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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554



In the Matter of                        )
                                   )
Telephone Number Portability            )    CC Docket No. 95-116
                                   )    RM-8535
                                   )


                 FIRST MEMORANDUM OPINION AND 
                    ORDER ON RECONSIDERATION


     Adopted:  March 6, 1997            Released: March 11, 1997 


By the Commission:

                                                        Paragraph
                        Table of Contents                 Number 


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

II.     BACKGROUND . . . . . . . . . . . . . . . . . . . . . .  2
     A.   First Report & Order . . . . . . . . . . . . . . . .  2
     B.   Number Portability Methods . . . . . . . . . . . . .  5
     C.   Current State Efforts. . . . . . . . . . . . . . . .  8

III.     DISCUSSION. . . . . . . . . . . . . . . . . . . . .   11
     A.   Issues Relating to Long-Term Number Portability Methods  11
          1.   Performance Criteria  . . . . . . . . . . . .   11
               a.   Background . . . . . . . . . . . . . . .   11
               b.   Pleadings. . . . . . . . . . . . . . . .   14
               c.   Discussion . . . . . . . . . . . . . . . . 19
                    (1)  Service Degradation . . . . . . . . . 21
                    (2)  Network Reliability . . . . . . . . . 25
                    (3)  Intranetwork Use of QOR . . . . . . . 30
          2.   Public Interest Considerations. . . . . . . . . 31
               a.   Overview . . . . . . . . . . . . . . . . . 31
               b.   Purported Cost Savings Associated with QOR 33
               c.   Impact of QOR on the Implementation Schedule 44
               d.   Impact on the States . . . . . . . . . . . 46
               e.   Conclusion . . . . . . . . . . . . . . . . 47
     B.   Implementation Schedule for Wireline Carriers. . . . 48
          1.   Background. . . . . . . . . . . . . . . . . . . 48
          2.   Deployment Only in Requested Switches . . . . . 50
          3.   Extension of Implementation Schedule. . . . . . 72
          4.   Acceleration of Implementation Schedule . . .  100
          5.   Exemptions for Rural and/or Smaller LECs. . .  108
          6.   Implementation Requirements for Intermediate (N-1) Carriers 124
     C.   Implementation Schedule for Wireless Carriers. . .  127
     D.   Deferral of Implementation Until Resolution of Cost Recovery Issues 143

IV.     ORDERING CLAUSES . . . . . . . . . . . . . . . . . .  149


APPENDIX A     List of Parties
APPENDIX B     Final Rules
APPENDIX C     Description of Number Portability Methods
APPENDIX D     Supplemental Final Regulatory Flexibility Analysis
APPENDIX E     Implementation Schedule


I.     INTRODUCTION

     1.   On June 27, 1996, the Commission adopted the First Report and Order and
Further Notice of Proposed Rulemaking (First Report & Order) in this docket implementing the
requirement under Section 251(b) of the Communications Act of 1934, as amended (the Act),
that all local exchange carriers (LECs) offer, "to the extent technically feasible, number
portability in accordance with requirements prescribed by the Commission."  By this action, we
resolve certain petitions for reconsideration or clarification of our number portability rules
adopted in the First Report & Order.  Twenty-two parties filed petitions for reconsideration or
clarification, nineteen parties filed oppositions or comments on the petitions, and sixteen parties
filed reply comments.  While the petitions raise a broad range of issues, we address three
primary issues in this First Memorandum Opinion and Order on Reconsideration (First
Reconsideration Order).  We will address the remaining issues in one or more subsequent
reconsideration orders in this docket.  First, we conclude that Query on Release (QOR) is not an
acceptable long-term number portability method.  Second, we extend the completion deadlines in
the implementation schedule for wireline carriers by three months for Phase I and by 45 days for
Phase II, clarify the requirements imposed thereunder, and address issues raised by rural LECs
and certain other parties.  Finally, we affirm and clarify our implementation schedule for wireless
carriers.  

II.     BACKGROUND

     A.   First Report & Order

     2.   Pursuant to the statutory requirement of Section 251(b), the First Report & Orderrequires all LECs to implement a long-term number portability method in the 100 largest
Metropolitan Statistical Areas (MSAs) according to a phased deployment schedule that
commences October 1, 1997, and concludes December 31, 1998.  Thereafter, in areas outside
the 100 largest MSAs, each LEC must make long-term number portability available within six
months after a specific request by another telecommunications carrier.  The First Report & Orderalso requires all cellular, broadband personal communications services (PCS), and covered
Specialized Mobile Radio (SMR) providers to be able to deliver calls from their networks to
ported numbers by December 31, 1998, and requires cellular, broadband PCS, and covered SMR
providers to offer number portability throughout their networks and have the capability to
support roaming nationwide by June 30, 1999.

     3.   Rather than choosing a particular technology for the provision of number
portability, the Commission established performance criteria that any long-term number
portability method selected by a LEC must meet.  The Commission noted, however, that one of
the criteria it adopted effectively precludes carriers from implementing QOR.  The First Report
& Order further concludes that long-term number portability should be provided through a
system of regional databases that will be managed by one or more independent administrators
selected by the North American Numbering Council (NANC).

