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                            Before the
                FEDERAL COMMUNICATIONS COMMISSION
                     Washington, D.C.  20554


In the Matter of                             )
                                        )    
Numbering Resource Optimization                   )    CC Docket No. 99-200
                                        )    
Connecticut Department of Public Utility Control       )    RM No. 9258
Petition for Rulemaking to Amend the Commission's      )    
Rule Prohibiting Technology-Specific or                )    
Service-Specific Area Code Overlays               )    
                                        )    
Massachusetts Department of Telecommunications    )    NSD File No. L-99-17
and Energy Petition for Waiver to Implement a          )    
Technology-Specific Overlay in the                )    
508, 617, 781, and 978 Area Codes            )    
                                        )    
California Public Utilities Commission and the People  )    NSD File No. L-99-36
of the State of California Petition for Waiver to           )    
Implement a Technology-Specific or Service-Specific    )    
Area Code                               )    



                  NOTICE OF PROPOSED RULEMAKING


Adopted:  May 27, 1999                  Released: June 2, 1999   

Comment Date:  July 30, 1999
Reply Comment Date:    August 30, 1999

By the Commission:  Commissioner Tristani issuing a statement.                        Table of Contents       Paragraph Number 


     I.    INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . .1

     II.   EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . .7

     III.  OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . 13
               A.   Background . . . . . . . . . . . . . . . . . . . . . 13
               B.   General Inquiries. . . . . . . . . . . . . . . . . . 31

     IV.  ADMINISTRATIVE MEASURES . . . . . . . . . . . . . . . . . 36
               A.   Introduction . . . . . . . . . . . . . . . . . . . . 36
               B.   Definitions of Categories of Number Usage. . . . . . 39
               C.   Verification of Need for Numbers . . . . . . . . . . 54
               D.   Reporting/Record-keeping Requirements. . . . . . . . 69
               E.   Audits . . . . . . . . . . . . . . . . . . . . . . . 83
               F.   Enforcement. . . . . . . . . . . . . . . . . . . . . 91
               G.   Reclamation of NXX Blocks. . . . . . . . . . . . . . 95
               H.   Cost Elements and Cost Recovery  . . . . . . . . . .101

     V.  OTHER NUMBERING OPTIMIZATION SOLUTIONS . . . . . . . . .  105
               A.   Introduction . . . . . . . . . . . . . . . . . . . .105
               B.   Non-LNP-Based Solutions. . . . . . . . . . . . . .  111
          1.   Rate Center Consolidation . . . . . . . . . . .111
                         2.   Mandatory Ten-Digit Dialing and Related Measures122
               C.   LNP-Based Solutions:  Number Pooling . . . . . . .  130
                         1.   Background. . . . . . . . . . . . . . . . . .  130
                         2.   Pooling Roll-out. . . . . . . . . . . . . . . .143
                         3.   Implementation Time Frame . . . . . . . . . .  155
                         4.   Non-LNP-Capable Carriers. . . . . . . . . . . .159
               D.   Pooling Implementation Issues. . . . . . . . . . . .177
                         1.   Technical Issues. . . . . . . . . . . . . . .  177
                         2.   Administration. . . . . . . . . . . . . . . . .182
                         3.   Cost Recovery . . . . . . . . . . . . . . . . .193
                         4.   Transition Issues . . . . . . . . . . . . . .  211
               E.   Carrier Choice of Numbering Optimization Strategy. .215
 
     VI.  PRICING OPTIONS . . . . . . . . . . . . . . . . . . . . .225

     VII.  AREA CODE RELIEF . . . . . . . . . . . . . . . . . . .  241
               A.   Introduction . . . . . . . . . . . . . . . . . . . .241
               B.   Background . . . . . . . . . . . . . . . . . . . . .242
               C.   Discussion . . . . . . . . . . . . . . . . . . . . .246

     VIII.  PROCEDURAL MATTERS. . . . . . . . . . . . . . . . . . .262
               A.   Ex Parte Presentations . . . . . . . . . . . . . .  262
               B.   Initial Paperwork Reduction Act Analysis . . . . .  263
               C.   Initial Regulatory Flexibility Act Analysis. . . . .264
               D.   Comment Filing Procedures. . . . . . . . . . . . . .283
          
     IX.  ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . .  289

     Appendix A

                       I.    INTRODUCTION

     1.   In this Notice of Proposed Rulemaking (Notice), we examine a variety of measures
intended to increase the efficiency with which telecommunications carriers use telephone
numbering resources.  The purpose of this effort is two-fold:  to slow the rate of number exhaust
in this country as evidenced by the ever-increasing rate at which new area codes are assigned; and
to prolong the life of the North American Numbering Plan (NANP).

     2.   In 1947, AT&T adopted the current nationwide numbering scheme, under which
the ten-digit telephone number serves not only as a network "address," but also conveys
information to the network as to how phone calls should be routed and billed.  A principal benefit
of this system was that it permitted automated routing of long-distance phone calls, obviating the
need for operators to assist in routing.  Under the allocation system that developed to support this
system, numbering resources are allocated to local telephone exchange carriers on the basis of
physical geography, rather than on the basis of end-user demand for those numbers.  That is,
typically a large block of numbers is allocated to a carrier for use in a geographic area, even
though there may not be end-users assigned to each individual number available in the area.  This
system worked smoothly so long as only one entity (the local exchange carrier) offered only one
type of service (wireline telephony) to customers.

     3.   New services using the same numbering system, particularly cellular telephones,
began to enter the telecommunications marketplace with increasing frequency beginning in the
late 1980's.  More recently, the Telecommunications Act of 1996 opened the market for
competitive local wireline service, again giving rise to more players entering the market.  In
addition, many customers are obtaining additional telephone lines to support additional services
such as Internet, data, and facsimile services.  Because of the relatively recent explosion of market
entry and customer demand for new services, as well as the allocation of telephone numbers to
multiple service providers in large blocks on a geographic basis, we have witnessed an incredible
increase in demand for numbering resources.

     4.   Although we are only just beginning to see the benefits of competition in the
marketplace for local wireline telephone service, the coincident costs in the form of the rapid
exhaust of area codes are already all too apparent.  The effect on consumers having to undergo, in
some cases, multiple area code changes in relatively short time frames is an unacceptable
byproduct of burgeoning competition in the telecommunications marketplace.  To illustrate the
pace of area code exhaust, consider California, which, at the end of 1992, had 13 area codes in
use.  The California Public Utilities Commission projects that by the end of 2002, it will have 41
area codes.  When the task of splitting the 323 area code from the 213 area code in the Los
Angeles area was completed in April 1999, rather than lasting for ten or even five years, the new
area code was immediately declared to be in jeopardy of exhausting its numbering resources.

     5.   The goal of this proceeding is to address the underlying drivers of area code
exhaust so that consumers are spared the enormous costs and inconveniences associated with the
rapid pace of implementation of new area codes.  In addition, clearly, implementing new area
codes is not a solution that can continue indefinitely.  As of the end of 1998, it was estimated that
nearly one-third of the total number of geographic area codes assignable to the United States had
been put into service.  By some projections, the NANP could exhaust within ten years.  Because
the estimated cost of expanding the NANP is enormous, and the time to effect such an expansion
is estimated to be on the order of ten years, the need to extend the life of the current NANP
through effective conservation and efficient utilization of numbering resources is apparent and
immediate.

     6.   This Commission, with input from industry groups, advisory bodies, state public
utility commissions and the public, has already begun to examine various numbering conservation
and optimization methods.  Continuing in these efforts, we issue this Notice to seek public
comment on how best to create national standards for numbering resource optimization.  In doing
so, we seek to:  (1) minimize the negative impact on consumers; (2) ensure sufficient access to
numbering resources for all service providers that need them to enter into or to compete in
telecommunications markets; (3) avoid, or at least delay, exhaust of the NANP and the need to
expand the NANP; (4) impose the least societal cost possible, in a competitively neutral manner,
while obtaining the highest benefit; (5) ensure that no class of carrier or consumer is unduly
favored or disfavored by our optimization efforts; and (6) minimize the incentives for carriers to
build and carry excessively large inventories of numbers.

                    II.   EXECUTIVE SUMMARY

     7.   In this Notice, we consider and seek comment on a variety of administrative and
technical measures that would promote more efficient allocation and use of NANP resources.  In
Section III, we seek specific comment on the relative costs and benefits, both financial and
societal, of implementing each measure.  We also ask that commenters weigh the cost of
extending the life of the current NANP through various numbering resource optimization
strategies against the projected cost of expansion of the NANP.

     8.   In Section IV, we examine the existing mechanisms for the administration and
allocation of numbering resources, which are governed by industry-developed guidelines.  We find
that the guidelines have not been effective in constraining the ability of carriers to obtain and carry
excessively large inventories of numbering resources for which they have no immediate need.  We
seek comment on whether the guidelines should be modified or replaced, wholly or in part, by
enforceable federal rules.  Within the section, we outline proposals for a uniform set of numbering
status definitions.  We also seek comment on measures that would tie the allocation of new
numbering resources to a showing of need by the carrier, increase carrier accountability for
number utilization through enhanced data reporting and audit requirements, and speed the return
of unused numbering resources.  We specifically seek comment on the possibility of requiring
carriers to meet number utilization thresholds before they can obtain additional numbering
resources.  These measures would not require implementation of new systems or technologies,
and we believe that they could be implemented in a relatively short time period at minimal cost.

     9.   In Section V, we consider and seek comment on some specific numbering resource
optimization solutions that could be implemented in addition to, or in combination with, stricter
administrative standards for the administration and allocation of numbering resources.  These
methods include rate center consolidation, mandatory ten-digit dialing, and number pooling.  We
consider the likely costs and potential number optimization benefits of each of these solutions. 
We also seek comment on a host of issues related to the way in which number pooling might be
implemented and administered, if we were to make carrier participation mandatory at some level.

     10.  In light of the potential costs of these numbering resource optimization solutions,
we seek comment on whether the magnitude of the number exhaust problem justifies requiring
carriers to participate in one or more of these solutions on a mandatory basis, either at the federal
level or through delegation of authority to the states.  In the alternative, we consider whether
optimal use of numbering resources could be accomplished without the need for such mandates,
provided that carriers achieved sufficiently high levels of efficiency in their usage of numbers. 
Under this approach, we would require carriers to meet specific number utilization thresholds, but
would leave to each carrier the choice of what numbering optimization method or methods to use
to achieve that threshold.  

     11.  In Section VI, we consider whether establishing a pricing mechanism for
numbering resources would improve the efficiency of number allocation and use.  Although it is
probably not feasible in the short-term to replace our existing numbering resource allocation
mechanism with a market-based approach, we believe it is important to consider using market-
based mechanisms to allocate numbers as a possible long-term alternative to regulatory mandates. 
We seek comment on whether moving to a market-based system of allocating numbering
resources is feasible, and how the transition to such a system could be implemented.   

     12.  In Section VII, we consider area code relief methodologies, including splits,
overlays, and boundary realignments, as numbering optimization strategies.  We recognize that
our consideration of both short-term and long-term numbering resource optimization measures in
this Notice does not eliminate the need for states to continue to implement area code relief in
those area codes that are approaching depletion.  We seek comment on what action the
Commission can take to assist states in implementing area code relief in a manner that is
consistent with the objectives of this proceeding.

                         III.  OVERVIEW

     A.   Background

     13.  With the passage of the 1996 Act, Congress sought to establish "a
pro-competitive, deregulatory national policy framework" for the United States
telecommunications industry.  Competition in telecommunications markets is dependent, in part,
upon fair and impartial access by all telecommunications carriers to national numbering resources. 
Inefficiencies in the allocation and utilization of numbering resources threaten to slow or halt the
growth of competition by preventing new entrants from getting into telecommunications markets,
and by preventing carriers already providing services from expanding their offerings.  Thus, we
view our efforts with regard to numbering resource optimization as an integral part of the
Commission's overall efforts to implement fully the goals of the 1996 Act.

     14.  Equally importantly, numbering resource optimization efforts are necessary to
address the considerable burdens imposed on consumers by the inefficient administration of
numbering resources.  Consumers face additional costs, both tangible and intangible, when a new
area code is implemented in their local area.  We believe that consumers should not be subjected
to these increased costs and inconveniences except when absolutely necessary.  Thus, we proceed
with the additional goal of lessening the negative impact of numbering resource optimization and
administration on consumers.

     15.  As discussed in greater detail below, there are several factors that contribute to the
current strain on numbering resources.  These factors include:  (1) the allocation of numbers in
blocks of 10,000 (NXX codes); (2) multiple rate centers, and the demand by most carriers to have
at least one NXX code per rate center; (3) the increased demand for numbering resources by new
entrants and new technologies; and (4) the absence of regulatory, industry or economic control
over requests for numbering resources.  Each of the numbering resource optimization measures
proposed in the Notice are intended to attack one or more of these numbering exhaust drivers.

     16.  Numbering Administration Authority.  Section 251(e)(1) of the Communications
Act grants the Commission plenary jurisdiction over numbering issues that pertain to the United
States.  Specifically, the Act directs the Commission to create or designate one or more
impartial entities to administer telecommunications numbering and to make such numbers
available on an equitable basis.  This section also gives the Commission the authority to delegate
to state commissions or other entities all or any portion of its jurisdiction over numbering
administration.  The Commission, however, retains jurisdiction over all matters it does not
specifically delegate.  We believe that we have the authority to adopt the numbering
optimization measures set forth in this Notice pursuant to the numbering administration authority
granted to the Commission under section 251(e).

     17.  The Commission has promulgated rules to implement section 251(e)(1).  These
rules provide, in part, that if the Commission delegates to the states or to other entities any
portion of its authority over telecommunications numbering, those states or entities must perform
their delegated functions in a manner consistent with certain guidelines, which require that
numbering administration:  (1) facilitate entry into the telecommunications marketplace by making
telecommunications numbering resources available on an efficient, timely basis to
telecommunications carriers; (2) not unduly favor or disfavor any particular industry segment or
group of telecommunications consumers; and (3) not unduly favor one telecommunications
technology over another.  These guidelines are intended to ensure the fair and timely availability
of numbering resources to all telecommunications carriers.  

     18.  The Commission also directed the North American Numbering Council (NANC),
a federal advisory committee created to advise the Commission on numbering matters, to
recommend to the Commission an independent, non-government entity to serve as the North
American Numbering Plan Administrator (NANPA).  Previously, the incumbent local exchange
carrier (LEC) within each geographic area, until recently, had performed central office code
assignment and area code relief functions, and Bell Communications Research (Bellcore)
performed other numbering administration functions.  In October 1997, the Commission affirmed
the selection of Lockheed Martin IMS as the new NANPA, noting that it would perform the
numbering administration functions previously performed by Bellcore, as well as area code relief
planning and CO code administration.

     19.  Area Code Relief.  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 and
industry guidelines for numbering administration. 

     20.  The assignment 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.  NXX codes are in such demand because of the
manner in which numbering resources are allocated; that is, entire NXX codes containing 10,000
telephone numbers apiece are typically allocated to service providers for each rate center within a
Numbering Plan Area (NPA) in which the provider seeks to offer service.  Thus, for example,
if a new entrant seeks to provide service throughout a hypothetical NPA containing 50 rate
centers, it would require 50 NXX codes (one per rate center), or 500,000 individual telephone
numbers.  With a maximum of 792 NXX codes in an NPA available for allocation, the
assignment of one NXX per rate center to as few as 16 service providers in the hypothetical NPA
could literally exhaust the NPA upon activation, although few individual telephone numbers may
actually be in use.  This practice has contributed to a recent increase in the number of existing
area codes going into jeopardy, although many individual telephone numbers may remain
unassigned or unused.

     21.  Preliminary estimates indicate that a relatively low percentage of individual
telephone numbers are actually assigned to customers throughout the NANP.  The NANPA
estimates that the "fill rate," or actual assignment to subscribers of telephone numbers allocated to
carriers, is between 5.7% and 52.6%, depending on the industry segment.  Despite the relatively
low utilization rate of individual telephone numbers, existing area codes are entering jeopardy and
new area codes are being activated throughout North America at an alarming rate.  The pace of
area code exhaust has accelerated exponentially in the past few years.  For example, in 1984, the
entire NANP had 125 area codes, and by December 1994, 134 area codes had been assigned, an
increase of only nine area codes in 10 years.  In marked contrast, in 1996 alone, 22 area codes
were added to the NANP, and in 1997, 43 area codes were added.  In 1998, 26 area codes were
added to the NANP, bringing to 248 the total number of geographic codes assigned, with 207 of
those codes serving portions of the United States.  Currently, 13 new area codes are expected to
be activated in 1999, with 22 area code relief plans pending state public utility commission
approval, many of which will likely lead to new area codes being added in 1999.  With only 680
usable area codes in the NANP, it is foreseeable that the NANP could exhaust in the relatively
near term.  The compelling need for immediate and comprehensive action to make more efficient
use of numbering resources is clear.

     22.  Concerns regarding the financial and societal costs of area code relief are well-
founded.  The introduction of a new area code carries with it a significant number of costs and
burdens that are sometimes difficult to quantify.  Consumers, who are especially reluctant to
undergo certain forms of area code relief, are affected by an increase in cost and inconvenience. 
For example, approximately one-half of customers in an area code to be split will be assigned a
new area code.  Some tangible costs that consumers may experience in this instance include time
and effort associated with notifying others of the change in area code, increased confusion and
difficulty in completing calls to parties whose area codes have changed, monetary costs associated
with reprinting stationery with the new area code, and time and effort associated with
reprogramming telephone automatic dialing systems, and other equipment, to incorporate the new
area code.  Intangible costs to consumers may include the loss of a community's geographic
identity and many other costs which are difficult to quantify.

     23.  Similarly, businesses also bear significant costs when they, or their customers, are
subject to area code relief.  Tangible costs may include those associated with reprogramming or
replacing telecommunications equipment such as private branch exchanges (PBXs), updating
customer databases that contain phone number fields, and reprinting advertising and stationery. 
Certain industries are uniquely harmed by the transition to a new area code; alarm systems, for
example, generally must be individually reprogrammed or even replaced to accommodate changes
in dialing patterns.  The telecommunications industry, in particular, incurs additional operational
costs related to equipment and technology upgrades necessary to provide service.  Intangible
costs to businesses associated with a change in area code may include a loss of goodwill when
customers have difficulties reaching the intended business.

     24.  State public utility commissions face an enormous burden in determining when,
and in what form, to implement area code relief.  In the initial stages, state utility commissions
must expend resources to convene public meetings and to plan for area code relief.  They must
also work with the NANPA and the industry to effect the chosen area code relief plan, and bear
the costs of notifying the public.  Furthermore, state commissions inevitably bear the brunt of
consumer dissatisfaction with whatever method of area code relief is chosen.

     25.  These limitations in the current area code relief paradigm underscore the need for
more efficient and longer-term solutions to the numbering crisis.  They also establish the need for
a shift in focus to other relief methods that effect optimization, and not merely the addition, of
numbering resources.  Because of the overwhelming costs associated with the implementation of
new area codes, we believe that this Commission should take definite and immediate steps to
ensure that telecommunications numbering resources are administered more efficiently.

     26.  Numbering Resource Optimization Efforts.  The Commission, state public utility
commissions, and the telecommunications industry have taken steps to optimize the use of
numbering resources through various administrative and regulatory efforts.  Many of these
undertakings will be examined at length in this Notice, toward the goal of creating a uniform
national strategy for numbering resource optimization. 
 
     27.  One such effort is the development by the industry of the CO Code Guidelines,
which were designed to provide a framework for allocation of numbering resources within the
geographic area codes of the NANP.  Another, mandated by the Commission in its rules and
addressed in the CO code guidelines, is the collection of data from service providers through the
Central Office Code Utilization Survey (COCUS).  The COCUS solicits data on actual and
projected CO code utilization for each NPA in the NANP, which the NANPA uses in order to
project NPA exhaust in connection with area code relief planning and implementation.  A third
effort is the development by the NANC of a set of interim audit procedures for the NANPA to
use in determining whether selected service providers are in compliance with the CO Code
guidelines.  

     28.  Additionally, the industry in January 1999 finalized guidelines for the
administration of thousands-block pooling, which uses the capabilities of Location Routing
Number (LRN) Local Number Portability (LNP) to allocate telephone numbers to service
providers in blocks of 1,000 numbers, rather than in entire NXX blocks containing 10,000
numbers each.  Two states have initiated thousands-block pooling trials in an effort to optimize
their numbering resources, and several other states have conducted extensive studies on the
impacts of thousands-block number pooling in some or all NPAs within the state. 

     29.  1998 NANC Numbering Resource Optimization Report (NANC Report).  Pursuant
to a request from the Common Carrier Bureau, the NANC in October 1998 provided a detailed
report evaluating a number of measures that may be used to optimize the use of
telecommunications numbering resources.  The first category, "Measures that Affect Local
Calling," includes rate center consolidation, extended local calling, and inconsistent rate centers
(IRCs).  These measures seek to reduce the demand for central office codes by either reducing the
number of rating areas within an NPA, or eliminating the need for carriers to obtain numbering
resources within each rate center in an NPA in order to provide service throughout the NPA.  The
second category, "Measures that are LRN-Based," includes measures that are dependent on the
existence of local number portability:  individual telephone number (ITN) pooling, thousands-
block number pooling, unassigned number porting, and location portability.  The final category,
"Measures that do not Require Local Number Portability," is a collection of administrative and
technological methods related to the management of numbering resources, and includes NXX
code sharing, code sharing using route indexing, mandatory ten-digit dialing, industry assignment
guidelines, overlays, reducing the demand for telephone numbers, and geographic splits.

     30.  The Bureau placed the NANC Report on public notice shortly after its receipt. 
The Public Notice specifically solicited comments on 6 of the 14 measures discussed in the report: 
extended local calling areas, mandatory ten-digit dialing, industry assignment guidelines,
thousands-block pooling, individual telephone number pooling, and unassigned number porting. 
The Bureau received comments from 48 parties.

     B.   General Inquiries

     31.  Costs and benefits comparison.  In addition to general information on the viability
and desirability of the numbering resource optimization measures examined herein, we seek
specific comment on the relative costs and benefits, both financial and societal, of implementing
each measure.  It would be particularly helpful for commenters to weigh the cost of extending the
life of the current NANP through the various proposed numbering optimization strategies against
the projected cost of expansion of the NANP, based on the assumption that continuing current
number allocation and use practices will lead to the premature exhaust of the NANP.

     32.  Although the time frame for NANP exhaust cannot be determined with precision,
the NANPA developed two models that predict the NANP will be exhausted in the 2006 to 2012
time frame.  The NANC established an industry working group to review the NANPA's exhaust
projections.  While the NANPA's projections are not universally supported by industry experts,
there is general agreement that the expected life of the NANP is limited.  We seek comments on
the design and assumptions contained in the NANPA's NANP Exhaust Model, and any alternative
projections of NANP exhaust that we should consider.

     33.  In addressing when action needs to be taken to address NANP exhaust, it is critical
to establish a benchmark estimate of how long it would take to develop and implement an
expanded NANP.  For example, if it is estimated that the process will take ten years, then it is
imperative that the process begin immediately and that we adopt conservation measures sooner
rather than later.  If it is estimated to take only two years, there is less urgency to begin work
immediately, and more time can be devoted to evaluating alternative options that can extend the
life of the existing NANP.  Industry numbering experts and the NANPA are already exploring
options for NANP expansion.  Based on their work, we believe that ten years may be a
conservative time frame for rolling out a new NANP.  We seek comment on this estimate and
request that commenters provide alternative projections.  Commenters should provide a detailed
analysis of any projections provided.   

     34.  We also seek comment on what costs will be incurred in expanding the NANP. 
We note that available estimates for the total cost of expanding the NANP vary greatly;
preliminary estimates of the total costs (telecommunications industry and societal combined)
discussed at the February 1999 NANC meeting established a range of $50 to $150 billion. 
These estimated costs are substantial, and would, we believe, significantly outweigh the cost of
implementing all or most of the numbering resource optimization solutions proposed in this
Notice.  Moreover, we believe that extending the life of the NANP by as little as ten years could
yield substantial benefits.  We seek comment on whether these preliminary estimates are within a
reasonable range or whether the actual costs can be expected to be materially higher or lower. 
Commenters providing estimates should separate their cost estimates into telecommunications
industry costs and societal costs. 

     35.  Adoption of rules.  Many of the proposals set forth in this Notice build upon
procedures and practices currently governed by voluntary industry guidelines, which lack
enforceability.  We are mindful of the deregulatory intent of the 1996 Act, and do not seek to
impose any unnecessary regulation.  Under the current system for allocation of numbering
resources, however, it is difficult for the industry to police itself effectively, given that each carrier
has an incentive to obtain as many numbers as possible, especially in places where area codes are
rapidly reaching exhaust.  In such light, we seek specific comment on which of the measures we
discuss in the Notice should be adopted as FCC rules.  Alternatively, should we direct the NANC
to ensure that certain of these measures are incorporated into existing industry guidelines? 
Further, we seek comment on the suggested interplay between FCC rules and industry guidelines
on numbering optimization.  For example, should we set forth general federal requirements for
numbering resource optimization, and leave the detailed implementation of these requirements to
industry bodies?

