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Before the
               Federal Communications Commission
                     Washington, D.C. 20554
In the Matter of
Numbering Resource Optimization
Petition for Declaratory Ruling and Request
For Expedited Action on the July 15, 1997
Order of the Pennsylvania Public Utility
Commission Regarding Area Codes 412, 610,
215, and 717
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CC Docket No. 99-200
CC Docket No. 96-98
 SECOND REPORT AND ORDER, ORDER ON RECONSIDERATION IN CC DOCKET
NO. 96-98 AND CC DOCKET NO. 99-200, AND SECOND FURTHER NOTICE OF
          PROPOSED RULEMAKING IN CC DOCKET NO. 99-200
          Adopted:   December 7, 2000                  Released:   December 29, 2000
Comment Date:   February 12, 2001
Reply Comment Date:   March 5, 2001
By the Commission:
                       TABLE OF CONTENTS
                                               Paragraph Number
                                      I.Introduction1
                          II.Background AND Overview4
                          III.UTILIZATION THRESHOLD18
               A.Initial Utilization Threshold21
    B.Adjustments to the Utilization Threshold25
C.Applicability of Utilization Threshold to Pooling Carriers27
D.Application of Utilization Threshold for Growth Resources29
            E.Calculation of Utilization Level30
F.Geographic Application of Utilization Threshold31
                  IV.Thousands-block number pooling34
A.Selection of Thousands-Block Number Pooling Administrator34
 1.Pooling Administrator Term of Appointment38
B.State Pooling Trials   California and Maine Petitions41
C.Thousands-Block Number Pooling for Covered CMRS Carriers47
II.AREA CODE RELIEF and Pennsylvania Numbering Order Petitions for
                  Reconsideration and Clarification52
                                A.Introduction52
                                  B.Background54
     C.Federal Guidelines for Area Code Relief56
D.Geographic Splits Versus All-Services Area Code Overlays62
                          1.Reverse Overlays71
                         2.Expanded Overlays73
E.Pennsylvania Numbering Order Petitions for Reconsideration and
                                 Clarification76
 III.other numbering resource optimization measures81
                                         A.Audits81
                           1.Types of Audits84
                      2.Audit Responsibility89
        3.Audited Information and Procedures94
        D.Mandatory Nationwide Ten-Digit Dialing100
                      E.Expansion of the D Digit105
               D.Clarification of Definitions107
                               1.Parent OCN107
2.Classification of Numbers Used for Intermittent or Cyclical Purposes110
E.        Reconsideration of Reserved Number Period113
F.Clarification of State Commissions' Access to Data116
1.State Commissions' Access to Mandatory Reporting Data116
2.State Commissions' Access to Numbering Resource Application
                                Information120
         III.FURTHER NOTICE OF PROPOSED RULEMAKING124
A.Service-Specific and Technology-Specific Overlays124
                    B.The Rate Center Problem144
              C.Liability of Related Carriers149
D.State Commissions' Access to Mandatory Reporting Data151
                     E.Fee for Number Reservations152
                                F.Enforcement153
G.State Commissions' Authority to Conduct "For Cause" and "Random
                                      Audits"155
H.Developing Market-Based Approaches for Optimizing Numbering
                                    Resources156
1.Commission Authority to Charge for Numbers158
2.The Need for a Market-Based Allocation System161
                     3.Structure of Markets164
4.Timing and Geographic Scope of Implementation177
I.Recovery of Pooling Shared Industry and Direct Carrier-Specific
                                        Costs179
J.Thousands-Block Number Pooling for Non-LNP-Capable Carriers183
    K.Waiver of Growth Numbering Requirements186
                              V.PROCEDURAL MATTERS190
                               VI.ordering clauses199
                                Final RulesAppendix A
           Final Regulatory Flexibility AnalysisAppendix B
    Initial Regulatory Flexibility AnalysisAppendix C
                           List of Parties Appendix D
                      I.INTRODUCTION
1.In this Second Report and Order (Second Report and Order), Order on Reconsideration
in CC Docket No. 99-200, and Second Further Notice of Proposed Rulemaking (Second Further
Notice), we continue to develop, adopt and implement a number of strategies to ensure that the
numbering resources of the North American Numbering Plan (NANP) are used efficiently, and
that all carriers have the numbering resources they need to compete in the rapidly expanding
telecommunications marketplace.  Less than nine months ago, we adopted a number of
administrative and technical measures designed to allow us to monitor more closely and increase
the efficiency with which numbering resources within the NANP are used, and sought further
comment on refinements to, and implementation of, those measures.  Primary among the
measures we adopted was a roadmap for the assignment of numbers to carriers in blocks of 1,000
rather than 10,000, as has historically been the practice.  At that time, we also made clear our
intention to continue to examine other optimization measures not specifically addressed then, in
furtherance of our national numbering resource optimization goals.
2.In undertaking to develop national numbering resource optimization strategies, we seek
to fulfill our statutory mandate under section 251(e) of the Communications Act of 1934, as
amended by the Telecommunications Act of 1996 (1996 Act or Act), which grants this
Commission plenary jurisdiction over the NANP.  In the First Report and Order, we
concentrated our efforts on two of the major factors that contribute to numbering resource
exhaust as identified in the Numbering Resource Optimization Notice of Proposed Rulemaking
(Notice):  the absence of regulatory, industry or economic control over requests for numbering
resources, which failed to promote accountability or efficiency with which numbering resources
were used and may even have led carriers to misuse the allocation system and build large
inventories of numbers, and the allocation of numbers in blocks of 10,000, irrespective of the
carrier's actual need for new numbers.  We continue to focus on these two factors, and, in
addition, examine several other measures raised in the Notice but not addressed in the First
                       Report and Order.
3.In the Pennsylvania Numbering Order, the Commission established guidelines for state
commissions to follow in selecting area code relief options and, among other things, encouraged
states to seek further delegated authority to implement number conservation plans.  In this Order
on Reconsideration in CC Docket No. 96-98, we address issues relating to the Commission's
delegation of authority to state public utility commissions (state commissions or states) to
undertake certain aspects of area code relief and to implement numbering resource optimization
measures.  We decline to amend the existing rules or implement additional rules for area code
relief at this time.  Rather, we find that the area code relief measures already in place are in accord
with the numbering resource optimization measures under consideration in this proceeding.
                   II.Background and overview
4.In the Communications Act of 1934, as amended by the 1996 Act, Congress gave the
Commission plenary jurisdiction over the NANP within the United States.  In discharging our
authority over numbering resources, we seek to balance two competing goals.  We must ensure
that carriers have the numbering resources that they need to compete and bring new and
innovative services to the consumer marketplace.  At the same time, we must ensure that, to the
extent possible, numbering resources are used efficiently.  Inefficient use of numbering resources
speeds the exhaust of area codes, imposing on carriers and consumers alike the burdens and costs
of implementing new area codes.  It also shortens the life of the NANP as a whole.  In the First
Report and Order, we described the alarming rate at which existing area codes were entering
states of jeopardy and new area codes were being activated throughout North America.  Recent
reports by the North American Numbering Plan Administrator (NANPA) indicate that at least 37
additional area codes are scheduled for implementation by the end of 2001.
5.Although it remains difficult to predict NANP exhaust with absolute precision, we know
that exhaust could have occurred within ten years unless we took measures to increase the
efficiency with which numbering resources are being used.  As noted in the First Report and
Order, the measures first examined were chosen because they could be implemented quickly and
would produce immediate and measurable results.  We recognize that it may be too soon to
measure comprehensively the effectiveness of the measures we implemented last March in
furtherance of numbering resource optimization.  Nevertheless, we are confident that those steps,
and the ones we implement in this order, will help us to achieve our goal of extending the life of
                       the current NANP.
6.Optimization Measures Already Implemented.   The measures adopted in the First
Report and Order marked a significant change in NANP administration.  Most notably, all carriers
in the United States that use NANP numbering resources now must closely monitor, track, and
report on their number usage based on uniform definitions established by the Commission.
Additionally, carriers must now demonstrate their need for additional numbering resources with
more than their subjective forecasts.  Carriers that fail to do so will be denied numbering
resources.  Other measures designed to increase discipline in numbering resource utilization
practices include mandatory reclamation of unused numbering resources and a requirement that
numbers be assigned by carriers to end-users sequentially to preserve the availability of unused
       blocks of numbering resources for other carriers.
7.Among the measures adopted that appear to be the most promising is thousands-block
number pooling.  Thousands-block number pooling is a system for allocating numbers in blocks
of 1,000 rather than 10,000.  It has been estimated that the nationwide implementation of
thousands-block number pooling and other numbering optimization measures could potentially
extend the life of the NANP by as many as 25 years.  Substantial benefit can be realized by
thousands-block number pooling because it enables carriers to take fewer than 10,000 numbers at
a time, which in turn leaves fewer numbers stranded and thus unavailable to be used by other
carriers.  By setting forth a framework for implementing thousands-block number pooling, we
hope to remedy the inefficient allocation and use of numbering resources at the national level.
8.State Commission Involvement.  A major component of our overall numbering resource
optimization strategy involves our commitment to continue developing and maintaining a
partnership with the state commissions.  We have enlisted states to assist us in numbering
resource optimization efforts by delegating significant authority to them to implement certain
measures.  In addition to the authority to implement area code relief, we have responded to the
requests of 25 state commissions by conditionally granting them authority to implement the
following measures: thousands-block number pooling trials; rationing for six months following
implementation of area code relief; hearing and addressing claims of carriers seeking numbering
resources outside of the rationing process; and auditing carriers' use of numbering resources.  The
grants of authority to the state commissions, however, were not intended to allow the states to
engage in number conservation measures to the exclusion of, or as a substitute for, unavoidable
and timely area code relief.  Although we did not mandate rate center consolidation in the First
Report and Order, we also believe that rate center consolidation is an attractive numbering
resource optimization measure because it enables carriers to use fewer NXX codes and thousands
blocks to provide service throughout a region, thereby reducing the demand for NXX codes and
thousands blocks, improving number utilization, and prolonging the life of an area code.  We
strongly encourage the state commissions to proceed as expeditiously as possible to consolidate
                         rate centers.
9.Additional Activities.   In the interim period since the release of the First Report and
Order, we have continued to implement measures in furtherance of our numbering resource
optimization goals.  On July 15, 2000, the Common Carrier Bureau (Bureau) released a Public
Notice in response to several questions the Bureau had received relating to the First Report and
Order.  On July 20, 2000, the Bureau released an order delegating to 15 states the authority to
implement number conservation measures.  In response to numerous requests from parties, on
July 31, 2000, we released an order staying the mandatory utilization and forecast reporting
requirements until September 15, 2000, and extending the deadline for compliance with the 45-
day reservation limit until December 1, 2000.  In addition, on August 30, 2000, the Bureau
released a Public Notice seeking comment on the California Public Utilities Commission and the
People of the State of California (California Commission) and the Maine Public Utilities
Commission (Maine Commission) petitions for waiver of the requirement that state commissions
conform their thousands-block number pooling trials to the national pooling rules set forth in the
First Report and Order by September 1, 2000.  We also released an order on August 31, 2000,
staying the compliance of the national pooling rules for California and Maine until we rule on the
merits of the petitions or December 31, 2000, whichever date is sooner.
10.Overview.   We sought comment on several matters relating to our findings in the First
Report and Order in an accompanying Further Notice of Proposed Rulemaking (Further Notice).
In the Further Notice, we sought comment on the level at which the utilization threshold for non-
pooling carriers should be established.  In this Second Report and Order, we establish a utilization
threshold of 60% that carriers must meet before receiving additional numbering resources in a
given rate center; this threshold will increase by 5% per year to a maximum of 75%.  We also
reconsider our decision not to apply a utilization threshold to pooling carriers.  We conclude that
application of a utilization threshold to pooling carriers will further our numbering resource
optimization goals, and therefore establish a utilization threshold of 60%, to increase by 5% per
year to a maximum of 75% for pooling carriers as well.  Those states already using a utilization
threshold that exceeds our established utilization threshold may continue to use their higher
threshold (up to 75%) only where it is currently in use until it no longer exceeds the mandated
threshold, at which time they must conform to the federally mandated threshold.
11.Furthermore, we address our national framework for thousands-block number pooling
administration, and conclude that the term of the Pooling Administrator will be five years rather
than coterminous with the current NANPA term.  We also rule on the merits of petitions for
waiver filed by the California Commission and the Maine Commission, and conclude that
California and Maine, as well as other state commissions conducting thousands-block number
pooling trials, may continue to use their utilization thresholds subject to parameters set forth in
                          this order.
12.In the Further Notice, we also sought comment on whether covered CMRS carriers
should be required to participate in pooling upon expiration of the local number portability (LNP)
forbearance period on November 24, 2002.  Based on the record before us, we decline to adopt
a transition period between the time that covered CMRS carriers must implement LNP and the
  time they must participate in any mandatory number pooling.
13.We also address several issues proposed in the Notice concerning area code relief.
Specifically, we consider whether we should amend the existing federal rules or develop
additional federal guidelines for area code relief.  At the present time, we decline to amend the
existing federal rules for area code relief or specify any new federal guidelines for the
implementation of area code relief.  We recognize the integral role state commissions play in our
numbering resource optimization policies and continue to rely on them to implement timely area
code relief.  We also address the advantages and disadvantages of geographic splits and all-
services overlays, and the approaches most commonly used by states to implement area code
relief.   We decline to state a preference for either all-services overlays or geographic splits as a
method of area code relief.  Moreover, we encourage state commissions to consider the use of
reverse overlays and expanded overlays, as well as boundary realignments, as a means of
  allocating new numbering resources to areas facing exhaust.
14.We also set forth a comprehensive audit program to verify carrier compliance with
federal rules and orders and industry guidelines.  We conclude that our comprehensive audit
program will consist of "for cause" and random audits performed by an auditor designated by the
Bureau.  Moreover, we direct the auditor to provide a comprehensive audit plan, including a
proposal for specific enforcement measures against those carriers that are found to have violated
our numbering guidelines and rules.  We also conclude that the costs of designated agents
involved in conducting audits will be allocated and recovered through the NANP administration
fund administered by the North American Billing and Collection Agent (NBANC).
15.Regarding nationwide mandatory ten-digit dialing, we decline to adopt this measure at
the present time.  Furthermore, because implementation issues remain unresolved, we decline to
adopt nationwide expansion of the "D digit" (the "N" of an NXX or central office code) to
include the digits 0 or 1, or to grant state commissions the authority to expand the D digit as a
  numbering resource optimization measure at the present time.
16.In this Second Report and Order, we also clarify certain aspects of the administrative
measures adopted in the First Report and Order.  First, we address certain elements of our new
requirements for monitoring carrier number usage, including the definition of Parent Operating
Company Number (OCN), and addressing how numbers used for intermittent and cyclical
purposes should be categorized under the uniform definitions established in the First Report and
Order.  We also address issues raised in several petitions for reconsideration of the 45-day period
for reserved numbers.  Next, we clarify the scope of access that state commissions have been
granted to mandatorily reported data and numbering resource application information.
17.We also seek comment on several matters relating to our findings in the Numbering
Resource Optimization proceeding in the attached Second Further Notice.  The issues addressed
include: our current prohibition on service-specific and technology-specific overlays, and whether
we should modify the prohibition and permit states to implement service-specific and technology-
specific overlays subject to certain conditions; the rate center problem, particularly what policies
could be implemented at the federal level to reduce the extent to which the rate center system
contributes to and/or accelerates numbering resource exhaust; and a proposal for a market-based
    approach for optimizing the use of numbering resources.
                   III.Utilization Threshold
18.Background.   In the First Report and Order, we concluded that carriers not
participating in thousands-block number pooling would be required to show that they had used a
certain percentage of their existing inventory of numbers before receiving additional resources in a
given rate center.  We also concluded that pooling carriers should not have to meet such a
utilization threshold to receive additional numbering resources in a rate center.  In the Further
Notice, we sought comment on several issues related to establishing a utilization threshold for
non-pooling carriers.  Although we determined that non-pooling carriers should be required to
meet a utilization threshold, we had no basis on which to establish a specific utilization threshold
because the parties provided very little empirical data.  In response to the Notice, parties had
suggested utilization thresholds within the 60%-90% range. The utilization thresholds proposed
by the parties, however, apparently were based on a calculation that included categories of
numbers in addition to assigned numbers in the numerator (such as administrative, aging, and
reserved numbers).  We recognized that these differences in calculating utilization would result in
different utilization levels and, therefore, tentatively concluded that a nationwide utilization
threshold for growth numbering resources should be set initially at 50%, and increased by 10%
          annually until it reaches a maximum of 80%.
19.Additionally, we tentatively concluded that a carrier should be required to meet a rate
center-based utilization threshold for the rate center in which it is seeking additional numbering
resources.  We sought comment on whether the rate center-based utilization should be used in
combination with NPA-based utilization thresholds.  Finally, we sought comment on whether
state commissions should be allowed to set the rate-center based utilization threshold within a
        range and based on criteria that we establish.
20.In the First Report and Order, we recognized that some states were in the process of
conducting utilization studies, and we hoped to examine those studies to learn what actual
utilization levels carriers are now achieving.  Several state commissions have since adopted
utilization thresholds pursuant to delegated authority.  Connecticut, Florida, Massachusetts,
New York, and Ohio, for example, have applied utilization thresholds to carriers that do not
participate in thousands-block number pooling.  California, New Hampshire, and Maine have
applied utilization thresholds to both pooling and non-pooling carriers.
              A.Initial Utilization Threshold
1.Discussion.   We agree with those commenting parties that suggest that allowing
carriers that have used only one-half of their existing inventories to receive additional numbering
resources does not reasonably encourage meaningful number optimization.  The record suggests
that carriers are able to achieve utilization levels above 50% before needing more numbering
resources.  Moreover, parties that support a 50% utilization threshold have provided no credible
basis for adopting this level.  Although setting the utilization threshold is not an exact science,
we agree with those commenters who state that allowing carriers to assign only one-half of the
numbers in their inventory before asking for more numbers undermines our efforts to optimize the
use of existing numbering resources.  In other words, we believe that carriers with lower
utilization levels do not need additional numbering resources.  Rather, they can serve customers
from their current inventory.  Commenters have presented no persuasive evidence to contradict
this reasoning; they offer no evidence that they (especially those with lower utilization rates) are
technically or otherwise precluded from using more of their existing inventory before requesting
more numbering resources.  We also believe that a 50% utilization threshold provides no incentive
for carriers to use numbers more efficiently, and that such a low initial utilization threshold may
cause us to lose some of the momentum gained from the strategies adopted in the First Report
                          and Order.
2.Instead, we adopt a 60% initial utilization threshold.  We find that 60% is an appropriate
initial utilization level for several reasons.  First, sound numbering resource optimization policies
should encourage carriers to use as many numbers as possible from their existing inventory before
obtaining additional numbers from the NANPA or the Pooling Administrator.  Also, state
commission studies and our preliminary assessment of data carriers reported to the NANPA
indicate that the average industry utilization levels range from approximately 45%-65%.  The
data reported to the NANPA suggests that the average industry-wide utilization is approximately
50%.  Thus, it appears that an initial threshold of 60% is high enough to encourage carriers to
use numbers from their existing inventory before seeking more resources, yet low enough to be
achievable by carriers that truly need additional resources.  In addition, states have used utilization
thresholds in this range with success.  Furthermore, this initial threshold level, because it is
demonstrably achievable, will give carriers an opportunity to make an orderly transition to the
higher thresholds we adopt below without compromising their ability to obtain numbering
        resources to serve customers in the short term.
3.The industry commenters differ from the public interest commenters as to what role, if
any, state commissions should play with respect to establishing utilization thresholds.  The
industry commenters argue that state commissions should not be allowed to deviate from the
utilization threshold that we establish.  The public interest commenters contend that state
commissions should be allowed to set specific utilization thresholds within a range established by
us.  We agree with those commenters that argue disparate utilization thresholds may be more
difficult to administer and may increase the difficulty of monitoring compliance.  We therefore
decline to delegate additional authority to state commissions to set different utilization thresholds,
with one exception.  State commissions that are currently using a utilization threshold pursuant to
delegated authority that exceeds 60% may continue to use their utilization threshold in those areas
as long as it does not exceed the Commission's established ceiling of 75%.  States exercising this
authority must ensure that utilization is being calculated in the manner established in the First
Report and Order; that is, only assigned numbers are included in the numerator.  This limited
exception allows states to continue their forward progress already achieving success with higher
utilization thresholds.  The utilization thresholds that we adopt herein shall otherwise be applied
                 on a uniform nationwide basis.
4.We also find it appropriate to allow a brief transition period for carriers to make
appropriate adjustments to the way in which they manage their numbering resource inventories.
We conclude, therefore, that all carriers shall have until three months after the effective date of
this Second Report and Order to meet the initial utilization threshold before applications for
growth numbering resources will be denied because of failure to meet the threshold.  In the
interim, however, carriers shall continue to be required to meet the months-to-exhaust (MTE)
        requirement before receiving growth resources.
        A.Adjustments to the Utilization Threshold
5.Discussion.   In the Further Notice, we tentatively concluded that the initial utilization
threshold should be increased annually by 10% to a maximum of 80%.  We are persuaded that
an annual increase in the utilization threshold is appropriate, but conclude that the utilization
threshold should be increased by 5% annually instead of 10%, until it reaches 75% rather than
80%.  We gradually increase the utilization level by 5% because we seek to give carriers sufficient
time to increase the efficiency with which they use numbering resources above current levels and
to use numbers currently in their inventories before they obtain more resources.  We remain
concerned that many carriers may be doing little if anything to groom their numbering inventories
to minimize waste of these important resources; this mandate should make all carriers take
significant and measurable steps to improve their utilization.  Moreover, we strongly believe that
as carriers become accustomed to the numbering resources optimization measures we have
adopted, the efficiency with which they use numbering resources will increase.
6.The initial utilization threshold of 60% shall be effective three months after publication
of this Second Report and Order in the Federal Register.  The utilization threshold shall be
increased by 5% on June 30, 2002, and annually thereafter until the utilization threshold reaches
75%.  The 75% threshold is a reasonable compromise between the 60% ceiling recommended by
some industry commenters and the 80% ceiling recommended by other commenters,
particularly since carriers are successfully meeting 75% utilization thresholds established by some
state commissions.  In fact, some carriers are able to reach utilization levels as high as 80%
before they need additional numbering resources.  This threshold balances our goal of
encouraging the efficient use of numbering resources with carriers' need to retain some flexibility
in managing their inventories.  In the future and as the market matures, however, carriers may be
able to achieve greater efficiencies in their use of numbering resources and, therefore, a higher
utilization threshold may be appropriate.  We urge carriers to develop strategies and procedures
to increase their utilization levels beyond the required thresholds in furtherance of our numbering
resource optimization goals, and in anticipation of any future adjustments.
A.Applicability of Utilization Threshold to Pooling Carriers
7.Discussion.  Petitioners and commenters sought reconsideration of our decision to
exempt pooling carriers from the requirement to meet a utilization threshold to obtain growth
numbering resources.  They argue that both non-pooling and pooling carriers should be required
to satisfy the utilization threshold in addition to the MTE requirement.  California asserts that the
utilization threshold it established for carriers participating in its pooling trials has increased
          numbering efficiency in its pooling trials.
8.We are encouraged by the results achieved in pooling trials using a utilization threshold,
and are persuaded that our national numbering resource optimization goals can be met more
quickly and efficiently if we require all carriers, including pooling carriers, to meet a utilization
threshold to obtain growth numbering resources.  We agree with Maine that applying the
utilization threshold to pooling carriers helps ensure that only those thousands blocks that are
needed are assigned.  Thus, the rationale we applied in establishing a utilization threshold for
non-pooling carriers, we believe, applies equally in a pooling environment.  Further, utilization
rates provide an objective, uniform means of determining when carriers are in need of additional
numbering resources.  We therefore conclude that pooling carriers, also, shall be subject to
meeting the utilization thresholds established herein to obtain growth numbering resources.
A.Application of Utilization Threshold for Growth Resources
9.Discussion.   Several petitioners and commenters disagreed with our decision to require
carriers to meet a utilization threshold in addition to MTE criteria to receive growth numbering
resources, generally asserting that the MTE calculation is sufficient to determine carriers' need
for numbering resources.   Nextel opposes utilization thresholds for growth numbering resources
and asserts that an MTE calculation more accurately reflects a carrier's numbering resource
demands.  As we stated in the First Report and Order, using MTE as the sole criterion for
evaluating need for numbering resources is inadequate, primarily because much of the MTE data
cannot be verified until after the carrier has already obtained the numbering resources.  Also, the
MTE forecast is highly subjective and dependent on good faith projections by each carrier.
Moreover, there is no retrospective accountability for carriers' forecasts.  In contrast, the
utilization threshold provides a more objective measure of carriers' need for numbering resources.
We, thus, affirm our conclusion that carriers must meet both the MTE and the utilization
 threshold requirements to receive growth numbering resources.
