA must provide to them and
     process the data themselves, or have it processed by another entity
     that is able to do the work more cost-effectively than the NANPA
     while maintaining the confidentiality of the data.[^311] The
     confidentiality protections specified in the *First Report and
     Order* apply to any customized reports provided by the NANPA or any
     other entity to the states, to the extent that such reports contain
     carrier-specific, disaggregated data.

### 2. State Commissions' Access to Numbering Resource Application Information {#state-commissions-access-to-numbering-resource-application-information .unnumbered}

120. In the *First Report and Order*, we granted to state commissions
     access to carriers' applications for initial and growth numbering
     resources.[^312] We also required that the state commissions treat
     this information as confidential.[^313] We did not specify in the
     *First Report and Order* whether the NANPA, the Pooling
     Administrator in pooled areas, or carriers themselves must provide
     such access, or the scope of information that should be made
     available.

121. We clarify that state commissions seeking access to carriers'
     numbering resource applications should request copies of such
     application materials directly from the carriers operating within
     their states. Not burdening the NANPA and the Pooling Administrator
     with the obligation to provide states with numbering resource
     applications will foster fairness in nationwide numbering
     administration by limiting the extent to which state-specific
     requests can increase the cost of national numbering
     administration. We also find that the burden to carriers of
     providing to the state commission a copy of what the carrier has
     provided to the administrator, if requested, is minimal.

122. We also clarify that all carriers that receive numbering resources
     must comply with state requests for copies of numbering resource
     application materials. Access to these materials is specifically
     provided for in the *First Report and Order* and herein*.* Thus,
     carriers that a state demonstrates to the NANPA or Pooling
     Administrator have failed to comply with a state request for
     numbering resource application materials shall be denied numbering
     resources. In furtherance of our goal of a uniform nationwide
     carrier reporting scheme, state commissions may not require
     carriers to submit additional or different application materials
     from those submitted to the NANPA or the Pooling Administrator when
     requesting numbering resources, so that carriers may simply submit
     duplicate copies of such materials to the states, upon
     request.[^314] State commissions may, however, determine whether
     this information must be provided whenever an application for
     numbering resources is made, or whether it may be provided less
     frequently or only in particular circumstances. To ensure that
     state commissions are aware of when an application for numbering
     resources has been submitted, state commissions may request
     notification from the NANPA.

123. Finally, we clarify that our grant to state commissions of access
     to numbering resource application materials is not intended to
     delay the processing of carriers' applications for numbering
     resources. Notwithstanding the state commissions' role in
     determining the validity of data submitted pursuant to our
     mandatory reporting requirements,[^315] our intent is not to give
     state commissions a veto over approval of applications, nor is it
     to introduce an additional layer of review for applications. The
     NANPA and the Pooling Administrator are responsible for determining
     whether application materials are sufficient in the first
     instance.[^316] State commissions, nevertheless, may continue to
     review applications for initial numbering resources when a carrier
     disputes a decision to withhold such numbering resources and seeks
     resolution from the state commission.[^317] In the attached *Second
     Further Notice*, we find some merit and seek comment whether states
     should have password-protected access to mandatorily reported data
     received by the NANPA. As we have in the past, we will continue to
     consider individual requests for authority from states\' for the
     collection of information from carriers that the requesting state
     believes is necessary and that is not captured in the national data
     collection.

# VII. further Notice of proposed rulemaking {#vii.-further-notice-of-proposed-rulemaking .unnumbered}

## A. Service-Specific and Technology-Specific Overlays {#a.-service-specific-and-technology-specific-overlays .unnumbered}

124. *Background*. The Commission has prohibited service-specific and
     technology-specific overlays, initially in the *Ameritech
     Order*,[^318] and then more broadly in the *Local Competition
     Second Report and Order*. In the *Ameritech Order*, we rejected a
     wireless-only overlay plan proposed by Ameritech for the 708 area
     code on the grounds that it would be unreasonably discriminatory
     and would unduly inhibit competition. We expressed concern about
     several facets of Ameritech's area code relief plan: the proposal
     to continue assigning 708 numbers to wireline carriers but to
     exclude paging and cellular carriers from such assignments; the
     proposal to require paging and cellular carriers to take back 708
     numbers previously assigned to their subscribers, while wireline
     carriers would not be required to do so; and the proposal to assign
     all numbers to paging and cellular carriers exclusively from the
     existing 312 and new 630 area codes, while wireline carriers (and
     perhaps others) would continue to receive 708 numbers.[^319] We
     found that Ameritech's plan would place paging and cellular
     companies at a distinct competitive disadvantage because their
     customers would suffer the cost and inconvenience of having to
     surrender existing numbers and go through the process of
     reprogramming their equipment, changing over to new numbers, and
     informing callers of their new numbers.[^320] We also found that
     any numbering resource optimization benefits from this plan were
     outweighed by the disproportionate burden that the plan would place
     on paging and cellular carriers.[^321] In the *Local Competition
     Second Report and Order*, we adopted our rule prohibiting
     service-specific and technology-specific overlays relying on the
     analysis outlined in the *Ameritech Order*.[^322]

125. The Connecticut Commission, the Massachusetts Commission, and the
     California Commission have filed petitions to amend or waive the
     Commission's rules prohibiting technology-specific or
     service-specific overlays so they can implement such
     overlays.[^323] The Ohio Commission and Pennsylvania Commission
     have filed petitions for additional delegated authority to
     implement service-specific and technology-specific area code
     overlays.

126. In the *Notice*, we indicated that we continued to believe that
     service-specific and technology-specific overlays raised serious
     competitive concerns, but that in light of the current numbering
     crisis, we decided to reexamine our policies and to consider
     whether we should modify or lift the restriction on these area code
     relief methods.[^324] Specifically, we sought comment on whether
     technology-specific and service-specific overlays could yield
     potential new benefits that were not previously contemplated, and
     on how a technology-specific or service-specific overlay could be
     implemented in a manner that would promote numbering resource
     optimization objectives.[^325] We also sought comment on whether
     there are specific services or technologies that could be assigned
     numbers from a technology or service-specific overlay area code
     without raising the competitive concerns that were cited in the
     *Ameritech Order*.[^326] Moreover, we sought comment on whether we
     should consider exceptions to the current prohibition on a
     case-by-case basis or whether we should adopt general rules or
     guidelines.[^327] Furthermore, we sought comment on whether we
     should address requests for service-specific and
     technology-specific overlays at the federal level, or whether we
     should delegate authority to the states to establish
     service-specific and technology-specific overlays within federal
     rules and guidelines.[^328]

127. Commenters were generally split about whether the Commission should
     permit service-specific and technology-specific overlays. The
     majority of state commissions support lifting the prohibition,
     arguing that service-specific and technology-specific overlays are
     important additional tools to address the current numbering
     crisis.[^329] Carriers, on the other hand, argue that the
     Commission should retain the current prohibition because
     service-specific and technology-specific overlays would place them
     at a competitive disadvantage and would result in inefficient use
     of numbering resources.[^330] Subsequent to the close of the
     comment cycle on the *Notice*, however, SBC and the Joint Wireless
     Commenters presented proposals in *ex parte* filings that would
     permit service-specific and technology-specific overlays on a
     transitional basis.[^331]

128. *Discussion*. We conclude that we should revisit the prohibition
     against service-specific and technology-specific overlays. We are
     persuaded by commenters who argue that this action is warranted by
     changes in the use of numbering resources that have occurred since
     the Commission's previous decisions.[^332] State commissions, in
     particular, have urged that we permit them to implement service and
     technology-specific overlays to address the escalating demand for
     numbering resources. They argue that there is widespread public
     support for such overlays, especially as a means of avoiding new
     area codes for home and business phones.[^333] By temporarily
     diverting a portion of the demand for numbering resources in
     existing area codes, implementation of service- or
     technology-specific overlays may help ease the transition to needed
     area code relief prior to the complete implementation of pooling,
     reducing end-user costs and inconveniences.

129. We nonetheless remain concerned about the potential competitive and
     efficiency implications of service and technology-specific
     overlays. We seek comment, however, on the conditions under which
     service-specific and technology-specific overlays must be
     implemented in order to promote competitive equity, maximize the
     efficient use of numbering resources, and minimize customer
     inconvenience.

130. We focus, in particular, upon proposals to permit state commissions
     to implement service- or technology-specific overlays on a
     "phased-in," or transitional basis, subject to certain
     conditions.[^334] As the pace of numbering exhaust has increased,
     many states have become increasingly reluctant to implement area
     code relief, in the face of significant consumer resistance. In
     area codes that are nearing exhaust, this reluctance has often led
     to severe number rationing schemes, and routinely individual
     carriers may find themselves unable to obtain numbering resources
     necessary to serve customers.[^335] Over the past few years, the
     Commission has received six requests for extraordinary relief from
     carriers in danger of running completely out of numbers, and has
     granted relief three times.[^336] In view of this situation,
     offering states the option to implement transitional service- or
     technology-specific overlays, subject to certain conditions, may
     help them to undertake necessary area code relief in a manner that
     they may perceive to be less objectionable to their citizens.

131. As an initial matter, we seek comment on the relative advantages
     from a numbering resource optimization perspective, a competitive
     perspective, and a consumer convenience perspective of service- or
     technology-specific overlays as opposed to all-services overlays.
     All-services overlays promote efficiency by ensuring that all users
     of numbering resources may obtain numbers from the overlay code. In
     contrast, service- or technology-specific overlays, which provide
     numbering resources to only a portion of number users, could run
     the risk of being underutilized. However, service- or
     technology-specific overlays might enhance the efficient use of
     underlying NPAs by removing a portion of the demand for numbering
     resources from those underlying area codes and increasing the
     amount of numbers available to carriers drawing resources from
     those area codes, for example, through a pooling mechanism. We
     further seek comment on how the perceived advantages of service- or
     technology-specific overlays relate to the specific conditions
     under which they are permitted. For example, assuming the ten-digit
     dialing requirement was retained for service- or
     technology-specific overlays, would a service- or
     technology-specific overlay be preferable to an all-services
     overlay from a consumer, competitive, or efficiency perspective?

132. Next, it is necessary to determine what services or technologies
     may be assigned to a transitional service- or technology-specific
     overlay code.[^337] One option would be to distinguish carriers
     that have implemented LNP from those that have not. This option
     appears sensible for several reasons. In the first place, a
     carrier's ability to participate in certain number conservation
     measures is determined by whether or not it has implemented LNP.
     LNP-capable carriers can participate in number pooling;
     non-LNP-capable carriers cannot. Second, this distinction between
     LNP-capable carriers and non-LNP-capable carriers is itself largely
     interim in nature, as most non-LNP-capable carriers are required to
     implement LNP within the next two years. [^338] For these reasons,
     we seek comment on whether it is appropriate to allow the creation
     of transitional technology-specific overlays that distinguish
     between carriers based on whether they have implemented LNP or
     not.[^339]

133. On this basis, we envision that states could choose to implement
     transitional technology-specific overlays that provide numbering
     resources solely to non-LNP-capable carriers. It is also
     conceivable that a state commission could choose to implement a
     transitional technology-specific overlay to provide numbering
     resources solely to LNP-capable carriers, for example, through a
     thousands-block number pooling mechanism. Of course, a transitional
     overlay serving LNP-capable carriers would be subject to the same
     conditions and limitations as one that serves non-LNP-capable
     carriers, as further detailed below.

134. Because one of the Commission's principal concerns about the
     competitive effect of technology-specific overlays has centered on
     "take-backs" of numbers from existing customers of carriers
     assigned to the technology-specific overlay, we tentatively
     conclude that transitional technology-specific overlays may not
     include mandatory "take-backs" and may only be implemented on a
     prospective basis. As the Commission noted in the *Ameritech
     Order*, taking back telephone numbers from carriers served by a
     technology-specific overlay would impose costs on those carriers
     and their customers, who would suffer the cost and inconvenience of
     surrendering their existing phone number, reprogramming their
     equipment, changing to new numbers, and informing callers of the
     new numbers.[^340] In a technology-specific overlay context,
     "take-backs" would exclusively affect customers of the particular
     technologies for which the overlay is established. We agree with
     commenters that these costs would be significant, would impose a
     disparate impact on customers of the services affected by the
     "take-back," and would thus adversely affect competition.[^341] We
     seek comment on the tentative conclusion that transitional
     technology-specific overlays must be prospective, and may not
     include mandatory "take-backs."

135. We seek comment on whether the geographic boundaries of a
     transitional technology overlay should conform to the boundaries of
     an existing area code, or whether it would be appropriate to allow
     a transitional technology-specific overlay that covered the
     geographic area of more than one pre-existing area code.[^342]
     Further we seek comment on whether we should permit state
     commissions to implement transitional technology-specific overlays
     only where pooling has been implemented in the underlying area
     code, or where pooling will be implemented by the time carriers may
     begin taking numbers from the transitional technology-specific
     overlay, as proposed by the Joint Wireless Commenters.[^343]

136. We also seek comment on how transitional technology-specific
     overlays should operate. Under the Joint Wireless Commenters'
     proposal, non-LNP-capable carriers that qualify for additional
     numbering resources under the Commission's rules would receive NXX
     codes only from the transitional overlay.[^344] The proposal limits
     the duration of this segregation, however, by providing that the
     overlay code would be converted to an all-services overlay and used
     to supply numbering resources to all carriers serving the
     underlying geographic region after the underlying NPA reaches
     exhaust (specifically, when the Pooling Administrator needs
     additional NXX codes to meet the needs of the pool and there are no
     remaining NXX codes in the original NPA). In the alternative, we
     could provide that transitional technology-specific overlays be
     converted to all-services overlays no later than the date by which
     covered CMRS providers are required to participate in
     thousands-block number pooling. We find that the ultimate
     transition from technology specific to all-services overlay both
     maximizes the efficient use of numbering resources, and serves to
     mitigate certain of our concerns about the potential
     anti-competitive effects of segregation.[^345] We seek comment on
     this approach and on the appropriate point for transition from
     technology-specific to all-services overlay.

137. In addition, we seek comment on whether and how our mandatory
     ten-digit dialing rule should apply in the context of transitional
     technology-specific overlays. Normally, ten-digit dialing is
     triggered when an overlay is established, *i.e*., consumers dial
     ten digits for all local calls in an area with an overlay area
     code.[^346] Under the Joint Wireless Commenters' proposal, the
     requirement for mandatory ten-digit dialing would be waived either
     until the overlay was converted to an all-services overlay (*i.e*.,
     numbering resources in the underlying area code were exhausted) or
     until the date upon which CMRS carriers are required to participate
     in thousands-block number pooling. The Joint Wireless Commenters
     propose, however, that permissive ten-digit dialing be provided
     when the transitional technology-specific overlay is implemented.

138. The Joint Wireless Commenters believe that this proposal may make
     transitional overlays more attractive to states, many of which have
     resisted implementing overlays because of the ten-digit dialing
     requirement. We are concerned about the potential competitive
     impacts that would result from a waiver of the ten-digit dialing
     requirement. We acknowledge, however, that the potential
     anti-competitive effect would be mitigated because ten-digit
     dialing would be waived only for a limited period of time. We seek
     comment on whether there is a basis to depart from the ten-digit
     dialing requirement for a transitional overlay. To the extent that
     such a departure would be necessary, we seek comment on whether it
     would be appropriate to waive the ten-digit dialing requirement as
     the Joint Wireless Commenters have proposed until the overlay is
     converted to an all-services overlay or until CMRS carriers are
     required to participate in thousands-block number pooling,
     whichever occurs earlier. To the extent that commenters disagree
     with this approach, we invite them to suggest alternatives.

139. Where a state chooses to implement a transitional
     technology-specific overlay to provide NXX code resources for
     non-LNP capable carriers, we seek comment about whether LNP-capable
     carriers should be prohibited from taking numbers out of the
     transitional overlay code prior to the time that it is converted to
     an all services overlay. Such a requirement would appear to be
     necessary to preserve the integrity of pooling by requiring all
     LNP-capable carriers to obtain numbering resources solely through
     the number pool mechanism. We do not intend, however, to in any way
     lessen covered CMRS carriers' incentive to timely implement LNP by
     appearing to provide them with a "protected" source of numbers. One
     way to achieve this objective might be to require that all
     transitional overlays convert to all-services overlays by the
     November 24, 2002 deadline for covered CMRS carriers to implement
     pooling.[^347]

140. We further seek comment on whether there should be any limitations
     on when states are permitted to implement transitional
     technology-specific overlays. For example, the Joint Wireless
     Commenters advocate that transitional technology-specific overlays
     be used in situations where the underlying area code is relatively
     close to exhaust. For this reason, they recommend that the
     transitional overlay be established when the original NPA only has
     remaining the greater of (1) 30 NXX codes, or (2) a quantity of NXX
     codes equal to the number of rate centers in the underlying
     NPA.[^348] Such a condition could potentially guard against
     implementation of a transitional overlay in areas where there are
     still sufficient numbering resources available to all carriers in
     the underlying area code.[^349] We seek comment on this proposal
     and on whether it is possible to establish such a concrete set of
     triggering conditions for this form of area code relief. We also
     seek comment about whether an alternative set of triggering
     conditions would be more appropriate. For example, should states be
     permitted to implement transition technology-specific overlays when
     a specific overall NPA-wide utilization threshold is met? We
     further seek comment on whether there are any other additional
     conditions that should be placed on states' ability to implement
     transitional technology-specific overlays. For example, the Joint
     Wireless Commenters propose that where a state has implemented a
     transitional technology-specific overlay, any state imposed
     rationing scheme in either the underlying area code or the
     transitional overlay should be ended. We seek comment on whether
     this type of restriction should be imposed.

141. Finally, we also seek comment on whether we should permit states
     that wish to designate transitional service or technology-specific
     area codes for groups besides non-LNP-capable carriers to do so. If
     so, we seek comment on whether the considerations that would be
     applied in those situations would be similar or different to those
     above.

142. Apart from transitional service- or technology-specific overlays,
     we seek comment on whether it would be appropriate to permit states
     to establish long-term overlays for certain services. Such services
     may include services that currently utilize numbers located in any
     area, such as certain unified messaging services. They also may
     include certain automatic crash notification services and concierge
     services, in which the telephone number serves only to establish
     communication with a specific service provider, and not with other
     parties.[^350] We seek comment on what other types of services may
     fall into this category. We also seek comment on whether
     establishing long-term service-specific overlays for such services
     would raise the same types of competitive concerns that we have
     identified with other service-specific overlays. In addition, we
     seek comment on whether these types of services use, or may in the
     future use, enough numbering resources that establishing long-term
     service-specific overlays to accommodate them would have numbering
     resource optimization benefits, or, in the alternative, would
     contribute to NANP exhaust by introducing new NPAs for which there
     is insufficient demand.

143. As explained above, our goal in opening this further inquiry into
     conditions under which service or technology-specific overlays may
     be implemented is to provide state commissions with additional
     number optimization tools, while ensuring that competitive equity
     and efficiency in numbering administration are preserved. In this
     light, we seek comment on any additional concerns or considerations
     that will inform our decision.

## B. The Rate Center Problem {#b.-the-rate-center-problem .unnumbered}

144. One of the major contributing factors to numbering resource exhaust
     is the existence of multiple rate centers in each NPA and the
     demand by most carriers to have numbering resources in each rate
     center in which they operate.[^351] The rate center system was
     established in the 1940s primarily to facilitate the routing and
     billing of telephone calls. Carriers typically need numbering
     resources in multiple rate centers to establish a footprint in a
     particular geographic area. This initial allocation of NXX codes
     and thousands blocks often results in the allocation of many more
     numbers than a carrier needs to serve its customers, which, in
     turn, leads to many numbers becoming \"stranded\" and unusable by
     other carriers.

145. The Commission has solicited comment on how to address and resolve
     the problems resulting from the existence of multiple rate centers
     in each NPA. Many of the questions raised focused on rate center
     consolidation, in which multiple rate centers are combined, thereby
     reducing the number of blocks or NXX codes that a carrier needs to
     establish a footprint in a given area. In the *Notice*, for
     example, we sought comment on how rate center consolidation
     potentially affects the efficiency of other methods of number
     conservation, such as number pooling.[^352] We also questioned how
     rate center consolidation would affect the routing of E911 calls,
     which tend to use NXX codes for default routing to the nearest
     PSAP.[^353] In addition, we asked whether the Commission should
     establish incentives for states to consolidate rate centers, and if
     so, by what means.[^354] In the *716 Public Notice*, we further
     inquired about the possible tension between rate center
     consolidation and the INC guideline against the splitting of rate
     centers when area code relief in the form of a geographic split is
     implemented.[^355]

146. We seek further comment on the rate center problem, particularly on
     what policies could be implemented at the federal level to reduce
     the extent to which the rate center system contributes to and/or
     accelerates numbering resource exhaust. Rate center consolidation
     is but one option; other possible solutions include extending local
     calling areas, and encouraging call billing methods that are not
     NXX dependent.

147. The Commission has stated repeatedly that states have authority to
     consolidate rate centers. Indeed, we have conveyed the importance
     of rate center consolidation and encouraged states to consolidate
     rate centers wherever possible. We believe that consolidating rate
     centers prior to implementing thousands-block number pooling and
     area code relief will increase the efficiency of these measures,
     because carriers will need fewer initial and growth numbering
     resources to provide service in a given area. In the *First*
     *Report and Order*, we declined to mandate rate center
     consolidation as a precursor to the national rollout of
     thousands-block number pooling,[^356] which some commenters had
     supported to encourage rate center consolidation.[^357] We
     nevertheless encourage states to consider and implement rate center
     consolidation on their own. Particularly, we encourage states to
     explore rate center consolidation opportunities in areas where
     contiguous calling areas have identical or substantially similar
     rating schemes. Rate center consolidation in these areas is least
     likely to have a significant impact on carrier revenues, because
     minimal realignment of local, extended, and toll calling boundaries
     would be necessary.