                  IV.  ADMINISTRATIVE MEASURES

     A.   Introduction

     36.  As noted above, one of the major drivers of number exhaust is the lack of
discipline in the process by which numbering resources are administered and allocated.  Currently,
the procedures for the allocation of numbering resources within the geographic area codes of the
NANP are set forth in the CO Code Guidelines, which were developed and are maintained by the
Industry Numbering Committee (INC).  Among other things, these guidelines set forth criteria
for the allocation of NXX codes, the responsibilities of the Central Office Code Administrator,
applicants and code holders, as well as NXX code reclamation requirements and certain code
conservation measures.  The INC updates the guidelines as needed or at the direction of the
NANC.  The guidelines were originally developed at the direction of the FCC and FCC rules
require the NANPA to perform its numbering administration functions in accordance with the
guidelines.  

     37.  As is identified in greater detail below, the current guidelines do not impose
adequate constraints on a carrier's ability to obtain and stockpile numbers for which it has no
immediate need.  To address these shortcomings, in this section, we set forth a number of
administrative proposals intended to inject a greater degree of discipline into the process of
allocating and administering numbering resources.  Generally speaking, these proposals would
place an increased responsibility on carriers to provide information about their utilization of the
numbering resources that have already been allocated to them.  Because the measures proposed in
this section do not require implementation of new systems or technologies, we believe that they
would impose minimal costs on the industry (and therefore, indirectly, on the consumer), and
could likely be put into place in a relatively short time period.  Further, because these measures do
not rely on the LNP platform, as do certain of the measures discussed in Section V, they may be
applicable immediately to all service providers that use numbering resources, regardless of
whether the provider has yet deployed (or, for that matter, will ever deploy) number portability. 
We further believe that implementing these measures will increase the efficiency with which
carriers use numbers, by tying allocation of new numbering resources to need, increasing carrier
accountability for numbering utilization, and speeding the return of unused codes.  We seek
comment on the costs and benefits of implementing each of the measures discussed in Section IV.

     38.  We recognize that the industry, through the NANC, has been working to develop
recommendations with respect to a number of the proposals outlined below, in particular in the
areas of standardized number status definitions, enhanced utilization and forecast data reporting,
and audits and enforcement.  In many cases, we have drawn upon the substantial work efforts of
industry bodies in developing our own proposals.  With respect to several of the measures
addressed in this section, we expect to receive recommendations from the NANC before the close
of the comment cycle in this proceeding, and we invite commenters to address the NANC
proposals and recommendations in their comments in response to this Notice.  We specifically
request the NANC to make recommendations regarding which, if any, of the measures discussed
in Section IV should be adopted as FCC rules.  We request that the NANC provide these
recommendations concurrently with the deadline for receipt of reply comments on this Notice.

     B.   Definitions of Categories of Number Usage

     39.  As a preliminary matter, we tentatively conclude that a uniform set of definitions
for the status of numbers should be established for purposes of implementing the proposals set
forth in this Notice.  We believe that uniform definitions are essential to effective communications
between carriers, the NANPA, and regulatory entities -- a common understanding of definitions
helps to ensure that all participants in the number administration process are using a common
"language."  As such, uniform definitions will improve our ability to collect accurate data on
number utilization and demand, which in turn will improve our ability to forecast number exhaust,
and will assist in enforcing the CO Code Guidelines.

     40.  We note that the industry already has devoted a substantial degree of effort to
establishing a uniform set of number status definitions.  Most of the definitions set forth in this
section are drawn directly from industry proposals.  As a general matter, we seek comment on
whether these uniform number status definitions should be codified as part of the FCC's rules, as
are certain definitions that relate to the status of toll free numbers.  In the alternative, we seek
comment on whether uniform number status definitions should be incorporated into the CO Code
Guidelines and the Thousand Block Pooling Guidelines, as intended by the INC.  We further
seek comment on whether all of the proposed definitions are necessary and useful, as well as on
whether we should adopt any additional number status definitions, such as definitions related to
telephone numbers allocated to resellers by facilities-based carriers.  We seek comment on the
following set of proposed number status definitions.

     41.  An administrative number is one which is not or should not be assigned to a
customer, because it is in one of the following categories:  employee/official number; Location
Routing Number (LRN); test number; Temporary Local Directory Number (TLDN); or Wireless
E911 ESRD/ESRK.  The referenced subcategories are as follows:

     -    An employee/official number is a number assigned by a service provider for its
own internal business purposes.  We seek comment on the types of internal business purposes
for which carriers use employee/official numbers.  We further seek comment on whether this
definition should be tightened, either by specifying appropriate uses for employee/official
numbers, or by identifying uses that are not appropriate.

     -    A Location Routing Number (LRN) is the ten-digit (NPA-NXX-XXXX) number
assigned to a switch or point of interconnection (POI) used for routing in a permanent local
number portability environment.

     -    A test number is a number assigned for inter- and intra-network testing purposes. 
We seek comment on the types of purposes for which carriers use test numbers.  We also seek
comment on whether this definition should be tightened, either by specifying appropriate testing
uses for numbers, or by identifying uses that are not appropriately termed "testing."

     -    A Temporary Local Directory Number (TLDN) is a number dynamically assigned
on a per-call basis by the serving wireless service provider to a roaming subscriber for the purpose
of incoming call setup.

     -    A wireless E911 emergency services routing digits/key (ESRD/ESRK) number is a
ten-digit number used to route an E911 call to the appropriate Public Service Answering Point
(PSAP) when that call is originating from wireless equipment.  If a NANP telephone number is
used as an ESRD or ESRK, this number cannot be assigned to a customer.

     42.  An aging number is a number in the aging process.  Aging is the process of
making a disconnected telephone number unavailable for re-assignment to another subscriber for a
specified period of time.  An aging interval includes any announcement treatment period, as well
as the blank telephone number intercept period.  A number is disconnected when it is no longer
used to route calls to equipment owned or leased by the disconnecting subscriber of record.  We
seek comment on the standard aging intervals currently used by carriers, as well as on whether we
should set limits on the amount of time a number may remain in "aging" status, e.g., 90 to 120
days.

     43.  An assigned number is a number that is:  (a) working in the PSTN under an
agreement (e.g., tariff, contract) at the request of a specific customer for that customer's use, or
(b) not yet working but has a customer service order pending.  We seek comment also on
whether this definition should be further refined by limiting the time during which a customer
service order may be considered to be "pending," e.g., 3 to 5 days.

     44.  A dealer numbering pool is a set of numbers allocated by a service provider to a
retail dealer for use in the sale and establishment of service on behalf of that service provider. 
We seek comment regarding how carriers currently classify these numbers for the purpose of
determining available inventories.  We seek comment on how dealer numbering pools should be
treated, and what, if any, limitations should be imposed in connection with assigning numbers to
dealer numbering pools.

     45.  A ported-out number is an assigned number that is ported from the code
holder/block holder to another service provider.  With respect to ported-out numbers, we seek
comment on how the porting carrier and the ported-to carrier should treat these numbers for
reporting purposes.  Should both of these carriers treat the number as unavailable for assignment? 
Should the ported-to carrier be entitled to treat the ported-out number as an assigned number for
purposes of calculating its utilization level?

     46.  Reserved number:  The industry has been working to craft a definition of reserved
telephone number.  To date, the industry has crafted a proposed set of characteristics for a
reserved number, which include:

          (1) A reserved number is a non-working number.
          (2) A reserved number has been set aside by a service provider at the request of a specific
     end-user customer for that customer's future use.
          (3) The reserved status of a telephone number is reflected in the telephone number
     administration system of the service provider in whose inventory the numbers are being
     reserved.
          (4) The name of the party requesting the reservation is in the service provider's
     administration system.
          (5) The end user is aware of the reservation of numbers.
          (6) A reserved number has some restrictions with respect to timeframe and quantity. 
          (7) Numbers reserved by a service provider on behalf of a customer may be ported where
     number portability is available and where any portion of the associated working numbers
     have been or will be ported from that service provider.

     47.  In addition, the industry has set forth the following broad guidelines with respect
to reserved numbers:
          
     (1) Service providers must ensure number reservations are not used for the purposes of 
     hoarding.
          (2) All classes of customers must be treated equally under the application of reserved
     number guidelines.
          (3) Reserved number guidelines must apply equally to all service providers making
     telephone number reservations on behalf of their end-user customers.
          (4) Reserved number guidelines must apply equally to service providers making use of
     telephone numbers for their end user customers from another service provider's inventory
     (e.g., resellers, Type 1 interconnection for Commercial Mobile Radio Service (CMRS)
     carriers).
          (5) The reserved number intervals begin for all customers regardless of any previous
     reservations, on the effective date of this process.
          (6) The original interval limitation established for given customers shall continue
     uninterrupted if or when the customer changes service providers.

     48.  We are quite concerned about how reserved numbers are categorized, and whether
they should be categorized as "unavailable for assignment."  We believe that an appropriately
narrow definition must be adopted for both "reserved number" and "reserved code" to prevent
potential abuse, e.g., a carrier's use of reserved status as a means to amass and retain excessive
inventories of numbers for which it has no immediate need.  In this light, we seek comment on the
NANC's working set of characteristics set forth above, and whether an appropriately narrow
definition and/or set of reserved number guidelines can be fashioned from them.  In the
alternative, we seek comment on MCI WorldCom's proposal that a  "reserved number" be defined
as a number set aside by a service provider under the provisions of a legally enforceable written
agreement at the request of a specific customer for future use.   

     49.  Moreover, we seek comment on whether time limits should be imposed on the
amount of time a code may be held in reserved status.  For example, our toll free assignment rules
specify that a number may be held in reserved status for only 45 days.  We seek comment on
whether 45 days is an appropriate period of time for a number to be held in reserved status.  In
the alternative, we seek comment on whether carriers should be required to pay a fee for numbers
held in reserved status.  We note that it is the practice of some carriers to require such a fee from
parties for whom they are reserving numbers, in order to ensure that the request for reservations
is bona fide.  We seek comment on whether the same type of assurance, via fee, should be
required from reserving carriers themselves.

     50.  A number in soft dial tone is a number temporarily assigned to line equipment and
facilities which permits restricted dialing (e.g., operator, 911, service provider business office). 
We seek comment concerning the purposes for which carriers use soft dial tone, and whether
these numbers are best categorized as a subset of administrative numbers.

     51.  Telephone numbers available for assignment are numbers within existing codes
(NXX) or blocks (NXX-X) that are available for assignment to subscriber access lines or their
equivalents within a switching entity/point of interconnection (POI), and are not categorized as
assigned, administrative, aging, or reserved.

     52.  Telephone numbers unavailable for assignment are numbers that are characterized
as administrative, aging, assigned, or reserved.  We seek comment on whether this number
status definition promotes our numbering optimization objectives, or whether it should be
narrowed, possibly by excluding reserved numbers.

     53.  In the CO Code Guidelines, working telephone numbers are defined as the quantity
of telephone numbers within existing NXX codes that are assigned to working subscriber access
lines or their equivalents, e.g., direct inward dialing trunks, paging numbers, special services,
temporary local directory numbers (TLDNs), etc., within a switching entity or POI.  This
definition seems to overlap with the definition of an assigned number set forth above.  Also, the
definition of a working telephone number contradicts the definition of an assigned number
because the working telephone number definition considers TLDNs to be working numbers, but
the definition of an assigned number does not.  For these reasons, we seek comment on whether
the definition of working telephone number should include TLDN and whether the definition of
working telephone number should be included in a comprehensive set of telephone number status
definitions. 

     C.   Verification of Need for Numbers 

     54.  Current central office code assignment procedures.  Under the current CO Code
Guidelines, NXX codes are assigned to entities for use at a switching entity or POI that they own
or control.  The NANPA must assign NXX codes pursuant to the assignment criteria on a first-
come, first-served basis.  

     55.  An "initial" code is the first NXX code assigned to the carrier at a new switching
entity, POI or unique rate center, and the administrator is to assign initial codes to the extent
required to terminate traffic.  To obtain an initial code, the applicant must certify that a need
exists due to routing, billing, regulatory or tariff requirements.  Although applicants may be
required to provide the administrator with technical support for initial code requests, the
guidelines specify that utilization criteria or projection will not be used to justify an initial NXX
code assignment.  The applicant for an initial code must be licensed or certified to operate in the
area for which the code is requested, and must demonstrate this to the NANPA.

     56.  A "growth" code is an additional NXX code requested for an established switching
entity, POI or rate center when the telephone numbers available for assignment in previously
assigned NXX codes will not meet expected demand.  To obtain a growth code, an applicant
must certify that existing codes associated with that switch, POI or rate center will exhaust within
12 months, and must prepare a Months-to-Exhaust Worksheet.  Applicants are required to
complete the Months-to-Exhaust Worksheet, and to maintain it in their files for audit purposes;
recent revisions to the CO Code Guidelines also require carriers to submit the Months-to-Exhaust
Worksheet to the NANPA when applying for growth codes.  In jeopardy NPAs, code holders
must certify that existing NXX codes will exhaust within six months.

     57.  Applicant demonstration of readiness or need.  As shown above, the current CO
Code Guidelines do not require applicants to demonstrate their readiness to utilize initial codes, or
their need to obtain growth codes.  The absence of such controls may lead some carriers to obtain
numbers that they are unable to use in the near term.  This behavior is especially likely in NPAs
that are approaching jeopardy, as carriers may be concerned that if they do not obtain an excess
supply of numbers, they may not be able to maintain an adequate inventory once jeopardy has
been declared.  In this section, we propose certain verification measures designed to prevent
carriers from obtaining numbering resources that they do not need in the near term. 

     58.  Initial codes.  With respect to an applicant's ability to obtain an initial code, we
seek comment on what type of showing would be appropriate.  It is not our intent to circumscribe
any carrier's ability to obtain initial codes in order to initiate provision of service or to expand its
service "footprint," but we wish to determine whether requesting additional information from
applicants for initial codes could prevent actual or potential abuses of the process.  In particular,
we are concerned that under the current guidelines, certain new entrants may obtain numbering
resources well in advance of when they will actually be able to provide service, which results in a
highly inefficient distribution of numbering resources.  To prevent this type of situation, we seek
comment on whether applicants should be required to make a particular showing regarding the
equipment they intend to use to provide service, the state of readiness of their network or
switches, or their progress with their business plan, prior to obtaining initial codes, or whether any
other type of showing should be required.  

     59.  We are also concerned about instances in which carriers have obtained initial codes
for use in areas in which they are not licensed or certificated.  We seek comment on whether
applicants should be required to submit evidence of their license/certificate with their applications
for initial codes, or conversely, whether we should place an obligation on the NANPA to check
the status of an applicant's license or certification with the relevant state commission prior to
issuing the requested initial code.  To the extent that commenting parties support the latter
proposal, they should comment on whether placing this obligation on the NANPA will slow down
the time in which the NANPA processes initial code applications, and if so, by how much.  We
seek comment generally on the most efficient, least burdensome way to ensure that applicants do
not obtain NXX codes in areas where they are not licensed or certificated.  For example, would a
general certification by a carrier that it intends to implement service within a specific timeframe
adequately assure that carriers only obtain initial codes in areas where they are licensed or
certificated?

     60.  Growth codes.  With respect to carriers' ability to obtain growth codes, we
tentatively conclude that applicants should be required to provide data that supports their need to
obtain additional numbering resources, as a means of preventing the building and carrying of
excessive inventories.  While verification of need will not eliminate an applicant's incentive to
hoard, it will reduce the applicant's ability to hoard numbering resources without being detected,
by providing a mechanism for oversight of applications.  We further tentatively conclude that the
NANPA may not allocate additional numbering resources to an applicant, unless the applicant has
made a satisfactory demonstration of need.  We seek comment on these tentative conclusions. 

     61.  Method of verification of need.  As outlined above, applicants are currently
required to complete a Months-to-Exhaust Worksheet prior to applying for growth codes, and
under recent revisions to the CO Code Guidelines, to provide the worksheet to the NANPA. 
We seek comment on whether requiring applicants to submit the Months-to-Exhaust Worksheet
along with an application for a growth code would be an adequate demonstration of need for
additional numbering resources.  We further seek comment on whether NANPA should be
required to evaluate the Months-to-Exhaust projection prior to allocating the requested code.  We
are concerned, however, about using the Months-to-Exhaust Worksheet as a proxy for need,
because the Months-to-Exhaust analysis is forward-looking, and cannot be verified until after the
carrier has already obtained the requested NXX code.  Further, the Months-to-Exhaust forecast is
largely subjective and dependent on good faith projections by each carrier.  We seek comment on
whether there are modifications to the current Months-to-Exhaust forecast that might alleviate
these concerns.

     62.  As an alternative, we seek comment on whether applicants should be precluded
from requesting growth codes from the NANPA until they have achieved a specified level of
numbering utilization (or "fill rate") in the area in question.  Several commenters support use of
number utilization thresholds as a means of verifying an applicant's need for numbers.  We
believe that a utilization threshold may be superior to a Months-to-Exhaust forecast because it is
an objective measurement that may be verified before the applicant obtains numbering resources. 
Moreover, a utilization threshold standard reflects the applicant's actual historical experience in
efficiently utilizing numbering resources, rather than marketing projections.

     63.  Setting a utilization rate.  We seek comment generally on whether a percentage
utilization threshold should be adopted, and if so, on the appropriate level for that threshold. 
We further seek comment on whether we should set a uniform nationwide utilization threshold or,
in the alternative, establish a range within which state commissions may set the utilization rate. 
We also seek comment on whether it is possible to set a uniform utilization level that applies to all
types of service providers, or whether there may be a need to set different utilization levels for
different types of services or service providers.  In addition, we seek comment on whether
utilization levels, if adopted, should gradually be increased over time, in order to provide carriers
time to adjust to the new requirements, and to improve their utilization performance over time. 
We further seek comment on whether the utilization threshold standard should apply nationwide,
or only in areas that are experiencing the most difficulties with number exhaust, e.g., the largest
100 metropolitan statistical areas (MSAs) and in area codes where a jeopardy condition has been
declared.  Alternatively, we seek comment on whether the smaller MSAs should have a lower
utilization rate than the largest 100 MSAs.  We seek comment on the costs and benefits of
establishing a utilization threshold for these areas.

     64.  Calculating utilization levels.  We also seek comment on how utilization
thresholds should be calculated.  We propose that a carrier's utilization rate in a given geographic
area (NPA or rate center) should be calculated by dividing the quantity of  "telephone numbers
unavailable for assignment" (the numerator) by the total quantity of telephone numbers in all
NXXs assigned to the carrier within the appropriate geographic area (the denominator), and
multiplying the result by 100.  We are concerned, however, that certain number status
categories, including reserved numbers, numbers allocated to resellers, and numbers in dealer
numbering pools, may be used by carriers to stockpile numbers.  That is, carriers may assign NXX
codes or portions thereof to these categories, and then count these codes or numbers as being
utilized, even when they are not being used to provide any type of service.  We are particularly
concerned that the incentive to assign numbers to these categories for such strategic purposes
may increase if we move to a number allocation regime based on utilization thresholds, as
proposed.  Accordingly, we seek comment on whether these categories of numbers should be
excluded from the "numerator," or whether there are other ways to prevent the types of abuses
about which we are concerned.

     65.  In most cases, newly acquired and activated NXX codes will have lower utilization
rates than older, more "mature" NXXs.  Accordingly, we seek comment on whether applicants
should have the option of excluding from their utilization rate calculation all NXXs obtained in
the period immediately preceding the carrier's request for additional numbering resources (i.e., all
newly acquired NXXs).  We seek comment on whether "newly acquired" NXXs should be
defined as those assigned to the applicant by the NANPA during the 90 days prior to the new
application, or whether 120 days is a more appropriate period for exclusion.  We propose that
carriers wishing to take advantage of such an exclusion must exclude the newly acquired NXXs
from both the numerator and the denominator of their utilization rate calculation.  Thus, to the
extent that a carrier had begun to assign numbers from a newly acquired NXX, the numbers
assigned may not be included in the numerator, if the entire NXX were not included in the
denominator of the equation. We seek comment on this proposal.  Wireless carriers have
expressed concern that, because of the existence of seasonal fluctuations in demand for their
services, the establishment of a utilization threshold will penalize them for not being able to utilize
their NXXs immediately.  Therefore, we seek comment on whether the exclusion of newly
acquired NXXs from the utilization rate calculation will accommodate these carriers' unique
situation.

     66.  We further seek comment on whether utilization levels should be calculated on an
NPA-wide or a rate center-wide basis.  That is, should all of the NXX code resources that an
applicant has been assigned in a particular NPA be included in the calculation of its utilization rate
for the purposes of obtaining another NXX code in that NPA, or should the calculation be limited
to only the NXX codes that have been assigned in the rate center in which the applicant wants an
additional code?  In particular, we seek comment on:  a) which method more closely tracks how
carriers actually use numbering resources; b) which method is least likely to result in strategic
number acquisition behavior (or "gaming") by carriers; c) which method is least likely to result in
carriers being unable to obtain numbering resources necessary to meet customer demand (for
example, to expand service "footprint"); d) which method is least likely to have an anticompetitive
effect on certain segments of industry; and e) which method would be less burdensome from a
regulatory standpoint.

     67.  In the event that we decide that utilization should be calculated on an NPA-wide
basis, we seek comment on how regional variances in number utilization patterns should be taken
into account.  For example, some NPAs contain both suburban/rural and urban areas.  In such
"mixed" NPAs, carriers may have high utilization rates in rate center(s) located in a densely-
populated areas of the NPA, and lower utilization rates in the more rural or suburban rate
center(s) in the NPA.  As a consequence, a carrier may be unable to meet an NPA-wide utilization
rate, even when it is running into numbering shortages in particular rate centers in more densely-
populated areas.  Additionally, we seek comment on whether and how "mixed" NPAs should be
identified, as well as on whether different utilization levels should be set for mixed NPAs.  In the
alternative, should applicants be entitled to obtain additional growth codes in a particular rate
center within a "mixed" NPA by demonstrating an extraordinary level of utilization within that
rate center, e.g., 85%? 

     68.  Impact on small carriers and new entrants.  We further seek comment on
whether, in implementing a numbering utilization threshold, we should distinguish between
carriers that have a small presence in a given NPA, or other appropriate geographic area, because
they are either new market entrants or small carriers, and those that have a larger presence. 
Imposing the same utilization requirements on carriers with a small market presence as on those
with a much larger presence may discourage market entry and competition, as well as diminish a
smaller or newer carrier's ability to react to market demands.  We seek comment on whether,
from a competitive standpoint, different utilization thresholds should apply to carriers with a small
market presence, and if so, what should be considered to be a small market presence.  For
example, should we apply a graduated utilization threshold scheme to carriers, based on the
number of NXX codes they have in a given NPA (e.g., 50% or lower utilization rate for carriers
with up to five NXXs in the NPA, 60% for carriers with up to ten NXXs, etc.)?  We emphasize
that the different treatment afforded to small carriers would apply only to those carriers with few
numbering resources.

     D.   Reporting/Record-keeping Requirements

     69.  It is necessary for the NANPA to collect information on the utilization of
numbering resources and projected future demand for numbering resources in order to allocate
numbering resources efficiently and to forecast NPA exhaust dates reliably.  As we discuss in
more detail in this section, we believe that it is necessary to strengthen the current system for
forecast and utilization data collection, both to enhance the accuracy with which the NANPA may
predict patterns of number usage and of NPA and NANP exhaust, and also to serve as a check on
the ability of unscrupulous carriers to hoard numbers or otherwise abuse the number allocation
and administration system. 

     70.  The need for better and more timely data on number usage and forecasted demand
has grown much more acute as competition in the local exchange market has developed and the
demand for numbers has rapidly increased.  The current data reporting mechanisms were designed
when the local exchange market was largely a monopoly; in that period, the industry and
regulators had fewer concerns about how numbers were being utilized or whether carrier
forecasts were indeed accurate.  Today, however, as a result of the tremendous demand for
numbers resulting from the recent opening of the local exchange market to competition, and the
rapid growth of the wireless telecommunications industry, numbering resources are being
allocated to carriers at an alarming rate.   

     71.  Current data collection mechanism:  COCUS.  The current mechanism for
forecast and utilization data collection is the Central Office Code Utilization Survey (COCUS). 
The NANPA administers the COCUS annually, which asks each carrier to provide information on
the total number of NXX codes assigned to it in each NPA, as well as its forecasted demand for
NXX codes over the next five years.  Code holders must provide additional numbering
utilization data in NPAs in which a jeopardy condition has been declared.  The NANPA uses
the COCUS data to monitor the use of NXX codes within each NPA and to forecast the date by
which all NXX codes within each NPA will be assigned.

