[]{#__RefHeading___Toc534163256 .anchor}Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | CC Docket No. 99-200         |
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| Numbering Resource Optimization  | ) | CC Docket No. 96-98          |
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| Implementation of the Local      | * | CC Docket No. 95-116         |
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**THIRD REPORT AND ORDER AND SECOND ORDER ON RECONSIDERATION IN CC
DOCKET NO. 96-98 AND CC DOCKET NO. 99-200**

**Adopted: December 12, 2001 Released: December 28, 2001**

By the Commission: Commissioner Martin issuing a separate statement.

**TABLE OF CONTENTS**

[Paragraph Number]{.underline}

Before the [1](#__RefHeading___Toc534163256)

I. INTRODUCTION [3](#introduction)

II\. BACKGROUND [5](#background)

III\. national thousands-block number pooling
[7](#national-thousands-block-number-pooling)

A. Pooling Administration [7](#pooling-administration)

B. Thousands-Block Number Pooling for Non-LNP Capable Carriers
[8](#thousands-block-number-pooling-for-non-lnp-capable-carriers)

1\. Paging Carriers [9](#paging-carriers)

2\. Non-LNP Capable Carriers Outside of the Largest 100 MSAs
[10](#non-lnp-capable-carriers-outside-of-the-largest-100-msas)

3\. State Authority to Require Pooling Capability
[11](#state-authority-to-require-pooling-capability)

C. Thousands-Block Number Pooling for Covered CMRS Carriers
[11](#thousands-block-number-pooling-for-covered-cmrs-carriers)

D. Federal Cost Recovery Mechanism
[12](#federal-cost-recovery-mechanism)

1\. Federal/State Jurisdiction [14](#federalstate-jurisdiction)

2\. Recovery of Shared Industry and Direct Carrier-Specific Costs
[16](#recovery-of-shared-industry-and-direct-carrier-specific-costs)

3\. Identification of Costs [22](#identification-of-costs)

IV\. Waiver of Growth Numbering Resource requirements
[24](#waiver-of-growth-numbering-resource-requirements)

A. Reconsideration of Months-to-Exhaust Criteria
[24](#reconsideration-of-months-to-exhaust-criteria)

B. Reconsideration of Utilization Threshold and Formula
[25](#b.-reconsideration-of-utilization-threshold-and-formula)

1\. Utilization Threshold [26](#utilization-threshold)

2\. Utilization Formula [27](#utilization-formula)

3\. Applicability of Utilization Threshold to Pooling Carriers
[27](#applicability-of-utilization-threshold-to-pooling-carriers)

C. Safety Valve [28](#safety-valve)

1\. Background [28](#background-2)

2\. Discussion [29](#discussion-1)

V. Service-specific and technology-specific area code overlays
[31](#service-specific-and-technology-specific-area-code-overlays)

A. Benefits and Costs of SOs [35](#benefits-and-costs-of-sos)

B. Criteria for SOs [37](#criteria-for-sos)

1\. Technologies and Services [37](#technologies-and-services)

2\. Geographic Area [38](#geographic-area)

3\. Transitional SOs [38](#transitional-sos)

4\. When to Implement and Transition SOs
[39](#when-to-implement-and-transition-sos)

5\. Take-Backs [40](#take-backs)

6\. Ten-Digit Dialing [41](#ten-digit-dialing)

7\. Rationing [42](#rationing)

8\. Thousands-Block Number Pooling [43](#thousands-block-number-pooling)

VI\. Other numbering resource optimization measures
[43](#other-numbering-resource-optimization-measures)

A. Audits [43](#audits)

1\. Enforcement [43](#enforcement)

2\. State Commissions' Authority to Conduct Audits
[45](#state-commissions-authority-to-conduct-audits)

3\. Petitions for Reconsideration and Clarification
[46](#petitions-for-reconsideration-and-clarification)

B. Reserved Numbers [50](#reserved-numbers)

1\. Reconsideration of Reservation Period
[50](#reconsideration-of-reservation-period)

2\. Fee for Reserved Numbers [51](#fee-for-reserved-numbers)

3\. Clarification of Numbers Used for Intermittent or Cyclical Purposes
[52](#clarification-of-numbers-used-for-intermittent-or-cyclical-purposes)

C. Clarification of Top 100 MSAs [54](#clarification-of-top-100-msas)

D. Liability of Related Carriers and Withholding of Numbering Resources
[56](#d.-liability-of-related-carriers-and-withholding-of-numbering-resources)

E. State Commissions' Access to Data
[58](#state-commissions-access-to-data)

VII\. PROCEDURAL MATTERS [60](#procedural-matters)

*A.* *Ex Parte* Presentations [60](#ex-parte-presentations)

B. Final Regulatory Flexibility Analysis
[60](#final-regulatory-flexibility-analysis)

C. Final Paperwork Reduction Analysis
[60](#final-paperwork-reduction-analysis)

D. Ordering Clauses [60](#ordering-clauses)

Final
Rules................................................................................Appendix
A

> Final Regulatory Flexibility
> Analysis................................................Appendix B

List of
Parties.............................................................................Appendix
C

List of the Top 100
MSAs..............................................................Appendix
D

# INTRODUCTION

1.  In this *Third Report and Order* and *Second Order on
    Reconsideration* in CC Docket No. 99-200, we continue efforts to
    maximize the efficiency with which numbering resources in the North
    American Numbering Plan (NANP) are utilized.[^1] By working with
    state commissions and the telecommunications industry, the
    Commission has been able to refine its numbering administration
    policies and processes, resulting in a substantial increase in the
    estimated life of the NANP as projected just two years ago.[^2] Our
    efforts have also contributed to the dramatic reduction in central
    office code assignments and area code relief efforts over the last
    year.[^3] With this Order, we aim to build upon this success to
    ensure that the limited numbering resources of the NANP continue to
    be used efficiently so that the NANP does not exhaust prematurely,
    and to ensure that all carriers have the numbering resources they
    need to compete in the telecommunications marketplace. Specifically,
    we address issues raised in the *Second Further Notice*[^4] and
    several petitions for reconsideration and/or clarification of the
    *First* or *Second Report and Orders*. We also clarify, on our own
    motion, certain aspects of our numbering resources optimization
    rules and local number portability requirements.

2.  *Overview*. In Section III, we make several decisions to address
    national thousands-block number pooling administration.
    Specifically, we decline to extend the pooling requirement to paging
    carriers; decline to extend pooling requirements to non-local number
    portability (LNP) capable carriers outside of the largest 100
    Metropolitan Statistical Areas (MSAs) that have not received a
    request to deploy LNP from a competing carrier; and decline to alter
    the implementation date for covered Commercial Mobile Radio Service
    (CMRS) carriers to participate in pooling.

3.  We also address the federal cost recovery for national
    thousands-block number pooling. For price cap local exchange
    carriers (LECs), we conclude that many of the costs associated with
    thousands-block number pooling are ordinary costs for which no
    additional special recovery is appropriate. To the extent that price
    cap carriers can demonstrate they have incurred extraordinary costs
    resulting from the implementation of the federally mandated
    thousands-block number pooling program, these extraordinary costs
    will be recovered through an exogenous adjustment to interstate
    access charges. We will allow, but not require, incumbent LECs
    (ILECs) subject to rate-of-return regulation to recover their
    carrier-specific costs directly related to thousands-block number
    pooling implementation through interstate access charges. Carriers
    not subject to rate regulation, such as competitive LECs (CLECs) and
    CMRS providers, may recover their carrier-specific costs directly
    related to implementation of thousands-block number pooling in any
    lawful manner consistent with their obligations under the
    Communications Act of 1934, as amended (the Act). Finally, we
    reaffirm that states that have conducted pooling trials should
    establish cost recovery mechanisms for costs incurred by carriers
    participating in such trials, and we encourage those states that
    have not yet established a mechanism to use the model established by
    the Commission for national pooling cost recovery.

4.  In Section IV, we reaffirm that the Months-to-Exhaust (MTE)
    requirement for carriers is an important element in ensuring that
    numbering resources are used efficiently and that carriers have an
    adequate supply of resources to serve customers. Furthermore, we
    find that the utilization threshold established in the *Second
    Report and Order* is reasonable. We also decline to exempt pooling
    carriers from the utilization threshold. Finally, we establish a
    safety valve mechanism to allow carriers that do not meet the
    utilization threshold in a given rate center to obtain additional
    numbering resources, and delegate authority to state commissions to
    hear claims that the safety valve should be applied when the NANPA
    or the Pooling Administrator denies a specific numbering resource
    request.

5.  In Section V, we revisit the prohibition of service-specific and
    technology-specific overlays. We conclude that we should lift the
    ban on such overlays, as several states have requested, and that
    authority to implement this area code relief option will be granted
    on a case-by-case basis.

6.  In Section VI, we address other numbering resource optimization
    measures. First, we find that carriers that are found, through an
    audit, to violate our numbering requirements, or that fail to
    cooperate with the Commission staff to conduct either a "for cause"
    or random audit, should be denied numbering resources in certain
    instances. We reaffirm state commissions' authority to conduct
    independent audits that are not duplicative of the national audit
    program. We also reaffirm our conclusion that the 180-day
    reservation period is sufficient and find that fees to extend the
    reservation period are not appropriate at this time. We also
    clarify, on our own motion, that the Commission intended to require
    all carriers in the top 100 MSAs to become LNP capable, not just
    those who receive a request. We further clarify that LNP is required
    in the top 100 MSAs identified at the time of this mandate, as well
    as new MSAs identified in all subsequent top 100 MSA lists.[^5]
    Finally, we find that state commissions should be allowed
    password-protected access to the NANPA database for data pertaining
    to NPAs located within their state.

# BACKGROUND[^6]

7.  The proliferation of area codes in the United States between 1997
    and 1999,[^7] coupled with the staggering estimated cost of
    expanding the current NANP,[^8] led the Commission, in 1999, to
    initiate the Numbering Resource Optimization proceeding.[^9] Since
    that time, new area code implementation has declined.[^10] This is
    due in part to the Commission's efforts to address two of the major
    factors that contribute to numbering resource exhaust: (1) the
    absence of regulatory, industry, or economic control over requests
    for numbering resources; and (2) and the allocation of numbering
    resources in blocks of 10,000, irrespective of the carrier's actual
    need for new numbering resources. [^11] By implementing a system of
    mandatory numbering resource utilization and forecast reporting, and
    thousands-block number pooling, we have directly, and successfully,
    attacked these major drivers of numbering exhaust.

8.  In past orders in this docket, the Commission has adopted the
    following measures: a mandatory utilization and forecast data
    reporting requirement; a uniform set of categories of numbers for
    which carriers must report their utilization; a utilization
    threshold to increase carrier accountability and incentives to use
    numbers efficiently; a single system for allocating numbers in
    blocks of 1,000, rather than 10,000 (thousands-block number
    pooling); a plan for national rollout of thousands-block number
    pooling; cost recovery principles for thousands-block number pooling
    that are similar to those adopted for LNP; reclamation requirements
    to ensure that unused numbers are returned to the NANP inventory for
    assignment to other carriers; sequential numbering, where carriers
    are required, to the extent possible, to first assign numbering
    resources within thousands-blocks; and an auditing program to verify
    carrier compliance with the Commission's rules.[^12]

9.  Also, the Commission has mandated that CMRS providers begin
    participating in thousands-block number pooling by November 24,
    2002.[^13] The allocation of numbers in blocks of 10,000 has been a
    significant driver of premature NPA and NANP exhaust, primarily
    because many telephone numbers become stranded and, thus, unusable.
    Thousands-block number pooling allows resources to be allocated in
    smaller blocks, and thus frees up stranded numbers. Once CMRS
    providers are capable of participating in pooling, even greater
    efficiencies will be achieved. Carriers will have greater
    flexibility to port numbers between switches and even outside of
    rate centers.[^14]

10. Although the 1996 Act gave the Commission plenary jurisdiction over
    numbering resources, numbering resource management has been a
    cooperative effort involving the Commission, the North American
    Numbering Council (NANC), which is the Commission's federal advisory
    committee on numbering issues, state commissions, and industry. The
    NANC has made recommendations to the Commission on several numbering
    resource optimization measures.[^15] States, for example, have been
    delegated authority to make area code relief decisions, establish
    utilization thresholds different from the national threshold, order
    sequential number assignments, reclaim unused NXX codes, and
    implement code sharing trials. Additionally, the Commission and the
    Common Carrier Bureau have granted over 30 state petitions for
    delegated authority to institute thousands-block pooling trials,
    establish rationing procedures for six months following area code
    relief, and address requests for numbering resources outside of the
    rationing process. The industry has played an active role as well by
    developing guidelines through industry consensus, which provide
    technical guidance to the industry on implementing numbering
    policies adopted by the Commission.[^16] The NANC also continues to
    analyze the benefits of various numbering resource optimization
    measures, including rate center consolidation, individual number
    pooling, and unassigned number porting.[^17] As stewards of the NANP
    for the United States, we expect to continue to work closely with
    state commissions, the NANC, the industry, as well as with other
    NANP countries, to monitor the progress that has been made in
    optimizing the use of NANP resources.

# national thousands-block number pooling

## Pooling Administration

11. On June 18, 2001, the Commission announced the selection of NeuStar,
    Inc. (NeuStar) as the national thousands-block number Pooling
    Administrator.[^18] As national Pooling Administrator, NeuStar is
    responsible for administering thousands-block number pools by
    assigning, managing, forecasting, reporting, and processing data
    that will allow service providers in areas designated for
    thousands-block number pooling to receive telephone numbers in
    blocks of 1,000. NeuStar, which also currently serves as the NANPA,
    has been awarded a one-year contract with four one-year options (for
    a potential term of five years) to be exercised at the discretion of
    the Commission. National thousands-block number pooling is scheduled
    to begin in March 2002. Currently, 107 pools in 26 states are up and
    running.[^19]

12. *National Pooling Rollout Schedule*. As directed by the Commission,
    NeuStar developed and proposed a national thousands-block number
    pooling schedule using the criteria established by the Commission in
    the *First Report and Order*. Specifically, NeuStar gave primary
    consideration to the following: NPAs that are located in the largest
    100 MSAs;[^20] NPAs in jeopardy; and NPAs with a projected life of
    at least one-year.[^21] In deciding when a pool for each qualifying
    NPA would be established, NeuStar also followed the Commission's
    directive to implement national pooling by quarter; for each
    three-month period, three pools in each of the 7 Number Portability
    Administration Center (NPAC) regions (for a total of 21 pools) would
    be initiated.[^22]

13. On October 17, 2001, the Commission issued a Public Notice seeking
    comment on the proposed national thousands-block number pooling
    rollout schedule. State commissions seeking to opt into, or out of,
    the rollout schedule, or wishing to substitute an alternative NPA
    for the NPA listed in the rollout schedule, must make such requests
    in response to the Public Notice within the established initial
    comment cycle.[^23] Upon review of the comments and requests
    submitted, the Commission will publish the final rollout
    schedule.[^24] States seeking to opt out of the rollout schedule on
    a temporary basis should inform NeuStar of their decision three
    months prior to the scheduled rollout date for the applicable
    NPA.[^25] In addition, to serve the needs of states that believe
    that pooling would be beneficial in an NPA that is not located in
    one of the largest 100 MSAs, the Common Carrier Bureau will consider
    petitions from state commissions to opt into the rollout schedule on
    a case-by-case basis. Finally, state commissions may petition to
    substitute an alternative NPA for an NPA listed in the rollout
    schedule, if the substitute NPA meets the eligibility criteria as
    set forth above.[^26]

## Thousands-Block Number Pooling for Non-LNP Capable Carriers

14. Under the Commission's current rules, certain carriers are exempted
    from pooling requirements, e.g., paging carriers, and carriers
    outside of the largest 100 MSAs that have not received a request to
    deploy LNP from a competing carrier. In the *Second Further Notice*,
    the Commission sought comment about whether it would be appropriate
    to extend pooling requirements to these carriers to further promote
    the efficient use of numbering resources. The Commission sought
    comment on whether the incremental number optimization benefits of
    requiring these carriers to participate in pooling would outweigh
    the associated costs.

15. Several state commissions support expanding pooling requirements,
    arguing that requiring all carriers to participate in pooling --
    regardless of their LNP status -- would greatly enhance the
    effectiveness of pooling.[^27] Several suggest that the Commission
    should delegate authority to states to determine for themselves,
    based on their own individual circumstances, whether to require
    non-LNP capable carriers to pool.[^28] Paging carriers, carriers
    outside of the largest 100 MSAs, and other industry commenters, on
    the other hand, oppose extending pooling requirements and assert
    that the costs of implementing pooling would far outweigh any
    potential number optimization benefits.[^29]

### Paging Carriers

16. Based on the record before us, we decline to extend pooling
    requirements to paging carriers.[^30] We are persuaded by paging
    carriers' assertions that the costs of implementing pooling would
    outweigh the potential numbering resource savings. In the *Second
    Further Notice,* we recognized that if the Commission were to expand
    pooling requirements, non-LNP capable carriers would be obligated to
    implement the common technological platform that is used to support
    both LNP and number pooling. Paging carriers assert that they would
    face certain unique technical challenges to establish pooling
    capability. Specifically, paging carriers would have to convert to
    signaling system 7 (SS7) signaling to be able to properly route
    calls.[^31] Currently, paging carriers use signaling systems such as
    multi-frequency or dual-tone multi-frequency signaling.[^32]
    Evidence from the record suggests that paging carriers have used
    these less sophisticated systems because paging switches do not
    originate traffic and because many of the enhanced features of SS7
    signaling are unnecessary for the provision of messaging
    services.[^33] To be able to participate in pooling, paging carriers
    would need to interconnect to other carriers using SS7
    signaling.[^34] We agree with paging carriers that the costs of
    converting to SS7 signaling would be significant.[^35]

17. There is insufficient evidence to conclude that the incremental
    number optimization benefits of requiring these carriers'
    participation in pooling would outweigh the associated costs.
    Evidence from the record indicates that the paging market is mature,
    and that paging carriers' demand for numbering resources has leveled
    off and is unlikely to increase significantly in the future.[^36]
    Instead, it appears more likely that paging carriers will serve
    customers through existing numbers made available to them through
    churn rather than requesting significant amounts of additional
    numbers.[^37] Moreover, recent data shows that paging carriers, as a
    whole, use relatively few numbering resources. The June 30, 2001
    Numbering Resource Utilization data shows that of the over 115,000
    NXX codes reported by all carriers only 5,813 of those codes, or
    slightly over 5%, were held by paging carriers.[^38] In light of
    these conditions, we conclude that paging carriers' participation in
    pooling would not result in significant savings of numbers.

18. Although we do not extend pooling requirements to paging carriers at
    this time, we expect paging carriers to contribute to other
    numbering resource conservation efforts. Specifically, we expect
    paging carriers to return unused NXX codes and to comply with the
    sequential number assignment rules discussed in the *First Report
    and Order*.[^39] If we find that paging carriers are not
    contributing to these numbering resource conservation efforts, we
    may consider extending pooling requirements to these carriers in the
    future.

### Non-LNP Capable Carriers Outside of the Largest 100 MSAs

19. For similar reasons, we also decline to extend pooling requirements
    to non-LNP capable carriers outside of the largest 100 MSAs that
    have not received a request to deploy LNP from a competing carrier.
    There is insufficient evidence in the record to conclude that
    requiring these carriers to participate in pooling would result in
    significant numbering resource savings. Many of the carriers outside
    of the largest 100 MSAs operate in rate centers where there are few,
    if any, competing carriers. Specifically, data from the LERG shows
    that in the approximately 2,012 rate centers in the 180 MSAs beyond
    the largest 100, approximately 1,320 are rate centers where there
    are no competing service providers and approximately 300 are rate
    centers where there is only one competing service provider.[^40] We
    agree with commenters who argue that it would be unreasonable to
    require non-LNP capable carriers in these areas to establish pooling
    capability because they would have few, if any, carriers with which
    to pool.[^41] In addition, there is insufficient evidence in the
    record for us to conclude that the non-LNP capable carriers
    operating outside of the largest 100 MSAs, viewed as a whole, hold
    significant amounts of numbering resources compared to carriers in
    larger metropolitan areas. Because these carriers hold relatively
    small amounts of numbering resources, there would be little benefit,
    at least from a nationwide perspective, to requiring them to
    participate in pooling. For example, LERG data shows that ILECs
    outside of the largest 100 MSAs use approximately 4.5 percent of all
    of the NXX codes and CLECs outside of the largest 100 MSAs only use
    approximately 2.3 percent of all NXX codes.[^42] For these reasons,
    we find that requiring these carriers to participate in pooling
    would not result in significant number optimization benefits.

20. We also find that requiring non-LNP capable carriers outside of the
    largest 100 MSAs to participate in pooling would impose
    disproportionate costs on them in comparison to LNP capable carriers
    operating in the 100 largest MSAs. Evidence from the record suggests
    that the per line cost to establish pooling capability would be
    significantly higher for small and rural carriers operating outside
    of the largest 100 MSAs than for carriers operating inside urban and
    metropolitan areas because of these carriers' limited customer
    bases.[^43] Additionally, some commenters predict that imposing
    these costs on smaller and rural carriers may delay efforts to bring
    advanced services to rural subscribers.[^44] Weighed against the
    limited number optimization benefits of requiring these carriers'
    participation in pooling, these costs appear to be unreasonably
    high.

### State Authority to Require Pooling Capability

21. Finally, we reject the State Coordination Group's request to
    delegate authority to states to determine on a case-by-case basis
    whether to extend pooling requirements.[^45] As we stated in the
    *First Report and Order*,[^46] uniform national standards for
    pooling are necessary to minimize confusion and additional expense
    related to compliance with inconsistent regulatory requirements. We
    will, however, entertain requests from state commissions to opt into
    the rollout schedule for pooling in MSAs outside of the largest
    100.[^47]

## Thousands-Block Number Pooling for Covered CMRS Carriers

22. In the *Second Report and Order*, we declined to adopt a transition
    period between the time that covered CMRS carriers must implement
    LNP and the time they must participate in mandatory pooling. Qwest,
    Cingular Wireless, BellSouth, Cellular Telecommunications & Internet
    Association (CTIA), and Sprint sought reconsideration of this
    issue.[^48] These commenters assert that additional time is needed
    to make changes to their systems to implement pooling.[^49] Sprint
    states that the Commission's decision not to establish a separate
    and phased-in implementation plan for CMRS pooling is unexplained
    and contrary to precedent.[^50]

23. We decline to address in this Order whether the LNP implementation
    date for covered CMRS carriers should be delayed or eliminated, as
    some carriers suggest.[^51] We find, however, that it is in the
    public interest to require covered CMRS carriers to participate in
    thousands-block number pooling as soon as possible to maximize
    number utilization efficiency.[^52] We therefore again decline to
    alter the implementation date for covered CMRS carriers to
    participate in pooling. The record in this proceeding does not
    demonstrate that covered CMRS carriers need additional time to
    participate in pooling, as some assert.[^53] As we stated in the
    *First Report and Order*, implementation of thousands-block number
    pooling in major markets is essential to extending the life of the
    NANP.[^54] Because the effectiveness of pooling increases as the
    number of participants increase, we remain convinced that covered
    CMRS carriers should participate in pooling as soon as possible.

## Federal Cost Recovery Mechanism 

24. Section 251(e)(2) of the Act requires that "\[t\]he cost of
    establishing telecommunications numbering administration
    arrangements and number portability shall be borne by all
    telecommunications carriers on a competitively neutral basis as
    determined by the Commission."[^55] This statutory provision applies
    both to the costs of numbering administration and to the costs of
    LNP. In the *First Report and Order*, the Commission established a
    competitively neutral federal cost recovery framework for
    thousands-block number pooling modeled on the LNP cost recovery
    framework.[^56] The Commission concluded that requiring carriers to
    bear and recover their own carrier-specific thousands-block number
    pooling costs is consistent with section 251(e)(2)'s competitive
    neutrality requirement.[^57] The Commission also concluded that
    shared industry costs, along with carrier-specific costs directly
    related to thousands-block number pooling, would be subject to an
    exclusively federal carrier-specific cost recovery mechanism to be
    established in a subsequent order.[^58] Finally, the Commission
    concluded that costs incurred by carriers to meet state-mandated
    thousands-block number pooling are intrastate costs and should be
    recovered under state cost recovery mechanisms.[^59]

25. In this *Third Report and Order*, we direct states implementing
    thousands-block number pooling under delegated authority to commence
    cost recovery actions for state-mandated thousands-block number
    pooling trials. We applaud the efforts that state commissions have
    made in implementing pooling trials within their respective
    jurisdictions, and we believe that the costs should be covered
    within those jurisdictions that have enjoyed the benefits of such
    trials. On the other hand, we believe that national cost recovery is
    appropriate when thousands-block number pooling is extended
    nationwide. We also conclude that many of the costs associated with
    thousands-block number pooling are ordinary costs for which no
    additional or special recovery is appropriate. We, therefore,
    establish a federal cost recovery mechanism under which price cap
    LECs may recover their extraordinary carrier-specific costs directly
    related to thousands-block number pooling through an exogenous
    adjustment to access charges. Rate of return carriers will recover
    their costs in their interstate access charges in the ordinary
    course. We permit carriers not subject to rate regulation to recover
    these costs in any lawful manner. Further, because thousands-block
    number pooling may actually reduce network costs, in order for
    carriers to qualify for the exogenous adjustment to access charges
    that we establish here, we require them to demonstrate that pooling
    results in a net cost increase rather than a cost reduction.
    Finally, we provide additional guidance as to how we will identify
    recoverable costs incurred "for the provision of" thousands-block
    number pooling.