148. We are mindful that rate center consolidation may be a difficult
     option for many states and carriers, especially incumbent local
     exchange carriers, because of the historic connection between rate
     centers and the billing, as well as routing, of calls. Rate center
     consolidation determines which calls are local versus toll, and
     thus consolidation may deprive some carriers of toll revenue. We
     therefore seek comment on ways of severing the connection between
     number assignment and call rating and routing. We also seek comment
     from the industry and state commissions on past and present rate
     center consolidation efforts, including information on the impact
     rate center consolidation has had on numbering optimization.
     Finally, we seek analysis of the benefits and costs of rate center
     consolidation in the 100 largest MSAs in the country, where we
     believe it would have the most significant effect. We believe that
     metropolitan regions are optimal candidates for rate center
     consolidation because they tend to involve more competing LECs and
     a higher demand for number resources.

## C. Liability of Related Carriers {#c.-liability-of-related-carriers .unnumbered}

149. Monitoring individual carriers' use of numbering resources is a
     necessary prerequisite to ensure efficient use of these resources
     and prevent the NANP from being exhausted prematurely. In the
     *First Report and Order*, the Commission established new semiannual
     reporting requirements to obtain more consistent, accurate, and
     complete reporting of numbering resource utilization and forecast
     data. Carriers are required to comply with the new reporting
     requirements, and the NANPA was directed to withhold numbering
     resources from non-compliant carriers. In the *First Report and
     Order*, the Commission did not address whether reporting carriers
     should be held accountable when related carriers fail to comply
     with the mandatory reporting requirements.

150. We believe that parent companies should play an active role in
     number conservation efforts, even if the parent companies are not
     themselves, reporting carriers. By encouraging, monitoring, and
     offering incentives for compliance from the top down, parent
     companies can contribute greatly to the success of our numbering
     resources optimization goals. We therefore tentatively conclude
     that carriers should, in certain instances, have numbering
     resources withheld when related carriers are subject to withholding
     for failure to comply with our mandatory reporting requirements. We
     seek comment on how to identify the relationships (*i.e.*, the
     existence of parent and sister companies) among reporting carriers,
     and what geographic limitations should be placed on those
     relationships in determining liability among related carriers.
     Specifically, should related carriers nationwide be affected, or
     only related carriers located within the same state, NPA or rate
     center as the noncompliant carrier? Commenters that believe only
     the noncompliant carrier should be subject to withholding of
     numbering resources should provide specific comments on other ways
     of providing incentives for parent companies to encourage and
     require compliance from all of their related reporting carriers and
     to ensure that our numbering resource optimization goals are not
     undermined by the complexities of corporate structures.

## D. State Commissions' Access to Mandatory Reporting Data {#d.-state-commissions-access-to-mandatory-reporting-data .unnumbered}

151. In the attached *Second Report and Order*, we clarified the scope
     of states' access to semi-annually reported data.[^358] We also
     clarified that state commissions must continue to permit the NANPA
     to process requests for numbering resources in a timely
     fashion.[^359] Some states assert that they require the same access
     to reporting data received by the NANPA; that is, full access to
     the database in which reported forecast and utilization data is
     stored.[^360] We find some merit in this proposal, and thus
     tentatively conclude that states should have password-protected
     access to mandatorily reported data received by the NANPA. NeuStar
     has proposed to provide the states with password access to obtain
     information from the NANPA.[^361] We seek comment on whether the
     type of access NeuStar proposes is necessary, sufficient or whether
     the access already granted is sufficient to accommodate the states'
     requests.

## E. Fee for Number Reservations {#e.-fee-for-number-reservations .unnumbered}

152. We seek further comment on the NANC's proposal to allow unlimited
     reservations of numbers on a month-to month basis.[^362] In the
     attached *Second Report and Order*, we conclude that the period for
     reserving numbers should be increased to a maximum of 180 days with
     no extensions. Some commenters suggested that the reservation
     period should be extended to 12 months, with additional time for
     extensions. We seek comment on whether unlimited reservations of
     numbers are necessary, or whether there should be a constraint on
     the time period that numbers can be reserved. We note that the NANC
     recommended that the fee be paid by end users, and seek comment on
     whether imposing a fee on end users would provide the appropriate
     incentives in this context. Alternatively, we seek comment on
     whether charging a fee to carriers would provide more appropriate
     incentives for number use. Commenters should also enumerate whether
     unlimited reservations of numbers should be allowed and propose a
     time period for which numbers may be reserved. Commenters should
     also state whether a fee should be charged for reserving numbers,
     who should pay for the fee and a specific fee amount. Commenters
     should also address how the fee revenues should be applied,
     particularly if, fees are charged to carriers by the Commission.

## F. Enforcement {#f.-enforcement .unnumbered}

153. In the attached *Second Report and Order*, we set forth a
     comprehensive audit program to verify carrier compliance with
     federal rules and orders and industry guidelines,[^363] and
     conclude that auditors in the Accounting Safeguards Division, or
     other Commission designated agents, will perform the audits.[^364]
     We also state that carriers found to be in violation of our
     requirements may be subject to possible enforcement action, which
     may include monetary forfeitures, revocation of interstate
     operating authority and cease and desist orders.[^365]

154. In addition to our traditional enforcement tools, we tentatively
     conclude that carriers that violate our numbering requirements, or
     that fail to cooperate with the auditor to conduct either a "for
     cause" or random audit, should also be denied numbering resources
     in certain instances. We seek comment on this tentative conclusion.
     We also seek comment on the process by which this additional remedy
     should be invoked. Specifically, we seek comment on whether only
     the Commission should direct the NANPA or Pooling Administrator to
     withhold numbering resources. We note that section 220(f) bars
     public release of audit findings except as directed by the
     Commission or court.[^366]

## G. State Commissions' Authority to Conduct "For Cause" and "Random" Audits {#g.-state-commissions-authority-to-conduct-for-cause-and-random-audits .unnumbered}

155. In the attached *Second Report and Order*, we set forth a
     comprehensive audit program to verify carrier compliance with
     federal rules and orders and industry numbering guidelines, and
     conclude that the audit program will consist of "for cause" and
     random audits, performed by an auditor designated by the Common
     Carrier Bureau.[^367] Although we believe that a national program
     will provide some degree of uniformity across the country in the
     way that audits are conducted, we recognize that state commissions
     would benefit from having a role in conducting these carrier
     audits.[^368] We therefore seek comment on whether state
     commissions should be given independent authority to conduct "for
     cause" and random audits in lieu of or in addition to the national
     audit program established in the attached *Second Report and
     Order*, and what parameters should apply to any such authority. In
     particular, commenters should address concerns about state
     commissions employing different standards in performing "for cause"
     and random audits that might force carriers operating in multiple
     states to comply with different demands. In seeking comment on this
     issue, we do not address state commissions' authority to perform
     audits under state law.

## H. Developing Market-Based Approaches for Optimizing Numbering Resources {#h.-developing-market-based-approaches-for-optimizing-numbering-resources .unnumbered}

156. In the *Notice*, we sought comment on alternative mechanisms for
     establishing a market-based solution to improve the allocation and
     use of numbering resources, the administrative burdens a
     market-based solution might impose on carriers, and the likely
     effect on competition of such an approach.[^369] At that time, most
     commenters opposed market-based allocation of numbering resources.
     The potential benefits of a flexible, market-oriented approach for
     allocating numbering resources, however, led us to seek additional
     comment on how the existing administrative measures could be
     supplemented or supplanted by market-based solutions and whether
     such an approach could strike this balance more effectively. In the
     *Further Notice,* we suggested that a market-based approach is the
     most pro-competitive, least intrusive way of ensuring that
     numbering resources are efficiently allocated.[^370] In response to
     the *Further Notice,* many carriers expressed opposition to a
     market-based allocation system for numbering resources, while some
     state utility commissions generally supported it.

157. In this *Second Further Notice*, we discuss the need for a
     market-based allocation system for numbering resources, and seek
     specific proposals on how to structure such a system, including the
     scope of our statutory authority to do so. We continue to believe
     that market-based methodologies for allocating numbering resources,
     either in conjunction with or as a substitute for some or all of
     the existing allocation rules, may best ensure that numbers will be
     allocated efficiently, provided that they are structured on an
     equitable and non-discriminatory basis.

### 1. Commission Authority to Charge for Numbers {#commission-authority-to-charge-for-numbers .unnumbered}

158. In the *Notice*, we sought comment on whether the Commission
     possesses the statutory authority to implement a market-based
     system for allocating numbering resources. Comments on this issue
     were limited. In the *Notice*, however, we did not request comment
     on specific market-based proposals. In this *Second Further
     Notice*, we provide more detailed information on the form that
     market-based mechanisms might take, and request that commenters
     propose specific market-based number allocation mechanisms. We seek
     comment on whether the Commission has the requisite authority to
     implement the proposals contained herein, as well as any proposed
     by commenters. If such authority is lacking, we request that
     commenters address what authority would be necessary. Commenters
     should address the scope of the Commission\'s plenary authority
     over numbering resource allocation in the United States pursuant to
     section 251(e). Commenters should also address statutory provisions
     pertaining to the Commission\'s authority to collect funds from
     carriers, as well as the statutory requirements on how such funds
     should be expended.

159. To emphasize that our goal in moving towards a market-based
     assignment process for numbers in the primary market is to increase
     the efficiency of numbering resource usage, and not to raise
     additional funds for Commission-approved programs (such as
     universal service, TRS, etc.), we sought comment in the *Further
     Notice* on whether we should use any funds collected for numbers to
     offset other payments carriers currently make to fund these
     programs. We continue to believe that the collection of money for
     numbering resources in the primary market should not increase the
     telecommunications industry's aggregate obligation for regulatory
     contributions and collections such as universal service, and
     telecommunications relay services. We seek comment on whether the
     way in which collected funds are used affects the extent of our
     authority under the Act to implement market-based allocation
     mechanisms. Specifically, we seek comment on whether our authority
     under section 254 enables us to implement a market-based number
     allocation system as a means of funding universal service.[^371]

160. We urge commenters to discuss how the Commission could structure a
     market-based allocation system that would retain its efficiency
     while working within the constraints of existing statutory
     authority. Commenters that believe that a market-based system could
     be structured more efficiently if the Commission had additional
     statutory authority to do so should describe the additional
     statutory authority that would be necessary.

### The Need for a Market-Based Allocation System

161. The impetus for establishing a market-based numbering resource
     allocation system was our belief that the lack of efficiency in
     carrier utilization of numbers may be in part due to the failure of
     existing allocation rules to recognize the economic value of
     numbers. By explicitly recognizing the value of numbers, we seek to
     provide incentives for carriers to take and retain only as many
     numbers as they need, in the short term, to provide service to
     their customers.

162. Several parties argue that carriers already incur a great deal of
     costs under the current allocation system and that these costs
     impose sufficient discipline on them to discourage inefficient
     use.[^372] Although we recognize that carriers incur costs under
     the present system for their use of numbers, we believe that
     efficient utilization will be better achieved if carriers pay a fee
     for numbering resources that is closely related to the supply and
     demand for numbers in a specific market.[^373] At the present time,
     the costs that carriers incur are not directly related to these
     factors, and therefore do not effectively encourage efficient
     number use. Where a competitive market for numbering resources
     exists, carriers that obtain more numbers than they need would be
     incurring unnecessary expense, and carriers that hold inventories
     of numbers in excess of their needs would be foregoing the revenue
     they could gain from selling or leasing them.

163. Moreover, we believe that if markets for numbering resources are
     structured in a manner that is competitively neutral, they will not
     create entry barriers to small entities or new entrants, but rather
     could serve to ensure a ready supply of numbering resources to such
     entities, in contrast with the rationing schemes they currently
     face in some areas. It is essential, however, that such markets be
     structured to avoid inequities that might occur through
     anti-competitive behavior, such as attempts by well-financed
     carriers to stockpile numbers to keep them away from their less
     well-financed competitors, or through unintended disparate impacts
     of the market mechanism, such as failure to take into account the
     competitive advantages associated with carriers' pre-existing
     number inventories. In light of these concerns, we seek comment on
     how to structure a numbering resources market mechanism in a manner
     that treats all users of numbering resources, and by implication,
     their existing and potential customers, in a fair, equitable and
     non-discriminatory manner.[^374]

### Structure of Markets

164. We believe that, where a competitively neutral primary market for
     numbers exists, permitting a secondary market to develop would
     further increase the efficiency with which numbers are used by
     creating economic incentives for carriers to find ways to transfer
     unused numbering resources in a given geographic area to others
     with a greater need for those resources. Under the present system,
     carriers sometimes receive numbers in blocks larger than their
     actual need. Thousands-block number pooling will substantially
     address this problem, but cannot eliminate it altogether. Some
     carriers, particularly new entrants, may need fewer than a thousand
     numbers in many of the rate centers they serve. Also, our current
     rules do not require carriers to contribute thousands-blocks to the
     pool if more than ten percent of the numbers in the block have been
     used. At present, it does not appear that existing LNP capacity can
     support pooling if blocks are more than 10 percent contaminated,
     and the industry has little incentive, other than regulatory
     mandate, to increase LNP capacity for pooling purposes. Creating a
     secondary market should introduce an opportunity cost for unused
     numbering resources that will encourage carriers to develop
     innovative ways to move these stranded resources to other carriers
     that may need and can use those resources. We therefore tentatively
     conclude that any market-based allocation system for numbering
     resources that we consider should include both primary and
     secondary markets for numbering resources.

#### a. Primary Market {#a.-primary-market .unnumbered}

165. In the *Notice* we sought comment on whether the price of numbers
     in the primary market, if implemented, should be established
     administratively or through the market using an auction.[^375]
     Several commenters argued that administrative prices would be
     unworkable because regulators are incapable of setting the
     "economically correct" prices.[^376] We agree that it is not easy
     to establish economically efficient prices administratively, and
     therefore seek comment on whether an auction would be the best and
     the most efficient economic means of allocating numbering resources
     in the primary market. The most direct approach for implementing a
     primary market for numbers may be to hold a separate auction for
     new numbering resources in each NPA, because the administrative
     costs of holding auctions in each of over 19,000 rate centers would
     almost certainly be excessive. We seek comment on whether the NANPA
     and the national Pooling Administrator would be in the best
     position to conduct such auctions, and we look for any other
     suggestions as to how an auction methodology should be designed. We
     also seek comment on how the supply of numbers to be auctioned in
     each geographic area would be determined.[^377]

166. Several parties argue that market-based auctions might be too
     costly to administer.[^378] These commenters, however, offer no
     support for their assertion. As we noted in the *First Report and
     Order*, the costs associated with expanding the NANP are estimated
     to be between \$50 - \$150 billion.[^379] Similarly, the costs to
     consumers of repeated area code relief can be substantial. We
     believe that any administrative costs associated with establishing
     a market for numbers will be smaller than the benefit of extending
     the life of area codes and the NANP. We seek further comment on
     this issue, however.

167. One alternative for setting a price for numbering resources would
     be for the Commission and the states collectively to develop an
     agreed-upon life for the NANP. Using this timeframe as a basis, we
     could authorize the states to control the release of new codes.
     Over time, the prescribed life of the NANP could be adjusted as
     better information on the costs associated with NANP exhaust
     evolves. We seek comment on this proposal and whether it would
     improve the efficiency of NANP allocation.

168. We also request parties to comment on whether prices for numbers in
     the primary market should be structured as a one-time charge, a
     recurring charge, or a combination of a flat non-recurring charge
     and a recurring charge. In response to the *Notice*, several
     commenters supported a recurring charge because such a charge would
     be consistent with a licensing arrangement, rather than
     ownership.[^380] Some parties prefer a recurring charge to be
     imposed frequently to accommodate situations where numbers change
     hands, while others argue for annual fees.[^381] The Ohio
     Commission proposes a two part approach in which part of the fee
     would be an administrative price that is designed to recover the
     costs associated with number administration, and the second part of
     the fee would be a "retention" price that would reflect the
     societal cost of numbering exhaust. [^382] We seek comment on the
     Ohio Commission's proposal, and also invite other proposals that
     recognize the fungible nature of numbering resources.

169. We see benefits and problems with both approaches for collecting
     fees. A recurring fee would provide concrete benefits to carriers
     that returned numbers that they are not using to the NANPA. On the
     other hand, a one-time charge paid when numbering resources are
     obtained from the NANPA, may be less complex to administer,
     particularly if an auction mechanism is used to allocate numbers.
     We seek comment on the relative feasibility of auctions under a
     one-time charge and a recurring fee approach, and how auctions
     would be structured in either instance. We are also uncertain about
     the effect of a recurring charge in the primary market on the
     efficient operation of a secondary market, especially for stranded
     numbering resources. We therefore seek comment on how carriers
     could avoid having to pay a recurring charge on stranded numbers
     that cannot be used elsewhere in the network.[^383]

170. We next turn to the question of whether carriers should be required
     to pay for the existing inventories of numbers that they are
     holding. Several parties argue that our "competitive neutrality"
     policy requires that carriers holding existing inventories of
     numbers pay for those resources if a market is created.[^384] We
     tentatively conclude that it would be preferable for carriers to
     pay for all of the resources that they hold, regardless of when
     they were obtained. We seek comment on this tentative conclusion.
     We also seek comment on how we should apply the market prices to
     the embedded base of numbers. Commenters should describe the
     administrative process we should employ to collect the required
     charges. Commenters should also address whether it is feasible to
     have an equitable market mechanism that applies solely to new
     numbers.

171. An appropriately structured market should discipline carriers
     against hoarding numbers, because carriers will be forced to pay to
     acquire the numbers and face the opportunity cost of retaining more
     numbers than they need. We seek comment, however, on whether there
     will remain a continuing need to retain certain existing
     administrative measures for allocating numbers in conjunction with
     the implementation of a market-based approach. For example,
     carriers could continue to be required to meet the eligibility
     tests we have established for initial and growth numbering
     resources before they are permitted to acquire additional resources
     from the NANPA or the national Pooling Administrator in the primary
     market.[^385] In that instance, the secondary markets would
     primarily be used to redistribute numbers that would otherwise be
     stranded or unavailable to other carriers.

#### b. Secondary Market {#b.-secondary-market .unnumbered}

172. Currently, NXX codes and thousands blocks are assigned to a
     specific rate center and cannot be ported across multiple rate
     centers. Thus, it is likely that each rate center would contain its
     own secondary market. Within each secondary market, service
     providers with available numbering resources would be permitted to
     sell or lease them to other service providers. We seek comment on
     the appropriate geographic scope of secondary markets.

173. Also, we recognize that a secondary market will not necessarily
     function well in rate centers where there are no, or only a single,
     CLEC. In these areas, the secondary market may not be sufficiently
     competitive to expect an incoming carrier to be able to obtain
     numbers at competitive prices from the small number of existing
     carriers. One possible method of addressing this situation is to
     direct the states to set aside a small quantity of NXXs to be
     distributed on a thousands-block basis to incoming carriers. There
     may be other solutions to this problem as well. We seek comment on
     how the Commission should address this issue.

174. We also seek comment on the extent to which we should regulate
     transactions in secondary markets. Specifically, we seek comment on
     how much structure we or the states should impose on these markets.
     Although we believe that government oversight should be minimal, we
     note that all markets are subject to some type of control, whether
     or not they are specifically regulated by a regulatory agency.
     Government oversight is designed to encourage competition and
     openness, while at the same time preventing private actions that
     disrupt the market. Our objective with respect to secondary markets
     for numbering resources is the same.

175. We seek comment on whether we should determine how secondary
     markets must be organized. Specifically, we seek comment on whether
     carriers should be permitted to negotiate unrestricted deals among
     themselves or whether all carriers should be required to deal
     through a clearinghouse that establishes uniform trading rules. The
     advantage of direct dealing is that carriers would be free to
     tailor their agreements to meet the specific circumstances of each
     transaction. On the other hand, mandating a clearinghouse might
     reduce aggregate transaction costs and prevent carriers from
     discriminating against competitors or otherwise disrupting the
     market. A clearinghouse might also make it easier to track the
     sales of numbers since such information would be housed at a single
     location. A third option might be to permit, but not require,
     carriers to create and fund a clearinghouse on their own. We seek
     comment on these or any other alternatives.

176. We also seek comment on the types of reporting requirements that
     might be necessary to ensure that secondary markets are open,
     competitive, and effective. Data from such reporting will permit us
     to evaluate the efficacy of permitting the secondary market to
     reallocate numbering resources. We request comments on the type of
     data and the frequency with which they should be reported. At a
     minimum, we believe that quantities of numbers involved in
     transactions should be reported in the numbering resource
     utilization and forecast (NRUF) reports which are required to be
     filed by our current rules twice a year. We also request comment on
     whether we should require carriers to file information on purchase
     or lease prices and the quantities involved in the transaction.
     Commenters should address whether such reporting requirements would
     impose an unreasonable burden on either carriers or the NANPA.
     Finally, commenters should also comment on how numbers sold in the
     secondary market should be reported in the NRUF report. One
     possible approach would be to treat sold numbers identically to
     ported numbers.

### Timing and Geographic Scope of Implementation 

177. Participation in markets for numbers requires that carriers be able
     to receive and move numbers in precise quantities, which requires
     all carriers involved in the transfer of numbers to be LNP-capable.
     We therefore seek comment on whether implementation should be
     delayed until after covered CMRS carriers are required to become
     LNP-capable, and whether we should limit implementation to areas
     where LNP has been deployed.