     72.  As currently configured, the COCUS has a number of shortcomings.  First,
because the COCUS was established through industry guidelines, carriers currently do not have a
regulatory obligation to respond, which impedes the NANPA's ability to gather comprehensive
and accurate number utilization and forecast information.  Carrier response has not been sufficient
to enable the NANPA to gather the information it requires.  Second, COCUS relies, in large
part, on carrier forecasts, but the current CO Code Guidelines do not provide any mechanism by
which the NANPA can evaluate the reasonableness of these forecasts.  Third, because the
COCUS is conducted only once a year, any analyses based on COCUS information become
quickly outdated.  Finally, the forecast and utilization data collected through COCUS lacks
sufficient specificity to enable the NANPA to determine how carriers are utilizing the numbers
currently assigned to them.  Unless addressed, this lack of detail will hamper numbering
resource optimization efforts, because utilization data drives many of the number optimization
measures proposed in this Notice, or otherwise being considered by the industry or state
commissions.  For example, the NANPA would need detailed utilization data to confirm that a
carrier had met utilization rate requirements such as those proposed above.  Moreover, accurate
and detailed utilization data is necessary to maximize the benefits of number pooling, both to
ensure that carriers fully utilize existing blocks of numbers before they request additional blocks,
and to determine which blocks of numbers are eligible for contribution to the pool.  We find
that these shortcomings render the current COCUS increasingly unreliable as a tool for managing
current and future numbering resources. 

     73.  Mandatory data submission requirement.  Consistent with the recommendation
made by the NANC, and supported by a number of the parties that commented on the NANC
report, we tentatively conclude that we should mandate that all users of numbering resources
supply forecast and utilization data to the NANPA.  We seek comment on this tentative
conclusion.  We further tentatively conclude that, as part of our obligation to develop a cogent
national numbering resource policy that will ensure adequate numbering resources to all carriers,
we must establish a more extensive, detailed and uniform reporting mechanism that will improve
numbering utilization and forecasting on a nationwide basis.  Several of the parties that
commented on the NANC report support the adoption of a more detailed reporting mechanism
that is operated at the federal level.  In addition, we tentatively conclude that the NANPA
should serve as the single point of collection for telephone number usage and forecast data. 
The data from this reporting system would, however, be available to states that want to perform
their own analyses to address NPA issues such as jeopardy situations and area code relief.  We
seek comment on these tentative conclusions.
 
     74.  Specific data elements.  We seek comment on the specific data items carriers
should be required to track.  We seek comment on whether all NXX codeholders should be
required to report the status of all telephone numbers within the NXX blocks assigned to them,
according to the number status definitions set forth earlier in this section.  In the alternative, we
seek comment on whether utilization data reporting on a more aggregated basis (e.g., reporting
on "telephone numbers unavailable for assignment" or some more aggregated set of telephone
number status categories) would provide sufficient data to track accurately number utilization.

     75.  We propose that any utilization reporting obligation that we adopt would be in
addition to the demand forecasting requirement that the COCUS currently places on carriers.  We
seek comment on whether any modifications should be made to improve the quality and accuracy
of carriers' demand forecasts, although we believe that consistent utilization tracking, and the
attendant ability to audit forecasts after the fact, may significantly improve the quality of these
forecasts.

     76.  Specificity of data.  We also seek comment on the level of granularity this
utilization and forecast data should be reported, e.g., at the NPA level, rate center level, or
thousands-block level.  We tentatively conclude that, in order to provide information that is
meaningful for utilization tracking and forecasting purposes, telephone number status data should
be reported at the rate center level, at a minimum.  Additionally, we seek comment on whether we
should also require the reporting of utilization data at the thousands-block level where thousands-
block pooling has been, or is going to be, implemented.  If we do require data to be reported at
the thousands-block level, we seek comment as to whether we should exempt carriers that
currently are not subject to LNP implementation obligations from having to report at this level of
granularity, or whether there are benefits to be had from obtaining thousands-block level data
from LNP-capable and non-LNP-capable carriers alike in an area that may move to thousands-
block pooling.  To the extent that commenters argue that more granular reporting requirements
would impose greater costs and burdens on carriers, we ask that they provide specific cost
estimates for comparison purposes, and explain in detail the burdens that would be imposed.  In
addition, we seek comment on whether we should limit utilization data collection to NPAs within
the largest 100 MSAs and jeopardy NPAs, and whether we should consider less granular data-
reporting requirements for areas outside the largest 100 MSAs or jeopardy NPAs.

     77.  Frequency of reporting.  We tentatively conclude that carriers should report
utilization and forecast data on a quarterly basis, rather than the current annual reporting cycle,
because the pace of number exhaust is so great in many areas that annually collected information
becomes so badly outdated that analyses based on it are useless.  We note that the NANC is
currently examining whether to establish quarterly, semi-annual and annual COCUS reporting
cycles, based on NPA growth rate and service provider size.  We seek comment on whether we
should differentiate between carriers in high-growth rate NPAs and low-growth rate NPAs in
terms of reporting frequency, and, if so, on how to distinguish high-growth NPAs from low-
growth NPAs.  In the alternative, would a mechanism modeled after the current practice of
conducting a "Jeopardy COCUS," or additional round of forecast data collection when jeopardy
is first declared in an area code, be sufficient to provide additional utilization and forecast data in
high-growth NPAs?  We further seek comment on whether there are other appropriate
distinctions that should be drawn among carriers with respect to reporting frequency.

     78.  Confidentiality of data.  Several parties that commented on the NANC report
express concern about the preservation of confidentiality of the utilization data they will be
required to provide.  We seek comment on what, if any, special provisions should be established
to protect the confidentiality of data disclosed to the NANPA, the FCC, and/or the state
commissions.  Under Exemption 4 of the Freedom of Information Act (FOIA), the FCC need not
disclose "commercial or financial information . . . [that is] privileged or confidential."  Based on
the proposals set forth above in this section, we seek comment on what specific information that
we may request from carriers would fall within this exemption.  Some commenters have voiced
particular concern about the ability of state commissions to protect the confidentiality of their
submissions.  Regarding proposals to enhance the COCUS, the NANC has recommended that
states have access to aggregate utilization data and solely for a stated purpose.  Also, the
NANC determined that states may obtain carrier-specific data only in states where a legally
enforceable confidentiality agreement is in place.  We seek comment on the NANC's
recommendations concerning use of confidential data by the state commissions. 

     79.  Cost of data collection activity.   To ensure that the data collection requirements
are not overly burdensome, we seek comment on the cost of the proposed data collection
activities to service providers.  Specifically, we seek comment on the estimated fixed and
incremental costs of that collection.  We also seek comment on whether the fixed costs can be
shared.  In addition, we seek comment as to whether there are any economic, legal, or business
reasons for excluding small carriers from reporting requirements, or otherwise scaling back their
reporting obligations.  Alternatively, we seek comment whether such an exclusion for small
carriers would be necessary if the proposed additional utilization data were only collected from
NPAs in the largest 100 MSAs and in jeopardy NPAs.

     80.  Alternative data collection options. Finally, we seek comment on several
alternative data collection options the industry has proposed.  The forecast and utilization
reporting process in the current Thousand Block Pooling Guidelines is one such option.  These
guidelines require carriers operating in an NPA where pooling has been or is planned to be
implemented to submit forecasts and utilization reports semiannually by thousands-block within a
rate area.  The pooling forecast is based on an 18-month projection.  If a carrier identifies a
significant change in its forecast, it is required to provide an updated forecast.  We seek comment
on whether the data collection provisions in these pooling guidelines should be applied more
generally, i.e., outside of pooling areas, and to all carriers, rather than just carriers participating in
pooling.

     81.  Another, similar proposal is the Line Number Utilization Survey (LINUS) data
collection model designed by NANPA staff as a replacement for COCUS and presented for
consideration to the NANC.  LINUS would conduct a survey of forecast data quarterly at the
rate center level.  Utilization data would be collected at the thousands-block level by rate center,
quarterly in the largest 100 MSAs, and semiannually in the remaining MSAs.  Also, collection of
utilization data collection would occur more often in NPAs that are nearing jeopardy. 
Participation in LINUS would be mandatory.  We seek comment on whether LINUS would meet
our data collection requirements, or whether modifications to LINUS are required in order to
make it more responsive to our forecasting and tracking needs.

     82.  In addition, other industry parties have submitted proposals to NANC for a
number utilization and forecasting mechanism to replace COCUS.  AT&T's proposed model
would, like COCUS, collect forecasting and utilization information annually, at the NPA level, but
with the capacity for "real time" updates at other times.  In addition, the forecast report in the
AT&T model would be separated into components for forecasts of growth codes, initial codes for
new entrants, and initial codes for new switching entities.  US West also proposed a COCUS
alternative that involves a two-stage process.  The first stage, referred to as the "Top-down
Analysis," relies on historical COCUS data and mathematical modeling to develop initial exhaust
forecasts for each area code.  After it has been determined that a particular NPA will exhaust
within a selected period, the second stage of this proposal would be applied.  The second stage
involves a "Bottoms-up Analysis," which relies on user input similar to the existing COCUS
system, but employs a mechanized data collection process.  Although these proposals are
presently under review by NANC, we seek comment regarding whether we should adopt any of
their specific components.

     E.   Audits

     83.  The only comprehensive method for verifying the validity and accuracy of
utilization data submitted by users of numbering resources is through the use of audits.   Audits
can also be used to verify compliance with non-quantitative rules or guidelines, for example, to
determine whether a carrier actually has subscribers for "assigned" numbers, or valid reservation
requests.  Audit requirements may also, independently, serve as a deterrent to carrier
noncompliance or strategic behavior, such as hoarding of numbers.  Because we believe that
audits can serve as a valuable tool in our efforts to promote numbering resource optimization, we
propose that the need verification measures proposed and the data collection program proposed
earlier in this section be supplemented with a comprehensive audit program that verifies carrier
compliance with federal rules and industry numbering guidelines.  We seek comment on this
proposal.

     84.  Types of audits.  Three types of audits are commonly used:  "for cause" audits,
regularly scheduled audits, and random audits.  As further detailed below, we seek 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 further seek comment on the comparative costs and benefits associated with
performing each type of audit.

     85.  "For cause" audits are conducted if there is reason to believe that the information a
carrier has provided, e.g., in connection with either reporting requirements or an application for
additional resources, is inaccurate or misleading.  Information providing a basis for initiating a for
cause audit may be drawn from a variety of sources.  Because for cause audits are triggered
only when there is some cause to believe that a carrier may be in noncompliance, they are a highly
cost-effective and necessary tool for monitoring number utilization and forecasting.  For this
reason, we tentatively conclude that we should include for cause audits within the comprehensive
audit program proposed.  We further seek comment on whether we should consider subsequent
follow-up audits on carriers that in previous years had been subject to for cause audits for
supplying inaccurate or misleading data or forecasts.

     86.  Regularly scheduled audits are repeated on a fixed schedule for a representative
cross-section of carriers, and, in this context, would be applied to all entities that obtain
numbering resources.  Perhaps more so than other types of audits, regularly scheduled audits may
encourage carriers to adopt better number utilization practices, because sooner or later, all
carriers would be subject to a regularly scheduled audit.  Given the large number of carriers that
hold numbering resources, we tentatively conclude that regularly scheduled annual audits of all
numbering resource holders would be too costly to be justified.  Instead, we seek comment on
whether conducting regularly scheduled audits every three years represents a reasonable
compromise between effective auditing and cost containment.

     87.  Random audits provide a third means by which carrier utilization and forecast
information can be reviewed for accuracy.  Through such audits, the auditor reviews a specific
carrier's information without triggering the expense and burden of regularly scheduled audit of all
carriers.  In addition, to better target problem areas, random audits could focus on those carriers
that historically have had a high demand for numbers or new carriers that appear to be seeking a
large quantity of numbers.  For this reason, random audits may be used more frequently and
flexibly than regularly scheduled audits.  At the same time, allegations of unusual or inappropriate
conduct are not necessary to trigger a random audit.  We seek comment on whether we should
adopt a random audit approach for use in situations where accurate reporting is paramount, such
as in area codes where jeopardy has been declared, or whether there are other situations in which
random audits would be appropriate.  

     88.  Audit responsibility.  We believe that numbering resource audits should be
conducted by a neutral entity.  One possibility is that the NANPA could conduct these audits. 
Because the industry guidelines envision that the NANPA itself, in its capacity as Central Office
code administrator, will be subject to periodic audits for compliance with numbering
administration guidelines and effective management of numbering resources, however, the
NANPA may not be the best choice to audit code holders on similar issues. It is also possible
that the FCC, state public utility commissions, or other neutral third parties could conduct
numbering resource audits.  We seek comment on how audit responsibility should be
apportioned among these possible candidates.  We further seek 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 that is subject to our approval.

     89.  Audited information/procedures.  We believe that the audit program should
address all aspects of carrier compliance with our numbering resource rules and industry
numbering guidelines, focusing in particular on utilization data reporting and forecasting.  It will
be easier to develop certain auditing procedures, including specific triggers related to for cause
and random audits, after data reporting requirements have been finalized.  We seek comment on
the process by which specific auditing procedures should be established, as well as on the
development of statistical and analytical approaches that will be required to evaluate the quality
and validity of reported data.  We ask parties to comment, in particular, on how we may structure
an audit process that is flexible enough to focus on new problems or issues as they arise.

     90.  We note that the NANC and the INC have been working to develop a
comprehensive audit process, and we direct 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 seek comment on the best method for soliciting the input of state public
utility commissions, who have valuable insight into and experience with potential problem areas. 
While we believe that we should develop a national framework and procedures for numbering
resource audits, so that there is some degree of uniformity across the country in the way that
audits are conducted, we also recognize that state commissions should have a major role in the
development of this framework and procedures.

     F.   Enforcement

     91.  Many of the parties that commented on the NANC Report acknowledge a need
both to strengthen the numbering allocation and assignment guidelines and to find an appropriate
enforcement mechanism to ensure compliance on the part of all users of the numbering
resource.  We seek comment on what actions we should take to enhance the enforceability of
the number utilization and optimization provisions contained in the guidelines. 

     92.  We tentatively conclude that the NANPA, the FCC and the state commissions each
have distinct roles to play in enforcing the provisions of the CO Code Guidelines, and other
numbering utilization rules, and we seek comment on specifying more precisely what those roles
are.  We note that, while the FCC retains the authority to take any necessary enforcement action,
in many instances, the NANPA would be the first entity to detect a carrier's violation of a rule or
guideline, such as failing an audit.  Because the NANPA might often be in the best position to
take swift and effective enforcement action, commenters to the NANC Report suggest that the
NANPA should be delegated additional enforcement authority.  We tentatively conclude that
the NANPA should be empowered to withhold NXX codes as a sanction for violation of the CO
Code Guidelines, especially where the violation involves failure or refusal to supply accurate and
complete utilization or forecast data.  We seek comment on this tentative conclusion and the
circumstances in which the NANPA should be empowered to withhold numbering resources.  For
example, should NANPA be authorized to restrict future requests for numbering resources, as a
sanction for prior violations, where the carrier has no pending request for resources when the
violation is detected, or would this type of situation be better addressed using alternative
sanctions?  We also seek comment on whether any additional enforcement authority should be
delegated to the NANPA.

     93.  There are several situations in which enforcement actions are more appropriately
taken by regulatory authorities than by the numbering administrator.  For example, in some
situations, the decision to take enforcement action involves a more subjective evaluation, or
would otherwise call the NANPA's neutrality into question.  In addition, regulatory authorities
should provide a route of appeal from NANPA enforcement actions.  We seek comment
regarding the appropriate allocation of number administration enforcement responsibilities
between the FCC and state regulators.  Currently, most state commissions are not performing
number administration functions.  We seek comment regarding whether delegating additional
enforcement authority to state commissions would place the states in the position of performing
numbering administration tasks, and if so, whether this should be any cause for concern.  

     94.  In other situations, such as where a violating carrier has no need for additional
numbering resources, withholding these resources would have no effect as a sanction.  We
tentatively conclude that fines and forfeitures, and possibly, in extreme situations, revocation of
certification and licenses should be available as possible sanctions for violation of the CO Code
Guidelines, all of which could only be imposed by regulatory authorities.  We seek comment on
this tentative conclusion.  In particular, if state revocation of a wireline carrier's certification or the
Commission's revocation of a wireless carrier's license is an appropriate sanction for CO Code
Guidelines violations, what standard should be used to trigger this specific sanction option?

     G.   Reclamation of NXX Blocks

     95.  Reclamation and reuse of unused NXX blocks is a numbering optimization
measure that may be one of the quickest and easiest measure to implement.  As outlined below,
the CO Code Guidelines contain provisions for NXX block reclamation.  The NANC Report
notes, however, that there has been "some hesitancy" on the part of the NANPA to enforce these
reclamation provisions, and recommends a current review and modification of the NXX code
reclamation procedure to address the current competitive status of the industry.  In such light,
we seek comment on several proposals to clarify and strengthen these reclamation provisions.

     96.   NXX Activation Rules.  The CO Code Guidelines require an NXX assignee to
activate the NXX code by placing it "in service" within six months of assignment.  Currently, an
NXX code is considered to be "in service" when the assignee has transmitted local routing
information to the LERG.  The carrier, however, does not have to assign and activate any
number from the block to end-user customers in order to satisfy the activation requirement. 
Furthermore, an assignee may apply to the NANPA for an extension of up to an additional 90
days to place the NXX code in service.  The CO Code Guidelines also allow an assignee to
reserve an NXX code for up to eighteen months.  In addition, an assignee of a reserved NXX
code is eligible to receive a single six-month extension of the reservation if it is able to
demonstrate that the proposed code use date was missed due to circumstances beyond its
control. 

     97.  NXX Reclamation Rules.  The CO Code Guidelines require the assignee to return
the NXX code to the NANPA if it has not been activated within six months of assignment, if the
assignee no longer requires that NXX code for the purpose it was originally assigned, or if the
service for which it was assigned is disconnected.  Moreover, the CO Code Guidelines direct
the NANPA to initiate reclamation action if the NXX code has not been activated within 18
months.  The CO Code Guidelines direct the NANPA to refer to the INC for resolution certain
instances where NXX codes have not been returned for reassignment by the assignee, as well as
certain applications for extension of the NXX code activation date. 

     98.  Modification of current CO Code Guidelines.  In their comments on the NANC
Report, several parties support the enforcement of the current reclamation rules by the
NANPA, while others propose modifications to the guidelines.  We tentatively conclude that
the current activation and reclamation requirements and timeframes in the CO Code Guidelines
should be modified in several ways to encourage more efficient use of NXX codes.  First, we seek
comment on whether the definition of placing an NXX code "in service" should be clarified to
mean not just activation of the code through the transmission of local routing information to the
LERG, but also that the carrier has begun to activate and assign to end users numbers within the
NXX code.  We tentatively conclude that this clarification will better ensure that NXX codes
are not left idle for a lengthy period.  We note that adopting such a definition, by itself, could lead
to undesirable behavior on the part of carriers, as they might simply activate a few numbers in an
otherwise unused NXX block in order to avoid reclamation of the block.  Therefore, we seek
comment regarding whether such a change in the definition of "in service" should be adopted only
in connection with a sequential numbering requirement, or whether we should adopt other
safeguards to prevent this type of strategic behavior.

     99.    We also seek comment on modifying the current reclamation provisions by
requiring the NANPA to initiate NXX code reclamation within 60 days of expiration of the
assignee's applicable activation deadline.  We tentatively conclude that this modification will limit
the length of time that an NXX code has been left idle and encourage better recycling of unused
NXX codes.  We further seek comment on whether there exist competitive pressures or other
reasons that should discourage us from reducing the amount of time during which a carrier may
reserve an NXX code from 18 months to three months, and, correspondingly, to reduce the
period of potential extension of that reservation from six months to 30 days.  We seek comment
on whether we should consider any other modifications to the reclamation provisions to improve
their enforceability, such as SBC's suggestion that we should maintain firm deadlines for
activation by removing the discretion the NANPA presently has to determine the length of an
extension.  Finally, we seek comment on whether we should direct the INC to incorporate these
proposed changes into the CO Code Guidelines, or whether we should adopt these proposals as
FCC rules.

     100. Delegating additional authority to the NANPA and the states.  We seek comment
on what, if any additional authority we should delegate to the NANPA to enforce the NXX block
reclamation provisions.  We tentatively conclude that we should delegate additional authority to
state public utility commissions to order NXX block reclamation in accordance with the CO Code
Guidelines, and any changes thereto adopted during the course of this proceeding.  We believe
that this grant of authority may increase the effectiveness of numbering conservation measures
adopted by the states.  We seek comment regarding whether we should direct the NANPA to
refer questions or disputes about code activation, deadline extensions or reclamation directly to
the state commissions for resolution, rather than to the INC.  State commissions may be able to
resolve such issues more quickly and decisively than an industry consensus process.  We also
seek comment regarding whether we should require state commissions to establish any particular
type of dispute resolution or appeals processes in connection with issues regarding activation and
reclamation of NXX codes.

     H.   Cost Elements and Cost Recovery  

     101. In the Executive Summary accompanying the NANC Report, the NANC stated
that "[c]ost/benefit analysis and determination of cost recovery mechanisms loom as high
priorities before going forward with implementation of any of the future optimization methods
presented in this, or future [NANC] reports."  The NANC Report does not, however, address
the costs of various optimization measures nor does it recommend a mechanism for recovery of
costs associated with those optimization methods.

     102. We seek comment on the specific cost elements of the proposed administrative
measures, including a detailed breakdown of the types of costs involved in implementation of each
particular administrative solution (for example, increasing staff to monitor number usage,
software to complete administrative tasks, etc.), as well as the overall magnitude of the costs of
the various administrative solutions.  We also seek comment on whether the benefits of moving to
a more efficient use of our numbering resources achieved through implementation of the proposed
administrative measures outweigh the costs of implementation of those administrative measures. 
We ask that commenters support their conclusion with specific cost data, where available, or
other evidence relevant to a cost/benefit analysis.    

     103. With respect to cost recovery, we tentatively conclude that the costs of the
administrative solutions proposed above should be allocated and recovered through the existing
NANPA fund formula.  Our conclusion is based on the assessment that the proposed
administrative solutions appear, in large part, to involve changes in the manner in which the
NANPA oversees and manages numbering resources.  For example, a requirement that the
NANPA verify an applicant's need for additional numbers may require the NANPA to evaluate the
applicant's months-to-exhaust projection or to evaluate carrier data proving that a particular
utilization level has been met.  Similarly, the costs of collecting utilization data, conducting service
provider audits, initiating reclamation of NXXs and other administrative costs may, in many cases,
be directed to the NANPA.  Furthermore, the implementation of administrative solutions will
benefit all telecommunications carriers by resulting in a more efficient use of numbering resources
and by delaying the need for new area codes, as well as the exhaust of the NANP.  We seek
comment on this tentative conclusion.

     104. In addition, because the administrative solutions we propose as possible ways of
increasing the efficiency with which telecommunications carriers use numbering resources fall
within the scope of numbering administration matters, we tentatively conclude that section
251(e)(2) requires that the costs of the administrative solutions be borne by all
telecommunications carriers on a competitively neutral basis.  We tentatively conclude that
including the costs of the administrative solutions in the NANPA fund will result in the allocation
and recovery of those costs from all telecommunications carriers on a competitively neutral basis
and should not overburden any one carrier or class of carriers.  We seek comment on these
tentative conclusions.  Commenters should address the Commission's interpretation that "on a
competitively neutral basis" means that the costs borne by each carrier do not affect significantly
any carrier's ability to compete with other carriers for customers in the marketplace and whether
the proposed cost recovery mechanism is consistent with this interpretation.  Parties that oppose
our tentative conclusions should propose specific alternative methods for allocating and
recovering the costs of administrative solutions to the numbering crisis on a competitively neutral
basis.  In addition, parties that argue that the Commission has authority to exclude a class or
classes of carriers from the costs of the proposed administrative solutions should provide a
detailed discussion of their position, including applicable statutory and regulatory authority. 
Commenters also should identify which class or classes of carriers should be excluded and why.

           V.  OTHER NUMBERING OPTIMIZATION SOLUTIONS

     A.   Introduction

     105. In Section IV, we considered a variety of administrative measures aimed at
ensuring that carriers obtain and use numbering resources efficiently.  In this section, we consider
and seek comment on additional numbering optimization methods that could be implemented in
addition to, or in combination with, these administrative measures.  

     106.      First, we consider rate center consolidation.  Rate center consolidation involves
creating larger geographic areas in which individual NXX codes can be used by consolidating or
combining existing rate centers.  Because many carriers, particularly competitive local exchange
carriers, require NXX codes in most or all rate centers in an NPA to establish a competitive
"footprint," establishing larger rate centers has significant potential to reduce the demand for
NXX codes.  Traditionally, rate center consolidation has been carried out at the state level.  We
seek comment on ways in which we may create incentives for state commissions and local
exchange carriers to pursue this measure more aggressively.