### Federal/State Jurisdiction

26. To enable consumers to benefit from thousands-block number pooling
    as soon as feasible, the Commission granted states authority to
    implement thousands-block number pooling on an individual basis in
    advance of national implementation.[^60] In the *First Report and
    Order*, the Commission determined, however, that national
    thousands-block number pooling cost recovery could not begin until
    national implementation occurs.[^61] Accordingly, the Commission
    determined that states exercising delegated authority over number
    pooling must develop their own cost recovery mechanisms.[^62]
    Development and implementation of state cost recovery is necessary
    to ensure that carriers recover the costs of advance implementation
    of thousands-block number pooling attributable to the state
    jurisdiction.[^63] These individual cost recovery schemes will
    transition to the national cost recovery plan, on a forward-looking
    basis, when the latter becomes effective.[^64] Some commenters
    complain that no states have established cost recovery mechanisms at
    the state level and that states generally have been reluctant to do
    so.[^65] Some argue that state costs should be folded into national
    costs and all thousands-block number pooling costs should be
    recovered in the federal jurisdiction.[^66]

27. We decline to revisit the Commission's prior determination on this
    issue.[^67] We expressly reject SBC's proposal to include its state
    pooling costs in the federal recovery mechanism;[^68] we believe
    that the entire nation should not be required to bear costs incurred
    for the benefit of a particular state. In the past, the Commission
    has urged state commissions to follow the "road map" provided in the
    *First Report and Order* regarding cost recovery for thousands-block
    number pooling.[^69] To the extent that states were awaiting
    additional guidance on a specific cost recovery mechanism, they may
    now follow the blueprint for cost recovery that we lay out here and
    in our prior orders, should they so choose.

28. We now direct states that have exercised delegated authority and
    implemented thousands‑block number pooling to likewise commence cost
    recovery procedures for these state‑specific costs. We agree with
    BellSouth that any state that has ordered implementation of pooling
    in advance of the national rollout is required to implement a cost
    recovery scheme.[^70] In our orders delegating authority to the
    state commissions to institute thousands-block number pooling
    trials, we have reminded the states to ensure that the shared costs
    of thousands-block number pooling are borne and that the
    carrier-specific costs of thousands-block number pooling are
    recovered on a competitively neutral basis in accordance with
    Section 251(e)(2) of the Act.[^71] If, after reviewing carrier cost
    submissions, states determine in accordance with Section 251(e)(2)
    and the Commission's analysis here and in the *First Report and
    Order* that carriers have incurred little or no recoverable
    carrier-specific costs directly related to state thousands-block
    number pooling trials (i.e., incremental costs directly attributable
    to thousands-block number pooling), they should make affirmative
    findings to that effect.

29. Carriers maintain that the bulk of their costs attributable to
    thousands-block number pooling are incurred on a regional, rather
    than a state-specific, level and thus they are uncertain how to
    allocate costs between the federal and the state jurisdiction.[^72]
    When carriers have incurred costs directly related to
    thousands-block number pooling at the state level prior to the
    implementation of national thousands-block pooling, the advancement
    costs of state-specific deployment should be attributed to the state
    jurisdiction.[^73] In other words, carrier-specific costs directly
    related to number pooling that are incurred for national
    implementation of thousands-block number pooling should be
    recoverable through the federal mechanism, but any costs
    attributable to advance deployment at the state level will be
    subject to state recovery mechanisms. Advancement costs should be
    allocated among study areas according to normal accounting
    procedures and assigned directly to the state jurisdiction.

### Recovery of Shared Industry and Direct Carrier-Specific Costs

#### Background

30. In the *Notice*, the Commission tentatively concluded that ILECs
    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 their costs through other cost recovery
    mechanisms.[^74] The Commission sought comment on how price cap
    carriers should be permitted to recover the costs of thousands-block
    number pooling implementation, particularly whether price cap
    carriers should be permitted to treat exogenously any of the
    thousands-block number pooling implementation cost categories.[^75]
    The Commission also sought comment on whether these costs should be
    placed in a new price cap basket or, alternatively, in an existing
    basket.[^76] The Commission tentatively concluded that carriers not
    subject to rate-of-return or price cap regulation should recover
    their carrier-specific costs directly related to thousands-block
    number pooling implementation in any lawful manner consistent with
    their obligations under the Act.[^77] The Commission sought comment
    on these tentative conclusions and asked whether they meet section
    251(e)(2)'s requirement that numbering administration costs must be
    borne on a competitively neutral basis.[^78] To facilitate its
    determination, in the *First Report and Order*, the Commission
    requested additional cost information, including comment and cost
    studies quantifying the shared industry and direct carrier-specific
    cost of thousands-block number pooling.[^79] The Commission also
    sought information on the cost savings that would be achieved
    through thousands-block number as opposed to the frequent area code
    changes that result from current numbering practices.[^80] In the
    *Second Report and Order,* the Commission renewed this request for
    further comment and data.[^81]

31. Some parties argue that we should not establish an explicit cost
    recovery mechanism because numbering costs are an ongoing cost of
    doing business for which recovery is inappropriate.[^82] Some
    commenters support the tentative decision to permit thousands-block
    number pooling cost recovery through access charges.[^83] Others
    argue that, like LNP, thousands-block number pooling is not an
    access-related service, and therefore it would not be competitively
    neutral to permit recovery of thousands-block number pooling costs
    through access charges.[^84] They argue that ILEC recovery through
    access charges would distort the market for interstate access
    services, disadvantage purchasers of access services, and cause
    implicit subsidies, which is contrary to the statutory mandate that
    subsidies be explicit.[^85] Some parties urge us to model our
    thousands-block number pooling cost recovery mechanism on the LNP
    cost recovery model by increasing the LNP end-user charge or
    extending it for a limited period of time.[^86] US West argues that
    federal cost recovery should be divided into two parts: (a)
    nonrecurring costs for developing and implementing pooling should be
    recovered through an end-user surcharge and (b) recurring costs
    should be recovered through a charge added to the existing
    subscriber line charge (SLC) that results from price caps.[^87]
    Other parties, however, oppose any charge.[^88]

#### Discussion

32. For the reasons discussed in the following paragraphs, we will allow
    but not require ILECs subject to rate-of-return or price cap
    regulation to recover their carrier-specific costs directly related
    to thousands-block number pooling implementation through existing
    cost recovery mechanisms of rate-of-return or price cap adjustments.
    We also conclude, as with LNP, that carriers not subject to rate
    regulation, such as CLECs and CMRS providers, may recover their
    carrier-specific costs directly related to implementation of
    thousands-block number pooling in any lawful manner consistent with
    their obligations under the Act.[^89]

33. *Characterization of Number Pooling Costs*. Despite the urging of
    many commenters, we resist imposing another direct charge on
    end-users. In the *LNP* *Third Report and Order*, the Commission
    chose not to include LNP costs in access charges because LNP is not
    an access-related service, and instead imposed a direct end-user
    charge.[^90] The Commission therefore found that recovering LNP
    costs through access charges would be inappropriate and would not be
    competitively neutral.[^91] With respect to thousands-block number
    pooling, however, we find the opposite to be true. Although
    thousands-block number pooling and LNP utilize the same LRN
    architecture,[^92] we find that because they are very different
    types of services, different types of recovery are appropriate.

34. We are led to the view that numbering administration is inherently
    access-related by the same reasoning that led us to conclude that
    LNP was *not* access-related. LNP was an entirely new service and
    performed no telephone network function that would benefit ILECs. It
    was implemented for the sole purpose of making it easier for
    subscribers to change carriers. Numbering administration, on the
    other hand, is a basic telephone network function. IXCs would not be
    able to route calls from their subscribers without a numbering
    system.[^93] Thousands-block number pooling is thus different from
    LNP because it is, essentially, an enhancement of existing numbering
    administration procedures designed to extend the life of the
    existing numbering system.[^94] Treating pooling as an
    access-related service is thus entirely appropriate. Access charges
    are the means by which access customers share in the costs of the
    telephone network,[^95] and all carriers and subscribers will
    benefit from national thousands-block number pooling to the extent
    that it postpones or avoids area code relief and ultimately the
    replacement of the existing NANP.[^96]

35. Characterizing pooling costs as access-related and permitting
    recovery of the extraordinary costs of thousands-block number
    pooling accordingly is consistent with the statutory mandate of
    competitive neutrality. In the *LNP Third Report and Order*, the
    Commission noted that, in evaluating the costs and rates of
    telecommunications services, the Commission ordinarily applies
    principles of cost causation under which the purchaser of a service
    pays at least the incremental cost of providing that service.[^97]
    The Commission found that following ordinary cost causation
    principles for assigning the costs of LNP would affect the ability
    of carriers to compete because LNP costs arise only when subscribers
    change carriers.[^98] At least initially, the vast bulk of such
    changes would occur as entrants win incumbents' customers. Imposing
    the bulk of the costs of LNP on new entrants would have contradicted
    the purpose of the statutory requirement for LNP, which was to make
    telephone markets more competitive.[^99] For this reason, in the
    case of LNP, departure from ordinary cost causation principles was
    necessary.[^100]

36. In the case of thousands-block number pooling, it is not clear who
    is the "cost causer." The need for pooling results from
    extraordinary growth of subscribership and the provision of new
    services in recent years, as well as the entry of new carriers that
    require blocks of numbers in each rate center.[^101] These factors
    have combined to make space in the number spectrum scarce. All
    carriers that provide numbers to subscribers have contributed to the
    number exhaust problem, regardless of whether they began using the
    numbers long ago or recently. All carriers can contribute to
    resolving the exhaust problem by using numbers more efficiently, in
    part through number conservation measures such as thousands-block
    number pooling. In this context, thousands-block number pooling is
    simply an enhancement to the previous numbering administration plan
    that facilitates more efficient coordination among all carriers, and
    thus there is no "cost causer" in the traditional sense.

37. *Recoverable Costs*. This same reasoning informs our analysis of the
    kind of costs for which carriers may seek recovery. We agree with
    those commenters that maintain that the costs of numbering
    administration are generally and appropriately treated as an
    ordinary cost of doing business.[^102] The recent growth in demand
    for number resources have required that ILECs and other carriers
    implement number conservation and numbering management practices,
    for example, reusing numbers assigned to former subscribers, area
    code splits, and overlays. We have considered the costs of these
    numbering administration measures to be ordinary LEC administrative
    functions that are recovered in LEC rates generally.[^103] Under
    price caps, they are usually considered normal network upgrades that
    do not qualify for extraordinary recovery (*i.e.*, through an
    exogenous adjustment to the price cap formula). Under
    rate-of-return, an adjustment was granted only through the normal
    review process, that is, upon a showing by the carrier that it would
    not otherwise earn its authorized rate-of-return. This means that,
    in principle, recovery of the costs of numbering administration is
    already provided for in LEC compensation.

38. Thus, the rationale that supported extraordinary cost recovery for
    LNP implementation does not support such recovery for
    thousands-block number pooling. That is, LNP was a new service that
    did not benefit local exchange operations, but instead made it
    easier for subscribers to change carriers. In contrast,
    thousands-block number pooling is, in principle, an enhancement of
    existing numbering administration procedures, the costs of which are
    already being recovered through existing mechanisms.[^104] However,
    because the Commission has mandated thousands-block number pooling
    as a national numbering resource optimization strategy, increased
    costs, if any, associated with thousands-block number pooling are
    distinguishable from those associated with NPA relief. Therefore, we
    conclude that a very narrow approach to thousands-block number
    pooling recovery is appropriate, and that extraordinary recovery
    should be granted only for extraordinary implementation costs.
    Because access charges are intended to recover a portion of
    telephone network costs, including the extraordinary costs of number
    pooling and permitting recovery of these extraordinary costs in
    access charges as we would any other cost of administration does not
    constitute a subsidy, implicit or explicit. More specific guidance
    as to how these extraordinary costs are to be identified is provided
    in section 3 below.

39. *Recovery Methodology*. Price cap carriers may recover extraordinary
    costs as follows. Under the price cap rules, extraordinary cost
    increases that result from mandates of this Commission may result in
    an exogenous increase in price cap ceilings that apply to access
    charges.[^105] Thus, any appropriate adjustment for price cap
    carriers should be made in this manner.[^106] The extraordinary
    costs of thousands-block number pooling will be assigned to the
    common line basket because they are most closely associated with
    lines. Because recovery for numbering administration expenses is
    already included in basic LEC compensation, however, LECs seeking
    extraordinary recovery of thousands-block number pooling costs in
    the form of an exogenous adjustment to their price cap formula must
    overcome a rebuttable presumption that no additional recovery is
    justified.

40. Moreover, in order to qualify for an exogenous upward adjustment,
    carriers must also demonstrate that thousands-block number pooling
    results in a net cost increase rather than a cost reduction. Unlike
    other mandates of the Commission, thousands-block number pooling may
    reduce network costs. Some commenters argued that savings associated
    with thousands-block number pooling are speculative or *de
    minimus*.[^107] Others argue that implementation of thousands-block
    number pooling will save substantial costs over current area code
    relief practices and could result in a cost savings.[^108] In the
    absence of carrier-specific evidence, we do not endorse either line
    of argument. However, as the Commission has already observed, to the
    extent that thousands-block number pooling postpones or avoids area
    code relief and ultimately the replacement of the existing NANP, all
    carriers and subscribers will benefit.[^109] To qualify for an
    exogenous adjustment, carriers must show that costs for which
    extraordinary treatment is sought exceed the costs that would have
    been incurred had the carrier engaged in an area code split, overlay
    or other numbering relief that would otherwise have been required in
    the absence of pooling. Only extraordinary upward costs will be
    subject to direct assignment to interstate access for separations
    purposes under the federal cost recovery mechanism we have
    established in this Order.[^110] That is, consistent with historical
    treatment, ordinary costs will flow though jurisdictional
    separations in the normal manner.[^111]

41. Because the extraordinary federal recovery mechanism is intended to
    recover only the initial implementation costs of thousands‑block
    number pooling and, as in the case of LNP, pooling will ultimately
    become a normal network feature recovered through existing
    means,[^112] any exogenous increase in an ILEC\'s permitted price
    cap revenues should be reversed after those initial extraordinary
    costs have been recovered. Based upon our review of the carriers'
    filings, the cost of thousand-block number pooling implementation is
    anticipated to be substantially lower than LNP implementation. Thus,
    we believe the five‑year recovery period for LNP costs represents
    the longest reasonable period for recovering the cost of
    thousands‑block number pooling. On the other hand, a one‑time charge
    would create an inordinate financial hardship on access customers.
    We are thus required to establish some reasonable period of time,
    shorter than five years, over which these costs may be recovered.
    Given that an ILEC\'s unrecovered capital investment will be subject
    to an 11.25 percent after-tax return, however, a longer recovery
    period greatly increases the total cost, while a shorter recovery
    period would decrease total cost by decreasing the interest expense.
    Accordingly, we conclude that recovery should be spread over a
    two-year period. This is appropriate given the two-year national
    rollout period recently proposed.[^113] After this implementation
    period, thousands-block number pooling will have become a normal
    network function and recovery of ongoing costs will be through
    existing means. Price cap carriers should file tariffs reflecting
    recovery through an exogenous recovery adjustment for a two-year
    period beginning April 2, 2002. Setting the effective date at the
    beginning of the month following scheduled implementation will be
    administratively convenient both for carrier billing systems and for
    the Commission\'s tariff review. Capital costs should be amortized
    over the recovery period. Non-price cap carriers subject to rate
    regulation may include these costs in the common line category in
    their biennial rate adjustment.[^114]

### Identification of Costs 

42. In the *First Report and Order*, the Commission determined that
    shared industry costs, along with other carrier-specific costs
    directly related to thousands-block number pooling, will be subject
    to a federal carrier-specific cost recovery mechanism,[^115] which
    we have now established as discussed above. The amount and detail of
    the data provided in response to the Commission's request for
    estimates of the costs of thousands-block number pooling, however,
    did not adequately reveal the amount and/or magnitude of such costs.
    This made selection of the appropriate cost recovery mechanism
    difficult.[^116] Accordingly, the Commission again requested cost
    information.[^117] Ultimately, several carriers filed cost
    studies.[^118] Our preliminary review of these initial cost studies
    indicates that some carriers may have included costs that are
    inappropriate under the test for extraordinary recovery that we
    established in the *First Report and Order*. Some of the cost items
    included are very similar to cost claims rejected in the *LNP Tariff
    Investigation Orders*.[^119] Accordingly, we briefly explain how we
    will identify recoverable costs incurred "for the provision of"
    thousands-block number pooling.

43. In the *First Report and Order*, the Commission concluded that the
    same strict standards applied to evaluate claimed costs of
    implementing LNP will also apply to thousands-block number
    pooling.[^120] Thus, under these standards, to be eligible for the
    extraordinary recovery we establish above, thousands-block number
    pooling costs must satisfy each of three criteria identified in the
    LNP proceedings. First, only costs that would not have been incurred
    "but for" thousands-block number pooling are eligible for
    recovery.[^121] Second, only costs incurred "for the provision of"
    thousands-block number pooling are eligible for recovery.[^122]
    Finally, only "new" costs are eligible for recovery.[^123] To be
    eligible for extraordinary recovery, carriers' thousands-block
    number pooling shared industry and carrier-specific costs directly
    related to thousands-block number pooling must satisfy all three of
    these criteria.[^124] Through the adoption of the LNP three-pronged
    test, the Commission sought both to prevent the overrecovery of
    thousands-block number pooling and number portability costs[^125]
    and to prevent the recovery of costs not directly related to
    thousands-block number pooling.[^126]

44. The first two criteria shall be interpreted as follows. Only costs
    that were incurred "for the provision of" thousands-block number
    pooling are eligible for recovery through this extraordinary
    mechanism, but these must also be costs that would not have been
    incurred "but for" thousands-block number pooling.[^127] This means
    that only the demonstrably incremental costs of thousands-block
    number pooling may be recovered.[^128] The Commission adopted a
    narrow definition of the phrase "for the provision of" in the LNP
    proceedings. The only eligible LNP costs were the "costs carriers
    incur specifically in the provision of number portability services,
    such as for the querying of calls and the porting of telephone
    numbers from one carrier to another."[^129] Similarly, we conclude
    here that costs specifically incurred in the narrowly defined
    thousands-block pooling functions are those incurred specifically to
    identify, donate and receive blocks of pooled numbers, to create and
    populate the regional databases and carriers' local copies of these
    databases, and to adapt the procedures for querying these databases
    and for routing calls so as to accommodate a number pooling
    environment. These findings are based on our review of the filed
    cost studies.[^130]

45. As with LNP, costs that carriers incur as an "incidental
    consequence" of thousands-block number pooling implementation are
    not incurred specifically in the provision of narrowly defined
    thousands-block pooling functions. Thus, costs incurred to adapt
    other systems to the presence of thousands-block number pooling are
    not incurred for the provision of thousands-block number pooling and
    are ineligible for recovery.[^131] Examples of such systems include
    those for maintenance, repair, billing and other functions not
    directly involved in the provision of thousands-block number
    pooling. These systems are not part of the provisioning of
    thousands-block number pooling. Similarly, costs incurred to
    facilitate the continued provision of other services in the presence
    of number pooling are an "incidental consequence" and are not
    eligible for recovery. For example, database-related costs such as
    those involving service control points (SCPs) that support services
    such as third-party billing or calling card calls are not eligible
    even though these costs would not have been incurred but for number
    pooling.

46. The third part of our test requires that thousands-block number
    pooling costs must also be "new" costs in order to qualify for
    recovery though the extraordinary mechanism. Costs incurred prior to
    the implementation of thousands-block number pooling are ineligible
    for recovery because they are embedded investments already subject
    to recovery through standard mechanisms. Thus, permitting recovery
    of these costs again through this extraordinary mechanism would
    amount to double recovery.[^132] Costs are not "new," and thus are
    ineligible for extraordinary treatment as thousands-block number
    pooling charges, if they previously were incurred, are already being
    recovered under ordinary recovery mechanisms, or are already being
    recovered thorough the number portability end-user charge or query
    charge.

# Waiver of Growth Numbering Resource requirements

## Reconsideration of Months-to-Exhaust Criteria

47. In the *First Report and Order*, the Commission mandated that
    carriers demonstrate that their inventory of numbering resources
    will exhaust within six months before obtaining additional numbering
    resources by completing a Months-to-Exhaust (MTE) Worksheet.[^133]
    Several carriers seek reconsideration of the MTE requirement.[^134]
    SBC recommends eliminating it, but maintaining the utilization
    requirement.[^135] Similarly, USTA argues that carriers should not
    be required to meet both the MTE and utilization requirements.[^136]
    USTA also suggests that if both the MTE and utilization requirements
    are retained, distinctions should be adopted between wireline and
    wireless carriers and pooling and non-pooling areas.[^137]

48. We reaffirm that the MTE requirement is an important tool to ensure
    that numbering resources are used efficiently and that carriers have
    an adequate supply of resources to serve customers.[^138] This
    requirement seeks to prevent carriers from carrying excessive
    inventories of numbering resources.[^139] To ensure that carriers
    request and receive numbering resources only when and where needed,
    carriers must continue to be required to demonstrate in the MTE
    calculation that they need numbering resources to provide services.
    The MTE requirement coupled with the utilization threshold
    requirement deters carriers from stockpiling excessive
    inventories.[^140] It also helps maintain a level playing field
    among carriers. We therefore reject USTA's suggestions to exempt
    certain carriers in certain areas from the MTE requirement.[^141] We
    also reject the argument that the MTE should be calculated on a
    per-switch basis. We continue to believe that the rate center-based
    projection is appropriate because it encourages carriers to use
    number efficiently within a local calling area and because the
    utilization threshold is calculated on a rate-center basis.

49. In addition, we are not persuaded by the comments that suggest a MTE
    requirement is not necessary in light of the utilization threshold
    requirement. Both requirements serve important, but different,
    functions in promoting the Commission's numbering optimization
    policies: the MTE requirement deters stockpiling, and the
    utilization requirement helps ensure that carriers optimize the use
    of existing resources. None of the comments in this proceeding have
    persuasively demonstrated that the utilization requirement alone
    will also deter stockpiling. Accordingly, we decline to eliminate
    the MTE requirement.

## B. Reconsideration of Utilization Threshold and Formula {#b.-reconsideration-of-utilization-threshold-and-formula .unnumbered}

50. In addition to meeting the MTE requirement, carriers must meet a 60%
    minimum utilization threshold in order to obtain growth numbering
    resources.[^142] The threshold will increase by 5% annually
    commencing June 30, 2002, until it reaches 75% on June 30,
    2004.[^143] The utilization level is calculated by dividing all
    numbers assigned to end-users (numerator) by the total numbering
    resources assigned to that carrier (denominator) and multiplying the
    result by 100.[^144] Several carriers seek reconsideration of the
    utilization requirements and the method for calculating utilization.
    Specifically, some carriers request reconsideration of the
    Commission's decision to exclude intermediate numbers from the
    numerator.[^145] Cingular and BellSouth would also include reserved,
    aging, and administrative numbers in the numerator. Cingular also
    contends that if the utilization calculation is not modified, the
    Commission should significantly reduce the utilization threshold.

51. SBC and Verizon object to the Commission's decision to allow state
    commissions that had established higher utilization levels to retain
    the higher threshold.[^146] USTA and Verizon contend that the states
    that have authority to use higher utilization thresholds should
    either be allowed to continue to use their own formula for
    calculating those levels or be required to adjust the utilization
    threshold down to the federal 60% level.[^147] Verizon requests
    reconsideration of the utilization calculation or, alternatively,
    confirmation that resellers are subject to the utilization
    level.[^148] WorldCom requests reconsideration of the decision that
    pooling carriers must achieve the same utilization level as
    non-pooling carriers.[^149]

### Utilization Threshold

52. We decline to lower the utilization threshold established in the
    *Second Report and Order*. No carrier has demonstrated in the record
    that the utilization threshold is not readily achievable, or that
    the ability in most instances to serve customers is hampered because
    the threshold level is too high. To the contrary, utilization
    studies show that many carriers can meet or exceed the 60%
    utilization threshold.[^150] A lower utilization threshold, or no
    utilization threshold as some commenters suggest, provides little
    incentive for carriers to optimize the use of their existing
    inventories. The utilization threshold is thus an important tool in
    achieving our numbering resource optimization goals, and petitioners
    have made no convincing arguments for eliminating or lowering
    it.[^151]

53. We will allow state commission that have established utilization
    thresholds higher than 60% to continue to use higher thresholds. In
    deference to state commissions and to encourage their progress in
    dealing with numbering exhaust, we support these stricter
    requirements. Grandfathered utilization thresholds cannot exceed the
    national 75% ceiling and must be calculated in the manner
    established in the *First Report and Order*.[^152] We clarify,
    however, that states may lower grandfathered utilization levels to
    compensate for having to use the federal utilization methodology. We
    are satisfied that carriers that need additional numbering resources
    to serve their customers before they are able to meet the required
    utilization threshold have sufficient redress at both the state and
    federal level.[^153] Accordingly, we decline to eliminate the
    grandfathered utilization levels.

### Utilization Formula

54. Previously, the Commission denied requests to reconsider the manner
    in which the utilization level is calculated.[^154] The petitioners
    present no arguments in support of their renewed request to change
    the calculation that have not already been rejected. The Commission
    previously found unpersuasive, and therefore rejected, arguments
    that administrative, aging, intermediate, and reserved numbers
    should be included in the numerator or that the utilization
    threshold should otherwise be reduced.[^155] The Commission
    explained that basing the utilization calculation on assigned
    numbers is the appropriate measure, because it provides a more
    accurate representation of the percentage of numbers being used to
    serve customers. We continue to believe that this is the proper
    approach for furthering our numbering optimization goals.[^156] We
    reaffirm that the utilization threshold should be calculated by
    dividing assigned numbers by the total numbering resources assigned
    to the carrier multiplied by 100.