178. We also seek comment on whether, if a market-based allocation
     system is implemented, we should implement both primary and
     secondary markets at the same time. It might be possible to
     implement the secondary market earlier than the primary market
     because the implementation of the secondary market might require
     nothing more than eliminating the current prohibition on carriers'
     exchanging numbers with each other for consideration.[^386] If we
     were to implement secondary markets while numbers were still
     available at no charge in the primary market, however, there may be
     incentives for carriers to obtain more numbers than they need in
     the primary market in order to sell them at a profit in the
     secondary market. In addition, carriers that could receive all the
     numbers they need in the primary market at no cost would not appear
     to have any incentive to pay for numbers in the secondary market.
     We seek comment on these issues, and on other alternative
     approaches regarding the sequence in which the primary and
     secondary markets should be implemented.

## I. Recovery of Pooling Shared Industry and Direct Carrier-Specific Costs {#i.-recovery-of-pooling-shared-industry-and-direct-carrier-specific-costs .unnumbered}

179. In the *First Report and Order*, we adopted a competitively neutral
     cost recovery framework for thousands-block number pooling similar
     to the cost recovery mechanism established for number
     portability.[^387] Specifically, we concluded that the cost
     recovery mechanism must be competitively neutral in that the costs
     for thousands-block number pooling should not: (a) give one
     provider an appreciable, incremental cost advantage over another
     when competing for a specific subscriber; and (b) have a disparate
     effect on competing providers' abilities to earn a normal
     return.[^388] Further, we adopted three cost categories for
     thousands-block number pooling -- shared industry costs (cost
     incurred by the industry as a whole such as NANP administration
     costs), carrier-specific costs directly related to thousands-block
     number pooling (such as enhancements to carriers SCP, LSMS, SOA,
     and OSS systems), and carrier-specific costs not directly related
     to thousands-block number pooling.[^389] We concluded that
     incremental shared industry costs become carrier-specific costs
     once they are allocated among carriers, and we adopted the NANPA
     fund formula for allocating shared industry costs for
     thousands-block number pooling.[^390] The incremental shared
     industry costs for thousands-block number pooling will be allocated
     to all carriers in proportion to each carrier's interstate,
     intrastate, and international telecommunications end-user
     revenue.[^391] We, however, did not establish a cost recovery
     mechanism for incremental carrier-specific costs because the record
     did not contain adequate information regarding the range and
     magnitude of incremental thousands-block number pooling costs.

180. In the *Notice*, we tentatively concluded that incumbent LECs
     subject to rate-of-return or price cap regulation may not recover
     their interstate carrier-specific costs directly related to
     thousands-block number pooling through a federal charge assessed on
     end-users, but may recover the costs through other cost recovery
     mechanisms.[^392] We requested detailed estimates of the costs of
     thousands-block number pooling and asked that commenters separate
     the estimates by category of costs.[^393] As we stated in the
     *First Report and Order*, the amount and detail of the data
     provided in response to the *Notice* was insufficient for us to
     determine the amount and magnitude of the costs associated with
     thousands-block number pooling.[^394] We, therefore, in the
     *Further Notice*, requested additional cost information to help us
     ascertain the appropriate cost recovery mechanism for the costs of
     thousands-block number pooling, including cost studies that take
     into account cost savings associated with thousands-block number
     pooling in comparison to the current numbering practices.[^395] We,
     nonetheless, identified the type of costs for which carriers may
     seek recovery and noted that costs associated with state
     implemented pooling trials should be excluded from the federal cost
     recovery mechanism.[^396]

181. As discussed above,[^397] we are conducting the procurement of a
     national Pooling Administrator in accordance with federal
     requirements. Once selected through a competitive bidding process,
     the national Pooling Administrator must develop a schedule for the
     implementation of new pools as well as the transition of pooling
     trials already underway. This schedule will significantly influence
     the timing and amount of costs carriers will incur for pooling.
     After the national pooling roll-out schedule is finalized, the
     timing and amount of pooling costs should be more readily
     ascertainable. We intend to establish an appropriate national cost
     recovery mechanism for pooling costs at that time.

182. In the interim, because we find that the amount and detail of the
     data provided in response to our request in the *Further Notice* is
     insufficient for us to determine the amount and/or magnitude of the
     costs associated with thousands-block number pooling, we seek
     further comment and cost studies that quantify shared industry and
     direct carrier-specific costs of thousands-block number pooling. We
     emphasize that cost studies should 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. We further emphasize that the quality
     of the specific cost data that carriers provide will determine the
     accuracy with which we are able to craft a cost recovery mechanism.

## J. Thousands-Block Number Pooling for Non-LNP-Capable Carriers {#j.-thousands-block-number-pooling-for-non-lnp-capable-carriers .unnumbered}

183. In the *First Report and Order*, we determined that thousands-block
     number pooling is a valuable mechanism to remedy the inefficient
     allocation and use of our numbering resources.[^398] We adopted
     thousands-block number pooling for LNP capable carriers,[^399] and
     we concluded that covered CMRS carriers must participate in
     thousands-block number pooling when they become LNP capable.[^400]
     We also concluded that when non-LNP capable wireline carriers
     become LNP capable, whether voluntarily or pursuant to Commission
     rules, they too must participate in thousands-block number
     pooling.[^401]

184. We believe that it is important for us to continue to explore
     possible expansion of our numbering resource optimization
     strategies. Thousands-block number pooling can help achieve greater
     number utilization both by allowing numbers to be allocated
     initially in smaller increments, and by providing a mechanism
     whereby the stranded numbering resources held by one carrier may be
     redistributed to other carriers. Therefore, we believe it is
     appropriate to consider whether extending our pooling requirements
     would further promote efficient use of numbering resources.
     Although in previous decisions we have indicated that it is
     necessary for carriers to achieve LNP capability before being able
     to participate in pooling, we seek comment on whether we should now
     require carriers to participate in pooling even if they are not
     required under our rules to implement LNP.

185. Under the Commission's current rules, certain carriers are exempted
     from pooling requirements, *e.g.*, carriers outside the largest 100
     MSAs who have not received a request to deploy LNP from a competing
     carrier, and paging carriers. We seek comment about whether it
     would be appropriate to extend pooling requirements to these
     carriers. Specifically, to what degree would these carriers'
     participation in thousands-block number pooling help avoid
     premature exhaust of numbering resources at the 10,000 number block
     level (NXXs) and extend the life of the NANP? Conversely, to what
     degree would requiring these carriers to participate in pooling
     impose disproportionate costs on them in comparison to LNP-capable
     carriers operating in the 100 largest MSAs? We recognize that under
     such a requirement, non-LNP-capable carriers would be obligated to
     implement the common technological platform that is used to support
     both LNP and number pooling. We seek comment on the specific types
     of implementation costs that would be imposed, and the magnitude of
     these costs. We also seek comment on whether the incremental number
     optimization benefits of requiring these carriers to participate in
     pooling would outweigh these associated costs. For example, to what
     extent are these carriers such significant users of numbering
     resources that their participation in pooling would have
     significant numbering optimization benefits? We also seek comment
     on the benefits of thousands-block number pooling for competing
     carriers that need initial numbering resources in each rate center
     for the purpose of establishing their "footprints." We seek comment
     on whether we should limit any additional pooling requirements to
     certain classes of carriers, and if so, on what bases any
     exemptions should be made. In addition, if we were to impose
     pooling requirements on carriers irrespective of their LNP status,
     we seek comment on whether rural carriers should be exempt from any
     such requirements.[^402]

## K. Waiver of Growth Numbering Resource Requirements {#k.-waiver-of-growth-numbering-resource-requirements .unnumbered}

186. Presently, carriers that cannot meet the requirements for receiving
     growth numbering resources, but can demonstrate an actual need for
     additional numbering resources, may seek a waiver of our rules. We
     have, in the past, granted waivers to carriers demonstrating a need
     for growth numbering resources in instances where they were unable
     to get them under our rules or state-established
     requirements.[^403] In most instances, these carriers had received
     a specific customer request for a large block of numbers, or were
     experiencing a spike in new business that current inventories could
     not accommodate.

187. Some commenting parties suggest that we take further steps to
     create an explicit "safety valve" that will allow carriers to
     obtain needed numbering resources in instances where they are
     unable to meet the utilization threshold in a given rate
     center.[^404] Some carriers contend that a rate-center based
     threshold sometimes cannot be met even though they need additional
     numbering resources because, for example, they have multiple
     switches within a rate center, but are unable readily to share
     numbering resources among those switches. Other carriers state that
     their utilization rate may be artificially low because the
     calculation does not take into account *intermediate* *numbers*
     that the carrier must make available to other carriers but which
     are unavailable for use by the carrier to provide service to
     customers.[^405]

188. In the *Second Report and Order*, we decline to depart from our
     rule requiring calculation of the utilization threshold on a
     rate-center basis.[^406] Similarly, we decline to reconsider the
     manner in which we calculate carrier utilization levels.[^407]
     Notwithstanding these decisions, we recognize the possibility that
     certain conditions may prevent carriers from meeting the rate
     center-based utilization threshold when they actually need
     additional numbers, for example, to meet a specific customer
     request, although we have limited data on the extent of the
     problem. We therefore seek comment on the need to establish a
     "safety valve" apart from the general waiver process to allow
     carriers that do not meet the utilization threshold in a given rate
     center to obtain additional numbering resources.

189. Specifically, we seek data on the extent to which this problem
     exists (especially empirical data). We also seek comment on
     possible solutions, including intra-company and intra-rate center
     pooling or porting of unassigned numbers among switches, as well as
     the form a possible "safety valve" mechanism might take. For
     example, we seek comment on whether the NANPA or state commissions
     should be given the authority to decide on requests for waiver of
     the utilization threshold requirement in certain narrowly defined
     instances. Proposals to adopt a "safety valve" should include
     specific criteria for determining when a waiver is warranted.
     Further, we seek comment on how any proposed "safety valve"
     mechanism would be consistent with other numbering optimization
     measures. Any recommendation to depart from a rate center-based
     utilization threshold should propose strategies for optimizing the
     use of numbering resources assigned to switches with low
     utilization levels.

# PROCEDURAL MATTERS

## A. *Ex Parte* Presentations {#a.-ex-parte-presentations .unnumbered}

190. This matter shall be treated as a "permit-but-disclose" proceeding
     in accordance with the Commission's *ex parte* rules.[^408] Persons
     making oral *ex parte* presentations are reminded that memoranda
     summarizing the presentations must contain summaries of the
     substance of the presentations and not merely a list of the
     subjects discussed. More than a one or two sentence description of
     the views and arguments presented is generally required.[^409]

## B. Comment Filing Procedures {#b.-comment-filing-procedures .unnumbered}

191. Pursuant to applicable procedures set forth in sections 1.415 and
     1.419 of the Commission's rules, 47 C.F.R. §§1.415 and 1.419,
     interested parties may file comments on or before February 12,
     2001, and reply comments on or before March 5, 2001. Comments may
     be filed using the Commission's Electronic Comment Filing System
     (ECFS) or by filing paper copies.[^410] Comments filed through the
     ECFS can be sent as an electronic file via the Internet to
     http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an
     electronic submission must be filed. In completing the transmittal
     screen, commenters should include their full name, Postal Service
     mailing address, and the applicable docket or rulemaking number,
     which in this instance is CC Docket No. 99-200; 96-98. Parties may
     also submit an electronic comment by Internet e-mail. To get filing
     instructions for e-mail comments, commenters should send an e-mail
     to ecfs@fcc.gov, and should include the following words in the body
     of the message, "get form \<your e-mail address\>." A sample form
     and directions will be sent in reply.

192. Parties who choose to file by paper must file an original and four
     copies of each filing. All filings must be sent to the Commission's
     Secretary, Magalie Roman Salas, Office of the Secretary, Federal
     Communications Commission, 445 Twelfth Street, S.W. Room TW A325,
     Washington, D.C. 20554.

193. Comments and reply comments must include a short and concise
     summary of the substantive arguments raised in the pleading.
     Comments and reply comments must also comply with section 1.49 and
     all other applicable sections of the Commission's rules.[^411] We
     also direct all interested parties to include the name of the
     filing party and the date of the filing on each page of their
     comments and reply comments. All parties are encouraged to utilize
     a table of contents, regardless of the length of their submission.

194. Parties who choose to file paper should submit their comments on
     diskette. These diskettes should be submitted to Carmel Weathers,
     Network Services Division, Common Carrier Bureau, 445 Twelfth
     Street, S.W., Room 6-B153, Washington, D.C. 20554. Such submissions
     should be on a 3.5-inch diskette formatted in an IBM compatible
     format using Word for Windows or compatible software. The diskette
     should be accompanied by a cover letter and should be submitted in
     "read only" mode. The diskette should be clearly labeled with the
     commenter's name, proceeding (including the docket number), type of
     pleading (comment or reply comment), date of submission, and the
     name of the electronic file on the diskette.

195. Regardless of whether parties choose to file electronically or by
     paper, parties should also file one copy of any documents filed in
     this docket with the Commission's copy contractor, International
     Transcription Services, Inc., 1231 20th Street, N.W., Washington,
     D.C. 20554. Comments and reply comments will be available for
     public inspection during regular business hours in the FCC
     Reference Center, 445 Twelfth Street, S.W. Washington, D.C. 20554.

## Initial Regulatory Flexibility Analysis

196. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. §
     603, an Initial Regulatory Flexibility Analysis (IRFA) was
     incorporated into the *Notice* and a second IRFA was incorporated
     into the *Further Notice*. The Commission sought written public
     comment on the proposals in the *Notice* and the *Further Notice*,
     including the IRFAs.[^412] Appendix B sets forth the Final
     Regulatory Flexibility Analysis for the *Second Report and Order.*

## D. Final Paperwork Reduction Analysis {#d.-final-paperwork-reduction-analysis .unnumbered}

197. 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.

##  E. Second Further Notice Initial Paperwork Reduction Act Analysis {#e.-second-further-notice-initial-paperwork-reduction-act-analysis .unnumbered}

198. This *Second Further Notice* contains either a proposed or modified
     information collection. As part of its continuing effort to reduce
     paperwork burdens, we invite the general public and the Office of
     Management and Budget (OMB) to take this opportunity to comment on
     the information collections contained in this *Second Further
     Notice*, as required by the Paperwork Reduction Act of 1995, Public
     Law 104-13. Public and agency comments are due at the same time as
     other comments on this *Second Further Notice*; OMB comments are
     due 60 days after publication of this *Second Further Notice* in
     the Federal Register. Comments should address: (a) whether the
     proposed collection of information is necessary for the proper
     performance of the functions of the Commission, including whether
     the information shall enhance the quality, utility and clarity of
     the information collected; (b) the accuracy of the Commission's
     burden estimates; (c) ways to enhance the quality, utility, and
     clarity of the information collected; and (d) ways to minimize the
     burden of the collection of information on the respondents,
     including the use of automated collection techniques or other forms
     of information technology.

# ordering clauses

199. Accordingly, IT IS ORDERED that 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, this 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 Appendix A.

200. IT IS FURTHER ORDERED that section 52.15(f)(1)(vi) of the
     Commission's rules, 47 C.F.R. § 52.15(f)(1)(vi), is effective upon
     the date of release of this SECOND REPORT AND ORDER. Section
     52.15(h) is effective three months from the date of publication in
     the Federal Register. All other amendments to sections 52.15
     through 52.20 of the Commission's rules as set forth in Appendix A
     are effective thirty days from the date of publication of this
     SECOND REPORT AND ORDER in the Federal Register. The action
     contained herein has been analyzed with respect to the Paperwork
     Reduction Act of 1995 and found to impose new or modified reporting
     and/or recordkeeping requirements or burdens on the public.
     Implementation of these new or modified reporting and/or
     recordkeeping requirements will be subject to approval by the
     Office of Management and Budget (OMB) as prescribed by the Act, and
     will go into effect upon announcement of OMB approval in the
     Federal Register.

201. IT IS FURTHER ORDERED that the establishment of a five year term
     for the Thousands-Block Pooling Administrator is effective upon the
     date of adoption of this SECOND REPORT AND ORDER.

202. IT IS FURTHER ORDERED that 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, this SECOND FURTHER NOTICE OF
     PROPOSED RULEMAKING is hereby ADOPTED.

203. IT IS FURTHER ORDERED that the Commission's Consumer Information
     Bureau, Reference Information Center, SHALL SEND a copy of this
     *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.

204. IT IS FURTHER ORDERED that the Final Regulatory Flexibility
     Analysis for this SECOND REPORT AND ORDER, pursuant to the
     Regulatory Flexibility Act, 5 U.S.C. § 604, is contained in
     Appendix B.

205. IT IS FURTHER ORDERED that the Initial Regulatory Flexibility
     Analysis for this SECOND FURTHER NOTICE OF PROPOSED RULEMAKING,
     pursuant to the Regulatory Flexibility Act, 5 U.S.C. § 603, is
     contained in Appendix C.

     FEDERAL COMMUNICATIONS COMMISSION

     Magalie Roman Salas

     Secretary

Appendix A

**Final Rules**

PART 52 -- NUMBERING

Subpart B -- Administration

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\. Section 52.15 is revised to read as follows:

**§ 52.15 Central office code administration.**

(a) \*\*\*

(b) \*\*\*

(c) \*\*\*

(d) \*\*\*

(e) \*\*\*

(f) \*\*\*

```{=html}
<!-- -->
```
(1) \*\*\*

```{=html}
<!-- -->
```
(i) \*\*\*

(ii) \*\*\*

(iii) \*\*\*

(iv) \*\*\*

(v) \*\*\*

```{=html}
<!-- -->
```
(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.

```{=html}
<!-- -->
```
(2) \*\*\*

(3) *Data Collection Procedures.*

```{=html}
<!-- -->
```
(i) \*\*\*

(ii) Reporting shall be by separate legal entity and must include
     company name, company headquarters address, Operating Company
     Number (OCN), parent company OCN(s), 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.

(iii) \*\*\*

```{=html}
<!-- -->
```
(4) \*\*\*

(5) \*\*\*

(6) \*\*\*

(7) \*\*\*

```{=html}
<!-- -->
```
(g) *Applications for Numbering Resources*.

```{=html}
<!-- -->
```
(1) \*\*\*

(2) \*\*\*

(3) *Growth numbering resources*.

> \(i\) \*\*\*

i.  

```{=html}
<!-- -->
```
(ii) \*\*\*

(iii) \*\*\*

(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.

```{=html}
<!-- -->
```
(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.

```{=html}
<!-- -->
```
(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%.

(i) \*\*\*

(j) \*\*\*

(k) *Numbering Audits.*

```{=html}
<!-- -->
```
(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 found to be in
    violation of Commission regulations and applicable industry
    guidelines relating to numbering administration may be subject to
    enforcement action.

```{=html}
<!-- -->
```
5.  Section 52.17 is revised to read as follows:

> The B&C Agent shall:

(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;

(b) \*\*\*;

(c) \*\*\*;

(d) \*\*\*

(e) \*\*\*

(f) \*\*\*

6\. Section 52.20 is revised to read as follows:

**§ 52.20 Thousands-block number pooling.**

(a) \*\*\*

(b) \*\*\*

(c) *Donation of thousands-blocks.*

```{=html}
<!-- -->
```
(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.

(3) \*\*\*

```{=html}
<!-- -->
```
(d) \*\*\*

> Appendix B

**FINAL REGULATORY FLEXIBILITY ANALYSIS**

1\. As required by the Regulatory Flexibility Act (RFA),[^413] an
Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the
*Notice of Proposed Rulemaking* (*Notice*).[^414] 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* (*First
Report and Order and Further Notice*).[^415] Also in the *First Report
and Order and Further Notice*, pursuant to 5 U.S.C. § 603, was a second
IRFA.[^416] 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.[^417]

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

2\. 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.

3\. In doing so, we sought to (1) ensure that the limited numbering
resources of the North American Numbering Plan (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.

4\. In this *Second Report and Order and Second Further Notice*, 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***

5\. 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.

6\. *Geographic Splits and All-Services Area Code Overlays.* One
commenter described geographic splits as harmful for small businesses
because the phone number plays a critical role in the identity of the
business.[^418] Geographic splits may cause small businesses to lose
customers who are unaware of the phone number change. In addition, small
businesses may incur additional costs on advertising materials as a
result of an area code change.[^419] Thus, all-services area code
overlays are strongly preferred by commenters because small businesses
would not be exposed to such costs.

7\. *Audits.* Commenters generally support "for cause" and random
audits.[^420] The Small Business Alliance strongly supports "for cause",
scheduled and random audits given the rapid depletion of numbering
resources.[^421] Another commenter supports "for cause" audits, but not
random audits.[^422]

8\. *Mandatory Nationwide Ten-Digit Dialing.* Commenters representing
small businesses support mandatory ten-digit dialing.[^423] For example,
OPASTCO 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***

9\. 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.[^424] The RFA defines the
term "small entity" as having the same meaning as the terms "small
business," "small organization," and "small governmental
jurisdiction."[^425] 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.[^426] 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).[^427]

10\. 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[^428]
and the data in its *Carrier Locator: Interstate Service Providers
Report*.[^429] 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.

11\. 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.[^430] Below, we discuss the total estimated number of
telephone companies falling within those two categories and the number
of small businesses in each, and attempt to refine further those
estimates to correspond with the categories of telephone companies that
are commonly used under our rules.

12\. 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.\"[^431] 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.[^432]
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.

13\. *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.[^433] 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.\"[^434] 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.