            A.Calculation of Utilization Level
10.Discussion.   Some carriers have asked us to reconsider the manner in which we
calculate the utilization levels.  We determined in the First Report and Order that utilization for
a given geographic area (rate center or NPA) must be calculated by dividing all assigned numbers
by the total numbering resources assigned to the carrier in that geographic area and multiplying
the result by 100.  Some commenting parties suggest that the utilization calculation should
include administrative, aging, intermediate, and reserved numbers in the numerator, or that the
utilization threshold should otherwise be reduced because carriers have very little or no control
over numbering resources in these categories.  These arguments are unpersuasive.  As we stated
in the First Report and Order, basing the utilization calculation on assigned numbers provides a
more accurate representation of the percentage of numbers being used to serve customers, which
we believe is the proper analysis for furthering our numbering optimization goals.  Moreover,
the utilization thresholds that we adopt herein take into consideration that only assigned numbers
are used in the numerator to calculate utilization.  In establishing them, we have considered
available data on carrier utilization and experience with utilization thresholds in several states.
Therefore, there is no need to alter the definition of utilization or to include administrative, aging,
       intermediate or reserved numbers in the numerator.
     A.Geographic Application of Utilization Threshold
11.Discussion.  In the First Report and Order, we determined that the utilization
threshold should be calculated and applied per rate center because numbering resources are
assigned per rate center.  Most commenters agree with this conclusion, and very few
    commenters support an NPA-wide utilization requirement.
12.Some ILECs suggest, however, that the utilization threshold should be calculated on a
per-switch basis in rate centers that have multiple switches, particularly where they have not
deployed LNP capability.  According to BellSouth, in the absence of thousands-block number
pooling, numbers cannot be shared easily among multiple switches in the same rate center.  They
assert that there are technical constraints on their ability to share numbering resources among
multiple switches within the same rate center and that a low utilization rate in one or more
switches could prevent it from meeting the rate center utilization threshold.  SBC argues in its
comments that the utilization threshold should be calculated at the "lowest code assignment
point"   the rate center, where there is only one switch, or the switch, where there is more than
                     one in a rate center.
13.We are not persuaded at this time that we should adopt a switch-based utilization or
"lowest code assignment point" utilization as suggested by SBC.  We are concerned that
allowing carriers to receive additional numbering resources when they have not reached the
overall rate center utilization threshold will increase the likelihood that numbering resources will
become stranded in underutilized switches.  We also believe that switch-based utilization
undermines our policy of encouraging rate center consolidation, which allows numbering
resources to be used over a wider geographic area.  Switch-based utilization calculation would
represent, in essence, rate center de-consolidation.  We urge carriers to pursue intra-rate center
and intra-company porting of numbers and other strategies to share numbers among switches,
both to minimize stranded numbers and to alleviate the need to get additional numbering
resources without meeting the established utilization threshold in each rate center.  Because a
number of parties have indicated that they are unable to port numbers between switches until they
have implemented pooling, we seek comment in the attached Second Further Notice on the
need, and specific criteria to be used, for a "safety valve" for carriers that do not meet the
utilization threshold for a given rate center, but have a demonstrable need for additional
numbering resources.  In the interim, until an alternative "safety valve" process is established,
carriers that do meet the utilization threshold in a given rate center may continue to seek waivers
 from the Commission to obtain additional numbering resources.
               IV.Thousands-block number pooling
A.Selection of Thousands-Block Number Pooling Administrator
14.In the First Report and Order, we determined that implementation of thousands-block
number pooling is essential to extending the life of the NANP by making the assignment and use
of NXX codes more efficient.  We therefore mandated nationwide thousands-block number
pooling in the 100 largest metropolitan statistical areas (MSAs), and set forth requirements and a
national framework for implementation.  Specifically, we required participation in pooling by
carriers that are required to be LNP-capable, either because they provide service in one of the
largest 100 MSAs, or pursuant to a request from another carrier, and directed that thousands-
block number pooling be deployed first in NPAs that are located in the largest 100 MSAs.  We
also directed covered Commercial Mobile Radio Service (CMRS) providers to implement
thousands-block number pooling after the forbearance from the LNP requirements expires on
November 24, 2002.  In addition, we required states that have implemented their own pooling
trials under delegated authority to bring these trials into conformity with the national framework
set forth in the First Report and Order.  Finally, we adopted certain technical requirements to
      ensure a consistent nationwide pooling architecture.
15.We also concluded that thousands-block number pooling should be administered by a
single national Pooling Administrator, but delayed implementation of pooling on a nationwide
basis until the national Pooling Administrator is selected through a competitive bidding process.
We delegated authority to the Commission's Office of the Managing Director (OMD), with the
assistance of the Common Carrier Bureau and the Office of the General Counsel, to prepare the
necessary bidding information and to develop an evaluation process for the Commission to use in
soliciting bids for a national Pooling Administrator.  We also directed the North American
Numbering Council (NANC) to make revisions to its proposed Thousands-Block Pooling
Administrator Requirements Document to specify the technical requirements for national pooling
administration.  On September 5, 2000, the Common Carrier Bureau released a Public Notice
seeking comment on the technical requirements recommended by the NANC.  After reviewing
the comments received from several parties, OMD, with the assistance of a technical consultant,
MITRE Corporation, developed a Request for Proposal (RFP) to be used in the selection of the
national Pooling Administrator.  To facilitate an expeditious implementation of national
thousands-block number pooling, OMD determined that a limited competitive bidding process is
appropriate, and thus identified and is inviting bids from three potential bidders known for having
experience in numbering administration: Mitretek Systems, NeuStar, Inc., and Telcordia
Technologies, Inc.  The procurement of a national Pooling Administrator is being conducted in
accordance with the requirements of the Federal Acquisition Regulation (FAR).
16.We note that as a consultant to the Commission for pooling administration, MITRE's
fees are part of the cost of establishing pooling administration.  MITRE's services have been an
integral aspect of the Commission's establishment of pooling administration.  Therefore,
MITRE's fees will be borne by carriers in a competitively neutral manner in the same way that the
       direct costs of pooling administration are borne.
17.Of particular concern with this procurement is the fairness of the bidding process, in
light of the NANC's earlier interactions with NeuStar in its capacity as NANPA and for several
state pooling trials.  Telcordia, for example, stated its belief that as a Pooling Administrator,
NeuStar would have an advantage in the bidding process, and asked the Commission to be
vigilant to ensure that NeuStar did not use its NANPA and Number Portability Administrator
Center (NPAC) administrator positions to gain an unfair competitive advantage in bidding to
provide national pooling administration.  In response to these concerns, we have taken
affirmative steps to structure the procurement process to ensure that no party has an unfair
competitive advantage.  First, we asked the NANC to "scrub" its proposed Requirements
Document, and ensure that its technical requirements are competitively neutral and do not favor
any particular party.  We then solicited comments from the public on the proposed technical
requirements to ensure that all interested parties had an opportunity to voice any concerns or
issues about the content of the technical requirements.  Next, we hired a neutral third party
consultant to help us evaluate and further refine the technical requirements, develop an RFP, and
assist us with the evaluation of competitive bids to facilitate an equitable process.  We believe that
the technical expertise of the consultant, coupled with its status as a neutral third party, adds
safeguards to the procurement process and helps to eliminate any perceived or actual advantages
for any one party.  Moreover, we ensured that no potential bidder had access to any information
pertaining to the RFP or the selection process, unless all potential bidders had access to such
information.  We also ensured that all potential bidders obtained any non-proprietary information
relevant to the RFP or the selection process that they requested.  It is anticipated that the national
Pooling Administrator selection will be made in the first quarter of 2001.
   1.Pooling Administrator Term of Appointment
18.Background.   In the First Report and Order, we indicated our intent to have the
national Pooling Administrator serve until the completion of the current NANPA's term.  This
would effectively give the national Pooling Administrator an initial term of less than two years.
Several commenters, including Telcordia, opined that the proposed term is too short.  Telcordia
asserts that the length of the award cycle makes it difficult for a Pooling Administrator bidder to
recoup its start up costs.  Telcordia states that, like the NANPA contract, the national Pooling
Administrator award period should be set at five years.  Other parties disagree.  WorldCom,
for example, states that the Commission should not reconsider its decision to make the initial
Pooling Administrator term coterminous with the current NANPA term, so as not to foreclose
potential synergies between the NANPA and the Pooling Administrator.
19.Discussion.   We conclude that the term of the thousands-block number Pooling
Administrator will be five years.  Thus, the Pooling Administrator's initial contract will not be
coterminous with the NANPA's term.  We agree with Telcordia's assertion that the Pooling
Administrator contract need not be tied to the NANPA's contract.  We believe that a five-year
award cycle will better enable the Pooling Administrator to recoup its startup costs, because it
allows the Administrator to spread its startup costs over a longer period of time.  We note that a
five-year contract should enhance competition by allowing bidders to offer a more attractive
annual contract price, thus increasing the interest of bidders in the contract.  A longer term will
also benefit carriers, who will be able to spread their costs associated with thousands-block
number pooling administration over a longer period of time.  Moreover, we note that if the
Pooling Administrator term were coterminous with the NANPA term, by allocating up to nine
months of the Pooling Administrator term to preparation for the national rollout, the Pooling
Administrator would have less than a year of operation before the term would end.
20.We nevertheless agree with WorldCom that it may be desirable in the future to link the
thousands-block number pooling administration and central office code administration duties to
take advantage of any synergies that may be achieved by one entity serving in both capacities.
We however are cognizant that vendor diversity for number administration services may have
advantages for the industry and the public.  We therefore intend to revisit the question of
whether the NANPA's and the Pooling Administrator's contract terms should be coterminous in
                          the future.
  B.State Pooling Trials   California and Maine Petitions
21.Background.   As we enunciated in the First Report and Order, uniform standards for
thousands-block number pooling are necessary to minimize the confusion and additional expense
related to compliance with inconsistent regulatory requirements.  We recognized in the First
Report and Order that pooling trials already underway might not conform to the standards set
forth in the national framework.  Thus, we required state commissions to bring their pooling
trials into conformity with the national framework by September 1, 2000.  Our goal in
establishing the September 1, 2000 deadline was to give state commissions time to bring their
pooling trials into conformity with the national framework, and to facilitate uniformity in the
implementation of thousands-block number pooling on a nationwide basis.
22.On August 4, 2000, the California Commission requested a waiver from compliance
with the Commission's directive in the First Report and Order to conform their thousands-block
number pooling trial to the Commission's national pooling rules by September 1, 2000.  On
August 14, 2000, the Maine Commission sought similar relief.  Specifically, both petitioners
seek to continue applying their utilization thresholds until the national pooling rollout begins.
Maine also specifically seeks relief from our sequential numbering rules.   California and Maine
seek waivers from complying with the September 1, 2000 deadline so that they may continue to
require pooling carriers to meet a utilization threshold, which they assert has proven integral to
the success of their number pooling trials.  Although both petitioners request relief from the
national pooling rules in general, their petitions enumerate specific arguments supporting only
their requests to continue to apply a utilization threshold for pooling carriers. California and
Maine further assert that conforming to national pooling rules would be detrimental to their
efforts to delay the exhaust of area codes.  Both California and Maine state that they will
conform to national number pooling rules when national pooling implementation begins.
23.In support of its waiver request, Maine states that uniformity is the exception and not
the rule in telephone regulation.  Maine believes that each state's circumstances are different
and "that if it must bear the responsibility of area code relief, it should be given the flexibility to
implement conservation measures which meet its specific needs."  California and Maine are also
concerned about the possibility that, under the Commission's national rules, pooling carriers will
be allowed to acquire more new numbers than they need by submitting a months to exhaust
calculation based upon completely subjective projections of future numbering needs.  On
August 31, 2000, the Commission released an Order granting California and Maine a stay of the
requirement to comply with national pooling rules until December 31, 2000, or until we ruled on
     the merits of the petitions, whichever date is sooner.
24.Discussion.   In applying utilization thresholds to pooling carriers as discussed above,
we grant California and Maine the primary relief sought in their petitions.  Specifically, they and
all other states that have commenced pooling trials in which they apply a utilization threshold to
pooling carriers may continue to use their thresholds if the thresholds meet or exceed the 60%
utilization threshold established herein for all other carriers, using our methodology for calculating
utilization.  States using a utilization threshold that exceeds the currently established initial
threshold of 60% in an active pooling trial need not decrease their threshold in that area, but may
continue to use their threshold up to a maximum level of 75%.  When the national Pooling
Administrator takes over the administration of these pooling trials, states will have the option of
maintaining the higher utilization threshold rather than lowering the threshold to conform to the
                        national level.
25.Maine also seeks relief from our sequential numbering rules.  Maine states that the
First Report and Order implements a standard for sequential numbering that provides little
guidance to carriers and provides them with ample room to avoid strict compliance.  Maine
describes neither what its sequential numbering rules are, nor how its sequential numbering rules
differ from the national rules.  Moreover, Maine proffers no reason why it cannot comply with the
national rules.  Also, contrary to Maine's assertions, we have not received other comments that
our rules do not provide enough guidance.  Moreover, we believe that the national rules should
address Maine's concerns about sequential numbering.  We also believe the benefit of having a
uniform requirement outweighs the potential inconvenience and confusion from the existence of
disparate requirements.  We therefore conclude that all service providers must assign numbers in
accordance with the sequential numbering rules we established in the First Report and Order.
26.Finally, we conclude that all states must conform all other aspects of their pooling trials
to the national framework.  They will be given a transition period of three months from the date of
publication of this Second Report and Order in the Federal Register to make any necessary
adjustments.  Both the California and Maine Commissions are to be commended for their
stewardship of numbering resources in their respective states.  Moreover, we recognize the need
for state commissions to have some flexibility in rendering numbering administration decisions
pursuant to their delegated authority.  We agree, however, with AT&T that "state commissions
have long been on notice that their interim pooling authority would be superseded by national
standards, and they presumably established their pooling trials with that fact in mind."  We find
that national requirements sufficiently support our numbering resource optimization goals, while
ensuring that service providers are subject to the same rules and requirements for each state in
which they operate.  We also find that compliance with a national, uniform framework for
thousands-block number pooling will permit service providers to avoid having to conform with
different requirements for every jurisdiction in which they operate, which would be unwieldy and
inefficient for service providers from both a regulatory and a financial perspective.  Moreover, a
lack of uniformity would harm consumers, who would likely incur the costs imposed on service
     providers operating under disparate pooling regimes.
C.Thousands-Block Number Pooling for Covered CMRS Carriers
4.Background.   In the Further Notice, we sought comment on whether covered CMRS
carriers should be required to participate in pooling by the LNP forbearance period on November
24, 2002.  In the alternative, we sought comment on whether we should allow a transition
period between the time that covered CMRS carriers must implement LNP and the time they must
participate in pooling, and if so, what the minimum reasonable allowance for such a transition
period would be.  We noted that by determining, in the First Report and Order, that CMRS
carriers would be required to participate in pooling once they have acquired LNP capability, we
were providing more than two years of lead time for carriers to perform the necessary
                         preparations.
5.State commissions generally oppose granting any additional time to CMRS carriers,
arguing that, because carriers have been on notice for over two years that they would be required
to implement pooling, they should not require additional time to make the necessary system
changes.  Carriers, on the other hand, assert that they need additional time to make changes to
their systems to implement pooling.  For example, VoiceStream states that to implement pooling,
carriers must modify their local service management systems (LSMSs), service control points
(SCPs), service order administration systems (SOAs), and operations support systems (OSSs).
6.Discussion.   In the First Report and Order, we found that implementation of
thousands-block number pooling in major markets is essential to extending the life of the NANP
by making the use of NXX codes more efficient.  In determining that CMRS carriers would be
required to participate in pooling once they acquired LNP capability, we noted that CMRS
providers would be able to contribute meaningfully to the numbering efficiencies to be gained by
               thousands-block number pooling.
7.Based on the record before us, we decline to adopt a transition period between the time
that covered CMRS carriers must implement LNP and the time they must participate in any
mandatory number pooling.  While carriers will have to modify some of their systems to
implement pooling, we agree with states that, because carriers are on notice that they will be
required to participate in pooling, and because pooling and LNP involve substantially similar
technical modifications, carriers should be able to implement pooling in the same time frame that
they achieve LNP capability.  Carriers have not provided us with sufficient evidence
demonstrating that they will not be able to implement pooling by the deadline for implementation
                            of LNP.
8.We are not persuaded by carriers' assertions that a brief transition period is necessary to
allow them time to troubleshoot any problems that may occur after LNP deployment.  Carriers
have not identified sufficiently any specific additional risks of implementing LNP and pooling at
the same time.   For instance, by the time wireless carriers begin to participate in pooling, number
pools will be well established in many areas of the country, and many of the initial implementation
problems will have previously been worked out. Moreover, carriers have not explained why any
potential risks could not be anticipated and addressed prior to the LNP implementation deadline.
In declining to adopt a transition period, we note that the fundamental administrative and
technological elements for thousands-block number pooling are currently, or will soon be,
available.  For example, there already are guidelines for the administration and assignment of
thousands blocks to LNP-capable service providers required to participate in thousands-block
number pooling.  In addition, NPAC Release 3.0, which is LNP software that includes efficient
data representation (EDR) for number pooling, is currently being tested.  EDR allows a
location routing number (LRN) to be associated with a block of one thousand numbers as a single
record.  Because EDR allows one thousand numbers to be downloaded and stored as a single
record, instead of one-thousand records, it is expected to significantly extend a carrier's SCP
capacity for thousands-block number pooling.  The availability of the Thousands-Block Pooling
Administration Guidelines, as well as the NPAC Release 3.0 software, should help CMRS carriers
     implement pooling by the LNP implementation deadline.
V.Area code relief and pennsylvania numbering order petitions for
               reconsideration and clarification
                    A.Introduction
2.In the First Report and Order, we set forth a number of administrative and technical
measures that focus on conservation of numbering resources within each NPA or area code.  By
maximizing efficient use of numbers within area codes, we reduce the need to introduce new area
codes, which protects consumers from the expense, trouble and dislocation that area code relief
entails and also can help prevent premature exhaust of the existing NANP.  We recognize,
however, that the adoption of these numbering optimization measures does not eliminate the need
for states to continue to implement area code relief in area codes that are approaching depletion.
Therefore, in the Notice, we considered what action we could take to assist states in implementing
area code relief in a manner that is consistent with other numbering resource optimization
measures that we may adopt in the Numbering Resource Optimization proceeding.
3.In this section, we address whether we should amend the existing federal guidelines or
develop additional federal guidelines for area code relief.  We also address the advantages and
disadvantages of geographic splits and all-services overlays, the approaches most commonly used
by states to accomplish area code relief, and whether area code overlays are preferable to
geographic splits from a numbering resource optimization perspective.  Moreover, we examine
the possible uses of reverse overlays and expanded overlays as area code relief options.
Furthermore, we reexamine our current prohibition on service-specific and technology-specific
overlays.  Finally, we address related petitions for clarification or reconsideration that were filed
        in response to the Pennsylvania Numbering Order.
                     D.Background
5.Traditionally, when the supply of numbers available within an area code is estimated to
exhaust during the planning horizon, some form of area code relief must be implemented so that
customers in that area can continue to obtain the services they desire from the carrier of their
choice.  The implementation of new area codes has been the primary relief measure employed in
geographic areas experiencing numbering resource shortages brought on by the rapid growth in
demand for central office codes or NXX codes.  Pursuant to Section 251(e)(1) of the Act, the
Commission has delegated to state commissions the authority to direct the form of area code
relief, to perform the functions associated with initiating and planning area code relief, and to
adopt final area code relief plans, subject to Commission guidelines for numbering
                        administration.
6.On September 28, 1998, we released the Pennsylvania Numbering Order, delegating
additional authority to state commissions to order NXX code rationing in conjunction with area
code relief decisions, in the absence of industry consensus.  The order further approved a
mandatory thousands-block number pooling trial in Illinois.  The order provided that state
commissions could order voluntary pooling trials, but in view of our efforts to develop national
pooling standards, we declined to delegate to state commissions the general authority to order
mandatory number pooling.   The Pennsylvania Numbering Order, however, encouraged state
commissions to seek limited delegations of authority to implement other number conservation
                           measures.
      G.Federal Guidelines for Area Code Relief
8.Background.  As discussed above, state commissions were delegated the authority to
direct the form of area code relief, to perform the functions associated with initiating and planning
area code relief, and to adopt final area code relief plans, subject to the Commission's guidelines
for numbering administration.  In the Notice, we sought comment generally on whether we
should amend the existing federal guidelines or develop additional federal guidelines for area code
 relief, to facilitate the optimization of numbering resources.
9.Discussion.   We decline to amend the existing federal rules for area code relief or to
specify any new federal guidelines for the implementation of area code relief at the present time.
State commissions may continue to authorize area code relief in accordance with previous
Commission rulings.  We continue to believe that state commissions are uniquely positioned to
determine when, and in what form, to implement area code relief.
10.Some commenters suggest that the Commission should impose limits on the time state
commissions may take to complete the implementation process for new area codes.  We decline
to do so at this time.  We agree that timely implementation of area code relief is critically
important to telecommunications carriers' ability to compete in the telecommunications
marketplace.  We are also, however, sensitive to the states' desire to minimize the consumer
impact of area code relief by not implementing new area codes any sooner than necessary.  Recent
experiences have revealed how difficult it is to balance both of these concerns.
11.NANP administration must reflect sensitivity to the growth and dynamic nature of the
telecommunications industry.  The ready availability, and use, of numbering resources by
communications service providers is essential to the public receiving the communications services
it wants and needs.  Unavailability of numbers, or an inefficient allocation of available numbers,
could prevent or discourage consumers from taking new services.  Thus, the timely
implementation of area code relief is essential if new providers are to enter and new services are
to appear in the telecommunications marketplace.  We continue to believe that we must rely on
state commissions to make area code relief decisions because of their unique position to ascertain
and weigh the very local and granular information inherent in area code relief decision making.  In
addition, no commenter has proposed a workable federal rule or "trigger" to require area code
relief if states fail to implement it in what they believe to be a timely manner.  Because of the
importance of this issue to competition, however, we emphasize that we will continue to monitor
area code relief carefully, and reserve the right to take a stronger role in this process should
circumstances warrant.  We acknowledge that the decision of when to implement area code relief
is difficult, and that consumers can be harmed if new area codes are implemented too early or too
late.  The implementation of new area codes before they are necessary forces consumers to go
through the expense and dislocation of changing telephone numbers or dialing patterns earlier or
more often than necessary.  On the other hand, delayed implementation of necessary area code
relief can leave carriers without the numbering resources they need to provide consumers with the
services they are demanding.  Long term rationing and other restrictions on access to numbers
poses an insidious threat to competition, as it can cause carriers to move their business to where
numbers are more readily available, robbing consumers of competitive choices.
12.In general, numbering administration should promote entry into the communications
marketplace by making numbering resources available on an efficient and timely basis, should not
unduly favor or disadvantage a particular industry segment or group of consumers, and should not
unduly favor one technology over another.  In applying these principles, state commissions
must take all necessary steps to prepare an NPA relief plan that may be adopted by the state
commission when numbering resources in the NPA are in imminent danger of being exhausted.
Furthermore, the implementation of any numbering resource optimization measures adopted in
this proceeding does not eliminate the need for states to continue to implement area code relief in
        those area codes that are approaching depletion.
13.We also reaffirm our commitment to the guidelines enumerated in the Pennsylvania
Numbering Order regarding the rationing of NXX codes.  In prior orders, we have declined to
grant state commissions authority to adopt NXX code rationing procedures prior to adopting an
area code relief plan, except in the most extreme circumstances.  Some commenting parties
suggest, nonetheless, that more and more states are relying on rationing as a means to defer area
code relief.  As determined in the Pennsylvania Numbering Order, the rationing of NXX codes
should only occur when it is clear that an NPA will run out of NXX codes before timely
implementation of a relief plan.  Rationing may only be used to ensure that an area code does
not exhaust completely before the state commission, acting expeditiously, can implement a new
area code.  Specifically, a state commission may order rationing only if it has ordered a specific
form of area code relief and has established an implementation date, and the industry is unable to
agree on a rationing plan.  If the state commission has not yet chosen a relief method and
established a relief date, the NANPA, as central office code administrator, and the industry should
devise the jeopardy conservation or rationing measures, consistent with the current industry
practice.  We also emphasized in the Pennsylvania Numbering Order that state commissions may
not use rationing as a substitute for area code relief.  We intend to closely monitor situations
where states may be using central office code rationing in lieu of timely area code relief and may
take appropriate action if we deem it necessary to ensure our rules are followed.  Under no
circumstances should consumers be precluded from receiving telecommunications services of their
choice from providers of their choice for a want of numbering resources.  For consumers to
benefit from the competition envisioned by the 1996 Act, it is imperative that competitors in the
telecommunications marketplace face as few barriers to entry as possible.