### Applicability of Utilization Threshold to Pooling Carriers

55. In the *Second Report and Order*, the Commission determined that the
    utilization threshold should be applied to pooling carriers.[^157]
    Encouraged by the results of pooling trials with utilization
    thresholds, the Commission concluded that the rationale for applying
    the utilization threshold in a non-pooling environment applies
    equally in a pooling environment.[^158] WorldCom seeks
    reconsideration of the Commission's extension of the utilization
    threshold to pooling carriers, arguing that there is a no record
    basis for establishing a utilization threshold for pooling
    carriers.[^159]

56. Requiring all carriers to meet the utilization threshold helps
    ensure that requests for additional numbering resources are
    needs-based. It furthers our numbering resource optimization
    policies by ensuring that all carriers retain only the numbers that
    they need in their inventories. We conclude that exempting pooling
    carriers from the utilization requirement will undermine the
    efficiencies that we have achieved by requiring non-pooling carriers
    to meet a utilization threshold. The need for a utilization
    threshold is especially present in large metropolitan areas where
    the demand for numbering resources is the greatest. Utilization
    thresholds provide an objective measure of determining when carriers
    are in need of additional numbering resources, and they provide a
    competitively neutral means for assigning numbering resources when
    and where needed. Accordingly, we affirm that the utilization
    threshold is appropriate for pooling carriers.

## Safety Valve

### 1. Background {#background-2 .unnumbered}

57. In the *Second Further Notice of Proposed Rulemaking*, the
    Commission sought 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. Specifically, the Commission sought
    empirical data on the extent to which this problem exists, possible
    solutions (e.g., intra-company and intra-rate center pooling or
    porting of unassigned numbers among switches), and comment on
    whether the NANPA or state commissions should be given the authority
    to decide requests for waiver in certain narrowly defined instances.

58. The Commission noted that certain conditions might prevent carriers
    from meeting the rate center-based utilization threshold when they
    actually need additional numbers.[^160] These conditions might
    include situations where a carrier has multiple switches within a
    rate center but it is unable to readily share numbering resources
    among those switches.[^161] In addition, some commenters suggested
    that a safety valve may be warranted where a carrier is unable to
    meet the utilization threshold because it has a large block of
    intermediate numbers that must be made available to other carriers
    and are unavailable for use by the carrier to provide service to its
    customers.[^162]

59. Most carriers support the use of a safety valve mechanism,
    particularly where a new switch is put into service to increase
    capacity in a given rate center.[^163] Other carriers support use of
    a safety valve when the growth requirements cannot be met and
    numbering resources are needed to meet a specific customer
    request.[^164] In contrast, Cox opposes an explicit safety valve for
    utilization waivers.[^165] It argues that a safety valve runs
    counter to the Commission's number usage and assignment goals and
    may become the rule rather than the exception.[^166] None of the
    commenters provided empirical data on the extent to which carriers
    are unable to comply with the growth numbering resource requirements
    and yet need numbering resources in order to serve customers.[^167]

60. The state commissions urge caution in creating a safety valve
    mechanism, and note that it should be applied only in exceptional
    circumstances.[^168] The Pennsylvania PUC suggests that state
    commissions should have the flexibility to grant waivers within the
    context of a nationally mandated utilization threshold.[^169]

### 2. Discussion {#discussion-1 .unnumbered}

61. We agree with the commenting parties that a safety valve mechanism
    should be established, and we delegate authority to state
    commissions to hear claims that a safety valve should be applied
    when the NANPA or Pooling Administrator denies a specific request
    for numbering resources.[^170] State commissions should only apply a
    safety valve mechanism as a last resort and, to the extent possible,
    use it as a stop gap measure to enable carriers in need of
    additional numbering resources to continue to serve their customers.
    We adopt one specific safety valve to address the numbering resource
    requirements of carriers experiencing rapid growth in a given rate
    area. We also clarify that states may grant requests by carriers
    that receive a specific customer request for numbering resources
    that exceeds their available inventory. Finally, we give states some
    flexibility to direct the NANPA or Pooling Administrator to assign
    additional numbering resources to carriers that have demonstrated a
    verifiable need for additional numbering resources outside of these
    specifically enumerated instances.

62. We share Cox's concern that the safety valve mechanism not be used
    to circumvent our growth resources requirements. When applying the
    safety valve, state commissions must take into consideration the
    extent to which the carrier has used available numbering resource
    optimization strategies, including intra-company porting. Carriers
    should pursue all available measures before applying for a "safety
    valve" waiver. The burden is on the carrier requesting application
    of the safety valve to demonstrate that deviation from the growth
    requirements is warranted. We reject Qwest's suggestion that
    carriers need only certify that they have met the safety valve
    parameters. As discussed in the prior orders, self-certification
    defeats the purpose of establishing needs-based tests.[^171]

63. We establish a safety valve to ensure that carriers experiencing
    rapid growth in a given market will be able to meet customer demand.
    States may use this safety valve to grant requests from carriers
    that demonstrate the following: 1) the carrier will exhaust its
    numbering resources in a market or rate area within three months (in
    lieu of the 6 months-to-exhaust requirement); and 2) projected
    growth is based on the carrier's actual growth in the market or rate
    area, or on the carrier's actual growth in a reasonably comparable
    market, but only if that projected growth varies no more than 15
    percent from historical growth in the relevant market.

64. We also agree with WinStar that a carrier should be able to get
    additional numbering resources when there is a verifiable need due
    to the carrier's inability to satisfy a specific customer
    request.[^172] We therefore clarify that states may also grant
    relief if a carrier demonstrates that it has received a customer
    request for numbering resources in a given rate center that it
    cannot meet with its current inventory. Carriers may demonstrate
    such a need by providing the state with documentation of the
    customer request and current proof of utilization in the rate
    center. States may not accommodate requests for specific numbers
    (i.e., vanity numbers), but may grant requests for customers seeking
    contiguous blocks of numbers. Any numbering resources granted for
    this reason may be initially activated only to serve the requesting
    customer for whom the application was made. If the customer request
    is withdrawn or declined, the requesting carrier must return the
    numbering resources to the NANPA or Pooling Administrator, and may
    not retain the numbering resources to serve other customers without
    first meeting our growth numbering resource requirements.

65. Additionally, we do not wish to foster practices that encourage
    carriers to use numbering resources in a manner that segments
    service offerings or customer classes (e.g., using separate switches
    and blocks of numbering resources for specific services or customer
    classes). We find that such practices are inconsistent with our
    numbering resource optimization goals. Although new numbering
    resources are used by carriers to activate new switches, we
    encourage carriers to pursue other alternatives, such as pooling, to
    activate those switches and to prevent numbering resources from
    becoming stranded as the result of installing multiple switches in
    the same rate center. The safety valve mechanism should be narrowly
    applied to meet specific customer requests or to meet a carrier's
    immediate numbering needs. We nevertheless will allow states to
    consider requests from carriers with multiple switches in a given
    rate center to determine whether relief is warranted on a
    case-by-case basis.

66. Finally, we recognize that in many instances, the failure to address
    a request for additional numbering resources can impair a carrier's
    ability to stay in or expand business. We therefore direct states to
    act on carrier requests for a safety valve as expeditiously as
    possible. Although we do not establish a specific time limit for
    states to act on these requests, we believe that, in most instances,
    10 business days from receipt of a request that the state determines
    to be sufficiently detailed and complete will be sufficient time to
    review and act upon safety valve requests. If a state does not reach
    a decision on a safety valve request within a reasonable timeframe,
    carriers may submit such requests to the Commission for resolution.
    In addition, carriers may appeal to the Commission safety valve
    decisions made by states, and we delegate authority to the Common
    Carrier Bureau to review such petitions as expeditiously a possible.

# Service-specific and technology-specific area code overlays

67. In the *Second Report and Order*, the Commission decided to revisit
    the prohibition against service-specific and technology-specific
    overlays (collectively specialized overlays or SOs).[^173] In this
    Order, we grant, in part, the petitions of California, Connecticut,
    Indiana, Massachusetts, Ohio, and Pennsylvania by lifting the ban on
    SOs, and will allow state commissions seeking to implement SOs to
    request delegated authority to do so on a case-by-case basis.[^174]
    We decline, at this time, to address the merits of the state
    petitions seeking specific authority to implement SOs, but invite
    these states and others to supplement their petitions or seek
    delegated authority to implement SOs in accordance with the criteria
    outlined below.[^175]

68. *Background*. In 1996, the Commission rejected a wireless-only
    overlay plan for the 708 NPA proposed by Ameritech after determining
    that the plan was unreasonably discriminatory and was an unjust and
    unreasonable practice in violation of sections 202(a) and 201(b) of
    the Act.[^176] In the *Local Competition Second Report and Order*,
    the Commission applied principles set forth in the *Ameritech
    Order*[^177] to prohibit SOs, reiterating that such plans would be
    unreasonably discriminatory and unduly inhibit competition.[^178] In
    1999, however, the Commission decided to reconsider whether to
    modify or lift the prohibition on SOs, based on the increased
    urgency of the numbering crisis and the broader issues raised in the
    *Numbering Resource Optimization* proceeding.[^179] In the *Notice*,
    the Commission sought comment on whether to consider exceptions to
    the prohibition on a case-by-case basis or to adopt general
    guidelines, and whether requests for SOs should be addressed at the
    federal level or whether state commissions should have authority to
    implement SOs applying federal guidelines.[^180] The issue was
    revisited in the *Second Report and Order*, which noted that
    commenters in response to the *Notice* argued that changes in the
    use of numbering resources warranted reconsideration of this
    ban.[^181] The Commission also sought comment on a proposal by the
    Joint Wireless Commenters (JWC) to adopt a framework for allowing
    transitional SOs subject to certain conditions.[^182]

69. Although most commenters appear to presume that any SO approved by
    the Commission would be applicable only to wireless and paging
    providers, we do not limit our discussion of SOs to those carriers.
    SOs may also include technologies and services other than or in
    addition to wireless services. For example, a service-specific
    overlay could include services that generally do not require numbers
    from a specific geographic area (e.g., some data services, automatic
    teller machines (ATMs), and unified messaging services), or a
    technology-specific overlay could include broader groups of
    technologies (e.g., non-pooling carriers). We therefore address SOs
    in this broader context.

70. *Discussion.* A number of commenters favor lifting the ban on
    SOs,[^183] arguing, among other things, that the life of existing
    area codes used by pooling carriers could be prolonged by creating
    SOs for exclusive assignment to non-pooling service providers.[^184]
    Other commenters oppose such a measure, because they believe that
    SOs are discriminatory.[^185] Moreover, they contend that SOs would
    not improve number efficiency and would accelerate exhaust of the
    NANP by dividing demand for numbers by service or technology.[^186]
    Most commenters that oppose lifting the ban, however, seem more
    amenable to SOs that are transitional in nature.[^187] For example,
    some wireless carriers state that in areas where an area code is in
    jeopardy, a technology-specific overlay could be created for use by
    non-pooling carriers and then converted to an all-services overlay
    when such carriers become pooling-capable. Thus, at least in the
    context of transitional SOs, earlier concerns raised over the
    potential discriminatory effects of SOs have been tempered by
    carriers' concerns over the availability of numbering resources in
    certain areas, particularly where state commissions have postponed
    needed area code relief.

71. Despite an apparent shift in views on the potential discriminatory
    effects of SOs, we continue to be concerned that placing specific
    services and technologies in SOs could have an adverse impact on the
    affected customers and service providers.[^188] For example,
    consumers may be dissuaded from signing up for wireless service if
    they do not have access to numbers in the "incumbent" area code. In
    the *Ameritech Order*, we considered whether, in light of such
    discriminatory effects, the different terms or conditions as applied
    to a specific group of service providers were "just and reasonable
    under the circumstances."[^189] At that time, we found that they
    were not.

72. We now believe, however, that circumstances have changed since the
    *Ameritech Order* that justify lifting the blanket prohibition on
    SOs and, instead, we will consider SO proposals on a case-by-case
    basis. First, carriers in 1996 were not faced with the exigent
    numbering shortages that exist today. Thus, the benefits of making
    more numbering resources available through SOs may, in some
    circumstances, outweigh their potential discriminatory effect.
    Second, in recent years, there has been a proliferation of new
    telecommunications services that use vast amounts of numbering
    resources but do not necessarily need numbering resources from a
    particular geographic area.[^190] If, through the use of
    service-specific overlays for such services, geographic identity for
    some areas can be preserved, that too might outweigh any potential
    discrimination.

73. We disagree with Sprint that re-examination of the ban on SOs is not
    justified by changes in the use of numbering resources.[^191] We
    find that, given the potential for premature NANP exhaust, we should
    examine all options, including SOs, which may be able to provide
    some form of relief to the numbering resource shortage. Thus, we can
    no longer fully embrace the notion that placing certain technologies
    and services in a separate overlay is necessarily *unreasonably*
    discriminatory, particularly if numbering resource optimization
    benefits are realized. We continue to focus on our goals of
    numbering use efficiency, nevertheless, and agree with commenters
    that in some cases, SOs may not promote number efficiency. We
    therefore set forth criteria below to provide some guidance to
    states on what types of proposals would likely merit our approval,
    and to help ensure that the numbering resource optimization benefits
    of any proposed SO are realized.

74. We have not pre-determined how the optimal SO would be structured,
    but believe that some SOs would be more likely to achieve our
    optimization goals than others. For example, as a general matter, we
    are extremely reluctant to consider permanent technology-specific
    overlays, because of the likelihood that numbering resources in the
    technology-specific overlay would lie fallow. Therefore, a
    technology-specific overlay that includes, for example, wireless and
    paging carriers, that is transitional in nature, that avoids
    take-backs, and that covers a sufficiently large geographic area
    such that the demand for numbers is substantial, would likely pass
    muster. We would also likely favor service-specific overlays that
    would include non-geographically sensitive services (such as data
    lines like those used for automatic teller machines or credit card
    approval, unified messaging services, or vehicle response systems
    such as OnStar) and that would require take-backs of such numbers
    from established area codes. Such service-specific overlays could
    even be permanent, to the extent that the demand for use of such
    numbers was sufficient to adequately utilize the service-specific
    overlay area code, which could be achieved if the geographic area
    covered by the service-specific overlay was sufficiently large. We
    emphasize that these examples are illustrative and not dispositive
    of any pending petition, since each area must be examined and
    evaluated on a case-by-case basis. Carriers should continue to work
    with the NANPA and state commissions to develop creative solutions
    to prevent premature exhaust of the NANP, including the possible use
    of service-specific overlays across multiple jurisdictions. We
    believe the NANC would be an appropriate forum for discussing such
    creative solutions.

## Benefits and Costs of SOs 

75. The only actual data we have on the potential benefits of SOs, from
    a numbering resource optimization perspective, come from the
    technology-specific overlay implemented in New York City by the New
    York Public Service Commission (New York Commission). The New York
    Commission implemented the 917 overlay in 1992, prior to the
    Commission's prohibition of SOs.[^192] Expecting exhaust of the 212
    NPA by 1993, the New York Commission adopted a plan to implement the
    917 overlay, under which new wireless and paging customers would
    receive numbers in the 917 NPA. Under that plan, existing paging
    customers were transitioned to the 917 NPA over a four-year period,
    and existing Bronx and Manhattan wireless customers were relocated
    to the 917 NPA over a six-year period. The plan also moved Bronx
    landline customers from the 212 NPA to the 718 NPA, and called for
    the inclusion of certain designated wireline services in the 917
    overlay at an unspecified point in time.[^193] By 1999, wireline
    customers were also receiving numbers from the 917 overlay.[^194]

76. As a result of this overlay plan, the 212 and 718 NPAs did not need
    relief again until 1999.[^195] The life of the 212 NPA was thus
    prolonged for six years beyond projected exhaust in part due to the
    implementation of the 917 technology-specific overlay. In addition,
    although the 917 NPA has now reached exhaust, it is currently
    estimated that the other area codes in New York City (646, 718,
    and 347) will last until the first quarter of 2006.[^196] Wireless
    customers in New York reportedly supported having wireless phones
    and pagers in their own code, which suggests that under some
    circumstances, the benefits of a specialized overlay may outweigh
    the potential discriminatory effects from a wireless consumer
    perspective.[^197] Furthermore, in New York City, the potentially
    discriminatory effects of take-backs[^198] on paging and wireless
    providers and customers were likely mitigated by the phased-in
    schedule, which allowed a gradual transfer of previously existing
    wireless and paging subscribers to the 917 SO.

77. The New York experience suggests that there may be circumstances in
    which SOs are beneficial because they prolong the life of the
    underlying area code by placing certain technologies and service
    providers into a separate area code,[^199] thereby easing the cost
    and inconvenience of frequent area code relief. SOs may also benefit
    consumers by facilitating the preservation of geographic identity
    for wireline customers in a particular area. Finally, and perhaps
    most significantly, SOs can make available additional resources to
    certain service providers that would otherwise be subject to
    rationing or other limitations on access to numbering resources
    because they operate in an area with thousands-block number pooling,
    but are not capable of participating in pooling.

78. On the other hand, SOs can also have significant costs associated
    with them. In the *Ameritech Order* and the *Local Competition
    Second Report and Order*, we recognized that Ameritech's proposed
    technology-specific overlay placed wireless and paging providers at
    a competitive disadvantage because it (1) excluded these providers
    from the underlying area code; (2) segregated these providers into a
    separate area code; and (3) required these providers and their
    customers to incur the cost and inconvenience of changing their
    numbers (*i.e.*, surrendering their numbers in the underlying area
    code and obtaining numbers from the new area code, also referred to
    as "take-backs"). We therefore must weigh the costs of allowing
    state commissions to implement SOs against the benefits to be
    realized.

79. We believe that, in some areas, SOs may offer a viable alternative
    to traditional forms of area code relief. We recognize the
    frustration experienced by state commissions that must choose the
    best form of area code relief, the frustration of carriers unable to
    obtain numbers due to delays in area code relief, and the
    frustration of consumers who must bear the cost and inconvenience of
    area code relief. We thus will review on a case-by-case basis, at
    least initially, each scenario to determine whether a proposed SO
    would likely result in numbering resource optimization in a given
    area.[^200] Accordingly, we lift the prohibition on SOs and will
    allow states to seek specific authority to implement SOs on a
    case-by-case basis.

## Criteria for SOs

80. As an initial matter, we emphasize that SOs are another form of area
    code relief available to state commissions in addition to
    all-services overlays, area code splits, and area code boundary
    realignments. As such, any delegated authority granted to state
    commissions to implement SOs will be limited to areas in which a
    state has properly determined that area code relief is needed. The
    effect of allowing SOs to be implemented in areas that are not
    nearing exhaust could be staggering, because of the potential for
    multiple requests for area codes over a short period of time. In
    direct contravention of our numbering resource optimization goals,
    this would lead to an acceleration of NANP exhaust. We also
    emphasize that SOs are numbering resource optimization measures;
    thus, states seeking to implement a SO must also demonstrate that
    the benefits will outweigh the costs of implementing the SO.

81. To provide further guidance to state commissions, we set forth the
    criteria that each request for delegated authority to implement a SO
    should address. This will enable us to examine the feasibility of
    SOs in a particular area, and determine whether the Commission's
    stated goals are likely to be met if the SO is implemented. As an
    initial matter, a state commission seeking to implement a SO should
    discuss why the numbering resource optimization benefits of the
    proposed SO would be superior to implementation of an all-services
    overlay. State commissions should also specifically address the
    following: (1) the technologies or services to be included in the
    SO; (2) the geographic area to be covered; (3) whether the SO will
    be transitional; (4) when the SO will be implemented and, if a
    transitional SO is proposed, when the SO will become an all-services
    overlay; (5) whether the SO will include take-backs; (6) whether
    there will be 10-digit dialing in the SO and the underlying area
    code(s); (7) whether the SO and underlying area code(s) will be
    subject to rationing; and (8) whether the SO will cover an area in
    which pooling is taking place.

### Technologies and Services

82. To provide any meaningful benefits, a SO should divert significant
    demand from the underlying area code to extend the life of that area
    code. We believe, for example, that in areas subject to
    thousands-block number pooling, non-pooling carriers could receive
    numbering resources from a SO to relieve demand on the underlying
    code. Moreover, we agree with commenters that SOs should initially
    include non-pooling providers, such as wireless and paging
    providers, as well as non-geographic-based service providers,[^201]
    who are also unable to participate in thousands-block number
    pooling. We specifically favor service-specific overlays that would
    include and retain non-geographic based services as a means to
    further reduce the demand in the underlying area code. State
    commissions seeking delegated authority to implement a SO should
    therefore provide specific information on which technologies and
    services will be placed in any proposed SO.

### Geographic Area

83. A number of commenters support expanded SOs, *i.e.*, SOs that cover
    multiple existing area codes.[^202] The Ohio Commission suggests
    that the SO could cover entire regions within a state. Other
    commenters believe, on the other hand, that SOs should conform to
    existing area code boundaries.[^203] The Connecticut Commission
    raises concerns about how expanded SOs would affect transition into
    an all-services overlay.[^204] We find that SOs that cover more than
    one area code are superior from a numbering resource optimization
    perspective because they would reduce the demand for numbers in
    multiple area codes, and the increased number of subscribers
    included in the SO would lead to better utilization of numbering
    resources in the SO NPA. We also believe that service-specific
    overlays that include non-geographic based services may be ideal,
    from a numbering resource optimization perspective, if implemented
    across a wide geographic area, including multiple states and
    encourage states to work together to explore this option. Because we
    agree with concerns raised regarding routing and rating issues,
    however, state commissions proposing expanded SOs should address
    specifically how they will resolve such issues, especially the
    rating and routing of calls placed between the underlying area codes
    and the SO NPA.

### Transitional SOs

84. As discussed in the *Second Report and Order*, the JWC provided a
    proposal to implement a framework for allowing SOs that would
    require a "transition" into an all-services overlay at a designated
    time. Recognizing the need for additional relief tools, we find that
    transitional overlays may provide some of the relief that proponents
    of SOs are seeking but limit the potentially discriminatory effects
    of creating a permanent SO. Moreover, because transitional SOs
    eventually include all providers, there is less danger of not being
    able eventually to utilize all of the numbers in a given SO NPA. We
    favor technology-specific overlays that are transitional primarily
    for this reason, and because they offer more flexibility, and thus
    more benefit. On the other hand, we favor service-specific overlays,
    particularly those that include non-geographic-based services, that
    are permanent in nature because they tend to preserve geographic
    identity. In addition, we note that there is significant support for
    transitional technology-specific overlays that are based on specific
    technologies, such as the ability to participate in thousands-block
    number pooling.[^205]

### When to Implement and Transition SOs

85. Some commenters submit that states should not be allowed to
    implement SOs when the underlying NPA is near jeopardy.[^206]
    BellSouth, for example, argues that the underlying NPA should have a
    life span of more than one year.[^207] Verizon supports prohibiting
    the use of SOs when to do so would postpone full area code relief;
    when they would be utilized in areas outside of the top 100 MSAs;
    and if they would be implemented after November 24, 2002.[^208] We
    believe that, to optimize their value, SOs should not be implemented
    when the underlying NPA has a projected life span of less than one
    year.[^209] For transitional SOs, this time frame should allow
    consumers to experience the benefits of the transitional overlay
    before it converts into an all-services overlay. At the same time,
    we do not want to encourage states to open new NPAs prematurely. If
    this occurred, SOs could accelerate NANP exhaust rather than
    alleviate it. Therefore, we will generally not grant authority to
    create SOs until the state commissions have determined, in
    accordance with our rules and orders, that area code relief is
    needed. This will enable states to take advantage of pooling and
    other numbering resource optimization measures, in addition to the
    SO, to extend the life of the underlying NPA.

86. In the case of transitional SOs, generally most commenters support
    transition to an all-services overlay when the underlying area code
    nears exhaust or when wireless carriers are able to participate in
    thousands-block number pooling.[^210] Regarding transitional SOs in
    which criteria other than pooling capability is used to determine
    which carriers are placed in the SO (e.g., a wireless only overlay),
    the exhaust trigger can conserve NPAs because, by making additional
    numbering resources available to those served by the underlying area
    code, additional area code relief can be delayed. It is likely that
    states would gain additional time to implement other numbering
    resource optimization measures, thereby potentially increasing the
    life of the underlying area code even further. If the pooling
    trigger is used, all transitional overlays would be scheduled to
    transition by November 24, 2002, the deadline for wireless carriers
    to pool. This deadline would, unlike the exhaust trigger, diminish
    the benefits of the transitional SOs, by, in effect, providing
    relief for the underlying area code prematurely. We therefore favor
    the exhaust trigger in cases where criteria other than pooling
    capability is used to determine which carriers are placed in the SO.

87. In the case of transitional SOs for non-pooling capable carriers, we
    find that there are arguments in favor of transitioning into an
    all-services overlay when carriers currently unable to participate
    in thousands-block number pooling become pooling capable. The
    benefits of number pooling are enhanced when a larger number of
    carriers are able to participate in pooling within an NPA, which
    diminishes the need to restrict access to the SO to a subset of
    users of numbering resources. At the same time, we recognize that
    because of the significant demand for wireless services in some
    areas, there are arguments that the effectiveness of some SOs can be
    increased if wireless carriers continue to be included in SOs even
    after they are able to participate in thousands-block number
    pooling.[^211] Therefore, if state commissions propose a
    transitional SO that segregates non-pooling carriers into the SO
    NPA, they bear the burden of demonstrating why the transition should
    not occur when wireless participation in pooling commences. State
    commissions should, in all instances, indicate which of these
    transition triggers they propose to use, and explain how the
    proposed transition mechanism meets our numbering resource
    optimization goals and equitably balances the interests of affected
    carriers and consumers in their proposal for transitioning SOs to
    all services overlays.