14\. *Wireline Carriers and Service Providers.* The SBA has developed a
definition of small entities for telephone communications companies
except 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.[^435] According to the SBA\'s definition, a
small business telephone company other than a radiotelephone company is
one employing no more than 1,500 persons.[^436] 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. We do not have data specifying the number of these
carriers that are not independently owned and operated, and thus 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 the SBA\'s definition. Consequently, we estimate
that fewer than 2,295 small telephone communications companies other
than radiotelephone companies are small entities or small incumbent LECs
that may be affected by the proposed regulations, herein adopted.

15\. *Local Exchange Carriers.* Neither the Commission nor the SBA has
developed a definition for small LECs. The closest applicable definition
under the SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies.[^437] According to the most recent
*Telecommunications* *Industry Revenue* data, 1,348 incumbent carriers
reported that they were engaged in the provision of local exchange
services.[^438] We do not have data specifying the number of these
carriers that are either dominant in their field of operations, are not
independently owned and operated, or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of LECs that would qualify as small business concerns under the
SBA\'s definition. Consequently, we estimate that fewer than 1,348
providers of local exchange service are small entities or small
incumbent LECs that may be affected by the proposed regulations, herein
adopted.

16\. *Interexchange Carriers.* Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.[^439] According to the
most recent *Trends in Telephone Service* data, 171 carriers reported
that they were engaged in the provision of interexchange services.[^440]
We do not have data specifying the number of these carriers that are not
independently owned and operated or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of IXCs that would qualify as small business concerns under the
SBA\'s definition. Consequently, we estimate that there are less than
171 small entity IXCs that may be affected by the proposed regulations,
herein adopted. 19.

17\. *Competitive Access Providers*. Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to
competitive access service providers (CAPs). The closest applicable
definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.[^441] According to the
most recent *Trends in Telephone Service* data, 212 CAP/CLECs carriers
and 10 other LECs reported that they were engaged in the provision of
competitive local exchange services.[^442] We do not have data
specifying the number of these carriers that are not independently owned
and operated, or have more than 1,500 employees, and thus are unable at
this time to estimate with greater precision the number of CAPs that
would qualify as small business concerns under the SBA\'s definition.
Consequently, we estimate that there are less than 212 small entity CAPs
and 10 other LECs that may be affected by the proposed regulations,
herein adopted.

18\. *Pay Telephone Operators.* Neither the Commission nor the 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.[^443] According to the most recent *Trends in
Telephone* *Service* data, 615 carriers reported that they were engaged
in the provision of pay telephone services.[^444] We do not have data
specifying the number of these carriers that are not independently owned
and operated or have more than 1,500 employees, and thus are unable at
this time to estimate with greater precision the number of pay telephone
operators that would qualify as small business concerns under the SBA\'s
definition. Consequently, we estimate that there are less than 615 small
entity pay telephone operators that may be affected by the proposed
regulations, herein adopted.

19\. *Resellers (including debit card providers).* Neither the
Commission nor the SBA has developed a definition of small entities
specifically applicable to resellers. The closest applicable SBA
definition for a reseller is a telephone communications company other
than radiotelephone (wireless) companies.[^445] According to the most
recent *Trends in Telephone* *Service* data, 388 toll and 54 local
entities reported that they were engaged in the resale of telephone
service.[^446] We do not have data specifying the number of these
carriers that are not independently owned and operated or have more than
1,500 employees, and thus are unable at this time to estimate with
greater precision the number of resellers that would qualify as small
business concerns under the SBA\'s definition. Consequently, we estimate
that there are fewer than 388 small toll entity resellers and 54 small
local entity resellers that may be affected by the proposed regulations,
herein adopted.

20\. *Wireless Telephony and Paging and Messaging.* Wireless telephony
includes cellular, PCS or specialized mobile radio (SMR) service
providers. Neither the Commission nor the SBA has developed a definition
of small entities applicable to cellular licensees, or to providers of
paging and messaging services. The closest applicable SBA definition for
a reseller is a telephone communications company other than
radiotelephone (wireless) companies.[^447] According to the most recent
*Locator* data, 806 carriers reported that they were engaged in the
provision of wireless telephony and 427 companies reported that they
were engaged in the provision of paging and messaging service.[^448] We
do not have data specifying the number of these carriers that are not
independently owned or operated, and thus are unable at this time to
estimate with greater precision the number that would qualify as small
business concerns under the SBA\'s definition. Consequently, we estimate
that there are fewer than 732 small carriers providing wireless
telephony services and fewer than 137 small companies providing paging
and messaging services that may be affected by the proposed regulations,
herein adopted.

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

***Requirements***

21\. *Audit Program.* In the *Notice*, we identified auditing as the
only legitimate method for verifying the validity and accuracy of
utilization data submitted by users of numbering resources.[^449] 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.[^450] 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.

22\. *"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 draft 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.

23\. *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***

24\. 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.[^451]

25\. *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.

26\. *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.

27\. *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.

28\. 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.

29\. 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.

30\. *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.

31\. *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,[^452]
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.

32\. *Reconsideration of Reserved Number Period.* In the *First Report
and Order*, we decided to allow numbers to remain in reserved status for
a maximum of 45 days.[^453] In this *Second Report and Order*, we extend
the period for reserving numbers to a maximum of 180 days.[^454] 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 NANC to charge a fee for extending the reservation period and are
seeking comment on this proposal in the *Second Further Notice*.

33\. ***Report to Congress:*** 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.[^455] 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. A
copy of this *Second Report and Order* and FRFA (or summaries thereof)
will also be published in the Federal Register.[^456]

Appendix C

**INITIAL REGULATORY FLEXIBILITY ANALYSIS**

1\. As required by the Regulatory Flexibility Act (RFA),[^457] the
Commission has prepared this present Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on small
entities by the policies and rules proposed in this *Second Report and
Order, Order on Reconsideration in CC Docket 96-98 and CC Docket 99-200,
and Second Further Notice in CC Docket No. 99-200* (*Second Further
Notice*). Written public comments are requested on this IRFA. Comments
must be identified as responses to the IRFA and must be filed by the
deadlines for comments on the *Second Further Notice* provided above in
Section VII. The Commission will send a copy of the *Second Further
Notice*, including this IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration (SBA).[^458] In addition, the *Second
Further Notice* and the IRFA (or summaries thereof) will be published in
the Federal Register.[^459]

**A. *Need for, and Objectives of, the Proposed Rules***

2\. In the Communications Act of 1934, as amended by the
Telecommunications Act of 1996, Congress gave the Commission plenary
jurisdiction over the North American Numbering Plan (NANP) within the
United States.[^460] In discharging our authority over numbering
resources, we seek to balance two competing goals. First, we must ensure
that carriers have the numbering resources that they need to compete and
bring new and innovative services to the consumer marketplace. Second,
we must ensure that, to the extent possible, numbering resources are
used efficiently. Inefficient use of numbering resources speeds the
exhaust of area codes, imposing on carriers and consumers alike the
burdens and costs of implementing new area codes. It also shortens the
life of the NANP as a whole.

3\. The Commission is issuing this *Second Further Notice* to seek
public comment on (a) the relative advantages of service-specific and
technology-specific overlays as opposed to all-services overlays, and
the conditions under which service-specific and technology-specific
overlays, if adopted, should be implemented in order to promote
competitive equity, maximize efficient use of numbering resources, and
minimize customer inconvenience; (b) what policies could be implemented
at the federal level to reduce the extent to which the rate center
system contributes to and/or accelerates numbering resource exhaust; (c)
whether carriers should be held accountable when related carriers fail
to comply with reporting requirements; (d) whether state commissions
should be granted direct, password-protected access to the mandatory
reporting data received by the North American Numbering Plan
Administrator (NANPA); (e) whether we should allow extensions (for a fee
or otherwise) on the 180-day reservation period for numbers; (f) what
enforcement mechanisms should be applied when a carrier either fails to
cooperate with an audit, or fails to resolve identified areas of
noncompliance; (g) whether state commissions should be allowed to
conduct audits; (h) the development of a market-based allocation system
for numbering resources; (i) the costs associated with thousands-block
number pooling; (j) whether the Commission should require carriers to
acquire Local Number Portability (LNP) capabilities for the purpose of
participating in thousands-block number pooling; and (k) whether a
"safety valve" should be established for carriers that need additional
numbering resources, but fail to meet the utilization threshold in a
given rate center.

4\. Receiving comments on such matters will help us to examine and
consider ways to achieve our objectives to use numbering resources more
efficiently in order to mitigate potential customer cost and
inconvenience of implementing new area codes and delaying costly
expansion of the NANP. For carriers, more numbering resources should
encourage competition in a growing telecommunications market.

**B. *Legal Basis***

5\. The proposed action is authorized under 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.[^461]

**C. *Description and Estimate of the Number of Small Entities To Which
the ***

***Proposed Rules Will Apply***

6\. 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.[^462] The RFA defines the
term "small entity" as having the same meaning as the terms "small
business," "small organization," and "small governmental
jurisdiction."[^463] 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.[^464] 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 SBA.[^465]

7\. 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[^466]
and the data in its *Carrier Locator: Interstate Service Providers
Report*.[^467] However, in a recent news release, the Commission
indicated that there are 4,144 interstate carriers.[^468] 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.

8\. 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.[^469] Below, we discuss the total estimated number of
telephone companies falling within the two categories and the number of
small businesses in each, and we then attempt to refine further those
estimates to correspond with the categories of telephone companies that
are commonly used under our rules.

9\. 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.\"[^470] 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.[^471]
We have therefore included small incumbent LECs in this RFA analysis,
although we emphasize that this RFA action has no effect on Commission
analyses and determinations in other, non-RFA contexts.

10\. *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.[^472] 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.\"[^473] For example, a personal
communications system 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.

11\. *Wireline Carriers and Service Providers.* The SBA has developed a
definition of small entities for telephone communications companies
except 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.[^474] According to the SBA\'s definition, a
small business telephone company other than a radiotelephone company is
one employing no more than 1,500 persons.[^475] 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. We do not have data specifying the number of these
carriers that are not independently owned and operated, and thus 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 the SBA\'s definition. Consequently, we estimate
that fewer than 2,295 small telephone communications companies other
than radiotelephone companies are small entities or small incumbent LECs
that may be affected by the proposed regulations.

12\. *Local Exchange Carriers.* Neither the Commission nor the SBA has
developed a definition for small LECs. The closest applicable definition
under the SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies.[^476] According to the most recent
*Telecommunications Industry Revenue* data, 1,348 incumbent carriers
reported that they were engaged in the provision of local exchange
services.[^477] We do not have data specifying the number of these
carriers that are either dominant in their field of operations, are not
independently owned and operated, or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of LECs that would qualify as small business concerns under the
SBA\'s definition. Consequently, we estimate that fewer than 1,348
providers of local exchange service are small entities or small
incumbent LECs that may be affected by the proposed regulations.

13\. *Interexchange Carriers.* Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.[^478] According to the
most recent *Trends in Telephone Service* data, 171 carriers reported
that they were engaged in the provision of interexchange services.[^479]
We do not have data specifying the number of these carriers that are not
independently owned and operated or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of IXCs that would qualify as small business concerns under the
SBA\'s definition. Consequently, we estimate that there are less than
171 small entity IXCs that may be affected by the proposed regulations.

14\. *Competitive Access Providers.* Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to
competitive access services providers (CAPs). The closest applicable
definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.[^480] According to the
most recent *Trends in Telephone Service* data, 212 CAP carriers and
Competitive Local Exchange Carriers (CLEC) and 10 other LECs reported
that they were engaged in the provision of competitive local exchange
services.[^481] We do not have data specifying the number of these
carriers that are not independently owned and operated, or have more
than 1,500 employees, and thus are unable at this time to estimate with
greater precision the number of CAPs that would qualify as small
business concerns under the SBA\'s definition. Consequently, we estimate
that there are less than 212 small entity CAPs and 10 other LECs that
may be affected by the proposed regulations.

15\. *Pay Telephone Operators.* Neither the Commission nor the 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.[^482] According to the most recent *Trends in
Telephone Service* data, 615 carriers reported that they were engaged in
the provision of pay telephone services.[^483] We do not have data
specifying the number of these carriers that are not independently owned
and operated or have more than 1,500 employees, and thus are unable at
this time to estimate with greater precision the number of pay telephone
operators that would qualify as small business concerns under the SBA\'s
definition. Consequently, we estimate that there are less than 615 small
entity pay telephone operators that may be affected by the proposed
regulations.

16\. *Resellers (including debit card providers).* Neither the
Commission nor the SBA has developed a definition of small entities
specifically applicable to resellers. The closest applicable SBA
definition for a reseller is a telephone communications company other
than radiotelephone (wireless) companies.[^484] According to the most
recent *Trends in Telephone Service* data, 388 toll and 54 local
entities reported that they were engaged in the resale of telephone
service.[^485] We do not have data specifying the number of these
carriers that are not independently owned and operated or have more than
1,500 employees, and thus are unable at this time to estimate with
greater precision the number of resellers that would qualify as small
business concerns under the SBA\'s definition. Consequently, we estimate
that there are fewer than 388 small toll entity resellers and 54 small
local entity resellers that may be affected by the proposed regulations.

17\. *Wireless Telephony and Paging and Messaging.* Wireless telephony
includes cellular, personal communications service (PCS) or specialized
mobile radio (SMR) service providers. Neither the Commission nor the SBA
has developed a definition of small entities applicable to cellular
licensees, or to providers of paging and messaging services. The closest
applicable SBA definition for a reseller is a telephone communications
company other than radiotelephone (wireless) companies.[^486] According
to the most recent *Locator* data, 806 carriers reported that they were
engaged in the provision of wireless telephony and 427 companies
reported that they were engaged in the provision of paging and messaging
service.[^487] We do not have data specifying the number of these
carriers that are not independently owned or operated, and thus are
unable at this time to estimate with greater precision the number that
would qualify as small business concerns under the SBA\'s definition.
Consequently, we estimate that there are fewer than 732 small carriers
providing wireless telephony services and fewer than 137 small companies
providing paging and messaging services that may be affected by the
proposed regulations.

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

***Requirements***

18\. In this *Second Further Notice* we seek comment on whether to
implement a market-based allocation system for numbering resources, and
on the types of reporting requirements needed to ensure that secondary
markets, if implemented, remain open, competitive and effective. Data
from such reports should allow us to determine the success of
reallocating numbering resources in secondary markets. We also seek
comment on whether carriers should be required to file information on
purchase or lease prices as well as the quantities involved in the
transaction. Commenters should discuss whether such reporting
requirements would pose an unreasonable burden on carriers or NANPA.

**E. *Steps Taken to Minimize Significant Economic Impact on Small
Entities, and ***

***Significant Alternatives Considered***

19\. 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.[^488]

20\. *Service-Specific and Technology-Specific Overlays.* Due to the
numbering crisis, we are reconsidering our prohibition against using
service-specific and technology-specific overlays as methods for area
code relief. The prohibition stems from our belief that these overlays
could pose a distinct competitive disadvantage on, for example, carriers
with customers who would suffer the cost and inconvenience of
surrendering existing numbers, changing over to new numbers, and
informing callers of the new numbers. Some commenters to the *Notice*
advocated that these overlays would address the demand for numbers as
well as receive substantial public support, especially as a means for
providing area code relief. We seek comment, especially from small
entities, on when and if these overlays should occur and if so, the
conditions under which service-specific and technology-specific overlays
should be implemented in order to promote competitive equity, maximize
the efficient use of numbering resources, and minimize customer
inconvenience. In determining appropriate conditions for implementing
these overlays, we will examine how such conditions would impact small
businesses.

21\. *The Rate Center Problem.* In this *Second Further Notice* we seek
comment on rate center consolidation. We find that rate center
consolidation would be a potential solution for relieving number exhaust
because the existence of multiple rate centers in each Numbering Plan
Area (NPA), as well as demand by most carriers to have numbering
resources in each rate center in which they operate, greatly contribute
to number exhaust. However, because of the connection between rate
centers and the rating and routing of calls, such consolidation may be
difficult for carriers, particularly incumbent LECs. Thus, we seek
comment on ways to separate the connection between rate centers, call
rating and routing. We also seek comment from industry and state
commissions regarding the effects of past and present rate center
consolidation efforts on carriers as well as the benefits and costs of
such consolidation in the top 100 metropolitan statistical areas (MSAs).
Such consolidation efforts should significantly impact numbering
resources by providing small and large businesses with access to more
numbers. In responding to this issue, commenters should also consider
alternatives to rate center consolidation, such as extending local
calling areas.

22\. *Liability of Related Carriers.* In the *First Report and Order*
the Commission established new semiannual reporting requirements to
obtain more consistent, accurate and complete reporting of number
resource utilization and forecast data. We tentatively conclude in this
*Second Further Notice* that carriers should, in certain instances, have
numbering resources withheld when related carriers fail to comply with
our mandatory reporting requirements and, as a result, are denied
numbers resources. We seek comment on how to identify the relationships
(*i.e.*, the existence of parent and sister companies) among reporting
carriers, and what geographic limitations should be placed on those
relationships in determining liability.

23\. *Fee for Number Reservations*. In this *Second Further Notice*, we
seek further comment on the NANC's proposal to allow unlimited
reservations of numbers on a month-to-month basis. We seek comment on
whether unlimited reservations of numbers are necessary, or, in the
alternative, whether there should be a constraint on the time period
that numbers can be reserved. Commenters should also discuss the
viability and reasonableness of assessing a fee for reserved numbers on
carriers and permitting carriers to recover such costs from end users
for whom numbers may be reserved. Such a fee could provide appropriate
incentives in this context. We encourage comments regarding any unique
small business needs related to these alternatives for number
reservations, and the disproportionate impact, if any, of fees on small
businesses.

24\. *Audit Compliance and Enforcement*. In the *Second Report and
Order*, we established a comprehensive audit program to verify carrier
compliance with federal rules and orders and industry guidelines. In
this *Second Further Notice*, we seek comment on what appropriate
enforcement mechanisms should be employed to address instances in which
a carrier either fails to cooperate with an audit, or fails to rectify
identified areas of noncompliance. We tentatively conclude that, at a
minimum, carriers that fail to cooperate with the auditor should be
denied numbering resources. The imposition of penalties would encourage
both large and small carriers to comply with auditors' requests.

25\. *State Authority to Perform Audits*. In addition to maintaining a
national audit program, we seek comment on whether state commissions,
given their extensive involvement in numbering issues, should be
permitted to conduct independently "for cause" and random audits of
carrier data. Small businesses should comment, in particular, on whether
the potential existence of differing state audit standards would be a
significant cost burden for them.

26\. *Market for Numbering Resources.* In this *Second Further Notice*
we seek comment on whether and how a market-based number allocation
system should be implemented. Proper implementation of this system
should encourage the efficient use of numbering resources by carriers as
well as be competitively neutral, especially towards small businesses.
The system's benefits (*i.e.*, more efficient use of numbers) should
outweigh carriers' concerns over costs. We believe that alternatives to
this system (*i.e.*, allocating numbers for free) would not promote the
efficient use of numbers as effectively. Commenters are encouraged to
propose ways to implement such a system so as to minimize any
unfavorable impact on small entities.

27\. *Recovery of Pooling Shared Industry and Direct Carrier Specific
Costs.* We determined in this *Second Further Notice* that we still do
not possess sufficient cost data to establish a cost recovery mechanism
at this time. We intend to establish a national cost recovery mechanism
after the national pooling roll-out schedule is finalized, because the
timing and amount of pooling costs should be more readily ascertainable
at that time. In the interim, we seek further comment and cost studies
quantifying shared industry and direct carrier-specific costs of
thousands-block number pooling. Such cost data should assist us in
ascertaining an appropriate cost recovery mechanism for small carriers.

28\. *Mandating LNP Capability for Thousands-Block Number Pooling.* In
the *First Report and Order*, we adopted thousands-block number pooling
for local number portability (LNP) capable carriers, concluding that
commercial mobile radio services carriers as well as non-LNP capable
wireline carriers must participate in pooling once they become LNP
capable. We seek comment on whether we should require carriers to become
LNP capable for the purpose of participating in thousands-block number
pooling. In the alternative, we seek comment on whether carriers can
utilize other network architecture to increase participation in
thousands-block number pooling, or at least central office code sharing,
without having fully deployed LNP. In examining alternatives to improve
the efficient use of numbering resources, we request comments from all
carriers, but especially small businesses that may become disadvantaged
by a requirement to become LNP-capable.

29\. *Waiver of Growth Numbering Resource Requirement*. Currently,
carriers may obtain a waiver of growth numbering resource requirements
by demonstrating their need for additional numbering resources. We seek
comment in this *Second Further Notice* on whether a "safety valve"
should be established for carriers that need additional numbering
resources, even though they fail to meet the utilization threshold in a
given rate center. In particular, we request data (especially empirical
data) indicating the extent to which this problem exists. In addition,
we seek comment on, among other things, the form of a "safety valve"
mechanism and specific criteria that would warrant a waiver. Commenters
are encouraged to provide data demonstrating small business' need for a
"safety valve" mechanism as well as specific criteria for granting a
waiver that would impose a minimal burden on small entities.

**F. *Federal Rules that May Duplicate, Overlap, or Conflict With the
Proposed ***

***Rules***

30. None.

Appendix D

**List of Parties**

**I. Numbering Resource Optimization Notice of Proposed Rulemaking**

**Comments -** In addition to the parties listed below, the Commission
also considered the comments, including e-mails, postcards and other
correspondence, from over 3,000 citizens in this matter.