     107.      Another potential numbering resource optimization method is mandatory ten-digit
dialing for all telephone calls, whether they are local or toll calls.  To date, we have implemented
mandatory ten-digit dialing only in area code overlay situations.  Expanding the use of ten-digit
dialing could yield certain numbering optimization benefits, by making overlays less disruptive to
implement, freeing up protected NXX codes and allowing use of "0" or "1" in the so-called "D"
digit (the first number of the NXX code).  At the same time, mandatory ten-digit dialing imposes
certain burdens on consumers, who would no longer be able to rely on traditional seven-digit
dialing for local calls.  

     108. We also consider number pooling as a numbering optimization method.  Number
pooling allows numbers to be allocated in smaller increments, so that multiple carriers can use
numbering resources from a single NXX code.  We seek comment on whether mandating some
form of number pooling is necessary to achieve our numbering optimization objectives, and if so,
how and to what extent pooling should be implemented.  We also seek comment on the potential
costs and benefits of three specific number pooling methods:  (1) allocation of numbers in blocks
of a thousand (thousands-block pooling), (2) individual telephone number pooling (ITN), and (3)
unassigned number porting (UNP).  Because one common element of all three pooling
alternatives is that they require participating carriers to have LNP capability, we seek comment on
whether non-LNP-capable carriers should be subject to pooling requirements or whether there are
other non-LNP-based alternatives to pooling that could be employed by such carriers to achieve
comparable results.  
      
     109. Regardless of whether or to what degree number pooling may be implemented on
a mandatory basis, there are a variety of technical and administrative issues associated with
pooling. We therefore address the issue of technical standards for pooling, appointment of an
administrator, and possible rules or guidelines for both donation of numbers to and withdrawal of
numbers from a number pool.  We also consider possible mechanisms that would allow for
recovery of shared costs and carrier-specific costs associated with implementing and administering
number pooling.  

     110. Finally, as an alternative to mandating that carriers employ any particular
numbering resource optimization method, we consider whether we can achieve our number
utilization objectives without the need for such mandates by allowing carriers to choose the
optimization solutions that best suit their particular circumstances.  We seek comment on a
regime that would require carriers to meet a number utilization threshold, as proposed in Section
IV, but leave to each carrier the decision about how to achieve the requisite level of utilization,
e.g., through participation in thousands-block number pooling, rate center consolidation, porting
unassigned numbers from other carriers, or simply returning excess codes. 

     B.   Non-LNP-Based Solutions
     
               1.   Rate Center Consolidation

     111. Rate centers are telephone company-designated geographic locations which are
assigned vertical and horizontal coordinates within an area code.  Historically, telephone
numbers are assigned on an NXX code basis, and associated with a particular switch.  For call
rating purposes, each switch is associated with a particular rate center.  For most carrier billing
systems, the rate centers associated with the switches serving the calling and called parties are
used to determine whether a call is local or toll and to compute the air mile distance for rating the
toll call.  Thus, most carrier billing systems rely on NPA-NXX code information for rating calls.

     112. Because it is typically necessary for each facilities-based service provider to be
assigned an NXX code for each rate center in which it provides service, the rate center structure
places a great strain on numbering resources.  Moreover, although wireless carriers offer larger
calling areas and thus require fewer NXX codes for the wireless service, they often must request
as many NXX codes as are required to permit wireless customers to be called by wireline
customers on a local basis.

     113. Rate center consolidation is the combining or aggregating of several existing rate
centers into fewer rate centers.  Rate center consolidation serves as a numbering optimization
measure by enabling carriers to use fewer NXX codes to provide service throughout a region,
thereby reducing the demand for NXX codes, improving number utilization, and prolonging the
life of an area code.  In areas where there are contiguous rate centers with identical calling areas
and identical exchange rates, rate center consolidation may be fairly easy and painless to
implement.  Rate center consolidation will be most beneficial in areas where new entrants have
NXX assignments, but service has not yet been activated.

     114. Rate center consolidation may be an attractive numbering optimization measure
because it enables carriers to maintain their existing call-routing and call-rating methods, is
competitively neutral, does not require LRN LNP, and does not preclude the adoption of other
numbering optimization methods.  Further, rate center consolidation may be flexibly
implemented, on a state, NPA or multiple rate center basis, and sometimes may be implemented
within a short timeframe.  Rate center consolidation may, however, have disruptive impacts on
carriers and customers.  For example, where local calling scopes must be modified in
connection with rate center consolidation, carrier revenue may decrease, because a larger
percentage of revenue may be derived from basic local service and a smaller percentage from toll
service.  Correspondingly, customers' local service rates may increase and they may experience
other types of confusion or inconveniences when their calling areas change.  Also, a complex
consolidation scheme may involve expensive modifications to carriers' switches and operations
support systems (OSS).  Furthermore, rate center consolidation can cause a disruption in the
routing of E911 calls because default routing of 911 calls is NXX driven.  

     115. The experiences of the state utility commissions that have implemented rate center
consolidation or have studied its potential impact demonstrate that this measure brings varying
levels of number conservation benefits and disruptive impact, depending on the effect on calling
scopes and the complexity of the rate center geography.  While some states are enthusiastic
about implementing this measure, others contend that rate center consolidation may not be the
best solution for their particular circumstances.

     116. As do most of the parties that commented on the NANC Report, we consider rate
center consolidation to be a vitally important long-term measure to optimize the utilization of
numbering resources.  We believe that rate center consolidation should be implemented to the
greatest extent possible, and we seek comment on what actions this Commission should take to
promote rate center consolidation.  

     117. We note that the Commission has previously encouraged states to consider rate
center consolidation, among other measures, to decrease the frequency of the need for area code
relief.  We wish to clarify our position that states do not require any additional delegation of
authority from the Commission to engage in rate center consolidation.  Rather, because rate
centers are inextricably linked with local call rating and routing issues, which fall within the
traditional jurisdiction of state public utility commissions, we believe that state commissions have
full authority to order rate center consolidation, and need obtain no further authorization from this
Commission.  We reiterate our support of state action to consolidate rate centers to improve
numbering efficiencies.  

     118. We seek comment on how we may further encourage states to implement rate
center consolidation where beneficial impacts could be achieved.  For example, would delegating
additional authority to state commissions to require codeholders to return vacant, unused codes
that are no longer needed because of consolidation, as is proposed above in Section IV, help them
to realize the full benefits of rate center consolidation?  We also seek comment on whether and
how the FCC or state commissions can create incentives to encourage incumbent local exchange
carriers (ILECs) voluntarily to combine rate centers for the purpose of improving the efficiency of
number utilization and slowing NPA exhaust rates.  In addition, we seek comment on whether the
introduction of intraLATA dialing parity, and the heightened competition that it may bring to the
short-haul toll market, may lessen incumbent carrier resistance to rate center consolidation.  In
addition, because the advent of competition in the short-haul toll market may reduce ILEC
revenue for these calls, we seek comment on whether ILEC migration to larger calling areas must,
as anticipated by state commissions, necessarily result in higher rates being charged for basic
service.

     119. Although we believe that rate center consolidation will assist us in optimizing our
numbering resources, we agree with MCI WorldCom that this measure will not, by itself,
substantially reduce the demand for NPA relief until the industry addresses the underlying
problem of associating call rating with NXX assignments.  Therefore, we seek comment on
whether there are ways to separate the call rating functions from the call routing functions, which
would result in a reduced demand for NXX codes.  We note that the Colorado Telephone
Numbering Task Force recommends eliminating the link between call rating and NXX codes by
investigating the possibility of using the Signaling System 7 (SS7) network, rather than the
current reliance on associating NPA-NXXs with the specific vertical and horizontal (V&H)
coordinates of a rate area to transmit the information required for the rating and routing of every
call.  Use of the SS7 network to transmit information for call rating would enable carriers to
maintain their existing rate centers and to route calls according to their current network
configuration.  The adoption of this call rating method, however, will require that carriers
complete a query for every call and modify their databases to include additional information, such
as network addresses, LRNs, and/or V&H coordinates for the calling and called parties, on the
SS7 call record.  Furthermore, carriers may have to develop systems to inform consumers
whether they are making a toll or local call through an audible or visual method.  We believe that
this proposal offers the possibility of greatly reducing the demand for additional NXX codes and
thus merits further investigation.  We seek comment on the Colorado Task Force's proposal.  We
also seek comment on whether the database modifications that carriers must make to
accommodate LNP are similar to the modifications required to implement call rating using the
SS7 network.     

     120. In addition, we seek comment on the relationship between rate center
consolidation and other numbering optimization measures we may adopt, particularly number
pooling.  We seek comment on whether rate center consolidation should necessarily precede
moving to pooling in an area, or whether it is possible to implement both measures
simultaneously, and simply expand the pools as rate centers are consolidated.  To the extent that
commenters suggest that consolidating rate centers prior to number pooling would increase the
effectiveness of pooling by creating fewer, larger pools within an NPA, we seek comment on
how we might create incentives for state commissions to undertake rate center consolidation prior
to implementing pooling in an area.  For example, should we grant states the authority to
implement pooling only after they have undertaken rate center consolidation in the area in
question?  In the alternative, would requiring carriers to meet specified number utilization
thresholds provide them the incentive to consolidate rate centers voluntarily?

     121. Finally, we seek comment on how to ensure that rate center consolidation does not
adversely impact 911 systems, in particular the default routing of 911 calls.  We further seek
comment on what, if any, role the FCC should have in determining potential impacts on 911
systems, and implementing appropriate solutions to these problems.  More specifically, are the
issues that arise regarding 911 default routing sufficiently similar in each state that we should
consider referring the matters to the NANC for a recommendation on a solution or set of
solutions that could be used in all states undertaking rate center consolidation?  We also seek
comment on whether the FCC should take any actions to ensure that the concerns of the 911
community are addressed in the rate center consolidation process.

                    2.   Mandatory Ten-Digit Dialing and Related Measures

     122. Currently, the standard dialing pattern is seven-digit dialing within an NPA, and
ten-digit dialing between NPAs.  Our area code relief rules dictate, however, that where 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 anticompetitive impacts on new entrants that may have few or
no numbers in the original NPA.  There is often significant customer resistance to ten-digit
dialing, which may explain why more state commissions have chosen to implement splits rather
than overlays.  In fact, to preserve seven-digit dialing for inter-NPA calls within a community of
interest, many states have authorized the use of "protected codes."
          
     123.      Mandatory ten-digit dialing and reclamation of protected codes.  Among the
numbering optimization measures that do not require LNP, mandatory ten-digit dialing entails the
dialing of ten digits for all calls, regardless of whether they are inter-NPA and intra-NPA and
rated as local or toll.  Mandatory ten-digit dialing works as a numbering optimization measure
by freeing up more numbering resources 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).  Moreover, the adoption of ten-digit
dialing on a nationwide basis might eliminate disincentives for states to adopt overlays.  To date,
we have observed the adoption of ten-digit dialing at the state and NPA levels in conjunction with
the use of overlays for area code relief.  Furthermore, ten-digit dialing and reclamation of
protected codes may be implemented on a national, statewide, or NPA-wide basis.  The NANC
Report finds that the conversion to ten-digit dialing and the reclamation of protected codes could
be implemented within 12 months.  

     124.      Benefits.  Ten-digit dialing would allow future area code relief projects,
particularly overlays, to be less disruptive to consumers.  In addition, Bell Atlantic Mobile
states that mandatory ten-digit dialing may foster new and different uses for NPA overlays. 
Moreover, if ten-digit dialing were adopted as part of a national numbering optimization policy,
customer confusion resulting from inconsistencies in dialing patterns from one area to another
would be eliminated.  PageNet also believes that ten-digit dialing would lower costs and reduce
entry barriers, which, in turn, could result in lower prices and increased product and service
innovation for all consumers.  GTE further states that ten-digit dialing will prevent
discrimination among service providers.  

     125. Disruptive effects.  Ten-digit dialing, however, does present certain disruptive
effects, particularly for consumers.  Consumers often object to the inconvenience and confusion
associated with having to remember and dial three extra digits.  Also, some research raises a
concern that the young, elderly and the memory impaired may be particularly affected by the
change to ten-digit dialing, especially where 911 has not been implemented.  Businesses may
also incur costs associated with changing advertising and stationery, updating databases, and
reprogramming customer premises equipment (CPE).  Although the industry cost of
implementing this measure 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) system.  In light of these concerns, we seek further information on
any other technical problems and costs associated with these measures.  In particular, we seek
comment on whether the ability to implement easily area code overlays could provide a
disincentive to use existing resources more efficiently.  

     126.      National policy.  The majority of industry commenters support the conversion to
mandatory ten-digit dialing as a numbering optimization measure, particularly in densely
populated areas with NPAs that are projected to exhaust shortly.  Some commenters, however,
explicitly reject the adoption of this measure.  The states also are divided in their embrace of
this measure.  For example, the Texas Commission supports an investigation into the costs and
benefits of mandatory ten-digit dialing as a numbering optimization measure.  Similarly, the
Florida Commission states that mandatory ten-digit dialing would open the possibility for new
types of area code overlays, including expanded overlays.  The Ohio Commission argues that
alternatives such as eight-digit uniform dialing and functional property codes have not been fully
considered, and that these methods may be used to improve numbering utilization and postpone
costly area code relief measures, while the New York Commission points out that ten-digit
dialing is not required to reclaim protected NXX codes. We seek comment on whether we
should adopt nationwide ten-digit dialing, or whether we should encourage states to implement
ten-digit dialing as a priority.

     127.      D digit expansion.  Expansion of the NANP so-called "D" digit (the fourth digit of
a ten-digit telephone number) to include 0 and 1 could accompany the implementation of ten-digit
dialing.  Adoption of this measure would increase the quantity of NXXs available within an
NPA by approximately 25%.  The NANC Report states 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.  We seek comment on
whether D digit expansion may be implemented on a statewide or NPA-wide basis, rather than at
a mandatory national level by all service providers.  The NANC Report also states this
modification is expected to be a multi-year process for carriers to implement, and therefore,
expansion of the D digit would be implemented as the final phase of the measures associated with
ten-digit dialing.  

     128.      Disruptive effects of D digit expansion.  D digit expansion, however, raises
significant implementation concerns.  The record reveals that implementation of this measure will
require significant and costly technical modifications to switches, operations support systems, and
customer premises equipment.  Moreover, since service providers may be using these NXXs for
intra-network use, they will need to develop an alternate technical solution.  Furthermore, a call
may not be completed if this measure is not implemented by all service providers in a timely
manner.  MCI WorldCom further asserts that adoption of this measure would preclude
significant options for long-term expansion of the NANP.     

     129. National policy.  We note that most commenters who addressed this issue oppose
the expansion of the D digit because of implementation concerns.  One commenter also
recommends that the Commission preclude states from requiring the expansion of the D digit to
preserve national flexibility to devise long-term alternatives for NANP expansion.   Therefore,
we seek further 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.  We
also seek comment on whether states should independently implement the expansion of the D
digit as a numbering optimization measure at the present time.

     C.   LNP-Based Solutions:  Number Pooling

                    1.   Background
     
     130. Telephone number pooling addresses one of the causes of area code exhaust: the
allocation of numbers in full central office code (NXX) blocks of 10,000.  Historically, network
routing mechanisms are based upon the understanding that geographic numbers are assigned on
an NXX code basis and associated with a specific switch, and, correspondingly, that the network
address to which the call must be routed is embedded in the first six digits (NPA-NXX) of the
called number.  Number pooling allows service providers in a given area to receive numbers in
blocks smaller than 10,000 by breaking the association between the NPA-NXX and the service
provider to whom the call is routed.  Through number pooling, participating carriers can
effectively share resources from NXX codes rather than receiving an entire NXX code at a time.

     131. Once the association between the NPA-NXX code and the service provider is
broken for purposes of call routing, an alternative to using the first six digits of the called number
to route the call must be found.  One alternative would be to perform seven-digit (NPA-NXX-X)
or greater screening within each switch on calls to pooled numbers.  The industry consensus
view is that this method of call routing would be costly to implement, administratively
burdensome and would result in an inefficient use of switch memory.  The Location Routing
Number (LRN) infrastructure supporting LNP provides a second, arguably more practical,
alternative routing method.  

     132. Under the LRN method, a unique ten-digit number -- the "location routing
number" or LRN -- is assigned to each central office switch to identify each switch in the network
for call routing purposes.  The LRN then serves as a network address.  When an individual
telephone number is ported, a record associating the ported number with the LRN of the
appropriate service provider's switch is created and stored in the former carrier's LNP service
control point (SCP) database, via downloads from the local Service Management System
(SMS).  Any service provider routing a call to the ported number would do so by querying the
database to determine the LRN that corresponds to the dialed telephone number, and routing the
call to the switch identified by that LRN.
   
     133. The LRN database structure can also be used to route calls to customers who have
been assigned telephone numbers from a pool, because, just like with ported numbers,  the NPA-
NXX of a pooled number no longer necessarily indicates the switch or service provider associated
with the service.  To facilitate call routing when LRN LNP is utilized for number pooling, the
entire population of pooled numbers in the pooling area, and associated LRNs, must be stored in
all of the LNP SCP databases that service providers use to store LRN information for numbers
ported from their networks.  Thus, number pooling can only be implemented where LRN LNP
has been deployed.

     134. The NANC Report proposed two different types of pooling:  thousands-block
pooling, in which carriers receive numbering resources in blocks of 1,000, and individual
telephone number (ITN) pooling, in which carriers receive telephone numbers one at a time.  In
addition, the NANC proposed a numbering optimization method known as unassigned number
porting (UNP).  Although not technically a pooling method because carriers receive numbering
resources from each other, rather than from a common pool overseen by a pooling administrator,
the method is somewhat similar to ITN in that individual numbers are ported using the same
network infrastructure (LNP) to route calls.

     135. Initially, proposed pooling methodologies would be confined to a rate center,
which denotes the smallest geographic area used to distinguish rate boundaries.  That is, each
rate center would contain a separate pool of numbering resources.  In this manner, current
wireline call rating mechanisms associating an NXX with a particular geographic area (i.e., rate
center) can be maintained.  Pooling, however, could be extended beyond the rate center if
methods to eliminate the link between call rating and NXX codes using the SS7 network, as
discussed in Section V.B.1., were implemented. 

     136. Thousands-block pooling.  Thousands-block pooling involves the allocation of
blocks of sequential telephone numbers within the same NXX code to different service providers,
and possibly different switches, within the same rate center.  All 10,000 numbers available in the
NXX code are allocated within one rate center, but are allocated to multiple service providers in
thousand-number blocks, instead to one particular service provider.  Allocations are
accomplished via a Pooling Administrator, who coordinates the allocation of numbers to a
particular service provider with the Number Portability Administration Center (NPAC) SMS.

     137. To implement thousands-block pooling, the industry has proposed employing the
Intelligent Network/Advanced Intelligent Network (IN/AIN) system used for LNP.  Use of this
external database system for number pooling is described in detail as the NXX-X/LRN method in
the INC Number Pooling Report.  As noted above, to facilitate proper network routing in a
thousands-block pooling environment, every service provider's existing LNP SCP database within
the pooling area would store specific LRN routing information for thousand- number blocks
within the same NXX.  In addition, each service provider's LNP mechanisms would query their
database for calls to pooled numbers allocated to other service providers.

     138. With little exception, parties commenting on the LRN-based methods of
numbering optimization strategies agree that a nationwide thousands-block pooling architecture
could make more efficient use of NXX codes already allocated and those awaiting allocation. 
Given the potential benefits of a nationwide pooling architecture, we tentatively conclude that
implementing thousands-block pooling in major markets is an important numbering resource
optimization strategy that is essential to extending the life of the NANP.  In this section of the
Notice, we seek comment on how thousands-block pooling should be implemented.  We believe
that carriers should be required to participate in pooling in areas where the benefits of pooling
outweigh the associated costs.  We seek comment on how best to achieve this goal.

     139. Individual telephone number pooling and unassigned number porting.  Similarly,
individual telephone number (ITN) pooling and unassigned number porting (UNP) involve the
allocation of individual telephone numbers within the same NXX to different service providers,
and possibly different switches, within the same rate center.  As with thousands-block pooling, all
10,000 available numbers in an NXX code are allocated within one rate center, but individual
telephone numbers may be allocated to different service providers.  With ITN pooling, allocations
would be accomplished via a Pooling Administrator, to coordinate the allocation of individual
numbers to a particular service provider with the NPAC.  With UNP, however, allocation of
individual telephone numbers generally would be accomplished between service providers by
using established LNP porting mechanisms, and would not involve a Pooling Administrator. 

     140. Just as it has been proposed for thousands-block pooling, ITN pooling and UNP
would also employ the IN/AIN system used for LNP.  To facilitate proper network routing in an
ITN pooling environment or with UNP, every service provider's existing LNP SCP database
within the rate center would store specific LRN routing information for individual numbers within
the same NXX.  In addition, each service provider's LNP mechanisms would query their database
for calls to individual numbers allocated to other service providers.

     141. The NANC Report estimates that four to six years may be required to implement
ITN pooling from the date of a regulatory order mandating its implementation.  Unlike
thousands-block pooling, the state of development of technical standards and administrative
guidelines for ITN pooling is not as advanced.  For these reasons, we tentatively conclude not to
pursue ITN pooling at this time.

     142. With regard to UNP, we seek comment on whether we should allow carriers to
port unassigned numbers among themselves.  Short of public safety and network concerns, we see
no reason to prohibit the practice where two or more carriers reach a mutual agreement to
transfer unassigned numbers among themselves.  Some carriers may find the practice useful in
extreme situations in which numbering resources may not otherwise be available.  We are mindful,
however, that porting large blocks of numbers may not be possible for certain types of switches,
and may disrupt processing of calls to E911 systems.  Therefore, we seek comment on whether
allowing carriers to port unassigned numbers among themselves may result in call-routing
problems and public safety concerns.  We also seek comment on whether state commissions
should make the determination to allow carriers to use UNP in a given area.

                    2.   Pooling Roll-out

     143. Relation of LNP implementation to thousands-block pooling.  As previously
explained, thousands-block pooling relies on the same network architecture that makes LNP
possible.  The Commission required wireline carriers in the largest 100 MSAs to implement
LNP as of December 31, 1998, in switches that another carrier has requested be made LNP
capable.  Therefore, the degree of deployment of LNP is greatest in switches located within the
largest 100 MSAs.  As of January 1, 1999, LECs may request LNP in other LECs' individual
switches in areas outside of the largest 100 MSAs, to be provided no later than six months after
receiving the request.  CMRS carriers are not required to deploy LNP until November 24,
2002.

     144. Given the deployment schedule for LNP, we tentatively conclude that any
deployment schedule for thousands-block pooling should initially be tied to the largest 100 MSAs. 
This is because it appears that the greatest benefits from pooling are achieved when all, or most,
participating carriers are LNP capable, and thus, are able to participate in a pooling
methodology.  We seek comment, then, on whether it is appropriate to tie initially  the
deployment schedule for thousands-block pooling to the largest 100 MSAs, or if another
deployment schedule should be considered.

     145. Authority to order deployment of LNP for thousands-block pooling purposes. 
Currently, our rules specify that only another carrier may request a LEC to provide number
portability in a given switch.  A key issue in determining the schedule for deployment of
thousands-block pooling is the treatment of carriers that may be LNP capable but have not yet
implemented LNP in a specific area, and the treatment of carriers that are not now, nor will be
for the foreseeable future, LNP capable.  We seek comment on whether ordering LNP
capability primarily for the purpose of thousands-block pooling is permitted under the 1996 Act. 
Does this Commission have the authority, and can it delegate to other entities, the authority to
order carriers to implement LNP for number utilization purposes?  We seek comment on
whether an entity other than a LEC could be permitted to request that a specific switch or group
of switches be made LNP capable for the sake of providing thousands-block pooling within or
without the largest 100 MSAs.  It appears from the record received on the NANC Report as well
as in other petitions filed with this Commission, that several state commissions are interested in
the possibility of ordering number pooling in areas outside the largest 100 MSAs.  Therefore,
we also request comment on whether requests that a carrier become LNP capable could be made
by an entity other than another LEC, such as a state commission, for areas outside the largest 100
MSAs.  Because of the expense involved in converting switches to provide LNP capability, we
also seek comment on whether the criteria for requesting LNP capability in a given switch or
switches for the purpose of implementing number pooling should be more stringent than the
criteria for requiring an already LNP-enabled switch or switches to participate in thousands-block
pooling. 

     146. Who decides whether to implement pooling in a given area.  As we have
tentatively concluded that thousands-block pooling should be implemented where the benefits of
doing so outweigh the costs, we seek comment, first, on what entity should be tasked with
making the decision whether to implement pooling in a given area.  For example, we could simply
order that LNP-capable carriers engage in thousands-block number pooling in the largest 100
MSAs, on the basis that LNP is most widely deployed in those areas, and they are also likely to be
subject to the majority of area code relief proceedings.  On the other hand, we could delegate the
decision to state utility commissions, which could order thousands-block pooling in any area,
pursuant to a determination that the costs of ordering pooling are outweighed by the benefits.