     4.   The First Report & Order also requires wireline LECs, pending their deployment
of a long-term number portability method, to provide currently available number portability
measures upon request by another telecommunications carrier.  Consistent with Section 251(e)(2)
of the Communications Act, the First Report & Order sets forth principles that ensure that the
costs of currently available measures are borne by all telecommunications carriers on a
competitively neutral basis, and permits states to utilize various cost recovery mechanisms, so
long as they are consistent with these statutory requirements and our principles.  The
Commission also concurrently adopted a Further Notice of Proposed Rulemaking (Further
Notice) seeking comment on cost recovery for long-term number portability. 

     B.   Number Portability Methods

     5.   Because most telephone numbers within the North American Numbering Plan
(NANP) are associated with a particular switch operated by a particular service provider, they
currently cannot be transferred outside the service area of a particular switch or between switches
operated by different service providers without technical changes to the switch or network. 
Industry participants have developed several methods for providing service provider portability
that would be suitable for long-term use by carriers.  These methods for providing long-term
number portability employ databases containing the customer routing information necessary to
route telephone calls to the proper terminating locations.  All of these methods depend on
Intelligent Network (IN) or Advanced Intelligent Network (AIN) capabilities.

     6.   While various methods for providing long-term number portability have been
developed, two methods have emerged as the primary ones advocated by parties in this
proceeding:  Location Routing Number (LRN) and Query on Release (QOR).  Under LRN, a
unique 10-digit number, or location routing number, is assigned to each central office switch. 
Carriers routing telephone calls to customers that have transferred their telephone numbers from
one carrier to another perform a database query to obtain the location routing number that
corresponds to the dialed telephone number.  The database query is performed for all calls to
switches from which at least one number has been ported.  The carrier then routes the call to the
new carrier based on the location routing number.

     7.   QOR, also known as Look Ahead, is a triggering mechanism that operates in
conjunction with the LRN addressing scheme.  Under QOR, the signalling used to set up a
telephone call is routed to the end office switch to which the dialed telephone number was
originally assigned (known as the donor switch or the release switch) according to the NPA-
NXX of the dialed number.  If the dialed number has been transferred to another carrier's switch,
the release switch sends a release message back, and the previous switch in the call path queries
the database to obtain the routing information.  The call is then completed to the new carrier's
switch.

     C.   Current State Efforts

     8.   Prior to the adoption of our First Report & Order, a number of state commissions
had selected LRN as the method for implementing number portability in areas within their states'
boundaries.  These states include Colorado, Georgia, Illinois, Maryland, New York, and Ohio. 
On August 2, 1996, the California Public Utilities Commission (CA PUC) issued an order
mandating the use of LRN as the long-term number portability method to be implemented in
California.  No states have selected QOR as the preferred method for long-term number
portability.

     9.   Since adoption of the First Report & Order, planning and implementation of long-
term number portability has progressed significantly.  A number of state commissions have spent
the past eight months developing state-specific plans for implementing LRN and resolving
technical issues associated with the deployment of LRN.  For example, the Illinois Commerce
Commission Number Portability Workshop (ICC Workshop) remains in the forefront with
respect to implementation of number portability.  It has developed a detailed LRN test plan and
has resolved numerous operational issues relating to switching, signalling, and SCP
requirements.  In addition, the Maryland Public Service Commission has determined a ranking
and timeline for deployment of LRN in every switch in Maryland; established a comprehensive
operations plan for LRN implementation; resolved issues relating to interfaces, ordering,
provisioning, repair and maintenance processes as well as operator services; and studied switch
and SCP requirements.  Number portability task forces in Indiana, Michigan, and Ohio have
also developed switch-specific implementation plans for those states.

     10.  The industry, under the auspices of the NANC, has been working on the design of
the number portability regional database system.  The NANC, a Federal Advisory Committee
established under the provisions of the Federal Advisory Committee Act to advise the
Commission on numbering issues, held its first meeting on October 1, 1996.  The NANC's
Local Number Portability Administration (LNPA) Selection Working Group and its task forces
have been meeting regularly to assist the NANC in recommending to the Commission resolution
of issues related to the selection and duties of an entity or entities to serve as the local number
portability administrator(s), the database architecture plan, and the technical and operational
requirements for the number portability database system.  The NANC has committed to making
its recommendation to the Commission on LNPA issues by May 1, 1997.  Under NANC
oversight, carriers in Illinois, Georgia, California, Maryland, Colorado, New York, and Texas
have formed a Limited Liability Corporation (LLC) and issued a Request for Proposal (RFP) for
each state to construct and maintain a number portability database.  Each LLC has contacted
neighboring states seeking to expand these state databases into regional databases covering the
RBOC service areas.  The LNPA Selection Working Group projects that all seven regional
databases will be ready for testing on dates ranging from April 18, 1997, to July 1, 1997, and will
be ready to support number portability deployment on or before October 1, 1997, in accordance
with the deployment schedule set forth in the First Report & Order.