### Take-Backs 

88. Most commenters oppose mandatory take-backs,[^212] with several
    commenters arguing that take-backs are anti-competitive to those
    technologies and service providers that receive numbering resources
    from the SO NPA.[^213] Take-backs require certain providers to
    reprogram their equipment and change their customers' phone
    numbers.[^214] Thus, take-backs result in significant cost and
    inconvenience to those customers and their service providers that
    are required to relinquish their existing numbers and use numbering
    resources in the SO NPA. If take-backs were imposed in the context
    of a wireless services technology-specific overlay, for example, the
    costs would be particularly significant due to the large and rapidly
    growing number of wireless subscribers, particularly in major
    markets.[^215] We acknowledge, therefore, that take-backs have
    significant drawbacks and costs, which need to be considered in
    determining whether a SO should include take-backs.

89. We decline to impose a blanket prohibition against take-backs,
    however. In some instances, the use of take-backs may enhance the
    effectiveness of SOs, from a numbering resource optimization
    perspective, by freeing up numbering resources in the underlying
    area code. Take-backs could increase the life of the underlying NPA,
    which, in turn, would preserve the geographic identity of a given
    area. Conversely, creating SOs without freeing up numbering
    resources in the underlying area code may not provide meaningful
    benefits because the life of the underlying NPA would not likely be
    significantly prolonged.[^216] There may also be instances in which
    the impact of take-backs on consumers can be mitigated either
    through voluntary incentives for consumers to relinquish their
    numbers or by limiting take-backs to services or technologies in
    which the telephone number is not directly used by or even
    necessarily known to the customer.[^217]

90. Therefore, although we do not favor take-backs as a matter of
    policy, we do not completely rule out the possibility of states
    using take-backs under circumstances designed to mitigate their
    potential harmful effects. Specifically, we would likely favor
    service-specific overlays that include take-backs of
    non-geographic-based numbers, but we would likely oppose
    technology-specific overlays that would include take-backs of
    numbers that are geographically sensitive. To ensure that the costs
    and benefits of take-backs are given careful consideration, we will
    require state commissions proposing to use take-backs include a
    strong showing that the consumer and industry costs associated with
    take-backs are outweighed by the optimization benefits of the
    take-backs. In their petitions, state commissions seeking to use
    take-backs would have to specifically demonstrate that the negative
    effects of take-backs will be mitigated by the benefits in the
    particular area by showing, for example, that: (1) consumers,
    particularly subscribers that would be required to relinquish their
    telephone numbers, support such a measure;[^218] (2) the state will
    provide incentives for providers and their current customers to
    relinquish their numbers in the underlying area code; and (3) a
    phased-in approach will help ease the cost burden on customers and
    service providers.

### Ten-Digit Dialing

91. In the *Second Report and Order*, we asked commenters whether
    ten-digit dialing should be imposed for transitional SOs.[^219] The
    JWC proposed a waiver of ten-digit dialing until either the
    transitional SO transformed into an all-services overlay or November
    24, 2002. In response, most, but not all, commenters agree with
    JWC's proposal. CTIA, for example, states that any waiver of the
    ten-digit dialing requirement should cease when the pooling
    administrator receives NXX codes from the new NPA or when wireless
    pooling commences, whichever comes first.[^220] A number of state
    commissions do not support ten-digit dialing,[^221] and the
    Connecticut Commission only supports ten-digit dialing once
    competition is demonstrated between wireline and wireless providers
    and the transitional SO has been converted into an all-services
    overlay.[^222]

92. Because we continue to believe that ubiquitous ten-digit dialing
    when an overlay is implemented would maximize numbering resource
    optimization,[^223] we favor SO proposals that include ten-digit
    dialing in the SO NPA as well as the underlying area code, in the
    same manner that ten-digit dialing is required when all-services
    overlays are implemented. Mandatory ten-digit dialing, we believe,
    minimizes anti-competitive effects due to dialing disparities,
    which, in turn, avoids customer confusion.[^224] We, nevertheless,
    will not necessarily require ten-digit dialing with SOs at this
    time, at least not until we are better able to determine whether a
    temporary waiver of the ten-digit dialing requirement in any way
    increases the use and effectiveness of SOs. We emphasize that,
    although temporary waivers might be warranted, it is not likely that
    requests for permanent waiver of the ten-digit dialing requirement,
    especially after a transitional SO is expanded to include all
    services, will be granted. State commissions seeking a waiver of the
    ten-digit dialing requirement should clearly indicate when any
    requested waiver would terminate.

### Rationing

93. Rationing is a number conservation measure that limits the amount of
    numbering resources made available for allocation to carriers in a
    given area, in accordance with an industry-implemented or
    state-implemented rationing plan.[^225] Rationing may be implemented
    pursuant to a declaration by the NANPA that a jeopardy situation
    exists, which means that the underlying area code is projected to
    exhaust before the new area code is scheduled to be
    implemented.[^226] Some state commissions have been delegated
    authority to continue an established rationing plan for six months
    after the new area code is activated.[^227] A number of commenters
    agree with the JWC that rationing in the underlying area code should
    cease upon implementation of the transitional SO,[^228] and that
    rationing should not occur in the transitional SO once it is
    established.[^229] We find that any SO that achieves the purposes
    for which it is implemented (that is, the availability of numbering
    resources is increased for all carriers), should not need to be
    subject to rationing. Thus, we agree with commenters that neither
    the SO NPA nor the underlying area code(s) should be subject to
    rationing.

### Thousands-Block Number Pooling

94. Most commenters argue that SOs should only be implemented in areas
    where thousands-block number pooling has been implemented. We
    disagree. We encourage states to use the numbering optimization
    measures available to them, but for area codes that do not qualify
    for pooling, implementing a SO may still be a viable option,
    particularly if non-pooling providers possess a significant portion
    of the underlying area code's numbering resources. Thus, SOs will be
    allowed in non-pooling areas provided the state commissions can
    justify the SO based on the criteria set forth in this Order. In
    particular, we will closely scrutinize any plans for SOs in
    non-pooling area codes to ensure that number utilization is
    sufficiently high. Also, the Commission will look favorably upon
    petitions from state commissions pursuing other numbering
    optimization measures in the underlying area code, such as rate
    center consolidation and unassigned number porting, and recommends
    that such measures be noted in their petitions. We also clarify
    that, as with all-services overlays, pooling must be implemented in
    the SOs if it covers an area in which pooling is taking place.

# Other numbering resource optimization measures

## Audits 

### Enforcement

95. In the *Second Report and Order*, the Commission set forth a
    comprehensive audit program to verify carrier compliance with
    federal rules and orders and industry guidelines,[^230] and
    concluded that auditors in the Accounting Safeguards Division of the
    Common Carrier Bureau, or other Commission designated agents, would
    perform the audits.[^231] The Commission also stated 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.[^232]

96. In addition to our traditional enforcement tools, the Commission
    tentatively concluded that carriers that violate its 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, and sought comment on this
    tentative conclusion. It also sought comment on the process by which
    this additional remedy should be invoked; specifically, whether only
    the Commission should direct the NANPA or Pooling Administrator to
    withhold numbering resources.[^233]

97. We conclude that carriers that are audited and found to have
    violated our numbering requirements, or that fail to cooperate with
    the auditor to conduct either a "for cause" or random audit, may be
    denied numbering resources in appropriate cases. State and industry
    commenters generally support this conclusion.[^234] In their
    comments, state commissions indicate a growing need for additional
    penalties for, in particular, carriers that fail to file Numbering
    Resource Utilization Forecast (NRUF) data because they do not
    anticipate a need for numbering resources in the near future.[^235]
    Additional penalties may include reclamation of numbering resources,
    depending on the nature of the violation. By also reaching carriers
    that fail to cooperate with auditing efforts, we hope to increase
    the effectiveness of our auditing program.

98. We further conclude that, to invoke this additional remedy, only the
    Commission, specifically the Common Carrier Bureau and the
    Enforcement Bureau, shall direct the NANPA or National Pooling
    Administrator to withhold numbering resources from carriers for
    audit-related violations.[^236] We decline, at this time, to
    delegate authority to state commissions or the NANPA to determine
    when a carrier shall be liable under this provision, primarily to
    ensure that this remedy is invoked uniformly. We encourage state
    commissions and the NANPA to work with the Commission to identify
    violators and target them for enforcement. We also confine the
    authority to deny numbering resources to the Commission to limit the
    release of proprietary information contained in audit findings only
    to those entities that need it to determine compliance with the
    rules and audit procedures, and to determine liability.

### State Commissions' Authority to Conduct Audits

99. In the *Second Report and Order*, the Commission determined that the
    audit program would consist of "for cause" and random audits,
    performed by an auditor designated by the Common Carrier
    Bureau.[^237] Although the Commission recognized that a national
    program will provide uniformity in the way that audits are
    conducted, it also recognized that state commissions would benefit
    from having a role in conducting these carrier audits.[^238] The
    Commission therefore sought 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 *Second Further Notice*, and what
    parameters should apply to any such authority.[^239] In particular,
    commenters were asked to 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.[^240] In seeking comment on this
    issue, the Commission did not address state commissions' authority
    to perform audits under state law.[^241]

100. Comments by state commissions generally support giving authority to
     conduct audits in addition to, but not in lieu of, the national
     audit program.[^242] Many contend that state level and national
     level audit results could and should be shared, possibly by
     incorporating state results into a national audit and vice
     versa.[^243] Several industry commenters, on the other hand, do not
     support giving states authority in addition to or in lieu of the
     national audit program. AT&T, for example, argues that the audits
     conducted by the states would have the same objective as the
     national audit plan, thus negating any reason to empower more than
     one body.[^244] In addition, some industry commenters indicate that
     the Commission has already taken appropriate steps to ensure an
     adequate level of state participation in its audit program.[^245]

101. The Commission values input from the states and considers
     coordination with them to be vitally important to advancing our
     shared policy goals of administering numbering resources
     efficiently. We reaffirm that states continue to have authority to
     conduct audits to the extent permitted under state law. Moreover,
     in recognition that states can serve a valuable role in helping the
     Commission to monitor carriers' number use, we clarify that states
     may conduct audits, at their own expense, to determine whether a
     particular carrier is in compliance with the Commission's numbering
     rules to discharge their own responsibilities. For example, state
     audits that seek to gather information needed to facilitate area
     code relief decisions would be appropriate to the extent that the
     information sought is not available through another source, such as
     NRUF data reports.[^246] This ability, coupled with the states'
     right to request "for cause" audits under the national auditing
     program, should provide states with sufficient and effective tools
     for carrying out their area code relief responsibilities. We expect
     that state commissions will not conduct audits that are duplicative
     of our national audits or that request information readily
     available from other sources. This should alleviate concerns by the
     industry that state audits would serve the same purpose as
     Commission audits.[^247]

102. Pursuant to long-standing delegated authority, we expect the
     Commission audit staff to cooperate with state commissions by
     coordinating compliance and enforcement activities and sharing
     information gathered in the course of audits under the national
     audit program.[^248] We expect, for example, to share with the
     requesting state the audit results arising out of any "for cause"
     audits requested by a state commission. We encourage states
     believing audits are required in certain circumstances to request
     "for cause" audits by making a written request to the
     Commission.[^249]

### Petitions for Reconsideration and Clarification

103. On March 12, 2001, BellSouth, Qwest, Sprint and USTA each filed a
     Petition for Reconsideration and/or Clarification requesting that
     the Commission reconsider certain aspects of its decision requiring
     audits. First, Qwest requests that the Commission reconsider its
     decision to require random audits as part of its national audit
     program and that it give carriers the opportunity to rebut a case
     for a "for cause" audit.[^250] Second, BellSouth requests that the
     Commission reconsider its decision that all carriers share the
     costs incurred to conduct "for cause" audits.[^251] Similarly, USTA
     requests that audits should be paid for by carriers participating
     in the audits.[^252] Finally, Sprint requests clarification
     regarding state's independent authority under state law to conduct
     number utilization audits.[^253]

104. *Random Audits*. In the *Second Report and Order,* the Commission
     concluded that because "for cause" audits are conducted only if
     there are specific allegations of non-compliant or inappropriate
     conduct on the part of a carrier, carrier compliance with our rules
     and orders and applicable industry guidelines should also be
     monitored through the use of random audits.[^254] The Commission
     found that random audits, in conjunction with the use of "for
     cause" audits, would provide the audit program with more
     flexibility to accomplish the stated goals, and would serve as a
     strong deterrent.[^255] Qwest argues that including random audits
     as part of our audit program is unsound regulatory policy.[^256]
     Qwest explains that promulgating rules and expecting compliance is
     the general regulatory model that has worked for decades,[^257] and
     contends that it is simply unnecessary to promulgate rules then
     create regulation to monitor their enforcement.[^258]

105. We find Qwest's arguments unpersuasive. The auditing program was
     established not only to monitor, but also to identify and correct
     violations of our rules and orders and applicable industry
     guidelines. As noted in the *Second Report and Order*, the program
     can serve to provide a level of confidence in the accuracy of data
     reported by carriers;[^259] ensure that carriers are complying with
     our rules by serving as a deterrent against non-compliance;[^260]
     and 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.
     We therefore deny Qwest's petition, and retain random audits as
     part of our national audit program.

106. *Carrier Opportunity to Rebut.* The Commission concluded in the
     *Second Report and Order* that "for cause" audits may be initiated
     based on information drawn from a variety of sources.[^261]
     Specifically, the NANPA, the Pooling Administrator, or a state
     commission may make a written request to the Common Carrier Bureau
     to request a "for cause" audit.[^262] The request should state the
     reason for which a "for cause" audit is being requested and include
     documentation of the alleged anomaly, inconsistency, or violation
     of the Commission rules or orders or applicable industry
     guidelines.[^263] The audit staff will determine from the
     application whether a "for cause" audit is warranted.[^264] Qwest
     accurately points out that the discussion did not address a
     carrier's ability to rebut the *prima facie* case that would
     trigger an audit.[^265]

107. We clarify that, although not stated explicitly, the audit program
     does, in fact, allow carriers to respond to the allegations before
     any enforcement action is taken as a result of audit findings. We
     also clarify that requests for a "for cause" should be submitted to
     the Common Carrier Bureau and the Enforcement Bureau. Once the
     Bureaus have received a request for a "for cause" audit, the
     carrier will be notified of that request and be given up to 30 days
     to respond to the allegation(s). This notification may involve a
     data request from the Commission staff and the carrier's response
     may result in a decision not to proceed with the requested "for
     cause" audit. If the carrier's response indicates that the alleged
     violation exists but will be corrected, then the Commission staff
     can allow the carrier up to 60 days to comply before performing the
     audit. We note that the Common Carrier Bureau will issue a Public
     Notice providing additional information on the audit plan shortly.

108. Consistent with standard auditing practices, we expect that the
     audit process will afford carriers ample opportunity to present
     their views during the audit, even beyond commenting on an initial
     allegation or request to conduct a \'for cause\' audit. We direct
     state commissions conducting numbering related carrier audits, in
     accordance with the parameters set forth herein, to provide
     carriers the same opportunity to explain their views and/or rebut
     audit findings. Finally, we note that an audit report itself does
     not constitute a legal determination of compliance or
     noncompliance. That determination is reserved for the Commission,
     and we expect to consider the audited carrier\'s views in making
     such judgments.

109. *Auditing Costs.* In the *Second Report and Order*, the Commission
     concluded 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, as required by section 251(e)(2) of
     the Act.[^266] In the case of "for cause" audits, BellSouth
     contends that since these audits will be conducted only if there is
     an alleged violation of the Commission's rules, the arrangement for
     auditing costs is unfair to carriers not subject to the "for cause"
     audit.[^267] BellSouth encourages the Commission to adopt a policy
     whereby the costs for a "for cause" audit are borne by the carrier
     subject to that audit, while the costs for random audits are shared
     by all carriers.[^268]

110. In its request that the Commission reconsider the allocation of
     auditing costs, USTA's stated concern is that the Commission's
     policy regarding these costs provides funding that is unchecked and
     could result in unnecessary audits.[^269] USTA encourages the
     Commission to maintain the policy whereby carriers that are subject
     to the audits, not the industry as a whole, pay for audits
     conducted under the Commission's auspices.[^270] To the extent it
     requires carriers subject to random audits to bear the costs of
     such audit, KMC Telecom, Inc. (KMC) opposes USTA's request.[^271]
     PCIA also opposes USTA's request, stating that the use of the NBANC
     fund is the clear method of assuring competitive neutrality.[^272]
     USTA's response to the objections indicate that the Commission's
     concern that costs are recovered on a competitively neutral basis
     is seemingly satisfied by recovering costs related to work
     performed by designated agents through the NBANC fund and thus
     including auditing costs for numbering in the Commission's fee
     schedule violates no statutory restriction.[^273]

111. We are not persuaded that the costs for audits should not be borne
     by all telecommunications carriers on a competitively neutral basis
     as required by section 251(e)(2). Auditing has general deterrent
     effects which benefits all carriers by improving the efficiency
     with which numbering resources are used, and thus, increasing the
     availability of numbering resources. As such, all carriers should
     bear the costs of auditing, whether random or "for cause."[^274]
     Moreover, individual carriers subject to "for cause" audits bear
     additional individual costs to comply that are not attributed to
     all carriers. Therefore, we believe at this time that all auditing
     costs are properly borne by all carriers.

## Reserved Numbers 

### Reconsideration of Reservation Period

112. In the *First Report and Order*, the Commission 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.[^275] In
     petitions for reconsideration[^276] of the *First Report and
     Order*, as well as numerous *ex partes*,[^277] several parties
     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.

113. In the *Second Report and Order*, the Commission concluded that the
     maximum period for reserving numbers should be increased to 180
     days,[^278] and sought comment on the NANC's proposal to allow
     unlimited reservations on a month-to-month basis in exchange for a
     fee.[^279] The Commission also stated that if a reservation
     extension fee is mandated in the future, it will reconsider whether
     the 180-day period remains appropriate. The commenters in this
     proceeding are fairly evenly split on the issue of extending
     reservation periods. A number of carriers support extended or
     unlimited number reservations for a fee.[^280] Many of the state
     commissions and consumer associations, however, oppose extending
     reservations for a fee and do not believe the current 180-day
     policy should be altered.[^281]

114. We reaffirm that the 180-day reservation period is sufficient, for
     the same reasons we discussed in the *Second Report and Order*, and
     should remain in place. Although they have generally alleged that
     the 180-day period is insufficient, carriers have not demonstrated
     or persuasively argued that 180 days is insufficient to accommodate
     most customer requirements, or how a longer reservation period
     might be compatible with our number conservation efforts.

### Fee for Reserved Numbers 

115. In addition to the issue of whether the maximum reservation period
     should be extended and whether to allow extensions, in the *Second
     Further Notice*, the Commission sought further comment on the
     NANC's proposal to allow unlimited reservations of numbers on a
     month-to-month basis.[^282] The Commission noted in the *Second
     Further Notice* the NANC's recommendation that a fee for extensions
     be established. Specifically, the NANC proposed that the fee be
     paid by end users, and the Commission sought comment on whether
     imposing a fee on end users would provide the appropriate
     incentives in this context. Alternatively, the Commission sought
     comment on whether charging a fee to carriers would provide more
     appropriate incentives for number use.[^283]

116. Several commentaries believe that the current 180-day reservation
     period will be sufficient for most customers and that reservation
     fees are not appropriate at this time.[^284] Focal Communications
     states that a new requirement for fees would fall most heavily on
     new entrants that are already having a difficult time obtaining
     capital. Thus, a reservation fee system could harm new entrants'
     ability to compete in the market.[^285] Reservations fees also may
     promote the hoarding of numbers. NASUCA states that reservations
     fees may have the unintended effect of accelerating number
     depletion if carriers with greater financial resources buy up
     quantities of numbers for future use.[^286] New York also believes
     that a fee will not protect against hoarding and that some entities
     may be willing to lock up numbers although they have no intention
     of putting the numbers in service.[^287]

117. Several commenters, however, support the proposal for charging a
     reservation fee for numbers.[^288] WinStar, for example, states
     that a number reservation fee would decrease the quantity of
     numbers held in reserve, while meeting the needs of users who have
     a legitimate reason to reserve numbers.[^289] WinStar also states
     that there is no incentive for carriers to abuse extensions.[^290]
     WorldCom also believes that reservation fees may deter needless or
     fraudulent reservations.[^291]

118. We conclude that a reservation fee would be too administratively
     burdensome to generate any significant benefit, especially in light
     of the fact that there is, most likely, no benefit from a numbering
     optimization perspective.[^292] We agree with commenters that do
     not believe charging fees will help conserve numbers.[^293] Rather,
     such a fee may promote the hoarding of numbers by "well-heeled"
     carriers and would thus have the unintended effect of accelerating
     the depletion of numbers by carriers with greater financial
     resources.[^294] Therefore, we find that a reservation fee may
     undermine our conservation efforts. Accordingly, we decline to
     establish a fee structure to enable carriers to extend the 180-day
     reservation period.

### Clarification of Numbers Used for Intermittent or Cyclical Purposes

119. 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."
     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 numbers designated for use 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.

120. On our own motion, we now clarify that numbers used for
     intermittent or cyclical purposes should not be categorized as
     reserved numbers for NRUF reporting purposes. To the extent that
     these numbers are "working," they would be categorized as *assigned
     numbers*.[^295] It is less clear how these numbers must be
     categorized when they are not "working." In reviewing the record in
     the proceeding, certain commenters appear to presume that
     intermittent and cyclical should be categorized as "reserved." The
     Association for Telecommunications Professionals in Higher
     Education (ACUTA), for example, believes that colleges and
     universities should not be subject to any limitation on reserving
     blocks of numbers due to the unique way in which they utilize
     numbers.[^296] Specifically, ACUTA explains that colleges and
     universities need to hold blocks of numbers beyond the 180-day
     maximum period for reserving numbers in order to provide students
     with the same number throughout their stay at the college or
     university.[^297] In addition, ACUTA explains that the 180-day
     reservation period fails to address the needs of higher education
     institutions to retain all numbers within NXX codes in order to
     achieve public safety[^298] and educational objectives.[^299] Thus,
     ACUTA believes that if colleges and universities are forced to
     return inactive numbers within an NXX code after 180 days, these
     important needs will be compromised.[^300]

121. Our purpose in establishing reserved numbers and limiting the
     reservation period is to allow carriers the ability to set aside
     numbers for specific customers' use in the near term. We did not
     intend, however, to limit carriers' ability to maintain the same
     telephone number or block of numbers for customers that activate
     service to particular lines on an intermittent or cyclical basis.
     Accordingly, we clarify that numbers assigned to specific end user
     customers for intermittent or cyclical use should not be
     categorized as reserved numbers.

122. Although we believe that customers with numbers used for
     intermittent or cyclical purposes should not be subject to losing
     these numbers when they are turned off for short periods of time,
     we are concerned that some of these numbers that remain unused
     indefinitely could be used to provide service to other customers.
     We therefore clarify that numbers contained in blocks assigned for
     use in Centrex or PBX systems may be categorized as assigned
     numbers by reporting carriers, to the extent that fifty percent
     (50%) or more of such numbers are "working" at all times.[^301]
     With this requirement, we seek to limit the amount of numbers that
     are set aside for use by a particular customer, but are not being
     used to provide service on a regular basis. Thus, in order to
     categorize such blocks of numbers as assigned numbers, carriers may
     have to decrease the amount numbers set aside for a particular
     customer. We also clarify that numbers "working" periodically for
     regular intervals of time, such as numbers assigned to summer homes
     or student residences, may be categorized as assigned numbers, to
     the extent that they are "working" for a minimum of 90 days during
     each calendar year in which they are assigned to a particular
     customer. Any numbers used for intermittent or cyclical purposes
     that do not meet these requirements may not be categorized as
     assigned numbers, and must be made available for use by other
     customers. We believe these limitations on the definitions of
     *assigned numbers* strike an appropriate balance between carriers'
     legitimate need to provide numbers for intermittent or cyclical use
     to their customers, and our responsibility to ensure that scarce
     numbering resources do not lie fallow.