     147. In the alternative, we seek comment on whether state utility commissions (or
another entity) could make the decision to opt into a nationwide thousands-block pooling
architecture on a regional basis, or opt out of a "default" nationwide roll-out of pooling.  Based
on the proximity of state utility commissions to area code exhaust problems, we seek comment on
whether a regime such as that which currently exists in the area of area code relief is more
desirable.  That is, should we allow state utility commissions to elect to make the decision
whether to opt in or out of thousands-block pooling, but provide that, if the commission elects
not to make the decision, another entity decides whether an area should opt in or out of
thousands-block pooling?  We further seek comment on what entity should decide whether to
deploy pooling in an area, if the state commission declines to do so.  Regardless of whether the
paradigm is one of opting into a nationwide pooling methodology, or opting out of a roll-out
based on the top 100 MSAs, and regardless of whether a state utility commission or some other
entity makes the decision to opt in or out of thousands-block pooling, certain criteria would have
to be met to justify the decision.  We are concerned, however, that a state-by-state assessment of
the value of number pooling may understate the overall value of number pooling to the life of the
NANP, because state commissions are likely to be primarily interested in extending the lives of
individual NPAs within their states, rather than the overall life of the NANP.

     148. Criteria to justify a mandate of pooling in a given area.  Ordering pooling in an
area should be guided by the decision that the benefits of doing so will outweigh the costs. 
Certain costs of pooling, such as establishing the Pooling Administrator, will necessarily be
nationwide in nature, and generally, fixed.  Other costs, however, particularly the costs to
individual carriers to update their OSS and switches to support pooling, will be more local in
nature.  Although it will be difficult to determine with precision whether the benefits of an area's
participation in pooling in avoiding area code exhaust, and the benefits to the country as a whole
of avoiding exhaust of the NANP, outweigh the costs to carriers, and ultimately to their
customers, we propose that certain criteria be met to justify a mandate of pooling in an area, or,
to relieve an area from a pooling mandate.  We seek comment generally on what those criteria
should be.  In comments on the NANC Report, certain parties proposed possible factors that
would justify an order of thousands-block pooling.  Based on those responses and the criteria in
the NANC Report under the heading "Conditions Which Support Maximum Potential," we seek
comment specifically on a number of areas.

     149. Because thousands-block pooling provides little benefit in situations where there is
little or no competition within a rate area, one criterion for opting in or out of pooling in a
given area may be the number of competing service providers in the area, and the number of
service providers likely to compete in the near future.  In addition, the number of LNP-ready
service providers in the rate center would also be related to the total number of service
providers.  If there are a number of service providers, but they are primarily CMRS or paging
providers, there may be little gain from number pooling, at least for the immediate future, because
CMRS providers are not required to implement LNP until November 2002, and paging providers
are not required to implement LNP at all.  Similarly, certain types of telephone company
switches may not be able to accommodate thousands-block pooling.  We seek comment on
what would be a reasonable number of LNP-ready service providers using numbering resources in
a given area to justify requiring pooling in the area.

     150. Another criterion that may weigh in the decision to require pooling in an area is the
stage of exhaust of the NPA in which pooling is to take place.  The NANC Report notes that
thousands-block pooling is likely to provide the greatest benefit when there are sufficient
numbering resources still available in the NPA to "stock" the pools.  If there are few numbering
resources remaining in an NPA, pooling may do little or nothing to extend the life of the NPA. 
Thus, we seek comment on whether a criterion for opting in or out of a thousands-block pooling
methodology should be the number of NXXs that remain in an NPA, or the expected number of
thousands blocks to be returned within an NPA pursuant to a pooling plan.  That is, although
few NXXs may remain for assignment, if a large number of already assigned NXXs have low
utilization rates, and thus are subject to reclamation, then there may be significant benefits to
pooling even in an NPA nearing exhaust.  Consideration of this criterion does not preclude a
mandatory reclamation of numbers if it is found that service providers have built excessively large
inventories of numbering resources.

     151. Several parties have observed that the greatest utility to be gained from thousands-
block pooling exists when that measure is combined with a rate center consolidation. 
Consolidating rate centers prior to pooling would likely lead to fewer, larger pools within an
NPA, thereby increasing the effectiveness of thousands-block pooling.   Because thousands-block
pooling exists at the rate center level, however, it may be problematic for an area to undergo rate
center consolidation while implementing thousands-block pooling.  Similarly, consolidating rate
centers following pooling implementation will require consolidation of the pools within the NPA. 
We seek comment on whether a criterion for opting in or out of thousands-block pooling should
be an on-going or planned effort to consolidate rate centers within an NPA.

     152. Several state utility commissions have studied the effects that ordering thousands-
block pooling would have on the lives of existing NPAs.  We seek comment on whether the
decision to opt in or out of a nationwide thousands-block pooling methodology should be based
on detailed studies of the effectiveness that pooling would bring to a particular NPA or NPAs.  If
detailed studies incorporating some or all of the criteria outlined above are ordered, then we seek
comment on whether we should designate the entity that will perform the studies.  Furthermore, if
we do so, we seek comment on who the entity should be.

     153. Finally, we invite commenting parties to suggest any other criteria that may favor a
mandate of thousands-block pooling in a given area.

     154. Relevant areas in which to adopt thousands-block pooling.  We seek comment on
the relevant areas for opting into, or out of, a nationwide thousands-block pooling methodology. 
Due to the deployment of LNP, generally, in the largest 100 MSAs, we seek comment on whether
the initial deployment of thousands-block pooling, like the LNP implementation schedule, should
be limited to the largest 100 MSAs, with extension to other areas following the initial deployment. 
We also seek comment on whether the implementation should be staggered, like the LNP
implementation schedule, to include the largest MSAs in the first group, with implementation in
smaller MSAs later.  We also seek comment on whether, if the paradigm is one of opting into,
rather than out of, a nationwide thousands-block pooling methodology, pooling should be
required in the entire MSA, on an NPA-wide basis, or on a rate-center-by-rate-center basis. 
Similarly, if the default implementation plan calls for pooling in the largest 100 MSAs with the
possibility of opting out of the pooling plan, should the appropriate areas from which to opt out
be based on an entire MSA, an NPA within the MSA, or on a rate-center by rate-center basis?

                    3.   Implementation Time Frame

     155. Of the two LNP-based number pooling alternatives addressed in the NANC
Report, ITN and thousands-block, the NANC believes that thousands-block pooling can be
implemented in a shorter time frame.  The actual time needed to implement thousands-block
pooling, however, is dependent on a number of variables.  The extent of LNP deployment, the
provisioning method chosen, compatibility of service providers operational support systems,
selection of a Pooling Administrator, and the need for enhancements to switches, SCPs, and other
service provider systems, and availability of necessary hardware and software changes from
vendors, all affect the time frame for implementation of thousands-block pooling.  

     156. The NANC Report includes an implementation timeline for thousands-block
pooling.  This timeline identifies the high-level tasks that must be accomplished to implement
thousands-block pooling, as well as the estimated time and the party responsible for
accomplishing each task.  Several pre-pooling activities, such as deployment of LNP and
analysis of current and future numbering needs, are already underway.  The pooling administration
tasks identified by the NANC Report include:  development of Pooling Administration guidelines;
selection of a Pooling Administrator; and development by the Pooling Administrator of an
automated system for allocation of pooled number resources, built according to industry-supplied
specifications and requirements.  Of these tasks, the Thousands Block Pooling Guidelines are
largely completed.  

     157. The NANC Report further identifies the selection of a pooling deployment method
-- port-on-demand, pre-port, or activate-as-needed -- as the first critical technical task.  The
industry selected the pre-port methodology with Efficient Data Representation (EDR), a data
formatting method that facilitates the transfer of large ranges of numbers as a single message. 
Other technical tasks include development and deployment of enhancements to the NPAC SMS to
accommodate pooling, development of switch requirements, and system testing.  The NANC
Report also sets forth a number of tasks that service providers, together with equipment vendors,
must accomplish to achieve number pooling.  These tasks include:  modifications to service
provider LSMSs and SCPs; enhancements to Service Order Administration systems (SOAs) and
operations support systems; and enhancements to switches, and subsequent testing.  

     158. Although each of these tasks will take a different amount of time to complete, the
NANC Report estimates that all of them may be achieved, and thousands-block pooling could be
implemented, within 10 to 19 months from a regulatory order.  We seek comment on whether
the estimated time allotted to each of the major tasks involved in implementing thousands-block
number pooling is necessary, or, on the other hand, is sufficient, to ensure the proper
implementation of thousands-block number pooling.

                    4.   Non-LNP-Capable Carriers

     159. As we have noted above, because thousands-block pooling and other pooling
methods are based on LRN architecture, carriers who have not deployed LRN architecture to
support LNP cannot participate in number pooling.  Assuming that we were to adopt some form
of pooling requirement for LNP-capable carriers, we must also consider how the implementation
of pooling would affect non-LNP-capable carriers.  In this section, we seek comment on whether
the need to promote efficient use of numbering resources requires non-LNP-capable carriers to
participate in pooling, the relative costs and benefits of extending pooling requirements to such
carriers, and whether there are viable non-LNP based alternatives to pooling that would promote
the efficient use of numbers by non-LNP based carriers.  

     160. For purposes of this inquiry, non-LNP-capable carriers can be divided into three
categories:  (1) "covered" CMRS carriers in the largest 100 MSAs, who are not currently LNP-
capable, but will be required to implement LNP by a date certain;  (2) wireline and "covered"
CMRS carriers outside the largest 100 MSAs, who will be required to deploy LNP in the future
only if and when they receive a request from a competing carrier; and  (3) non-"covered"
CMRS providers, such as paging carriers, who are not subject to LNP requirements of any kind. 
We address the issue of number pooling as it affects each category in turn.

     161. With respect to the first category, we recently decided in the CMRS LNP
Forbearance Order that covered CMRS providers would be required to implement LNP in the
largest 100 MSAs by November 24, 2002.  Once that has occurred, it presumably will be
feasible for these carriers to participate in thousands-block number pooling on the same or an
equivalent basis as wireline carriers in the largest 100 MSAs that have already developed LNP
capability.  Accordingly, we believe that once covered CMRS carriers are LNP capable, they
should be equally subject to any pooling requirement that we may adopt for LNP-capable wireline
carriers.  We seek comment on this proposal.  

     162. In the CMRS LNP Forbearance proceeding and this proceeding, CMRS carriers
have generally asserted that their participation in number pooling would have less impact on
efficient number utilization than participation by other carriers.  Among the reasons asserted are: 
(1) CMRS carriers would have few, if any, numbers to contribute to pools because these carriers
have high utilization rates; (2) because CMRS carriers use only a limited number of rate
centers, their pooled numbers would be available for wireline assignment only in those rate
centers, instead of area-wide; (3) because CMRS carriers experience rapid subscriber growth, it
is more efficient for wireless carriers to be assigned an entire NXX, rather than multiple thousands
blocks, to meet short-term needs.  

     163. On the other hand, some state regulators have urged the Commission to consider
applying pooling requirements to CMRS carriers.  These states contend that the participation of
CMRS carriers in pooling is important because, even if CMRS carriers have high utilization rates
that would prevent them from contributing large amounts of numbers to a pool, the ability of
CMRS carriers to draw numbers from the pool, rather than requiring separately allocated NXX
blocks, would enhance the effectiveness of pooling as a numbering optimization measure.  

     164. The issue of CMRS participation in number pooling is also the subject of data
provided by the NANPA, in the CMRS LNP Forbearance proceeding and in a subsequent
presentation to the NANC.  In these submissions, the NANPA has presented several alternative
projections of the potential impact of thousands-block number pooling on NANP exhaust that
vary depending upon whether CMRS participation in pooling is assumed.  Specifically, the
NANPA estimates that if thousands-block pooling were implemented in the year 2000 by all
wireline, CMRS, and paging carriers, the life of the NANP would be extended until 2051, or even
longer if the pooling program included reclamation of existing NXX codes.   In an alternative
projection, the NANPA estimates that implementation of pooling by wireline carriers alone (i.e.,
with no CMRS participation) would extend NANP life until 2027. 

     165. We seek comment on the assertions of CMRS carriers and state regulators
regarding the potential numbering resource optimization benefits that would flow from covered
CMRS participation in thousands-block number pooling.  We also seek comment on the
projections presented by the NANPA concerning the comparative impact on NANP exhaust
depending on whether pooling includes or does not include CMRS participants.  We recognize
that the NANPA's projections have been criticized by some carriers, and that the NANPA has
indicated that its efforts to project the impact of pooling on NANP exhaust are ongoing. 
Nevertheless, we believe that careful review and further analysis of the NANPA's number exhaust
projections are essential to our evaluation of the issue of pooling participation by different
industry segments.  We commend the NANC for initiating this process by establishing a team to
review the NANPA's projections in detail and submit its findings to the NANC.  We  encourage
the NANC to submit any conclusions or recommendations that it may have regarding pooling,
including pooling by CMRS carriers, based on the NANPA's projections or the team's findings. 
We also urge all participants in this proceeding to consider and comment on the Number
Utilization Study and NANP Exhaust Study and any responses to the report as they pertain to
CMRS participation in pooling.

     166. If we were to extend thousands-block pooling requirements to covered CMRS
providers, we seek comment on whether such requirements should be limited to specific NPAs or
rate centers or whether they should apply to all NPAs located in the largest 100 MSAs.  We also
seek comment on the potential cost to covered CMRS providers if they are subject to pooling
requirements.  Assuming that they will have already incurred the cost of implementing LNP, what
additional cost would be required to implement number pooling?  Commenters should specifically
address and, if possible, provide documentation of the incremental costs that would be incurred
over and above the cost of LNP deployment.

     167. We also seek comment on the timeframe that would be required for
implementation of number pooling by covered CMRS providers following LNP deployment.  As
noted above, the NANC has estimated that deployment of thousands-block number pooling by
wireline carriers that have already deployed LNP could occur within 10 to 19 months of a
regulatory order establishing pooling requirements.  This estimate, however, is based in part on
the estimated time required to select a pooling administrator and establish administrative
procedures for the pooling process.  Assuming that this process could be completed before the
November 2002 deadline for CMRS LNP deployment, covered CMRS carriers would presumably
not require as lengthy a time interval to initiate pooling, because the administrative infrastructure
for pooling would already be in place.  We seek comment on this assumption, and on the ability of
covered CMRS carriers to participate in decisions regarding number pooling administration prior
to their development of LNP capability.  Commenters should also address whether there are any
other technical considerations and administration issues unique to covered CMRS carriers that
could affect the timing of their participation in pooling.  

     168. In the CMRS LNP Forbearance Order, we noted that our decision to extend the
LNP implementation deadline for covered CMRS providers to November 24, 2002, does not limit
our ability to require CMRS participation in pooling at an earlier date, if doing so is deemed
necessary to address specific number exhaust problems.  Some state regulatory agencies, such
as the North Carolina Commission, argue that CMRS participation in pooling prior to November
2002 may be necessary in order for the public to realize the full benefits of pooling.  On the
other hand, requiring CMRS carriers to participate in pooling earlier than November 2002 would
require these carriers to accelerate their deployment of LNP technology, which would impose
significant costs and burdens that we have concluded in the CMRS LNP Forbearance Order are
not warranted for LNP purposes.  In light of our decision to extend the deadline for CMRS
implementation of LNP until November 2002, we seek comment on whether there is a need to
consider such an accelerated schedule to address specific number exhaust problems.  Specifically,
commenters should address whether there are potential benefits from CMRS participation in
pooling earlier than November 2002 that would be sufficient to justify the significant added cost
and burden that would be borne by covered CMRS providers in deploying LNP architecture on an
accelerated basis.

     169. The second category of non-LNP-capable carriers consists of wireline and covered
CMRS carriers outside the largest 100 MSAs, who will be required to deploy LNP at some time
in the future only if and when they receive a request from a competing carrier.  In the case of
wireline carriers outside the largest 100 MSAs, such deployment could occur as early as July 1,
1999, if a request was received by January 1, 1999.  In the case of covered CMRS carriers
outside the largest 100 MSAs, such deployment would not occur before May 22, 2003, under the
timetable established by the CMRS LNP Forbearance Order.  

     170. At present, it is not certain to what degree carriers in this category will be subject
to requests to provide LNP in their own markets, or when such deployment will occur.  It is
unlikely, however, that deployment of LNP outside the largest 100 MSAs will be uniform.  For
example, in some instances, carriers outside the largest 100 MSAs may be requested to provide
LNP only in certain switches, so that they will not necessarily have LNP capability throughout
their service areas.  It is also possible that widespread deployment of LNP in these markets will
occur gradually over an extended period of time.  In light of these uncertainties, we seek comment
on the degree to which carriers in this category should be required to participate in any pooling
regime we may establish for wireline or CMRS carriers in the largest 100 markets.  Specifically,
should a carrier that establishes LNP capability based on another carrier's request presumptively
be required to participate in pooling?  Alternatively, are there circumstances under which we
should impose pooling obligations on carriers even if they have not received a request for LNP
from another carrier?  To what extent should pooling obligations apply if the carrier's
deployment of LNP is limited to certain switches rather than its entire service area?  

     171. Another potential factor that could affect the ability of covered CMRS carriers
outside the largest 100 MSAs to participate in pooling is the requirement that CMRS carriers who
deploy LNP be able to support nationwide roaming.  As a result of this requirement,  covered
CMRS carriers outside the largest 100 MSAs will need to make certain changes to their networks
before November 24, 2002 so that they can support roaming by CMRS customers from the
largest 100 markets who use ported numbers.  These changes are not as extensive as those that
would be required to implement LNP for their own customers, or to participate in number
pooling.  Nevertheless, we seek comment on whether implementing the network changes required
to support roaming would affect the cost to CMRS carriers of implementing pooling, even if such
carriers do not receive a request from a competing carrier to deploy LNP in their home markets.    

     172. The final category of non-LNP-capable carriers consists of wireless carriers
outside the covered CMRS definition, who are not required to deploy LNP at all.   This
category includes, among others, paging carriers, data-only services, and small SMR carriers who
fall outside the covered CMRS definition because they do not provide switched-network mobile
voice service with seamless handoff of calls.  In the Telephone Number Portability proceeding,
we concluded that these services should not be subject to LNP requirements because LNP
implementation by these classes of carriers would have little impact on wireless-wireless or
wireless-wireline competition.  Some of these classes of carriers, however, particularly paging
carriers, are significant users of numbering resources.  Therefore, even though they are not
subject to LNP requirements, it is important to assess both the potential benefits and the cost of
participation by these carriers in number pooling.
     
     173. We seek comment on whether the need for numbering resource optimization
warrants the participation in pooling by wireless carriers that are not included in the definition of
covered CMRS providers.  We recognize that extending pooling requirements to these carriers
would impose significant costs and burdens that we have concluded in the Telephone Number
Portability proceeding are not warranted for LNP purposes.  Therefore, we believe that such
requirements should not be extended to non-LNP-capable carriers without a substantial showing
that their participation in pooling would have significant numbering optimization benefits that
outweigh those costs.  We seek comment on whether participation by these carriers in pooling is
necessary to achieve our numbering resource optimization objectives.  

     174. As an alternative, we seek comment on the feasibility of numbering resource
optimization methods that would enable non-LNP-capable carriers to participate in or
approximate the effect of pooling without requiring them to develop LNP capability.  For
example, paging carriers currently receive allocations of numbers in thousands blocks through
Direct Inward Dialing (DID) agreements.  Under DID agreements, ILECs set aside blocks of
numbers for paging carriers and route the numbers to them through PBX or Centrex trunks.  In
some states, wireless service providers receive allocations of numbers in thousands blocks through
NXX code sharing arrangements, which are similar to DID agreements, except that they do not
involve the use of PBX or Centrex trunks.  

     175. In addition, the Colorado Commission is considering a proposal that would enable
rural LECs to receive numbers in thousands blocks by modifying their switches to query LNP-
capable switches ("Colorado Rural LEC Proposal").  Under the Colorado Rural LEC Proposal,
a small LEC could have, for example, only 400 telephone numbers assigned within the 0000-0999
block of an NPA-NXX, but it would have all 10,000 numbers associated with the NXX allocated
to it.  Since the numbers 1000-9999 associated with NXX would not be assigned, these numbers
could be released to the pool administrator for allocation elsewhere in the rate center.  The small
LEC's switch could be programmed to handle calls from its own subscribers to telephone numbers
in the 0000-0999 block that it retains, including vacant number treatment.  The switch could also
be programmed to direct calls initiated by the small LEC's own subscribers to telephone numbers
in the 1000-9999 number block (which contains nine thousand-number blocks) to an LNP-capable
switch, either to obtain the routing information so it could route the call itself, or to have the
LNP-capable switch route the call.  Calls coming to the LNP-capable switch to numbers that are
within the 0000-0999 number block would be sent to the small LEC's switch.  Calls to numbers in
the 1000-9999 number block would be routed using a query to the LNP database to determine the
appropriate LRN.  We seek comment on the Colorado Rural LEC Proposal, DID agreements,
NXX code sharing arrangements, and any other methods that would accomplish the goal of
enabling non-LNP-capable carriers to participate in or approximate the effect of pooling without
requiring them to develop LNP capability. 

     176. Finally, to the extent that non-LNP-capable carriers in a market are unable to use
an "alternative" pooling method not based on LNP, it will be necessary to continue allocating
numbers to these carriers in full NXX blocks while LNP-capable carriers in the same market may
draw smaller blocks of numbers from the pool.  This will require the establishment of a number
allocation method that does not discriminate unfairly in favor of either pooling participants or
non-pooling participants.  We seek comment on how to establish such an allocation method and
what its elements should be.  In particular, we seek comment on how requests for numbering
resources should be sequenced by the administrator to avoid unfair discrimination in favor of
either pooling participants or non-pooling participants.    

     D.   Pooling Implementation Issues
     
                    1.   Technical Issues
     
     177. Thousands-Block Number Pooling Standards.  For wireline service providers, the
Alliance for Telecommunications Industry Solutions (ATIS) T1S1.6 Working Group on Number
Portability (T1S1.6) has developed the technical requirements that define the switch and number
portability database requirements for thousands-block number pooling, within a rate area, using
the LRN method of number portability.  Among other things, this document specifies the
network prerequisites that must be met for number pooling to function properly using LRN
number portability.

     178. We seek comment on whether we should adopt the T1S1.6 proposed technical
requirements for thousands-block pooling as the standard for a national pooling architecture or, in
the alternative, whether we should direct the NANC to recommend technical standards for
thousands-block pooling once such standards have been adopted by the American National
Standards Institute (ANSI).  In addition, we seek comment on whether there are any technical
issues with respect to thousands-block number pooling that have not been identified, such as
potential impacts to private branch exchange equipment, or that remain to be resolved, and
whether it is necessary for the Commission to direct or request resolution of these issues.
     
     179. Public Safety Impacts.  Several entities have expressed concern about thousands-
block pooling's impact on the provision of E911 services, and the need for upgrades and changes
to E911 systems if pooling is implemented.  For instance, the Colorado Commission has identified
a potential problem if LNP, rate center consolidation, and number pooling are implemented
simultaneously.  The Colorado Commission is concerned that, as rate areas become consolidated
and more numbers are ported between service providers, there could be routing delays for, or
mishandling of, E911 calls.

     180. The National Emergency Number Association (NENA), however, in its comments
on the NANC Report, states that number pooling is a better option than other numbering resource
optimization methods, such as rate center consolidation or inconsistent rate centers.  In fact, the
impact of thousands-block pooling on E911 systems has been assessed by the 911 Subcommittee
of the Illinois Number Portability Workshop.  In addition, in Technical Requirements for
Number Pooling, T1S1.6 did not specifically identify any impacts on the provision of E911
service associated with the implementation of thousands-block pooling.  Significantly, however,
in Technical Requirements for Number Portability - Switching Systems, T1S1.6 recommends that
routing numbers to which E911 calls are translated not be ported.  This is because the call-back to
a ported number is handled best whenever the call-back is over a dedicated trunk between the
Public Safety Answering Point switch and the originating switch.

     181. We seek comment, then, on whether the NENA-recommended standards, as well
as the T1S1.6 recommended restriction on the porting of E911 routing numbers, are sufficient to
ensure the reliable provision of E911 service where thousands-block pooling is implemented.  If
commenters do not believe they are sufficient, we ask them to describe in detail what additional
measures the Commission should take to ensure that calls to E911 are completed accurately and
without delay.