III.     DISCUSSION

     A.   Issues Relating to Long-Term Number Portability Methods

          1.   Performance Criteria 

               a.   Background

     11.  The Act requires all LECs "to provide, to the extent technically feasible, number
portability in accordance with requirements prescribed by the Commission."  The Act states
that "[t]he term 'number portability' means the ability of users of telecommunications services to
retain, at the same location, existing telecommunications numbers without impairment of quality,
reliability, or convenience when switching from one telecommunications carrier to another." 
We interpreted these statutory provisions to mean that the Commission should develop a national
number portability policy and prescribe the requirements that all local exchange carriers, both
incumbents and others, must meet to satisfy their statutory obligations. 

     12.  In the First Report & Order, we concluded that establishing performance criteria
that a LEC's number portability architecture must meet would better serve the public interest than
choosing a particular technology or specific architecture.  We thus adopted the following nine
minimum criteria, which require that any long-term number portability method must:  (1) support
existing network services, features, and capabilities; (2) efficiently use numbering resources; (3)
not require end users to change their telecommunications numbers; (4) not require
telecommunications carriers to rely on databases, other network facilities, or services provided
by other telecommunications carriers in order to route calls to the proper termination point; (5)
not result in unreasonable degradation in service quality or network reliability when
implemented; (6) not result in any degradation of service quality or network reliability when
customers switch carriers; (7) not result in a carrier having a proprietary interest in any long-term
method; (8) be able to accommodate location and service portability in the future; and (9) have
no significant adverse impact outside the areas where number portability is deployed.  We
concluded that a number of these criteria implement the statutory requirement that customers
switching their carrier be able to retain their numbers "without impairment of quality, reliability,
or convenience."

     13.  In addition, we concluded that criterion four precludes carriers from using such
number portability methods as QOR.  When discussing criterion four, we stated that carriers
may experience several undesirable effects if they are forced to rely on the networks of their
competitors in order to route calls.  For example, the use of number portability methods that first
route the call through the original service provider's network in order to determine whether the
call is to a ported number, and then perform a query only if the call is to be ported, would treat
ported numbers differently than non-ported numbers, resulting in ported calls taking longer to
complete than unported calls.  This differential in efficiency would disadvantage the carrier to
whom the call was ported and impair that carrier's ability to compete effectively against the
original service provider.  

               b.   Pleadings

     14.  Most petitioners focus primarily on our conclusion in the First Report & Orderthat incumbent LECs are prohibited from using QOR as a long-term number portability
method.  They argue that QOR does not violate the performance criteria the Commission
established, and that QOR has many public interest benefits that will make it more efficient,
easier, and less costly to deploy than other number portability methods.  They assert that, at a
minimum, we should allow a carrier to use QOR within its own network in order to route calls
made by its own customers to NXXs assigned to that carrier.  Furthermore, they claim that a
LEC's "intranetwork" use of QOR would not impact other carriers, nor would it present network
interoperability issues.  Some petitioners also argue that we should allow the use of QOR
between networks if the carriers mutually agree to do so.

     15.  With respect to the performance criteria, petitioners assert that QOR does not
violate performance criterion four (i.e., it does not "require dependency on another carrier's
network") any more than other number portability methods, such as LRN.  For example, Pacific
and USTA argue that there is no rational basis for the Commission to conclude that a number
portability method that requires an SS7 message to be sent to a switch to which the NXX code of
the called number has been assigned (the "essence" of QOR) causes "undue reliance" on the
networks of other carriers, while a number portability method that requires an SS7 message to be
sent to the incumbent's Service Control Point (SCP) (the "essence" of LRN) does not involve
such undue reliance.  Because every number portability method requires some dependence on
another carrier's network facilities, several petitioners suggest that we eliminate criterion four as
one of the performance criteria that a long-term number portability method must meet. 

     16.  Petitioners also argue that QOR does not result in any degradation of service
quality or network reliability when customers switch carriers (performance criterion six).  These
parties contend that claims that use of QOR will cause significant additional delays in the routing
of calls to ported numbers are unfounded.  They allege that any additional delay attributable to
the use of QOR is insignificant and imperceptible, as compared to the delay associated with
LRN.  U S West urges the Commission to conduct a survey to determine whether callers would
perceive differences in call set-up time between LRN and QOR.  In addition, NYNEX asserts
that QOR would impose post-dial delay on a much smaller set of calls than LRN, because LRN
without QOR increases post-dial delay for all interswitch calls, whether ported or not.  USTA,
on the other hand, argues that the standard should not be whether network routing for ported and
non-ported numbers is identical, but whether service quality is discriminatory.  

     17.  With respect to network reliability, proponents of QOR assert that QOR is less
likely to threaten the reliability of the network than LRN, because QOR requires far fewer
database queries than LRN.  These parties contend that QOR imposes less of a burden on the
SS7 network and, therefore, poses a lower risk of a network outage.   In a late-filed ex partepresentation, SBC submitted a network reliability study conducted by Bellcore that purportedly
demonstrates that there is a 0.036 percent (0.00036) probability of a "catastrophic outage" if
LRN is implemented under what they characterize as a "normal" schedule, and no probability of
such a catastrophic network outage if QOR is implemented under a "normal" schedule and less
than one percent of the numbers are ported.  MCI and AT&T vigorously dispute the purported
findings of the Bellcore study, arguing, among other things, that the figures for "catastrophic
outage" assume that all number portability databases in Houston fail simultaneously, which they
argue is a highly improbable scenario, given that SBC has never experienced a single dual SCP
failure, much less a dual failure of all SCPs.  MCI also notes that, according to the Bellcore
study, probabilities for FCC reportable outages with LRN and QOR are virtually identical under
the same scheduling scenarios.  In response, Bellcore argues that the types of failures
contemplated by the Bellcore study are not "too improbable to be of concern" as AT&T claims,
because a combination of events and errors has resulted in various switch failures and outages in
the past.  Thus, Bellcore asserts that, even though a complete failure has not occurred, there is
certainly a reasonable probability that such an event could occur in the future.  In fact, Bellcore
claims that such partial and complete failures have been relatively rare in the United States,
because the industry has been diligent in anticipating failures, guarding against them, and
adopting designs and procedures that minimize their effects when they occur.