## Clarification of Top 100 MSAs 

123. The 1996 Act requires LECs to offer, \"to the extent technically
     feasible, number portability in accordance with requirements
     prescribed by the FCC."[^302] The Commission required wireline
     carriers in the largest 100 MSAs to offer LNP pursuant to a phased
     implementation schedule spread over five quarters, which ended on
     December 31, 1998.[^303] Beginning January 1, 1999,
     telecommunications carriers outside of the largest 100 MSAs were
     permitted to file requests for number portability with LNP-capable
     carriers, which are required to provide LNP no later than six
     months after a request is received.[^304] The Commission
     established a separate LNP implementation schedule for CMRS
     providers, which are scheduled to become LNP capable by November
     24, 2002. [^305] In addition, the Commission mandated that carriers
     required to be LNP capable also be capable of participating in
     pooling in the top 100 MSAs by that date.[^306]

124. Some states have advised that not all wireline carriers in the top
     100 MSAs are LNP capable.[^307] Apparently, some carriers have
     interpreted our rules to require LNP capability only when a request
     is received from a competing carrier, even in the top 100 MSAs.
     This issue was brought to light when state pooling trials were
     implemented and certain carriers had not acquired the necessary
     capability to participate in thousands-block number pooling. We
     therefore clarify, on our own motion, that the LNP and pooling
     requirements extend to all carriers in the largest 100 MSAs,
     regardless of whether they have received a specific request to
     provide LNP from another carrier. We also clarify that the "top 100
     MSAs" include those MSAs listed in the *LNP First Report and
     Order,* Appendix D used to determine the scope of LNP deployment in
     1996, as well as all areas included on any subsequent top 100 MSA
     list. [^308]

125. *Covered Carriers*. As explained in the Commission's News Release
     announcing the adoption of rules on telephone number portability,
     the Commission intended to require all wireline carriers to become
     LNP capable in the largest 100 MSAs, and to make number portability
     available in areas outside of the largest 100 MSAs within six
     months of a request from another carrier.[^309] The requirement
     applies to carriers operating in and entering into these markets.
     The limitation that carriers need to become LNP-capable only when
     they receive a request from a competing carrier only applies
     outside of the largest 100 MSAs. To clarify any uncertainty in our
     rules, we modify them herein.[^310] To the extent that wireline
     carriers in the top 100 MSAs may have misinterpreted these rules as
     requiring LNP capability only when they receive a request from a
     competing carrier, we give non-compliant carriers six months from
     the effective date of this order to become LNP capable in the top
     100 MSAs. Carriers that enter markets in the largest 100 MSAs are
     required to be LNP capable upon entry. We also retain the
     requirement that carriers outside of the top 100 MSAs become LNP
     capable within six months of receiving a request from a competing
     carrier.

126. *Scope of the Top 100 MSAs.* Upon initially determining the scope
     of required LNP deployment, the Commission used the 1990 U.S.
     Census data, updated with 1994 information, which was the most
     current at that time.[^311] We note that, with the 2000 U.S.
     Census, the 100 largest MSAs have changed in several respects from
     those identified in the 1990 U.S. Census. For example, several MSAs
     that were on the 1990 list of the 100 largest MSAs are now combined
     in Consolidated Metropolitan Statistical Areas (CMSAs). In
     addition, several new areas and MSAs are included on the current
     list of the 100 largest MSAs,[^312]

127. We believe that widespread LNP and pooling deployment will further
     our competition and numbering resource optimization goals. Rather
     than limit deployment to a list that is not reflective of the
     current and ever-changing population and competitive landscape, we
     conclude that new entrants on the top 100 MSA list should be
     included. We decline, however, to delete any areas that may
     subsequently fall off the list; we believe that those areas will,
     in most instances, continue to be heavily populated and competitive
     and, thus, should continue to be targeted for LNP and pooling. We
     also find that it would be discriminatory to allow new entrants
     into markets in which all carriers are LNP capable to enter these
     markets as competitors without being subject to the same
     requirements. We therefore clarify that LNP is required in the top
     100 MSAs identified in the 1990 U.S. Census reports and all
     subsequent updates; areas on the original list but no longer on the
     current list are still subject to LNP requirements. As new areas
     are added to the list of the top 100 MSAs, carriers will be given a
     six month period after release of the updated list to comply with
     LNP and pooling capability requirements.

## D. Liability of Related Carriers and Withholding of Numbering Resources  {#d.-liability-of-related-carriers-and-withholding-of-numbering-resources .unnumbered}

128. In the *Second Report and Order*, the Commission tentatively
     concluded 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.[^313] The Commission sought comment on how to
     identify the relationships among reporting carriers, and what
     geographic limitations should be placed on those relationships in
     determining liability among related carriers. The Commission also
     stated its belief that parent companies should play an active role
     in number conservation efforts, even if the parent companies
     themselves are not reporting carriers. [^314] Particularly, by
     monitoring and offering incentives from the top down, parent
     companies can contribute to the success of our number optimization
     goals. In addition, the Commission asked commenters to discuss
     alternative methods of providing incentives for parent companies to
     encourage compliance from all their related carriers and to ensure
     that our numbering resource optimization goals are not undermined
     by the complexities of corporate structures.

129. We decline at this time to hold related carriers accountable for
     reporting violations. In addition to the difficulty of determining
     which carriers should be deemed "related" for enforcement
     purposes,[^315] we are not convinced that related carrier liability
     is necessary or that it would be an effective deterrent to carriers
     seeking to circumvent our numbering reporting requirements. We
     continue to believe that parent companies should play an active
     role in ensuring that their related companies comply with the
     reporting requirements. We also believe that states will continue
     to play an important role in helping us to achieve our numbering
     resource optimization goals, and we encourage states to use their
     ability to request "for cause" audits in furtherance of these
     goals. Rather than focusing our enforcement efforts on related
     carriers, however, we find that dealing directly with the violating
     carrier is the better approach.

130. We nevertheless intend to use, as necessary, the full range of
     enforcement options available to us against carriers that fail to
     comply with the reporting requirements, including fines and
     forfeitures, especially for egregious and repeated violations.
     Fines and forfeitures, however, may be of limited value to motivate
     certain carriers to comply with reporting violations because some
     companies may consider them a minor additional cost of doing
     business. Relying on fines and forfeitures alone may also
     disproportionately affect smaller companies that do not have the
     resources of larger carriers. Withholding numbers is therefore a
     more equitable means of deterring reporting violations for carriers
     who refuse to observe number optimization requirements. We
     emphasize that we will take appropriate enforcement action upon
     discovering that a carrier is attempting to circumvent our
     reporting requirements, for example, by establishing a separate
     company for the sole purpose of receiving initial numbering
     resources.

131. When we determine by audit or are notified by the NANPA or a state
     commission that a reporting carrier is not in compliance with
     mandatory numbering reporting requirements, the reporting carrier
     will be notified in writing that it is subject to withholding of
     numbering resources. Some commenters raise concerns that carriers
     will not have sufficient opportunity to respond to or rebut
     findings that they should be subject to withholding of numbering
     resources before withholding occurs.[^316] Reporting carriers that
     have failed to submit semi-annual NRUF data are given ample
     opportunity to respond to notifications of apparent violations. For
     example, NANPA currently notifies carriers who have failed to
     provide necessary reports, and allows carriers the opportunity to
     respond or rectify the reporting violation, as necessary.[^317]
     Similarly, the Commission will give reporting carriers an
     opportunity to respond to and rebut findings. If the carrier fails
     to respond or remedy a reporting violation within a specified or
     reasonable period of time, the reporting carrier will be subject to
     withholding of numbering resources. We delegate authority to the
     Common Carrier Bureau and the Enforcement Bureau to determine when
     numbering resources should be withheld from carriers.

132. Accurate number utilization reporting and forecast data are
     essential for the NANPA, the Pooling Administrator, and the
     Commission to achieve our numbering resource optimization goals. We
     are persuaded by reports of inaccurate, incomplete, and missing
     reporting data[^318] that additional incentive is needed to
     encourage carriers to comply with our reporting requirements, and
     we believe that the possibility of having numbering resources
     withheld will provide such incentive.

## State Commissions' Access to Data

133. In the *Second Report and Order*, the Commission clarified the
     scope of states access to carriers' utilization and forecast data
     submitted semi-annually to the NANPA. Specifically, the Commission
     stated that states shall have access to all such mandatorily
     reported data received by NANPA.[^319] The Commission also noted
     that some states have asserted that they require full access to the
     database in which reported utilization and forecast data is stored,
     and tentatively concluded that states should have
     password-protected access to the database. The Commission further
     noted that NeuStar has proposed to provide the states with
     password-protected access to obtain forecast and utilization data
     from NANPA. The Commission sought comment on whether the type of
     access NeuStar proposes is necessary or sufficient, or whether the
     access already granted is sufficient to accommodate the states'
     request. The majority of commenters support the proposal,[^320] and
     several state commissions commented that it was important for them
     to have vital utilization and forecasting information in making
     decisions regarding area code relief.[^321] Several industry
     commenters oppose password-protected access on the grounds that
     carrier-specific data will not be sufficiently protected from
     public disclosure.[^322]

134. By this Order we hold that state commissions should have
     password-protected access to the NANPA database for data pertaining
     to NPAs located within their state. Each state commission may
     designate a person or persons to whom NeuStar will provide
     password-protected access, and the state commission must maintain
     the confidentiality of carrier-specific data as set forth in the
     *First Report and Order*.[^323]

135. The advantages of providing states with password-protected access
     to forecast and utilization data include the ability to access data
     on a more timely basis, and access to the data in a format that
     allows manipulation of the data and the creation of customized
     reports. We conclude that such access will only enhance the ability
     of states to determine when and what area code relief is necessary.
     Further, we do not believe that allowing state commissions
     password-protected access to carrier-specific forecast and
     utilization data will pose any greater security risks than the
     current reporting system, in which NANPA distributes this data in
     semi annual reports. Moreover, we find that the value to state
     commissions of timely access to forecast and utilization data
     outweighs the confidentiality concerns expressed by the carriers
     required to submit this data to the NANPA.

136. Despite this finding, we nevertheless reiterate that the
     confidentiality protections for forecast and utilization data
     adopted in the *First Report and Order* apply to state commissions
     when accessing carrier-specific data, whether in the form of
     semiannual reports or through the use of password-protected access.
     Specifically, state commissions must have appropriate protections
     in place (which may include confidentiality agreements or
     designation of information as proprietary under state law) that
     would preclude disclosure to any entity other than the NANPA or the
     Commission.[^324] Any state that cannot certify its ability to keep
     such data confidential shall not have access, password-protected or
     otherwise.

137. Additionally, we agree with commenters[^325] stating that state
     commissions' access to reported utilization and forecast data
     should be limited to data concerning rate centers and NPAs within
     the requesting state, just as data in the form of semi-annual
     reports from the NANPA is so limited. Limiting access to individual
     states provides a further measure of protection for such data by
     ensuring that access will be granted only to state commission staff
     that uses this data for area code relief purposes.

138. We have consulted with NeuStar, the entity that serves as the
     NANPA, regarding the availability of and cost of providing
     password-protected access to state commissions. NeuStar has
     indicated that it can provide password-protected access to its
     current database for mandatory reported data.[^326] However,
     NeuStar has not provided any information on whether such access
     will exceed the cost of its current NANPA contract. The Common
     Carrier Bureau will continue to work with NeuStar to develop the
     manner in which such access can be provided as quickly as possible.

# PROCEDURAL MATTERS

## *Ex Parte* Presentations

139. This matter shall be treated as a "permit-but-disclose" proceeding
     in accordance with the Commission's *ex parte* rules.[^327] 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.[^328]

## Final Regulatory Flexibility Analysis

140. *See* Appendix B for the Final Regulatory Flexibility Analysis.

## Final Paperwork Reduction Analysis

141. This *Third Report and Order* contains some new and/or modified
     information collections, which will be submitted to OMB for
     approval, as prescribed by the Paperwork Reduction Act.

## Ordering Clauses

142. 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 THIRD 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.

143. IT IS FURTHER ORDERED that the policies, rules and requirements
     adopted herein are adopted and SHALL BE EFFECTIVE 30 days after
     publications in the Federal Register.

144. IT IS FURTHER ORDERED that incumbent local exchange carriers
     seeking to recover carrier-specific costs directly related to
     national thousands-block number pooling as described herein MAY
     FILE the necessary tariffs to take effect no earlier than April 2,
     2002.

145. IT IS FURTHER ORDERED that the Commission's Consumer Information
     Bureau, Reference Information Center, SHALL SEND a copy of this
     *Third Report and Order and Second Order on Reconsideration in CC
     Docket No. 96-98 and CC Docket No. 99-200*, including the Final
     Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
     of the Small Business Administration.

     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.**

> \*\*\*

\(g\) Applications for Numbering Resources.

> \*\*\*

(3) *Growth Numbering resources*.

> \*\*\*
>
> \(iv\) (deleted)
>
> \(4\) *Non-Compliance.* 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
> Operating Company Number (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 may overturn, the
> NANPA's decision to withhold numbering resources from the carrier
> based on its determination that the carrier has complied with the
> reporting and numbering resource application requirements herein. The
> state commission also may overturn the NANPA's decision to withhold
> numbering resources from the carrier based on its determination that
> the carrier has demonstrated a verifiable need for numbering resources
> and has exhausted all other available remedies.
>
> \(5\) *State Access to Applications*. State regulatory commissions
> shall have access to service provider's applications for numbering
> resources. The 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.
>
> \*\*\*

\(k\) *Numbering Audits.*

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

(2) The Enforcement Bureau will oversee the conduct and scope of all
    numbering audits conducted under the Commission's jurisdiction, and
    determine the audit procedures necessary to perform the audit.
    Numbering audits performed by independent auditors pursuant to this
    section shall be conducted in accordance with generally accepted
    auditing standards and the American Institute of Certified Public
    Accountants' standards for compliance attestation engagements, as
    supplemented by the guidance and direction of the Chief of the
    Enforcement Bureau.

(3) Requests for "for cause" audits shall be forwarded to the Chief of
    the Enforcement Bureau, with a copy to the Chief of the Common
    Carrier Bureau. Requests must state the reason for which a "for
    cause" audit is being requested and include documentation of the
    alleged anomaly, inconsistency, or violation of the Commission rules
    or orders or applicable industry guidelines. The Chief of the
    Enforcement Bureau will provide carriers up to 30 days to provide a
    written response to a request for a "for cause" audit.

3\. Section 52.19 is revised to read as follows:

> \*\*\*
>
> (c)\*\*\*
>
> \(3\) An all services area code overlay, which occurs when a new area
> code is introduced to serve the same geographic area as one or more
> existing area code(s), subject to the following conditions:

(i) No all services area code overlay may be implemented unless all
    numbering resources in the new overlay area code are assigned to
    those entities requesting assignment on a first-come, first-serve
    basis, regardless of the identity of, technology used by, or type of
    service provided by that entity, except to the extent that a
    technology- or service-specific overlay is authorized by the
    Commission. No group of telecommunications carriers shall be
    excluded from assignment of numbering resources in the existing area
    code, or be assigned such resources only from the all services
    overlay area code, based solely on that group's provision of a
    specific type of telecommunications service or use of a particular
    technology; and