N.Geographic Splits Versus All-Services Area Code Overlays
15.Background.   A geographic split occurs when the geographic area served by an area
code is split into two or more geographic regions and one region maintains the old area code and
one (or more) receive one (or more) new area codes.  An all-services area code overlay occurs
when a new area code is introduced to serve the same geographic area as an existing area code.
The Commission has concluded that, if a state commission chooses to implement an all-services
overlay, the all-services overlay plan must include mandatory ten-digit local dialing by all
customers between and within area codes in the area covered by the new code.  NANPA data
reveal that state commissions implement new area codes through the implementation of
geographic splits significantly more often than through the use of overlays. In the Notice, we
sought comment on the advantages and disadvantages of all-services overlays and geographic
splits from a numbering resource optimization perspective, and whether there is a need for
additional rules or guidelines at the federal level with respect to the implementation of geographic
splits by state authorities.  We also sought comment on whether there is a need to modify our
existing guidelines with respect to the implementation of all-services overlays.
16.Discussion.    Several commenting parties identified a number of disadvantages of
geographic splits as a measure of area code relief when compared with overlays.  For example,
SBC states that, from a numbering resource optimization perspective, geographic splits result in
the less efficient use of NPA resources, especially where carriers stand in line on one side of the
geographic split while resources sit unused and unusable, on the other side.  Geographic splits
also require approximately half of the subscribers in the existing NPA to change to the new NPA.
As a result, these subscribers may incur additional cost, including disruption to users due to the
need for reprogramming Customer Premises Equipment (CPE) and changes made to stationery
and advertising.  Because geographic splits require approximately half of the subscribers in the
existing NPA to change to a new NPA, successive geographic splits create substantial costs for
subscribers, thus increasing the consequences associated with inaccurately forecasting growth
versus non-growth areas.  Splits can also often create dialing confusion by requiring customers to
use one dialing pattern for some calls (seven digits) and another dialing pattern for others (ten
                            digits).
17.Other commenters identified a number of advantages of geographic splits as a measure
of area code relief.  For example, the Ohio Commission states that geographic splits can be
implemented in many NPAs with minimal effects on the vast majority of callers' seven-digit local
calling patterns.  Thus, with the implementation of geographic splits, any given customer's
premises will be served by one NPA, and customers maintain seven-digit intra-NPA dialing.
Geographic splits also allow customers the ability to associate an NPA with a unique geographic
area.  Moreover, geographic splits allow for equal availability of unassigned NXXs in both the
new and the old NPA to all industry segments.  Other commenters suggest that splits are
competitively neutral and offer the benefits of increased competition.
18.Although we recognize that there are advantages and disadvantages to geographic
splits as a form of area code relief, we decline to follow the recommendations of parties urging
that we enumerate additional rules or guidelines at the federal level with respect to the
implementation of geographic splits.  We agree with the North Carolina Commission that state
commissions continue to need the flexibility to make decisions regarding area code relief and to
set the boundaries of a geographic split in the most appropriate way, considering the technical
implications for carriers' networks, the local circumstances, consumer preferences, and
communities of interest.  Although we do not establish additional rules or guidelines regarding
the implementation of geographic splits at the present time, we require the state commissions to
abide by the same general requirements that this Commission has imposed on the NANPA with
regard to numbering administration.  Thus, state commissions that choose to implement
geographic splits must ensure that numbering resources are made available on an equitable basis;
that numbering resources are made available on an efficient and timely basis; that relief not unduly
favor or disfavor any particular telecommunications industry segment or group of
telecommunications consumers; and that the relief not unduly favor one telecommunications
                    technology over another.
19.Several commenting parties also identified a number of advantages of all-services
overlays as a measure for area code relief.  From a numbering optimization perspective, an all-
services overlay creates a new numbering resource that is available for use throughout the entire
geographic area covered by the old NPA code, allowing resources to follow demand
throughout an area receiving area code relief.  As a result, the consequences associated with
inaccurately forecasting growth versus non-growth areas may be reduced.  Other commenters
note that all-services area code overlays are the least disruptive means of providing numbering
relief because overlays only affect the assignment of new numbers; existing consumers are not
required to change their telephone numbers, in contrast to geographic splits.  Businesses avoid
the expense of reprinting stationery and business cards, and they will not lose any business
opportunities or goodwill due to missed calls.  This advantage is particularly significant in high-
demand areas where there is a need for more frequent area code relief, because prospective all-
services overlays can be implemented without requiring existing consumers to change their
telephone numbers, in contrast to geographic splits.  Moreover, some commenting parties suggest
that area code overlays can be implemented quickly and are perhaps less expensive to implement
than splits because no customers are forced to change their numbers.
20.Some commenters identified a number of disadvantages of all-services overlays.
First, customers must use ten-digit dialing for calls in their own area, both to call numbers that use
the overlay area code and, pursuant to the Commission's mandate, to call numbers within their
own area code.  Thus, although an overlay does not require existing customers to change their
own telephone numbers, it leads to additional costs associated with ten-digit dialing and it reduces
the ability of customers readily to identify geographic areas with specific NPAs.  Second, from
a numbering optimization perspective, if an all-services overlay is implemented on a prospective
basis (i.e., no existing customers are reassigned to the new NPA), it does not free up new
numbering resources within the existing NPA.  Thus, new entrants in a market are less likely to be
able to obtain numbers in the existing NPA, and therefore may be less able to compete effectively
against incumbents for customers desiring numbers in the existing NPA.  Furthermore, Cox
contends that there is no inherent benefit to all-services overlays because all-services overlays do
 not increase the total numbering resources throughout the NPA.
21.Some commenting parties state that all-services overlays should be the preferred
method of choice for area code relief at the present time.  SBC, for example, urges the
Commission to adopt a presumption in favor of all-services overlays in the largest 100 MSAs and
require all-services overlays where either an exhausting area code has failed to last for the
recommended interval in the Industry Numbering Committee's (INC's) NPA relief planning
guidelines or the new area code is projected to last less than the recommended interval in the
guidelines.  At this time, we decline to adopt a presumption in favor of all-services overlays as a
method of area code relief.  We believe that state commissions are singularly situated to determine
the best available relief plan among the alternatives presented based on local geography, local
needs, the public interest, and carrier compatibility.  State commissions are uniquely positioned to
evaluate the best relief plan on a case-by-case basis and, therefore, the determinations of
appropriate relief should be left to state commissions.  We also believe that specific
circumstances and considerations in each relief area should determine which option geographic
split or all-services overlay would best suit the area.  Thus, state commissions may continue
to make decisions regarding the relative merits of area code splits and overlays so long as they act
consistently with the Commission's guidelines.  In addition to these two options, state
commissions should consider whether a third option, boundary realignments, would better serve
                 their area code relief needs.
22.Several commenters in this proceeding also suggest suspending or eliminating the ten-
digit dialing requirement for all-services overlays.  Ameritech, for example, contends that
suspending the ten-digit dialing requirement will provide the incentive for states to implement all-
services area code overlays.  SBC states that developments since the Local Competition Second
Report and Order have eliminated the need for the ten-digit dialing requirement.  The North
Carolina Commission states that, although the ten-digit dialing requirement mitigates dialing
disparity resulting from the implementation of an overlay that could be conceived as a competitive
disadvantage, it does not justify the inconvenience of ten-digit dialing being forced upon citizens
who are not yet enjoying any benefits of a competitive marketplace. Other commenters,
however, support the retention of the mandate that calls placed both within and outside of the
subscriber's NPA use ten digits when an overlay is implemented.  The Small Business Alliance,
for example, notes that ten-digit dialing is so common in many areas that customers automatically
give their area code and number when leaving a message on voice mail or on an answering
                            machine.
23.We continue to believe that imposing the ten-digit dialing requirement on the
implementation of all-services overlays will ensure that competitors, including small entities, do
not suffer competitive disadvantages.  We therefore retain the mandatory ten-digit dialing
requirement when all-services overlays are implemented.  Thus, "no area code overlay may be
implemented unless there exists, at the time of implementation, mandatory ten-digit dialing for
every telephone call within and between all area codes in the geographic area covered by the
overlay area code."  We require mandatory ten-digit dialing for all calls in areas served by
overlays to ensure that competition will not be deterred in overlay area codes as a result of dialing
disparity.  We believe that local dialing disparity would occur absent mandatory ten-digit dialing,
because all existing telephone users would remain in the old area code and dial seven digits to call
others in that area code, while new users with the overlay code would have to dial ten digits to
reach any customers in the old code.  Requiring ten-digit dialing for all calls avoids the
potentially anti-competitive effect of all-services area code overlays.
               1.Reverse Overlays
1.Background.    A "reverse overlay" involves the creation of a single area served by two
or more existing NPAs when a previously established NPA boundary is eliminated.  The Public
Utility Commission of Texas (Texas Commission) has deployed reverse overlays in the Dallas
area (214/972) and the Houston area (713/281).  In the Notice, we sought comment on the use
     of reverse overlays as a method for area code relief.
2.Discussion.  We find that reverse overlays can be useful tools to allow the use of
otherwise "stranded" numbering resources, and encourage the industry and state commissions to
consider their use.  According to SBC, reverse overlays have all of the advantages of all-service
overlays, and they also eliminate inefficiencies created by a previous, erased geographic split
line.  GTE states that the reverse overlays deployed in Dallas and Houston were handled easily
with few customer problems.  Such an overlay plan can be especially useful in areas where the
NPAs from the previous split are exhausting unevenly and relief is necessary in one but not the
other.  Reverse overlays can also be very useful where a slow-growing NPA is adjacent to a
fast-growing NPA that is nearing exhaust.  Rather than using a new NPA to relieve the area code
that is nearing exhaust, the state could turn the adjacent, slow-growing NPA into an overlay,
thereby freeing up NPA-NXXs in the slower-growing code that might otherwise have continue to
lie fallow for years.  This approach, if widely deployed, could significantly extend the life of the
supply of NPAs in the NANP.  We therefore strongly encourage states and the industry to
                          consider it.
               1.Expanded Overlays
3.Background.   The NANC has identified an "expanded overlay" proposal that would
implement an overlay covering a region that is larger than an existing NPA.  The "expanded
overlay" proposal would not replace or change assignment boundaries for existing NPAs, but
rather permits the allocation of numbering resources over a potentially larger geographic
region.  In the Notice, we sought comment on the feasibility of expanded area code overlays as
a means of allocating new numbering resources to areas facing exhaust of existing NPAs.  In
particular, we sought comment on the practicality of this approach in light of its potential effect
on rating and billing of calls between the overlay NPA and underlying NPAs.  We also sought
comment on whether there are any practical limits to the size of overlay NPAs.
4.Discussion.  We encourage state commissions to consider the use of expanded overlays
as a means of allocating new numbering resources to areas facing exhaust.  There is no
requirement that overlay area codes be implemented to use the same geographic boundaries as the
underlying area codes.  Potentially, use of such expanded overlay area codes could have
significant numbering resource optimization benefits, because it would allow for use of a single
area code to provide relief to multiple existing codes.  Furthermore, as Cox asserts, an expanded
NPA overlay could provide ways to improve efficiency of NXX code usage within densely
                        populated areas.
5.Allocating new numbering resources over a larger geographic region than existing NPAs
would give states enhanced flexibility to accommodate demand for numbers in high-growth areas
that may not correspond to existing area code boundaries.  Thus, the relative benefits of an
overlay are maximized when the overlay covers the greatest area possible.  We note that the
creation of expanded area codes may also raise complex rating and billing issues, however,
because the overlay NPA would have a larger coverage area than the underlying NPAs it
overlaps.  We therefore encourage the state commissions and the telecommunications industry
to work together to solve these issues if an expanded overlay is implemented in a certain area.
E.Pennsylvania Numbering Order Petitions for Reconsideration and Clarification
6.We also address petitions for clarification or reconsideration that were filed in response
to the Pennsylvania Numbering Order.  In the Pennsylvania Numbering Order, the
Commission delegated additional authority to state commissions to order number rationing in
jeopardy situations and encouraged state commissions to seek further limited delegations of
authority to implement other innovative number conservation methods.  The Commission,
however, clarified that state commissions do not have the authority to order the return of NXX
  codes or thousand number blocks to the code administrator.
7.Several parties filed petitions for clarification or reconsideration of the Pennsylvania
Numbering Order as it relates to states' authority to order the return of central office codes or
thousand number blocks.  In the First Report and Order, we recognized that state commissions
may be able to resolve certain issues more quickly and decisively than an industry consensus
process.  In this regard, we granted authority to state commissions to direct the NANPA to
reclaim unactivated or unused NXX codes.  Similarly, we gave the same authority to the states
to direct the Pooling Administrator in state pooling trials, as well as the national thousands-block
number Pooling Administrator once national thousands-block number pooling has been
established, to reclaim unactivated or unused thousands-blocks.  In light of the delegation of
authority to the states, the requests that the Commission clarify the Pennsylvania Numbering
Order or reconsider the state commissions' authority to reclaim unused and reserved NXX codes
and thousand-number blocks are moot.  Accordingly, we dismiss as moot this aspect of the
petitions for clarification or reconsideration that were filed in response to the Pennsylvania
                        Numbering Order.
8.Several parties also request clarification or reconsideration of the Pennsylvania
Numbering Order restricting state commissions from imposing number conservation methods
(e.g., NXX code rationing) until after a final decision is made regarding the implementation of
area code relief.  As discussed above, we reaffirm our commitment to the guidelines
enumerated in the Pennsylvania Numbering Order that the rationing of NXX codes should only
occur when it is clear that an NPA will run out of NXX codes before timely implementation of a
relief plan.  We emphasize that state commissions may not use rationing as a substitute for area
code relief.  In prior orders, the Commission and Bureau have also declined to grant state
commissions authority to adopt NXX code rationing procedures prior to adoption of an area code
relief plan, except in the most extreme circumstances.  Because of the difficulty in getting
needed numbering resources experienced by some carriers in areas subject to rationing, we are not
persuaded that Commission precedent should be changed at this time.  Thus, we decline to alter
       this aspect of the Pennsylvania Numbering Order.
9.We believe that the authority the Commission and the Bureau delegated to several state
commissions to implement other relief measures will provide them with the tools they need to
address the inefficiencies of numbering use in their states.  For example, the Commission and the
Bureau have granted several state commissions the authority to maintain pre-NPA relief NXX
code rationing measures for six months following implementation of area code relief.  The
Commission and the Bureau reasoned that a continuation of rationing after area code relief neither
contradicts the Pennsylvania Numbering Order, as the requisite area code relief has been
implemented, nor has the potential in contrast to rationing prior to area code relief to forestall
area code relief indefinitely.  In addition, state commissions were also granted the authority to
hear and address claims for an extraordinary need for numbering resources in an NPA subject to a
rationing plan.  This grant of authority empowers the state commissions to ensure that carriers
in dire need of numbering resources can obtain the numbering resources they need to continue to
provide service to their prospective customers, if the rationing plan will not ensure that the
carriers will have adequate and timely access to numbering resources.
10.The California Commission also requests reconsideration of the Pennsylvania
Numbering Order to the extent that it restricts state commissions from initiating mandatory
number pooling.  With the release of the First Report and Order, we adopted a nationwide
system for allocating numbers in blocks of one thousand, rather than ten thousand, wherever
possible, and announced our intention to establish a plan for national rollout of thousands-block
number pooling.  The Commission and the Bureau have also granted several state commissions
the authority to initiate thousands-block number pooling trials.  In fact, the California
Commission was delegated authority to initiate thousands-block number pooling trials in
California on September 15, 1999.  Accordingly, we dismiss as moot this aspect of the California
           Commission's petition for reconsideration.
       VI.Other numbering resource optimization measures
                         A.Audits
11.Background.   In the Notice, we opined that auditing is the only comprehensive method
for verifying the validity and accuracy of utilization data submitted by users of numbering
resources.  We stated that audits could also be used to verify compliance with non-quantitative
rules or guidelines.  We further stated that audit requirements may independently serve as a
deterrent to carrier noncompliance or self-serving behavior, such as hoarding of numbers.
Consequently, we proposed that any data collection and need verification measures proposed
should be supplemented with a comprehensive audit program that verifies carrier compliance with
   federal numbering rules and industry numbering guidelines.
12.Discussion.  We adopt our proposal to supplement the need verification measures and
data collection requirements, adopted in the First Report and Order, with a comprehensive audit
program to verify carrier compliance with federal rules and orders and industry guidelines.  In
addressing need verification measures in the First Report and Order, we adopted a more
verifiable, needs-based approach to allocating initial and growth numbering resources predicated
on proof that carriers need numbering resources when, where, and in the quantity requested.  We
find that an audit program is an important adjunct to these measures.
13.A comprehensive auditing program can serve many useful purposes.  First, it can
provide a level of confidence in the accuracy of data reported by carriers.  Our ability to monitor
numbering resource use and accurately predict NPA and NANP exhaust is dependent on the
quality of the data submitted by the carriers.  Auditing provides a way of verifying the accuracy of
these data.  Auditing also helps ensure that carriers are complying with our rules promoting
efficient number usage because it serves as a deterrent.  The mere possibility of an audit, we
believe, will prevent behavior that is contrary to numbering resource optimization goals, such as
stockpiling of unneeded resources.  Finally, auditing will allow us to identify inefficiencies in the
manner in which carriers use numbers, such as excessive use of certain categories of numbers such
       as administrative, aging, or intermediate numbers.
                 1.Types of Audits
14.Background.  In the Notice, we identified the three commonly used types of audits:
"for cause" audits, regularly scheduled audits, and random audits.  "For cause" audits are
conducted if there is a reason to believe that the information a carrier provided is inaccurate or
misleading, or that a carrier has violated the Commission's rules or orders or applicable industry
guidelines.  Regularly scheduled audits, for our purposes, would be conducted on a fixed
schedule for all entities that obtain numbering resources.  Random audits are unscheduled audits
of users of numbering resources selected at random.  We sought comment on whether and, if
so, how, all three types of audits should be employed as part of a comprehensive audit program to
monitor carrier compliance with number allocation and administration rules and guidelines.  We
also sought comment on the comparative costs and benefits associated with performing each type
                           of audit.
15.Discussion.  After careful consideration, we conclude that our comprehensive audit
program will consist of "for cause" and random audits.  Given that we have strengthened our
rules concerning need verification measures and data collection, we believe that we can better
accomplish our goals with the use of these two types of audits.  We agree with Omnipoint that
regularly scheduled audits would be "exorbitantly expensive" to the industry, which includes
thousands of code-holding carriers, or valueless due to the extended period of time between
                           audits.
16.We observe that there is broad agreement among commenters that "for cause" audits
should be included in our comprehensive audit program.  "For cause" audits may be initiated
based on information drawn from a variety of sources.  For example, "for cause" audits could be
triggered by the Bureau, the NANPA or the Pooling Administrator, or a state commission that has
reason to believe that a service provider may have violated the Commission's rules or orders, or
applicable industry guidelines.  "For cause" audits could also be triggered by inconsistencies or
anomalies, including inaccurate or misleading data, identified by the NANPA or the Pooling
Administrator in reported mandatory utilization and forecast data, or by the Bureau or a state
commission conducting its own review of submitted utilization and forecast data.
17.To request that a "for cause" audit be conducted for any of the above stated reasons,
the NANPA, the Pooling Administrator or a state commission must make a written request to the
entity designated by the Commission to conduct audits (the Auditor).  Such request shall state the
reason for which a "for cause" audit is being requested and shall include documentation of the
alleged anomaly, inconsistency, or violation of the Commission rules or orders or applicable
industry guidelines.  The Auditor shall determine from the application whether a "for cause" audit
is warranted.  Also, the Auditor may, as an additional deterrent, and at its own discretion, conduct
a "for cause" audit and follow-up audits of service providers that previously were subject to "for
                         cause" audits.
18.Because "for cause" audits are conducted only if there are specific allegations of non-
compliant or inappropriate conduct on the part of a carrier, we conclude that we should also
monitor carrier compliance with our rules and orders and applicable industry guidelines through
the use of random audits.  We decline to employ only "for cause" audits in our program, as
suggested by some commenters, because we believe it would weaken our ability to effectively
monitor compliance with all rules, orders, and applicable guidelines.  In conjunction with the use
of "for cause" audits, we find that random audits will provide our comprehensive audit program
with more flexibility to accomplish our auditing goals.  Since random audits are not necessarily
triggered by allegations of non-compliant or inappropriate conduct, they can serve as a strong
deterrent to any carrier who might misuse numbering resources.  We agree with the Texas
Commission that random audits are particularly important to ensure continuous compliance with
applicable rules and regulations.  We disagree with Level 3 that random audits will expose a
company to the arbitrary application of a costly process.  All carriers should be prepared at any
time to show their compliance with our requirements; the use of random audits will spare the vast
majority of carriers from having to do so while providing a similar deterrent effect.
             2.Audit Responsibility
19.Background.   We identified the NANPA, the Commission, and the state commissions
in the Notice as possible candidates to conduct numbering resource audits. We sought comment
on whether we should direct the NANC to select an entity to audit carrier number utilization and
forecast data using a competitive bidding process subject to our approval.  We acknowledged
that the NANPA may not be the best choice to audit code holders because the NANPA, in its
capacity as central office code administrator, would be subject to periodic audits for related
issues.  We also sought comment on who should conduct audits, and on whether audit
responsibility should be apportioned among these or other neutral third parties.
20.Discussion.   Although numerous commenters, including some state commissions,
supported selecting NANPA as the auditor for our program, we decline to do so.  We recognize,
as do some commenters, that the selection of the NANPA as the auditor could pose a potential
conflict of interest since the NANPA is subject to similar audits for numbering compliance.
Instead, the Commission will ensure, by using auditors in the Audits Branch of the Accounting
Safeguards Division in the Common Carrier Bureau or other designated agents, that "for cause"
and random audits are properly and promptly conducted.  We disagree with AirTouch that federal
regulatory agencies do not have the necessary resources to conduct audits of the breadth that is
needed.  Since auditors are already employed by the Commission, we expect that only minimal
costs will be incurred in implementing the auditing program.  In addition, the Commission may
designate agents under section 251(e)(1) to conduct audits or otherwise assist in the
            comprehensive numbering audit program.
21.Many of the state commissions responding to the Notice proposed that we delegate
authority to the states to conduct their own audits in addition to the audits prescribed herein.
We decline to delegate authority to the states to conduct the audits prescribed herein at the
present time.  We are concerned that some states may not, as indicated by the California
Commission, have the resources to properly conduct the audits that we require.  In addition, we
are concerned that states may employ different standards in performing the audits.  Many carriers
operate in multiple states, and one of our goals in adopting a national auditing framework is to
prevent carriers from having to comply with differing demands in different states.  In declining to
delegate authority to states to perform audits under the national program, we do not intend to
 preempt any state authority to perform audits under state law.
22.Nevertheless, we do believe that a certain level of state participation in our auditing
program is desirable.   Thus, we have granted states the ability to request "for cause" audits, as
noted above.  In the attached Further Notice, we seek comment on whether and under what
circumstances state commissions should be given the independent authority to conduct "for
cause" and "random" audits either in lieu of, or in addition to, the national audit program
established herein.  In addition, we will permit states that have the resources to do so to
participate on Commission audit teams if they wish to do so.  We note that the state
commissions, through resolutions adopted by the National Association of Regulatory Utility
Commissioners (NARUC), have encouraged such joint audit efforts.
23.Although not selected to perform the audits in our comprehensive program, the
NANPA, in its capacity as code administrator, will continue to have audit-type responsibilities.
Specifically, it must examine the data it receives from service providers for anomalies and
inconsistencies.  This audit-type responsibility is distinct from the audit program that we are
establishing.  Thus, our actions in establishing an audit program do not relieve NANPA of its
responsibility to examine and verify data submitted by service providers.  To the contrary, we
require NANPA to continue to discharge these responsibilities, which will alert it to any
information that may lead to the initiation of a "for cause" audit by the Auditor.
      3.Audited Information and Procedures
24.Background.   We sought comment on the process by which specific auditing
procedures should be established, as well as on the development of statistical and analytical
approaches that would be required to evaluate the quality and validity of reported data.  We
asked parties to comment on how we may structure an audit process that is flexible enough to
focus on new problems or issues as they arise.  We noted that the NANC and the INC have
been working to develop a comprehensive audit process, and we directed the NANC to provide a
progress report regarding this work effort to the Common Carrier Bureau on or before the
deadline for initial comments in this proceeding.  We also sought comment on the best method
for soliciting the input of state commissions, recognizing that state commissions should have a
major role in the development of this framework and procedures.
25.Discussion.   On July 18, 2000, the NANC submitted a progress report to the Common
Carrier Bureau regarding its work with the INC in developing a comprehensive audit process.
Although we do not adopt the report in its entirety, we do adopt several of its proposals.  In this
regard, we delegate authority to the Chief of the Common Carrier Bureau to develop a
comprehensive audit plan including detailed analytical audit procedures for both "for cause"
audits and random audits.  The plan should identify compliance issues based on risk assessment
and should include a schedule of audits that focuses audit resources on the critical issues
         pertaining to numbering resource optimization.