     18.       Parties opposing these petitions argue that QOR violates both criterion four and
criterion six.   They argue that QOR requires greater dependence on an incumbent LEC's
network than other number portability methods, such as LRN.  For example, opponents of QOR
claim that QOR requires more signalling and routing steps than LRN before the call is delivered
to a customer that has ported a number.  They also assert that QOR relies to a greater extent on
an incumbent LEC's facilities, because QOR uses both the signalling and trunking networks to
reserve a call path to the incumbent LEC's terminating switch to which the NXX code of the
called party was originally assigned.  Opponents of QOR further assert that the use of QOR
affects service quality and network reliability.  They contend that:  (1) QOR results in service
degradation by causing an incremental increase in the post-dial delay for calls ported to a new
carrier; (2) QOR impairs network reliability because additional network routing increases the
potential for dropped calls and call blocking for ported calls, and that (3) QOR is therefore not
"competitively neutral," even when it is used only "within a carrier's network" or between
consenting carriers.  

               c.   Discussion

     19.  Criterion Four.  Based on our analysis of the record in this proceeding, we now
conclude that criterion four should be removed from our list of minimum performance criteria
required for number portability, because all interconnected carriers are likely to rely upon each
other's networks to some extent to process and route calls in a market in which a long-term
number portability method has been deployed.  For example, under both LRN and QOR, the
competitive LEC may be dependent upon facilities provided by the original service provider for
the proper routing of all ported calls, because the original service provider is the entity that
launches a query to the number portability database to obtain the location routing number for the
dialed number.  Furthermore, we find no basis in the record for drawing a principled distinction
between permissible and impermissible levels of reliance on the original service provider's
network.  For these reasons, we find that criterion four -- which requires that any number
portability method may not "require telecommunications carriers to rely on databases, other
network facilities, or services provided by other telecommunications carriers in order to route
calls to the proper termination point" --  is, from a practical perspective, unworkable.  Moreover,
many of our concerns about reliance on a competitor's network (e.g., the possibility of service
degradation and call blocking) are addressed by criterion six.  Thus, criterion four does not
appear to be necessary in order to implement the statutory definition of number portability.  In
light of our decision to eliminate criterion four, we conclude that AirTouch's requested
clarification of criterion four is moot. 

     20.  Criterion Six.  With respect to criterion six, we affirm our conclusion in the First
Report & Order that any long-term number portability method must not result in any degradation
of service quality or network reliability when customers switch carriers.  We further conclude,
based on the record in this proceeding, that criterion six prohibits the use of QOR as a long-term
number portability method.  We agree with the commenters, primarily potential new providers of
local exchange services (also referred to as "competitive LECs"), that:  (1) QOR results in
degradation of service by imposing post-dial delay only on calls ported to new carriers; (2) if
network reliability problems were to arise as a result of QOR, those problems would
disproportionately affect customers who port their numbers; and (3) QOR should not be
permitted on an intranetwork basis, because it is not "competitively neutral."  We discuss each
of these conclusions in more detail below.

                    (1)  Service Degradation

     21.  After considering petitioners' arguments and concerns, we affirm our conclusion
in the First Report & Order that, in accordance with criterion six, a long-term number portability
method may not cause customers to experience "a greater dialing delay or call set up time" as
compared to when the customer was with the original carrier.  Criterion six implements the
statutory requirement that consumers be able to retain their numbers "without impairment of
quality, reliability, or convenience when switching from one telecommunications carrier to
another."  

     22.  At the outset, we agree with AT&T and Time Warner that the time it takes to
receive a call is an important factor for many subscribers, particularly businesses that receive and
respond to a large number of calls on a daily basis.  If the party making a call to a business
experiences additional delay because that business has switched carriers, that delay may
negatively impact how the business is perceived, which, in turn, could dissuade the business
from switching carriers in the first place.  Therefore, we clarify that performance criterion six
requires that calls to customers who change carriers (not just calls from customers who change
carriers) must not take longer to complete merely because the customer has switched local
service providers.  In order to implement the statutory requirement that consumers should be
able to change carriers and retain their original phone number without impairment of quality,
reliability, or convenience, we conclude that any post-dial delay imposed by a number portability
method should be roughly equivalent for all consumers, whether they are calling to or from a
ported or a non-ported number.  