(ii) \*\*\*

```{=html}
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i.  

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(4) A technology-specific or service-specific overlay, which occurs when
    a new area code is introduced to serve the same geographic area as
    one or more existing area code(s) and numbering resources in the new
    area code overlay are assigned to a specific technology(ies) or
    service(s). State commissions may not implement a
    technology-specific or service-specific overlay without express
    authority from the Commission.

4\. Section 52.21 is revised to read as follows:

> \*\*\*
>
> \(r\) The term *100 largest Metropolitan Statistical Areas (MSAs)*
> refers to the MSAs set forth in the appendix to this part and any
> subsequent MSAs identified by U.S. Census Bureau data to be in the
> largest 100 MSAs.
>
> **Appendix B**

**FINAL REGULATORY FLEXIBILITY ANALYSIS**

1\. As required by the Regulatory Flexibility Act, as amended,
(RFA),[^329] an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the *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* (*Second* *Further* *Notice*).[^330] The
Commission sought written public comment on the proposals in the *Second
Further* *Notice*, including comment on the IRFA. No comments received
addressed the IRFA. This present Final Regulatory Flexibility Analysis
(FRFA) conforms to the RFA.[^331]

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

2\. In the *Second Further Notice,* we sought 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)
whether carriers should be held accountable when related carriers fail
to comply with reporting requirements; (c) whether state commissions
should be granted direct, password-protected access to the mandatory
reporting data received by the North American Numbering Plan
Administrator (NANPA); (d) whether we should allow extensions (for a fee
or otherwise) on the 180-day reservation period for numbers; (e) what
enforcement mechanisms should be applied when a carrier either fails to
cooperate with an audit, or fails to resolve identified areas of
noncompliance; (f) whether state commissions should be allowed to
conduct audits; (g) the costs associated with thousands-block number
pooling; (h) whether the Commission should require carriers to acquire
Local Number Portability (LNP) capabilities for the purpose of
participating in thousands-block number pooling; and (i) 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.

3\. In this *Third Report and Order* *and* *Second Order on
Reconsideration* (*Third Report and Order*), we continue efforts to
utilize efficiently the numbering resources in the North American
Numbering Plan (NANP). Our goal with this *Third Report and Order* is to
build upon previous success working with the state commissions and the
telecommunications industry to ensure that the limited numbering
resources of the NANP do not exhaust prematurely, and to ensure that all
carriers have the numbering resources they need to compete in the
telecommunications marketplace. In particular, we address issues raised
in the *Second Further Notice* and several petitions for reconsideration
and/or clarification of the *First* or *Second Report and Order*. In
addition, we also clarify, on our own motion, certain aspects of our
numbering resources optimization rules and local number portability
requirements.

**B. *Summary of Significant Issues Raised by Public Comments in
Response to the IRFA***

4\. In a recent letter, the Small Business Administration (SBA) contends
that in the Final Regulatory Flexibility Analysis of the *Second Report
and Order* (*Second Report and Order FRFA*) the Commission failed to ".
. . include a description of telecommunications service providers that
are directly affected by the audit provisions. . ." and believes that
the ". . .oversight may be due to the inconsistency in the text of the
Order itself. Under the Commission's numbering rules, carriers and
service providers are two separate classes."[^332] The SBA then notes
that the terms "carrier" and "service provider" were used
interchangeably within the audit provisions of the *Second Report and
Order*.

5\. Although the terms "carrier" and "service provider" were used
interchangeably within the audit provisions, the rule on auditing
procedures in section 52.15(k) of the Commission's rules (in Appendix A
of the *Second Report and Order*) clearly applies to telecommunications
service providers.[^333] As discussed in section 52.5(i) of the
Commission's numbering rules, a service provider is an ". . .entity that
receives numbering resources from the NANPA . . ."[^334] Thus, given
that the rule is clear, we conclude that an adequate description of
telecommunications service providers existed in this *Second Report and
Order FRFA* and that no clarifications are needed in this FRFA.

6\. In the *SBA Letter*, the SBA argues that, in the *Second Report and
Order FRFA*, the Commission fails to ". . . adequately consider
alternatives to the audit program that would minimize the impact on
small businesses."[^335] In the FRFA, the Commission is only required to
discuss those significant alternatives that would affect the impact on
small businesses. Thus, the Commission is not required to create
significant alternatives for every proposal in a rulemaking order.[^336]
In crafting the final rule for audits, we considered no other
significant alternatives to the rule that would influence the impact on
small businesses. Therefore, no significant alternatives were available
to be discussed in the *Second Report and Order FRFA*. We also note
that, of the small businesses that commented on our audit proposal,
small businesses were in favor of audits.[^337]

7\. Commenters responded to several issues addressed in the *Second
Further Notice* that concern small entities. Their opinions are
summarized below. In addition, the Commission has considered any
potential significant economic impact of the rules on small entities.

8\. *Thousands-Block Number Pooling for Non-LNP Capable Carriers.*
Commenters generally agree that the costs to small and rural carriers to
participate in thousands-block pooling would outweigh any benefits
derived from the pooling requirements.[^338] The Organization for the
Promotion and Advancement of Small Telecommunications Companies
(OPASTCO) fears that the costs may be so prohibitive as to delay the
implementation of advanced services to rural subscribers.[^339] We agree
with commenters that there is insufficient evidence in the record to
conclude that requiring non-LNP capable carriers to participate in
pooling would result in significant number resource savings. Data from
the Local Exchange Routing Guide (LERG) shows that in the approximately
2,012 rate centers in the 180 Metropolitan Statistical Areas (MSAs)
beyond the largest 100, approximately 1,320 are rate centers where there
are no competing service providers and approximately 300 are rate
centers where there is only 1 competing service provider. Because these
carriers hold relatively few numbering resources, we agree that
requiring them to participate in pooling would not result in significant
number optimization benefits.

9\. *Independent State Commissions' Authority to Conduct Audits.* One
commenter expressed concern that allowing states individual authority to
conduct audits may expose carriers to two different standards.[^340] It
predicts that this result would impose costs and burdens on small
carriers that outweigh the benefits of the additional audits.[^341] We
declined to give states the independent authority to conduct audits,
concluding that most of the audits that states would be given authority
to conduct would serve the same purpose as the Commission audits, thus
posing the potential burden of overlapping audits that would outweigh
the benefits of the additional audits. It is our expectation, however,
that the Commission audit staff will cooperate with state commissions,
including coordinating compliance and enforcement activities and sharing
information gathered during the course of the audits. In addition, as we
noted, this order does not modify a state commission\'s authority to
conduct audits under state law.

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

10\. 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 rules adopted herein.[^342] The RFA defines the term
"small entity" as having the same meaning as the terms "small business,"
"small organization," and "small governmental jurisdiction."[^343] 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.[^344] 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.[^345]

11\. The most reliable source of information regarding the total numbers
of certain common carrier and related providers nationwide appears to be
data the Commission publishes annually in its *Telecommunications
Provider Locator* report, derived from filings made in connection with
the Telecommunications Relay Service (TRS).[^346] According to data in
the most recent report, there are 5,679 interstate service
providers.[^347] These providers 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.

12\. We have included small incumbent local exchange carriers
(LECs)[^348] 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.\"[^349] 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.[^350] 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 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.[^351] This number contains a variety of different categories of
carriers, including LECs, interexchange carriers, competitive access
providers, operator service providers, pay telephone operators, 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.\"[^352] It seems
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 these rules.

14\. *Wireline Carriers and Service Providers.* The SBA has developed a
definition of small entities for telephone communications companies
other than radiotelephone (wireless) companies. The Census Bureau
reports that there were 2,321 such telephone companies in operation for
at least one year at the end of 1992.[^353] According to the SBA\'s
definition, a small business telephone company other than a
radiotelephone (wireless) company is one employing no more than 1,500
persons.[^354] All but 26 of the 2,321 non-radiotelephone (wireless)
companies listed by the Census Bureau were reported to have fewer than
1,000 employees. Even if all 26 of the remaining companies had more than
1,500 employees, there would still be 2,295 non‑radiotelephone
(wireless) companies that might qualify as small entities or small
ILECs. Although it seems certain that some of these carriers are not
independently owned and operated, we are unable at this time to estimate
with greater precision the number of wireline carriers and service
providers that would qualify as small business concerns under SBA's
definition. Therefore, we estimate that fewer than 2,295 small telephone
communications companies other than radiotelephone (wireless) companies
are small entities or small incumbent LECs that may be affected by these
rules.

15\. *Local Exchange Carriers, Competitive Access Providers,
Interexchange Carriers, Operator Service Providers, Payphone Providers,
and Resellers.* Neither the Commission nor the SBA has developed a
definition for small LECs, competitive access providers (CAPS),
interexchange carriers (IXCs), operator service providers (OSPs),
payphone providers, or resellers. The closest applicable definition for
these carrier-types under SBA rules is for telephone communications
companies other than radiotelephone (wireless) companies.[^355] The most
reliable source of information that we know regarding the number of
these carriers nationwide appears to be the data that we collect
annually in connection with the TRS.[^356] According to our most recent
data, there are 1,329 LECs, 532 CAPs, 229 IXCs, 22 OSPs, 936 payphone
providers, and 710 resellers.[^357] Although it seems certain that some
of these carriers are not independently owned and operated, or have more
than 1,500 employees, we are unable at this time to estimate with
greater precision the number of these carriers that would qualify as
small business concerns under the SBA\'s definition. Therefore, we
estimate that there are fewer than 1,329 small entity LECs or small
incumbent LECs, 532 CAPs, 229 IXCs, 22 OSPs, 936 payphone providers, and
710 resellers that may be affected by these rules.

16\. *Wireless Telephony and Paging and Messaging.* Wireless telephony
includes cellular, personal communications services (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 is a telephone communications company other
than radiotelephone (wireless) companies.[^358] According to the most
recent *Provider Locator* data, 858 carriers reported that they were
engaged in the provision of wireless telephony and 576 companies
reported that they were engaged in the provision of paging and messaging
service.[^359] 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 858 small carriers
providing wireless telephony services and fewer than 576 small companies
providing paging and messaging services that may be affected by these
rules.

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

17\. The numbering resource optimization requirements discussed herein
should not require additional reporting, recordkeeping or compliance
requirements for service providers. In this *Report and Order*, we are
not mandating new recordkeeping and compliance requirements. Rather, in
most instances, we are affirming or clarifying these requirements.

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

18\. 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.[^360]

19\. *Thousands-Block Number Pooling for Non-LNP Capable Carriers.* In
this *Third Report and Order*, we decline to extend pooling requirements
to paging carriers and non-LNP capable carriers outside of the largest
100 MSAs that have not received a request to deploy LNP from a competing
carrier. We believe the costs associated with the alternative of
requiring all carriers, including small entities, to participate in
pooling would greatly outweigh any number optimization benefits. In
addition, these costs imposed on smaller and rural carriers may delay
efforts in bringing advanced services to rural subscribers. Thus we
reaffirm our current rules that certain carriers, *e.g*., paging
carriers and carriers outside of the largest 100 MSAs who have not
received a request to deploy LNP from a competing carrier, are exempted
from pooling requirements.

20\. *Service-Specific and Technology-Specific Area Code Overlays.* In
this order, we lift the prohibition on technology-specific overlays
(SOs) and will consider proposals submitted by state commissions to
implement SOs on a case-by-case basis. 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. In the alternative, we examined a requirement
mandating that state commissions impose all-services area code overlays
as the primary method for area code relief. However, the Commission
believes that states should have the flexibility to determine the best
form of area code relief. In addition, we considered a 50% utilization
threshold as an alternative to a higher threshold, which would have been
less burdensome to service providers, including small service providers.
We determined, however, that a 60% utilization threshold would more
successfully encourage service providers to use numbers from their
current inventories and would still be a reasonable threshold level for
service providers to satisfy before requesting additional numbering
resources.

21\. ***Report to Congress:*** The Commission will send a copy of this
*Third Report and Order*, including this FRFA, in a report to be sent to
Congress pursuant to the Congressional Review Act.[^361] In addition,
the Commission will send a copy of this *Third Report and Order*,
including this FRFA, to the Chief Counsel for Advocacy of the SBA. A
copy of this *Third Report and Order* and FRFA (or summaries thereof)
will also be published in the Federal Register.[^362]

> **Appendix C**

**List of Parties**

**Numbering Resource Optimization Third Report and Order**

**and Second Order on Reconsideration**

**A. [Parties Filing Comments in Response to Second Report and Order
]{.underline}**

1.  Association for Telecommunications Professionals in Higher Education
    (ACUTA)

2.  Ad Hoc Telecommunications Users Committee (Ad Hoc)

3.  Allegiance Telecom

4.  Association for Local Telecommunications Services (ALTS)

5.  Association of Communications Enterprises

6.  AT&T

7.  BellSouth

8.  California PUC

9.  Cingular Wireless (Cingular)

10. Connecticut Department of Public Utility Control

11. Cox Communications, Inc. (Cox)

12. Cellular Telecommunications Industry Association (CTIA)

13. Florida PSC

14. Focal Communications Corporation (Focal Communications)

15. Global NAPS, Inc.

16. Illinois Commerce Commission

17. Indiana Office of Utility Consumer Counselor

18. Iowa Utilities Board

19. Level 3 Communications, LLC (Level 3)

20. Maine PUC

21. Maryland PSC

22. Metrocall

23. Michigan PSC

24. National Association of State Utility Consumer Advocates (NASUCA)

25. National Exchange Carrier Association, Inc.(NECA)

26. NENA

27. New Hampshire PUC

28. New York State Department of Public Service

29. National Telephone Cooperative Association (NTCA)

30. Office of the Consumer Advocate

31. Ohio PUC

32. Organization for the Promotion and Advancement of Small
    Telecommunications Companies (OPASTCO)

33. Personal Communications Industry Association PCIA

34. Pennsylvania PUC

35. Qwest

36. Rural Cellular Association

37. State Coordination Group Comments

38. SBC Communications

39. Texas PUC

40. Time Warner Telecom

41. United States Telephone Association (USTA)

42. Verizon Communications (Verizon)

43. Verizon Wireless

44. VoiceStream Wireless (VoiceStream)

45. WinStar Communications (WinStar)

46. WorldCom, Inc. (WorldCom)

**B. [Parties Filing Reply Comments in Response to Second Report and
Order]{.underline}**

1.  Ad Hoc

2.  Allegiance Telecom, Inc.

3.  ASCENT

4.  AT&T

5.  BellSouth

6.  California PUC

7.  CTIA

8.  Cingular

9.  Iowa Utilities Board

10. Global NAPS, Inc.

11. Metrocall

12. Michigan PSC

13. Minnesota PUC

14. NECA

15. National Emergency Number Association (NENA)

16. NASUCA

17. PCIA

18. Qwest

19. SBC

20. Sprint

21. Tennessee Regulatory Authority

22. USTA

23. Verizon Wireless

24. VoiceStream

25. WorldCom

26. Z-Tel

**C. [Parties Filing Comments in Response to First Report and
Order]{.underline}**

1.  AT&T

2.  CTIA

3.  General Services Administration

4.  Joint Consumer Comments

5.  NECA

6.  NTCA

7.  SBC

8.  Sprint

9.  USTA

10. US West

11. Verizon Wireless

12. WorldCom

**D. [Parties Filing Reply Comments in Response to First Report and
Order]{.underline}**

1.  AT&T

2.  Bell Atlantic

3.  California PUC

4.  Maine PUC

5.  VoiceStream

**E. [Parties Filing Petitions for Reconsideration and/or
Clarification]{.underline}\***

1.  AT&T Wireless\*

2.  BellSouth

3.  CTIA

4.  Cingular\*

5.  Qwest

6.  SBC

7.  Sprint

8.  USTA

9.  Verizon

10. Verizon Wireless

11. WorldCom

**F. [Parties Filing Oppositions to and Support for
Petitions]{.underline}**

1.  KMC Telecom, Inc. (KMC)

2.  Maine PUC

3.  PCIA

**G. [Parties Filing Replies to and Comments on Opposition to
Petitions]{.underline}**

1.  SBC\*

2.  USTA

\*indicates that the petition was not addressed in this proceeding

**Appendix D**

**List of the Top 100 Metropolitan Statistical Areas (MSAs)**

**A. 100 Largest MSAs and Their Populations: Year 2000 Census**

1.  New York\--Northern New Jersey\--Long Island, NY\--NJ\--CT\--PA CMSA
    21,199,865

2.  Los Angeles\--Riverside\--Orange County, CA CMSA 16,373,645

3.  Chicago\--Gary\--Kenosha, IL\--IN\--WI CMSA 9,157,540

4.  Washington\--Baltimore, DC\--MD\--VA\--WV CMSA 7,608,070

5.  San Francisco\--Oakland\--San Jose, CA CMSA 7,039,362

6.  Philadelphia\--Wilmington\--Atlantic City, PA\--NJ\--DE\--MD CMSA
    6,188,463

7.  Boston\--Worcester\--Lawrence, MA\--NH\--ME\--CT CMSA 5,819,100

8.  Detroit\--Ann Arbor\--Flint, MI CMSA 5,456,428

9.  Dallas\--Fort Worth, TX CMSA 5,221,801

10. Houston\--Galveston\--Brazoria, TX CMSA 4,669,571

11. Atlanta, GA MSA 4,112,198

12. Miami\--Fort Lauderdale, FL CMSA 3,876,380

13. Seattle\--Tacoma\--Bremerton, WA CMSA 3,554,760

14. Phoenix\--Mesa, AZ MSA 3,251,876

15. Minneapolis\--St. Paul, MN\--WI MSA 2,968,806

16. Cleveland\--Akron, OH CMSA 2,945,831

17. San Diego, CA MSA 2,813,833

18. St. Louis, MO\--IL MSA 2,603,607

19. Denver\--Boulder\--Greeley, CO CMSA 2,581,506

20. San Juan\--Caguas\--Arecibo, PR CMSA 2,450,292

21. Tampa\--St. Petersburg\--Clearwater, FL MSA 2,395,997

22. Pittsburgh, PA MSA 2,358,695

23. Portland\--Salem, OR\--WA CMSA 2,265,223

24. Cincinnati\--Hamilton, OH\--KY\--IN CMSA 1,979,202

25. Sacramento\--Yolo, CA CMSA 1,796,857

26. Kansas City, MO\--KS MSA 1,776,062

27. Milwaukee\--Racine, WI CMSA 1,689,572

28. Orlando, FL MSA 1,644,561

29. Indianapolis, IN MSA 1,607,486

30. San Antonio, TX MSA 1,592,383

31. Norfolk\--Virginia Beach\--Newport News, VA\--NC MSA 1,569,541

32. Las Vegas, NV\--AZ MSA 1,563,282

33. Columbus, OH MSA 1,540,157

34. Charlotte\--Gastonia\--Rock Hill, NC\--SC MSA 1,499,293

35. New Orleans, LA MSA 1,337,726

36. Salt Lake City\--Ogden, UT MSA 1,333,914

37. Greensboro\--Winston-Salem\--High Point, NC MSA 1,251,509

38. Austin\--San Marcos, TX MSA 1,249,763

39. Nashville, TN MSA 1,231,311

40. Providence\--Fall River\--Warwick, RI\--MA MSA 1,188,613

41. Raleigh\--Durham\--Chapel Hill, NC MSA 1,187,941

42. Hartford, CT MSA 1,183,110

43. Buffalo\--Niagara Falls, NY MSA 1,170,111

44. Memphis, TN\--AR\--MS MSA 1,135,614

45. West Palm Beach\--Boca Raton, FL MSA 1,131,184

46. Jacksonville, FL MSA 1,100,491

47. Rochester, NY MSA 1,098,201

48. Grand Rapids\--Muskegon\--Holland, MI MSA 1,088,514

49. Oklahoma City, OK MSA 1,083,346

50. Louisville, KY\--IN MSA 1,025,598

51. Richmond\--Petersburg, VA MSA 996,512

52. Greenville\--Spartanburg\--Anderson, SC MSA 962,441

53. Dayton\--Springfield, OH MSA 950,558

54. Fresno, CA MSA 922,516

55. Birmingham, AL MSA 921,106

56. Honolulu, HI MSA 876,156

57. Albany\--Schenectady\--Troy, NY MSA 875,583

58. Tucson, AZ MSA 843,746

59. Tulsa, OK MSA 803,235

60. Syracuse, NY MSA 732,117

61. Omaha, NE\--IA MSA 716,998

62. Albuquerque, NM MSA 712,738

63. Knoxville, TN MSA 687,249

64. El Paso, TX MSA 679,622

65. Bakersfield, CA MSA 661,645

66. Allentown\--Bethlehem\--Easton, PA MSA 637,958

67. Harrisburg\--Lebanon\--Carlisle, PA MSA 629,401

68. Scranton\--Wilkes-Barre\--Hazleton, PA MSA 624,776

69. Toledo, OH MSA 618,203

70. Baton Rouge, LA MSA 602,894

71. Youngstown\--Warren, OH MSA 594,746

72. Springfield, MA MSA 591,932

73. Sarasota\--Bradenton, FL MSA 589,959

74. Little Rock\--North Little Rock, AR MSA 583,845

75. McAllen\--Edinburg\--Mission, TX MSA 569,463

76. Stockton\--Lodi, CA MSA 563,598

77. Charleston\--North Charleston, SC MSA 549,033

78. Wichita, KS MSA 545,220

79. Mobile, AL MSA 540,258

80. Columbia, SC MSA 536,691

81. Colorado Springs, CO MSA 516,929

82. Fort Wayne, IN MSA 502,141

83. Daytona Beach, FL MSA 493,175

84. Lakeland\--Winter Haven, FL MSA 483,924

85. Johnson City\--Kingsport\--Bristol, TN\--VA MSA 480,091

86. Lexington, KY MSA 479,198

87. Augusta\--Aiken, GA\--SC MSA 477,441

88. Melbourne\--Titusville\--Palm Bay, FL MSA 476,230

89. Lancaster, PA MSA 470,658

90. Chattanooga, TN\--GA MSA 465,161

91. Des Moines, IA MSA 456,022

92. Kalamazoo\--Battle Creek, MI MSA 452,851

93. Lansing\--East Lansing, MI MSA 447,728

94. Modesto, CA MSA 446,997

95. Fort Myers\--Cape Coral, FL MSA 440,888

96. Jackson, MS MSA 440,801

97. Boise City, ID MSA 432,345

98. Madison, WI MSA 426,526

99. Spokane, WA MSA 417,939

100. Pensacola, FL MSA 412,153

B. 100 Largest Metropolitan Statistical Areas (MSAs) and Their
Populations (from the LNP First Report and Order FCC 96-286)

Number range level0Number range level1Number range level2Number range
level3Number range level4Number range level5Number range level6Number
range level71. Los Angeles, CA 9,150,000

2\. New York, NY 4,474,000

3\. Detroit, MI 4,307,000

4\. Houston, TX 3,653,000

5\. Atlanta, GA 3,331,000

6\. Boston, MA\* 3,211,000

7\. Riverside, CA 2,907,000

8\. Dallas, TX 2,898,000

9\. Minneapolis, MN 2,688,000

10\. Nassau, NY 2,651,000

11\. San Diego, CA 2,621,000

12\. Orange Co., CA 2,543,000

13\. St. Louis, MO 2,536,000

14\. Phoenix, AZ 2,473,000

15\. Baltimore, MD 2,458,000

16\. Pittsburgh, PA 2,402,000

17\. Akron, OH 2,222,000

18\. Oakland, CA 2,182,000

19\. Seattle, WA 2,180,000

20\. Tampa, FL 2,157,000

21\. Miami, FL 2,025,000

22\. Newark, NJ 1,934,000

23\. Denver, CO 1,796,000

24\. Portland, OR 1,676,000

25\. Kansas City, KS 1,647,000

26\. San Francisco, CA 1,646,000

27\. Cincinnati, OH 1,581,000

28\. San Jose, CA 1,557,000

29\. Norfolk, VA 1,529,000

30\. Fort Worth, TX 1,464,000

31\. Indianapolis, IN 1,462,000

32\. Milwaukee, WI 1,456,000

33\. Sacramento, CA 1,441,000

34\. San Antonio, TX 1,437,000

35\. Columbus, OH 1,423,000

36\. Fort Lauderdale, FL 1,383,000

37\. Orlando, FL 1,361,000

38\. New Orleans, LA 1,309,000

39\. Bergen, NJ 1,304,000

40\. Charlotte, NC 1,260,000

41\. Buffalo, NY 1,189,000

42\. Salt Lake City, UT 1,178,000

43\. Hartford, CT\* 1,156,000

44\. Providence, RI\* 1,131,000

45\. Greensboro, NC 1,107,000

46\. Rochester, NY 1,090,000

47\. Las Vegas, NV 1,076,000

48\. Nashville, TN 1,070,000

49\. Middlesex, NJ 1,069,000

50\. Memphis, TN 1,056,000

51\. Monmouth, NJ 1,035,000

52\. Oklahoma City, OK 1,007,000

53\. Grand Rapids, MI 985,000

54\. Louisville, KY 981,000

55\. Jacksonville, FL 972,000

56\. Raleigh, NC 965,000

57\. Austin, TX 964,000

58\. Dayton, OH 956,000

59\. West Palm Beach, FL 955,000

60\. Richmond, VA 917,000

61\. Albany, NY 875,000

62\. Honolulu, HI 874,000

63\. Birmingham, AL 872,000

64\. Greenville, SC 837,000

65\. Fresno, CA 835,000

66\. Syracuse, NY 754,000

67\. Tulsa, OK 743,000

68\. Tucson, AZ 732,000

69\. Ventura, CA 703,000

70\. Cleveland, OH 677,000

71\. El Paso, TX 665,000

72\. Omaha, NE 663,000

73\. Albuquerque, NM 646,000

74\. Tacoma, WA 638,000

75\. Scranton, PA 637,000

76\. Knoxville, TN 631,000

77\. Gary, IN 620,000

78\. Toledo, OH 614,000

79\. Allentown, PA 612,000

80\. Harrisburg, PA 610,000

81\. Bakersfield, CA 609,000

82\. Youngstown, OH 604,000

83\. Springfield, MA\* 584,000

84\. Baton Rouge, LA 558,000

85\. Jersey City, NJ 552,000

86\. Wilmington, DE 539,000

87\. Little Rock, AR 538,000

88\. New Haven, CT\* 527,000

89\. Charleston, SC 522,000

90\. Sarasota, FL 518,000

91\. Stockton, CA 518,000

92\. Ann Arbor, MI 515,000

93\. Mobile, AL 512,000

94\. Wichita, KS 507,000

95\. Columbia, SC 486,000

96\. Vallejo, CA 483,000

97\. Fort Wayne, IN 469,000

\* Population figures for New England\'s city and town based MSAs are
for 1992, while others are for 1994.

**SEPARATE STATEMENT OF\
COMMISSIONER KEVIN J . MARTIN**

*Re: Numbering Resource Optimization*, Third Report and Order and Second
Order on Reconsideration in CC Docket No. 96-98 and CC Docket No. 99-200

I join in approving this Order because it is an important step in
providing the States the additional flexibility they require to address
numbering issues. As I have said before, State commissions often bear
the brunt of consumer complaints. Particularly, with regard to numbering
issues, it is the State commissions that hear all of the complaints.
Therefore, I appreciate this Commission's actions in granting States
additional numbering flexibility.

This Order grants the requests of several States to lift the prohibition
on technology specific and service specific overlays. Allowing States
such flexibility in how to address numbering issues is crucial, as the
States are on the front lines of this battle. We must remember that it
is the State Commissions, not this Commission, that feel the outcry from
consumers when number conservation measures are adopted. I am thus
hopeful that this Order will provide the States significant additional
tools.

This item hardly ends our task, however. I expect this Commission to
continue to work with the States to facilitate their number conservation
plans in the future, providing expeditious decisions on applications for
technology specific and service specific overlays and granting States
additional flexibility as they need it.

[^1]: The NANP was established over 50 years ago by AT&T to facilitate
    the expansion of long distance calling. It is the basic numbering
    scheme for the United States, Canada, and most Caribbean countries.
    The NANP is based on a 10-digit dialing pattern in the format
    NXX-NXX-XXXX where "N" represents any digit 2-9 and "X" represents
    any digit 0-9. The first three digits represent the numbering plan
    area (NPA), commonly known as the area code. The second three digits
    represent the central office, or NXX code, commonly referred to as
    an exchange. The last four digits represent the subscriber line