26.We also adopt the NANC's proposal that the Auditor provide standard audit reports.
Specifically, we require draft audit reports, no later than 30 days after the completion of an audit,
that contain a summary of the auditor's results.  Based on the final audit report, to the extent the
Common Carrier Bureau finds evidence of potential violations, it shall refer the matter to the
Enforcement Bureau for possible enforcement action, which may include, for example, monetary
forfeitures, revocation of interstate operating authority and cease and desist orders.  In the
Further Notice attached to this Second Report and Order, we seek comment on whether and how
numbering resources should be denied as an additional enforcement mechanism.
27.Auditing Costs.  Based on our assessment in the Notice that auditing and other
administrative solutions for allocating and administering numbering resources appear to involve
changes in the manner in which these resources are overseen and managed, we tentatively
concluded that the costs for our proposed solutions should be allocated and recovered through
the existing NBANC fund.  In addition, we tentatively concluded that section 251(e)(2)
requires that the costs of the administrative solutions be borne by all telecommunications carriers
on a competitively neutral basis and that including the costs in the NBANC fund would result in
the allocation and recovery of costs from all telecommunications carriers on such a basis.
28.We conclude that the costs associated with our comprehensive auditing program are
numbering administration costs and, as such, they should be borne by all telecommunications
carriers on a competitively neutral basis. Although we intend that the audits will be conducted by
auditors in the Bureau's Audits Branch,  to the extent that designated agents other than
Commission staff are used to perform the work related to our comprehensive audit program, we
conclude that the costs associated with such work performed by designated agents should be
         allocated and paid for through the NBANC fund.
29.Finally, we decline to provide a specific cost recovery mechanism for carrier specific
auditing costs, including those associated with providing requested documentation or information
needed by the Auditor to conduct the audit.  We believe that these costs will be minimal since the
carrier's primary responsibility when being audited is to provide the Auditor with requested
information.  Moreover, we believe that these costs will not significantly affect a carrier's ability
             to be competitive in the marketplace.
         B.Mandatory Nationwide Ten-Digit Dialing
30.Background.   Currently, the standard dialing pattern is seven-digit dialing within an
NPA, and ten-digit dialing (or one plus ten digit) between NPAs.  Ten-digit dialing is required in
both the relieved and the new NPA when all-services overlays are implemented as area code
relief.  In the Notice, we sought comment on whether we should adopt nationwide ten-digit
dialing, (i.e., the dialing of ten digits for all calls, regardless of whether they are inter-NPA, intra-
NPA, or toll) or whether we should encourage states to implement ten-digit dialing.  We
recognized that mandatory ten-digit dialing increases the supply of numbers available for use,
through the reclamation of protected codes, and potentially through permitting the use of either
0 or 1 as the first digit of an NXX code (the fourth, or "D digit, of a ten-digit telephone
number).  We also sought comment on any technical problems and costs associated with ten-
                        digit dialing.
31.Discussion.   We decline to adopt nationwide mandatory ten-digit dialing at the present
time as a numbering resource optimization measure.  As discussed above, we also continue to
require that, where all-services overlays are used, ten-digit dialing is required not only between
the original NPA and the overlay NPA, but also within each NPA, to prevent anti-competitive
impacts on new entrants that may have few or no numbers in the original NPA.
32.Several commenting parties support mandatory nationwide ten-digit dialing.
Commenters support the conversion to ten-digit dialing as a numbering resource optimization
measure, particularly in densely populated areas with NPAs that are projected to exhaust
shortly.  Airtouch, for example, contends that mandatory ten-digit dialing will eliminate the
need for protected NXX codes, thereby significantly increasing the number of NXX codes that
can be assigned in an area, and will permit expanded use of the D digit.  Other commenters,
however, explicitly reject the adoption of this measure.  Several commenting parties state that
mandatory ten-digit dialing would allow future area code relief projects, particularly all-services
overlays, to be less disruptive to consumers, and might foster new and different uses for NPA
                           overlays.
33.It appears, however, that at the present time, the numbering resource optimization
benefits of ten-digit dialing are limited.  Protected codes, which enable seven-digit dialing
across area code boundaries, may be reclaimed without regard to whether mandatory nationwide
ten-digit dialing is implemented.  In fact, the NANC recommends that protected codes should be
eliminated in all instances.  Also, the record in this proceeding reveals that expansion of the D
digit to optimize the effectiveness of ten-digit dialing raises significant implementation concerns.
SBC, for example, states that D digit expansion would require substantial time and effort, as well
as modification of all switching systems and networks to allow the "unblocked" "0" or "1" D digit
to be recognized as the fourth digit of a ten-digit number.  Perhaps an advantage that could be
realized at this time from implementing mandatory ten-digit dialing is that it might liberate state
commissions from having to face dialing pattern questions as they make area code relief decisions,
perhaps allowing them to focus more sharply on numbering resource optimization concerns.  We
have concluded, however, that we should leave area code relief decisionmaking with the states at
                      the present time.
34.In addition, the record in this proceeding indicates that a nationwide transition to ten-
digit dialing would require some technical modifications to switches, operations support systems,
and customer premises equipment.  The NANC Report states that, although the industry cost of
implementing ten-digit dialing will vary according to each geographic area and service provider,
some carriers could experience substantial costs associated with modifications to switch
translations and OSS, directory publishing, changes to announcement systems, and customer
education.  Implementation of ten-digit dialing will also require upgrades to the Public Safety
Answering Point (PSAP) systems used to respond to 911 calls.  More importantly, mandatory
ten-digit dialing does present some disruptive effects, particularly for consumers.  Consumers
often object to the inconvenience and confusion associated with having to remember and dial
three extra digits.  For the foregoing reasons, we decline to require mandatory nationwide ten-
               digit dialing at the present time.
                C.Expansion of the D Digit
35.Background.    In the Notice, we recognized that expansion of the fourth digit of a ten-
digit telephone number, the so-called "D" digit (the "N" of an NXX or central office code),
would increase the quantity of NXXs available within an NPA by approximately 25% if
accompanied by the implementation of ten-digit dialing.  Accordingly, we sought comment on
the costs and benefits of expanding the D digit, and on whether we should mandate the adoption
of this measure at the national level to ensure its effectiveness or on a statewide or NPA-wide
basis.  Furthermore, we sought comment on whether states should independently implement the
 expansion of the D digit as a numbering optimization measure.
36.Discussion.   We decline to adopt nationwide expansion of the D digit to include 0 or
1, or to grant state commissions the authority to implement the expansion of the D digit as a
numbering resource optimization measure at the present time.  We agree with commenting parties
that D digit expansion raises some implementation concerns.  The record in this proceeding
reveals that implementation of this measure will require some technical modifications to switches,
operations support systems, and customer premises equipment.  For example, since service
providers may be using NXXs that begin with "0" or "1" for intra-network use, they will need to
develop an alternate technical solution.  In addition, several commenting parties contend that D
digit expansion must be done simultaneously by all participants in the NANP because otherwise
calls can not be completed to exchanges where carriers continue to retain the D digit for internal
use.  The INC also states that this modification is expected to be a multi-year process for
carriers to implement, and therefore, expansion of the D digit would need to be implemented as
the final phase of the measures associated with ten-digit dialing.  For the foregoing reasons, we
decline at this time to adopt nationwide expansion of the D digit to include 0 or 1, or grant state
commissions the authority to implement the expansion of the D digit as a numbering resource
optimization measure at the present time.  We recognize that the current use of 0 or 1 as the D
digit is extensive and therefore steps must be taken to identify and eliminate all such uses prior to
any release of the D digit.  We therefore direct carriers to begin identifying and eliminating
specialized uses of 0 or 1 as the D digit in anticipation of the eventual expansion of the D digit.
              D.Clarification of Definitions
                     1.Parent OCN
37.In the First Report and Order, we mandated that all carriers that receive numbering
resources from the NANPA, or that receive numbering resources from a Pooling Administrator,
report forecast and utilization data to the NANPA.  We also required carriers that receive
numbering resources from another carrier to report forecast and utilization data for such numbers
                     in their inventories.
38.We required the NANPA to develop a reporting form for both utilization and forecast
data.  To ensure that the NANPA has a means for associating each carrier's reported data with
carrier identification information, we required that the reporting forms for utilization and forecast
information include company name, company headquarters address, OCN, parent company OCN,
and the primary type of business in which the numbers are being used.  We stated that carriers
should report their utilization and forecast information by separate legal entity, identifying each
entity by its OCN.  We also directed the NANPA to withhold numbering resources from any
United States carrier that fails to provide its utilization and forecast information as mandated in
the First Report and Order until such information has been provided.
39.We directed reporting carriers to identify a parent OCN to enable us to determine the
relationships among them and to monitor number usage for corporations and groups of companies
as well as individual carrier entities.  We are aware that, because of varying and complex
corporate structures, reporting carriers may have more than one entity that could be deemed its
"parent."  For example, if a reporting carrier is a subsidiary of company A, which is in turn a
subsidiary of company B, both companies A and B could be deemed the parent of the reporting
carrier.  We therefore clarify that the reporting carrier should identify as its parent, and provide
the OCN for, the highest related legal entity located within the state for which it is reporting data.
Thus, in the example above, the appropriate parent would be company B, provided that company
B is located within the relevant state.  In the attached Second Further Notice, we seek comment
on whether additional data regarding corporate relationships should be reported with carriers'
mandatory number utilization and forecast reports, and whether or how that information should
be used to ensure the widest possible compliance with our number usage monitoring and
optimization efforts, without unduly burdening reporting entities.
2.Classification of Numbers Used for Intermittent or Cyclical Purposes
40.Numbers used for intermittent purposes are numbers designated for use by a particular
customer that may be "working" in the Public Switched Telephone Network (PSTN) periodically,
but that remain designated for the customer's use even if they are not "working" at other times.
These may include numbers contained in blocks assigned to Centrex or Private Branch Exchange
(PBX) users, or to large corporations that require an inventory of spare numbers to accommodate
internal usage on short notice.  These customers typically use all or a portion of a block of
numbers at any given time.  Numbers used for cyclical purposes are similarly designated numbers
that are typically "working" for regular intervals of time. Customers with numbers used for
cyclical purposes typically wish to retain the same number even when the numbers are not
"working."  A customer's summer home telephone number that is in service for six months out of
the year, or a college student's telephone number that is in service only for the school year are
       examples of numbers used for cyclical purposes.
41.To the extent that these numbers are "working" on the mandatory reporting date, they
should be reported as assigned numbers.  It is less clear how these numbers must be reported
when they are not "working."  We note that many commenters assumed that numbers used for
intermittent or cyclical purposes must be reported as reserved numbers during the period in which
they are not "working," and that this assumption has prompted several parties to seek
reconsideration of our decision to limit the reservation period to 45 days.  In the First Report and
Order, we defined reserved numbers as "numbers held by service providers at the request of
specific end use customers for their future use."  We also determined that after the 45-day
reservation period, carriers have to treat these previously "reserved" numbers as "available."  Our
purpose in establishing reserved numbers and limiting the reservation period to 45 days was to
allow carriers the ability to set aside numbers for specific customers' use in the near term. We did
not intend, however, to prevent carriers from maintaining the same telephone number or block of
numbers for customers that activate service to particular lines on an intermittent or cyclical basis.
42.We affirm that numbers used for intermittent or cyclical purposes that are not
"working" on the mandatory reporting date should be reported as reserved numbers.  We
nevertheless agree that customers should not be subject to losing these numbers when they are
turned off for short periods of time.  On the other hand, we are concerned that some of these
numbers that remain unused indefinitely could be used to provide service to other customers. We
therefore address concerns that the 45-day reservation period is too short to accommodate the
needs of end user customers to retain numbers used for intermittent or cyclical purposes in the
next section.  Specifically, in the next section, we increase the maximum reservation period to 180
days.  We believe that this approach strikes an appropriate balance between carriers' legitimate
need to provide numbers for intermittent or cyclical uses to their customers, and our responsibility
to ensure that scarce numbering resources do not lie fallow for unlimited periods of time.  We also
seek comment in the attached Second Further Notice on whether we should allow carriers to
extend the reservation period for numbering resources, for a fee, which could further alleviate the
concerns raised by carriers regarding numbers used for intermittent or cyclical purposes.
        E.Reconsideration of Reserved Number Period
43.In the First Report and Order, we concluded that reserved numbers, defined as
numbers held by service providers at the request of specific end use customers for their future use,
may be held in reserve status for a maximum of 45 days.  In petitions for reconsideration of
the First Report and Order, as well as numerous ex partes, several parties have asserted that
the 45-day reservation period is a major departure from current business practices and should be
   increased to enable them to meet specific customer needs.
44.We conclude that the maximum period for reserving numbers should be increased to
180 days.  In deciding how much additional time to allow, we considered suggestions that the
reservation period be increased to as much as 12 months.  We are persuaded by commenters
and petitioners that 45 days does not adequately address the needs of many customers who need
to know their telephone numbers for a period of time before telephone service is activated, but
remain cautious about extending the period too much because of the potential for accelerating the
exhaust of some NPAs.  Given the need for customers, especially business customers, to plan
for implementation and/or expansion of telephone service, print stationery and business cards
prior to commencing business, and have their telephone numbers printed in telephone directories,
we find it reasonable to extend the reservation period to 180 days.  This provision shall be
    effective upon release of this Second Report and Order.
45.We also note that we are considering a proposal from the NANC on the issue of
charging fees to extend the number reservation period.  In the attached Second Further Notice,
we seek comment on the NANC's proposal to allow unlimited reservations on a month-to-month
basis in exchange for a fee.  If we choose to mandate a reservation extension fee in the future,
we will reconsider whether the 180-day period remains appropriate.
   F.Clarification of State Commissions' Access to Data
1.State Commissions' Access to Mandatory Reporting Data
46.In the First Report and Order, we granted all state commissions access to the semi-
annually reported mandatory forecast and utilization data, subject to appropriate confidentiality
protections.  We recognized that, with access to the data, states would be better able to meet
their obligations regarding the implementation of area code relief and to act on their delegations
of additional numbering authority.  We declined, however, to delegate authority to the state
commissions to impose additional regularly scheduled reporting requirements on carriers because
of our belief that such authority would undermine the purpose of establishing regularly scheduled,
            uniform federal reporting requirements.
47.We granted state commissions access to mandatorily reported forecast and utilization
data to eliminate the need for them to require carriers to report separately and duplicatively,
utilization and forecast data that they are already reporting to the NANPA on a regular basis.  In
doing so, we considered the need for states to have this information as well as the considerable
burden such requests could place on carriers.  We also considered the burden on the NANPA in
responding to excessive individual state requests for information.  We recognize, however, that
some state commissions may desire to have access to carrier-specific data on file with the
NANPA more frequently or in different formats.  For example, states might wish to receive data
at frequent intervals, per individual or class of carrier, per geographic area, or they could request
all data collected on all reporting carriers within their state.
48.We clarify that our grant of access to mandatorily reported forecast and utilization data
includes all such data, as submitted semi-annually by reporting carriers.  The NANPA shall
provide mandatorily reported forecast and utilization data to any requesting state twice per year,
consistent with its collection of such data twice per year.  Commencing with the second
collection of mandatorily reported data, currently scheduled for February 1, 2001, a state may
request a single report containing disaggregated data reported by carriers operating in its state
beginning 30 days after each deadline for collection of the data, up to the next deadline for
reporting.  Because state commissions have emphasized the need to receive the data in a format
that would enable them readily to perform their own data analyses, we require that the NANPA
provide the data via secured electronic transfer, which may include e-mail, or on a computer disk.
NANPA shall, in the alternative upon request from a state commission, provide the data in paper
            copy form without any cost to the state.
49.In the event state commissions wish to receive the data in different formats involving
processing or culling of the data, such as customized reports that provide data by carrier or class
of carrier, geographic area, or other categories, the NANPA may create and provide such
customized reports to requesting states as an enterprise service.  We emphasize, however, that
the NANPA may only charge a fee for enterprise services that is reasonable; that is, based on the
cost of processing and compiling the data from its existing database, preparing the customized
report, and providing it to the state commission.  Once the NANPA's proposal for providing
customized reports as an enterprise service is approved, state commissions are free to negotiate
with the NANPA a reasonable price for the customized reports.  We also emphasize that states
are free to take the data that the NANPA must provide to them and process the data themselves,
or have it processed by another entity that is able to do the work more cost-effectively than the
NANPA while maintaining the confidentiality of the data.  The confidentiality protections
specified in the First Report and Order apply to any customized reports provided by the NANPA
or any other entity to the states, to the extent that such reports contain carrier-specific,
                      disaggregated data.
2.State Commissions' Access to Numbering Resource Application
                   Information
50.In the First Report and Order, we granted to state commissions access to carriers'
applications for initial and growth numbering resources.  We also required that the state
commissions treat this information as confidential.  We did not specify in the First Report and
Order whether the NANPA, the Pooling Administrator in pooled areas, or carriers themselves
must provide such access, or the scope of information that should be made available.
51.We clarify that state commissions seeking access to carriers' numbering resource
applications should request copies of such application materials directly from the carriers
operating within their states.  Not burdening the NANPA and the Pooling Administrator with the
obligation to provide states with numbering resource applications will foster fairness in
nationwide numbering administration by limiting the extent to which state-specific requests can
increase the cost of national numbering administration.  We also find that the burden to carriers of
providing to the state commission a copy of what the carrier has provided to the administrator, if
                     requested, is minimal.
52.We also clarify that all carriers that receive numbering resources must comply with
state requests for copies of numbering resource application materials.  Access to these materials is
specifically provided for in the First Report and Order and herein.  Thus, carriers that a state
demonstrates to the NANPA or Pooling Administrator have failed to comply with a state request
for numbering resource application materials shall be denied numbering resources.  In furtherance
of our goal of a uniform nationwide carrier reporting scheme, state commissions may not require
carriers to submit additional or different application materials from those submitted to the
NANPA or the Pooling Administrator when requesting numbering resources, so that carriers may
simply submit duplicate copies of such materials to the states, upon request.  State commissions
may, however, determine whether this information must be provided whenever an application for
numbering resources is made, or whether it may be provided less frequently or only in particular
circumstances.  To ensure that state commissions are aware of when an application for numbering
resources has been submitted, state commissions may request notification from the NANPA.
53.Finally, we clarify that our grant to state commissions of access to numbering resource
application materials is not intended to delay the processing of carriers' applications for
numbering resources.  Notwithstanding the state commissions' role in determining the validity of
data submitted pursuant to our mandatory reporting requirements, our intent is not to give state
commissions a veto over approval of applications, nor is it to introduce an additional layer of
review for applications.  The NANPA and the Pooling Administrator are responsible for
determining whether application materials are sufficient in the first instance.  State commissions,
nevertheless, may continue to review applications for initial numbering resources when a carrier
disputes a decision to withhold such numbering resources and seeks resolution from the state
commission.  In the attached Second Further Notice, we find some merit and seek comment
whether states should have password-protected access to mandatorily reported data received by
the NANPA.  As we have in the past, we will continue to consider individual requests for
authority from states' for the collection of information from carriers that the requesting state
believes is necessary and that is not captured in the national data collection.
           VII.further Notice of proposed rulemaking
    A.Service-Specific and Technology-Specific Overlays
54.Background.  The Commission has prohibited service-specific and technology-specific
overlays, initially in the Ameritech Order, and then more broadly in the Local Competition
Second Report and Order.  In the Ameritech Order, we rejected a wireless-only overlay plan
proposed by Ameritech for the 708 area code on the grounds that it would be unreasonably
discriminatory and would unduly inhibit competition.  We expressed concern about several facets
of Ameritech's area code relief plan:  the proposal to continue assigning 708 numbers to wireline
carriers but to exclude paging and cellular carriers from such assignments; the proposal to require
paging and cellular carriers to take back 708 numbers previously assigned to their subscribers,
while wireline carriers would not be required to do so; and the proposal to assign all numbers to
paging and cellular carriers exclusively from the existing 312 and new 630 area codes, while
wireline carriers (and perhaps others) would continue to receive 708 numbers.  We found that
Ameritech's plan would place paging and cellular companies at a distinct competitive
disadvantage because their customers would suffer the cost and inconvenience of having to
surrender existing numbers and go through the process of reprogramming their equipment,
changing over to new numbers, and informing callers of their new numbers.  We also found that
any numbering resource optimization benefits from this plan were outweighed by the
disproportionate burden that the plan would place on paging and cellular carriers.  In the Local
Competition Second Report and Order, we adopted our rule prohibiting service-specific and
technology-specific overlays relying on the analysis outlined in the Ameritech Order.
55.The Connecticut Commission, the Massachusetts Commission, and the California
Commission have filed petitions to amend or waive the Commission's rules prohibiting
technology-specific or service-specific overlays so they can implement such overlays.  The Ohio
Commission and Pennsylvania Commission have filed petitions for additional delegated authority
to implement service-specific and technology-specific area code overlays.
56.In the Notice, we indicated that we continued to believe that service-specific and
technology-specific overlays raised serious competitive concerns, but that in light of the current
numbering crisis, we decided to reexamine our policies and to consider whether we should modify
or lift the restriction on these area code relief methods.  Specifically, we sought comment on
whether technology-specific and service-specific overlays could yield potential new benefits that
were not previously contemplated, and on how a technology-specific or service-specific overlay
could be implemented in a manner that would promote numbering resource optimization
objectives.  We also sought comment on whether there are specific services or technologies that
could be assigned numbers from a technology or service-specific overlay area code without
raising the competitive concerns that were cited in the Ameritech Order.  Moreover, we sought
comment on whether we should consider exceptions to the current prohibition on a case-by-case
basis or whether we should adopt general rules or guidelines.  Furthermore, we sought
comment on whether we should address requests for service-specific and technology-specific
overlays at the federal level, or whether we should delegate authority to the states to establish
service-specific and technology-specific overlays within federal rules and guidelines.
57.Commenters were generally split about whether the Commission should permit service-
specific and technology-specific overlays.  The majority of state commissions support lifting the
prohibition, arguing that service-specific and technology-specific overlays are important additional
tools to address the current numbering crisis.  Carriers, on the other hand, argue that the
Commission should retain the current prohibition because service-specific and technology-specific
overlays would place them at a competitive disadvantage and would result in inefficient use of
numbering resources.  Subsequent to the close of the comment cycle on the Notice, however,
SBC and the Joint Wireless Commenters presented proposals in ex parte filings that would permit
service-specific and technology-specific overlays on a transitional basis.
58.Discussion.   We conclude that we should revisit the prohibition against service-
specific and technology-specific overlays.  We are persuaded by commenters who argue that this
action is warranted by changes in the use of numbering resources that have occurred since the
Commission's previous decisions. State commissions, in particular, have urged that we permit
them to implement service and technology-specific overlays to address the escalating demand for
numbering resources.  They argue that there is widespread public support for such overlays,
especially as a means of avoiding new area codes for home and business phones.  By
temporarily diverting a portion of the demand for numbering resources in existing area codes,
implementation of service- or technology-specific overlays may help ease the transition to needed
area code relief prior to the complete implementation of pooling, reducing end-user costs and
                        inconveniences.
59.We nonetheless remain concerned about the potential competitive and efficiency
implications of service and technology-specific overlays.  We seek comment, however, on the
conditions under which service-specific and technology-specific overlays must be implemented in
order to promote competitive equity, maximize the efficient use of numbering resources, and
               minimize customer inconvenience.
60.We focus, in particular, upon proposals to permit state commissions to implement
service- or technology-specific overlays on a "phased-in," or transitional basis, subject to certain
conditions.  As the pace of numbering exhaust has increased, many states have become
increasingly reluctant to implement area code relief, in the face of significant consumer resistance.
In area codes that are nearing exhaust, this reluctance has often led to severe number rationing
schemes, and routinely individual carriers may find themselves unable to obtain numbering
resources necessary to serve customers.  Over the past few years, the Commission has received
six requests for extraordinary relief from carriers in danger of running completely out of numbers,
and has granted relief three times.  In view of this situation, offering states the option to
implement transitional service- or technology-specific overlays, subject to certain conditions, may
help them to undertake necessary area code relief in a manner that they may perceive to be less
                objectionable to their citizens.
61.As an initial matter, we seek comment on the relative advantages from a numbering
resource optimization perspective, a competitive perspective, and a consumer convenience
perspective of service- or technology-specific overlays as opposed to all-services overlays.  All-
services overlays promote efficiency by ensuring that all users of numbering resources may obtain
numbers from the overlay code.  In contrast, service- or technology-specific overlays, which
provide numbering resources to only a portion of number users, could run the risk of being
underutilized.  However, service- or technology-specific overlays might enhance the efficient use
of underlying NPAs by removing a portion of the demand for numbering resources from those
underlying area codes and increasing the amount of numbers available to carriers drawing
resources from those area codes, for example, through a pooling mechanism.  We further seek
comment on how the perceived advantages of service- or technology-specific overlays relate to
the specific conditions under which they are permitted.  For example, assuming the ten-digit
dialing requirement was retained for service- or technology-specific overlays, would a service- or
technology-specific overlay be preferable to an all-services overlay from a consumer, competitive,
                  or efficiency perspective?