     23.  We further conclude that consumers that switch telecommunications carriers and
retain their numbers would experience "impairment of quality" if QOR were used, because the
post-dial delay imposed by QOR is not equivalent for all consumers.  Under QOR, calls that are
placed to ported numbers must undergo a series of signalling and routing steps that result in
longer post-dial delay than occurs for calls that are placed to non-ported numbers.  (The
additional steps in the call flow required by QOR are illustrated in Appendix C.)  No party
disputes that QOR causes additional post-dial delay.  There is disagreement, however, over the
appropriate baseline for comparison.  Proponents of QOR erroneously focus on the post-dial
delay of alternative number portability technologies, comparing the incremental post-dial delay
associated with a call to a ported number using LRN with that of a call to a ported number using
QOR.  That is not the statutory standard.  We agree with AT&T and MCI that the proper
comparison for incremental post-dial delay is the difference in delay between calls placed to
ported numbers and calls placed to non-ported numbers, because that is the delay that occurs
"when switching from one telecommunications carrier to another."  According to the most
conservative estimates, calls to ported numbers from a network that uses QOR would experience
an additional post-dial delay of approximately 1.3 seconds as compared to calls placed to non-
ported numbers.  Because we find that post-dial delay of 1.3 seconds is significant, we conclude
that QOR violates the statutory definition of number portability and criterion six.  By contrast,
under LRN, there is no differential between ported and non-ported calls; for all calls, it takes the
same amount of time to query the database for appropriate routing instructions.  LRN therefore
does not impair service quality when a customer changes carriers.  Accordingly, we conclude
that LRN is consistent with the statutory definition of number portability and performance
criterion six.

     24.  We also reject petitioners' argument that some degree of added post-dial delay
should be acceptable, provided that it is not "perceptible" to the public.  First, we agree with
AT&T that the studies submitted by petitioners fail to demonstrate that 1.3 seconds of post-dial
delay is imperceptible to the public.  Second, we agree with those parties that contend that,
even if the additional post-dial delay were imperceptible to the caller, QOR could adversely
affect competitors, because the incumbent LEC could truthfully advertise the fact that calls to
customers that remain on the incumbent LEC's network are completed more quickly than calls to
customers that switch to a competitor's network.  MCI points out that this could create a
marketplace perception that competitive LECs are operating inferior networks, which could harm
competition.  In response, six incumbent LECs have voluntarily committed not to mention the
call set-up time differences between LRN and QOR in their advertising materials.  As AT&T
and MCI point out, however, the incumbent LECs' voluntary commitment is limited to
"advertising materials," and therefore does not preclude them from mentioning call set up in all
other aspects of their marketing, such as direct sales and telemarketing, news releases, studies
commenced to compare competitors' service performance, and editorials.  Furthermore, because
only six incumbent LECs signed the letter, we have no basis on which to conclude that all
incumbent LECs will refrain from using the differences in call set-up time to influence
marketplace perceptions and inhibit competition.  Thus, we decline to designate a threshold
below which added post-dial delay is permissible.  Moreover, given our concerns about these
marketplace perceptions, we find U S West's suggestion that the Commission survey consumers
to ascertain whether they can perceive the post-dial delay associated with QOR to be
unnecessary. 

                    (2)  Network Reliability

     25.  QOR.  As discussed above, criterion six requires that no long-term number
portability method may result in "any degradation of service quality or network reliability when
customers switch carriers."  We agree with the opponents of QOR that technical concerns raised
by QOR are more likely to impact ported numbers adversely than non-ported numbers.  For
example, QOR requires fewer SS7 links to the number portability database than LRN because of
the lower number of queries to support.  There is a risk, therefore, that an SS7 network
engineered to accommodate a lower traffic level would not be able to handle an unexpected sharp
increase in the number of calls to ported numbers.  Such increases could occur in response to
advertising or promotions by competitive LECs with ported numbers.  Difficulties in querying
the database may result in call blockage (i.e., lost or incomplete calls) and increased post-dial
delay, but only on calls to ported numbers.  We also note that the apparent advantage of QOR in
requiring fewer queries to the database is offset by the fact that it will require at least two
additional signalling messages for each call to a ported number before routing instructions are
obtained.  This additional load on the signalling network creates the potential for reliability
problems for ported calls.  We conclude that network reliability concerns posed by QOR violate
criterion six and the statutory definition of number portability because, if any network problems
arise as a result of QOR, they would disproportionately affect consumers who port their numbers. 


     26.  LRN.  As a related matter, proponents of QOR assert that deployment of LRN is
more likely to result in network failure than if carriers are permitted to use the QOR
enhancement to LRN.  Although the proponents of QOR do not frame their arguments in terms
of the performance criteria we adopted in the First Report & Order, the thrust of their argument
appears to fall within the scope of criterion five, which requires that no number portability
method should result in "unreasonable degradation in service quality or network reliability when
implemented."  