    number.

[^2]: In 1999, the North American Numbering Plan Administrator (NANPA)
    estimated that NANP exhaust was likely to occur in 2006 -- 2012, and
    the North American Numbering Council (NANC) estimated that NANP
    exhaust was likely to occur in 2005 -- 2016. In its recent study,
    the NANPA estimates that NANP exhaust is likely to occur well beyond
    2020. *See* NANPA Report to the NANC, October 16-17, 2001, p. 8. The
    NANPA estimates that with the introduction of thousands-block number
    pooling NANP exhaust is not likely to occur before 2025 -- 2034.
    *Id*. at p. 9.

[^3]: The NANPA reported that the net central office code assignments
    from January through October 2001 averaged 413 per month as compared
    to 2172 codes per month for the same period in 2000. *See* NANPA
    Report to the NANC, November 27-28, 2001, p 2.

[^4]: Numbering Resouce Optimization, *Second Report and Order, Order on
    Reconsideration in CC Docket No. 96-98 and in CC Docket No. 99-200,
    and Second Further Notice of Proposed Rulemaking in CC Docket No.
    99-200*, 16 FCC Rcd 306 (2000) (*Second Report and Order*).

[^5]: *See* List from the 1990 U.S. Census reports.

[^6]: For a more complete summary of the history of this proceeding
    *see* Numbering Resource Optimization, *Report and Order and Further
    Notice of Proposed Rulemaking*, 15 FCC Rcd 7574, 7577-82, paras.1-9
    (2000) (*First Report and Order*) and *Second Report and Order*, 16
    FCC Rcd at 310-14, paras. 4-17 .

[^7]: In the ten year period, 1984 to 1994, nine new area codes were
    implemented. Commencing in 1997, new area code activations increased
    to 32 new area codes activated in 1997, 24 activated in 1998, and 22
    activated in 1999.

[^8]: In 1999, some industry members suggested that the cost to
    expanding the NANP by adding one or more digits could be between
    \$50 to \$150 billion. *See* NANC Meeting Minutes, February 18-19,
    1999 at 13.

[^9]: Numbering Resource Optimization, *Notice of Proposed Rulemaking*,
    14 FCC Rcd 10322 (1999) (*Notice*).

[^10]: In 2000, 14 new area codes were activated, and approximately 20
    new area codes are expected to be activated by December 2001. In
    contrast, 46 new area codes were activated during 1998-1999.

[^11]: In the *Notice*, the Commission recognized that other factors
    driving premature NANP and area code exhaust include: (1) multiple
    rate centers in an NPA 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*
    at 10328-29, para. 15.

[^12]: *See generally*, *First Report and Order* and *Second Report and
    Order*.

[^13]: This coincides with an earlier mandate that CMRS become LNP
    capable by that date. Cellular Telecommunications Industry
    Association's Petition for Forebearance from Commercial Mobile Radio
    Services Numbering Portability Officiations, *Memorandum Opinion and
    Order*, 14 FCC Rcd 3092 (1999) (*CMRS LNP Forebearance Order*).

[^14]: *See* LNPA Working Group Status Report to NANC, October 16, 2001,
    PIM 11.

[^15]: *See* Common Carrier Bureau Seeks Comment on North American
    Numbering Report Concerning Telephone Number Pooling and
    Optimization Measures, *Public Notice*, DA 98-2265, NSD File No.
    L-98-134 (rel. No. 6, 1998).

[^16]: Numbering guidelines are developed by the Industry Numbering
    Committee (INC) and can be found at www.ATIS.org.

[^17]: *See* NANP Expansion Optimization Issues Management Group Status
    Report to NANC, October 16, 2001.

[^18]: Federal Communications Commission's Common Carrier Bureau Selects
    NeuStar, Inc. as National Thousands-Block Number Pooling
    Administrator, *Press Release*, CC Docket 99-200 (June 18, 2001).
    NeuStar was named the Pooling Administrator effective June 15, 2001.

[^19]: *See* [www.nanpa.com](http://www.nanpa.com/). Mandatory pooling
    trials that have commenced before March 15, 2002 are being
    transitioned into the national pooling administration program prior
    to national pooling rollout.

[^20]: We clarify, on our own motion, in this Order that for the purpose
    of the rollout schedule, the top 100 MSAs are those listed at the
    end of this Order. *See infra* at Section VI.C and Appendix D.

[^21]: *First Report and Order*, 15 FCC Rcd at 7647-48, paras. 161-162.

[^22]: *Id*. at 7645-46, para. 159.

[^23]: The Common Carrier Bureau Seeks Comment on the National
    Thousands-Block Number Pooling Rollout Schedule, *Public Notice*, CC
    Docket 99-200, DA 01-2419 (rel. October 17, 2001) (*Thousands-Block
    Number Pooling Public Notice*).

[^24]: The schedule will include all NPAs in the top 100 MSAs.

[^25]: *First Report and Order*, 15 FCC Rcd at 7648, para. 163.

[^26]: *See id*. at 7649, para. 165. Such requests should also be made
    not less than three months prior to the scheduled rollout date, to
    ensure that the Pooling Administrator has sufficient time to prepare
    for implementation.

[^27]: Iowa Utilities Board Comments at 4; Maine PUC Comments at 7; New
    York State Department of Public Service Comments at 7; Ohio PUC
    Comments at 27; Pennsylvania PUC Comments at 11.

[^28]: State Coordination Group Comments at 8.

[^29]: BellSouth Comments at 30; Cingular Reply Comments at 13-16;
    Metrocall Comments at 3-7; NTCA Comments at 2-4; OPASTCO Comments at
    6-7; PCIA Comments at 10-11; USTA Comments at 4-5; Verizon Wireless
    Comment at 16-17.

[^30]: We also decline to extend pooling requirements to other messaging
    services and CMRS providers who are specifically excluded from LNP
    requirements. See Telephone Number Portability*, First Report and
    Order and Further Notice of Proposed Rulemaking,* 11 FCC Rcd 8352,
    8433-34 para. 156 (1996) (*LNP First Report and Order*).

[^31]: Metrocall Comments at 3-4; Verizon Comments at 16.

[^32]: Verizon Comments at 16.

[^33]: Metrocall Comments at 4; Verizon Comments at 16.

[^34]: Metrocall Comments at 3-4; Verizon Comments at 16.

[^35]: Metrocall Comments at 4; Verizon Comments at 16. Metrocall states
    that the cost of converting to SS7 signaling necessary for both
    porting and pooling would be enormous and requiring implementation
    could threaten carriers' economic well being. Specifically,
    Metrocall indicates that cost for the first year of installing and
    paying subscription fees for SS7 signaling would be approximately
    three million dollars, excluding usage fees. After the first year,
    Metrocall indicates that the recurring annual costs would be one and
    a half million dollars plus usage fees. *See* Metrocall Comments at
    4-5.

[^36]: Metrocall Comments at 5; PCIA Comments at 10; Verizon Comments at
    17. We note that the June 30, 2001, Numbering Resource Utilization
    data shows an increase in the total number of NXX codes held by
    paging carriers as compared with the number of NXX codes held by
    paging carriers as of December 2000. This increase, however, is most
    likely attributable to the increased number of paging carriers
    reporting numbering resources in the most recent survey**.** For
    example, TSR Wireless, one of the largest paging carriers, did not
    report any NXX code holdings in December but reported in June that
    it held 544 NXX codes. *See* FCC, Common Carrier Bureau, Industry
    Analysis Division, *Numbering Resource Utilization in the United
    States as of June 30, 2001*, Table 1 (November 2001) (*November 2001
    Numbering Resource Utilization Report*). This report may be
    downloaded (filename: utilizationjune2001.pdf) from the FCC-State
    Link Internet site at \<<http://www.fcc.gov/ccb/stats>\>.

[^37]: PCIA Comments at 10; Verizon Comments at 17.

[^38]: *See November 2001 Numbering Resource Utilization Report* at
    Table 1*.*

[^39]: *First Report and Order*, 15 FCC Rcd at 7684, para. 244.

[^40]: The data on the number of CLECs in the 180 MSAs outside of the
    100 largest MSAs was taken from the October 2001 LERG, which is
    published by Telcordia Technologies, Inc. Information on obtaining a
    copy of the LERG can be found at \<http://www.trainfo.com\>.

[^41]: OPASTCO Comments at 7; USTA Reply Comments at 6.

[^42]: In contrast, in the largest 100 MSAs, CLECs hold approximately
    26.4 percent of all NXX codes.

[^43]: NTCA Comments at 2-3.

[^44]: OPASTCO Comments at 7.

[^45]: State Coordination Group Comments at 8.

[^46]: *See* *First Report and Order*, 15 FCC Rcd at 1761, para. 169.

[^47]: *See* *Thousands-Block Number Pooling Public Notice* at 2. States
    outside of the largest 100 MSAs who wish to establish pooling may
    opt into the national pooling rollout schedule if they can
    demonstrate that: 1) an NPA in the state is in jeopardy, 2) the NPA
    in question has a remaining life span of at least one year, and 3)
    the majority of wireline carriers in the NPA are LNP-capable. *See
    First Report and Order*, 15 FCC Rcd at 7648-49, para. 164.

[^48]: BellSouth Petition at 12-15; Cingular Wireless Petition at 3-13;
    CTIA Petition at 5-14; Qwest Petition at 2-5; Sprint Petition at
    5-12. *But see* Opposition of the Maine Public Utilities Commission
    to Petitions for Reconsideration (April 12,2001).

[^49]: Cingular Wireless Petition at 3-6 and Qwest Petition at 5. Both
    Qwest and Cingular cite numerous factors delineating why additional
    time is needed to implement pooling. These factors will be more
    fully addressed in the current proceeding in the Wireless Bureau
    addressing the Verizon Wireless Petition. *See infra* at n. 51.

[^50]: *See* Sprint Petition at 5-12.

[^51]: *See* Verizon Wireless Petition Pursuant to 47 U.S.C. Sec. 160
    for Partial Forbearance from the Commercial Mobile Radio Services
    Number Portability Obligation, WT Docket 01-184 (filed July 26,
    2001) (*Verizon Wireless Petition*). Verizon Wireless seeks
    forbearance of the requirement that covered CMRS carriers become LNP
    capable by November 24, 2002. The petition indicates that Verizon
    Wireless will, however, comply with the corresponding deadline for
    participation in pooling. The Commission intends to address issues
    raised by Verizon Wireless's petition in a separate order.

[^52]: We note that CMRS service providers are not exempt from numbering
    resource optimization measures, and that they are significant users
    of numbering resources.

[^53]: Indeed, some carriers have asserted that pooling capability is
    more readily achievable than LNP capability. We also note that the
    NANC Local Number Portability Administration (LNPA) Working Group,
    has followed a timeline tracking LNP progress. *See* LNPA Working
    Group, *Wireless Number Portability Operations Status Report to
    NANC*, June 15, 2001.

[^54]: *First Report and Order*, 15 FCC Rcd at 7625, para. 122.

[^55]: 47 U.S.C. § 251(e)(2).

[^56]: *First Report and Order*, 15 FCC Rcd at 7662-63, 7665-67, paras.
    193-94, 201-03.

[^57]: *Id.* at 7669, para. 209. The Commission also concluded that
    because carrier-specific costs not directly related to
    thousands-block number pooling are not costs of thousands-block
    number pooling implementation, they are not subject to the
    competitively neutral requirement of Section 251. Accordingly,
    carriers are not allowed to recover such costs. *First Report and
    Order*, 15 FCC Rcd at 7670, para. 211 (citing Telephone Number
    Portability *Third Report and Order*, 13 FCC Rcd 11701, 11724 (1998)
    (*LNP Third Report and Order*)).

[^58]: *See First Report and Order*, 15 FCC Rcd at 7663, 7668-69, paras.
    196, 207.

[^59]: *Id.* at 7664, para. 197.

[^60]: *See, e.g*., California Public Utilities Commission Petition for
    Delegation of Additional Authority Pertaining to Area Code Relief
    and NXX Code Conservation Measures, 14 FCC Rcd 17486, 17492, para.
    14 (1999); Florida Public Service Commission Petition to FCC for
    Expedited Decision for Grant of Authority to Implement Number
    Conservation Measures, 14 FCC Rcd 17506, 17511, para. 13 (1999);
    Massachusetts Department of Telecommunications and Energy\'s
    Petition For Waiver of Section 52.19 to Implement Various Area Code
    Conservation Methods in the 508, 617, 781, and 978 Area Codes, 14
    FCC Rcd 17447, 17452, para. 14 (1999); New York State Department of
    Public Service Petition for Additional Delegated Authority to
    Implement Number Conservation Measures, 14 FCC Rcd 17467, 17472,
    para. 13 (1999).

[^61]: *First Report and Order*, 15 FCC Rcd at 7652, para. 171.

[^62]: *Id*. at 7664, para. 197.

[^63]: *See id*. at 7652-53, 7664, paras. 171, 197. Costs associated
    with state pooling trials are excluded from the federal cost
    recovery mechanism. *Id.* at 7664, para. 197.

[^64]: *Id*. at 7652, para 171.

[^65]: *See* SBC Comments to *First Report and Order* at 3 n.8; USTA
    Comments to *First Report and Order* at 9. *But see* California PUC
    Reply Comments to *First Report and Order* at 5-6; Maine PUC Reply
    Comments to *First Report and Order* at 6-7.

[^66]: *See* Attachment to Letter from Pete Sywenki, Director Federal
    Regulatory Affairs, Sprint, to Magalie Roman Salas, Secretary,
    Federal Communications Commission, CC Docket No. 99-200 at 2 (filed
    July 25, 2001); Florida Public Service Commission Comments at 9-10;
    USTA Comments to *First Report and Order* at 9; US West Comments to
    *First Report and Order* at 3-4; Verizon Wireless Comments to *First
    Report and Order* at 27.

[^67]: *See First Report and Order*, 15 FCC Rcd at 7664, para. 197.

[^68]: *See* SBC Comments at 25 n.71, SBC Comments to *First Report and
    Order* at 3 n.8.

[^69]: See, e.g., Petitions of Indiana Utility Regulatory Commission et
    al. for Delegated Authority to Implement Number Optimization
    Measures, 16 FCC Rcd 5474, 5484, para. 22 (2001) (*Indiana
    Delegation Order*); Petitions of the Arizona Corporation Commission,
    et al. for Delegated Authority to Implement Number Conservation
    Measures, 15 FCC Rcd 23371, 23382, para. 22 (2000) (*Arizona
    Delegation Order*).

[^70]: *See* BellSouth Reply Comments at 6-7.

[^71]: *See Indiana Delegation Order*, 16 FCC Rcd at 5483-84, para. 21;
    *Arizona Delegation Orde*r, 15 FCC Rcd at 23381-82, para. 22; *First
    Report and Order*, 15 FCC Rcd at 7652-53, para.171 and n.410.

[^72]: *See*, *e.g.,* Letter from Kathleen B. Levitz, Vice President --
    Federal Regulatory, BellSouth, to Magalie Roman Salas, Secretary,
    Federal Communications Commission, CC Docket Nos. 96-98, 99-200
    (filed June 20, 2001) (*BellSouth Cost Study*).

[^73]: *See* Bell Atlantic Reply Comments to *First Report and Order* at
    3-4.

[^74]: *Notice*, 14 FCC Rcd at 10410, para. 204.

[^75]: *Id*. at para. 205.

[^76]: *Id*.

[^77]: *Id.* at para. 204.

[^78]: *Id*.

[^79]: *First Report and Order*, 15 FCC Rcd at 7671, 7687-88, paras.
    214, 253.

[^80]: *Id*.

[^81]: *Second Report and Order*, 16 FCC Rcd at 379, para. 182.

[^82]: *See* Ad Hoc Comments at 33-34; NASUCA at 32; *see also* AT&T
    Reply Comments at 17-18.

[^83]: *See* NECA and NTCA Comments to *First Report and Order* at 2-3;
    Bell Atlantic Reply Comments to *First Report and Order* at 6.

[^84]: *See* Sprint Comments to *First Report and Order* at 18; WorldCom
    Comments to *First Report and Order* at 20.

[^85]: *See* AT&T Reply Comments at 18 n.58; Sprint Reply Comments at
    19; CTIA Comments to *First Report and Order* at 8-9; WorldCom
    Comments to *First Report and Order* at 20; AT&T Reply Comments to
    *First Report and Order* at 13; VoiceStream Reply Comments to *First
    Report and Order* at 13.

[^86]: *See* BellSouth Comments at 29; SBC Comments at 27; Sprint
    Comments at 19; Verizon Comments at 6; AT&T Comments to *First
    Report and Order* at 16 n.38; WorldCom Comments to *First Report and
    Order* at 20.

[^87]: *See* US West Comments to *First Report and Order* at 2.

[^88]: *See* NASUCA Comments at 30; General Services Administration
    Comments to *First Report and Order* at 10-11.

[^89]: *See LNP Third Report and Orde*r, 13 FCC Rcd at 11774, para. 136.

[^90]: *See id*., 13 FCC Rcd at 11773, para. 135.

[^91]: *See id*.

[^92]: *See First Report and Order*, 15 FCC Rcd at 7622, para. 117 and
    n.238. The Location Routing Number (LRN) database structure, which
    supports LNP, is used to route calls to customers who have been
    assigned telephone numbers from a pool because, as with a ported
    number, the NPA-NXX of a pooled number no longer necessarily
    identifies the switch or service provider associated with the
    service. The LRN is a unique ten-digit number assigned to each
    central office switch to identify each switch in the network for
    call routing purposes. *Id.*

[^93]: Carriers use telephone numbers for many other access-related
    services such as billing, maintenance, administration, and various
    forms of record keeping.

[^94]: *See Notice*, 14 FCC Rcd at 10384, para. 138.

[^95]: *See generally*, 47 C.F.R. § 69.1 *et seq.*

[^96]: *See First Report and Order*, 15 FCC Rcd at 7625, para. 122.

[^97]: *See LNP Third Report and Orde*r, 13 FCC Rcd at 11726-27, para.
    41 (citing *LNP First Report and Order*, 11 FCC Rcd at 8419-20).

[^98]: *See id*.

[^99]: *See id*. at 11727, para. 43 (citing *LNP First Report and
    Order*, 11 FCC Rcd at 8420-21).

[^100]: *See id*. at 11726-28, 11731-32, paras. 41-44, 52-53.

[^101]: *See* *First Report and Order* 15 FCC Rcd at 7577, 7578-79,
    paras. 2, 5.

[^102]: *See* Ad Hoc Comments at 33-34; NASUCA Comments at 32.

[^103]: *See* Telephone Number Portability Cost Classification
    Proceeding, *Memorandum Opinion and Order*, 13 FCC Rcd 24495, 24499,
    para. 7 (1998) (*LNP Cost Classification Order*).

[^104]: Moreover, implementation of thousands-block number pooling will
    enable continued growth of carriers' subscriber base. This, and the
    revenue from the additional services sold as a result, will provide
    some substantial recovery for numbering administration costs,
    including the costs of implementing thousands-block number pooling.

[^105]: *See* 47 C.F.R. § 61.45(d).

[^106]: For rate-of-return carriers, of course, costs arising from
    thousands-block number pooling would be treated in the same manner
    as other costs in each carrier's biennial rate adjustments. *See* 47
    C.F.R. § 61.39.

[^107]: *See* NECA Comments at 3; SBC Comments at 25; Verizon Comments
    at 5.

[^108]: *See* Ad Hoc Comments at 31-33; Joint Consumer Comments to
    *First Report and Order* at 42; General Services Administration
    Reply Comments to *First Report and Order* at 16-17.

[^109]: *See supra* at n.96 and accompanying text (citing *First Report
    and Order*, 15 FCC Rcd at 7625, para. 122).

[^110]: In the *First Report and Order*, the Commission concluded that
    ILECs will be able to recover qualifying costs of thousands-block
    number pooling through an exclusively federal cost recovery
    mechanism and that qualifying costs are assigned directly to the
    interstate jurisdiction for separations purposes. *See* *First
    Report and Order*, 15 FCC Rcd at 7663-64, paras. 196-197.

[^111]: *See generally*, 47 C.F.R. § 36.

[^112]: *See LNP Third Report and Order*, 13 FCC Rcd at 11777, para.
    144.

[^113]: *See* Thousands-Block Number Pooling Public Notice.

[^114]: Some commenters have argued that a cost recovery mechanism
    should be established for nonpooling carriers. *See, e.g.*, NECA
    Comments at 4-5; USTA Reply Comments to *First Report and Order* at
    5-6. In the LNP context, some non-LNP capable carriers have incurred
    costs associated with LNP database queries. Because these carriers
    are not LNP-capable, they are ineligible to recover these costs
    under current Commission rules. *See* 47 C.F.R. § 52.33. Commenters
    in the instant proceeding seek to avoid being subject to similar
    rules that might preclude recovery for thousands-block number
    pooling query charges. In areas in which thousands-block number
    pooling has been implemented, one database query will retrieve both
    LNP and thousands-block number pooling routing information. A
    petition for reconsideration of the *LNP Third Report and Order*,
    which raises the issue of cost recovery for database query charges
    incurred by non-LNP capable carriers, is currently pending before
    the Commission. *See* NECA Expedited Petition for Reconsideration,
    CC Docket No. 95-116 (filed July 29, 1998). Because number pooling
    can be implemented only where LRN LNP has been deployed, s*ee First
    Report and Order*, 15 FCC Rcd at 7622, para. 117, and because only
    one database query will occur for both the LNP and pooling
    inquiries, this issue is appropriately resolved in the LNP
    proceeding rather than in this matter.

[^115]: *First Report and Order*, 15 FCC Rcd at 7669, para. 207.

[^116]: *Id*. at 7671, 7687, paras. 214, 253.

[^117]: *See Second Report and Order*, 16 FCC Rcd at 379, para. 182;
    *First Report and Order*, 15 FCC Rcd at 7671, 7687, paras. 214, 253.

[^118]: *See* BellSouth Cost Study; Qwest Comments at Appendix A; SBC
    Comments (Cost Support Data); Sprint Reply Comments (Cost Study);
    *see also* US West Comments to *First Report and Order* at
    Workpapers 1-3.

[^119]: *See* Long-Term Number Portability Tariff Filings, Ameritech
    Operating Companies, et al., 14 FCC Rcd 11883 (1999); Long-Term
    Number Portability Tariff Filings, 14 FCC Rcd 11983 (1999)
    (collectively *LNP Tariff Investigation Orders).*

[^120]: *See First Report and Order*, 15 FCC Rcd at 7673, paras. 218-19.

[^121]: *See id*. at 7673, para. 218.

[^122]: *See id*.

[^123]: *See id*. at 7673, para. 219.

[^124]: Carrier-specific costs not directly related to thousands-block
    number pooling implementation are not eligible for recovery. *See
    id.* at 7670, para. 211.

[^125]: Because changes to the network for both thousands-block number
    pooling and number portability are similar, and because carriers are
    currently recovering the costs of number portability through a
    separate end-user charge, carriers were directed to distinguish the
    costs of providing number portability from the costs of implementing
    thousands-block number pooling. *See id.* at 7672, para. 216.

[^126]: *See id.* at 7672-73, paras. 216-17.

[^127]: *See id*. at 7673, para. 218.

[^128]: *See id*. at 7672-75, paras. 217-24.

[^129]: *See LNP Cost Classification Order*, 13 FCC Rcd at 24501, para.
    12 (citing *LNP Third Report and Order*, 13 FCC Rcd at 11740, para.
    72).

[^130]: *See generally*, BellSouth Cost Study; Qwest Comments at
    Appendix A; SBC Comments (Cost Support Data); Sprint Reply Comments
    (Cost Study).

[^131]: *See LNP Cost Classification Order*, 13 FCC Rcd at 24501, para.
    12 (citing *LNP Third Report and Order*, 13 FCC Rcd at 11740, para.
    72).

[^132]: *See First Report and Order*, 15 FCC Rcd at 7673, para. 219;
    *see also LNP Cost Classification Order*, 13 FCC Rcd at 24503, para.
    18.

[^133]: *First Report and Order*, 15 FCC Rcd at 7615-16, para. 101-102.

[^134]: BellSouth Petition at 1; SBC Petition at 1-2; USTA Petition at
    2.

[^135]: SBC Comments at 2.

[^136]: USTA Comments at 2.

[^137]: *Id.* at 3. USTA suggests that the MTE and utilization criteria
    should be calculated at the switch level in a non-pooling
    environment and at the rate center level in a pooling environment.

[^138]: In response to several petitions for reconsideration that
    opposed adoption of the MTE criteria, and a utilization threshold,
    the Commission affirmed both requirements. *Second Report and
    Order*, 16 FCC Rcd at 320, para. 29.

[^139]: *See* *Notice*, 14 FCC Rcd at 10348.

[^140]: Both requirements are necessary to optimize the use of numbering
    resources. They serve as objective needs-based criteria to allow
    carriers access to numbering resources in a competitively neutral
    manner.

[^141]: As noted in the *First Report and Order*, we decline to require
    different criteria for different market segments in order to
    maintain competitive neutrality. *See* *First Report and Order*, 15
    FCC Rcd at 7618, para. 106.

[^142]: *Second Report and Order*, 16 FCC Rcd at 316, para. 22. See also
    *Second Report and Order*, 16 FCC Rcd at 319-20, para. 29, wherein
    the Commission addresssed petitions for reconsideration of the
    utilization requirement.

[^143]: *Id*. at 318, paras. 25-26.

[^144]: *First Report and Order*, 15 FCC Rcd at 7619, para. 109.

[^145]: SBC Petition at 3; CTIA Petition at 3; USTA Petition at 4.
    Intermediate numbers are numbers that are made available for use by
    another telecommunications carrier or non-carrier entity for the
    purpose of providing telecommunications service to an end user or
    customer. Numbers ported for the purpose of transferring an
    established customer's service to another service provider shall not
    be classified as intermediate numbers. *See* 47 C.F.R. §
    52.15(f)(v).

[^146]: SBC Petition at 5-7; Verizon Wireless Petition at 8-10.

[^147]: USTA Petition at 6; Verizon Petition at 8-9.

[^148]: Verizon Wireless Petition at 4-7.

[^149]: WorldCom Petition at 1-6.

[^150]: *See November 2001 Numbering Utilization Report* at Figures 1-4.
    The data shows that where carriers have ten to twenty NXXs in a rate
    center LECs report over 65% utilization, CLECs report approximately
    40% utilization, and wireless carriers report over 60% utilization.

[^151]: We also note that the utilization threshold applies to all
    carriers, including resellers, that receive numbering resources from
    the NANPA or the pooling administrator.

[^152]: *Second Report and Order*, 16 FCC Rcd at 317, para 23.

[^153]: *See* *infra* at Section IV.C.

[^154]: *Second Report and Order*, 16 FCC Rcd at 320, para. 30.

[^155]: *Id.*

[^156]: *First Report and Order*, 15 FCC Rcd at 7618, para. 107 and
    *Second Report and Order*, 16 FCC Rcd at 320, para. 30.

[^157]: *Second Report and Order*, 16 FCC Rcd at 319, para. 27-28.

[^158]: *Id.*

[^159]: WorldCom Petition at 1.

[^160]: *Second Report and Order*, 16 FCC Rcd at 381, para. 188.

[^161]: *Id.* at 380-81, para. 187.

[^162]: *Id*.

[^163]: Verizon Comments at 2; Warner Telecom Comments at 7-9.

[^164]: ALTS Comments at 18; Focal Communications Comments at 7.

[^165]: Cox Comments at 16.

[^166]: *Id.*

[^167]: Since the growth requirements became effective on May 8, 2001,
    the Common Carrier Bureau has received five waiver requests.

[^168]: Texas PUC Comments at 19; Ohio PUC Comments at 28-29; New
    Hampshire PUC Comments at 7.

[^169]: Pennsylvania PUC Comments at 9.

[^170]: See Ad Hoc Telecommunications Users Comments at 36-37; BellSouth
    Comments at 31.

[^171]: *See First Report and Order*, 15 FCC Rcd at 7610-13, paras.
    86-92.

[^172]: WinStar Comments at 9.

[^173]: *See Second Report and Order*, 16 FCC Rcd at 306, 359-66, paras.
    124-143. In a service-specific overlay, numbering resources are
    assigned to carriers that provide a particular type of service or
    services, such as unified messaging and/or vehicle response (e.g.,
    OnStar) services. In contrast, numbering resources in a
    technology-specific overlay are assigned to carriers that use a
    particular type of technology or technologies, such as wireless. For
    convenience, we will refer to both service-specific and
    technology-specific overlays collectively as SOs.

[^174]: *See* Common Carrier Bureau Seeks Comment on a Petition of the
    California Public Utilities 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);
    Connecticut Department of Public Utility Control Files Petition for
    Rulemaking, Public Comment Invited, *Public Notice*, 13 FCC Rcd 7416
    (1998); *Petition of the Connecticut Department of Public Utility
    Control for Authority to Conduct a Transitional Service/Technology
    Specific Overlay Trial*, filed Mar. 12, 2001 (Connecticut Petition);
    *Petition of the Indiana Utility Regulatory Commission for Waiver of
    47 C.F.R. § 52.19(c)(3)*, filed Apr. 17, 2001; 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*,
    14 FCC Rcd 5083 (1999); Common Carrier Bureau Seeks Comments on the
    Ohio Public Utilities Commission's Petition for Delegation of
    Additional Authority to Implement Number Conservation Measures,
    *Public Notice*, DA 99-2016 (1999). Common Carrier Bureau Seeks
    Comment on the Pennsylvania Public Utility Commission's Petition for
    Delegation of Additional Authority to Implement Number Conservation
    Measures, *Public Notice*, 15 FCC Rcd 2904 (2000).

[^175]: *See, e.g.,* California Commission Comments at 2-3; Connecticut
    Commission Comments at 7-10; Florida Commission Comments at 5;
    Illinois Commission Comments at 4-7; Michigan Commission Comments at
    1-2; New Hampshire Commission Comments at 5-6; New York State
    Department of Public Services Comments at 1-2; Ohio Commission
    Comments at 5; and Texas Commission Comments at 7-8.