1.  Adamson, Grier

2.  Ad Hoc Telecommunications Users Committee (Ad Hoc)

3.  AirTouch Communications, Inc. (AirTouch)

4.  Ameritech

5.  Arsinow, Richard A.

6.  Arvanitas, Ms. Peggy

7.  Association for Local Telecommunications Services (ALTS)

8.  AT&T Corporation (AT&T)

9.  Bartel, Richard C., and Communications Venture Services, Inc.
    (Venture Services)

10. Bell Atlantic

11. BellSouth Corporation (BellSouth)

12. Burrows Resource Group Inc. (BRG)

13. Cablevision Lightpath, Inc. (Cablevision)

14. California Public Utilities Commission and the People of the State
    of California (California Commission)

15. Campbell, Bill - California Assemblyman 71^st^ District, letter to

Congressman James E. Rogan

16. Carlson, Douglas F.

17. Cellular Telecommunications Industry Association (CTIA)

18. Chambers, Rose A.

19. Cincinnati Bell Telephone Company (CinBell)

20. Citizens Utility Board, People of the State of Illinois, Cook County
    State's Attorney's

Office, and the City of Chicago (Citizens Util. Bd., et al.)

21. Cohen, Marsha N.

22. Colpitts, Robert M., Jr.

23. Colorado Public Utilities Commission (Colorado Commission)

24. Connect Communications Corporation (Connect)

25. Connecticut Department of Public Utility Control (Connecticut
    Commission)

26. Cox Communications, Inc. (Cox)

27. Eyre, Richard

28. Florida Public Service Commission (Florida Commission)

29. Gethard, Elaine Meitus

30. GTE Service Corporation (GTE)

31. Illinois Chapter of National Emergency Number Association (INENA)

32. Joint Comments of Choice One Communications, Inc., and GST
    Telecommunications,

Inc. (Choice One and GST)

33. Joint Comments of Centennial Cellular Corporation; CenturyTel
    Wireless, Inc.;

Thumb Cellular, Limited Partnership; and Trillium Cellular Corp.
(Centennial, et al.)

34. Joint Comments of Texas Office of Public Utility Counsel and
    National Association

of State Utility Consumer Advocates (Texas Public Util. Counsel and
NASUCA)

35. Level 3 Communications, Inc. (Level3)

36. Liberty Telecom LLC (Liberty)

37. Maine Public Utilities Commission (Maine Commission)

38. Maydak, Keith

39. Massachusetts Department of Telecommunications and Energy

(Massachusetts Commission)

40. MCI WorldCom, Inc. (WorldCom)

41. MediaOne Group, Inc. (MediaOne)

42. Minnesota Department of Public Service (Minnesota Commission)

43. Missouri Public Service Commission (Missouri Commission)

44. Mitretek Systems, Inc.

45. Mobility Canada

46. Mohlenbrok, Gerald

47. National Association of Regulatory Utility Commissioners (NARUC)

48. National Emergency Number Association (NENA)

49. National Exchange Carriers Association (NECA)

50. National Telephone Cooperative Association (NTCA)

51. Neill, Professor Bill

52. New Hampshire Public Utilities Commission (New Hampshire Commission)

53. New Jersey Board of Public Utilities (New Jersey Commission)

54. Newman, Vicky

55. New York State Department of Public Service (New York Commission)

56. Nextel Communications, Inc. (Nextel)

57. Nextlink Communications, Inc. (Nextlink)

58. Nilsen, Beate

59. North American Numbering Plan Administrator (NANPA)

60. North American Numbering Council (NANC)

61. North Carolina Utilities Commission (North Carolina Commission)

62. Omnipoint Communications, Inc. (Omnipoint)

63. Organization for the Promotion and Advancement of Small
    Telecommunications

Companies (OPASTCO)

64. Paging Network, Inc.

65. Pennsylvania Office of Consumer Advocate and NASUCA (Pennsylvania

Consumer Advocate and NASUCA)

66. Pennsylvania Public Utility Commission (Pennsylvania Commission)

67. Personal Communications Industry Association (PCIA)

68. Prichard, Douglas R. City of Rolling Hills Estates City Manager

69. PrimeCo Personal Communications, L.P. (PrimeCo)

70. Public Service Commission of Wisconsin (Wisconsin Commission)

71. Public Utilities Commission of Ohio (Ohio Commission)

72. Public Utility Commission of Texas (Texas Commission)

73. Qwest Communications Corporation (Qwest)

74. Ravizza, Norman

75. RCN Telecom Services, Inc. (RCN)

76. REC Networks

77. Rogers Cantel, Inc.

78. Saco River Telegraph & Telephone Co.

79. Salva, Carol

80. SBC Communications, Inc. (SBC)

81. Small Business Alliance for Fair Utility Regulation (Small Business
    Alliance)

82. Solnit, Kenneth T.

83. Sprint Corporation (Sprint)

84. Sullivan, Mr. Michael A.

85. Texas Advisory Commission on State Emergency Communications, et al.

86. Texas Office of Public Utility Counsel

87. Time Warner

88. Thro, Dennis

89. United States Telephone Association (USTA)

90. U S West Communications, Inc. (U S West)

91. Virginia State Corporation Commission, Division of Communications

92. VoiceStream Wireless Corp. (VoiceStream)

93. WinStar Communications, Inc. (WinStar)

94. Yablon, Gilbert (Smart Dialing Systems)

95. Zamzow, Norma

**Reply Comments**

96. Ad Hoc

97. AirTouch

98. Allegiance Telecom, Inc. (Allegiance)

99. Ameritech

100. ALTS

101. Association of Public-Safety Communications
     Officials-International, Inc.

and the National Emergency Number Association (APCO and NENA)

102. AT&T

103. Bell Atlantic

104. BellSouth

105. California Commission

106. CTIA

107. CenturyTel, Inc.

108. CinBell

109. Colorado Numbering Task Force

110. Competitive Telecommunications Association (CompTel)

111. Connect Communications Corporation (Connect)

112. Cook County State's Attorney's Office

113. Cox

114. Florida Commission

115. GTE

116. INENA

117. Choice One and GST

118. Level 3

119. Levine, Richard

120. Maine Commission

121. WorldCom

122. MediaOne

123. NENA

124. NECA

125. NTCA

126. Neill, Professor Bill

127. New York Commission

128. Nextel

129. Nextlink

130. Omnipoint

Pennsylvania Consumer Advocate and NASUCA

131. Pennsylvania Commission

132. PCIA

133. RCN

134. SBC

135. Small Business Alliance

136. Sprint

137. Telcordia

138. Teligent, Inc. (Teligent)

139. USTA

140. WinStar

141. Wisconsin Commission

**II. Numbering Resource Optimization First Report and Order and First
Further Notice of Proposed Rulemaking**

A.  **Further Notice Comments**

```{=html}
<!-- -->
```
1.  Ad Hoc

2.  AT&T

3.  ALTS

4.  BellSouth

5.  Bell Atlantic

6.  California Commission

7.  CTIA

8.  2^nd^ Century Communications, Inc. (2^nd^ Century)

9.  CompTel

10. Cox

11. GTE

12. General Services Administration (GSA)

13. State of Illinois, Department of Central Management Services

14. Maine Commission

15. MediaOne

16. Joint Comments of Midvale Telephone Exchange, Inc., Northeast
    Louisiana Telephone Company, Inc., Interstate Telecommunications
    Cooperative, Inc., and Radio Paging Service

17. Missouri Commission

18. Joint Comments of the National Exchange Carrier Association and
    National Telephone Cooperative Association (Joint Comments of NECA
    and NTCA)

19. New Hampshire Commission

20. New York Commission

21. Nextel

22. Nextlink

23. Oregon Commission

24. Pennsylvania Commission

25. Joint Comments of Pennsylvania Office of Consumer Advocate, Texas
    Office of Public Utility Counsel, Missouri Office of Public Counsel,
    Florida Office of Public Counsel, District of Columbia Office of
    People's Counsel, California Office of Rate Payer Advocates, The
    Utility Reform Network, Maryland Office of people's Counsel, Maine
    Public Advocate, Indiana Office of Utility Consumer Counsel
    (Consumer Commenters)

26. PCIA

27. RCN

28. Rural Independent Competitive Alliance

29. SBC

30. Sprint

31. Telcordia

32. Texas Commission

33. Time Warner

34. USTA

35. U S WEST

36. Verizon Wireless

37. VoiceStream

38. WinStar

39. WorldCom

```{=html}
<!-- -->
```
B.  **Further Notice Reply Comments**

```{=html}
<!-- -->
```
40. Allegiance

41. Arch Communications

42. Arvanitas, Peggy

43. AT&T

44. BellSouth

45. California Commission

46. CTIA

47. General Services Administration (GSA)

48. Illuminet, Inc.

49. Maine Commission

50. NARUC

51. NeuStar, Inc. (NeuStar)

52. Nextel

53. RCN

54. SBC

55. Sprint

56. Telcordia

57. USTA

58. U S West

59. Verizon Wireless

60. VoiceStream

61. WorldCom

```{=html}
<!-- -->
```
C.  **Petitions for Reconsideration, Clarification, Waivers and Motions
    for Clarification and Extension of Time**

62\. ACUTA

63\. Ad Hoc

64\. Arkansas, Department of Information Services

65\. ALTS

66\. AT&T

67\. Autopage & Radio Paging Services

68\. BellSouth

69\. Blackfoot Telephone Coop.

70\. California Commission

71. Cal-Ore Telephone Co.

72. CTIA

73. CenturyTel, Inc.

74. CinBell

75. Electric Lightwave, Inc.

76. Florida Commission

77. General Communication Inc. (GCI)

78. Intermedia Communications Inc.

79. Iowa Telecom

80. Kassem, Ahmed (U. of Illinois -- Chicago)

81. KMC Telecom

82. Maine Commission

83. Metropolitan Government of Nashville & Davidson County

84. NASNA

85. NENA

86. NTCA

87. Nextlink

88. OPASTCO

89. Ohio Commission

90. PCIA

91. Puerto Rico Telephone Co., & Celulares Telefonica

92. Qwest

93. RCA

94. RCN

95. SBC

96. Sprint

97. Telcordia

98. Tennessee Telecommunications Authority (TTA)

99. USTA

100. Verizon

101. Verizon Wireless

102. VoiceStream

103. Washington Department of Information Services

104. Whitmer, Glenn (U. of Illinois -- Urbana-Champaign)

105. WinStar

106. WorldCom

```{=html}
<!-- -->
```
D.  **Oppositions to and Support for Petitions, Waivers and Motions**

```{=html}
<!-- -->
```
107. AT&T

108. BellSouth

109. CinBell

110. Ohio Commission

111. PCIA

112. Texas Commission

113. Qwest

114. SBC

115. Sprint

116. USTA

117. Verizon

118. Verizon Wireless

119. VoiceStream

120. WorldCom

**III. Pennsylvania Numbering Order**

A.  **Petition for Reconsideration**

```{=html}
<!-- -->
```
1.  California Cable Television Association

2.  California Commission

3.  Connecticut Commission

4.  Maine Commission

5.  Massachusetts Commission

6.  MediaOne

7.  NARUC

8.  New Hampshire Commission

9.  Pennsylvania Commission

10. SBC

11. Texas Commission

```{=html}
<!-- -->
```
B.  **Petitions for Clarification**

```{=html}
<!-- -->
```
1.  NARUC

2.  SBC

```{=html}
<!-- -->
```
C.  **Comments**

```{=html}
<!-- -->
```
1.  Bell Atlantic

2.  SBC

3.  Vanguard

```{=html}
<!-- -->
```
D.  **Reply Comments**

```{=html}
<!-- -->
```
1.  California Cable Television Association

2.  Maine Commission

3.  Vanguard

```{=html}
<!-- -->
```
E.  **Opposition to Petition for Reconsideration or Clarification**

```{=html}
<!-- -->
```
1.  Bell Atlantic Mobile, Inc.

2.  MCI

3.  Nextel Communications

```{=html}
<!-- -->
```
F.  **Reply to Opposition to Petition for Reconsideration**

1\. Pennsylvania Commission

[^1]: The NANP was established in the 1940s, when American Telephone and
    Telegraph (AT&T) realized that there was a need to ensure that the
    expansion of long distance calling would be guided by principles
    consistent with the ultimate incorporation of all public switched
    telephone networks into an integrated nation-wide network. The NANP
    is the basic numbering scheme for the telecommunications networks
    located in Anguilla, Antigua, Bahamas, Barbados, British Virgin
    Islands, Canada, Cayman Islands, Dominica, Dominican Republic,
    Grenada, Jamaica, Montserrat, St. Kitts & Nevis, St. Lucia, St.
    Vincent, Turks & Caicos Islands, Trinidad & Tobago, and the United
    States (including Puerto Rico, the U.S. Virgin Islands, Guam and the
    Commonwealth of the Northern Mariana Islands). Under the plan, the
    United States and Canada originally were divided into eighty-three
    \"zones,\" each of them identified by three digits. Within each
    zone, a central office was represented by another three-digit code.
    The zones are now referred to as Numbering Plan Areas (NPAs), and
    the 3 digits representing those areas are referred to either as
    Numbering Plan Area codes or area codes. The three digits
    representing central offices are called central office codes or
    NXXs. The central office code is used for routing calls and for
    rating and billing calls. Typically, wireline carriers obtain a
    central office code for each rate center in which they provide
    service in a given area code. All public network facilities and
    private network facilities (such as private branch exchange systems)
    are designed and programmed to be consistent with the NANP scheme.

[^2]: *See Numbering Resource Optimization*, Report and Order and
    Further Notice of Proposed Rulemaking, 15 FCC Rcd 7574 (rel. Mar.
    31, 2000) (*First Report and Order*).

[^3]: Pub. L. No. 104-104, 110 Stat. 56 (1996 Act). The 1996 Act amended
    the Communications Act of 1934, 47 U.S.C. §§ 151-174. 47 U.S.C. §
    251(e)(1) provides:

    > The Commission shall create or designate one or more impartial
    > entities to administer telecommunications numbering and to make
    > such numbers available on an equitable basis. The Commission shall
    > have exclusive jurisdiction over those portions of the North
    > American Numbering Plan that pertain to the United States. Nothing
    > in this paragraph shall preclude the Commission from delegating to
    > State commissions or other entities all or any portion of such
    > jurisdiction.

[^4]: *See* *Numbering Resource Optimization*, Notice of Proposed
    Rulemaking, 14 FCC Rcd 10322, 10328-29, para. 15 (rel. June 2, 1999)
    (*Notice*); *First Report and Order*, 15 FCC Rcd at 7578, para. 4.
    The other two factors we identified in the *Notice* were: (1)
    multiple rate centers, and the demand by most carriers to have at
    least one NXX code per rate center; and (2) the increased demand for
    numbering resources by new entrants and new technologies. *Notice,*
    14 FCC Rcd at 10328-29, para. 15.

[^5]: *See Petition for Declaratory Ruling and Request for Expedited
    Action on the July 15, 1997 Order of the Pennsylvania Public Utility
    Commission Regarding Area Codes 412, 610, 215, and 717*, Memorandum
    Opinion and Order and Order on Reconsideration, 13 FCC Rcd 19009,
    19025, para. 23 (rel. Sept. 28, 1998) (*Pennsylvania Numbering
    Order*).

[^6]: 47 U.S.C. § 251(e)(1).

[^7]: *First Report and Order*, 15 FCC Rcd at 7577-78, para. 2.

[^8]: *See* NANPA, NPA Relief Activites, Planned NPAs Not Yet in
    Service, *available at*
    \<[www.nanpa.com/area_codes/npa_planned.html](http://www.nanpa.com/area_codes/npa_planned.html).\>
    Compared to the activation of only 9 new area codes in the ten-year
    period between 1984-1994, in 1996 alone, 11 new area codes were
    activated within the NANP. In 1997, 32 new area codes were
    activated, and 46 new area codes were activated during 1998-1999.
    *See* North American Numbering Plan Exhaust Study, submitted to the
    NANC by the NANPA, Lockheed Martin CIS, April 22, 1999, at 6 (Number
    Utilization Study). In 2000, 13 area codes have been activated.

[^9]: *First Report and Order*, 15 FCC Rcd at 7578, para. 4.

[^10]: NANP expansion will not only be very costly, but will change the
    local and long distance dialing patterns by increasing the number of
    digits that must be dialed to place calls.

[^11]: Thousands-block number pooling allows service providers in a
    given area to receive numbers in blocks of 1,000 by breaking the
    association between the NPA-NXX and the service provider to whom the
    call is routed. All 10,000 numbers available in the NXX code are
    allocated within one rate center, but can be allocated to multiple
    service providers in thousand number blocks, instead of only to one
    particular service provider. For example, if the 202-418 NPA/NXX
    were pooled, up to ten service providers could serve customers from
    it. One service provider could be allocated every line number from
    202-418-0000 through 202-418-0999. Another service provider could be
    allocated every line number in the range 202-418-1000 through
    202-418-1999.

[^12]: NANPA Report to the NANC, September 19-20, 2000, at 7. We
    recognize that this is a conservative estimate, because information
    on the full impact of thousands-block number pooling and other
    number optimization measures was not available at the time this
    report was prepared. Consequently, certain assumptions were made
    that may not fully reflect the effectiveness of these number
    optimization measures.

[^13]: *Pennsylvania Numbering Order*, 13 FCC Rcd at 19027, para. 26;
    *see also First Report and Order*, 15 FCC Rcd at 7581, para. 7.

[^14]: *Common Carrier Bureau Responses to Questions in the Numbering
    Resource Optimization Proceeding*, Public Notice, CC Docket 99-200,
    DA 00-1549 (rel. July 11, 2000).

[^15]: *Numbering Resource Optimization*, Order, CC Docket No. 96-98,
    99-200, DA 00-1616 (rel. July 20, 2000) (addressing petitions for
    additional delegated authority to implement numbering resource
    optimization strategies filed by the following state commissions:
    Arizona, Colorado, Georgia, Indiana, Iowa, Kentucky, Missouri,
    Nebraska, North Carolina, Oregon, Pennsylvania, Tennessee, Utah,
    Virginia, and Washington).

[^16]: *Numbering Resource Optimization*, Order, CC Docket No. 99-200,
    FCC 00-280 (rel. July 31, 2000).

[^17]: *Common Carrier Bureau Seeks Comment on the California Public
    Utilities Commission and Maine Public Utilities Commission Petitions
    for Waiver of the Requirement to Conform Their Thousands-Block
    Number Pooling Trials to the National Thousands-Block Number Pooling
    Rules by September 1, 2000*, Public Notice, CC Docket No. 99-200, DA
    00-1995 (rel. Aug. 30, 2000).

[^18]: *Numbering Resource Optimization*, Order, CC Docket No. 99-200,
    FCC 00-333 (rel. Aug. 31, 2000).

[^19]: *First Report and Order*, 15 FCC Rcd at 7686, para. 249.

[^20]: We intend to use auditors in the Audits Branch of the Accounting
    Safeguards Division in the Bureau or other designated Commission
    agents.

[^21]: *First Report and Order*, 15 FCC Rcd at 7616-17, para. 103.

[^22]: *Id.*

[^23]: *Id.* at 7685-86, para. 248.

[^24]: *See* Letter from Trina M. Bragdon, Maine Commission, to Magalie
    Roman Salas, FCC, dated October 25, 2000.

[^25]: California, Florida, and Maine have filed petitions for
    reconsideration of our decision to exclude pooling carriers from the
    utilization requirement. California Petition for Reconsideration at
    3; Florida Commission Petition for Reconsideration at 7; Maine
    Commission Petition for Reconsideration at 3-5. They argue that the
    utilization threshold we adopt here should be applied to pooling
    carriers as well.

[^26]: California Commission Comments at 4; Maine Commission Comments at
    2; Missouri Commission Comments at 3.

[^27]: California Commission Comments at 4; Consumer Commenters Comments
    at 13; Florida Commission Comments at 8-11; Maine Commission
    Comments at 3; Missouri Commission Comments at 3; New Hampshire
    Commission Comments at 6; New York Commission Comments at 1; *see
    also* Letter from Trina M. Bragdon, Maine Commission, to Magalie
    Roman Salas, FCC, dated October 25, 2000.

[^28]: GTE Comments at 7; SBC Comments at 11; Sprint Comments at 7.
    Although we recognize that Bell Atlantic and GTE are now operating
    as "Verizon Communications," we nonetheless refer to Bell Atlantic
    and GTE, where appropriate, rather than Verizon because the bulk of
    those parties' filings in this docket were made prior to the
    completion of the merger. *See Application of GTE Transferor, and
    Bell Atlantic Corporation Transferee, For Consent to Transfer
    Control of Domestic and International Sections of 214 and 310
    Authorizations and Application to Transfer Control of a Submarine
    Cable Landing License,* CC Docket No. 98-184, Memorandum Opinion and
    Order, FCC 00-221 (rel. June 16, 2000).

[^29]: *See* New Hampshire Commission Comments at 3.

[^30]: *See* California Commission Comments at 4; Florida Commission
    Comments at 8-11; Maine Commission Comments at 3; Missouri
    Commission Comments at 3; New Hampshire Commission Comments at 6;
    New York Commission Comments at 1; Consumer Commenters Comments at
    13; *see also Numbering Resource Utilization in the United States*,
    Report by Industry Analysis Division, Common Carrier Bureau, FCC at
    Table 1 (rel. Dec. 2000) (*Numbering Utilization Report*). This
    report may be downloaded (filename: UtilizationJun2000.ZIP or
    UtilizationJun2000.PDF) from the FCC-State Link Internet site at
    \<<http://www.fcc.gov/ccb/stats>\>. *See also* Letter from Trina M.
    Bragdon, Maine Commission, to Magalie Roman Salas, FCC, dated
    October 25, 2000.