62.Next, it is necessary to determine what services or technologies may be assigned to a
transitional service- or technology-specific overlay code.  One option would be to distinguish
carriers that have implemented LNP from those that have not.  This option appears sensible for
several reasons.  In the first place, a carrier's ability to participate in certain number conservation
measures is determined by whether or not it has implemented LNP.  LNP-capable carriers can
participate in number pooling; non-LNP-capable carriers cannot.  Second, this distinction between
LNP-capable carriers and non-LNP-capable carriers is itself largely interim in nature, as most non-
LNP-capable carriers are required to implement LNP within the next two years.   For these
reasons, we seek comment on whether it is appropriate to allow the creation of transitional
technology-specific overlays that distinguish between carriers based on whether they have
                    implemented LNP or not.
63.On this basis, we envision that states could choose to implement transitional
technology-specific overlays that provide numbering resources solely to non-LNP-capable
carriers.  It is also conceivable that a state commission could choose to implement a transitional
technology-specific overlay to provide numbering resources solely to LNP-capable carriers, for
example, through a thousands-block number pooling mechanism.  Of course, a transitional overlay
serving LNP-capable carriers would be subject to the same conditions and limitations as one that
 serves non-LNP-capable carriers, as further detailed below.
64.Because one of the Commission's principal concerns about the competitive effect of
technology-specific overlays has centered on "take-backs" of numbers from existing customers of
carriers assigned to the technology-specific overlay, we tentatively conclude that transitional
technology-specific overlays may not include mandatory "take-backs" and may only be
implemented on a prospective basis.  As the Commission noted in the Ameritech Order, taking
back telephone numbers from carriers served by a technology-specific overlay would impose costs
on those carriers and their customers, who would suffer the cost and inconvenience of
surrendering their existing phone number, reprogramming their equipment, changing to new
numbers, and informing callers of the new numbers.  In a technology-specific overlay context,
"take-backs" would exclusively affect customers of the particular technologies for which the
overlay is established.  We agree with commenters that these costs would be significant, would
impose a disparate impact on customers of the services affected by the "take-back," and would
thus adversely affect competition.  We seek comment on the tentative conclusion that
transitional technology-specific overlays must be prospective, and may not include mandatory
                         "take-backs."
65.We seek comment on whether the geographic boundaries of a transitional technology
overlay should conform to the boundaries of an existing area code, or whether it would be
appropriate to allow a transitional technology-specific overlay that covered the geographic area of
more than one pre-existing area code.  Further we seek comment on whether we should permit
state commissions to implement transitional technology-specific overlays only where pooling has
been implemented in the underlying area code, or where pooling will be implemented by the time
carriers may begin taking numbers from the transitional technology-specific overlay, as proposed
               by the Joint Wireless Commenters.
66.We also seek comment on how transitional technology-specific overlays should
operate.  Under the Joint Wireless Commenters' proposal, non-LNP-capable carriers that qualify
for additional numbering resources under the Commission's rules would receive NXX codes only
from the transitional overlay.  The proposal limits the duration of this segregation, however, by
providing that the overlay code would be converted to an all-services overlay and used to supply
numbering resources to all carriers serving the underlying geographic region after the underlying
NPA reaches exhaust (specifically, when the Pooling Administrator needs additional NXX codes
to meet the needs of the pool and there are no remaining NXX codes in the original NPA).  In the
alternative, we could provide that transitional technology-specific overlays be converted to all-
services overlays no later than the date by which covered CMRS providers are required to
participate in thousands-block number pooling.  We find that the ultimate transition from
technology specific to all-services overlay both maximizes the efficient use of numbering
resources, and serves to mitigate certain of our concerns about the potential anti-competitive
effects of segregation.  We seek comment on this approach and on the appropriate point for
  transition from technology-specific to all-services overlay.
67.In addition, we seek comment on whether and how our mandatory ten-digit dialing rule
should apply in the context of transitional technology-specific overlays.  Normally, ten-digit
dialing is triggered when an overlay is established, i.e., consumers dial ten digits for all local calls
in an area with an overlay area code.  Under the Joint Wireless Commenters' proposal, the
requirement for mandatory ten-digit dialing would be waived either until the overlay was
converted to an all-services overlay (i.e., numbering resources in the underlying area code were
exhausted) or until the date upon which CMRS carriers are required to participate in thousands-
block number pooling.  The Joint Wireless Commenters propose, however, that permissive ten-
digit dialing be provided when the transitional technology-specific overlay is implemented.
68.The Joint Wireless Commenters believe that this proposal may make transitional
overlays more attractive to states, many of which have resisted implementing overlays because of
the ten-digit dialing requirement.  We are concerned about the potential competitive impacts that
would result from a waiver of the ten-digit dialing requirement.  We acknowledge, however, that
the potential anti-competitive effect would be mitigated because ten-digit dialing would be waived
only for a limited period of time.  We seek comment on whether there is a basis to depart from the
ten-digit dialing requirement for a transitional overlay.  To the extent that such a departure would
be necessary, we seek comment on whether it would be appropriate to waive the ten-digit dialing
requirement as the Joint Wireless Commenters have proposed until the overlay is converted to an
all-services overlay or until CMRS carriers are required to participate in thousands-block number
pooling, whichever occurs earlier.  To the extent that commenters disagree with this approach, we
              invite them to suggest alternatives.
69.Where a state chooses to implement a transitional technology-specific overlay to
provide NXX code resources for non-LNP capable carriers, we seek comment about whether
LNP-capable carriers should be prohibited from taking numbers out of the transitional overlay
code prior to the time that it is converted to an all services overlay.  Such a requirement would
appear to be necessary to preserve the integrity of pooling by requiring all LNP-capable carriers
to obtain numbering resources solely through the number pool mechanism. We do not intend,
however, to in any way lessen covered CMRS carriers' incentive to timely implement LNP by
appearing to provide them with a "protected" source of numbers.  One way to achieve this
objective might be to require that all transitional overlays convert to all-services overlays by the
November 24, 2002 deadline for covered CMRS carriers to implement pooling.
70.We further seek comment on whether there should be any limitations on when states
are permitted to implement transitional technology-specific overlays.  For example, the Joint
Wireless Commenters advocate that transitional technology-specific overlays be used in situations
where the underlying area code is relatively close to exhaust.  For this reason, they recommend
that the transitional overlay be established when the original NPA only has remaining the greater
of (1) 30 NXX codes, or (2) a quantity of NXX codes equal to the number of rate centers in the
underlying NPA.  Such a condition could potentially guard against implementation of a
transitional overlay in areas where there are still sufficient numbering resources available to all
carriers in the underlying area code.  We seek comment on this proposal and on whether it is
possible to establish such a concrete set of triggering conditions for this form of area code relief.
We also seek comment about whether an alternative set of triggering conditions would be more
appropriate.  For example, should states be permitted to implement transition technology-specific
overlays when a specific overall NPA-wide utilization threshold is met?  We further seek
comment on whether there are any other additional conditions that should be placed on states'
ability to implement transitional technology-specific overlays.  For example, the Joint Wireless
Commenters propose that where a state has implemented a transitional technology-specific
overlay, any state imposed rationing scheme in either the underlying area code or the transitional
overlay should be ended.  We seek comment on whether this type of restriction should be
                            imposed.
71.Finally, we also seek comment on whether we should permit states that wish to
designate transitional service or technology-specific area codes for groups besides non-LNP-
capable carriers to do so.  If so, we seek comment on whether the considerations that would be
applied in those situations would be similar or different to those above.
72.Apart from transitional service- or technology-specific overlays, we seek comment on
whether it would be appropriate to permit states to establish long-term overlays for certain
services.  Such services may include services that currently utilize numbers located in any area,
such as certain unified messaging services.  They also may include certain automatic crash
notification services and concierge services, in which the telephone number serves only to
establish communication with a specific service provider, and not with other parties.  We seek
comment on what other types of services may fall into this category.  We also seek comment on
whether establishing long-term service-specific overlays for such services would raise the same
types of competitive concerns that we have identified with other service-specific overlays.  In
addition, we seek comment on whether these types of services use, or may in the future use,
enough numbering resources that establishing long-term service-specific overlays to accommodate
them would have numbering resource optimization benefits, or, in the alternative, would
contribute to NANP exhaust by introducing new NPAs for which there is insufficient demand.
73.As explained above, our goal in opening this further inquiry into conditions under
which service or technology-specific overlays may be implemented is to provide state
commissions with additional number optimization tools, while ensuring that competitive equity
and efficiency in numbering administration are preserved.  In this light, we seek comment on any
additional concerns or considerations that will inform our decision.
                 B.The Rate Center Problem
74.One of the major contributing factors to numbering resource exhaust is the existence of
multiple rate centers in each NPA and the demand by most carriers to have numbering resources
in each rate center in which they operate.  The rate center system was established in the 1940s
primarily to facilitate the routing and billing of telephone calls.  Carriers typically need numbering
resources in multiple rate centers to establish a footprint in a particular geographic area.  This
initial allocation of NXX codes and thousands blocks often results in the allocation of many more
numbers than a carrier needs to serve its customers, which, in turn, leads to many numbers
      becoming "stranded" and unusable by other carriers.
75.The Commission has solicited comment on how to address and resolve the problems
resulting from the existence of multiple rate centers in each NPA.  Many of the questions raised
focused on rate center consolidation, in which multiple rate centers are combined, thereby
reducing the number of blocks or NXX codes that a carrier needs to establish a footprint in a
given area.  In the Notice, for example, we sought comment on how rate center consolidation
potentially affects the efficiency of other methods of number conservation, such as number
pooling.  We also questioned how rate center consolidation would affect the routing of E911
calls, which tend to use NXX codes for default routing to the nearest PSAP.  In addition, we
asked whether the Commission should establish incentives for states to consolidate rate centers,
and if so, by what means.  In the 716 Public Notice, we further inquired about the possible
tension between rate center consolidation and the INC guideline against the splitting of rate
centers when area code relief in the form of a geographic split is implemented.
76.We seek further comment on the rate center problem, particularly on what policies
could be implemented at the federal level to reduce the extent to which the rate center system
contributes to and/or accelerates numbering resource exhaust.  Rate center consolidation is but
one option; other possible solutions include extending local calling areas, and encouraging call
          billing methods that are not NXX dependent.
77.The Commission has stated repeatedly that states have authority to consolidate rate
centers.  Indeed, we have conveyed the importance of rate center consolidation and encouraged
states to consolidate rate centers wherever possible. We believe that consolidating rate centers
prior to implementing thousands-block number pooling and area code relief will increase the
efficiency of these measures, because carriers will need fewer initial and growth numbering
resources to provide service in a given area.  In the First Report and Order, we declined to
mandate rate center consolidation as a precursor to the national rollout of thousands-block
number pooling, which some commenters had supported to encourage rate center
consolidation.  We nevertheless encourage states to consider and implement rate center
consolidation on their own.  Particularly, we encourage states to explore rate center consolidation
opportunities in areas where contiguous calling areas have identical or substantially similar rating
schemes.  Rate center consolidation in these areas is least likely to have a significant impact on
carrier revenues, because minimal realignment of local, extended, and toll calling boundaries
                      would be necessary.
78.We are mindful that rate center consolidation may be a difficult option for many states
and carriers, especially incumbent local exchange carriers, because of the historic connection
between rate centers and the billing, as well as routing, of calls.  Rate center consolidation
determines which calls are local versus toll, and thus consolidation may deprive some carriers of
toll revenue.  We therefore seek comment on ways of severing the connection between number
assignment and call rating and routing. We also seek comment from the industry and state
commissions on past and present rate center consolidation efforts, including information on the
impact rate center consolidation has had on numbering optimization.  Finally, we seek analysis of
the benefits and costs of rate center consolidation in the 100 largest MSAs in the country, where
we believe it would have the most significant effect.  We believe that metropolitan regions are
optimal candidates for rate center consolidation because they tend to involve more competing
         LECs and a higher demand for number resources.
              C.Liability of Related Carriers
79.Monitoring individual carriers' use of numbering resources is a necessary prerequisite
to ensure efficient use of these resources and prevent the NANP from being exhausted
prematurely.  In the First Report and Order, the Commission established new semiannual
reporting requirements to obtain more consistent, accurate, and complete reporting of numbering
resource utilization and forecast data.  Carriers are required to comply with the new reporting
requirements, and the NANPA was directed to withhold numbering resources from non-compliant
carriers.  In the First Report and Order, the Commission did not address whether reporting
carriers should be held accountable when related carriers fail to comply with the mandatory
                    reporting requirements.
80.We believe that parent companies should play an active role in number conservation
efforts, even if the parent companies are not themselves, reporting carriers. By encouraging,
monitoring, and offering incentives for compliance from the top down, parent companies can
contribute greatly to the success of our numbering resources optimization goals. We therefore
tentatively conclude that carriers should, in certain instances, have numbering resources withheld
when related carriers are subject to withholding for failure to comply with our mandatory
reporting requirements.  We seek comment on how to identify the relationships (i.e., the existence
of parent and sister companies) among reporting carriers, and what geographic limitations should
be placed on those relationships in determining liability among related carriers.  Specifically,
should related carriers nationwide be affected, or only related carriers located within the same
state, NPA or rate center as the noncompliant carrier?  Commenters that believe only the
noncompliant carrier should be subject to withholding of numbering resources should provide
specific comments on other ways of providing incentives for parent companies to encourage and
require compliance from all of their related reporting carriers and to ensure that our numbering
resource optimization goals are not undermined by the complexities of corporate structures.
  D.State Commissions' Access to Mandatory Reporting Data
81.In the attached Second Report and Order, we clarified the scope of states' access to
semi-annually reported data.  We also clarified that state commissions must continue to permit
the NANPA to process requests for numbering resources in a timely fashion.  Some states
assert that they require the same access to reporting data received by the NANPA; that is, full
access to the database in which reported forecast and utilization data is stored.  We find some
merit in this proposal, and thus tentatively conclude that states should have password-protected
access to mandatorily reported data received by the NANPA.  NeuStar has proposed to provide
the states with password access to obtain information from the NANPA.  We seek comment on
whether the type of access NeuStar proposes is necessary, sufficient or whether the access already
   granted is sufficient to accommodate the states' requests.
               E.Fee for Number Reservations
82.We seek further comment on the NANC's proposal to allow unlimited reservations of
numbers on a month-to month basis.  In the attached Second Report and Order, we conclude
that the period for reserving numbers should be increased to a maximum of 180 days with no
extensions.  Some commenters suggested that the reservation period should be extended to 12
months, with additional time for extensions.  We seek comment on whether unlimited reservations
of numbers are necessary, or whether there should be a constraint on the time period that numbers
can be reserved.  We note that the NANC recommended that the fee be paid by end users, and
seek comment on whether imposing a fee on end users would provide the appropriate incentives
in this context.  Alternatively, we seek comment on whether charging a fee to carriers would
provide more appropriate incentives for number use.  Commenters should also enumerate whether
unlimited reservations of numbers should be allowed and propose a time period for which
numbers may be reserved.  Commenters should also state whether a fee should be charged for
reserving numbers, who should pay for the fee and a specific fee amount.  Commenters should
also address how the fee revenues should be applied, particularly if, fees are charged to carriers by
                       the Commission.
                       F.Enforcement
83.In the attached Second Report and Order, we set forth a comprehensive audit program
to verify carrier compliance with federal rules and orders and industry guidelines, and conclude
that auditors in the Accounting Safeguards Division, or other Commission designated agents, will
perform the audits.  We also state that carriers found to be in violation of our requirements may
be subject to possible enforcement action, which may include monetary forfeitures, revocation of
  interstate operating authority and cease and desist orders.
84.In addition to our traditional enforcement tools, we tentatively conclude that carriers
that violate our numbering requirements, or that fail to cooperate with the auditor to conduct
either a "for cause" or random audit, should also be denied numbering resources in certain
instances.  We seek comment on this tentative conclusion.  We also seek comment on the process
by which this additional remedy should be invoked.  Specifically, we seek comment on whether
only the Commission should direct the NANPA or Pooling Administrator to withhold numbering
resources.  We note that section 220(f) bars public release of audit findings except as directed by
                    the Commission or court.
G.State Commissions' Authority to Conduct "For Cause" and "Random" Audits
85.In the attached Second Report and Order, we set forth a comprehensive audit program
to verify carrier compliance with federal rules and orders and industry numbering guidelines, and
conclude that the audit program will consist of "for cause" and random audits, performed by an
auditor designated by the Common Carrier Bureau.  Although we believe that a national
program will provide some degree of uniformity across the country in the way that audits are
conducted, we recognize that state commissions would benefit from having a role in conducting
these carrier audits.  We therefore seek comment on whether state commissions should be given
independent authority to conduct "for cause" and random audits in lieu of or in addition to the
national audit program established in the attached Second Report and Order, and what parameters
should apply to any such authority.  In particular, commenters should address concerns about
state commissions employing different standards in performing "for cause" and random audits that
might force carriers operating in multiple states to comply with different demands.  In seeking
comment on this issue, we do not address state commissions' authority to perform audits under
                           state law.
H.Developing Market-Based Approaches for Optimizing Numbering Resources
86.In the Notice, we sought comment on alternative mechanisms for establishing a market-
based solution to improve the allocation and use of numbering resources, the administrative
burdens a market-based solution might impose on carriers, and the likely effect on competition of
such an approach.  At that time, most commenters opposed market-based allocation of
numbering resources. The potential benefits of a flexible, market-oriented approach for allocating
numbering resources, however, led us to seek additional comment on how the existing
administrative measures could be supplemented or supplanted by market-based solutions and
whether such an approach could strike this balance more effectively.  In the Further Notice, we
suggested that a market-based approach is the most pro-competitive, least intrusive way of
ensuring that numbering resources are efficiently allocated.   In response to the Further Notice,
many carriers expressed opposition to a market-based allocation system for numbering resources,
 while some state utility commissions generally supported it.
87.In this Second Further Notice, we discuss the need for a market-based allocation
system for numbering resources, and seek specific proposals on how to structure such a system,
including the scope of our statutory authority to do so.  We continue to believe that market-based
methodologies for allocating numbering resources, either in conjunction with or as a substitute for
some or all of the existing allocation rules, may best ensure that numbers will be allocated
efficiently, provided that they are structured on an equitable and non-discriminatory basis.
     1.Commission Authority to Charge for Numbers
88.In the Notice, we sought comment on whether the Commission possesses the statutory
authority to implement a market-based system for allocating numbering resources.  Comments on
this issue were limited.  In the Notice, however, we did not request comment on specific market-
based proposals.  In this Second Further Notice, we provide more detailed information on the
form that market-based mechanisms might take, and request that commenters propose specific
market-based number allocation mechanisms.  We seek comment on whether the Commission has
the requisite authority to implement the proposals contained herein, as well as any proposed by
commenters.  If such authority is lacking, we request that commenters address what authority
would be necessary.  Commenters should address the scope of the Commission's plenary authority
over numbering resource allocation in the United States pursuant to section 251(e).  Commenters
should also address statutory provisions pertaining to the Commission's authority to collect funds
from carriers, as well as the statutory requirements on how such funds should be expended.
89.To emphasize that our goal in moving towards a market-based assignment process for
numbers in the primary market is to increase the efficiency of numbering resource usage, and not
to raise additional funds for Commission-approved programs (such as universal service, TRS,
etc.), we sought comment in the Further Notice on whether we should use any funds collected for
numbers to offset other payments carriers currently make to fund these programs.  We continue to
believe that the collection of money for numbering resources in the primary market should not
increase the telecommunications industry's aggregate obligation for regulatory contributions and
collections such as universal service, and telecommunications relay services.  We seek comment
on whether the way in which collected funds are used affects the extent of our authority under the
Act to implement market-based allocation mechanisms.  Specifically, we seek comment on
whether our authority under section 254 enables us to implement a market-based number
   allocation system as a means of funding universal service.
90.We urge commenters to discuss how the Commission could structure a market-based
allocation system that would retain its efficiency while working within the constraints of existing
statutory authority.  Commenters that believe that a market-based system could be structured
more efficiently if the Commission had additional statutory authority to do so should describe the
    additional statutory authority that would be necessary.
 1.The Need for a Market-Based Allocation System
91.The impetus for establishing a market-based numbering resource allocation system was
our belief that the lack of efficiency in carrier utilization of numbers may be in part due to the
failure of existing allocation rules to recognize the economic value of numbers.  By explicitly
recognizing the value of numbers, we seek to provide incentives for carriers to take and retain
only as many numbers as they need, in the short term, to provide service to their customers.
92.Several parties argue that carriers already incur a great deal of costs under the current
allocation system and that these costs impose sufficient discipline on them to discourage
inefficient use.  Although we recognize that carriers incur costs under the present system for
their use of numbers, we believe that efficient utilization will be better achieved if carriers pay a
fee for numbering resources that is closely related to the supply and demand for numbers in a
specific market.  At the present time, the costs that carriers incur are not directly related to
these factors, and therefore do not effectively encourage efficient number use.  Where a
competitive market for numbering resources exists, carriers that obtain more numbers than they
need would be incurring unnecessary expense, and carriers that hold inventories of numbers in
excess of their needs would be foregoing the revenue they could gain from selling or leasing them.
93.Moreover, we believe that if markets for numbering resources are structured in a
manner that is competitively neutral, they will not create entry barriers to small entities or new
entrants, but rather could serve to ensure a ready supply of numbering resources to such entities,
in contrast with the rationing schemes they currently face in some areas.  It is essential, however,
that such markets be structured to avoid inequities that might occur through anti-competitive
behavior, such as attempts by well-financed carriers to stockpile numbers to keep them away from
their less well-financed competitors, or through unintended disparate impacts of the market
mechanism, such as failure to take into account the competitive advantages associated with
carriers' pre-existing number inventories.  In light of these concerns, we seek comment on how to
structure a numbering resources market mechanism in a manner that treats all users of numbering
resources, and by implication, their existing and potential customers, in a fair, equitable and non-
                     discriminatory manner.
             1.Structure of Markets
94.We believe that, where a competitively neutral primary market for numbers exists,
permitting a secondary market to develop would further increase the efficiency with which
numbers are used by creating economic incentives for carriers to find ways to transfer unused
numbering resources in a given geographic area to others with a greater need for those resources.
Under the present system, carriers sometimes receive numbers in blocks larger than their actual
need.  Thousands-block number pooling will substantially address this problem, but cannot
eliminate it altogether.  Some carriers, particularly new entrants, may need fewer than a thousand
numbers in many of the rate centers they serve.  Also, our current rules do not require carriers to
contribute thousands-blocks to the pool if more than ten percent of the numbers in the block have
been used.  At present, it does not appear that existing LNP capacity can support pooling if
blocks are more than 10 percent contaminated, and the industry has little incentive, other than
regulatory mandate, to increase LNP capacity for pooling purposes.  Creating a secondary market
should introduce an opportunity cost for unused numbering resources that will encourage carriers
to develop innovative ways to move these stranded resources to other carriers that may need and
can use those resources.  We therefore tentatively conclude that any market-based allocation
system for numbering resources that we consider should include both primary and secondary
               markets for numbering resources.
                a.Primary Market
95.In the Notice we sought comment on whether the price of numbers in the primary
market, if implemented, should be established administratively or through the market using an
auction.  Several commenters argued that administrative prices would be unworkable because
regulators are incapable of setting the "economically correct" prices.  We agree that it is not
easy to establish economically efficient prices administratively, and therefore seek comment on
whether an auction would be the best and the most efficient economic means of allocating
numbering resources in the primary market.  The most direct approach for implementing a
primary market for numbers may be to hold a separate auction for new numbering resources in
each NPA, because the administrative costs of holding auctions in each of over 19,000 rate
centers would almost certainly be excessive. We seek comment on whether the NANPA and the
national Pooling Administrator would be in the best position to conduct such auctions, and we
look for any other suggestions as to how an auction methodology should be designed.  We also
seek comment on how the supply of numbers to be auctioned in each geographic area would be
                          determined.
96.Several parties argue that market-based auctions might be too costly to administer.
These commenters, however, offer no support for their assertion.  As we noted in the First
Report and Order, the costs associated with expanding the NANP are estimated to be between
$50 - $150 billion.  Similarly, the costs to consumers of repeated area code relief can be
substantial.  We believe that any administrative costs associated with establishing a market for
numbers will be smaller than the benefit of extending the life of area codes and the NANP.  We
          seek further comment on this issue, however.
97.One alternative for setting a price for numbering resources would be for the
Commission and the states collectively to develop an agreed-upon life for the NANP.  Using this
timeframe as a basis, we could authorize the states to control the release of new codes.  Over
time, the prescribed life of the NANP could be adjusted as better information on the costs
associated with NANP exhaust evolves.  We seek comment on this proposal and whether it would
           improve the efficiency of NANP allocation.