                    2.   Administration

     182. Any nationwide implementation of thousands-block pooling will require detailed
guidelines governing its administration.  In the areas of administration of the NANP and LNP,
certain industry groups, particularly the INC and Committee T1S1, have drafted guidelines and
technical specifications that describe, in detail, the procedures to be followed both by
administrators and those carriers requesting NANP resources or subject to number portability
requirements.  We anticipate that a similar type of arrangement will exist in relation to
administration of thousands-block pooling.  Indeed, the INC has already drafted guidelines
relating to the functioning of the Pooling Administrator and entities requesting numbering
resources from the Pooling Administrator.  We seek comment on whether this arrangement
should be the model for thousands-block pooling administration.

     183. The INC Guidelines propose a pooling architecture in which a Pooling
Administrator functions essentially as another carrier, requesting numbering resources from the
NANP in order to maintain a sufficient inventory of thousands blocks for allocation to carriers
within a rate area.  Carriers desiring blocks of numbers within a rate area request those blocks
from the Pooling Administrator, rather than the NANPA.  We seek comment on whether this
general method of administration satisfies parties that may be taking numbers in thousands blocks
from a pool as well as those that continue to take whole NXXs, and, in particular, if this model
sufficiently addresses concerns about the neutral administration of the numbering resource.  

     184. Selecting a Pooling Administrator.  We seek comment on whether the NANPA
should serve as thousands-block Pooling Administrator or whether the Commission should seek
competitive bids in response to a request for proposal or requirements, as it did with respect to
NANP administration.  Parties recommending that the Commission seek competitive bids on
pooling administration should discuss the advantages of using the competitive bidding process and
the specific criteria to be used in selecting a Pooling Administrator.  Having determined that
thousands-block pooling may appropriately be considered a numbering administration function,
the NANC is currently assessing a proposal from the NANPA to add thousands-block pooling
administration to its present duties.  We tentatively conclude we should ask the NANC for a
recommendation regarding what entity should serve as the Pooling Administrator.  We seek
comment on whether the criteria used by the NANC to evaluate potential Pooling Administrators
adequately addresses concerns of the industry, state regulators, and the public.  If not, we invite
commenters to propose other criteria by which to judge potential Pooling Administrators. 

     185. Related to the question of who will recommend a potential Pooling Administrator
and under what criteria will potential applicants be judged is the matter of the relationship
between the Pooling Administrator and the NANPA and LNPA.  Although there were two
LNPAs initially, now all LNPA functions exist in one entity.  If the current NANPA is also
chosen as the Pooling Administrator, all nationwide numbering administration functions will be
concentrated in one entity.  We seek comment on concerns raised by this possible hegemony over
all nationwide number administration matters and whether we should seek a different entity to
serve as the Pooling Administrator.

     186. We also note that there may be certain advantages to simply adding pooling
administration functions to the NANPA and LNPA.  Thousands-block pooling administration
involves matters of central office code administration in that the Pooling Administrator requests
full NXX blocks from the NANPA as are necessary to maintain the inventory in the pools, but
relies on the LNP architecture that is administered by the LNPA.  Thus, because duties imposed
on the NANPA as it administers central office code assignments may be reduced as a result of
carriers requesting numbering resources from the Pooling Administrator, some cost savings may
be realized in that area.  We seek comment on the efficiencies that may be gained by allowing the
current NANPA and LNPA to serve as the Pooling Administrator, and whether these efficiencies
outweigh the concerns associated with the concentration of these duties in one entity.

     187. Reclamation of Thousands Blocks.  One aspect of pooling administration in
particular raises questions regarding the competitive impact of thousands-block pooling on
particular industry segments.  Both the NANC Report and the INC Number Pooling Report
contemplate a "donation" of thousands-blocks already assigned to a service provider to the
pool.  Because a service provider may not be using all of the numbering resources allocated to
it in a particular NXX code, donation of "uncontaminated" or lightly contaminated thousands-
blocks in the NXX code could add significant numbering resources to number pools within an
NPA.  The NANC and INC have proposed that carriers with thousands-blocks that are up to
10% contaminated should donate those blocks to a pool within a rate center.

     188. MCI WorldCom and Ad Hoc have stated that the 10% level will work to excuse
ILECs from having to contribute to the pool numbers from their "embedded base" of available
numbers.  Cox Communications states that there are relatively few thousands-blocks allocated
to ILECs that do not have some numbers assigned from them, and as a consequence, it is unlikely
that ILECs would return many blocks of numbers to a pool.  Cox also suggests that a
contamination level of 25% may be more appropriate than 10%.  We seek comment on whether
setting a 10% threshold contamination level will harm a particular segment of the industry.

     189. To compensate for the perceived competitive advantage in favor of ILECs,
MediaOne proposes that the contamination level for ILECs should be at least 25%, while 10% is
appropriate for CLECs.  MediaOne argues that this difference would help to ensure that ILECs
and CLECs contribute to the industry pool in an equitable way.  We seek comment on
MediaOne's proposed alternative.  In addition, we seek comment on network capacity and SCP
implications of setting a contamination level at 25%.

     190. Sequential number assignment.  Because a thousands-block pooling infrastructure
will likely require some time to implement, we seek comment on whether we should order some
form of sequential number assignment prior to the actual implementation of pooling.  By
sequential number assignment, we envision a requirement that carriers assign numbers within
individual thousands-blocks sequentially, and that, except where necessary to specific customer
needs, they fill or substantially fill each thousands block before beginning to assign numbers from
another block.  Sequential number assignment from within thousands blocks has the potential to
forestall other thousands blocks from becoming contaminated and thus ineligible for possible
donation to a pool prior to implementation of pooling in a given area.  Moreover, sequential
number assignment may improve carrier efficiency in utilizing numbering resources, regardless of
whether pooling is implemented. The INC Pooling Administration Guidelines require that prior to
the pooling implementation date, carriers will be required to protect thousands blocks that are less
than 10% contaminated.  BellSouth states that it supports voluntary sequential number
assignment in areas in which number pooling is being deployed on a trial basis.  The California
Commission states that it has required ILECs to assign numbers sequentially in certain areas.

     191. We seek comment in a number of areas regarding a possible requirement for the
sequential assignment of numbers.  Should sequential number assignment be limited to those areas
in which pooling would be required within a certain amount of time?  Should non-LNP capable
carriers be required to assign numbers sequentially in anticipation of a pooling mandate at some
future time?  Should any decision to require sequential number assignment be left to state
commissions, or are there consistency concerns that would be better addressed by adoption of a
nationwide standard?  What exceptions to a general requirement of sequential number assignment
would have to be put in place to assure a service provider could meet the needs of a large
customer or could respond to other types of customer requests or needs?  Would sequential
numbering cause undue burden to any particular industry segment, or create unnecessary
customer inconvenience?

     192. Finally, the Thousands Block Pooling Guidelines propose a nine-month inventory
of numbers in both the industry inventory and service provider inventory.  That is, the Pooling
Administrator will attempt to maintain thousands-blocks sufficient for a nine-month inventory,
and each service provider may maintain sufficient resources within a pool to last for nine
months.  We seek comment on whether these inventory levels are appropriate to assure
adequate access to numbering resources, while avoiding potential waste of the resource by
permitting numbers to lie unused for overly long periods of time.

                    3.   Cost Recovery 

     193. Federal/State Jurisdiction.  Because we conclude that thousands-block number
pooling is a numbering administration function, we tentatively conclude that section 251(e)(2)
authorizes the Commission to provide the distribution and recovery mechanism for both intrastate
and interstate costs of number pooling.  In reaching this conclusion, we note that section
251(e)(2) expressly and unconditionally grants the Commission authority to ensure that carriers
bear the costs of numbering administration on a competitively neutral basis.  Section 251(e)(2)
states that carriers shall bear the costs of numbering administration "as determined by the
Commission," and does not distinguish between numbering administration costs incurred in
connection with intrastate calls and costs incurred in connection with interstate calls.  Thus, we
tentatively conclude that section 251(e)(2) addresses both interstate and intrastate matters and
overrides section 2(b)'s reservation of authority to the states over intrastate matters.  We seek
comment on these tentative conclusions.   

     194. We tentatively conclude that an exclusively federal recovery mechanism for
number pooling will enable the Commission to satisfy most directly its competitively neutral
mandate, and will minimize the administrative and enforcement difficulties that might arise were
jurisdiction over numbering administration divided.  Further, such an approach obviates the need
for state allocation of the shared costs of the number pooling administration, a task that would
likely be complicated by the multistate nature of the databases to be used for thousands-block
pooling implementation.  Under the exclusively federal numbering administration cost recovery
mechanism, we tentatively conclude that incumbent LECs' numbering administration costs,
including costs incurred as a result of number pooling, will not be subject to jurisdictional
separations.  Instead, we will allow incumbent LECs to recover their costs under the federal cost
recovery mechanism established in our final order in this proceeding.  We seek comment on these
tentative conclusions.

     195. Competitively Neutral Requirement.  Because we tentatively conclude that
thousands-block pooling falls within the scope of numbering administration under section
251(e)(1), we also tentatively conclude that section 251(e)(2) requires that the costs of
thousands-block pooling implementation be borne by all telecommunications carriers on a
competitively neutral basis.  Our conclusion is based on the plain language of the statute
together with the underlying goal of section 251(e)(2) to prevent the costs of numbering
administration and number portability from themselves undermining competition.  Parties that
argue that the Commission has authority to exclude a class or classes of carriers from the costs of
thousands-block pooling implementation should provide a detailed discussion of their position,
including applicable statutory and regulatory authority.  Commenters also should identify which
class or classes of carriers should be excluded and why.
  
     196. Further, we tentatively conclude that, like number portability cost recovery,
principles for both the distribution and the recovery of thousands-block pooling implementation
must be competitively neutral.  We tentatively conclude that an interpretation of section
251(e)(2) that permits the Commission to oversee both the distribution and the recovery of the
costs of thousands-block pooling implementation best achieves the policy goal of ensuring the
numbering administration costs overall, including thousands-block pooling costs, are not at odds
with the pro-competitive goals of the Act.  If the Commission ensured the competitive neutrality
of only the distribution of costs, carriers could effectively undo the competitively neutral
distribution scheme by recovering their costs only from other carriers.  Moreover, we tentatively
conclude that the two-part test adopted by the Commission to determine whether carriers will
bear the interim and long-term costs of number portability on a competitively neutral basis
should be applied here.  Specifically, the mechanism for recovering the costs of thousands-
blocking pooling:  (a) should not give one provider an appreciable, incremental cost advantage
over another, when competing for a specific subscriber; and (b) should not have a disparate effect
on competing providers' abilities to earn a normal return.  We seek comment on these tentative
conclusions.  Parties that oppose our conclusions should propose specific alternatives.  

     197. Cost categories.  We tentatively conclude that thousands-block pooling
administration involves three categories of costs:  (1) costs incurred by industry as a whole (such
as NANP administrator costs, and enhancements to the existing number portability regional
database system); (2) carrier-specific costs directly related to thousands-block pooling
implementation (such as enhancements to carriers' SCP, LSMS, SOA, and OSS systems); and
(3) carrier-specific costs not directly related to thousands-block pooling implementation (such as
unrelated upgrades to carriers' networks that happen as a result of thousands-block pooling
implementation).  We seek comment on these cost categories, and ask commenters to identify
other categories of costs, if any, involved in thousands-block pooling implementation.  To the
extent other costs are identified, commenters should discuss  who will incur such costs, for
example, LECs, IXCs, CMRS providers, or others.

     198. Although the NANC Report recommended that cost allocation and cost recovery
issues be addressed by the appropriate regulatory agency and Bell Atlantic, OPASTCO, SBC,
and Teligent recommend that the Commission adopt cost recovery methods for any
implementation of thousands-block pooling, few parties commented on the costs associated
with implementation of thousands-block pooling.  SBC estimates that its general costs to
implement thousands-block pooling will range from $160 to $190 million.  U S West estimates
that its initial general implementation costs for 1999 will be in excess of $65 million, including
changes to its OSS, network modifications, and the creation of a new administrative process. 
We seek further detailed estimates of the costs of thousands-block pooling, and ask that
commenters separate any estimates by category of cost.  In addition, we seek comment on the
methodology used to develop these and other cost estimates, whether other parties have
developed similar cost estimates, and whether the cost estimates account for avoided costs, such
as savings from delay in the implementation of an expanded NANP.  In particular, we also
encourage comments from parties with knowledge of the costs incurred to implementing
thousands-block pooling initiatives in the states of Illinois and New York.    

     199. We tentatively conclude that 251(e)(2)'s competitively neutral requirement applies
only to the allocation and recovery of thousands-block pooling implementation costs, that is,
shared industry costs and carrier-specific costs directly related to the implementation of
thousands-block pooling, and not to carrier-specific costs not directly related to thousands-block
pooling implementation (network upgrades).  Based on the plain language of the statute, we
tentatively conclude that costs not directly related to thousands-block pooling implementation, are
not costs of thousands-block implementation.  As with number portability, we expect costs not
directly related to providing number pooling to encompass a wide range of costs that carriers
incur to provide telecommunications functions unrelated to number pooling.  Because we
tentatively conclude that costs not directly related to providing number pooling are not subject to
section 251(e)(2), we also tentatively conclude that the Commission is not required to create
special provisions by which those costs may be recovered and carriers may recover those costs in
any lawful manner consistent with their obligations under the Act.  We seek comment on our
tentative conclusions.   

     200. Allocation and Recovery of Shared Industry Costs.  We tentatively conclude that
the shared industry costs of thousands-block pooling implementation should be recovered through
the existing NANPA formula.  We note that the NANC Report reached the same conclusion. 
We seek comment on this tentative conclusion.  

     201. The shared industry costs of thousands-block pooling implementation include, for
example, modifications to the number portability regional databases to support thousands-block
pooling.  We tentatively conclude that a competitively neutral allocation of shared industry costs
of thousands-block pooling implementation should allocate costs among all telecommunications
carriers in proportion to each carrier's intrastate, interstate and international end-user
telecommunications revenues.  We conclude that the allocation among carriers based on end-user
revenues will fulfill section 251(e)(2)'s requirement that "[t]he cost of establishing
telecommunications numbering administration arrangements . . . shall be borne by all
telecommunications carriers on a competitively neutral basis as determined by the Commission." 
 We also tentatively conclude that once a telecommunications carrier has been allocated its
portion of the shared costs of thousands-block pooling implementation, the carrier shall treat that
portion of its costs as a carrier-specific cost directly related to thousands-block pooling
implementation.  We seek comment on these tentative conclusions, and ask whether other
methods would allocate shared industry costs on a more competitively neutral basis.  Commenters
that oppose our tentative conclusions should propose specific alternatives.

     202. Further, we seek comment on whether the Commission has the authority to
allocate the shared costs of thousands-block pooling implementation only to those carriers that
receive thousands-blocks of numbers.  For example, if incumbent LECs recover their costs of
thousands-block pooling implementation through rate-of-return or price-cap adjustments, we seek
comment on whether IXCs would be charged twice for the shared industry costs of thousands-
block implementation -- once when the IXCs incur an allocated portion of the shared industry
costs, and again when incumbent LECs recover their shared industry costs through access
charges.  We also ask commenters to address the impact of allocating shared industry costs only
to carriers that receive numbering resources.  Commenters should discuss whether such an
allocation scheme meets the competitively neutral requirement of section 251(e)(2).  

     203. Allocation and Recovery of Carrier-Specific Costs Directly Related to
Thousands-Block Pooling Implementation.   Carrier-specific costs directly related to thousands-
block pooling implementation include, for example, updating carriers' LSMS and interfaces to
support thousands-block pooling.  We tentatively conclude that carrier-specific costs directly
related to thousands-block pooling implementation could be allocated in at least two ways:  (a)
individual carriers bearing and recovering their own costs of thousands-block pooling
implementation; and (b) carriers adding their carrier-specific costs directly related to thousands-
block pooling implementation to the shared industry costs.  We tentatively conclude that it is
competitively neutral for carriers to bear and recover their own carrier-specific costs directly
related to thousands-block pooling implementation.  We seek comment on these tentative
conclusions.
 
     204. Recognizing consumers' sensitivity to end-user charges, we tentatively conclude
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 pooling implementation
through a federal charge assessed on end-users.  Instead, we tentatively conclude that incumbent
LECs subject to rate-of-return or price-cap regulation should recover their carrier-specific costs
directly related to thousands-block pooling implementation through the existing cost recovery
mechanisms of rate-of-return or price-cap adjustments.  We also tentatively conclude that
carriers not subject to rate regulation -- such as competitive LECs, CMRS providers, and non-
dominant IXCs -- may recover their carrier-specific costs directly related to thousands-block
pooling implementation in any lawful manner consistent with their obligations under the Act. 
We seek comment on these tentative conclusions, and ask whether they meet section 251(e)(2)'s
requirement that numbering administration costs must be borne on a competitively neutral basis.

     205. Price cap regulation may affect carriers' ability to recover their costs under the
methods described above, or other possible methods, because it restricts the flexibility with which
price cap carriers may price various services.  We seek comment, therefore, on how price cap
carriers should be permitted to recover shared industry costs of thousands-block pooling
implementation, carrier-specific costs directly related to thousands-block pooling implementation,
and carrier-specific costs not directly related to thousands-block pooling implementation.  In
particular, we seek comment on whether price cap carriers should be permitted to treat
exogenously any of the above thousands-block pooling implementation cost categories.  We also
seek comment on whether these costs, alternatively, should be placed in a new price cap basket or
an existing basket.  If parties recommend that such costs should be placed in an existing basket,
we ask parties to identify which basket would be most appropriate.

     206. As an alternative to recovering costs based on end-user revenues, as proposed
above, we seek comment on whether pooling costs should be recovered through a per-number
charge.  Specifically, we seek comment on whether this approach may have advantages over a
revenue-based cost recovery mechanism.  For example, would such an approach allocate costs in
proportion to quantity of numbering resources being held by each carrier and thus require carriers
with larger quantities of numbering resources to make larger contributions to pooling costs than
carriers with fewer resources?  In addition, we seek comment on whether basing cost recovery on
the quantity of numbers being held would discourage carriers from maintaining excessively large
quantities of non-revenue generating numbers while rewarding carriers that efficiently use their
numbering resources.  

     207. We also seek comment on whether tying cost recovery for pooling to the quantity
of numbers held by each carrier would provide economic incentives to participate in the pooling
process by donating excess blocks back to the pool.  We seek comment on whether holding spare
numbers creates a cost for such carriers for which they have no offsetting revenue and whether
each carrier would balance the benefit of holding a block of unused numbers against the costs
associated with cost recovery.  We seek comment on whether this method of cost recovery would
provide an incentive to return spare blocks of numbers for which there is no foreseeable need, and
ask whether this method meets section 251(e)(2)'s competitively neutral requirement.  We also
seek comment on other recovery methods for thousands-block pooling implementation costs.

     208. Finally, as discussed in section V.E, above, one possible solution to the numbering
crisis is for us to simply establish thresholds for efficient use of numbering resources, but leave the
choice of method for achieving these thresholds to individual carriers.  Thus, we would require
carriers to achieve certain utilization levels for their numbering resources within a given area, but
we would not mandate that they implement any particular technical solution, such as participating
in thousands-block number pooling, provided the mandatory threshold levels are achieved.  If we
allow carriers to choose the method for achieving compliance with the mandatory threshold
levels, we tentatively conclude that carriers would bear their own implementation costs, whether
they meet the mandatory threshold levels through thousands-block pooling implementation or by
some other means.  We seek comment on this tentative conclusion, and ask whether it complies
with section 251(e)(2)'s competitive neutrality requirement.

     209. Allocation and Recovery of Carrier-Specific Costs Not Directly Relating to
Thousands-Block Pooling Implementation.  We tentatively conclude that, whether or not the
NANPA formula covers the costs of thousands-block pooling implementation, carrier-specific
costs not directly related to thousands-block pooling implementation should be borne by
individual carriers as network upgrades; as such, carrier-specific costs not directly related to
thousands-block pooling implementation are not subject to the competitively neutral requirements
of section 251(e)(2).  We seek comment on this tentative conclusion, and ask if there are
alternative methods for recovering this type of cost.

     210. State Allocation and Recovery Mechanism.  As noted above, we tentatively
conclude the determination of whether to implement thousands-block pooling in a given area may
be made in several ways.  We tentatively conclude that the states' role in deciding on a cost
distribution or recovery mechanism for thousands-block pooling implementation will depend on
who decides whether to implement pooling in a given area.  If we simply order that LNP-capable
carriers engage in thousands-block number pooling in the largest 100 MSAs, we tentatively
conclude that states must follow the cost distribution and cost recovery mechanism adopt by the
Commission.  If, on the other hand, we delegate to state utility commissions the decision-making
authority as to whether to implement thousands-block pooling in any area, we tentatively
conclude that we also will delegate to states the authority to implement a cost distribution and
recovery mechanism, subject to our principles of the competitively neutral mandate of section
251(e)(2).  Finally, if we allow state utility commissions to make the decision as to whether to opt
in or out of a nationwide thousands-block pooling architecture on a regional basis, we tentatively
conclude that we also will allow state utility commissions to choose whether to opt in or out of
our cost distribution and recovery mechanism.  If a state commission elects not to make the
decision as to whether an area should opt in or out of a nationwide thousands-block pooling
architecture, and we choose another entity to make the decision, we tentatively conclude that the
state must follow our cost distribution and recovery mechanism.  We seek comment on these
tentative conclusions.

                    4.   Transition Issues

     211. In commenting on the NANC Report, several parties suggested that, although ITN
pooling constituted the most efficient manner in which to allocate numbering resources, due to the
difficulty in implementing it both in terms of time and cost, thousands-block pooling should be
implemented in the near term with a transition to ITN pooling to follow in the future.  Other
parties assert that thousands-block pooling is not a "stepping stone" toward ITN pooling.

     212. Although we have tentatively concluded not to pursue ITN pooling, we are
interested in further study on the use of ITN pooling as a numbering resource optimization
measure, as it appears to offer the greatest potential for eliminating, or nearly eliminating,
"stranded" numbers that may be allocated to carriers in either an NXX code or a thousand-block
of numbers, but are not assigned to individual customers.  Because of the potential for ITN
pooling to offer a more efficient use of numbering resources than thousands-block pooling, we
seek comment on the possibility of migrating from a thousands-block pooling regime to an ITN
pooling regime.

     213. As a threshold matter, we seek comment on whether the benefits of moving to ITN
pooling from thousands-block pooling outweigh whatever costs may be involved.  We are also
concerned that the implementation of thousands-block pooling not hinder a possible migration to
ITN pooling.  Therefore, we seek comment on what measures can be taken in implementing
thousands-block pooling that could ease a transition to ITN pooling.  We also seek comment on
whether the costs of building thousands-block pooling systems that may allow for an easier
transition to ITN pooling are not outweighed by the benefits of doing so, in terms of future cost
savings in implementing ITN pooling.

     214. We also seek comment on whether UNP can be used simultaneously with
thousands-block pooling, or whether special considerations must be met for the two measures to
coexist.  If it appears that the costs of allowing UNP and thousands-block pooling to coexist
outweigh the benefits, we seek comment on whether we should allow carriers to port numbers by
mutual agreement among themselves prior to a mandate of pooling, or in areas in which pooling
may never be mandated.

               E.   Carrier Choice of Numbering Optimization Strategy
     
     215. In addressing potential numbering optimization solutions outlined above, we
believe it is also important to consider whether there are incentive-based mechanisms that could
be used to address the numbering crisis without the need for more intrusive or burdensome
regulatory mandates on carriers.  In Section IV, among other things, we sought comment on
whether carriers should be required to meet certain utilization thresholds to obtain additional
numbering resources.  In preceding subsections of Section V, we sought comment on whether
carriers should further be required to implement technical measures, both LNP-based and non-
LNP based, that would promote more efficient allocation and use of numbering resources.

     216. Here, we seek comment on whether we should simply establish thresholds for
efficient use of numbering resources, but leave the choice of method for achieving these
thresholds to individual carriers.  Under this alternative, as discussed in Section IV, we would
require carriers to achieve certain utilization levels for their numbering resources within a given
area, but we would not mandate that they implement any particular technical solutions, such as
thousand-block number pooling, so long as they achieved the mandatory levels.  Thus, carriers
would be able to meet prescribed utilization thresholds by choosing the optimization method or
methods that are most suitable to their situation, including participation in number pooling, or
simply returning excess codes.  We particularly encourage commenters to address whether and to
what extent these alternatives would further the objectives of this proceeding. 

     217. The principal advantage to this proposal is that it encourages carriers to arrive at
their own solutions to the problem of number exhaust rather than requiring the Commission to
select and impose regulatory requirements that may prove more burdensome or less beneficial
than anticipated.  If, over time, certain methods of numbering optimization prove more effective
than others, or if certain methods or combinations of methods suit local conditions better than
others, a "carrier choice" alternative could give carriers greater flexibility to adopt whatever
method works best.  This alternative also limits the need for regulatory intervention by the
Commission:  although the Commission would be responsible for enforcing carriers' utilization
obligations, the manner in which carriers fulfilled those obligations would be left largely up to the
carriers themselves.  