[^31]: *Numbering Utilization Report* at Figures 2, 4, 6 & 8. The data
    shows that where carriers have 10 or more NXXs in a rate center,
    LECs report over 65% utilization, CLECs report approximately 20%
    utilization, paging carriers report nearly 50% utilization, and
    wireless carriers report over 55% utilization.

[^32]: Before the *First Report and Order* was released, California
    allowed carriers to calculate utilization by dividing *assigned*,
    *aging*, *administrative*, and *reserved* numbers by the total
    numbers assigned to the carrier. Other states adopted utilization
    thresholds after the *First Report and Order* was released and
    require carriers to calculate utilization as we prescribed in the
    *First Report and Order*. We have not received complaints that
    carriers are not able to meet these thresholds when they need
    additional numbering resources.

[^33]: Specifically, California, Connecticut, Florida, Maine,
    Massachusetts, New Hampshire, and New York have required carriers to
    meet a 75% utilization threshold. Ohio requires carriers to meet a
    65% utilization threshold.

[^34]: These commenters consist of state commissions, state attorneys
    general, and state consumer advocates.

[^35]: AT&T Comments at 7; Nextlink Comments at 7, 10; SBC Comments at
    12; Verizon Comments at 13; VoiceStream Comments at 12; WinStar
    Comments at 10.

[^36]: California Commission Comments at 2-3; Consumer Commenters
    Comments at 14-15; Missouri Commission Comments at 5.

[^37]: AT&T Comments at 7.

[^38]: *See infra* para. 25.

[^39]: *See* 47 C.F.R. 1.103.

[^40]: *First Report and Order*, 15 FCC Rcd at 7685, para. 248

[^41]: The initial increase from 60% to 65% will occur on June 30, 2002.
    The increase to 75% will occur on June 30, 2004.

[^42]: AT&T Comments at 2, 7.

[^43]: California Commission Comments at 2; New Hampshire Commission
    Comments at 5; Nextlink Comments at 4; Texas Commission Comments at
    2.

[^44]: California Commission Comments at 4; Maine Commission Comments at
    1-2; Missouri Commission Comments at 3-4; New Hampshire Commission
    Comments at 6.

[^45]: *See* *Numbering Resource Utilization Report*, *supra* note 30.

[^46]: California Commission Petition for Reconsideration at 3; Florida
    Commission Petition for Reconsideration at 7; Maine Commission
    Petition for Reconsideration at 3-5; Oregon Commission Comments at
    4; Texas Commission Comments at 2.

[^47]: California Public Utilities Commission and the People of the
    State of California Petition for Waiver at 2-7 (filed Aug. 4, 2000)
    (California Petition).

[^48]: *See First Report and Order,* 15 FCC Rcd at 7636, para. 142
    ("\[W\]e may revist the issue of whether to improve utilization
    threshold requirements on pooling carriers in the future if we find
    that such thresholds significantly increase number use efficiency.")

[^49]: Petition of the Maine Public Utilities Commission for Waiver to
    Continue State Pooling Trials until National Pooling is Implemented
    at 3 (filed Aug. 14, 2000) (Maine Petition).

[^50]: ALTS Petition for Reconsideration and Clarification at 7;
    BellSouth Petition for Reconsideration at 15; PCIA Petition for
    Clarification and Reconsideration at 3; Sprint Petition for
    Reconsideration and Clarification at 5; VoiceStream Petition for
    Reconsideration at 9-10; CompTel Comments at 3; Nextel Comments at
    3; USTA Comments 2; Verizon Comments at 2.

[^51]: Nextel Comments at 3; VoiceStream Comments at 10

[^52]: Nextel Comments at 3.

[^53]: *First Report and Order*, 15 FCC Rcd at 7617, para. 104

[^54]: ALTS Petition for Reconsideration and Clarification at 5; AT&T
    Petition for Reconsideration at 4; BellSouth Petition for
    Reconsideration at 11; SBC Petition for Reconsideration and
    Clarification at 7; Verizon Petition for Suspension of Enforcement
    Date and Reconsideration at 5.

[^55]: *First Report and Order*, 15 FCC Rcd at 7619, para. 109.

[^56]: BellSouth Comments at 9-10; Sprint Comments at 5; Time Warner
    Comments at 5.

[^57]: *First Report and Order*, 15 FCC Rcd at 7618, para. 107.

[^58]: That is, we believe that carriers would be able to meet a higher
    utilization threshold before needing additional numbering resources
    if they could include numbers other than *assigned* in the
    numerator.

[^59]: *First Report and Order*, 15 FCC Rcd at 7617, para. 105 (stating
    that the rate center-based utilization "more accurately reflects how
    numbering resources are assigned").

[^60]: ALTS Comments at 6; CompTel Comments at 5; Consumer Commenters
    Comments at 11-12; Nextel Comments at 3; Nextlink Comments at 5;
    PCIA Comments at 6-7; Sprint Comments at 8; Time Warner Comments at
    6; USTA Comments at 4; Verizon Comments 2-3; WorldCom Comments at 3;
    AT&T Reply Comments at 15.

[^61]: Bell Atlantic Comments at 8; SBC Comments at 7; *see also*
    BellSouth Petition for Reconsideration at 20*;* Letter from Kathleen
    B. Levitz, BellSouth, to Magalie Roman Salas, FCC, dated October 19,
    2000.

[^62]: BellSouth Petition for Reconsideration at 20*.*

[^63]: BellSouth Petition for Reconsideration at 20; Letter from
    Kathleen B. Levitz, BellSouth, to Magalie Roman Salas, FCC, dated
    October 19, 2000; *see also* USTA Comments at 4-5.

[^64]: SBC Comments at 53.

[^65]: SBC Comments at 7.

[^66]: *See*, *e.g.*, Letter from Kathleen B. Levitz, BellSouth, to
    Magalie Roman Salas, FCC, dated November 30, 2000. Even after
    pooling is implemented, some carriers argue that they will only be
    able to port numbers between switches in thousands-blocks. *Id.*

[^67]: *First Report and Order*, 15 FCC Rcd at 7625, para. 122.

[^68]: *Id*. at 7627, para. 125.

[^69]: *Id.* at 7645, para. 158.

[^70]: *Id.* at 7632, para. 134.

[^71]: *Id.* at 7651, para. 169; *see also id.* at 7643-49, paras.
    156-66; 7653-61, paras. 172-191 for a general description of the
    national framework for thousands-block number pooling. We have
    stayed these requirements pending resolution of petitions filed by
    Maine and California. *See infra* section IV.B.

[^72]: *See First Report and Order*, 15 FCC Rcd at 7656, para. 181
    (adopting the T1S1.6 Technical Requirements as the technical
    standard for thousands-block number pooling); *id.* at 7657, para.
    182 (stating that the inclusion of Efficient Data Representation
    (EDR) in the pooling software used for thousands-block number
    pooling is significant because it will reduce the strain on the
    network from the large volume of number porting).

[^73]: *Id*. at 7639-43, paras. 148-55.

[^74]: *Id.* at 7643, para. 155. The NANC submitted its proposed
    technical requirements on July 20, 2000. *See* Letter from John
    Hoffman, Chairman, North American Numbering Council, to Lawrence E.
    Strickling, Chief, Common Carrier Bureau, dated July 20, 2000.

[^75]: The NANC was created under the Federal Advisory Committee Act, 5
    U.S.C. App 2 (1988), to advise the Commission and to make
    recommendations, reached through consensus, that foster efficient
    and impartial number administration. The membership of NANC, which
    includes twenty-eight voting members and four special non-voting
    members, was selected to represent all segments of the
    telecommunications industry as well as regulatory entities and
    consumer groups with interests in number administration. The current
    NANC charter directs the Council to develop recommendations on
    numbering policy issues and facilitate number conservation including
    identification of technical solutions to number exhaust.

[^76]: *First Report and Order*, 15 FCC Rcd at 7643, para. 155.

[^77]: *The Commission Seeks Comments On The Thousands-Block Pooling
    Administrator Technical Requirements*, Public Notice, CC Docket
    99-200, DA 00-2011 (rel. Sept. 5, 2000).

[^78]: Commenting parties include: AT&T; BellSouth; California
    Commission; Cox; Florida Commission; Maine Commission; NeuStar; New
    Hampshire Commission; New York Commission; Pennsylvania Office of
    Consumer Advocate; Missouri Commission; Texas Commission; RCN
    Telecom Services; SBC; Telcordia; USTA; WorldCom.

[^79]: The techincal consultant is MITRE Corporation. MITRE is a section
    501(c)(3) not-for-profit corporation that operates federally funded
    research and development centers for various agencies.

[^80]: The FAR is Chapter 48 of the C.F.R. The FAR governs the
    acquisition by contract of supplies and services by and for the use
    of the Federal Government.

[^81]: *See*, *e.g.,* Telcordia Comments at 2-3.

[^82]: *Id.* at 2.

[^83]: *Id*. at 3.

[^84]: *The Commission Seeks Comments On The Thousands-Block Pooling
    Administrator Technical Requirements*, Public Notice, CC Docket
    99-200, DA 00-2011 (rel. Sept. 5, 2000).

[^85]: *First Report and Order*, 15 FCC Rcd at 7643, para. 155. The
    NANPA's term ends in November 2002.

[^86]: Telcordia Comments at 3; Telcordia Petition for Reconsideration
    at 1.

[^87]: *Id.*

[^88]: *Id*.

[^89]: *See* WorldCom Opposition.

[^90]: WorldCom Opposition at 14.

[^91]: Telcordia Petition for Reconsideration at 1.

[^92]: Telcordia Comments at 3-4; Telcordia Petition for Reconsideration
    at 1-2.

[^93]: Telcordia raised concerns that a short-term contract would likely
    prevent the Pooling Administrator from recouping its start-up costs.
    *See* Telcordia Comments at 3; Telcordia Petition for
    Reconsideration at 1.

[^94]: *First Report and Order,* 15 FCC Rcd at 7643, para. 156.

[^95]: WorldCom Opposition at 14; *see also First Report and Order*, 15
    FCC Rcd at 7642, para. 152.

[^96]: *First Report and Order*, 15 FCC Rcd at 7642, para. 152.

[^97]: *Id*. at 7651, para. 169.

[^98]: *Id.*

[^99]: *Id.*

[^100]: *Id*.

[^101]: *See* *generally* California Petition.

[^102]: *See generally* Maine Petition. New Hampshire sought similar
    relief in comments it filed in support of California and Maine's
    Petitions. *See generally* New Hampshire Commission Comments.

[^103]: California Petition at 1-2; Maine Petition at 1.

[^104]: Maine Petition at 1.

[^105]: California Petition at 2; Maine Petition at 2-3.

[^106]: *See generally* California Petition; Maine Petition.

[^107]: California Petition at 3; Maine Petition at 7.

[^108]: California Petition at 2; Maine Petition at 1.

[^109]: Maine Reply Comments at 2.

[^110]: Maine Reply Comments at 2.

[^111]: California Petition at 4; Maine Petition at 6. *See supra*
    section III for a more detailed discussion of months to exhaust
    calculations and utilization thresholds.

[^112]: *Numbering Resource Optimization*, Order, CC Docket No. 99-200,
    FCC 00-333 (rel. Aug. 31, 2000).

[^113]: *See supra* section III.

[^114]: We note that state commissions that currently apply a higher
    utilization threshold to non-pooling carriers pursuant to delegated
    authority may also continue to apply their thresholds up to a
    maximum level of 75%*. See supra* para. 23.

[^115]: Maine Petition at 1.

[^116]: *Id*. at 5.

[^117]: *First Report and Order*, 15 FCC Rcd at 7684-85, paras. 244-245.

[^118]: AT&T Opposition at 2.

[^119]: *First Report and Order,* 15 FCC Rcd at 7686, para. 249.

[^120]: *Id.*

[^121]: *See, e.g.,* California Commission Comments at 6-8; Consumer
    Commenters Comments at 20-21; Maine Commission Comments at 5;
    Missouri Commission Comments at 3; New Hampshire Commission Comments
    at 7; Texas Commission Comments at 3-4.

[^122]: VoiceStream Comments at 14.

[^123]: *First Report and Order,* 15 FCC Rcd at 7625, para. 122.

[^124]: *Id.* at 7635, para. 140.

[^125]: Thousands-block number pooling implementation requires carriers
    to make the same network changes as those required to implement LNP.
    *See* Number Resource Optimization Working Group Modified Report to
    the North American Numbering Council on [N]{.smallcaps}umber
    [O]{.smallcaps}ptimization [M]{.smallcaps}ethod, October 20, 1998 at
    91; *see also* North American Numbering Council Wireless Number
    Portability Subcommittee Report on Wireless Number Portability
    Technical, Operational and Implementation Requirements Phase II
    Version 1.7, submitted to the Commission on September 26, 2000; CTIA
    Report on Wireless Number Portability Version 2.0.

[^126]: Carriers have been on notice for several years that they must
    comply with our LNP requirements by November 24, 2002.

[^127]: *See, e.g.,* AT&T Comments at 8-9; BellSouth Comments at 10;
    Bell Atlantic Comments at 8-9.

[^128]: The latest "Thousand Block NXX-X Pooling Administration
    Guidelines" (INC 99-0127-023) can be found at
    \<[http://www.atis.org](http://www.atis.org/)\>.

[^129]: *See* *LNPA Working Group Status Report to the NANC*, October
    17, 2000, North American Numbering Council Meeting, at 1.

[^130]: *See First Report and Order*, 15 FCC Rcd at 7655, para. 177.

[^131]: *Id.*

[^132]: *Pennsylvania Numbering Order*, 13 FCC Rcd at 19025, para. 23.

[^133]: 47 U.S.C. § 251(e)(1); *see also Implementation of the Local
    Competition Provisions of the Telecommunications Act of 1996*,
    Second Report and Order and Memorandum Opinion and Order, 11 FCC Rcd
    19392 (1996) (*Local Competition Second Report and Order)*, *vacated
    in part*, California v. FCC, 124 F.3d 934 (8^th^ Cir. 1997), *rev'd*
    AT&T v. Iowa Utils. Bd., 199 S. Ct. 721 (1999). The authority
    delegated to the states includes determination of the boundaries of
    a new area code; the implementation date for the new area code;
    directing public education efforts regarding area code changes; and
    the mechanism for introducing the new area code (*e.g.*, via an area
    code split, overlay, or a boundary realignment). State commissions
    were also delegated the authority to perform the functions
    associated with initiation and development of area code relief
    plans. The Commission found that enabling states to initiate and
    develop area code relief plans was generally consistent with our
    delegation of new area code implementation matters to the state
    commissions based on their unique familiarity with local
    circumstances. The Commission made this delegation, however, only to
    those states wishing to perform area code relief initiation and
    development. Because the Commission recognized that many state
    commissions may not wish to perform these functions because the
    initiation and development of area code relief can require
    specialized expertise and staff resources and development that some
    state commissions may not have, it required states seeking to
    perform any or all of these functions to notify the new NANP
    administrator within 120 days of the selection of the NANP
    administrator.

[^134]: *Pennsylvania Numbering Order*, 13 FCC Rcd at 19025, para. 24.

[^135]: *Id.* at 19029-30, para. 30.

[^136]: *Id.* at 19027-28, para. 27.

[^137]: *Id.* at 19027, para. 27. Subject to conditions, we permitted
    state commissions to withhold a certain number of NXX codes within a
    new area code for purposes of number pooling. *Id.*

[^138]: *Id.* at 19030, para. 31.

[^139]: *Local Competition Second Report and Order*, 11 FCC Rcd at
    19512, para. 271.

[^140]: *Notice*, 14 FCC Rcd at 10427, para. 247.

[^141]: *See* California Commission Comments at 43; Ohio Commission
    Comments at 40. State commissions face an enormous burden in
    determining when, and in what form, to implement area code relief.
    In the initial stages, state commissions must expend resources to
    convene public meetings and to plan for area code relief. They must
    also work with the NANPA and the industry to effect the chosen area
    code relief plan, and bear the costs of notifying the public.
    Furthermore, state commissions inevitably bear the brunt of consumer
    dissatisfaction with whatever method of area code relief is chosen.

[^142]: AirTouch Comments at 13; Sprint Comments at 24.

[^143]: *See* Bell Atlantic Comments at 39 (stating that area code
    relief has been delayed with accompanying harm to consumers).

[^144]: Section 253 of the Act provides that no state requirement may
    prohibit or have the effect of prohibiting the ability of any entity
    to provide telecommunications service. 47 U.S.C. § 253(a).

[^145]: 47 C.F.R. § 52.9(a)(1)-(3).

[^146]: *See, e.g.*, Paging Network Comments at 2.

[^147]: As determined in the *Pennsylvania Numbering Order*, state
    commission implementation of number conservation measures could not
    be used as "substitutes for area code relief or to avoid making
    difficult and potentially unpopular decisions on area code relief."
    *See Pennsylvania Numbering Order*, 13 FCC Rcd at 19027, para. 26.

[^148]: *See*, *e.g.*, *Florida Public Service Commission Petition for
    Expedited Decision for Grant of Authority to Implement Number
    Conservation Measures*, Order, 14 FCC Rcd 17506, 17522, para. 40
    (1999) (*Florida Delegation Order*); *Massachusetts Department of
    Telecommunications and Energy Petition for Waiver of Section 52.19
    to Implement Various Area Code Conservation Methods in the 508, 617,
    781, and 978 Area Codes*, Order, 14 FCC Rcd 17447, 17464, para. 41
    (1999) (*Massachusetts Delegation Order*); *New York State
    Department of Public Service Petition for Additional Delegated
    Authority to Implement Number Conservation Measures*, Order, 14 FCC
    Rcd 17467, 17481-82, para. 32, 33 (1999) (*New York Delegation
    Order*); *but see* *California Public Utilities Commission Petition
    for Delegation of Additional Authority Pertaining to Area Code
    Relief and NXX Code Conservation Measures*, Order*,* 14 FCC Rcd
    17485, 17503-04, para. 37, 40 (1999) (*California Delegation
    Order*); (noting that unique circumstances exist in California which
    require public participation in the area code relief planning
    process at least 30 months prior to the submission of a recommended
    relief plan to the California Commission).

[^149]: *See*, *e.g.*, AT&T Comments at 64.

[^150]: *Pennsylvania Numbering Order*, 13 FCC Rcd at 19025-26, para.
    24.

[^151]: *Id.*

[^152]: *Pennsylvania Numbering Order*, 13 FCC Rcd at 19027, para. 25;
    *see also* *First Report and Order*, 15 FCC Rcd at 7581, para. 7.

[^153]: *See First Report and Order*, 15 FCC Rcd at 7652, para. 171;
    *see also* Letter from William E. Kennard, Chairman, FCC, to Loretta
    M. Lynch, President, California Commission, dated October 18, 2000.

[^154]: 47 C.F.R. § 52.19(c)(1).

[^155]: 47 C.F.R. § 52.19(c)(3).

[^156]: *Local Competition Second Report and Order*, 11 FCC Rcd at
    19518, para. 286.

[^157]: Of the over 100 area codes introduced in the United States since
    1995, 17 have been accomplished through all-services overlays. *See*
    NANPA, NPAs Introduced, November 1, 2000. This document is available
    at
    \<[http://www.nanpa.com/area_codes/npa_introduced.html](http://www.nanpa.com/area_codes/npa_intorduced.html)\>.

[^158]: *Notice*, 14 FCC Rcd at 10428, para. 249.

[^159]: *Id*. at 10429, para. 252.

[^160]: Numbering Resource Optimization Working Group Modified Report to
    the North American Numbering Council on Number Utilization Methods
    (Oct. 21, 1998) at § 14.0 (NANC Report). This report is available at
    \<http://www.fcc.gov/ccb/Nanc/nanccorr.html\>. WorldCom states that
    geographic splits should be preferred if they can be implemented in
    a way that recognizes actual community geography. *See* WorldCom
    Comments at 61.

[^161]: SBC Comments at 97.

[^162]: North Carolina Commission Comments at 17; [Where Have All the
    Numbers Gone]{.smallcaps}? at 16. The tangible costs that consumers
    may experience include time and effort associated with notifying
    others of the change in area code, increased confusion and
    difficulty in competing calls to parties whose area codes have
    changed, monetary costs associated with reprinting stationery with
    the new area code, and time and effort associated with reprogramming
    telephone automatic dialing systems, and other equipment, to
    incorporate the new area code. *Id.*

[^163]: Bell Atlantic Comments at 38.

[^164]: Ohio Commission Comments at 40.

[^165]: RCN Comments at 16.

[^166]: North Carolina Commission Comments at 17.

[^167]: NANC Report at § 14.

[^168]: AT&T Comments at 5; Level 3 Comments at 12; RCN Comments at 16.

[^169]: *See* North Carolina Commission Comments at 17; *see also* Ohio
    Commission Comments at 40 (noting that additional constraints on
    geographic splits should not be implemented).

[^170]: BellSouth Comments at 18; PrimeCo Comments at 10; SBC Comments
    at 94.

[^171]: Bell Atlantic Comments at 38; Small Business Alliance Comments
    at 3.

[^172]: SBC Comments at 94; Small Business Alliance Comments at 3.

[^173]: Bell Atlantic Comments at 38; BellSouth Comments at 20.

[^174]: NANC Report at § 12.1.

[^175]: *Local Competition Second Report and Order*, 11 FCC Rcd at
    19518, para. 287.