98.We also request parties to comment on whether prices for numbers in the primary
market should be structured as a one-time charge, a recurring charge, or a combination of a flat
non-recurring charge and a recurring charge.  In response to the Notice, several commenters
supported a recurring charge because such a charge would be consistent with a licensing
arrangement, rather than ownership.  Some parties prefer a recurring charge to be imposed
frequently to accommodate situations where numbers change hands, while others argue for annual
fees.   The Ohio Commission proposes a two part approach in which part of the fee would be
an administrative price that is designed to recover the costs associated with number
administration, and the second part of the fee would be a "retention" price that would reflect the
societal cost of numbering exhaust.   We seek comment on the Ohio Commission's proposal,
and also invite other proposals that recognize the fungible nature of numbering resources.
99.We see benefits and problems with both approaches for collecting fees. A recurring fee
would provide concrete benefits to carriers that returned numbers that they are not using to the
NANPA.  On the other hand, a one-time charge paid when numbering resources are obtained
from the NANPA, may be less complex to administer, particularly if an auction mechanism is used
to allocate numbers.  We seek comment on the relative feasibility of auctions under a one-time
charge and a recurring fee approach, and how auctions would be structured in either instance.
We are also uncertain about the effect of a recurring charge in the primary market on the efficient
operation of a secondary market, especially for stranded numbering resources. We therefore seek
comment on how carriers could avoid having to pay a recurring charge on stranded numbers that
           cannot be used elsewhere in the network.
100.We next turn to the question of whether carriers should be required to pay for the
existing inventories of numbers that they are holding.  Several parties argue that our "competitive
neutrality" policy requires that carriers holding existing inventories of numbers pay for those
resources if a market is created.  We tentatively conclude that it would be preferable for carriers
to pay for all of the resources that they hold, regardless of when they were obtained.  We seek
comment on this tentative conclusion.  We also seek comment on how we should apply the
market prices to the embedded base of numbers.  Commenters should describe the administrative
process we should employ to collect the required charges.  Commenters should also address
whether it is feasible to have an equitable market mechanism that applies solely to new numbers.
101.An appropriately structured market should discipline carriers against hoarding
numbers, because carriers will be forced to pay to acquire the numbers and face the opportunity
cost of retaining more numbers than they need.  We seek comment, however, on whether there
will remain a continuing need to retain certain existing administrative measures for allocating
numbers in conjunction with the implementation of a market-based approach.  For example,
carriers could continue to be required to meet the eligibility tests we have established for initial
and growth numbering resources before they are permitted to acquire additional resources from
the NANPA or the national Pooling Administrator in the primary market.  In that instance, the
secondary markets would primarily be used to redistribute numbers that would otherwise be
           stranded or unavailable to other carriers.
               b.Secondary Market
102.Currently, NXX codes and thousands blocks are assigned to a specific rate center and
cannot be ported across multiple rate centers. Thus, it is likely that each rate center would contain
its own secondary market.  Within each secondary market, service providers with available
numbering resources would be permitted to sell or lease them to other service providers.  We seek
comment on the appropriate geographic scope of secondary markets.
103.Also, we recognize that a secondary market will not necessarily function well in rate
centers where there are no, or only a single, CLEC.  In these areas, the secondary market may not
be sufficiently competitive to expect an incoming carrier to be able to obtain numbers at
competitive prices from the small number of existing carriers.  One possible method of addressing
this situation is to direct the states to set aside a small quantity of NXXs to be distributed on a
thousands-block basis to incoming carriers.  There may be other solutions to this problem as well.
We seek comment on how the Commission should address this issue.
104.We also seek comment on the extent to which we should regulate transactions in
secondary markets.  Specifically, we seek comment on how much structure we or the states
should impose on these markets.  Although we believe that government oversight should be
minimal, we note that all markets are subject to some type of control, whether or not they are
specifically regulated by a regulatory agency.  Government oversight is designed to encourage
competition and openness, while at the same time preventing private actions that disrupt the
market.  Our objective with respect to secondary markets for numbering resources is the same.
105.We seek comment on whether we should determine how secondary markets must be
organized.  Specifically, we seek comment on whether carriers should be permitted to negotiate
unrestricted deals among themselves or whether all carriers should be required to deal through a
clearinghouse that establishes uniform trading rules.   The advantage of direct dealing is that
carriers would be free to tailor their agreements to meet the specific circumstances of each
transaction.  On the other hand, mandating a clearinghouse might reduce aggregate transaction
costs and prevent carriers from discriminating against competitors or otherwise disrupting the
market.  A clearinghouse might also make it easier to track the sales of numbers since such
information would be housed at a single location.  A third option might be to permit, but not
require, carriers to create and fund a clearinghouse on their own.  We seek comment on these or
                    any other alternatives.
106.We also seek comment on the types of reporting requirements that might be necessary
to ensure that secondary markets are open, competitive, and effective.  Data from such reporting
will permit us to evaluate the efficacy of permitting the secondary market to reallocate numbering
resources.  We request comments on the type of data and the frequency with which they should
be reported.  At a minimum, we believe that quantities of numbers involved in transactions should
be reported in the numbering resource utilization and forecast (NRUF) reports which are required
to be filed by our current rules twice a year.  We also request comment on whether we should
require carriers to file information on purchase or lease prices and the quantities involved in the
transaction.  Commenters should address whether such reporting requirements would impose an
unreasonable burden on either carriers or the NANPA.  Finally, commenters should also comment
on how numbers sold in the secondary market should be reported in the NRUF report.  One
possible approach would be to treat sold numbers identically to ported numbers.
1.Timing and Geographic Scope of Implementation
107.Participation in markets for numbers requires that carriers be able to receive and move
numbers in precise quantities, which requires all carriers involved in the transfer of numbers to be
LNP-capable.  We therefore seek comment on whether implementation should be delayed until
after covered CMRS carriers are required to become LNP-capable, and whether we should limit
      implementation to areas where LNP has been deployed.
108.We also seek comment on whether, if a market-based allocation system is
implemented, we should implement both primary and secondary markets at the same time.  It
might be possible to implement the secondary market earlier than the primary market because the
implementation of the secondary market might require nothing more than eliminating the current
prohibition on carriers' exchanging numbers with each other for consideration.  If we were to
implement secondary markets while numbers were still available at no charge in the primary
market, however, there may be incentives for carriers to obtain more numbers than they need in
the primary market in order to sell them at a profit in the secondary market.  In addition, carriers
that could receive all the numbers they need in the primary market at no cost would not appear to
have any incentive to pay for numbers in the secondary market. We seek comment on these
issues, and on other alternative approaches regarding the sequence in which the primary and
            secondary markets should be implemented.
I.Recovery of Pooling Shared Industry and Direct Carrier-Specific Costs
109.In the First Report and Order, we adopted a competitively neutral cost recovery
framework for thousands-block number pooling similar to the cost recovery mechanism
established for number portability.  Specifically, we concluded that the cost recovery
mechanism must be competitively neutral in that the costs for thousands-block number pooling
should not: (a) give one provider an appreciable, incremental cost advantage over another when
competing for a specific subscriber; and (b) have a disparate effect on competing providers'
abilities to earn a normal return.  Further, we adopted three cost categories for thousands-block
number pooling   shared industry costs (cost incurred by the industry as a whole such as NANP
administration costs), carrier-specific costs directly related to thousands-block number pooling
(such as enhancements to carriers SCP, LSMS, SOA, and OSS systems), and carrier-specific
costs not directly related to thousands-block number pooling.  We concluded that incremental
shared industry costs become carrier-specific costs once they are allocated among carriers, and we
adopted the NANPA fund formula for allocating shared industry costs for thousands-block
number pooling.  The incremental shared industry costs for thousands-block number pooling
will be allocated to all carriers in proportion to each carrier's interstate, intrastate, and
international telecommunications end-user revenue.  We, however, did not establish a cost
recovery mechanism for incremental carrier-specific costs because the record did not contain
adequate information regarding the range and magnitude of incremental thousands-block number
                        pooling costs.
110.In the Notice, we tentatively concluded that incumbent LECs subject to rate-of-return
or price cap regulation may not recover their interstate carrier-specific costs directly related to
thousands-block number pooling through a federal charge assessed on end-users, but may recover
the costs through other cost recovery mechanisms.  We requested detailed estimates of the
costs of thousands-block number pooling and asked that commenters separate the estimates by
category of costs.  As we stated in the First Report and Order, the amount and detail of the
data provided in response to the Notice was insufficient for us to determine the amount and
magnitude of the costs associated with thousands-block number pooling.  We, therefore, in the
Further Notice, requested additional cost information to help us ascertain the appropriate cost
recovery mechanism for the costs of thousands-block number pooling, including cost studies that
take into account cost savings associated with thousands-block number pooling in comparison to
the current numbering practices.  We, nonetheless, identified the type of costs for which carriers
may seek recovery and noted that costs associated with state implemented pooling trials should be
       excluded from the federal cost recovery mechanism.
111.As discussed above, we are conducting the procurement of a national Pooling
Administrator in accordance with federal requirements.  Once selected through a competitive
bidding process, the national Pooling Administrator must develop a schedule for the
implementation of new pools as well as the transition of pooling trials already underway.  This
schedule will significantly influence the timing and amount of costs carriers will incur for pooling.
After the national pooling roll-out schedule is finalized, the timing and amount of pooling costs
should be more readily ascertainable.  We intend to establish an appropriate national cost recovery
          mechanism for pooling costs at that time.
112.In the interim, because we find that the amount and detail of the data provided in
response to our request in the Further Notice is insufficient for us to determine the amount and/or
magnitude of the costs associated with thousands-block number pooling, we seek further
comment and cost studies that quantify shared industry and direct carrier-specific costs of
thousands-block number pooling.  We emphasize that cost studies should take into account the
cost savings associated with thousands-block number pooling in comparison to the current
numbering practices that result in more frequent area code changes.  We further emphasize that
the quality of the specific cost data that carriers provide will determine the accuracy with which
        we are able to craft a cost recovery mechanism.
J.Thousands-Block Number Pooling for Non-LNP-Capable Carriers
113.In the First Report and Order, we determined that thousands-block number pooling is
a valuable mechanism to remedy the inefficient allocation and use of our numbering resources.
We adopted thousands-block number pooling for LNP capable carriers, and we concluded that
covered CMRS carriers must participate in thousands-block number pooling when they become
LNP capable.  We also concluded that when non-LNP capable wireline carriers become LNP
capable, whether voluntarily or pursuant to Commission rules, they too must participate in
                thousands-block number pooling.
114.We believe that it is important for us to continue to explore possible expansion of our
numbering resource optimization strategies.  Thousands-block number pooling can help achieve
greater number utilization both by allowing numbers to be allocated initially in smaller increments,
and by providing a mechanism whereby the stranded numbering resources held by one carrier may
be redistributed to other carriers.  Therefore, we believe it is appropriate to consider whether
extending our pooling requirements would further promote efficient use of numbering resources.
Although in previous decisions we have indicated that it is necessary for carriers to achieve LNP
capability before being able to participate in pooling, we seek comment on whether we should
now require carriers to participate in pooling even if they are not required under our rules to
                         implement LNP.
115.Under the Commission's current rules, certain carriers are exempted from pooling
requirements, e.g., carriers outside the largest 100 MSAs who have not received a request to
deploy LNP from a competing carrier, and paging carriers.  We seek comment about whether it
would be appropriate to extend pooling requirements to these carriers.  Specifically, to what
degree would these carriers' participation in thousands-block number pooling help avoid
premature exhaust of numbering resources at the 10,000 number block level (NXXs) and extend
the life of the NANP?  Conversely, to what degree would requiring these carriers to participate in
pooling impose disproportionate costs on them in comparison to LNP-capable carriers operating
in the 100 largest MSAs?  We recognize that under such a requirement, non-LNP-capable carriers
would be obligated to implement the common technological platform that is used to support both
LNP and number pooling.  We seek comment on the specific types of implementation costs that
would be imposed, and the magnitude of these costs.  We also seek comment on whether the
incremental number optimization benefits of requiring these carriers to participate in pooling
would outweigh these associated costs.  For example, to what extent are  these carriers such
significant users of numbering resources that their participation in pooling would have significant
numbering optimization benefits?  We also seek comment on the benefits of thousands-block
number pooling for competing carriers that need initial numbering resources in each rate center
for the purpose of establishing their "footprints."  We seek comment on whether we should limit
any additional pooling requirements to certain classes of carriers, and if so, on what bases any
exemptions should be made.  In addition, if we were to impose pooling requirements on carriers
irrespective of their LNP status, we seek comment on whether rural carriers should be exempt
                  from any such requirements.
    K.Waiver of Growth Numbering Resource Requirements
116.Presently, carriers that cannot meet the requirements for receiving growth numbering
resources, but can demonstrate an actual need for additional numbering resources, may seek a
waiver of our rules.  We have, in the past, granted waivers to carriers demonstrating a need for
growth numbering resources in instances where they were unable to get them under our rules or
state-established requirements.  In most instances, these carriers had received a specific
customer request for a large block of numbers, or were experiencing a spike in new business that
          current inventories could not accommodate.
117.Some commenting parties suggest that we take further steps to create an explicit
"safety valve" that will allow carriers to obtain needed numbering resources in instances where
they are unable to meet the utilization threshold in a given rate center.  Some carriers contend
that a rate-center based threshold sometimes cannot be met even though they need additional
numbering resources because, for example, they have multiple switches within a rate center, but
are unable readily to share numbering resources among those switches.  Other carriers state that
their utilization rate may be artificially low because the calculation does not take into account
intermediate numbers that the carrier must make available to other carriers but which are
unavailable for use by the carrier to provide service to customers.
118.In the Second Report and Order, we decline to depart from our rule requiring
calculation of the utilization threshold on a rate-center basis.  Similarly, we decline to
reconsider the manner in which we calculate carrier utilization levels.  Notwithstanding these
decisions, we recognize the possibility that certain conditions may prevent carriers from meeting
the rate center-based utilization threshold when they actually need additional numbers, for
example, to meet a specific customer request, although we have limited data on the extent of the
problem.  We therefore seek comment on the need to establish a "safety valve" apart from the
general waiver process to allow carriers that do not meet the utilization threshold in a given rate
        center to obtain additional numbering resources.
119.Specifically, we seek data on the extent to which this problem exists (especially
empirical data).  We also seek comment on possible solutions, including intra-company and intra-
rate center pooling or porting of unassigned numbers among switches, as well as the form a
possible "safety valve" mechanism might take.  For example, we seek comment on whether the
NANPA or state commissions should be given the authority to decide on requests for waiver of
the utilization threshold requirement in certain narrowly defined instances.  Proposals to adopt a
"safety valve" should include specific criteria for determining when a waiver is warranted.
Further, we seek comment on how any proposed "safety valve" mechanism would be consistent
with other numbering optimization measures.  Any recommendation to depart from a rate center-
based utilization threshold should propose strategies for optimizing the use of numbering
 resources assigned to switches with low utilization levels.
                      1PROCEDURAL MATTERS
               A.Ex Parte Presentations
2.This matter shall be treated as a "permit-but-disclose" proceeding in accordance with the
Commission's ex parte rules.  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.
                B.Comment Filing Procedures
3.Pursuant to applicable procedures set forth in sections 1.415 and 1.419 of the
Commission's rules, 47 C.F.R. 1.415 and 1.419, interested parties may file comments on or
before February 12, 2001, and reply comments on or before March 5, 2001.  Comments may be
filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper
copies. Comments filed through the ECFS can be sent as an electronic file via the Internet to
http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission must be
filed.  In completing the transmittal screen, commenters should include their full name, Postal
Service mailing address, and the applicable docket or rulemaking number, which in this instance is
CC Docket No. 99-200; 96-98.  Parties may also submit an electronic comment by Internet e-
mail.  To get filing instructions for e-mail comments, commenters should send an e-mail to
ecfs@fcc.gov, and should include the following words in the body of the message, "get form
<your e-mail address>."  A sample form and directions will be sent in reply.
4.Parties who choose to file by paper must file an original and four copies of each filing.
All filings must be sent to the Commission's Secretary, Magalie Roman Salas, Office of the
Secretary, Federal Communications Commission, 445 Twelfth Street, S.W. Room TW A325,
                    Washington, D.C. 20554.
5.Comments and reply comments must include a short and concise summary of the
substantive arguments raised in the pleading.  Comments and reply comments must also comply
with section 1.49 and all other applicable sections of the Commission's rules.  We also direct all
interested parties to include the name of the filing party and the date of the filing on each page of
their comments and reply comments.  All parties are encouraged to utilize a table of contents,
         regardless of the length of their submission.
6.Parties who choose to file paper should submit their comments on diskette.  These
diskettes should be submitted to Carmel Weathers, Network Services Division, Common Carrier
Bureau, 445 Twelfth Street, S.W., Room 6-B153, Washington, D.C. 20554.  Such submissions
should be on a 3.5-inch diskette formatted in an IBM compatible format using Word for Windows
or compatible software.  The diskette should be accompanied by a cover letter and should be
submitted in "read only" mode.  The diskette should be clearly labeled with the commenter's
name, proceeding (including the docket number), type of pleading (comment or reply comment),
date of submission, and the name of the electronic file on the diskette.
7.Regardless of whether parties choose to file electronically or by paper, parties should
also file one copy of any documents filed in this docket with the Commission's copy contractor,
International Transcription Services, Inc., 1231 20th Street, N.W., Washington, D.C. 20554.
Comments and reply comments will be available for public inspection during regular business
hours in the FCC Reference Center, 445 Twelfth  Street, S.W. Washington, D.C. 20554.
      C.Initial Regulatory Flexibility Analysis
101.As required by the Regulatory Flexibility Act (RFA), 5 U.S.C.  603, an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated into the Notice and a second IRFA was
incorporated into the Further Notice.  The Commission sought written public comment on the
proposals in the Notice and the Further Notice, including the IRFAs.  Appendix B sets forth the
Final Regulatory Flexibility Analysis for the Second Report and Order.
       D.        Final Paperwork Reduction Analysis
102.This Second Report and Order contains some new information collections, which will
be submitted to OMB for approval, as prescribed by the Paperwork Reduction Act.
E.Second Further Notice Initial Paperwork Reduction Act Analysis
103.This Second Further Notice contains either a proposed or modified information
collection.  As part of its continuing effort to reduce paperwork burdens, we invite the general
public and the Office of Management and Budget (OMB) to take this opportunity to comment on
the information collections contained in this Second Further Notice, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13.  Public and agency comments are due at the same
time as other comments on this Second Further Notice; OMB comments are due 60 days after
publication of this Second Further Notice in the Federal Register.  Comments should address: (a)
whether the proposed collection of information is necessary for the proper performance of the
functions of the Commission, including whether the information shall enhance the quality, utility
and clarity of the information collected; (b) the accuracy of the Commission's burden estimates;
(c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on the respondents, including the use of
automated collection techniques or other forms of information technology.
                       1ordering clauses
2.Accordingly, IT IS ORDERED that pursuant to Sections 1, 3, 4, 201-205, 251 of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 153, 154, 201-205, and 251, this
SECOND REPORT AND ORDER is hereby ADOPTED and Part 52 of the Commission's rules
ARE AMENDED AND ADOPTED as set forth in the attached Appendix A.
3.IT IS FURTHER ORDERED that section 52.15(f)(1)(vi) of the Commission's rules, 47
C.F.R.  52.15(f)(1)(vi), is effective upon the date of release of this SECOND REPORT AND
ORDER.  Section 52.15(h) is effective three months from the date of publication in the Federal
Register.  All other amendments to sections 52.15 through 52.20 of the Commission's rules as set
forth in Appendix A are effective thirty days from the date of publication of this SECOND
REPORT AND ORDER in the Federal Register.  The action contained herein has been analyzed
with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified
reporting and/or recordkeeping requirements or burdens on the public.  Implementation of these
new or modified reporting and/or recordkeeping requirements will be subject to approval by the
Office of Management and Budget (OMB) as prescribed by the Act, and will go into effect upon
     announcement of OMB approval in the Federal Register.
4.IT IS FURTHER ORDERED that the establishment of a five year term for the
Thousands-Block Pooling Administrator is effective upon the date of adoption of this SECOND
                       REPORT AND ORDER.
5.IT IS FURTHER ORDERED that pursuant to Sections 1, 3, 4, 201-205, 251 of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 153, 154, 201-205, and 251, this
SECOND FURTHER NOTICE OF PROPOSED RULEMAKING is hereby ADOPTED.
6.IT IS FURTHER ORDERED that the Commission's Consumer Information Bureau,
Reference Information Center, SHALL SEND a copy of this Second Report and Order and
Further Notice of Proposed Rulemaking, including the Initial and Final Regulatory Flexibility
Analyses, to the Chief Counsel for Advocacy of Small Business Administration.
7.IT IS FURTHER ORDERED that the Final Regulatory Flexibility Analysis for this
SECOND REPORT AND ORDER, pursuant to the Regulatory Flexibility Act, 5 U.S.C.  604, is
                    contained in Appendix B.
8.IT IS FURTHER ORDERED that the Initial Regulatory Flexibility Analysis for this
SECOND FURTHER NOTICE OF PROPOSED RULEMAKING, pursuant to the Regulatory
  Flexibility Act, 5 U.S.C.  603, is contained in Appendix C.
                                 FEDERAL COMMUNICATIONS COMMISSION
                      Magalie Roman Salas
                           Secretary
                                                           Appendix A
                          Final Rules
PART 52   NUMBERING
Subpart B   Administration
     1.   The authority citation for Part 52 continues to read as follows:
AUTHORITY: Sections 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 U.S.C.  151, 152, 154, 155
unless otherwise noted.  Interpret or apply secs. 3, 4, 201-05, 207-09, 218, 225-7, 251-2, 271 and
332, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 153, 154, 201-205, 207-09, 218, 225-7, 251-2,
271 and 332 unless otherwise noted.
2.   Section 52.15 is revised to read as follows:
 52.15 Central office code administration.
       (a)     ***
       (b)     ***
       (c)     ***
       (d)     ***
       (e)     ***
       (f)     ***
          (1)  ***
               (i)  ***
               (ii) ***
               (iii)     ***
               (iv) ***
               (v)  ***
               (vi) Reserved numbers are numbers that are held by service providers at the
               request of specific end users or customers for their future use.  Numbers held
               for specific end users or customers for more than 180 days shall not be
               classified as reserved numbers.
          (7)  ***
          (8)  Data Collection Procedures.
               (i)  ***
               (ii) Reporting shall be by separate legal entity and must include company name,
               company headquarters address, Operating Company Number (OCN), parent
               company OCN(s), and the primary type of business in which the reporting
               carrier is engaged.  The term "parent company" refers to the highest related
               legal entity located within the state for which the reporting carrier is
               reporting data.
               (iii)     ***
          (4)  ***
          (5)  ***
          (6)  ***
          (7)  ***
       (h)     Applications for Numbering Resources.
          (1)  ***
          (2)  ***
          (3)  Growth numbering resources.
       (i)     ***
            i
               (ii) ***
               (iii)     ***
               (iv) The NANPA shall withhold numbering resources from any U.S. carrier that
               fails to comply with the reporting and numbering resource application
               requirements established in this part. The NANPA shall not issue numbering
               resources to a carrier without an OCN.  The NANPA must notify the carrier
               in writing of its decision to withhold numbering resources within ten (10)
               days of receiving a request for numbering resources.  The carrier may
               challenge the NANPA's decision to the appropriate state regulatory
               commission.  The state commission may affirm or overturn the NANPA's
               decision to withhold numbering resources from the carrier based on its
               determination of compliance with the reporting and numbering resource
               application requirements herein.
          (5)  State Access to Applications.  State commissions shall have access to service
          provider's applications for numbering resources.  State commissions should request
          copies of such applications from the service providers operating within their states,
          and service providers must comply with state commission requests for copies of
          numbering resource applications.  Carriers that fail to comply with a state
          commission request for numbering resource application materials shall be denied
          numbering resources.
       (f)     National Utilization Threshold. All applicants for growth numbering resources shall
       achieve a 60% utilization threshold, calculated in accordance with paragraph (g)(3)(ii) of
       this section, for the rate center in which they are requesting growth numbering resources.
       This 60% utilization threshold shall increase by 5% on June 30, 2002, and annually
       thereafter until the utilization threshold reaches 75%.
       (g)      ***
       (h)     ***
       (i)     Numbering Audits.
          (1)  All telecommunications service providers shall be subject to "for cause" and random
          audits to verify carrier compliance with Commission regulations and applicable
          industry guidelines relating to numbering administration.
          (2)  All telecommunications service providers shall be prepared to demonstrate
          compliance with Commission regulations and applicable industry guidelines at all
          times.  Service providers found to be in violation of Commission regulations and
          applicable industry guidelines relating to numbering administration may be subject to
          enforcement action.