     27.  Based on the record before us, we conclude that petitioners have not demonstrated
that LRN fails to meet criterion five.  Although the initial deployment of any new technology
may pose some risk to the network, we are not persuaded that deployment of LRN will result in
unreasonable degradation of network reliability when deployed under the revised schedule
adopted in this First Reconsideration Order.  Indeed, petitioners' concerns about LRN's impact on
network reliability are mitigated by a number of factors.  First, as we noted previously, LRN has
been examined extensively by a number of state commissions and industry workshops, and had
been selected for deployment by at least six states prior to the adoption of the First Report &
Order.  Second, we provided in the First Report & Order for a field test of LRN in the Chicago
MSA (Chicago trial), which should help to protect against network reliability problems.  If
technical problems with LRN arise with respect to the Chicago trial, we can take appropriate
action at that time.  Third, as discussed in more detail in Section III.B.3 below, we are
extending the implementation schedule for Phase I to allow carriers additional time to test
number portability in a live environment, and to take appropriate steps to safeguard network
reliability.  Indeed, the Bellcore study submitted by SBC supports our conclusion that additional
time for testing, integration, and soaking (limited use of the software in a live environment for a
length of time sufficient to find initial defects) will help to reduce the probability of network
failure.  Fourth, as we clarify below, the Commission's implementation schedule does not
require a flashcut implementation on October 1, 1997, for those MSAs in the first phase of the
deployment schedule.  Rather, number portability may be implemented gradually throughout the
initial phase, provided that implementation in the designated markets is completed by the end of
that phase. 

     28.  Moreover, petitioners' fears about LRN's impact on the SS7 network are not
grounds for abandoning LRN.  Because of the pre-deployment procedures we adopt in this order,
carriers will know in advance the specific switches in each MSA that require local number
portability capabilities.  Furthermore, the task of forecasting signalling load requirements
should be easier with LRN than QOR, because queries are required for all interoffice intraLATA
calls.  As a result, carriers should be able to use historic traffic flows to help predict how many of
these calls are typically destined to switches where local number portability has been deployed. 
In contrast, for QOR, signalling loads are dependent upon the percentage of numbers actually
ported, which is a figure more difficult to predict in advance.  
     29.  In sum, we conclude that claims that LRN will threaten network reliability are
speculative and are mitigated by the added time we have provided for carriers to implement
number portability during Phase I and Phase II.  We expect the industry to continue to anticipate
failures, guard against them, and minimize their effects when they occur, which, as Bellcore
points out, has helped to make such failures rare events in the United States in the past.  Thus,
given all of the safeguards and mitigating factors discussed above, we are persuaded that
deployment of LRN will not result in "unreasonable degradation of network reliability."

                    (3)  Intranetwork Use of QOR

     30.  Incumbent LECs ask us to permit them to use QOR on all calls that originate on
their network and are placed to numbers that originally were assigned to one of their end offices
(i.e., calls "within their own network" or "intranetwork calls").  We conclude that their request
is misleading insofar as it implies that only calls to and from their own customers would be
affected.  In fact, calls that are placed to numbers that have been ported would require a query to
the number portability database after the originating switch is notified by the terminating switch
in the incumbent LEC's service area that the called number has been ported.  We agree with MCI
that, as customers subscribe to alternative carriers, the only calls that will remain "within" the
incumbent LEC's network will be calls from one of the incumbent LEC's customers to another. 
As discussed above, however, the call to the ported number would experience increased post-dial
delay because of the additional signalling and routing preparations required by QOR.  Such
disparity in treatment between ported and non-ported numbers violates criterion six and the
statutory definition of number portability. 

     2.   Public Interest Considerations

          a.   Overview

     31.  Petitioners further assert that, regardless of our performance criteria, incumbent
LECs should not be prohibited from using QOR as a number portability method, because
deployment of QOR serves the public interest.  First, they claim that QOR will result in
significant cost savings.  Second, they claim that permitting incumbent LECs to use QOR will
make it easier for them to meet the Commission's implementation schedule.  

     32.  As an initial matter, we disagree with the petitioners' premise that LECs should be
permitted to implement QOR regardless of the performance criteria, if the Commission
determines that QOR serves the public interest.  As stated above, we conclude that QOR violates
criterion six, which is required by the statute.  Thus, we are not at liberty to apply a public
interest analysis that could result in an abrogation of the statutory mandate.  Nevertheless,
because the parties raised public interest concerns, we address them here in order to establish that
our decision to prohibit QOR is not contrary to the public interest.

          b.   Purported Cost Savings Associated with QOR 

     33.  Background.  In the First Report & Order, we concluded that there was little
evidence on the record to support the claim that deployment of QOR would result in significant
cost savings.  We found, based on the record, that the competitive benefits of ensuring that calls
are not routed through the original carrier's network outweighed any cost savings that QOR
might bring in the immediate future.  Although Pacific submitted summary figures purporting
to indicate that it would save approximately $14.2 million per year if it implemented QOR
(assuming that 20 percent of subscribers ported their numbers), we concluded that these
purported savings, which represent less than two-tenths of a percent of Pacific's total annual
operating revenues, appeared insignificant in relation to the potential economic and non-
economic costs to competitors if QOR is used.  There was also record evidence that using QOR
would only be cost-effective at low levels of ported numbers, depending on the switch type.  In
addition, we expressed concern that, because carriers using QOR may be required to send QOR
signalling to another carrier's switch to determine whether a customer has ported his number, this
would require the second carrier to have the ability to recognize and respond to the QOR
message, thereby increasing its costs.