[^176]: NANC Report at § 12.1; *see also* Cox Comments at 24 (noting
    that there are significant unmeasured costs, such as costs of
    converting to ten-digit dialing and costs of replacing or updating
    legacy customer equipment).

[^177]: Cox Comments at 24.

[^178]: BellSouth Comments at 18; Richard Eyre Comments at 1.

[^179]: SBC Comments at 94-95. The INC is a standing committee of the
    Carrier Liason Committee (CLC), one of the fora sponsored by the
    Alliance for Telecommunications Industry Solutions (ATIS). The INC
    addresses issues associated with the planning, administration,
    allocation, assignment and use of numbering resources and related
    dialing considerations, and has developed guidelines for the
    assignment and administration of all types of numbering resources,
    as well as for the administration of area code relief.

[^180]: *See*, *e.g.*, AT&T Comments at 67; California Commission
    Comments at 43.

[^181]: ALTS Comments at 28.

[^182]: SBC Comments at 94.

[^183]: Ameritech Reply Comments at 15; North Carolina Commission
    Comments at 18; SBC Comments at 101 (noting that the ten-digit
    dialing requirement is outmoded and unnecessary today).

[^184]: Ameritech Reply Comments at 15.

[^185]: SBC Comments at 102.

[^186]: North Carolina Commission Comments at 18.

[^187]: AT&T Comments at 67; ALTS Comments at 30-31 (stating that the
    ten-digit dialing requirement is essential to ensuring that an
    overlay does not disadvantage competitive LECs and their customers).

[^188]: Small Business Alliance Comments at 3.

[^189]: *Local Competition Second Report and Order*, 11 FCC Rcd at
    19519, para. 288.

[^190]: 47 C.F.R. § 52.19(c)(3)(ii).

[^191]: *Id.*

[^192]: *Local Competition Second Report and Orde*r, 11 FCC Rcd at
    19518, para. 287.

[^193]: *Notice*, 14 FCC Rcd at 10429, para. 253.

[^194]: *See Public Utility Commission of Texas Petition for Expedited
    Waiver of 47 C.F.R. § 52.19(c)(3)(ii) for Area Code Relief*, Order,
    13 FCC Rcd 21798 (1998) (granting the Texas Commission a waiver of
    the ten-digit dialing requirement in section 52.19(c)(3)(ii) for a
    period not to exceed 6 months from the date of implementation of the
    reverse overlays).

[^195]: *Notice*, 14 FCC Rcd at 10429, para. 253.

[^196]: SBC Comments at 98.

[^197]: GTE Comments at 72.

[^198]: NANC Report at § 12.2; *see also* SBC Comments at 98 (noting
    that metropolitan areas where area code splits have been ordered are
    prime candidates for reverse overlays).

[^199]: NANC Report at § 12.3. We also note that the Georgia Commission
    implemented an expanded NPA overlay for the 770 and 404 NPAs in
    Atlanta. *See* North American Numbering Plan Planning Letter,
    PL-NANP-102, Nov. 21, 1997. This document is available at
    \<[http://www.nanpa.com](http://www.nanpa.com/)\>.

[^200]: NANC Report at § 12.3.1.

[^201]: *Notice*, 14 FCC Rcd at 10430, para. 255.

[^202]: *Id.*

[^203]: *Id.*

[^204]: Cox Comments at 29.

[^205]: *See* WorldCom Comments at 64. AT&T, however, states that it is
    unconvinced that expanded overlays would have significant numbering
    resource optimization benefits. AT&T Comments at 67.

[^206]: *See* AT&T Comments at 67 (stating that expanded overlays make
    it more difficult for customers to determine whether they will be
    billed for calls as toll or local).

[^207]: *Pennsylvania Numbering Order*, 13 FCC Rcd 19011, para. 1.

[^208]: *Id*. at 19026, para. 24.

[^209]: Connecticut Commission Pennsylvania Numbering Order Petition for
    Reconsideration at 7; Maine Commission Pennsylvania Numbering Order
    Petition for Reconsideration at 1; New Hampshire Commission
    Pennsylvania Numbering Order Petition for Reconsideration at 2;
    Pennsylvania Commission Pennsylvania Numbering Order Petition for
    Reconsideration at 7; *see also* *Pennsylvania Numbering Order*, 13
    FCC at 19026.

[^210]: *First Report and Order*, 15 FCC Rcd at 7680, para. 237.

[^211]: *Id.* at 7681, para. 238.

[^212]: California Commission Pennsylvania Numbering Order Petition at
    1-2; Connecticut Commission Pennsylvania Numbering Order Petition at
    3-5; Maine Commission Pennsylvania Numbering Order Petition at 1;
    Massachusetts Commission Pennsylvania Numbering Order Petition at
    7-8; New Hampshire Commission Pennsylvania Numbering Order Petition
    at 1-2; Pennsylvania Commission Pennsylvania Numbering Order
    Petition at 2.

[^213]: *See infra* para. 61.

[^214]: *Pennsylvania Numbering Order*, 13 FCC Rcd at 19025, para. 24.

[^215]: *Id*. at 19027, para. 26.

[^216]: *See*, *e.g.*, *Florida Delegation Order*, 14 FCC Rcd at 17522,
    para. 39; *Massachusetts Delegation Order*, 14 FCC Rcd at 17464,
    para. 41; *New York Delegation Order*, 14 FCC Rcd at 17481-82,
    paras. 32, 34; *but see* *California Delegation* Order, 14 FCC Rcd
    at 17503-04, para 38, 40 (noting that unique circumstances exist in
    California which require public participation in the area code
    relief planning process at least 30 months prior to the submission
    of a recommended relief plan to the California Commission).

[^217]: *See*, *e.g.*, *Florida Delegation Order*, 14 FCC Rcd at
    17517-18, paras. 26, 28; *Massachusetts Delegation Order*, 14 FCC
    Rcd at 17458-59, para. 27; *Wisconsin Delegation Order*, 15 FCC Rcd
    at 1310-11, paras. 30, 31. Where area code relief takes the form of
    an area code split, the Commission granted several states the
    authority to direct that whatever rationing plan was in place prior
    to area code relief continue to be applied in both the newly
    implemented area code and the relieved area code for a period of up
    to six months following the date of implementation of area code
    relief. Correspondingly, if the area code relief is in the form of
    an all-services overlay, the states may direct that the pre-existing
    rationing plan be applied to both the overlay code and the relieved
    code for a period of six months following the date of implementation
    of area code relief. Whether the rationing plan in place prior to
    relief was an industry consensus plan, or whether it was a state
    commission-ordered plan, only those terms in place prior to area
    code relief may remain in place following area code relief. The
    state commissions may order a continuation of rationing for up to
    six months, but neither the state commissions, nor the
    telecommunications industry participants in a consensus plan, may
    alter the terms of the rationing plan. We found this limitation
    appropriate to prevent a potentially contentious re-opening of the
    terms of a previously settled code rationing plan, resulting in
    uncertainty and a drain on resources.

[^218]: The *Pennsylvania Numbering Order* stated that state commission
    implementation of number conservation measures could not be used "as
    substitutes for area code relief or to avoid making difficult and
    potentially unpopular decisions on area code relief." *Pennsylvania
    Numbering Order*, 13 FCC Rcd at 19027, para. 26.

[^219]: *See*, *e.g.*, *California Delegation Order*, 14 FCC Rcd at
    17500-501, para. 32; *Massachusetts Delegation Order*, 14 FCC Rcd at
    17462-463, para. 37.

[^220]: California Commission Pennsylvania Numbering Order Petition at
    2.

[^221]: *See, e.g.,* *Numbering Resource Optimization*, Order, CC Docket
    No. 96-98, 99-200, DA 00-1616 (rel. July 20, 2000).

[^222]: *Notice*, 14 FCC Rcd at 10358-9, para. 83.

[^223]: *Id.*

[^224]: *Id.*

[^225]: *Id.*

[^226]: *Id*. at 10359, para. 84.

[^227]: *Id*. at 10359, para. 85.

[^228]: *Id*. at 10359, para. 86.

[^229]: *Id*. at 10360, para. 87.

[^230]: *Id.* at 10359, para. 84.

[^231]: *Id.*

[^232]: *See* Omnipoint Reply Comments at 12-13.

[^233]: The NANPA is required to renew submitted utilization and
    forecast data and to identify inconsistencies and anomalies in such.

[^234]: *Cf*. CinBell Comments 8 (recommending that anomalies in
    information reported to NANPA trigger "for cause" audits).

[^235]: *See* AT&T Comments at 22; North Carolina Commission Comments at
    7; Texas Commission Comments at 14; VoiceStream Comments at 17.

[^236]: *See* Connect Reply Comments at 6-7; Nextlink Reply Comments at
    25; RCN Comments at 7; Time Warner Comments at 21.

[^237]: *See* SBC Comments at 56.

[^238]: *See* Texas Commission Comments at 14.

[^239]: *See* Level 3 Comments at 7.

[^240]: *Notice*, 14 FCC Rcd at 10360, para. 88.

[^241]: *Id.*

[^242]: *Id.*

[^243]: *Id*.

[^244]: SBC Comments at 57-58.

[^245]: AirTouch Comments at 22.

[^246]: *See, e.g.*, Connecticut Commission Comments at 13; North
    Carolina Commission Comments at 7.

[^247]: California Commission Comments at 16.

[^248]: *See supra* section VI.A.1.

[^249]: *See infra* section VII.G.

[^250]: *See* 47 C.F.R. § 0.291(b). To improve operating and
    administrative efficiency, the Commission delegated authority to the
    Common Carrier Bureau to coordinate joint audits with state
    commissions when: (i) there is a shared policy interest, and (ii)
    the states have procedures for protecting confidential information
    equivalent to those of the Commission. To the extent that the
    Commission imposes a higher standard of confidentiality than state
    law, the state is required to adhere to the higher Federal standard.
    *Amendment of Parts 0, 1, and 64 of the Commission\'s Rules with
    Respect to Delegation of Authority to the Chief, Common Carrier
    Bureau*, Report and Order, 5 FCC Rcd 4601 (1990); *Delegation of
    Authority to the Chief, Common Carrier Bureau*, Memorandum Opinion
    and Order, 50 Fed. Reg. 18487‑03 (1985), *on reconsideration*, 104
    FCC2d. 733 (1986).

[^251]: *See, e.g.,* Resolution Urging Pro-Competitive, Pro-Consumer
    Federal-State Joint Audits, Sponsored by the NARUC Committees on
    Finance & Technology and Communications at the NARUC Annual
    Convention and Regulatory Symposium held in July 2000 in Los
    Angeles, California (July 26, 2000).

[^252]: *Notice*, 14 FCC Rcd at 10361, para. 89.

[^253]: *Id*.

[^254]: *Id*. at 10361, para. 90.

[^255]: *Id*.

[^256]: *See* Number Administration Auditor Technical Requirements,
    dated July 18, 2000.

[^257]: *Notice*, 14 FCC Rcd at 10367, para. 103.

[^258]: 47 U.S.C. § 251(e)(2).

[^259]: *Notice*, 14 FCC Rcd at 10368, para. 104.

[^260]: Although the costs incurred by the Bureau's Audits Branch with
    respect to the auditing program will not be allocated and paid for
    through the NBANC fund, we note that such costs generally will be
    allocated and recovered through annual regulatory fees and thus
    still will be borne by carriers on a competitively neutral basis.

[^261]: According to the NBANC Status Report and Fund Projection dated
    October 10, 2000, the funds set aside for auditing costs for the
    current fund year totaled \$350,000.

[^262]: *Notice*, 14 FCC Rcd at 10378, para. 126.

[^263]: In fact, to preserve seven-digit dialing for inter-NPA calls
    within a community of interest, many states have authorized the use
    of "protected codes." Where a community of interest contains
    portions of two or more NPAs, a particular NXX code that has been
    assigned for use within one of the NPAs is "protected," or made
    unassigable in the adjacent NPA. This permits every switch in the
    local calling area to route calls based on the NXX code, rather than
    the NPA-NXX, even across NPA boundaries. In addition, other
    protected codes are reserved for special services, such as N11
    codes. Thus, protected codes are not available for number
    assignments to end users. NANC Report at §§ 10.5.2 and 10.5.3.1.

[^264]: *Notice*, 14 FCC Rcd at 10376, para. 123.

[^265]: *Id*. at 10378, para. 125.

[^266]: *See* 47 C.F.R. § 52.19 (c)(3)(ii).

[^267]: GTE Comments at 34; OPASTCO Comments at 6; PrimeCo Comments at
    10; USTA Comments at 7; U S West Comments at 16.

[^268]: *See*, *e.g.*, Small Business Alliance Comments at 9.

[^269]: AirTouch Comments at 9.

[^270]: *See*, *e.g.*, California Commission Comments at 24 (stating
    that the determination of whether to impose a dialing pattern which
    includes both the area code and customer's seven-digit number is
    best left to the states); Maine Commission Comments at 19; North
    Carolina Commission Comments at 11-12.

[^271]: *See* CinBell Telephone Comments at 14; Nextel Comments at 23;
    PrimeCo Comments at 10; VoiceStream Comments at 25-26.

[^272]: *See*, *e.g*., Texas Office of Public Util. Counsel and NASUCA
    Comments at 47.

[^273]: *See* NPA Code Relief Planning and Notification Guidelines, INC
    97-0404-016, § 5.0, November 2000, *available at* \<www.atis.org\>.

[^274]: AT&T Comments at 37; SBC Comments at 106-7; USTA Comments at 7.

[^275]: SBC Comments at 100.

[^276]: *See supra* sections V.C-D.

[^277]: NANC Report at § 10.8.2.

[^278]: NANC Report at § 10.1; *see also* AirTouch Comments at 9; Bell
    Atlantic Comments at 19-20. NXX codes that begin with "0" and "1"
    are restricted by industry agreement and are used for switches to
    access operators, toll dialing and/or inter-NPA calling. NANC Report
    at § 10.5.2.2. In order for these restricted NXX codes to be
    available for assignment, a uniform ten-digit dialing pattern must
    be implemented. *Id.*

[^279]: NANC Report at § 10.5.2.2. Release of the D digit removes the
    current restriction on the fourth digit in the numbering sequence
    allowing the digit to be a 0 or 1. Thus, NXXs in the form 000-199
    could be assigned which theoretically provides a 25% increase in the
    current NANP.

[^280]: *Notice*, 14 FCC Rcd at 10380, para. 129.

[^281]: *Id*.

[^282]: *See*, *e.g.*, USTA Comments at 7.

[^283]: *See* Ameritech Comments at 37 (stating that D digit expansion
    involves serious adverse impacts and costly network and operation
    support system (OSS) modifications); AT&T Comments at 37; BellSouth
    Comments at 18 (noting that most switches in the public switched
    telephone network (PSTN) cannot route such numbers and there is no
    OSS ready for such a fundamental change); Citizens Utility Bd., et
    al. Comments at 44; SBC Comments at 106-07; *see also* NANC Report
    at § 10.6.1.3.

[^284]: *See* Nortel Networks October 4, 2000 e*x parte*; Telcordia
    October 24, 2000 *ex parte*; *see also* NANC Report at § 10.6.1.3.

[^285]: NANC Report at § 10.7.2.2.

[^286]: NANC Report at §§ 10.2, 10.3, and 10.7.2.1; *see also* AirTouch
    Comments at 9 (supporting expansion of the D digit through federally
    required ten-digit dialing at the national level).

[^287]: *See*, *e.g.*, Cox Comments at 20-21.

[^288]: *First Report and Order*, 15 FCC Rcd at 7594, para. 40.

[^289]: *Id.*

[^290]: *Id.* at 7598, para. 52.

[^291]: *Id.*

[^292]: *Id.* at 7594, para. 41.

[^293]: *Id.* at 7609-10, para. 84. We also noted that, if a carrier
    failed to provide the necessary reports, the NANPA must notify the
    carrier in writing allowing ten days for the carrier either to
    provide the report or show that it already has done so. *Id.*

[^294]: *See infra* section VII.C for discussion of whether carriers
    should be held accountable when related carriers fail to report
    numbering utilization and forcast information.

[^295]: *See infra* paras. 149-150.

[^296]: *See First Report and Order*, 15 FCC Rcd at 7585, para. 16.

[^297]: *Id*. at 7587-88, paras. 22-23.

[^298]: *Id*.

[^299]: *See*, *e.g.,* AT&T Petition for Reconsideration; SBC Petition
    for Reconsideration and Clarification; Qwest Petition for
    Reconsideration.

[^300]: *See*, *e.g.,* Letter from Don Melton, Director, State of
    Arkansas Department of Information Services, to FCC, dated July 21,
    2000; Letter from Kathleen B. Levitz, BellSouth, to Magalie Roman
    Salas, FCC, dated August 25, 2000; Letter from Glen Whitmer,
    Assistant Director, Computing and Communicating Services Office,
    University of Illinois, Urbana-Champaign, to FCC, dated August 14,
    2000.

[^301]: *See* AT&T Petition for Reconsideration at 8; BellSouth Petition
    for Reconsideration and Clarification at 8. *See also* ALTS Petition
    for Reconsideration and Classification; Sprint Petition for
    Reconsideration; USTA Petition for Clarification and
    Reconsideration.

[^302]: *See,* *e.g.,* Bell South Petition for Reconsideration and
    Clarification at 5-11.

[^303]: Allowing numbers to remain in the reserved category indefinitely
    decreases the amount of available numbering resources, which in turn
    accelerates the need for area code relief.

[^304]: *See* Letter from John Hoffman, Chairman, North American
    Numbering Council, to Dorothy Attwood, Chief, Common Carrier Bureau,
    dated September 20, 2000.

[^305]: *See* *infra* para. 152.

[^306]: *First Report and Order*, 15 FCC Rcd at 7606, para. 75.

[^307]: *Id.* at 7606, para. 76.

[^308]: That is, states are entitled to one report per data collection
    cycle. We believe that states should have direct access to mandatory
    data and we address this issue in the attached *Second Further
    Notice*. *See infra* section VII.D.

[^309]: The February 20, 1997 NANPA Requirements Document at § 7.0
    states that enterprise services are "services not described
    elsewhere in this Requirements Document that may be provided by the
    new NANPA for a specific fee. Enterprise services and their
    associated fees are subject to prior approval by the NANC." *See*
    *Administration of the North American Numbering Plan*, Third Report
    and Order, 12 FCC Rcd 23040 (1997).

[^310]: *See* 47 C.F.R. § 52.12(f) (stating that the NANPA shall
    identify all direct costs associated with enterprise services and
    submit them to the NANC for review, and to the Commission for
    appropriate review and action). *See also Administration of the
    North American Numbering Plan*, Third Report and Order, 12 FCC Rcd
    23040 (1997).

[^311]: Any such entity would be subject to the same confidentiality
    requirements that the states are subject to when given access to
    carrier-specific, disaggregated data.

[^312]: *First Report and Order*, 15 FCC Rcd at 7609, para. 82.

[^313]: *Id.*

[^314]: We do not preclude the NANPA or the Pooling Administrator from
    providing application materials as an enterprise service to states
    that prefer to receive such materials from a single source, as long
    as the costs associated with providing these materials are borne by
    the requesting states. As with other enterprise service offerings,
    any associated fees shall be reasonable and supported by detailed
    cost analysis from which the reasonableness of the fees may be
    determined. Similarly, we do not preclude carriers from providing
    more or different information to the states if the carrier agrees to
    do so or if the state has a separate basis for the request (*e.g.*,
    for auditing purposes).

[^315]: *First Report and Order*, 15 FCC Rcd at 7598-99, para. 54.

[^316]: We required in the *First Report and Order* the NANPA, with
    cooperation from the NANC, to develop criteria to assess
    applications for initial and growth numbering resources.

[^317]: *First Report and Order*, 15 FCC Rcd at 7615, para. 98.

[^318]: *Proposed 708 Relief Plan and 630 Numbering Plan Area Code by
    Ameritech -- Illinois*, Declaratory Ruling and Order, 10 FCC Rcd
    4596 (1995) (*Ameritech Order*).

[^319]: *Ameritech Order,* 10 FCC Rcd at 4605, 4607-09, 4610-12, paras.
    21-36.

[^320]: *Id.* at 4608.

[^321]: *Id.*

[^322]: *Local Competition Second Report and Order,* 11 FCC Rcd at
    19512.

[^323]: *See Connecticut Department of Public Utility Control Files
    Petition for Rulemaking, Public Comment Invited*, Public Notice, 13
    FCC Rcd 7416 (1998) (Connecticut Petition); *Common Carrier Bureau
    Seeks Comment on Massachusetts Department of Telecommunications and
    Energy Petition for Waiver to Implement a Technology-Specific
    Overlay in the 508, 617, 781, and 978 Area Codes*, Public Notice, 10
    FCC Rcd 5083 (1999); *Common Carrier Bureau Seeks Comment on a
    Petition of the California Public Utilites Commission and the People
    of the State of California for a Waiver to Implement a
    Technology-Specific or Service-Specific Area Code*, Public Notice,
    14 FCC Rcd 7490 (1999).

[^324]: *Notice,* 14 FCC Rcd at 10431, para. 257.

[^325]: *Id*. at 10431-32, paras. 257-259.

[^326]: *Id*. at 10431, para. 258.

[^327]: *Id*. at 10432, para 261.

[^328]: *Id*.

[^329]: *See, e.g.,* California Commission Comments at 46-50;
    Connecticut Commission Comments at 8-11; Citizens Util. Bd., et al.
    Comments at 35-36; Maine Commission Comments at 27-29; New Hampshire
    Commission Comments at 21-22; New Jersey Commission Comments at 7;
    New York Commission Comments at 22; North Carolina Commission
    Comments at 18; Ohio Commission Comments at 41-42; Texas Commission
    Comments at 33-36.