     5.   Section 52.17 is revised to read as follows:
     The B&C Agent shall:
       (a)     Calculate, assess, bill and collect payments for all numbering administration functions and
       distribute funds to the NANPA, or other agent designated by the Common Carrier
       Bureau that performs functions related to numbering administration, on a monthly basis;
       (b)     ***;
       (c)     ***;
       (d)     ***
       (e)     ***
       (f)     ***
6.   Section 52.20 is revised to read as follows:
 52.20  Thousands-block number pooling.
       (a)     ***
       (b)     ***
       (c)     Donation of thousands-blocks.
          (1)  All service providers required to participate in thousands-block number pooling shall
          donate thousands-blocks with ten percent or less contamination to the thousands-
          block number pool for the rate center within which the numbering resources are
          assigned.
          (2)  All service providers required to participate in thousands-block number pooling shall
          be allowed to retain at least one thousands-block per rate center, even if the
          thousands-block is ten percent or less contaminated, as an initial block or footprint
          block.
          (3)  ***
       (d)     ***
                             Appendix B
             FINAL REGULATORY FLEXIBILITY ANALYSIS
1.   As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory
Flexibility Analysis (IRFA) was incorporated into the Notice of Proposed Rulemaking (Notice).
The Commission sought written public comment on the proposals in the Notice, including comment
on the IRFA.  In addition, pursuant to 5 U.S.C.  604, a Final Regulatory Flexibility Analysis
(FRFA) was incorporated in the First Report and Order and Further Notice of Proposed
Rulemaking (First Report and Order and Further Notice).  Also in the First Report and Order
and Further Notice, pursuant to 5 U.S.C.  603, was a second IRFA.  The Commission sought
written public comment on the proposals in the First Report and Order and Further Notice,
including comment on the second IRFA.  No comments specifically addressing the second IRFA are
relevant to the matters addressed in this Second Report and Order; however, comments received
concerning small business issues in general are summarized below. This present FRFA conforms to
the RFA.
A.   Need for, and Objectives of, the Second Report and Order
2.   In the First Report and Order and Further Notice, we sought public comment on (a)
what specific utilization threshold carriers, not participating in thousands-block number pooling,
should meet in order to request growth numbering resources; (b) whether state commissions should
be allowed to set rate-center based utilization thresholds based on Commission-established criteria;
(c) whether covered commercial mobile radio services (CMRS) carriers should be required to
participate in thousands-block number pooling immediately upon expiration of the Local Number
Portability (LNP) forbearance period on November 24, 2002, or whether a transition period should
be allowed; and (d) how a market-based allocation system for numbering resources could be
implemented.  We also sought additional information regarding: (a) cost studies that quantify the
incremental costs of thousands-block number pooling; (b) cost studies that quantify shared industry
and direct carrier-specific costs of thousands-block number pooling; and (c) cost studies that take
into account the cost savings associated with thousands-block number pooling in comparison to the
current numbering practices that result in more frequent area code changes.
3.   In doing so, we sought to (1) ensure that the limited numbering resources of the
North American Numbering Plan (NANP) are used efficiently; (2) protect customers from the
expense and inconvenience that result from the implementation of new area codes; (3) forestall the
enormous expense that will be incurred from expanding the NANP; and (4) ensure that all carriers
have the numbering resources they need to compete in the rapidly growing telecommunications
marketplace.
4.   In this Second Report and Order and Second Further Notice, we continue to
develop, adopt and implement a number of strategies to ensure that the numbering resources of the
NANP are used efficiently, and that all carriers have the numbering resources they need to compete
in the rapidly expanding telecommunications marketplace.  In particular, we finalize plans
implementing thousands-block number pooling, and also seek comment on additional strategies to
increase further the efficiency with which numbering resources are used.
B.   Summary of Significant Issues Raised by Public Comments
     5.   Commenters expressed support and opposition to several issues addressed in this
Second Report and Order that concern small entities.  Their opinions are summarized below and,
where applicable, discussed in Section E.  Other comments filed by small entities which are not
addressed in this Second Report and Order, such as those relating to carriers' cost recovery
mechanisms for thousands-block number pooling and developing markets for numbering resources,
will be addressed at a later date.
6.   Geographic Splits and All-Services Area Code Overlays. One commenter described
geographic splits as harmful for small businesses because the phone number plays a critical role in
the identity of the business.  Geographic splits may cause small businesses to lose customers who
are unaware of the phone number change.  In addition, small businesses may incur additional costs
on advertising materials as a result of an area code change.  Thus, all-services area code overlays
are strongly preferred by commenters because small businesses would not be exposed to such costs.
7.   Audits.  Commenters generally support "for cause" and random audits.  The Small
Business Alliance strongly supports "for cause", scheduled and random audits given the rapid
depletion of numbering resources.  Another commenter supports "for cause" audits, but not
random audits.
8.   Mandatory Nationwide Ten-Digit Dialing.  Commenters representing small
businesses support mandatory ten-digit dialing.  For example, OPASTCO believes that ten-digit
dialing would be less disruptive for customers, and technical modifications would be less expensive.
.
C.   Description and Estimate of the Number of Small Entities To Which Rules Will
     Apply
9.   The RFA directs agencies to provide a description of, and, where feasible, an
estimate of the number of small entities that may be affected by the proposed rules, if adopted.
The RFA defines the term "small entity" as having the same meaning as the terms "small business,"
"small organization," and "small governmental jurisdiction." 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.  Under
the Small Business Act, a "small business concern" is one which: (1) is independently owned and
operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (SBA).
     10.  The most reliable source of information regarding the total numbers of certain
common carrier and related providers nationwide, as well as the number of commercial wireless
entities, appears to be data the Commission publishes in its Trends in Telephone Service report
and the data in its Carrier Locator: Interstate Service Providers Report.  These carriers include,
inter alia, local exchange carriers, wireline carriers and service providers, interexchange carriers,
competitive access providers, operator service providers, pay telephone operators, providers of
telephone service, providers of telephone exchange service, and resellers.
     11.  The SBA has defined establishments engaged in providing "Radiotelephone
Communications" and "Telephone Communications, Except Radiotelephone" to be small businesses
when they have no more than 1,500 employees.  Below, we discuss the total estimated number of
telephone companies falling within those two categories and the number of small businesses in each,
and attempt to refine further those estimates to correspond with the categories of telephone
companies that are commonly used under our rules.
     12.  We have included small incumbent local exchange carriers (LECs) in this present
RFA analysis.  As noted above, a "small business" under the RFA is one that, inter alia, meets the
pertinent small business size standard (e.g., a telephone communications business having 1,500 or
fewer employees), and "is not dominant in its field of operation."  The SBA's Office of Advocacy
contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation
because any such dominance is not "national" in scope.  We have therefore included small
incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on
FCC analyses and determinations in other, non-RFA contexts.
     13.  Total Number of Telephone Companies Affected.  The U.S. Bureau of the Census
(Census Bureau) reports that, at the end of 1992, there were 3,497 firms engaged in providing
telephone services, as defined therein, for at least one year.  This number contains a variety of
different categories of carriers, including local exchange carriers, interexchange carriers, competitive
access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone
operators, covered specialized mobile radio providers, and resellers.  It seems certain that some of
these 3,497 telephone service firms may not qualify as small entities or small incumbent LECs
because they are not "independently owned and operated."  For example, a personal
communications services (PCS) provider that is affiliated with an interexchange carrier having more
than 1,500 employees would not meet the definition of a small business.  It is reasonable to conclude
that fewer than 3,497 telephone service firms are small entity telephone service firms or small
incumbent LECs that may be affected by the proposed regulations, herein adopted.
      14. Wireline Carriers and Service Providers.  The SBA has developed a definition of
small entities for telephone communications companies except radiotelephone (wireless) companies.
The Census Bureau reports that there were 2,321 such telephone companies in operation for at least
one year at the end of 1992.  According to the SBA's definition, a small business telephone
company other than a radiotelephone company is one employing no more than 1,500 persons.  All
but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to
have fewer than 1,000 employees.  Thus, even if all 26 of those companies had more than 1,500
employees, there would still be 2,295 non-radiotelephone companies that might qualify as small
entities or small incumbent LECs.  We do not have data specifying the number of these carriers that
are not independently owned and operated, and thus are unable at this time to estimate with greater
precision the number of wireline carriers and service providers that would qualify as small business
concerns under the SBA's definition.  Consequently, we estimate that fewer than 2,295 small
telephone communications companies other than radiotelephone companies are small entities or
small incumbent LECs that may be affected by the proposed regulations, herein adopted.
     15.  Local Exchange Carriers.   Neither the Commission nor the SBA has developed a
definition for small LECs.  The closest applicable definition under the SBA rules is for telephone
communications companies other than radiotelephone (wireless) companies.  According to the
most recent Telecommunications Industry Revenue data, 1,348 incumbent carriers reported that they
were engaged in the provision of local exchange services.  We do not have data specifying the
number of these carriers that are either dominant in their field of operations, are not independently
owned and operated, or have more than 1,500 employees, and thus are unable at this time to
estimate with greater precision the number of LECs that would qualify as small business concerns
under the SBA's definition.  Consequently, we estimate that fewer than 1,348 providers of local
exchange service are small entities or small incumbent LECs that may be affected by the proposed
regulations, herein adopted.
     16.                       Interexchange Carriers.  Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to providers of interexchange services (IXCs).  The
closest applicable definition under the SBA rules is for telephone communications companies other
than radiotelephone (wireless) companies.  According to the most recent Trends in Telephone
Service data, 171 carriers reported that they were engaged in the provision of interexchange
services.  We do not have data specifying the number of these carriers that are not independently
owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate
with greater precision the number of IXCs that would qualify as small business concerns under the
SBA's definition.  Consequently, we estimate that there are less than 171 small entity IXCs that may
be affected by the proposed regulations, herein adopted.  19.
     17.  Competitive Access Providers.  Neither the Commission nor the SBA has developed
a definition of small entities specifically applicable to competitive access service providers (CAPs).
The closest applicable definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.  According to the most recent Trends in
Telephone Service data, 212 CAP/CLECs carriers and 10 other LECs reported that they were
engaged in the provision of competitive local exchange services.  We do not have data specifying
the number of these carriers that are not independently owned and operated, or have more than
1,500 employees, and thus are unable at this time to estimate with greater precision the number of
CAPs that would qualify as small business concerns under the SBA's definition.  Consequently, we
estimate that there are less than 212 small entity CAPs and 10 other LECs that may be affected by
the proposed regulations, herein adopted.
      18. Pay Telephone Operators.  Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to pay telephone operators.  The closest applicable
definition under SBA rules is for telephone communications companies other than radiotelephone
(wireless) companies.  According to the most recent Trends in Telephone Service data, 615
carriers reported that they were engaged in the provision of pay telephone services.  We do not
have data specifying the number of these carriers that are not independently owned and operated or
have more than 1,500 employees, and thus are unable at this time to estimate with greater precision
the number of pay telephone operators that would qualify as small business concerns under the
SBA's definition.  Consequently, we estimate that there are less than 615 small entity pay telephone
operators that may be affected by the proposed regulations, herein adopted.
      19. Resellers (including debit card providers).  Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to resellers.  The closest applicable
SBA definition for a reseller is a telephone communications company other than radiotelephone
(wireless) companies.  According to the most recent Trends in Telephone Service data, 388 toll
and 54 local entities reported that they were engaged in the resale of telephone service.  We do
not have data specifying the number of these carriers that are not independently owned and operated
or have more than 1,500 employees, and thus are unable at this time to estimate with greater
precision the number of resellers that would qualify as small business concerns under the SBA's
definition.  Consequently, we estimate that there are fewer than 388 small toll entity resellers and 54
small local entity resellers that may be affected by the proposed regulations, herein adopted.
 20. Wireless Telephony and Paging and Messaging.  Wireless telephony includes
cellular, PCS or specialized mobile radio (SMR) service providers.  Neither the Commission nor the
SBA has developed a definition of small entities applicable to cellular licensees, or to providers of
paging and messaging services.  The closest applicable SBA definition for a reseller is a telephone
communications company other than radiotelephone (wireless) companies.  According to the most
recent Locator data, 806 carriers reported that they were engaged in the provision of wireless
telephony and 427 companies reported that they were engaged in the provision of paging and
messaging service.  We do not have data specifying the number of these carriers that are not
independently owned or operated, and thus are unable at this time to estimate with greater precision
the number that would qualify as small business concerns under the SBA's definition.  Consequently,
we estimate that there are fewer than 732 small carriers providing wireless telephony services and
fewer than 137 small companies providing paging and messaging services that may be affected by
the proposed regulations, herein adopted.
D.   Description of Projected Reporting, Recordkeeping, and Other Compliance
     Requirements
21.  Audit Program.  In the Notice, we identified auditing as the only legitimate method
for verifying the validity and accuracy of utilization data submitted by users of numbering
resources.  The Second Report and Order approves the Commission's proposal to supplement the
need verification measures and data collection requirements, adopted in the First Report and Order,
with a comprehensive audit program.  The audits, which include "for cause" and random audits, will
be used to verify carrier compliance with federal rules and orders and industry guidelines.  In
addition, the Commission declines to provide a specific cost recovery mechanism for carrier-specific
auditing costs, including costs related to providing documentation to the auditor.  We believe that
such costs are minimal and do not significantly affect a carrier's ability to compete.  Nevertheless,
even if such costs impose a burden on small carriers, the benefits of monitoring numbering resource
use, thereby enabling us to predict accurately exhaustion of numbering resources, would far
outweigh those costs.
22.  "For Cause" Auditing Requests.  To request a "for cause" audit, the North America
Numbering Plan Administrator (NANPA), the Pooling Administrator or a state commission must
draft a written request to the Auditor stating the reason for the request, such as misleading or
inaccurate data, as well as supporting documentation evidencing such grounds for the audit.  The
audits will be performed by the Commission's auditors in the Audits Branch of the Accounting
Safeguards Division in the Common Carrier Bureau, or other designated agents.
23.  Numbering Resource Application Materials.  State commissions should request
copies of carriers' applications for initial and growth numbering resources directly from the carriers,
instead of NANPA or the Pooling Administrator.  Such an approach avoids a costly burden on the
national numbering administrator while placing only a minimal burden on carriers because small and
large carriers merely need to duplicate applications previously submitted to the NANPA. Carriers
receiving numbering resources must comply with state requests and will be denied numbering
resources for noncompliance.
E.   Steps Taken to Minimize Significant Economic Impact on Small Entities, and
     Significant Alternatives Considered
     24.  The RFA requires an agency to describe any significant alternatives that it has
considered in reaching its proposed approach, which may include the following four alternatives
(among others): (1) the establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small entities; (2) the clarification,
consolidation, or simplification of compliance or reporting requirements under the rule for small
entities; (3) the use of performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.
     25.  Utilization Threshold.  We require carriers to utilize 60% of their existing inventory
of numbers before receiving additional resources within a particular rate center.  We find that 60%
is an appropriate threshold level because, for example, according to the data reported to NANPA,
average industry utilization levels range from approximately 45%-65%.  We considered adopting a
50% threshold as an alternative, however, we believe that a 60% utilization threshold will more
successfully encourage carriers to use numbers from existing inventories while making such
utilization achievable for carriers that need additional numbering resources.  The threshold will
increase by 5% each year starting June 30, 2002, to a maximum threshold of 75%.  We establish
these small yearly percentage increases in order to allow carriers, especially small carriers, sufficient
time to maximize their utilization levels.
26.  Thousands-Block Number Pooling for Covered CMRS Carriers.  CMRS carriers will
be required to participate in thousands-block number pooling once the LNP forbearance period
expires on November 24, 2002.  No transition period between the CMRS carriers' LNP
implementation and participation in mandatory number pooling will be granted because such carriers
have almost two years' advance notice of the pooling requirement, and technical modifications for
pooling and LNP are largely similar.  We believe that given the deadline date for compliance,
carriers, including small businesses, should have ample time to prepare for these changes without the
need for a transition period.
27.  Geographic Splits and All-Services Area Code Overlays. We considered whether to
impose additional rules on state commissions or to leave the development of any rules to the states.
We have decided that additional rules or guidelines will not be enumerated at the federal level with
regard to geographic splits or all-services overlays.  We believe that state commissions should be
allowed to choose an appropriate measure, including geographic splits or overlays, for area code
relief.  However, state commissions must ensure that, in implementing area code relief, carriers
receive numbers on an equitable basis and that such numbers are available in a timely and efficient
manner.  Such an approach allows state commissions to consider the surrounding local
circumstances, including the needs of small, local businesses, in deciding whether or how to provide
area code relief.
28.  In the alternative, we could have mandated state commissions to impose all-services
area code overlays as the primary method for area code relief.  As discussed in Section B, small
businesses that incur additional costs related to geographic splits may have benefited from this
alternative proposal.   However, the Commission believes that states should have the flexibility to
determine the best method for area code relief given their unique knowledge of their geographic
region.
29.  In addition, we will continue to require ten-digit dialing within and throughout the
geographic area covered by an all-services overlay.  Such a requirement ensures that no dialing
disparity exists to disadvantage competitors, including small businesses.
30.  Audits. A comprehensive audit program will be established to verify carriers' actual
need for numbering resources, in accordance with federal rules and industry guidelines.  As
discussed in Section B, small entity commenters generally support audits.  This audit program, which
will consist of "for cause" and random audits, should help to determine whether carriers accurately
record data or inconspicuously stockpile numbers.  Failure to comply with auditor requests will
result in penalties.  For small carriers, audits will help to ensure that large businesses are not
hoarding numbers or otherwise preventing small carriers from gaining access to numbering
resources.  In addition, costs should not impose a significant burden on small or large carriers.
However, the benefits of being able to rely on carrier data in order to monitor numbering resource
use and to predict accurately exhaustion of numbering resources would far outweigh any significant
costs incurred by small carriers.
31.  Mandatory Nationwide Ten-Digit Dialing. At the present time, we decline to adopt
nationwide mandatory ten-digit dialing as a method of area code relief.  Although commenters,
including small entities, supported the adoption of this measure, the burdens of implementation at
this time outweigh the benefits.  Such a transition would require technical modifications by both
large and small carriers, at a potentially expensive cost.  In addition, ten-digit dialing adds to
consumer inconvenience and confusion.  At this time, the need for area code relief does not
outweigh these burdens on carriers.
32.  Reconsideration of Reserved Number Period.  In the First Report and Order, we
decided to allow numbers to remain in reserved status for a maximum of 45 days.  In this Second
Report and Order, we extend the period for reserving numbers to a maximum of 180 days.  We
considered extending the period to 12 months, but we believe that, at the present time, 180 days is
a sufficient time period to allow small and large carriers to address their customers' needs while
mitigating the effects of such reservations on the depletion of numbering resources.  It also allows
small and large business customers to plan for implementation and/or expansion of telephone service.
For carriers requesting more time to reserve numbers, we are considering a proposal by the NANC
to charge a fee for extending the reservation period and are seeking comment on this proposal in the
Second Further Notice.
33.  Report to Congress: The Commission will send a copy of this Second Report and
Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional
Review Act.  In addition, the Commission will send a copy of this Second Report and Order,
including this FRFA, to the Chief Counsel for Advocacy of the SBA.  A copy of this Second Report
and Order and FRFA (or summaries thereof) will also be published in the Federal Register.
                                                           Appendix C
            INITIAL REGULATORY FLEXIBILITY ANALYSIS
1.   As required by the Regulatory Flexibility Act (RFA), the Commission has prepared
this present Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the policies and rules proposed in this Second Report and Order, Order on
Reconsideration in CC Docket 96-98 and CC Docket 99-200, and Second Further Notice in CC
Docket No. 99-200 (Second Further Notice).  Written public comments are requested on this IRFA.
Comments must be identified as responses to the IRFA and must be filed by the deadlines for
comments on the Second Further Notice provided above in Section VII. The Commission will send
a copy of the Second Further Notice, including this IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration (SBA).  In addition, the Second Further Notice and the IRFA (or
summaries thereof) will be published in the Federal Register.
A.   Need for, and Objectives of, the Proposed Rules
2.   In the Communications Act of 1934, as amended by the Telecommunications Act of
1996, Congress gave the Commission plenary jurisdiction over the North American Numbering Plan
(NANP) within the United States.  In discharging our authority over numbering resources, we
seek to balance two competing goals.  First, we must ensure that carriers have the numbering
resources that they need to compete and bring new and innovative services to the consumer
marketplace.  Second, we must ensure that, to the extent possible, numbering resources are used
efficiently.  Inefficient use of numbering resources speeds the exhaust of area codes, imposing on
carriers and consumers alike the burdens and costs of implementing new area codes.  It also shortens
the life of the NANP as a whole.
3.   The Commission is issuing this Second Further Notice to seek public comment on (a)
the relative advantages of service-specific and technology-specific overlays as opposed to all-
services overlays, and the conditions under which service-specific and technology-specific overlays,
if adopted, should be implemented in order to promote competitive equity, maximize efficient use of
numbering resources, and minimize customer inconvenience; (b) what policies could be implemented
at the federal level to reduce the extent to which the rate center system contributes to and/or
accelerates numbering resource exhaust; (c) whether carriers should be held accountable when
related carriers fail to comply with reporting requirements; (d) whether state commissions should be
granted direct, password-protected access to the mandatory reporting data received by the North
American Numbering Plan Administrator (NANPA); (e) whether we should allow extensions (for a
fee or otherwise) on the 180-day reservation period for numbers; (f) what enforcement mechanisms
should be applied when a carrier either fails to cooperate with an audit, or fails to resolve identified
areas of noncompliance; (g) whether state commissions should be allowed to conduct audits; (h) the
development of a market-based allocation system for numbering resources; (i) the costs associated
with thousands-block number pooling; (j) whether the Commission should require carriers to acquire
Local Number Portability (LNP) capabilities for the purpose of participating in thousands-block
number pooling; and (k) whether a "safety valve" should be established for carriers that need
additional numbering resources, but fail to meet the utilization threshold in a given rate center.
4.   Receiving comments on such matters will help us to examine and consider ways to
achieve our objectives to use numbering resources more efficiently in order to mitigate potential
customer cost and inconvenience of implementing new area codes and delaying costly expansion of
the NANP.  For carriers, more numbering resources should encourage competition in a growing
telecommunications market.
B.   Legal Basis
5.   The proposed action is authorized under Sections 1, 3, 4, 201-205, 251 of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 153, 154, 201-205, and 251.
C.   Description and Estimate of the Number of Small Entities To Which the
     Proposed Rules Will Apply
6.   The RFA directs agencies to provide a description of, and, where feasible, an
estimate of the number of small entities that may be affected by the proposed rules, if adopted.
The RFA defines the term "small entity" as having the same meaning as the terms "small business,"
"small organization," and "small governmental jurisdiction." 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.  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.
     7.   The most reliable source of information regarding the total numbers of certain
common carrier and related providers nationwide, as well as the number of commercial wireless
entities, appears to be data the Commission publishes in its Trends in Telephone Service report
and the data in its Carrier Locator: Interstate Service Providers Report.  However, in a recent
news release, the Commission indicated that there are 4,144 interstate carriers.  These carriers
include, inter alia, local exchange carriers, wireline carriers and service providers, interexchange
carriers, competitive access providers, operator service providers, pay telephone operators,
providers of telephone service, providers of telephone exchange service, and resellers.
   8.     The SBA has defined establishments engaged in providing "Radiotelephone
Communications" and "Telephone Communications, Except Radiotelephone" to be small businesses
when they have no more than 1,500 employees.  Below, we discuss the total estimated number of
telephone companies falling within the two categories and the number of small businesses in each,
and we then attempt to refine further those estimates to correspond with the categories of telephone
companies that are commonly used under our rules.
   9.     We have included small incumbent local exchange carriers (LECs) in this present
RFA analysis.  As noted above, a "small business" under the RFA is one that, inter alia, meets the
pertinent small business size standard (e.g., a telephone communications business having 1,500 or
fewer employees), and "is not dominant in its field of operation."  The SBA's Office of Advocacy
contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation
because any such dominance is not "national" in scope.  We have therefore included small
incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on
Commission analyses and determinations in other, non-RFA contexts.
   10.    Total Number of Telephone Companies Affected.  The U.S. Bureau of the Census
(Census Bureau) reports that, at the end of 1992, there were 3,497 firms engaged in providing
telephone services, as defined therein, for at least one year.  This number contains a variety of
different categories of carriers, including local exchange carriers, interexchange carriers, competitive
access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone
operators, covered specialized mobile radio providers, and resellers.  It seems certain that some of
these 3,497 telephone service firms may not qualify as small entities or small incumbent LECs
because they are not "independently owned and operated."  For example, a personal
communications system provider that is affiliated with an interexchange carrier having more than
1,500 employees would not meet the definition of a small business.  It is reasonable to conclude that
fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent
LECs that may be affected by the proposed regulations.
     11.  Wireline Carriers and Service Providers.  The SBA has developed a definition of
small entities for telephone communications companies except radiotelephone (wireless) companies.