     218. Allowing carriers to choose among numbering optimization methods also raises
certain issues, however.  One potential concern is that carrier choice could reduce the
effectiveness of certain numbering optimization methods because fewer carriers would be required
to implement them.  For example, if carriers with high utilization rates elected not to participate in
thousand-block number pooling, they would be unable to draw available thousand-blocks from
number pools formed by carriers that have opted to pool because of their low utilization rates. 
Thus, even though high-utilization carriers would be unlikely to contribute numbers to thousand-
block number pools in any event, their drawing additional numbering resources in the traditional
fashion could leave many potential numbers, on an absolute basis, stranded and unavailable for
assignment by other carriers.  We seek comment on the degree to which carrier choice could
reduce the potential effectiveness of certain optimization strategies, particularly thousands-block
number pooling.

     219.      Another potential concern on which we seek comment is how to establish an
appropriate utilization rate that is competitively neutral to all participants in the
telecommunications marketplace that require numbering resources.  We seek comment on what
an appropriate rate would be.  Setting a relatively high rate applicable to all carriers would
presumably create greater incentives for carriers to increase the efficiency of their use of
numbering resources, and would likely lead to broader participation in number pooling, including
participation by carriers that have already achieved comparatively high utilization rates.  On the
other hand, setting a uniform rate at too high a level, particularly at the outset, could impose
undue burdens on carriers and limit the flexibility of carriers to choose numbering optimization
methods that are most suitable to their particular circumstances.  This is particularly true of
competitive LECs (CLECs), which typically have low utilization rates given their nascency in the
marketplace compared to the more established ILECs.

     220.      One way to balance these considerations might be to start with a utilization rate
that is reasonably consistent with current levels of usage and adjust it upward over time.  This
would give carriers more flexibility to plan their strategies for using numbering resources more
efficiently, and to increase their efficiency on a gradual basis.  Another possibility might be to
establish differing utilization rates for different classes of carriers.  We question, however,
whether such a system would be competitively neutral.  Therefore, we seek comment on whether
a utilization rate should apply across the board, or whether different rates could be set depending
on the class of carrier.  If we mandate a uniform utilization rate that imposes a disparate impact on
different types of carriers, we seek comment on whether this system would be competitively
neutral.  Alternatively, we seek comments on whether mandating different utilization rates for
different classes of carriers would be competitively neutral.  Finally, we invite comment on the
feasibility of equalizing utilization rates among the various classes of carriers if those rates start
out at different thresholds.

     221. We seek comment on the implementation of this approach, including how to
determine an appropriate initial utilization rate and how quickly the rate should rise over time. 
Because gathering baseline data on current utilization rates is critical to the success of this
proposal, we also seek comment on how quickly this proposal could be implemented, how quickly
we could reasonably expect carriers with low utilization rates to meet successively higher
thresholds, and how the timetable for such increases would affect their likely choices of
numbering optimization methods.  We also seek comment on the penalties for operating in an area
without having achieved a threshold fill rate.

      222.     Another variable to consider as part of the carrier choice alternative is the relevant
area in which utilization rates would apply and the geographic basis on which they would be
calculated.  We seek comment on whether utilization rates should be based on individual NXXs,
rate centers, NPAs, states, or the entire region or regions served by a service provider.  One
advantage of setting a larger area is that it encourages high levels of number utilization across
many different boundaries.  Another is that it may encourage rate center consolidation.  Setting a
smaller area as the relevant region, however, may be more feasible for carriers serving vastly
different regions, and could also take into account differences between regions, such as the
number of competing carriers in an area and the number of rate centers in an area.  In addition, we
seek comment on whether utilization rates should vary based on the likely overall demand for
numbers.  For example, a lower utilization rate -- or no requirement at all -- may be appropriate in
less densely populated areas of the country where demand for numbers is not high and area code
relief may not required for years.  Similarly, in areas where there are few competing carriers that
require numbering resources, there might be no useful purpose to establishing utilization
thresholds even under a carrier choice regime. Thus, we seek comment on how to adapt the
carrier choice alternative to variable local market conditions. 

     223. We recognize that the carrier choice alternative may serve as a substitute for some
of the other optimization measures outlined above, and also as a supplement to other measures. 
For example, it appears that for the carrier choice plan to function effectively, certain measures,
like the reporting and utilization thresholds outlined above, would need to be put in place prior to
implementing carrier choice.  Other numbering optimization measures, such as pooling, may be
substituted, however, by the carrier choice plan.  That is, while carrier choice requires threshold
fill levels be met, it does not necessarily result in a mandate of thousands-block pooling for all
carriers.  We seek comment on what measures outlined above would be a predicate for enacting a
carrier choice regime.  We also seek comment on the impact that adopting a carrier choice
alternative would have on cost recovery for numbering resource optimization, as discussed in
Sections IV.H and V.D.3.  

     224. Finally, we seek comment on the role of the Commission and state authorities if
this alternative were adopted.  Because this approach would largely leave number optimization
solutions up to individual carriers, regulation of numbering at both the state and federal level
would presumably be less intrusive than if these solutions were imposed on a mandatory basis. 
Nevertheless, we must still consider the respective roles of federal and state authority in
implementing this alternative.  We seek comment on whether carrier choice should be governed
by federal standards or whether we should delegate authority to the states to establish utilization
rates and timetables that would apply to carriers under their jurisdiction.  We also seek comment
on the respective roles that this Commission and the states should play in sanctioning carriers that
do not achieve the requisite utilization rates.

                       VI.  PRICING OPTIONS

     225. An alternative approach for improving the allocation and utilization of numbering
resources would be to require carriers to pay for the numbering resources that they request or
receive. This approach could be used in isolation or in combination with the administrative and
numbering optimization approaches discussed in previous sections.  Below, we seek comment on
both the theoretical and practical issues related to using pricing to allocate optimally numbering
resources.

     226. Unlike most other resources used by the telecommunications industry, numbering
resources are administratively allocated rather than sold -- that is, they are priced at zero.  The
poor utilization of numbering resources that we have experienced in recent years may be in part
due to administrative allocation rules that fail to recognize the economic value of numbers.  If a
pricing mechanism for allocating numbering resources were instituted, carriers would likely seek
ways of using numbers more efficiently.  We recognize that, in the short term, it is probably not
feasible to replace our existing numbering allocation mechanism with a pricing allocation
mechanism, but we nonetheless believe it is important to consider price-based mechanisms as a
possible long-term alternative to administrative numbering allocation and as a supplement to or
substitute for mandatory numbering optimization measures such as pooling and rate center
consolidation. 

     227. As a matter of business and economics, telecommunications carriers request NXX
codes when they expect the incremental benefits of having an additional code to exceed the cost
of acquiring that code.  At the current price of zero, even inconsequential benefits can justify a
request for an additional NXX code.  Moreover, carriers have little incentive to seek ways of
improving the utilization of their current pool of numbers.  Changing the method of allocating
numbers from one that relies on administrative rules to one that is price-based can provide needed
incentives to foster the efficient utilization of numbers.  As the cost of holding numbering
resources increases, carriers will seek ways of reducing their numbering resource costs.  For
example, they may look for ways of increasing the utilization of existing stocks of numbers by
engaging in number pooling and other optimization measures.  These activities will decrease the
demand for new NPAs and extend the life of the NANP.  In areas where numbering resources are
being rationed, i.e., NPAs that are in jeopardy, a pricing system could ensure that remaining
numbering resources are allocated to those carriers and end users that need and value them the
most. 

     228. We seek comment, generally, on the legal issues involved in establishing a  pricing
mechanism for numbering resources.  Section 251(e)(2) of the Act provides that the costs of
numbering administration arrangements and number portability shall be borne by carriers on a
competitively neutral basis as determined by the Commission.  We seek comment on whether
this delegation of statutory authority to the Commission is sufficiently broad to allow us to
establish a pricing mechanism that would be based on the market value of numbering resources to
carriers, or whether its scope is limited to recovery of administrative costs related to numbering
administration.  We also seek comment on whether we have general authority to establish price-
based mechanisms for number allocation based on our plenary jurisdiction over numbering issues
in the United States under section 251(e)(1) of the Act.  In the alternative, if necessary, should
we seek such authority? 

     229. Assuming that we have statutory authority to establish a pricing mechanism for
numbering resources, we seek comment on whether there are any public policy reasons not to do
so.  For example, could we achieve increased efficiency in numbering usage through refinements
and reform of existing administrative allocation mechanisms?  In particular, we seek comment on
arguments that have been raised against using prices to allocate numbering resources.  One such
argument is that numbers are a public resource that can not be owned, and that establishing a
pricing mechanism would turn numbers into a private commodity.  We agree that numbers are a
public resource, although this is not necessarily an argument against requiring payment for their
use, much as payments are required for other public resources, including radio spectrum and
public lands.  Consequently, the charges we envision for numbering resources would be more akin
to license or rental arrangements rather than outright ownership of numbers.  We seek comment
on whether a license-type arrangement would be consistent with our long-held view that numbers
are a public resource.  If we were to permit a charge for numbering resources, should such a
charge be monthly, annual, or multi-year?  We also seek comment on whether a two-tier pricing
system would be preferable.  Under a two-tier pricing system we envision a flat charge and
variable charge for every NXX code.  The purpose of the flat charge would be to discourage
carriers from requesting more numbers than they need.  Without such a charge, carriers may have
the expectation that they could return excess numbers to the NANPA without incurring material
costs.  We seek comment on these observations.

     230. Another consideration in determining whether to establish prices for numbers is
that the added cost and administrative burden to carriers may inhibit competitive entry if it
imposes a disproportionate burden on new entrants.  We recognize that requiring carriers to pay
for numbers would impose costs on all carriers, but seek comment on whether these costs might
pose a particular challenge for new entrants that require numbering resources simply to establish a
presence in a market.  To assess this burden fairly, however, one must compare it to the societal
costs imposed on carriers and subscribers by the current allocation system, including the potential
impact on competitive entry in markets that are facing or will soon face numbering exhaust.  We
believe that, even if some carriers will have more difficulty than others paying a market-based
price for numbers, this outcome does not necessarily mean that the use of a pricing mechanism
will be discriminatory or anti-competitive.  To the contrary, so long as there are no distortions in
the market, the pricing of numbering resources should be competitively neutral.  In addition,
pricing numbering resources may actually aid competitive entry by discouraging carriers from
amassing excessively large inventories of numbers, thereby ensuring that an adequate supply of
numbering resources is available to all service providers.  We seek comment on these issues, and
on what measures would be needed to ensure competitive neutrality in using a pricing mechanism
to allocate numbering resources.

     231. We also seek comment on the possible components of a pricing mechanism for
allocating numbers.  There appear to be two basic approaches for setting a "price" for numbering
resources:  administratively determined pricing and market-based pricing.  An administratively
determined pricing system could, for example, be based on a traditional cost-based pricing
mechanism, where the "price" of numbering resources would be limited to levels that are required
to recover industry related numbering costs.  Alternatively, it could be based on total societal
costs.  A market-based mechanism, on the other hand, permits prices to be determined by both the
supply and demand for numbering resources.  As discussed in more detail below, the rate of
increase in the supply of numbers, for example, could be set based on achieving a prescribed life
for each NPA and the market could then be permitted to determine the price for each NXX
code. Depending on market conditions, such market-based prices can be higher or lower than
they would be under an administratively determined pricing system.  

     232. With respect to administratively determined pricing approaches, a traditional cost-
based pricing mechanism would focus on the costs incurred by the telecommunications industry in
rolling out numbering resources, including costs associated with reprogramming switches and
purchasing new equipment.  Prices based on cost recovery, however, exclude any consideration of
the costs imposed on the rest of society when new numbers are rolled out.  These costs range
from those associated with changing business cards and stationery to those associated with NANP
exhaust.  Since the societal cost of numbering exhaust should exceed the direct industry costs
of activating individual NPAs, pricing based on traditional cost recovery may result in too low a
price to encourage efficient conservation of numbers.  For this reason, we believe that a more
expansive definition of cost must be used if we were to adopt an administratively determined
pricing mechanism.  Our view is supported by the NANC, which has stated that the goal of
national numbering optimization policy should be to minimize total societal costs and impacts. 
We seek comment on the relative advantages and disadvantages of using an administratively
determined pricing mechanism for numbering resources.  More specifically, we seek comment on
the types of costs that should be recovered.  For example, commenters should address whether
prices for numbers should be set to recover the cost of implementing a new NPA or the cost of
expanding the NANP, as well as how these types of costs can best be estimated.  We also seek
comment on whether a traditional cost-based system can yield prices that are sufficient to
encourage carriers to utilize numbers efficiently and what should be done if there is more demand
for numbering resources than there is available supply at the administratively set price.  

     233. Under a market-based approach, on the other hand, prices could be set by an
auction-like process in each market and would vary from one time period to another and from one
market to another depending on the supply and demand conditions in each market.  We seek
comment generally on how such a market-based pricing mechanism could be structured and
implemented.  We also seek comment on whether a market-based pricing mechanism can be
designed to reflect fully the total private and societal cost of numbering resources.  As we
indicated above, the costs associated with numbering exhaust in a particular NPA extend beyond
the costs incurred by industry, end users, and state commissions in that specific location.  Because
there are a finite number of area codes in the ten-digit NANP, each area code that is activated
leaves one less that could be used in another part of the country, or in the other countries that
participate in the NANP.  Thus, a properly designed market-based pricing mechanism should take
into account all societal costs, including the cost of NANP exhaust.  

     234. We believe one way of recognizing and addressing the societal cost of eventual
NANP exhaust would be to prescribe a life for NPAs and to release NXX codes at a rate that
corresponds to this life.  The price of NXX codes could be increased to reflect higher societal
costs by lengthening the expected lives of NPAs or could be reduced to reflect lower societal
costs by shortening prescribed lives.  We request comment on whether controlling the release of
NXX codes in each market provides a reasonable mechanism for reflecting all relevant societal
costs associated with numbering resource use.  Commenters are asked to identify other
approaches that could be used to ensure that a market-based pricing system reflected the full
societal cost of numbering resources.

     235. By permitting the price of numbering resources to float depending on the relative
supply and demand for numbers in each market, carriers will have an incentive to  use newly
activated numbers, as well as previously assigned numbers efficiently.  We seek comment on the
types of procedures and safeguards that would have to be employed for a market mechanism to
operate efficiently and in a non-discriminatory manner.  For example, how could we prevent the
price of NXX codes from fluctuating widely from month to month in the same market or rising to
levels that might discourage competitive entry?  We also seek comment on whether and how
previously assigned numbers should be priced.  Efficiency would require that all numbers, whether
previously assigned or currently available for assignment, reflect their current market value. 
Otherwise, there will be little incentive for carriers to improve their utilization of existing stocks
of numbers.  Moreover, incumbent carriers would have a distinct competitive advantage over new
entrants if they had large stocks of numbers for which they did not have to pay the current market
price.  We also seek comment on whether a secondary market for numbers should be permitted. 
We believe that this would facilitate improved use of existing stocks of numbers and would
facilitate the most efficient use for all numbers.   

     236. In spite of the differences between administratively determined and market-based
pricing mechanisms, implementation of both must begin with a proper definition of the geographic
area(s) in which the prices will apply.  For an administratively determined pricing system, the
geographic area will be determined by a definition of which costs will be reflected in the price for
numbers.  In a market-based pricing system, the area in which carriers compete for available
numbering resources can be used to define a single market.  Commenters are requested to address
the above distinction and provide suggestions on how geographic areas under each mechanism
should be defined.  Our initial impression is that the area covered by each NPA represents a
separate geographic area under both mechanisms. We note that NXX codes can be located
anywhere within the NPA from which they are assigned but cannot be moved between NPAs. 
Thus, NXX codes in different NPAs logically could have different prices because they have
different cost and demand characteristics.  NXX codes in Wyoming, for example, can be expected
to have a different price than NXX codes from a New York City or Long Island area code. 
Alternatively, the geographic area could be defined as broadly as the nation or as narrowly as a
rate center.  We seek comment on the appropriate geographic area for administratively
determined or market-based pricing mechanisms and whether this market should be defined
broadly or narrowly.

     237. If we were to adopt either an administratively determined or a market-based
pricing mechanism, we seek comment on what should be done with revenues generated by this
type of allocation system.  One possibility would be to use the funds primarily to offset all costs
associated with numbering such as administration, pooling, and rate center consolidation. With
respect to rate center consolidation, revenues could be used to cover all transitional costs incurred
by local exchange carriers, subscribers, Public Safety Answering Point service providers, and
others.  Another possibility is that we could substitute numbering revenues for other funds used to
finance existing telecommunications programs.  It is possible, however, that Congress will require
all funds that are collected to be turned over to the U.S. Treasury.  

     238. We recognize that adopting an administratively determined or market-based
allocation mechanism for numbering resources raises significant transitional issues that could
adversely impact some carriers early on. Specifically, carriers would have to review their
numbering use practices and adjust them to take into account an explicit cost for these resources. 
If we were to adopt such a mechanism, we seek comment on what a feasible time frame for
implementing it would be, and whether this decision should affect our thinking about number
optimization methods discussed elsewhere in this Notice that could be implemented in the interim. 
We believe that gradual implementation of a price-based allocation mechanism would be
preferable to a flash-cut change because this would allow carriers time to make necessary changes
in institutional arrangements and/or implement procedures that encourage efficient numbering
resource use. 

     239. Therefore, we seek comment on what types of transitional pricing mechanisms and
transitional safeguards could be used during a gradual implementation of either an administratively
set or market-based pricing mechanism.  For an administratively set pricing mechanism, we could
establish a low initial price designed to recover a specified portion of costs and over time
gradually increase that price to recover all relevant costs.  For a market-based pricing system, we
could set an initial price cap at the average cost of activating a new NPA in the existing NANP. 
That cap could be gradually increased until it approximated the average cost of activating a new
NPA in an expanded NANP.  We also seek comment on how long such caps should be kept in
place.  One possibility is to permanently retain a cap based on the long run average cost of
activating a new NPA in an expanded NANP.  Alternatively, we could gradually move away from
any cap.  We seek comment on the use of a cap to limit prices during the  transition, how we
should set the cap, and whether the cap should be permanent.  One of the problems with setting a
cap is that if it is set too low, demand for numbers may exceed supply at the capped price and
administrative allocation controls such as rationing will be also required.  We seek comment on
the procedures we might adopt to address or avoid those situations.  

     240. Finally, we have previously suggested that synergies exist between establishing a
price for numbers and number conservation measures.  We seek comment on the potential
synergies between a price-based allocation system for numbers and certain of the other number
optimization measures discussed in this Notice.  We believe that charging for the use of numbers
would improve the effectiveness of several of the mechanisms contained in this Notice and that
optimization measures such as number pooling and rate center consolidation, in turn, would make
a price-based allocation system more effective.  For example, pooling would reduce the size of the
number blocks that a carrier would need to acquire in order to establish a service footprint,
thereby making the numbers more affordable to small or new entrants and promoting competition. 
We request commenters to indicate which of the other numbering resource optimization measures
discussed in this Notice would work in conjunction with a pricing mechanism.  Commenters
should also address whether the economic incentives provided by pricing numbering resources
would be sufficient to encourage the industry to undertake these optimization measures on their
own or whether at some level, regulatory authorities would still have to mandate the
implementation and enforcement of such measures.

                      VII.  AREA CODE RELIEF

     A.   Introduction

     241. In Sections IV, V and VI above, we have sought comment on various numbering
optimization methods that focus on conservation of numbering resources within each area code
that is activated for use.  By maximizing efficient use of numbers within area codes, we reduce the
need to introduce new area codes, which can help prevent premature exhaust of the existing
NANP.  We recognize, however, that the adoption of any of these numbering resource
optimization measures does not eliminate the need for states to continue to implement area code
relief in those area codes that are approaching depletion.  As discussed in Section III.A above, the
rapid increase in area code consumption throughout the country may lead to the creation of
approximately 68 new area codes by the year 2000 through the implementation of geographic
splits and overlays.  In this section, we seek comment on what action the Commission can take
to assist states in implementing area code relief in a manner that is consistent with any other
numbering resource optimization measures that we may adopt in this proceeding.  

     B.   Background

     242. As outlined in Section III.A., state commissions have the authority to implement
appropriate forms of area code relief, as delegated by the Commission in the Local Competition
Second Report and Order.  Under Section 52.19 of the Commission's rules, states can
introduce new area codes through the use of:  (1) an area code overlay, which occurs when a new
area code is introduced to serve the same geographic area as an existing area code; (2) a
geographic split, which occurs when the geographic area served by an area code is split into two
or more geographic parts and one part maintains the old area code and one (or more) receive a
new area code; or (3) an area code boundary realignment, which occurs when the boundary lines
between two adjacent area codes are shifted to allow unassigned NXX codes in one area code to
be used in another area code for which few or no NXX codes are left for assignment.   

     243. In the Local Competition Second Report and Order, the Commission emphasized
that its delegation of authority to the states for implementing area code relief is subject to the
Commission's guidelines for numbering administration.  The Commission reiterated the
guidelines that it had set forth in a declaratory ruling on Ameritech's area code relief plan for
Chicago ("Ameritech Order"), stating that numbering administration should: (1) seek to
facilitate entry into the communications marketplace by making numbering resources available on
an efficient and timely basis; (2) not unduly favor or disadvantage a particular industry segment or
group of consumers; and (3) not unduly favor one technology over another.  The Commission
also clarified its numbering administration guidelines with respect to how area code overlays can
be lawfully implemented.  First, the Commission prohibited all service-specific or technology-
specific overlays because it found that such overlay plans would be unreasonably discriminatory
and would unduly inhibit competition.  Second, the Commission concluded that, if a state
commission chooses to implement an all-services area code overlay, the all-services overlay plan
must include:  (1) mandatory ten-digit local dialing by all customers between and within area
codes in the area covered by the new code; and (2) availability to every existing
telecommunications carrier, including CMRS providers, authorized to provide telephone
exchange service, exchange access, or paging service in the affected area code 90 days before the
introduction of a new overlay area code, of at least one NXX in the existing area code, to be
assigned during the 90-day period preceding the introduction of the overlay.  The Commission
stated that imposing these conditions on the implementation of all-services overlay plans would
ensure that competitors, including small entities, do not suffer competitive disadvantages.  

     244. In the Local Competition Second Report and Order, the Commission stated that if
a state acts inconsistently with federal numbering guidelines designed to ensure the fair and timely
availability of numbering resources to all telecommunications carriers, parties wishing to dispute a
proposed area code plan may file a petition for declaratory ruling, rulemaking, or other
appropriate action with the Commission.  In a subsequent order in CC Docket 96-98, the
Commission granted in part a petition for declaratory ruling challenging an area code relief plan of
the Pennsylvania Public Utility Commission, ruling that certain of the actions mandated in the plan
exceeded the scope of authority that the FCC had delegated to state commissions and unduly
disfavored carriers that could not participate in certain of the measures ordered.  The
Commission, however, elected to delegate additional authority to state commissions to order
NXX code rationing in conjunction with area code relief decisions, in the absence of industry
consensus on a rationing plan.  In addition, the Commission encouraged state commissions to
seek further limited delegations of authority to implement other innovative number conservation
methods.  
 
     245. The Connecticut Department of Public Utility Control ("Connecticut
Commission"), the Massachusetts Department of Telecommunications and Energy
("Massachusetts Commission"), and the California Public Utilities Commission and the People of
the State of California ("California Commission") have filed petitions to amend or waive the
Commission's rules prohibiting technology-specific or service-specific overlays so that they can
implement such overlays.  In addition, the Florida Public Service Commission ("Florida
Commission"), the Maine Public Utilities Commission ("Maine Commission"), the Massachusetts
Commission, the New York Department of Public Service ("New York Commission"), and the
California Commission have requested additional delegated authority to implement other number
conservation methods such as thousands-block pooling.  

     C.   Discussion

     246. As discussed in Section VII.A above, the Commission has delegated authority to
the states to implement area code relief measures, subject to the Commission's numbering
administration guidelines.  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, the Commission specifically prohibited technology-specific or service-specific overlays
and required that all-services overlays be accompanied by implementation of mandatory ten-digit
dialing.  

     247. In this section, we seek comment on whether the Commission, to facilitate the
maximum optimization of numbering resources, should amend its existing guidelines or develop
additional guidelines for area code relief.  First, we seek comment on the advantages and
disadvantages of geographic splits, the approach most commonly used by states to accomplish
area code relief.  Second, we seek comment on whether area code overlays may be preferable
to geographic splits from a numbering resource optimization perspective, and whether the
Commission should consider modifying the conditions it has imposed on the use of all-services
overlays.  Third, we seek comment on whether we should reexamine our prohibition of service-
specific or technology-specific overlays, and whether there may be numbering resource
optimization benefits that warrant modifying or lifting this prohibition under some circumstances.  
   