[^330]: *See, e.g.,* AT&T Comments at 68-70; Bell Atlantic Comments at
    38-39; BellSouth Comments at 19; GTE Comments at 74-76; WorldCom
    Comments at 64; Nextel Comments at 24-25; PageNet Comments at 5-9;
    PrimeCo Comments at 11; SBC Comments at 100-104; US West Comments at
    8; VoiceStream Comments at 30-31; Winstar Comments at 45-46. *But
    see* Omnipoint Comments at 19 (arguing that in light of the current
    numbering crisis, Commission should reconsider prohibition and that
    service-specific and technology-specific overlays would provide
    wireless carriers with immediate access to numbers); Bell Atlantic
    Comments at 5-6, filed in response to *Connecticut Petition*
    (recommending that, in light of changes that have occurred in the
    use of numbering resources, Commission should reconsider prohibition
    against service and technology-specific overlays).

[^331]: *See* Letter from Judith St. Ledger-Roty and Todd Daubert,
    Kelley, Drye & Warren, LLP, to Magalie Roman Salas, Secretary, FCC,
    dated November 15, 2000 (joint filing on behalf of PCIA, AT&T
    Wireless, Nextel, Verizon Wireless, Verizon Wireless Messaging
    services and VoiceStream Wireless) (Joint Wireless Commenters
    November 15 *ex parte*); *see also* letter from Celia Nogales, SBC,
    to Magalie Roman Salas, Secretary, FCC, dated November 19, 1999 (SBC
    November 19 *ex parte*).

[^332]: *See, e.g.,* California Commission Comments at 46; Texas Public
    Util. Counsel and NASUCA Comments at 41.

[^333]: *See, e.g.,* California Commission Comments at 46; Connecticut
    Commission Comments at 10; Maine Commission Comments at 27-28.

[^334]: *See* Joint Wireless Commenters November 15 *ex parte. See also*
    SBC November 19 *ex parte.*

[^335]: Wireless carriers and CLECs are often hardest hit by restrictive
    numbering rationing measures. Wireless carriers are affected because
    of high growth rates and seasonal demand for services. CLECs are
    affected because they often need to obtain numbers in every rate
    center in an area code in order to establish a service footprint.
    However, in areas where there is pooling, wireline CLECs are able to
    obtain numbers through the pool mechanism, whereas wireless
    carriers, who do not currently have LNP capability, cannot.

[^336]: On March 12, 1999, the Common Carrier Bureau concurred with the
    conclusions of the New York Commission that Sprint PCS had
    adequately demonstrated its genuine and immediate need to obtain
    numbering resources in advance of the assignment schedule provided
    for in the 516 NPA rationing plan. *See* Sprint PCS Request for
    Emergency Numbering Relief in the 516 NPA, NSD File No. 99-25, DA
    99-505 (Mar. 12, 1998). Similarly, on April 7, 1999, the Common
    Carrier Bureau concurred with the conclusions of the New York
    Commission that American Cellular Corporation had adequately
    demonstrated its genuine and immediate need to obtain numbering
    resources in advance of the assignment schedule provided for in the
    914 NPA rationing plan. *See* Emergency Petition of American
    Cellular Corporation for Numbering Relief, NSD File No. 99-31, DA
    99-663 (Apr. 7, 1999). On June 6, 2000, the Common Carrier Bureau
    granted AT&T Wireless an NXX Code in the 810 NPA.

[^337]: Parties have also suggested other alternatives, including
    fax-specific overlays and modem-specific overlays. It does not,
    however, appear possible to establish overlays that would separate
    out faxes or modems. These devices are generally used with ordinary
    wireline telephone connections often sharing the same number with an
    ordinary telephone, so there appears to be no reasonable way to
    distinguish the numbers associated with these devices from numbers
    associated with the provision of telephone services by the same
    carrier.

[^338]: Covered CMRS carriers in the largest 100 MSAs must implement
    pooling by November 24, 2002. *CMRS LNP Forbearance Order,* 14 FCC
    Rcd at 3112. Wireline and covered CMRS carriers outside the top 100
    MSAs are required to deploy LNP in the future only if and when they
    receive a request from a competing carrier. *LNP First Memorandum
    Opinion and Order on Reconsideration,* 12 FCC Rcd at 7314. Covered
    CMRS carriers outside the largest 100 MSAs, however, must support
    separation of the Mobile Identification Number (MIN) and the Mobile
    Directory Number (MDN) used to identify a subscriber, in order to
    support roaming by subscribers with ported numbers. Non-covered CMRS
    carriers, such as paging carriers, are not subject to LNP
    requirements of any kind. *LNP First Report and Order and Further
    Notice and Further Notice of Proposed Rulemaking,* 11 FCC Rcd at
    8433-34.

[^339]: Because we tentatively conclude that carriers should be included
    in an overlay on the basis of their technological capabilities,
    rather than on the basis of the type of service they provide, we
    will refer solely to technology-specific overlays from here on.

[^340]: *Ameritech Order,* 10 FCC Rcd at 4608, para. 27.

[^341]: *See, e.g.,* AT&T Comments at 69-70.

[^342]: *See* Joint Wireless Commenters November 15 *ex parte.*

[^343]: *See* Joint Wireless Commenters November 15 *ex parte.*

[^344]: *Id.*

[^345]: *See* Letter from Douglas I. Brandon, AT&T Wireless, to Yog R.
    Varma, Deputy Chief, Common Carrier Bureau, dated November 20, 2000;
    *see also* Letter from Anne E. Hoskins, Verizon Wireless, to Yog R.
    Varma, Deputy Chief, Common Carrier Bureau, dated November 21, 2000.

[^346]: *Local Competition Second Report and Order,* 11 FCC Rcd at
    19518. The Commission mandates ten-digit dialing for all-services
    overlays based on the assumption that dialing parity is necessary to
    preserve competition between carriers assigned numbers in the
    underlying NPA and carriers assigned numbers in the overlay NPA.
    Under this requirement, ten-digit dialing is required within the
    overlay and within the existing NPA. Ten-digit dialing is also
    required for calls between the overlay code and the existing NPA.

[^347]: *See supra* section IV.C.

[^348]: *See* Joint Wireless Commenters November 15 *ex parte.*

[^349]: *See* AT&T Wireless November 20, 2000 *ex parte;* Verizon
    Wireless November 21, 2000 *ex parte.*

[^350]: For example, General Motors' OnStar Service.

[^351]: *Notice*, 14 FCC Rcd at 10328, para. 15.

[^352]: *Id.* at 10375, para. 120.

[^353]: *Id*. at 10375, para. 121.

[^354]: *Id*. at 10369, para. 106.

[^355]: *Common Carrier Bureau Seeks Comment on the State of New York
    Department of Public Service Request for the Release of a New Area
    Code to Provide Relief for the 716 Numbering Plan Area*, Public
    Notice, CC Docket 96-98, NSD File No. L-00-161, DA 00-1806 (rel.
    Aug. 9, 2000) (*716 Public Notice*).

[^356]: *First Report and Order*, 15 FCC Rcd at 7628, para. 128.

[^357]: *See, e.g.,* AirTouch Comments at 4; Sprint Comments at 22.

[^358]: *See supra* section VI.F.

[^359]: *Id.*

[^360]: *See* California Commission July 21 Petition at 7-14; Maine
    Commission July 17 Petition at 11-13.

[^361]: *See NeuStar, Inc. Petition for Compensation Adjustment, Request
    for Approval of Implementation Schedule and Emergency Request for
    Interim Relief*, CC Docket No. 99-200 (June 30, 2000).

[^362]: *See* Letter from John Hoffman, Chairman, North American
    Numbering Council, to Dorothy Attwood, Chief, Common Carrier Bureau,
    dated September 20, 2000.

[^363]: *See supra* section VI.A.

[^364]: *See supra* section VI.A.2.

[^365]: *See supra* section VI.A.3.

[^366]: 47 U.S.C. 220(f).

[^367]: *See supra* section VI.A.

[^368]: *See generally supra* section VI.A*.*

[^369]: *Notice*, 14 FCC Rcd at 10418, para. 230.

[^370]: *First Report and Order*, 15 FCC Rcd at 10428, para. 251.

[^371]: 47 U.S.C. § 254. There are some inherent difficulties with this
    proposal. For example, this scheme would shift primary
    responsibility for universal service funding from IXCs and wireless
    carriers to ILECs. We also recognize that we would need to consult
    with the Universal Service Joint Board before implementing such a
    scheme.

[^372]: *See* Level 3 Comments at 13; PrimeCo Comments at 10; WorldCom
    Comments at 48.

[^373]: As many commenting parties point out, prices that are too low
    relative to the market price will not sufficiently improve numbering
    resource allocation and prices that are too high will discourage
    both efficient and inefficient telephone numbering use. *See*
    WorldCom Comments at 49; Ad Hoc Comments at 12.

[^374]: *See*, *e.g.*, California Commission Comments at 40.

[^375]: *Notice*, 14 FCC Rcd at 10419-20, paras. 231-233.

[^376]: SBC Comments at 109; WorldCom Comments at 49.

[^377]: The rate at which numbers are released for auction will
    determine the life span of a given area code and/or the NANP as a
    whole, and, jointly with the demand for numbers, will determine the
    market price.

[^378]: SBC Comments at 113; VoiceStream Comments at 17.

[^379]: *See* *First Report and Order*, 15 FCC Rcd at 7580, n.10.

[^380]: *See, e.g*., New Hampshire Commission Comments at 20.

[^381]: *See* California Commission Comments at 10-11; New Hampshire
    Commission Comments at 13-33; Texas Commission Comments at 4-6,
    Exhibit A.

[^382]: Ohio Commission Comments at 39-40.

[^383]: For example, we may have to require the NANPA to accept stranded
    individual numbers back from carriers if the carrier cannot transfer
    its stranded numbers directly to other carriers. Another possible
    approach would be to empower the NANPA to facilitate trades on the
    secondary market.

[^384]: Ad Hoc Comments at 10; AT&T Comments at 62; MediaOne Comments at
    7; Nextlink Comments at 23. According to these parties, economic
    efficiency requires that carriers pay for all numbers that they
    control, regardless of when those numbers were obtained.

[^385]: 47 C.F.R. § 52.15(g).

[^386]: *See* Central Office Code (NXX) Assignment Guidelines, INC
    95-0407-008, at §7.0 (Nov. 13, 2000).

[^387]: *First Report and Order*, 15 FCC Rcd at 7662, para. 193.

[^388]: *Id.* at 7664, para. 199.

[^389]: *Id.* at 7665, para. 201.

[^390]: *Id.* at 7668, para. 207. Both shared industry costs and
    carrier-specific costs must be offset by any cost savings.

[^391]: We determined that carriers may not recover costs that are not
    directly related to thousands-block number pooling.

[^392]: *Notice*, 14 FCC Rcd at 10410, para. 204.

[^393]: *Id.* at 10407-08, para. 198.

[^394]: *First Report and Order*, 15 FCC Rcd at 7687, para. 253.

[^395]: *Id*.

[^396]: *Id.* at 7671, para. 215.

[^397]: See *supra* section IV.A.

[^398]: *First Report and Order*, 15 FCC Rcd at 7625, para. 122.

[^399]: Thousands-block number pooling relies on the LRN architecture
    that is used to support LNP, and therefore we have required LNP
    capable carriers to participate in thousands-block number pooling.
    Specifically, we have mandated thousands-block number pooling in the
    top 100 MSAs were carriers are required to be LNP capable. Outside
    the top 100 MSAs carriers are required to become LNP capable after
    receiving a request from another carrier. 47 C.F.R. § 52.23(b). The
    specific roll-out schedule for national thousands-block number
    pooling will be adopted after the Pooling Administrator is selected.

[^400]: *First Report and Order*, 15 fcc Rcd. at 7632-33, para. 134.

[^401]: *Id.*

[^402]: 47 U.S.C. § 251(f).

[^403]: *See* Letter from Yog R. Varma, Deputy Chief, Common Carrier
    Bureau, to Ronald Conners, Director, North American Numbering Plan
    Administrator, dated June 6, 2000 (DA 00-1247); Letter from Yog R.
    Varma, Deputy Chief, Common Carrier Bureau, to Ronald Conners,
    Director, North American Numbering Plan Administrator, dated April
    7, 1999 (DA 99-663); Letter from Yog R. Varma, Deputy Chief, Common
    Carrier Bureau, to Ronald Conners, Director, North American
    Numbering Plan Administrator, dated March 12, 1999 (DA 99-505).

[^404]: *See, e.g*., AT&T Comments at 2, 5; California Commission
    Comments at 5; CompTel Comments at 3-4; CTIA Comments at 11; GTE
    Comments at 9; Maine Commission Comments at 3-4; MediaOne Comments
    at 6; Missouri Commission Comments at 6; Pennsylvania Consumer
    Advocate Comments at 16; PCIA Comments at 4; SBC Comments at 9-10;
    Sprint Comments at 3-4.

[^405]: *See* AT&T Comments at 5; PCIA Comments at 7-11*; see also* 47
    C.F.R. § 20.12(B) (requiring CMRS carriers to permit unrestricted
    resale of its service).

[^406]: *See supra* section III.F.

[^407]: *See supra* section III.E.

[^408]: *See* Amendment of 47 C.F.R. 1.1200 et seq. Concerning Ex Parte
    Presentations in Commission Proceedings, *Repo rt and Order*, 12 FCC
    Rcd 7348, 7356-57 (1997) (citing 47 C.F.R. § 1.1204(b)(1)).

[^409]: *See* 47 C.F.R. § 1.1206(b)(2).

[^410]: *See Electronic Filing of Documents in Rulemaking Proceedings,*
    63 Fed. Reg. 24, 121 (1998).

[^411]: *See* 47 C.F.R. § 1.49.

[^412]: 5 U.S.C. § 603(a).

[^413]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq*.,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^414]: Numbering Resource Optimization, *Notice of Proposed
    Rulemaking*, 14 FCC Rcd at 10433-34 (1999) (*Notice*).

[^415]: *First Report and Order and Further Notice of Proposed
    Rulemaking*, 15 FCC Rcd at 7699-7706, Appendix B (2000) (*First
    Report and Order and Further Notice*).

[^416]: *Id.* at 7707-7710, Appendix C.

[^417]: *See* 5 U.S.C. § 604.

[^418]: Small Business Alliance for Fair Utility Regulation (Small
    Business Alliance) Comments at 2.

[^419]: *Id.* at 2.

[^420]: Liberty Telecom Comments at 5; PrimeCo Personal Communications,
    L.P. (PrimeCo) Comments at 16.

[^421]: Small Business Alliance Comments at 6.

[^422]: PrimeCo Comments at 16.

[^423]: *See* Organization for the Promotion and Advancement of Small
    Telecommunications Companies (OPASTCO) Comments at 6; Small Business
    Alliance Comments at 9.

[^424]: 5 U.S.C. § 603(b)(3).

[^425]: 5 U.S.C. § 601(6).

[^426]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C. § 632). Pursuant to the RFA,
    the statutory definition of a small business applies "unless an
    agency, after consultation with the Office of Advocacy of the Small
    Business Administration and after opportunity for public comment,
    establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definitions in the Federal Register." 5 U.S.C. § 601(3).

[^427]: 15 U.S.C. § 632.

[^428]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^429]: *See* FCC, Carrier Locator: Interstate Service Providers
    (October 2000) (*Locator*). This report lists 4,822 companies that
    provided interstate telecommunications service as of December 31,
    1999 and was compiled using information from FCC Form 499-A
    Telecommunications Reporting Worksheets filed by carriers. *Id*. at
    1.

[^430]: 13 CFR § 121.201, Standard Industrial Classification (SIC) codes
    4812 and 4813. *See also* Executive Office of the President, Office
    of Management and Budget, *Standard Industrial Classification
    Manual* (1987).

[^431]: 5 U.S.C. § 601(3).

[^432]: Letter *from* Jere W. Glover, Chief Counsel for Advocacy, SBA,
    *to* William E. Kennard, Chairman, FCC (May 27, 1999). The Small
    Business Act contains a definition of \"small business concern,\"
    which the RFA incorporates into its own definition of \"small
    business.\" *See* 15 U.S.C. § 632(a) (Small Business Act); 5 U.S.C.
    § 601(3) (RFA). SBA regulations interpret \"small business concern\"
    to include the concept of dominance on a national basis. 13 CFR §
    121.102(b). Since 1996, out of an abundance of caution, the
    Commission has included small incumbent LECs in its regulatory
    flexibility analyses. *See*, *e.g*., *Implementation of the Local
    Competition Provisions of the Telecommunications Act of 1996*, CC
    Docket, 96-98, First Report and Order, 11 FCC Rcd 15499, 16144‑45
    (1996), 61 FR 45476 (Aug. 29, 1996).

[^433]: U.S. Department of Commerce, Bureau of the Census, *1992 Census
    of Transportation, Communications, and* *Utilities: Establishment
    and Firm Size*, at Firm Size 1‑123 (1995) (Census Bureau).

[^434]: *See generally* 15 U.S.C. § 632(a)(1).

[^435]: Census Bureau, *supra*, at Firm Size 1‑123.

[^436]: 13 CFR § 121.201, SIC code 4813.

[^437]: *Id.*

[^438]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^439]: 13 CFR § 121.201, SIC code 4813.

[^440]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^441]: 13 CFR § 121.201, SIC code 4813.

[^442]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^443]: 13 CFR § 121.201, SIC code 4813.

[^444]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^445]: 13 CFR § 121.201, SIC code 4813.

[^446]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^447]: 13 C.F.R. § 121.201, SIC code 4813.

[^448]: *Locator* at 1-2.

[^449]: *See supra* para. 85 (citing *Notice*, 14 FCC Rcd 10358, para.
    83).

[^450]: *See supra para.* 99.

[^451]: 5 U.S.C. § 603(c).

[^452]: *See, e.g.*, OPASTCO Comments at 6; Small Business Alliance
    Comments at 8-9.

[^453]: *First Report and Order*, 15 FCC Rcd at 7587, 7588, paras.
    22-23.

[^454]: *See supra* para. 114.

[^455]: *See* 5 U.S.C. § 801(a)(1)(A).

[^456]: *See* 5 U.S.C. § 604(b).

[^457]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq*.,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^458]: *See* 5 U.S.C. § 603(a).

[^459]: *See* *id*.

[^460]: 47 U.S.C. § 251(e)(1).

[^461]: 47 U.S.C. §§ 151, 153, 154, 201-205, and 251.

[^462]: 5 U.S.C. § 603(b)(3).

[^463]: 5 U.S.C. § 601(6).

[^464]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C. § 632). Pursuant to the RFA,
    the statutory definition of a small business applies "unless an
    agency, after consultation with the Office of Advocacy of the Small
    Business Administration and after opportunity for public comment,
    establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definitions in the Federal Register." 5 U.S.C. § 601(3).

[^465]: 15 U.S.C. § 632.

[^466]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^467]: *See* FCC, Carrier Locator: Interstate Service Providers
    (October 2000) (*Locator*). This report lists 4,822 companies that
    provided interstate telecommunications service as of December 31,
    1999 and was compiled using information from FCC Form 499-A
    Telecommunications Reporting Worksheets filed by carriers. *Id*. at
    1.

[^468]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^469]: 13 CFR § 121.201, Standard Industrial Classification (SIC) codes
    4812 and 4813. *See also* Executive Office of the President, Office
    of Management and Budget, *Standard Industrial Classification
    Manual* (1987).

[^470]: 5 U.S.C. § 601(3).

[^471]: Letter *from* Jere W. Glover, Chief Counsel for Advocacy, SBA,
    *to* William E. Kennard, Chairman, FCC (May 27, 1999). The Small
    Business Act contains a definition of \"small business concern,\"
    which the RFA incorporates into its own definition of \"small
    business.\" *See* 15 U.S.C. § 632(a) (Small Business Act); 5 U.S.C.
    § 601(3) (RFA). SBA regulations interpret \"small business concern\"
    to include the concept of dominance on a national basis. 13 CFR
    121.102(b). Since 1996, out of an abundance of caution, the
    Commission has included small incumbent LECs in its regulatory
    flexibility analyses. *See*, *e.g*., *Implementation of the Local
    Competition Provisions of the Telecommunications Act of 1996*, CC
    Docket, 96-98, First Report and Order, 11 FCC Rcd 15499, 16144‑45
    (1996), 61 FR 45476 (Aug. 29, 1996).

[^472]: U.S. Department of Commerce, Bureau of the Census, *1992 Census
    of Transportation, Communications, and Utilities: Establishment and
    Firm Size*, at Firm Size 1‑123 (1995) (Census Bureau).

[^473]: *See generally* 15 U.S.C. § 632(a)(1).

[^474]: Census Bureau, *supra*, at Firm Size 1‑123.

[^475]: 13 CFR § 121.201, SIC code 4813.

[^476]: *Id.*

[^477]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000) .

[^478]: 13 CFR § 121.201, SIC code 4813.

[^479]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^480]: 13 CFR § 121.201, SIC code 4813.

[^481]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^482]: 13 CFR § 121.201, SIC code 4813.

[^483]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^484]: 13 CFR § 121.201, SIC code 4813.

[^485]: FCC, Common Carrier Bureau, Industry Analysis Division, *Trends
    in Telephone Service*, Table 19.3 (March 2000).

[^486]: 13 C.F.R. § 121.201, SIC code 4813.

[^487]: *Locator* at 1-2.

[^488]: 5 U.S.C. § 603(c).