[^176]: *See Proposed 708 Relief Plan and 630 Numbering Plan Area Code
    by Ameritech -- Illinois*, Declaratory Ruling and Order, 10 FCC Rcd
    4596, 4607-12, paras. 25-29, 33-35 (1996) (*Ameritech Order*); *see
    also* 47 U.S.C. §§ 201(b), 202(a).

[^177]: Administration of the NANP should (1) seek to facilitate entry
    into the communications marketplace by making numbering resources
    available on an efficient and timely basis; (2) not unduly favor or
    disadvantage a particular industry segment or group of consumers;
    and (3) not unduly favor one technology over another. 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, 19516-17, para. 281 (1996) (citing *Ameritech Order*,
    10 FCC Rcd at 4604, para. 18) (*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).

[^178]: See *Local Competition Second Report and Order*, 11 FCC Rcd at
    19518, para. 285 (1996).

[^179]: *Notice*, 14 FCC Rcd at 10431, para. 257.

[^180]: *Id*. at 10432, para. 261.

[^181]: *Second Report and Order*, 16 FCC Rcd at 361, para. 128.

[^182]: *See Second Report and Order*, 16 FCC Rcd at 361-63, 364-66,
    paras. 127, 130, 135-141 (citing 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 Messaging
    Services and VoiceStream Wireless) and letter from Celia Nogales,
    SBC, to Magalie Roman Salas, Secretary, FCC, dated November 19,
    1999). In the transitional SO, the SO would convert into an
    all-services overlay at a designated time or when certain events
    occurred, such as the exhaust of the underlying area code.

[^183]: Ad Hoc Comments at 3, 6 (imminent exhaust of the NANP justifies
    the use of SOs); Cox Comments at 2 (expanded SOs should ensure that
    numbering resources are not being underutilized within that SO);
    Illinois Commerce Commission Comments at 7 (expanded SOs were not
    included in the proposal rejected by the FCC in the *Ameritech
    Order*); Michigan PSC Reply Comments at 3 (lifting the prohibition
    on SOs would provide state commissions with more options for
    providing area code relief); NASUCA Comments at 5-6; Ohio PUC
    Comments at 5 (state commissions should be allowed to determine
    whether a SO should be transitional).

[^184]: *See, e.g.*, Ad Hoc Comments at 3.

[^185]: *See, e.g.*, BellSouth Comments at 3, 10; Cingular Comments at
    8; PCIA Comments at 7 (wireless carriers often compete with wireline
    carriers); Sprint Reply Comments at 8, 10 (SOs would not improve
    number conservation or the efficient use of numbering resources,
    even if the Commission required take-backs because the wireless
    carriers' level of number utilization would be the same in the SO);
    USTA Reply Comments at 2; Verizon Wireless Reply Comments at 3;
    VoiceStream Comments at 3-4; WinStar Comments at 1-2.

[^186]: *See, e.g.*, Sprint Reply Comments at 10; WorldCom Reply
    Comments at 2.

[^187]: *See, e.g.*, BellSouth Comments at 3, 10; Cingular Comments at
    6-8; PCIA Comments at 7, 8; Verizon Wireless Reply Comments at 3;
    VoiceStream Comments at 3-5.

[^188]: Particularly, we question NASUCA's argument that discrimination
    does not exist for wireless providers because they serve a separate
    market. *See* NASUCA Comments at 6. *See also Wireless Order*, 16
    FCC Rcd at 13381, 13382 (acknowledging that, for some consumers,
    wireless service has replaced wireline service, and that some
    wireless carriers have been competing directly with local wireline
    providers).

[^189]: *See Ameritech Order*, 10 FCC Rcd at 4607, para. 25 (citing *MCI
    Telecommunications Corp. v. FCC*, 842 F.2d 1296 (D.C. Cir. 1988).

[^190]: Examples of these services include atms, On-Star, and unified
    messaging services.

[^191]: Sprint Reply Comments at 8.

[^192]: Proceeding on Motion of the Commission Pursuant to Section 97(2)
    of the Public Service Law Concerning the Supply of Telephone Numbers
    Available to New York Telephone Company in New York City*, Order
    Approving Stipulation*, Case 90-C-0347 (Issued and effective Jan. 7,
    1991) (*New York Order*).

[^193]: At that time, Bellcore stated that, under national guidelines,
    all area codes had to be associated with landline services that had
    a geographic identity. *See generally, New York Order*.

[^194]: *See* Gersh Kuntzman and Emily Lambert, *Looking for 212? Your
    Number's Up*, N.Y. Post, June 28, 1999.

[^195]: At that time, the New York Commission adopted a plan to
    implement the 646 and 347 NPAs as all-services overlays. This
    information is available at \<http://www.nanpa.com\>. In addition,
    voluntary thousands-block number pooling in the 212 and 718 NPAs did
    not commence until July 1, 1998 and March 1, 1999, respectively, and
    mandatory pools commenced on August 31, 2001. This information is
    available at \<http://www.numberpool.com\>.

[^196]: *Id.* Thus, over a ten-year period, from 1996 to 2006, only two
    new area codes will have been implemented in New York City.

[^197]: *See, e.g.*, Eric Malnic, *New Area Code Coming to Some in North
    O.C.*, Los Angeles Times, Mar. 23, 1994 (noting that the customers
    of NYNEX, a telephone company serving New York state, reacted
    positively to the 917 SO).

[^198]: Take-backs in New York City required existing paging and
    wireless subscribers with numbers in the 212 and 718 NPAs to change
    their numbers to the 917 SO.

[^199]: SOs may be particularly beneficial for non-pooling service
    providers that significantly drain numbering resources because they
    must take 10,000 instead of 1,000 numbers at a time.

[^200]: We agree that public opinion and the use of expanded overlays
    are factors in support of SOs. However, commenters fail to provide
    evidence, establishing that the public supports SOs, and in
    particular, that wireless subscribers support giving up their number
    in favor of implementing a SO (with take-backs). Commenters also
    fail to provide empirical data establishing that an expanded SO
    within a particular region would ensure that numbers would be used
    efficiently. Also, commenters fail to explain how state commissions
    would handle the exhaust of one of the underlying area codes
    encompassed by an expanded SO.

[^201]: *See, e.g.*, Ad Hoc Comments at 3; Connecticut Department of
    Public Utility Control Comments at 8; Illinois Commerce Commission
    Comments at 5. Non-geographic-based services include unified
    messaging services and automobile-based services such as OnStar.
    Consumers of such services are likely unaware of, or have no
    preference for, where their number comes from.

[^202]: *See, e.g.*, Cingular Comments at 7; Illinois Commerce
    Commission Comments at 7; Ohio PUC Comments at 9, 10; WorldCom
    Comments at 4.

[^203]: *See, e.g.*, Connecticut Department of Public Utility Control
    Comments at 7; CTIA Comments at 7.

[^204]: Connecticut Department of Public Utility Control Comments at 7.

[^205]: *See, e.g.*, AT&T Corp. Comments at 5-8; BellSouth Comments at
    3, 10; Cingular Comments at 6-8; PCIA Comments at 7, 8; Verizon
    Wireless Reply Comments at 3; VoiceStream Comments at 3-5.

[^206]: *See, e.g.*, ALTS Comments at 5; BellSouth Comments at 5;
    Cingular Comments at 7.

[^207]: BellSouth Comments at 5-6.

[^208]: Verizon Comments at 7.

[^209]: We acknowledge that in some instances, such as when a state
    already scheduled area code relief and can demonstrate the benefits
    of implementing a transitional SO in lieu of an all-services
    overlay, a SO may be appropriate. *See* *generally*, Connecticut
    Petition .

[^210]: *See, e.g.*, ALTS Comments at 6 (supporting transition on
    November 24, 2002); BellSouth Comments at 7; Connecticut Department
    of Public Utility Control Comments at 8 (transition should occur
    when underlying NPA nears exhaust); PCIA Comments at 9; Verizon
    Wireless Comments at 11; VoiceStream Comments at 7.

[^211]: This approach could help to ensure that the demand for numbering
    resources in the underlying NPA is not affected by an increase in
    the demand for wireless services, while increasing the likelihood
    that the SO is not underutilized.

[^212]: *See, e.g.*, AT&T Wireless Comments at 6; BellSouth Comments at
    8; Cingular at 6; CTIA Comments at 7; Illinois Commerce Commission
    Comments at 5; Ohio PUC Comments at 8-9; PCIA Comments at 8; Verizon
    Comments at 8; VoiceStream Comments at 6.

[^213]: *See, e.g.*, AT&T Wireless Comments at 6; Illinois Commerce
    Commission Comments at 5; Ohio PUC Comments at 8-9; Verizon Wireless
    Comments at 8; VoiceStream Comments at 5-6. Other commenters support
    take-backs only under certain circumstances. For example, the
    Connecticut Department of Public Utility Control supports
    take-backs, but only for unopened NXX codes, and Cox supports
    take-backs only for certain service providers such as
    point-of-service technologies that have little impact on the public.
    Connecticut Department of Public Utility Control Comments at 6; Cox
    Comments at 4-5.

[^214]: However, as Ad Hoc notes, wireline providers and their
    subscribers experience the cost and inconvenience of take-backs when
    a geographic split occurs. *See* Ad Hoc Comments at 4.

[^215]: According to data set forth by the CTIA, wireless subscribership
    has more than tripled since 1995. *See* FCC, Common Carrier Bureau,
    Industry Analysis Division, *Trends in Telephone Service*, Table
    12.2 (as reported by the CTIA) (Aug. 2001). This report is available
    at \<http://www.fcc.gov/ccb/stats\>. *See also* Cahners In-Stat
    Group Expects 32% Increase in Wireless Phone Use by Corporate
    Employees by 2000, *Press Release* (Oct. 5, 1998). This document is
    available at \<http://www.instat.com/pr/1998/wir-ser.htm\>.

[^216]: It could be argued, however, that there would be some limited
    benefit because the demand for additional numbering resources in the
    underlying NPA would be reduced.

[^217]: Examples of services where the telephone number is not
    necessarily known or used directly by the customer include atms, fax
    machines, and j-fax.

[^218]: Evidence of strong consumer support would weigh in favor of
    allowing take-backs, because consumers, especially wireless
    consumers, would be the primary group to be negatively impacted.

[^219]: *See Second Report and Order*, 16 FCC Rcd at 365, para. 137.

[^220]: CTIA Comments at 8.

[^221]: *See, e.g.*, Michigan PSC Comments at 2; New York State
    Department of Public Service Comments at 2; State Coordination Group
    Outline at 1.

[^222]: Connecticut Department of Public Utility Control Comments at 10.

[^223]: We note that the U.S. Court of Appeals recently affirmed the
    Commission's authority to require ten-digit dialing when an
    all-services overlay is implemented. *See* *People of the State of
    New York et al. v. Federal Communications Commission*, Docket No.
    99-4205 (2^nd^ Cir. 2001).

[^224]: See *Local Competition Second Report and Order*, 11 FCC Rcd at
    19518-19, para. 287.

[^225]: *See, e.g.*, Petition for Declaratory Ruling and Request for
    Expedited Action on 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 at 19025-19027, paras. 23-26; see also Central Office Code (NXX)
    Assignment Guidelines (95-0407-008), § 9.0, September 2001,
    available at \<www.atis.org\>.

[^226]: *See* *id*.

[^227]: Currently, several states have authority to continue rationing
    in both the overlay area code and the underlying area code for a
    period of six months after area code relief is implemented. *See,
    e.g.*, Numbering Resource Optimization, *Order*, 16 FCC Rcd 15842,
    15857-15858, paras. 39-42 (2001) (delegating authority to the
    Michigan Public Service Commission); Numbering Resource
    Optimization, *Order*, 16 FCC Rcd 5474, 5490-5491, paras. 37-38
    (2001) (delegating authority to the West Virginia Public Service
    Commission); Florida Public Service Commission Petition for
    Expedited Decision for Grant of Authority to Implement Number
    Conservation Measures, *Order*, 14 FCC Rcd 17506, 17517-17518,
    paras. 25-28 (1999).

[^228]: *See, e.g.*, BellSouth Comments at 10; CTIA Comments at 9.

[^229]: WorldCom Comments at 3.

[^230]: *Second Report and Order*, 16 FCC Rcd at 344-50, paras. 81-99.

[^231]: *Id.* at 347, para. 90.

[^232]: *Id*. at 349, para. 96.

[^233]: The Commission noted that section 220(f) bars public release of
    audit findings by a member, officer, or employee of the Commission
    except as directed by the Commission or court. 47 U.S.C. § 220(f).

[^234]: *See, e.g*., ALTS Comments at 14; California PUC Comments at
    10-11; Cingular Wireless Comments at 17-19; Connecticut Department
    of Public Utility Control Comments at 3-4; Maine PUC Comments at
    5-6; Maryland PSC Comments at 2; Michigan PSC Comments at 6; NASUCA
    Comments at 32-33; New Hampshire PUC Comments at 1; Ohio PUC
    Comments at 22; Pennsylvania PUC Comments at 1.

[^235]: That is, unless they need numbering resources there is no
    incentive for these carriers to file NRUF reports because currently
    the only penalty is denial of resources until the data is filed.
    *See, e.g*., Maine PUC Comments at 1; Maryland PSC Comments at 2;
    New Hampshire PUC Comments at 1.

[^236]: NANPA shall continue to withhold numbering resources from
    carriers who fail to comply with the mandatory reporting
    requirements. *First Report and Order*, 15 FCC Rcd at 7609, para.
    84.

[^237]: *Second Report and Order*, 16 FCC Rcd at 344-50, paras. 81-99.

[^238]: *Id*. at 347, para. 92.

[^239]: *Id*. at 370, para. 155.

[^240]: *Id*.

[^241]: *Id*.

[^242]: *See, e.g*., Connecticut Department of Public Utility Control
    Comments at 13; New Hampshire PUC Comments at 6; New York State DPS
    Comments at 6; Pennsylvania PUC Comments at 7; *but see* Ohio PUC
    Comments at 24.

[^243]: *See, e.g*., California PUC Comments at 11; Connecticut
    Department of Public Utility Control Comments at 3-4; Maine PUC
    Comments at 1; Maryland PSC Comments at 2; New Hampshire PUC
    Comments at 1; Texas PUC Comments at 14.

[^244]: AT&T Comments at 14-15.

[^245]: *See, e.g*., ALTS Comments at 14-15; BellSouth Comments at 21;
    Cingular Comments at 19-20.

[^246]: *See, e.g.,* California Public Utilities Commission
    Telecommunications Division, Report on the 619 Area Code, March 13,
    2001.

[^247]: AT&T Comments at 14-15.

[^248]: *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 compliance and enforcement
    activities with state commissions when: (i) there is a shared policy
    interest, and (ii) the states have processes for protecting
    confidential information. 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 F2d 733 (1986).

[^249]: *Id*. at 345, para. 87.

[^250]: Qwest Petition at 2.

[^251]: BellSouth Petition at 15-16.

[^252]: USTA Petition at 7.

[^253]: Sprint Petition at 12-14. This request has been addressed in the
    previous section. *See supra* at para. 99-102.

[^254]: *Second Report and Order*, 16 FCC Rcd at 346, para. 88.

[^255]: *Id.*

[^256]: Qwest Petition at 6.

[^257]: *Id*.

[^258]: *Id*. at 6-7.

[^259]: *Second Report and Order*, 16 FCC Rcd at 344, para. 83.

[^260]: *Id*.

[^261]: *Id*. at 345, para. 86.

[^262]: *Id*. at 345, para. 87.

[^263]: *Id*. at 345-46, para. 87.

[^264]: *Id*. at 346, para. 87.

[^265]: Qwest Petition at 7.

[^266]: *Second Report and Order*, 16 FCC Rcd at 349, para. 98.

[^267]: BellSouth Petition at 15.

[^268]: *Id*. at 15-16.

[^269]: USTA Petition at 7.

[^270]: *Id*.

[^271]: *See* KMC Opposition at 2 (concluding that such a requirement
    would be unfair because these carriers are not suspected of
    violating the Commission's rules regarding numbering).

[^272]: PCIA Opposition at 2.

[^273]: USTA Reply at 1-2.

[^274]: These additional costs should not be viewed as punitive in
    nature, however, since the initiation of an audit is not necessarily
    an indication that a carrier has done something wrong. The purpose
    of an audit is not to punish the carrier by imposing additional
    costs on the carriers that are audited.

[^275]: *First Report and Order*, 15 FCC Rcd at 7587-88, paras. 22-23.

[^276]: *See*, *e.g.,* AT&T Petition for Reconsideration of *First
    Report and Order*; SBC Petition for Reconsideration and
    Clarification of *First Report and Order*; Qwest Petition for
    Reconsideration of *First Report and Order*.

[^277]: *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.

[^278]: *Second Report and Order*, 16 FCC Rcd at 355-56, para. 114.

[^279]: *Id*. at 369, para. 152.

[^280]: *See* BellSouth Comments at 20; Cox Comments at 20; Qwest
    Comments at 5-6; Verizon Commenrs at 3-4; Winstar Comments at 6;
    WorldCom Comments at 11.

[^281]: *See* Ad Hoc Comments at 24; NASUCA Coments at 25-31; New York
    State Department of Public Service Comments at 4-5; Ohio PUC
    Comments at 21-22; SBC Comments at 12; State Coordination Group
    Comments at 5-6; Verizon Wireless Comments at 33-34.

[^282]: *See* Letter from John Hoffman, Chairman, North American
    Numbering Council, to Dorothy Attwood, Chief, Common Carrier Bureau,
    dated September 20, 2000.

[^283]: *See Second Report and* Order, 16 FCC Rcd at 369, para. 152.

[^284]: *See* Ad Hoc Comments at 23; SBC Comments at 11-12; Connecticut
    Department of Public Utility Control Comments at 3; Verizon Wireless
    Comments at 33; Focal Communications Comments at 5; Ohio PUC
    Comments at 21. Although ALTS supports the use of reservation fees,
    it notes that the 180-day reservation period should be sufficient
    for most customers. *See* ALTS Comments at 12.

[^285]: Focal Communications Comments at 5-6.

[^286]: NASUCA Comments at 23.

[^287]: New York State Department of Public Service Comments at 5.

[^288]: *See* ALTS Comments at 12; BellSouth Comments at 20; Cox
    Comments at 10; Verizon Comments at 3--4; Winstar Comments at 6.
    Although Verizon has generally opposed charging fees for the use of
    reservation of telephone number, it also believes that some
    customers have legitimate needs to reserve numbers for more time
    that is permitted by the rules. Given the choice of no fees with
    180-day reservation limits**,** or charging fees for longer
    reservation periods, Verizon would support the NANC proposal to
    allow carriers to maintain a fee for reservations. Verizon, however
    supports extending the reservation period to one year. Verizon
    Comments at 3; Winstar Comments at 6; WorldCom Comments at 11.

[^289]: *See* Winstar Comments at 6.

[^290]: *Id*.

[^291]: *See* WorldCom Comments at 11.

[^292]: For example, we would have to determine, among other things,
    whether carriers or end users would pay the fee; for what purposes
    the money collected would be used; what amount should be charged;
    whether and how to limit the extent of reservation, or whether they
    could be indefinite.

[^293]: *See*, *et al*, Connecticut Department of Public Utility Control
    Comments at 3; NASUCA Comments at 29; New Hampshire PUC Comments at
    1-2; New York State Department of Public Service Comments at 5;
    State Coordination Group Comments at 5.

[^294]: *See supra* at para. 110.

[^295]: *First Report and Order*, 15 FCC Rcd at 7585, para. 16.

[^296]: ACUTA Comments at 4.

[^297]: *Id*. at 6.

[^298]: On many campuses, the association between numbers and dormitory
    rooms allows for calling locations to be identifed in order to
    facilitate implementation of E911 systems. This speeds access to
    emergency services, including fire, police, and medical staff. *See*
    ACUTA Comments at 6-7.

[^299]: *Id*. at 6. According to ACUTA, colleges and universities use
    reserved numbers to: hold numbers for students or rooms while the
    student is absent, or rooms are empty during summer breaks or
    semesters abroad; retain abbreviated dialing patterns between staff,
    students, and faculty offices and rooms for safety administrative
    purposes; assign specific features and capabilities only to blocks
    of numbers; assist campus telecommunications professionals in
    administering billing of telecommunications services to specific
    user groups; and, preserve a sense of community and identity through
    the unique NXX code that becomes associated with a campus or
    university system.

[^300]: *Id*.

[^301]: For example, if 50 numbers out of a block of 100 are being used,
    all 100 numbers may be categorized as "assigned."

[^302]: 47 U.S.C. § 252(e).

[^303]: Telephone Number Portability, *First Memorandum Opinion and
    Order on Reconsideration*, 12 FCC Rcd 7236, 7283, 7625-27, 7346-47
    (1997) modifying *LNP First Report and Order*, 11 FCC Rcd at 8355,
    9393-96, 8482-85) (*LNP First Reconsideration Order*). In a series
    of orders, the Common Carrier Bureau granted a number of petitions
    for extension of the LNP deployment schedule due to the change of
    the NPAC in the Southeast, Western, and West Coast regions and
    certain technical problems.

[^304]: *Id*.

[^305]: CMRS carriers were originally required to have the capability of
    delivering calls from their networks to ported numbers anywhere in
    the country by December 31, 1998. *See* *LNP First Report and
    Order*, 11 FCC Rcd at 8355, 8439-40. In addition, CMRS carriers in
    the top 100 MSAs were required to offer LNP, including the ability
    to support roaming, throughout their networks by June 30, 1999. On
    February 9, 1999, the Commission granted a CTIA forbearance petition
    extending the deadline for CMRS providers to support service
    provider LNP until November 24, 2002. *CMRS LNP Forebearance Order*,
    14 FCC Rcd at 3092.

[^306]: *Second Report and Order*, 16 FCC Rcd at 329-30, paras. 49-51.

[^307]: *See* California Comments at 17.

[^308]: The top 100 MSAs list in the *LNP First Report and Order* is
    based on 1990 U.S. Census data updated with 1994 information.

[^309]: Commission Adopts Rules on Telephone Number Portability, *News
    Release*, Report No. DC 96-60 (June 27, 1996).

[^310]: *See* Appendix D for a list of the applicable MSAs.

[^311]: LNP First Report and Order, Appendix D.

[^312]: The 100 largest MSAs have changed in the following respects: the
    Bergen, NJ, Jersey City, NJ, Middlesex, NJ, Monmouth, NJ, Nassau,
    NY, Newark, NJ, and New Haven, CT MSAs are now part of the New
    York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA; the Orange
    County, CA and Riverside, CA MSAs are now part of the Los
    Angeles-Riverside-Orange County, CA CMSA; the Gary, IN MSA is now
    part of the Chicago-Gary-Kenosha, IL-IN-WI CMSA; the Baltimore, MD
    MSA is now part of the Washington-Baltimore, DC-MD-VA-WV CMSA; the
    Oakland, CA, San Jose, CA, and Vallejo, CA MSAs are now part of the
    San Francisco-Oakland-San Jose, CA CMSA; the Wilmington, DE MSA is
    now part of the Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD
    CMSA; the Ann Arbor, MI MSA is now part of the Detroit-Ann
    Arbor-Flint, MI CMSA; the Fort Worth TX MSA is now part of the
    Dallas-Fort Worth, TX (CMSA); the Fort Lauderdale, FL MSA is now
    part of the Miami-Fort Lauderdale, FL CMSA; the Tacoma, WA MSA is
    now part of the Seattle-Tacoma-Bremerton, WA CMSA; and the Akron, OH
    MSA is now part of the Cleveland, OH CMSA. The Census Bureau's
    Metropolitan Areas Ranked by Population: 2000 table is available at
    \<<http://www/census.gov/population/www/cen2000>\>.

    The following are now part of the 100 largest MSAs: the San
    Juan-Caguas-Arecibo, PR CMSA, McAllen-Edinburg-Mission, TX MSA,
    Colorado Springs, CO MSA, Daytona Beach, FL MSA, Lakeland-Winter
    Haven, FL MSA, Johnson City-Kingsport-Bristol, TN-VA MSA, Lexington,
    KY MSA, Augusta-Aiken, GA-SC MSA, Melbourne-Titusville-Palm Bay, FL
    MSA, Lancaster, PA MSA, Chattanooga, TN-GA MSA, Des Moines, IA MSA,
    Kalamazoo-Battle Creek, MI MSA, Lansing-East Lansing, MI MSA,
    Modesto, CA MSA, Fort Myers-Cape Coral, FL MSA, Jackson, MS MSA,
    Boise City, ID MSA, Madison, WI MSA, Spokane, WA MSA, and the
    Pensacola, FL MSA.

[^313]: *See Second Report and Order*, 16 FCC Rcd at 369, para. 151.

[^314]: The term \"parent company,\" as used herein, refers to the
    highest related legal entity located within the state for which the
    reporting carrier is reporting data. *See also* 47 C.F.R.
    §52.15(f)(3)(ii).

[^315]: Some commenters attribute this difficulty to the current climate
    of mergers and divestments in the telecommunications industry. *See*
    Cingular Comments at 13; PCIA Comments at 23; Verizon Wireless
    Comments at 19; BellSouth Comments at 18. Verizon also argues that
    any determination of how carriers are "related" is problematic for
    wireless carriers because many wireless systems are owned by
    partnerships or joint ventures.

[^316]: ALTS Comments at 10; WorldCom Comments at 10.

[^317]: *See* *First Report and Order,* 15 FCC Rcd at 7609, para. 84.

[^318]: *See* Michigan PSC Comments at 5.

[^319]: *See* *Second Further Notice*, 16 FCC Rcd at 369, para. 151.

[^320]: Illinois Commerce Commission Comments at 11; Maine PUC Comments
    at 4-5; Ohio PUC Comments at 2-3; Pennsylvania PUC at 4-5;
    California PUC Comments at 9: NASUCA Comments at 18; State
    Coordination Group Comments at 5; WorldCom Comments at 10; SBC
    Comments at 10; Verizon Comments at 10.

[^321]: Illinois Commerce Commission Comments at 11; Maine PUC Comments
    at 4-5; Ohio PUC Comments at 2-3; Pennsylvania PUC Comments at 4-5.

[^322]: *See* Cingular Comments at 16; Winstar Comments at 5; Verizon
    Wireless Comments at 35.

[^323]: *See First Report and Order,* 15 FCC Rcd at 7608, paras. 81-82;
    *see also* *Second Report and Order,* 16 FCC Rcd at 357, para. 119

[^324]: *Id*. at 7574, paras. 81-- 82.

[^325]: Cingular Comments at 16; ATLTS Comments at 11-12; Focal
    Communications Comments at 5.

[^326]: See *Second Report and Order*, 16 FCC Rcd at 369, para. 151.
    *See also* NeuStar Inc. Petition for Compensation Adjustment,
    Request for Approval of Implementation Scehdule and Emergency
    request of Interim Relief, CC Docket No. 99-200 (June 30, 2001)

[^327]: *See* Amendment of 47 C.F.R. § 1.1200 et seq. Concerning Ex
    Parte Presentations in Commission Proceedings, *Report and Order*,
    12 FCC Rcd 7348, 7356-57 (1997) (citing 47 C.F.R. § 1.1204(b)(1)).

[^328]: *See* 47 C.F.R. § 1.1206(b)(2).

[^329]: *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).

[^330]: Numbering Resource Optimization, 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, 16 FCC Rcd 306
    (2000) (Second Further Notice).

[^331]: *See* 5 U.S.C. § 604.

[^332]: Letter to Susan Walthall, SBA, to Michael K. Powell, Chairman,
    FCC, dated March 30, 2001. (*SBA Letter*).

[^333]: *See* 47 C.F.R. § 52.15(k).

[^334]: 47 C.F.R. § 52.5(i).

[^335]: SBA Letter at 5.

[^336]: We addressed significant alternatives where applicable in the
    *Second Report and Order FRFA*. For example, we discussed a
    significant alternative that would prohibit state commissions from
    implementing geographic splits. Small businesses that incur the
    costs of geographic splits may have benefited from this proposal,
    but we found that states should continue to have the flexibility in
    implementing area code relief. *See Second Report and Order*, 16 FCC
    Rcd at 397, para. 28.

[^337]: *See id*. at 390, 397, paras. 7, 30, Appendix B.

[^338]: NTCA Comments at 2-3; OPASTCO Comments at 7.

[^339]: OPASTCO Comments at 7.

[^340]: *Id*. at 4.

[^341]: *Id*.

[^342]: 5 U.S.C. § 604(a)(3).

[^343]: 5 U.S.C. § 601(6).

[^344]: 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
    definition(s) in the Federal Register." 5 U.S.C. § 601(3).

[^345]: 15 U.S.C. § 632.

[^346]: FCC, Common Carrier Bureau, Industry Analysis Division,
    *Telecommunications Provider Locator*, Tables 1-2 (November 2001)
    (*Provider Locator*). *See also* 47 C.F.R. § 64.601 *et seq.*

[^347]: *Provider Locator* at Table 1.

[^348]: *See* 47 U.S.C 251(h) (defining "incumbent local exchange
    carrier").

[^349]: 15 U.S.C. § 632.

[^350]: 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 C.F.R. §
    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).

[^351]: 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) (1992 Census).

[^352]: *See generally* 15 U.S.C. § 632(a)(1).

[^353]: *1992 Census* at Firm Size 1‑123.

[^354]: 13 C.F.R. § 121.201, North American Industry Classification
    System (NAICS) codes 513310, 513330, and 513340.

[^355]: 13 C.F.R. § 121.201, NAICS codes 513310, 513330, and 513340.

[^356]: *See* 47 C.F.R. § 64.601 *et seq*.; *Provider Locator* at Table
    1.

[^357]: *Provider Locator* at Table 1. The total for resellers includes
    both toll resellers and local resellers.

[^358]: 13 C.F.R. § 121.201, NAICS codes 513321 and 513322.

[^359]: *Provider Locator* at Table 1.

[^360]: 5 U.S.C. § 603(c).

[^361]: *See* 5 U.S.C. § 801(a)(1)(A).

[^362]: *See* 5 U.S.C. § 604(b).