The Census Bureau reports that there were 2,321 such telephone companies in operation for at least
one year at the end of 1992.  According to the SBA's definition, a small business telephone
company other than a radiotelephone company is one employing no more than 1,500 persons.  All
but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to
have fewer than 1,000 employees.  Thus, even if all 26 of those companies had more than 1,500
employees, there would still be 2,295 non-radiotelephone companies that might qualify as small
entities or small incumbent LECs.  We do not have data specifying the number of these carriers that
are not independently owned and operated, and thus are unable at this time to estimate with greater
precision the number of wireline carriers and service providers that would qualify as small business
concerns under the SBA's definition.  Consequently, we estimate that fewer than 2,295 small
telephone communications companies other than radiotelephone companies are small entities or
small incumbent LECs that may be affected by the proposed regulations.
     12.  Local Exchange Carriers.   Neither the Commission nor the SBA has developed a
definition for small LECs.  The closest applicable definition under the SBA rules is for telephone
communications companies other than radiotelephone (wireless) companies.  According to the
most recent Telecommunications Industry Revenue data, 1,348 incumbent carriers reported that they
were engaged in the provision of local exchange services.  We do not have data specifying the
number of these carriers that are either dominant in their field of operations, are not independently
owned and operated, or have more than 1,500 employees, and thus are unable at this time to
estimate with greater precision the number of LECs that would qualify as small business concerns
under the SBA's definition.  Consequently, we estimate that fewer than 1,348 providers of local
exchange service are small entities or small incumbent LECs that may be affected by the proposed
regulations.
     13.  Interexchange Carriers.  Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to providers of interexchange services (IXCs).  The
closest applicable definition under the SBA rules is for telephone communications companies other
than radiotelephone (wireless) companies.  According to the most recent Trends in Telephone
Service data, 171 carriers reported that they were engaged in the provision of interexchange
services.  We do not have data specifying the number of these carriers that are not independently
owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate
with greater precision the number of IXCs that would qualify as small business concerns under the
SBA's definition.  Consequently, we estimate that there are less than 171 small entity IXCs that may
be affected by the proposed regulations.
     14.  Competitive Access Providers.  Neither the Commission nor the SBA has developed
a definition of small entities specifically applicable to competitive access services providers (CAPs).
The closest applicable definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.  According to the most recent Trends in
Telephone Service data, 212 CAP carriers and Competitive Local Exchange Carriers (CLEC) and 10
other LECs reported that they were engaged in the provision of competitive local exchange
services.  We do not have data specifying the number of these carriers that are not independently
owned and operated, or have more than 1,500 employees, and thus are unable at this time to
estimate with greater precision the number of CAPs that would qualify as small business concerns
under the SBA's definition.  Consequently, we estimate that there are less than 212 small entity
CAPs and 10 other LECs that may be affected by the proposed regulations.
     15.  Pay Telephone Operators.  Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to pay telephone operators.  The closest applicable
definition under SBA rules is for telephone communications companies other than radiotelephone
(wireless) companies.  According to the most recent Trends in Telephone Service data, 615
carriers reported that they were engaged in the provision of pay telephone services.  We do not
have data specifying the number of these carriers that are not independently owned and operated or
have more than 1,500 employees, and thus are unable at this time to estimate with greater precision
the number of pay telephone operators that would qualify as small business concerns under the
SBA's definition.  Consequently, we estimate that there are less than 615 small entity pay telephone
operators that may be affected by the proposed regulations.
     16.  Resellers (including debit card providers).  Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to resellers.  The closest applicable
SBA definition for a reseller is a telephone communications company other than radiotelephone
(wireless) companies.  According to the most recent Trends in Telephone Service data, 388 toll
and 54 local entities reported that they were engaged in the resale of telephone service.  We do
not have data specifying the number of these carriers that are not independently owned and operated
or have more than 1,500 employees, and thus are unable at this time to estimate with greater
precision the number of resellers that would qualify as small business concerns under the SBA's
definition.  Consequently, we estimate that there are fewer than 388 small toll entity resellers and 54
small local entity resellers that may be affected by the proposed regulations.
17.  Wireless Telephony and Paging and Messaging.  Wireless telephony includes
cellular, personal communications service (PCS) or specialized mobile radio (SMR) service
providers.  Neither the Commission nor the SBA has developed a definition of small entities
applicable to cellular licensees, or to providers of paging and messaging services.  The closest
applicable SBA definition for a reseller is a telephone communications company other than
radiotelephone (wireless) companies.  According to the most recent Locator data, 806 carriers
reported that they were engaged in the provision of wireless telephony and 427 companies reported
that they were engaged in the provision of paging and messaging service.   We do not have data
specifying the number of these carriers that are not independently owned or operated, and thus are
unable at this time to estimate with greater precision the number that would qualify as small business
concerns under the SBA's definition.  Consequently, we estimate that there are fewer than 732 small
carriers providing wireless telephony services and fewer than 137 small companies providing paging
and messaging services that may be affected by the proposed regulations.
D.   Description of Projected Reporting, Recordkeeping, and Other Compliance
     Requirements
18.  In this Second Further Notice we seek comment on whether to implement a market-
based allocation system for numbering resources, and on the types of reporting requirements needed
to ensure that secondary markets, if implemented, remain open, competitive and effective.  Data
from such reports should allow us to determine the success of reallocating numbering resources in
secondary markets.  We also seek comment on whether carriers should be required to file
information on purchase or lease prices as well as the quantities involved in the transaction.
Commenters should discuss whether such reporting requirements would pose an unreasonable
burden on carriers or NANPA.
E.   Steps Taken to Minimize Significant Economic Impact on Small Entities, and
     Significant Alternatives Considered
19.  The RFA requires an agency to describe any significant alternatives that it has
considered in reaching its proposed approach, which may include the following four alternatives
(among others): (1) the establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small entities; (2) the clarification,
consolidation, or simplification of compliance or reporting requirements under the rule for small
entities; (3) the use of performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.
20.  Service-Specific and Technology-Specific Overlays. Due to the numbering crisis, we
are reconsidering our prohibition against using service-specific and technology-specific overlays as
methods for area code relief.  The prohibition stems from our belief that these overlays could pose
a distinct competitive disadvantage on, for example, carriers with customers who would suffer the
cost and inconvenience of surrendering existing numbers, changing over to new numbers, and
informing callers of the new numbers.  Some commenters to the Notice advocated that these
overlays would address the demand for numbers as well as receive substantial public support,
especially as a means for providing area code relief.  We seek comment, especially from small
entities, on when and if these overlays should occur and if so, the conditions under which service-
specific and technology-specific overlays should be implemented in order to promote competitive
equity, maximize the efficient use of numbering resources, and minimize customer inconvenience.
In determining appropriate conditions for implementing these overlays, we will examine how such
conditions would impact small businesses.
21.  The Rate Center Problem.  In this Second Further Notice we seek comment on rate
center consolidation.  We find that rate center consolidation would be a potential solution for
relieving number exhaust because the existence of multiple rate centers in each Numbering Plan Area
(NPA), as well as demand by most carriers to have numbering resources in each rate center in which
they operate, greatly contribute to number exhaust.  However, because of the connection between
rate centers and the rating and routing of calls, such consolidation may be difficult for carriers,
particularly incumbent LECs.  Thus, we seek comment on ways to separate the connection between
rate centers, call rating and routing.  We also seek comment from industry and state commissions
regarding the effects of past and present rate center consolidation efforts on carriers as well as the
benefits and costs of such consolidation in the top 100 metropolitan statistical areas (MSAs).  Such
consolidation efforts should significantly impact numbering resources by providing small and large
businesses with access to more numbers.  In responding to this issue, commenters should also
consider alternatives to rate center consolidation, such as extending local calling areas.
22.  Liability of Related Carriers.  In the First Report and Order the Commission
established new semiannual reporting requirements to obtain more consistent, accurate and
complete reporting of number resource utilization and forecast data.  We tentatively conclude in
this Second Further Notice that carriers should, in certain instances, have numbering resources
withheld when related carriers fail to comply with our mandatory reporting requirements and, as a
result, are denied numbers resources.  We seek comment on how to identify the relationships (i.e.,
the existence of parent and sister companies) among reporting carriers, and what geographic
limitations should be placed on those relationships in determining liability.
23.  Fee for Number Reservations.  In this Second Further Notice, we seek further
comment on the NANC's proposal to allow unlimited reservations of numbers on a month-to-month
basis.  We seek comment on whether unlimited reservations of numbers are necessary, or, in the
alternative, whether there should be a constraint on the time period that numbers can be reserved.
Commenters should also discuss the viability and reasonableness of assessing a fee for reserved
numbers on carriers and permitting carriers to recover such costs from end users for whom numbers
may be reserved.  Such a fee could provide appropriate incentives in this context. We encourage
comments regarding any unique small business needs related to these alternatives for number
reservations, and the disproportionate impact, if any, of fees on small businesses.
24.  Audit Compliance and Enforcement.  In the Second Report and Order, we
established a comprehensive audit program to verify carrier compliance with federal rules and orders
and industry guidelines.  In this Second Further Notice, we seek comment on what appropriate
enforcement mechanisms should be employed to address instances in which a carrier either fails to
cooperate with an audit, or fails to rectify identified areas of noncompliance.  We tentatively
conclude that, at a minimum, carriers that fail to cooperate with the auditor should be denied
numbering resources.  The imposition of penalties would encourage both large and small carriers to
comply with auditors' requests.
     25.  State Authority to Perform Audits.  In addition to maintaining a national audit
program, we seek comment on whether state commissions, given their extensive involvement in
numbering issues, should be permitted to conduct independently "for cause" and random audits of
carrier data.  Small businesses should comment, in particular, on whether the potential existence of
differing state audit standards would be a significant cost burden for them.
26.  Market for Numbering Resources.  In this Second Further Notice we seek comment
on whether and how a market-based number allocation system should be implemented. Proper
implementation of this system should encourage the efficient use of numbering resources by carriers
as well as be competitively neutral, especially towards small businesses.  The system's benefits (i.e.,
more efficient use of numbers) should outweigh carriers' concerns over costs.  We believe that
alternatives to this system (i.e., allocating numbers for free) would not promote the efficient use of
numbers as effectively.  Commenters are encouraged to propose ways to implement such a system
so as to minimize any unfavorable impact on small entities.
27.  Recovery of Pooling Shared Industry and Direct Carrier Specific Costs. We
determined in this Second Further Notice that we still do not possess sufficient cost data to establish
a cost recovery mechanism at this time.  We intend to establish a national cost recovery mechanism
after the national pooling roll-out schedule is finalized, because the timing and amount of pooling
costs should be more readily ascertainable at that time.  In the interim, we seek further comment and
cost studies quantifying shared industry and direct carrier-specific costs of thousands-block number
pooling.  Such cost data should assist us in ascertaining an appropriate cost recovery mechanism for
small carriers.
28.  Mandating LNP Capability for Thousands-Block Number Pooling. In the First
Report and Order, we adopted thousands-block number pooling for local number portability (LNP)
capable carriers, concluding that commercial mobile radio services carriers as well as non-LNP
capable wireline carriers must participate in pooling once they become LNP capable.  We seek
comment on whether we should require carriers to become LNP capable for the purpose of
participating in thousands-block number pooling.  In the alternative, we seek comment on whether
carriers can utilize other network architecture to increase participation in thousands-block number
pooling, or at least central office code sharing, without having fully deployed LNP.  In examining
alternatives to improve the efficient use of numbering resources, we request comments from all
carriers, but especially small businesses that may become disadvantaged by a requirement to become
LNP-capable.
29.  Waiver of Growth Numbering Resource Requirement.  Currently, carriers may obtain
a waiver of growth numbering resource requirements by demonstrating their need for additional
numbering resources.  We seek comment in this Second Further Notice on whether a "safety valve"
should be established for carriers that need additional numbering resources, even though they fail to
meet the utilization threshold in a given rate center.  In particular, we request data (especially
empirical data) indicating the extent to which this problem exists.  In addition, we seek comment on,
among other things, the form of a "safety valve" mechanism and specific criteria that would warrant
a waiver.  Commenters are encouraged to provide data demonstrating small business' need for a
"safety valve" mechanism as well as specific criteria for granting a waiver that would impose a
minimal burden on small entities.
F.   Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed
     Rules
          30.  None.
                                     Appendix D
                        List of Parties
I.   Numbering Resource Optimization Notice of Proposed Rulemaking
Comments - In addition to the parties listed below, the Commission also considered the
comments, including e-mails, postcards and other correspondence, from over 3,000 citizens in this
                           matter.
  1.      Adamson, Grier
  2.      Ad Hoc Telecommunications Users Committee (Ad Hoc)
  3.      AirTouch Communications, Inc. (AirTouch)
  4.      Ameritech
  5.      Arsinow, Richard A.
  6.      Arvanitas, Ms. Peggy
  7.      Association for Local Telecommunications Services (ALTS)
  8.      AT&T Corporation (AT&T)
  9.      Bartel, Richard C., and Communications Venture Services, Inc. (Venture Services)
  10.          Bell Atlantic
  11.          BellSouth Corporation (BellSouth)
  12.          Burrows Resource Group Inc. (BRG)
  13.          Cablevision Lightpath, Inc. (Cablevision)
  14.          California Public Utilities Commission and the People of the State of California    (California
  Commission)
  15.          Campbell, Bill - California Assemblyman 71st District, letter to
Congressman James E. Rogan
  16.          Carlson, Douglas F.
  17.          Cellular Telecommunications Industry Association (CTIA)
  18.          Chambers, Rose A.
  19.          Cincinnati Bell Telephone Company (CinBell)
  20.          Citizens Utility Board, People of the State of Illinois, Cook County State's Attorney's
Office, and the City of Chicago (Citizens Util. Bd., et al.)
  21.          Cohen, Marsha N.
  22.          Colpitts, Robert M., Jr.
  23.          Colorado Public Utilities Commission (Colorado Commission)
  24.          Connect Communications Corporation (Connect)
  25.          Connecticut Department of Public Utility Control (Connecticut Commission)
  26.          Cox Communications, Inc. (Cox)
  27.          Eyre, Richard
  28.          Florida Public Service Commission (Florida Commission)
  29.          Gethard, Elaine Meitus
  30.          GTE Service Corporation (GTE)
  31.          Illinois Chapter of National Emergency Number Association (INENA)
  32.          Joint Comments of Choice One Communications, Inc., and GST Telecommunications,
     Inc. (Choice One and GST)
  33.          Joint Comments of Centennial Cellular Corporation; CenturyTel Wireless, Inc.;
     Thumb Cellular, Limited Partnership; and Trillium Cellular Corp. (Centennial, et al.)
  34.          Joint Comments of Texas Office of Public Utility Counsel and National Association
     of State Utility Consumer Advocates (Texas Public Util. Counsel and NASUCA)
  35.          Level 3 Communications, Inc. (Level3)
  36.          Liberty Telecom LLC (Liberty)
  37.          Maine Public Utilities Commission (Maine Commission)
  38.          Maydak, Keith
  39.          Massachusetts Department of Telecommunications and Energy
     (Massachusetts Commission)
  40.          MCI WorldCom, Inc. (WorldCom)
  41.          MediaOne Group, Inc. (MediaOne)
  42.          Minnesota Department of Public Service (Minnesota Commission)
  43.          Missouri Public Service Commission  (Missouri Commission)
  44.          Mitretek Systems, Inc.
  45.          Mobility Canada
  46.          Mohlenbrok, Gerald
  47.          National Association of Regulatory Utility Commissioners (NARUC)
  48.          National Emergency Number Association (NENA)
  49.          National Exchange Carriers Association (NECA)
  50.          National Telephone Cooperative Association (NTCA)
  51.          Neill, Professor Bill
  52.          New Hampshire Public Utilities Commission (New Hampshire Commission)
  53.          New Jersey Board of Public Utilities (New Jersey Commission)
  54.          Newman, Vicky
  55.          New York State Department of Public Service (New York Commission)
  56.          Nextel Communications, Inc. (Nextel)
  57.          Nextlink Communications, Inc. (Nextlink)
  58.          Nilsen, Beate
  59.          North American Numbering Plan Administrator (NANPA)
  60.          North American Numbering Council (NANC)
  61.          North Carolina Utilities Commission (North Carolina Commission)
  62.          Omnipoint Communications, Inc. (Omnipoint)
  63.          Organization for the Promotion and Advancement of Small Telecommunications
Companies (OPASTCO)
  64.          Paging Network, Inc.
  65.          Pennsylvania Office of Consumer Advocate and NASUCA (Pennsylvania
Consumer Advocate and NASUCA)
  66.          Pennsylvania Public Utility Commission (Pennsylvania Commission)
  67.          Personal Communications Industry Association (PCIA)
  68.          Prichard, Douglas R. City of Rolling Hills Estates City Manager
  69.          PrimeCo Personal Communications, L.P. (PrimeCo)
  70.          Public Service Commission of Wisconsin (Wisconsin Commission)
  71.          Public Utilities Commission of Ohio (Ohio Commission)
  72.          Public Utility Commission of Texas (Texas Commission)
  73.          Qwest Communications Corporation (Qwest)
  74.          Ravizza, Norman
  75.          RCN Telecom Services, Inc. (RCN)
  76.          REC Networks
  77.          Rogers Cantel, Inc.
  78.          Saco River Telegraph & Telephone Co.
  79.          Salva, Carol
  80.          SBC Communications, Inc. (SBC)
  81.          Small Business Alliance for Fair Utility Regulation (Small Business Alliance)
  82.          Solnit, Kenneth T.
  83.          Sprint Corporation (Sprint)
  84.          Sullivan, Mr. Michael A.
  85.          Texas Advisory Commission on State Emergency Communications, et al.
  86.          Texas Office of Public Utility Counsel
  87.          Time Warner
  88.          Thro, Dennis
  89.          United States Telephone Association (USTA)
  90.          U S West Communications, Inc. (U S West)
  91.          Virginia State Corporation Commission, Division of Communications
  92.          VoiceStream Wireless Corp. (VoiceStream)
  93.          WinStar Communications, Inc. (WinStar)
  94.          Yablon, Gilbert (Smart Dialing Systems)
  95.          Zamzow, Norma
Reply Comments
  96.          Ad Hoc
  97.          AirTouch
  98.          Allegiance Telecom, Inc. (Allegiance)
  99.          Ameritech
  100.    ALTS
  101.    Association of Public-Safety Communications Officials-International, Inc.
and the National Emergency Number Association (APCO and NENA)
  102.    AT&T
  103.    Bell Atlantic
  104.    BellSouth
  105.    California Commission
  106.    CTIA
  107.    CenturyTel, Inc.
  108.    CinBell
  109.    Colorado Numbering Task Force
  110.    Competitive Telecommunications Association (CompTel)
  111.    Connect Communications Corporation (Connect)
  112.    Cook County State's Attorney's Office
  113.    Cox
  114.    Florida Commission
  115.    GTE
  116.    INENA
  117.    Choice One and GST
  118.    Level 3
  119.    Levine, Richard
  120.    Maine Commission
  121.    WorldCom
  122.    MediaOne
  123.    NENA
  124.    NECA
  125.    NTCA
  126.    Neill, Professor Bill
  127.    New York Commission
  128.    Nextel
  129.    Nextlink
  130.    Omnipoint
Pennsylvania Consumer Advocate and NASUCA
  131.    Pennsylvania Commission
  132.    PCIA
  133.    RCN
  134.    SBC
  135.    Small Business Alliance
  136.    Sprint
  137.    Telcordia
  138.    Teligent, Inc. (Teligent)
  139.    USTA
  140.    WinStar
  141.    Wisconsin Commission
     II.  Numbering Resource Optimization First Report and Order and First Further Notice
     of Proposed Rulemaking
          A.   Further Notice Comments
     1.   Ad Hoc
     2.   AT&T
     3.   ALTS
     4.   BellSouth
     5.   Bell Atlantic
     6.   California Commission
     7.   CTIA
     8.   2nd Century Communications, Inc. (2nd Century)
     9.   CompTel
     10.  Cox
     11.  GTE
     12.  General Services Administration (GSA)
     13.  State of Illinois, Department of Central Management Services
     14.  Maine Commission
     15.  MediaOne
     16.  Joint Comments of Midvale Telephone Exchange, Inc., Northeast Louisiana Telephone
     Company, Inc., Interstate Telecommunications Cooperative, Inc., and Radio Paging Service
     17.  Missouri Commission
     18.  Joint Comments of the National Exchange Carrier Association and National Telephone
     Cooperative Association (Joint Comments of NECA and NTCA)
     19.  New Hampshire Commission
     20.  New York Commission
     21.  Nextel
     22.  Nextlink
     23.  Oregon Commission
     24.  Pennsylvania Commission
     25.  Joint Comments of Pennsylvania Office of Consumer Advocate, Texas Office of Public
     Utility Counsel, Missouri Office of Public Counsel, Florida Office of Public Counsel, District
     of Columbia Office of People's Counsel, California Office of Rate Payer Advocates, The
     Utility Reform Network, Maryland Office of people's Counsel, Maine Public Advocate,
     Indiana Office of Utility Consumer Counsel (Consumer Commenters)
     26.  PCIA
     27.  RCN
     28.  Rural Independent Competitive Alliance
     29.  SBC
     30.  Sprint
     31.  Telcordia
     32.  Texas Commission
     33.  Time Warner
     34.  USTA
     35.  U S WEST
     36.  Verizon Wireless
     37.  VoiceStream
     38.  WinStar
     39.  WorldCom
          NN.  Further Notice Reply Comments
     41.  Allegiance
     42.  Arch Communications
     43.  Arvanitas, Peggy
     44.  AT&T
     45.  BellSouth
     46.  California Commission
     47.  CTIA
     48.  General Services Administration (GSA)
     49.  Illuminet, Inc.
     50.  Maine Commission
     51.  NARUC
     52.  NeuStar, Inc. (NeuStar)
     53.  Nextel
     54.  RCN
     55.  SBC
     56.  Sprint
     57.  Telcordia
     58.  USTA
     59.  U S West
     60.  Verizon Wireless
     61.  VoiceStream
     62.  WorldCom
          KKK. Petitions for Reconsideration, Clarification, Waivers and Motions for
          Clarification and Extension of Time
     62.  ACUTA
     63.  Ad Hoc
     64.  Arkansas, Department of Information Services
     65.  ALTS
66.  AT&T
67.  Autopage & Radio Paging Services
     68.  BellSouth
     69.  Blackfoot Telephone Coop.
     70.  California Commission
     71.  Cal-Ore Telephone Co.
     72.  CTIA
     73.  CenturyTel, Inc.
     74.  CinBell
     75.  Electric Lightwave, Inc.
     76.  Florida Commission
     77.  General Communication Inc. (GCI)
     78.  Intermedia Communications Inc.
     79.  Iowa Telecom
     80.  Kassem, Ahmed (U. of Illinois   Chicago)
     81.  KMC Telecom
     82.  Maine Commission
     83.  Metropolitan Government of Nashville & Davidson County
     84.  NASNA
     85.  NENA
     86.  NTCA
     87.  Nextlink
     88.  OPASTCO
     89.  Ohio Commission
     90.  PCIA
     91.  Puerto Rico Telephone Co., & Celulares Telefonica
     92.  Qwest
     93.  RCA
     94.  RCN
     95.  SBC
     96.  Sprint
     97.  Telcordia
     98.  Tennessee Telecommunications Authority (TTA)
     99.  USTA
     100. Verizon
     101. Verizon Wireless
     102. VoiceStream
     103. Washington Department of Information Services
     104. Whitmer, Glenn (U. of Illinois   Urbana-Champaign)
     105. WinStar
     106. WorldCom
          CCCCC.    Oppositions to and Support for Petitions, Waivers and Motions
     108. AT&T
     109. BellSouth
     110. CinBell
     111. Ohio Commission
     112. PCIA
     113. Texas Commission
     114. Qwest
     115. SBC
     116. Sprint
     117. USTA
     118. Verizon
     119. Verizon Wireless
     120. VoiceStream
     121. WorldCom
     III. Pennsylvania Numbering Order
       A.      Petition for Reconsideration
     1.   California Cable Television Association
     2.   California Commission
     3.   Connecticut Commission
     4.   Maine Commission
     5.   Massachusetts Commission
     6.   MediaOne
     7.   NARUC
     8.   New Hampshire Commission
     9.   Pennsylvania Commission
     10.  SBC
     11.  Texas Commission
       L.      Petitions for Clarification
     1.   NARUC
     2.   SBC
       C.      Comments
     1.   Bell Atlantic
     2.   SBC
     3.   Vanguard
       D.      Reply Comments
     1.   California Cable Television Association
     2.   Maine Commission
     3.   Vanguard
       D.      Opposition to Petition for Reconsideration or Clarification
     1.   Bell Atlantic Mobile, Inc.
     2.   MCI
     3.   Nextel Communications
       D.      Reply to Opposition to Petition for Reconsideration
1.   Pennsylvania Commission