     34.  Pleadings.  Petitioners again contend they should be allowed to use QOR because
they would achieve significant cost savings.  These parties claim that QOR would result in a
reduction in the number of database queries, which, in turn, would reduce the costs that must be
incurred to complete the infrastructure upgrades necessary to implement QOR compared to those
necessary to utilize LRN.  Specifically, petitioners allege that QOR would require a carrier to
install fewer additional SCP pairs and SS7 signalling links, and to upgrade fewer STPs, than
would be the case for LRN.  Petitioners also allege that QOR would place less additional load
on switch processors, and would thereby delay the need to upgrade those switch processors.
 
     35.  Petitioners further argue that QOR would allow carriers to expand the capacity of
their SS7 signalling networks more gradually to handle an increased number of queries, as
numbers are ported to other carriers.  They allege that LRN, in contrast, will require carriers to
engineer their networks to accommodate queries on every call from a given NXX once one
telephone number has been ported from that NXX.  According to these parties, this will require
their networks to be grossly "over-engineered" when number portability is initially deployed. 
Several petitioners note that carriers using QOR would be able to decide on a switch-by-switch
basis when it is more cost effective to disable the QOR triggering mechanism and use LRN
alone.

     36.  In response, both AT&T and MCI claim that the LECs have overestimated the
costs of LRN and underestimated the costs of QOR, thereby grossly exaggerating the relative
cost savings associated with QOR.  Their principal objections to the carriers' cost studies are
that they:  (1) overstate the number of SCP pairs needed to deploy LRN; (2) exaggerate the
impact of LRN on switch processor capacity and fail to account for the impact of QOR on switch
processor capacity; (3) overstate the number of queries from non-participating carriers, which
results in overstated cost estimates, and fail to account for offsetting revenues; (4) fail to
estimate the cost of unnecessary call set-up under QOR; (5) fail to account for the additional
cost of provisioning QOR in all intermediate and terminating switches, including modifications
to Operator Support Systems (OSS); and (6) exaggerate the speed of number portability
deployment outside of the top 100 MSAs.  In addition, MCI points out that GTE, SBC,
NYNEX, and Bell Atlantic failed to specify the assumptions underlying their cost studies, and
Pacific submitted its cost study on a confidential basis, making it difficult to undertake a detailed
analysis of those cost studies.

     37.  Furthermore, there is a dispute in the record over the point at which it becomes
more cost effective to use LRN rather than QOR.  As we noted in the First Report & Order,
AT&T contends that it is more cost effective to deploy LRN in Lucent switches when 12 percent
of the customers served by such a switch have ported their numbers, and to deploy LRN in
Siemens switches when 23 percent of the customers served by such a switch have ported their
numbers.  In this phase of the proceeding, BellSouth asserts that the crossover point occurs
when 68 percent of its customers have ported their numbers.  NYNEX contends that the
appropriate transition is a function of its SCP costs, its signalling costs, and its switch costs, and
suggests that "this point may occur when 50 percent of numbers have ported."  In contrast,
several interexchange carriers have argued that the crossover point for Pacific occurs when
20 percent of numbers have ported.

     38.  Discussion.  At the outset, it is important to clarify the nature of the asserted "cost
savings" associated with QOR.  As most carriers recognize, LRN is the more economical way to
provide long term number portability once ported numbers for a given switch reach a certain
level, although the point at which it becomes more cost-effective to use LRN rather than QOR
remains in dispute.  From an economic perspective, the question is whether the present
discounted value of the cost of initially deploying LRN is less than the present discounted value
of the cost of deploying QOR initially and LRN at some later date.  Proponents of QOR
contend that the use of the QOR enhancement to LRN would result in real cost savings, not just a
short-term deferral of expenses, because the number of ported calls in some areas will never
reach the level where it is more cost effective to disable QOR and complete the build-out
necessary to support LRN.  We conclude, however, that the statutory scheme that Congress has
put in place should, over time, result in vigorous facilities-based competition in most areas, and
therefore LRN will be the most economical long-term solution.  Thus, deploying QOR would
most likely result in short-term cost savings, not overall cost savings.  In fact, at least one
incumbent LEC, Ameritech, has already decided that it is beneficial to deploy LRN from the
outset, rather than converting from QOR to LRN at some later date.  Even if facilities-based
competition does not develop in the immediate future, however, we conclude that the harm that
QOR imposes on competitors (as discussed in Section III.A.1 above) outweighs the benefit of
allowing incumbent LECs to defer the cost of implementing a superior long-term number
portability solution.

     39.  Moreover, we are not convinced that the incumbent LEC's estimates of the short-
term savings associated with QOR are reliable.  We are particularly concerned by the fact that
the cost savings estimates submitted by incumbent LECs have varied significantly over the
course of this proceeding.  In some cases, estimates from the same carrier have changed by 100
percent or more.  Further, the changed estimates have not moved in the same direction; some
carriers' estimates of the cost savings increased drastically and other carriers' estimates decreased
equally drastically.  While we recognize that carriers have worked over time to refine their
projections, the wide variation in the estimates submitted by individual carriers at different points
in this proceeding raises questions about the reliability of these estimates.  Furthermore, the
fact that some carriers have not explained the basis for the assumptions underlying their
estimates precludes us from conducting an independent evaluation of the reasonableness and
reliability of their projected cost savings and, consequently, limits the weight we can reasonably
assign to those estimates.  