     248. Geographic Splits.  In most cases, states create new area codes through the
implementation of geographic splits.  The NANC Report identified a number of advantages of a
geographic split as a measure of area code relief, including the following:  customers will be able
to associate an NPA with a unique geographic area; any given customers' premises will be served
by one NPA; customers maintain intra-NPA seven-digit dialing; and equal availability of
unassigned NXXs in both the new and the old NPA to all industry segments.  The NANC
Report also identified a number of disadvantages of a geographic split as a measure of area code
relief.  First, geographic splits require approximately half of the subscribers in the existing NPA
to change to the new NPA.  As a result, these subscribers may incur additional costs, including
disruption to users due to the need for reprogramming CPE and changes made to stationary and
advertising.  Second, because geographic splits require approximately half of the subscribers in
the existing NPA to change to a new NPA, successive geographic splits would create substantial
costs for subscribers, thus increasing the consequences associated with inaccurately forecasting
growth versus non-growth areas.

     249. We seek comment on the advantages and disadvantages of geographic splits
relative to other methods of area code relief from a numbering optimization perspective.  We also
seek comment on 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.  For example, if a split has
recently been implemented, should there be any limitations or conditions on implementing another
split as opposed to an overlay in the same area within a certain time frame?  Are there other
circumstances in which limitations or conditions on splits might be warranted such as following
rate center consolidations, rollout of service provider number portability, or implementation of
number pooling in an NPA?  Alternatively, should we direct that the implementation of splits be
accompanied by other numbering optimization initiatives to ensure that numbering resources in
both the new and the pre-existing area code are used efficiently?  If so, which of the methods
discussed in previous sections are most suitable?  

     250. All-Services Overlays.  The NANC Report identified a number of advantages of
all-services overlays as a method of area code relief.  First, from a numbering optimization
perspective, an all-service overlay creates a new numbering resource that is available for use
throughout the entire geographic area covered by the old NPA code.  As a result, the
consequences associated with inaccurately forecasting growth versus non-growth areas may be
reduced.  Second, because overlays only affect the assignment of new numbers, existing
consumers are not required to change their telephone numbers.  This advantage is particularly
significant in areas where there is a need for frequent area code relief because subsequent
prospective all-services overlays can also be implemented without requiring existing consumers to
change their telephone numbers.  

     251. The NANC Report also 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 to identify geographic areas with specific
NPAs.  Second, 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.  The introduction of LNP, however, may
mitigate the disadvantage to new entrants, because customers with numbers in the pre-overlay
NPA will have the option of porting their numbers if they elect to obtain service from a new
competitor.

     252. We seek comment on the advantages and disadvantages of all-services overlays
relative to other methods of area code relief from a numbering resource optimization perspective. 
In particular, we seek comment on the cost of implementing all-services overlays relative to other
methods of area code relief and how this cost varies depending on whether the overlay is
implemented on a prospective basis and whether other overlays have previously been implemented
for the relevant area.  We also seek comment on whether there is a need to modify our existing
guidelines with respect to the implementation of all-services overlays.  For example, should we
retain the requirements concerning ten-digit dialing or are there numbering resource optimization
benefits that would justify allowing states to implement overlays without this condition?  Also, as
in the case of geographic splits, commenters should address whether the implementation of
overlays should be accompanied by other numbering resource optimization initiatives to ensure
that numbering resources in both the new and the pre-existing area code are used efficiently.  We
also seek comment on the relative impact of splits versus overlays on the deployment and
potential benefits of LNP.  For example, if the geographic area covered by an NPA is reduced
because of a split, could this reduce opportunities for customers to port their numbers that would
have existed otherwise?   

     253. Another possible overlay option is the use of so-called "reverse" overlays, which
involve the creation of a single area served by two or more existing NPAs when a previously
established NPA boundary is eliminated.  For example, the Public Utility Commission of Texas
has deployed reverse overlays in the Dallas area (214/972) and the Houston area (713/281). 
The NANC Report notes that 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.  We seek comment on this alternative.  

     254. We also seek comment on how the size of an all-services overlay area would affect
the advantages and disadvantages discussed above.  Although all overlay area codes implemented
to date have used the same geographic boundaries as the underlying area codes, there is no
requirement that they be limited in this respect.  For example, the NANC Report identifies an
"expanded NPA overlay" proposal that would implement an overlay covering a region that is
larger than an existing NPA.  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.  Moreover, 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.  Creation of expanded area codes would also raise complex rating
and billing issues, however, because the overlay NPA would have a larger calling area than the
underlying NPAs it overlaps.

     255. We seek comment on the feasibility of expanded area overlays as a means of
allocating new numbering resources to areas facing exhaust of existing NPAs.  In particular, we
seek 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 seek comment on
whether there are any practical limits to the size of overlay NPAs.  For example, should we
consider the possibility of regional NPAs that cover NPAs in multiple states, or even national
NPAs established for overlay purposes?  If we were to consider this approach, should the
Commission assume responsibility for implementation of such codes, or should it delegate
authority to the states to enter into agreements with one another for purposes of establishing
multi-state overlay area codes?  

     256. Service-Specific and Technology-Specific Overlays.  As noted above, 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.  Specifically, we were concerned 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 the 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.

     257. We continue to believe that service-specific or technology-specific overlays raise
serious competitive issues that must be carefully considered for the reasons stated in our prior
orders.  Nonetheless, in light of the increased urgency of the numbering crisis and the broader
issues raised in this proceeding, we believe it is appropriate at least to reexamine our policies with
respect to service-specific and technology-specific overlays, and to consider whether we should
modify or lift the restriction on these area code relief methods.  Do technology-specific and
service-specific overlays yield potential numbering resource optimization benefits that would not
also result from implementation of an all-services overlay?  To what extent would concerns about
the discriminatory impact of service or technology-specific overlays be mitigated if such overlays
were prospective only and did not involve the taking back of numbers from existing customers? 
Commenters should also address whether technology-specific and service-specific overlays could
yield potential new benefits that were not previously contemplated.  For example, in the event that
the wireless industry were to move to "calling party pays" (CPP) as a pricing option, could use
of wireless-specific area codes provide a means to notify wireline customers that they are making
a chargeable call to a wireless number? 
     
     258. We also seek comment on whether there are particular services or technologies
that could be assigned numbers from a technology or service-specific overlay code without raising
the competitive concerns that we cited with respect to Ameritech's wireless-overlay proposal.  In
their respective petitions, Connecticut and Massachusetts argue that service-specific or
technology-specific overlays would not produce anti-competitive effects if there is no existing or
likely competition between the industry segment using the service/technology that is targeted by
the overlay and the industry segment using the service/technology that is unaffected by the
overlay.  We seek comment on this assertion, and on what non-competing services or
technologies, if any, would meet this standard. 

     259.      We further seek comment on how a technology-specific or service-specific overlay
could be implemented in a manner that would promote our number optimization objectives. 
Because wireless carriers often require, on average, fewer NXXs than wireline carriers to serve
the same size geographic footprint, technology-specific or service-specific overlays that cover the
same geographic scope as pre-existing NPAs might decrease, rather than increase, the efficiency
with which numbering resources are used.  These circumscribed service-specific overlays would
provide wireless carriers serving the area with many more NXX codes than they need, which
would, at the same time, be unavailable to wireline carriers that need them.  Therefore, we seek
comment on whether technology-specific or service-specific overlays should only be implemented
on an expanded or regional basis.  

     260. We also seek comment on the relationship between technology-specific or service-
specific overlays and other numbering resource optimization methods discussed above, such as
number pooling.  For example, if we were to adopt pooling requirements for LNP-capable
carriers, should we consider allowing the creation of overlay area codes specifically for carriers
that are not LNP-capable?  Arguably, this would ensure that non-LNP capable carriers continue
to have access to numbering resources in markets where existing area codes are in jeopardy, while
increasing the potential availability for pooling of codes in existing NPAs.  On the other hand,
segregating LNP-capable and non-LNP capable carriers by area code assignment could have a
discriminatory impact on users of the overlay code, and could inhibit the ability of non-LNP
capable carriers to compete with LNP-capable carriers.   We seek comment on the relative costs
and benefits of this alternative.

     261. Finally, to the extent that we consider any modification of our prohibition on
service-specific and technology-specific overlays, we seek comment on whether we should
consider exceptions to the current prohibition on a case-by-case basis or whether we should adopt
general rules and guidelines.  We also seek 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 or guidelines.

                    VIII.  PROCEDURAL MATTERS

     A.   Ex Parte Presentations

     262. 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 listing of the subjects discussed.  More than a one or two sentence
description of the views and arguments presented is generally required.

     B.   Initial Paperwork Reduction Act Analysis   

     263. This Notice of Proposed Rulemaking (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 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 Notice; OMB comments are due 60 days from date of
publication of this 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 have practical utility; (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.

     C.   Initial Regulatory Flexibility Act Analysis 

     264. Pursuant to the Regulatory Flexibility Act (RFA), the Commission has prepared
the following Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic
impact on small entities of the policies and rules in this Notice.  Written public comments are
requested on the IRFA.  These comments must be filed in accordance with the same filing
deadlines as comments on the rest of the Notice, and should have a separate and distinct heading
designating them as responses to the IRFA.  The Commission shall send a copy of this Notice,
including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration in
accordance with the RFA.

     265. Need for and Objectives of the Proposed Rules.  The Commission is issuing this
Notice to seek public comment on how best to create national standards for numbering resource
optimization.  In doing so, we seek to:  (1) ensure sufficient access to numbering resources for all
service providers that need them to enter into or to compete in telecommunications markets; (2)
avoid, or at least delay, exhaust of the NANP and the need to expand the NANP; (3) minimize the
negative impact on consumers; (4) impose the least cost possible, in a competitively neutral
manner, while obtaining the highest benefit; (5) ensure that no class of carrier or consumer is
unduly favored or disfavored by our numbering resource optimization efforts; and (6) minimize
the incentives for building and carrying excessively large inventories of numbers.

     266. Legal Basis.  The proposed action is authorized under sections 1, 4(i) and (j), 
201, 208, and 251 of the Communications Act of 1934, as amended.

     267. Description and Estimate of the Number of Small Entities That May Be Affected
by this Notice.  The RFA requires that an initial regulatory flexibility analysis be prepared for
notice-and-comment rulemaking proceedings, unless the agency certifies that "the rule will not, if
promulgated, have a significant economic impact on a substantial number of small entities." 
The RFA generally defines "small entity" as having the same meaning as the terms "small
business," "small organization," and "small governmental jurisdiction."  In addition, the term
"small business" has the same meaning as the term "small business concern" 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).  

     268. In this IRFA, we consider the potential impact of this Notice on all users of
telephone numbering resources.  The small entities possibly affected by the proposed rules, if
adopted, include wireline, wireless, and other entities, as described below.  The SBA has defined a
small business for Standard Industrial Classification (SIC) categories 4,812 (Radiotelephone
Communications) and 4,813 (Telephone Communications, Except Radiotelephone) to be small
entities having no more than 1,500  employees.  In the FRFA to the Universal Service Order,
we described and estimated in detail the number of small entities that would be affected by the
new universal service rules.  Although some affected incumbent local exchange carriers (ILECs)
may have 1,500 or fewer employees, we do not believe that such entities should be considered
small entities within the meaning of the RFA because they are either dominant in their field of
operations or are not independently owned and operated, and therefore by definition not "small
entities" or "small business concerns" under the RFA.  Accordingly, our use of the terms "small
entities" and "small businesses" does not encompass small ILECs.  Out of an abundance of
caution, however, for regulatory flexibility analysis purposes, we will separately consider small
ILECs within this analysis and use the term "small ILECs" to refer to any ILECs that arguably
might be defined by the SBA as "small business concerns."   

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

     270. Total Number of 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, personal communications services providers, covered  specialized mobile radio
providers, and resellers.  It seems certain that some of those 3,497 telephone service firms may
not qualify as small entities or small ILECs because they are not "independently owned and
operated."  For example, a 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 ILECs that may be affected by the proposed rules, if adopted. 

     271. Local Service Providers.  There are two principle providers of local telephone
service; ILECS and competing local service providers.  Neither the Commission nor the SBA has
developed a definition for small providers of local exchange services (LECs).  The closest
applicable definition under the SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies.  According to data set forth in the FCC Statistics of
Communications Common Carriers (SOCC), 34 ILECs have more than 1,500 employees.  We
do not have data specifying the number of these carriers that are either dominant in their field of
operations or are not independently owned and operated, and thus are unable at this time to
estimate with greater precision the number of ILECs that would qualify as small business concerns
under the SBA's definition.  Consequently, we estimate that fewer than 1,376 ILECs are small
entities that may be affected by the proposed rules, if adopted.    

     272. Competitive Local Service Providers.  This category includes competitive access
providers (CAPs), competitive local exchange providers (CLECs), shared tenant service
providers, local resellers, and other local service providers.  Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to competitive local service
providers.  The closest applicable definition under the SBA rules is for telephone communications
companies other than radiotelephone (wireless) companies.  According to the most recent
Locator data, 145 carriers reported that they were engaged in the provision of competitive local
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
of competitive local service providers that would qualify as small business concerns under the
SBA's definition.  Consequently, we estimate that there are fewer than 145 small entity
competitive local service providers that may be affected by the proposed rules, if adopted.

     273. Providers of Toll Service.  The toll industry includes providers of interexchange
services (IXCs), satellite service providers and other toll service providers, primarily resellers.
Neither the Commission nor the SBA has developed a definition of small entities specifically
applicable to providers of toll service.  The closest applicable definition under the SBA rules is for
telephone communications companies other than radiotelephone (wireless) companies. 
According to the most recent Locator data, 164 carriers reported that they were engaged in the
provision of toll 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 toll providers that would qualify as
small business concerns under the SBA's definition.  Consequently, we estimate that there are
fewer than 164 small entity toll providers that may be affected by the proposed rules, if adopted.  

     274. In addition, an alternative SBA standard may apply to satellite service providers. 
The applicable definition of small entity generally is the definition under the SBA rules applicable
to Communications Services, Not Elsewhere Classified (NEC).  This definition provides that a
small entity is expressed as one with $11.0 million or less in annual receipts.  According to the
Census Bureau, there were a total of 848 communications services providers, NEC, in operation
in 1992, and a total of 775 had annual receipts of less than $9,999 million.  The Census report
does not provide more precise data. 

     275. Resellers.  This category includes toll resellers, operator service providers, pre-
paid calling card providers, and other toll service 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 Locator data, 405 carriers
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 or operated, 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 405 small entity resellers that may be affected by the proposed rules, if adopted.

     276. 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, 732 carriers
reported that they were engaged in the provision of wireless telephony and 137 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 fewer than
732 carriers are engaged in the provision of wireless telephony and fewer than 137 companies are
engaged in the provision of paging and messaging service.

     277. The SBA has developed a definition of small entities for cable and other pay
television services, which includes all such companies generating $11 million or less in revenue
annually.  This definition includes cable systems operators, closed circuit television services,
direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems
and subscription television services.  According to the Census Bureau data from 1992, there were
1,788 total cable and other pay television services and 1,423 had less than $11 million in
revenue.

     278. The Commission has developed its own definition of a small cable system operator
for the purposes of rate regulation.  Under the Commission's rules, a "small cable company" is one
serving fewer than 400,000 subscribers nationwide.  Based on our most recent information, we
estimate that there were 1,439 cable operators that qualified as small cable system operators at the
end of 1995.  Since then, some of those companies may have grown to serve over 400,000
subscribers, and others may have been involved in transactions that caused them to be combined
with other cable operators.  Consequently, we estimate that there are fewer than 1,439 small
entity cable system operators.  

     279. The Communications Act also contains a definition of a small cable system
operator, which is "a cable operator that, directly or through an affiliate, serves in the aggregate
fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or
entities whose gross annual revenues in the aggregate exceed $250,000,000."  The Commission
has determined that there are 66,000,000 subscribers in the United States.  Therefore, we found
that an operator serving fewer than 660,000 subscribers shall be deemed a small operator, if its
annual revenues, when combined with the total annual revenues of all of its affiliates, do not
exceed $250 million in the aggregate.  Based on available data, we find that the number of cable
operators serving 660,000 subscribers or less totals 1,450.   We do not request nor do we
collect information concerning whether cable system operators are affiliated with entities whose
gross annual revenues exceed $250,000,000, and thus are unable at this time to estimate with
greater precision the number of cable system operators that would qualify as small cable operators
under the definition in the Communications Act.  It should be further noted that recent industry
estimates project that there will be a total of 66,000,000 subscribers, and we have based our fee
revenue estimates on that figure.

     280. Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements.  See paragraph 263, for an initial Paperwork Reduction Act analysis.  This Notice
proposes the following information collection:  The Notice seeks comment on whether all NXX
codeholders should be required to report the status of all telephone numbers within the NXX
blocks assigned to them.  In the alternative, the Notice seeks comment on whether utilization data
reporting on a more aggregated basis (or some more aggregated set of telephone number status
categories) would provide sufficient data to accurately track number utilization.  The Notice
proposes that any utilization reporting obligation that the Commission  adopts would be in
addition to the demand forecasting requirement that the COCUS currently places on carriers.  The
Notice seeks comment on whether any modifications should be made to improve the quality and
accuracy of carriers' demand forecasts.  Alternatively, the Notice seeks comment  on several
alternative data collection options, including the forecast and utilization reporting process in the
current Thousand Block Pooling Guidelines, and the Line Number Use Survey (LINUS) data
collection model designed by NANPA staff as a replacement for COCUS.  The Notice also seeks
comment on other industry proposals for a number utilization and forecasting mechanism to
replace COCUS.  Finally, it seeks comment on whether to supplement the need verification
measures and data collection program with a comprehensive audit program that verifies carrier
compliance with federal rules and industry numbering guidelines.

     281. Steps taken to Minimize Significant Economic Impact on Small Entities and
Significant Alternatives Considered.  The rules we propose in this Notice are designed to ensure
sufficient access to numbering resources for all service providers that need them.  The Notice
seeks public comment on how best to create national standards for numbering resource
optimization in order to:  (1) ensure sufficient access to numbering resources for all service
providers that need them to enter into or to compete in telecommunications markets; (2) avoid, or
at least delay, exhaust of the NANP and the need to expand the NANP; (3) minimize the negative
impact on consumers; (4) impose the least cost possible, in a competitively neutral manner, while
obtaining the highest benefit; (5) ensure that no class of carrier or consumer is unduly favored or
disfavored by our optimization efforts; and (6) minimize the incentives for carriers to build and
carry excessively large inventories of numbers.  We seek comment on our tentative conclusions
and proposals, and on additional actions we might take in this regard to relieve burdens on users
of telephone numbering resources.

     282. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed
Rules.  None.

     D.   Comment Filing Procedures

     283. Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the
Commission's rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on or before
July 30, 1999 and reply comments on or before August 30, 1999.  Comments may be filed using
the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies.  See
Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998). 
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.  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.  

     284. 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-B204F,
Washington, D.C.  20554.  

     285. Written comments by the public on the proposed information collections are due
by July 30, 1999.  Written comments must be submitted by the Office of Management and Budget
(OMB) on the proposed and/or modified information collections on or before 60 days after date
of publication in the Federal Register.  In addition to filing comments with the Secretary, a copy
of any comments on the information collections contained herein should be submitted to Judy
Boley, Federal Communications Commission, Room 1-C804, 445 12th Street, S.W., Washington,
D.C.  20554, or via the Internet to jboley@fcc.gov and to Timothy Fain, OMB Desk Officer,
10236 NEOB, 725 - 17th Street, N.W., Washington, D.C.  20503 or via the Internet to
fain_t@al.eop.gov.

     286. Parties who choose to file by paper should also submit their comments on diskette. 
These diskettes should be submitted to Alvin McCloud, Common Carrier Bureau, Network
Services Division, 445 Twelfth Street, S.W., Room 6-A423, Washington, D.C. 20554.  Such a
submission should be on a 3.5 inch diskette formatted in an IBM compatible format using
WordPerfect 5.1 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 labelled
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.  The label should also include the following phrase "Disk Copy - Not an Original."  Each
diskette should contain only one party's pleading, preferably in a single electronic file.  In addition,
commenters must send diskette copies to the Commission's copy contractor, International
Transcription Service, Inc., 1231 20th Street, N.W., Washington, D.C.  20037.  

     287. 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.  20036.  Comments and reply comments will be available for public inspection during
regular business hours in the FCC Reference Center, 445 12th Street, S.W., Washington, D.C. 
20554.  

     288. 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.                                 
                     IX.  ORDERING CLAUSES

     289.      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 NOTICE OF PROPOSED RULEMAKING is hereby ADOPTED. 

     290. IT IS FURTHER ORDERED that the Commission's Office of Public Affairs,
Reference Operations Division, shall send a copy of this NOTICE OF PROPOSED
RULEMAKING, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration, in accordance with section 603(a) of the
Regulatory Flexibility Act, 5 U.S.C.  602 et seq. (1981).

                              FEDERAL COMMUNICATION COMMISSION




                              Magalie Roman Salas
                              Secretary
                           Appendix A

Comments on the NANC Report were received from 49 entities: 

AirTouch Communications, Inc. (AirTouch)
Allegiance Telecom, Inc. (Allegiance)
American Cellular Corporation 
Ameritech
Association for Local Telecommunications Services (ALTS) 
AT&T Corporation (AT&T)
Bell Atlantic 
Bell Atlantic Mobile, Inc. (Bell Atlantic Mobile)
BellSouth Corporation (BellSouth)
California Public Utilities Commission and the People of the State of California
Cellular Telecommunications Industry Association (CTIA) 
Colorado Public Utilities Commission
Commonwealth of Virginia, State Corporation Commission, Division of Communications
Communications Venture Services, Inc. and Richard Bartel (CVSI) 
Cox Communications, Inc. (Cox)
Dr. Richard Levine
Florida Public Service Commission 
GTE Service Corporation (GTE) 
Joint Comments (filed by Centennial Cellular Corporation, CenturyTel Wireless, Inc., RFB
Cellular, Inc., Thumb Cellular Limited Partnership, and Trillium Cellular Corporation)
Kentucky Public Service Commission 
Lincoln Madison, LincMad.Com Consulting (Madison)
Maine Public Utilities Commission 
MCI WorldCom, Inc. (MCI WorldCom) 
MediaOne Group, Inc. (MediaOne) 
National Association of State Utility Consumer Advocates (NASUCA) 
National Emergency Number Association (NENA) 
New Hampshire Public Utilities Commission 
New York State Department of Public Service 
Nextel Communications, Inc. (Nextel)
Nextlink Communications and Cablevision Lightpath, Inc. (Nextlink) 
North Carolina Utilities Commission 
Organization for the Promotion and Advancement of Small Telecommunications Companies
(OPASTCO) 
Paging Network, Inc. (PageNet)
Pennsylvania Public Utility Commission 
Personal Communications Industry Association (PCIA) 
PrimeCo Personal Communications, L.P. (PrimeCo)
Public Utilities Commission of Ohio
Public Utility Commission of Texas 
RCN Telecom Services, Inc. (RCN)
SBC Communications, Inc. (SBC)
Sprint Corporation (Sprint)
Telco Year 2000 Forum
Telecommunications Resellers Association (TRA)
Teligent, Inc. (Teligent) 
Texas Advisory Commission on State Emergency Communications and Texas Emergency
Communications Districts 
Unified Dialing Plan for Overlays, Gilbert Yablon  
United States Telephone Association (USTA)
U S West Communications, Inc. (U S West)   
Vanguard Cellular Systems, Inc. (Vanguard)                                                                                      May 27, 1999

                     Separate Statement of
                  Commissioner Gloria Tristani

     Re:  Numbering Resource Optimization.  CC Docket No. 99-200

     This Notice represents an important first step towards promoting efficient number
utilization and creating standards for number optimization.  The advent of new services using our
nationwide numbering scheme, the entry of new competitors in the telecommunications market,
the explosive growth of customer demand for telephone lines to support additional services, and
the inefficient use of numbers all have contributed to a tremendous strain on our nation's
numbering resources.  

     For some states, this problem has reached crisis proportions.  Illustrating the rapid pace of
area code exhaust, the California Public Utilities Commission projects that by the end of 2002,
California will have 41 area codes.  At the end of 1992, the state had only 13 area codes in use. 
In April, the California Public Utilities Commission reported that it had approved 7 new area
codes in the previous 10 months.  In one instance, immediately after the area code split was
completed, the code administrator declared the new area code in jeopardy of exhausting its
numbering resources. 

     The Commission must act expeditiously to relieve the burden not only on the state
commissions developing area code relief plans but most importantly on consumers, who face
enormous costs and inconvenience each time area code relief is implemented.  The carriers that
serve these consumers have a vital role to play in forging solutions to promote efficient allocation
and use of numbering resources.  Accordingly, I urge telecommunications carriers and state
commissions alike to participate in this proceeding to help craft a solution that will prevent the
exhaust of our North American Numbering Plan.