     40.  In addition, MCI alleges that the cost savings that would be realized by permitting
the deployment of QOR are far less than the estimated $54 million to $136.3 million in annual
savings alleged by individual incumbent LECs.  The following chart shows the difference
between estimated savings submitted by the petitioners and estimated savings calculated by
MCI: 


Carrier
Estimated Savings as
Reported by the
Carrier (Millions)
Estimated Savings
as Reported by MCI
(Millions)


Bell Atlantic
$68
$15


BellSouth
$102
N/A


GTE
$136
$28


NYNEX
$54
N/A


Pacific
$130
-$12


SBC
$84
$19


U S West
$50-$75
N/A



     41.  MCI's calculation of the asserted cost savings associated with QOR challenges a
key assumption underlying the incumbent LECs' estimates.  Specifically, MCI claims that the
LECs substantially underestimate the number of transactions (i.e., queries) per second (tps) that
an SCP pair can perform and, consequently, their estimate of the number of SCP pairs that must
be deployed to provide LRN is overstated.  AT&T also alleges that the incumbent LECs'
savings estimates do not take into account offsetting increases in additional switching facilities
costs that would be required for QOR.  MCI and AT&T further contend that the incumbent
LECs' estimates of the relative costs of deploying LRN and QOR must be adjusted downward to
account for revenues that they will receive to perform database queries at the request of rural and
other LECs that do not have the capability to perform such queries themselves.  Although
incumbent LECs would obtain such revenues with both the LRN and QOR methodologies, the
revenue stream is likely to be significantly greater with LRN because the number of database
queries is likely to be much greater.  Indeed, Pacific, a proponent of QOR, acknowledges that its
estimate of the cost savings associated with QOR would be reduced by as much as $18 million if
such revenues were included in the estimate.  In view of the significant changes in the
estimates of the cost savings associated with QOR submitted by individual incumbent LECs over
the past months, a lack of data explaining many of the assumptions underlying their estimates,
and the questions raised by MCI and AT&T with respect to specific aspects of the estimates, we
find, on balance, that the incumbent LECs have not substantiated their claim that deployment of
QOR will produce significant cost savings.

     42.  Moreover, a recent submission by Illuminet, a provider of SS7, database, and
other services to independent LECs and other entities, casts doubt on the reasonableness of one
of the most basic assumptions underlying the incumbent LECs' estimates of the relative costs of
QOR and LRN.  Incumbent LEC estimates assume that the LEC number portability
architecture will be deployed through a network of SCPs, and that a major cost driver of LRN
is the number of SCPs needed to handle increased traffic volumes.  On the other hand,
Illuminet advocates using an STP-based architecture, in which call routing information from the
regional database is transferred to a carrier's STP instead of an SCP, and the SCP is not involved
in processing the number portability query.  Illuminet asserts that STPs are designed
specifically to do ten-digit translations such as LRN query processing and can process number
portability queries at a much faster rate than SCPs.  In contrast, SCPs are designed to support
multiple call processing applications and process significantly fewer queries per second. 
Carriers using an STP-based architecture, therefore, would need to purchase and install a
relatively smaller number of STPs instead of the larger number of SCPs alleged by the LECs,
and would not need to purchase and install additional SS7 links between the SCPs and STPs. 
Thus, according to Illuminet, use of an STP-based architecture would reduce dramatically the
cost of LRN.  In response, Pacific acknowledges that a combined STP-SCP approach may
reduce some costs, but that expenses related to upgrading switch processors, links, and existing
STPs will still be substantial.  Although we acknowledge that carriers deploying LRN will
incur costs other than those associated with SCPs, we agree with Illuminet that an STP-based
approach should reduce the relative cost differential between LRN and QOR.  

     43.  In addition, as we discuss more fully in Section III.B.2 below, we are modifying
our implementation schedule to require LECs to deploy number portability only in those
switches requested by a competitive LEC within a given MSA on the implementation schedule,
rather than in every switch in that MSA.  As a result, fewer switches should require upgrading in
each phase of the deployment schedule, with a corresponding reduction in the cost of
implementation for all carriers.  Moreover, if number portability capabilities are not deployed in
all switches, then there will be fewer switches generating database queries, and thus fewer SCPs
and signalling links will be needed than the LECs have estimated.  Sprint, for instance, has
estimated that it would save approximately 25 percent of its number portability budget of $60
million for 1997 if it were not required to deploy number portability in the smaller exchanges
within the MSAs on its deployment schedule.  While it is impossible at this time to quantify
the precise magnitude of this effect nationwide because we do not know in how many switches
competitive LECs will request number portability, this modification to our number portability
requirements should lessen somewhat whatever actual cost differences may exist between LRN
and QOR.  

          c.   Impact of QOR on the Implementation Schedule

     44.  Pleadings.  Bell Atlantic and Pacific claim that allowing the use of QOR would
make it easier for carriers to meet the Commission's implementation schedule, because they
would not need to deploy as many databases and as extensive a signalling infrastructure as would
be needed under LRN.  MCI disputes the claim that QOR would help carriers meet the
implementation schedule.  MCI argues that QOR has never been fully examined and specified by
the industry in any state task force.  MCI further argues that the proponents of QOR have not
established that it would be technically infeasible to deploy LRN fully under the existing
implementation schedule.  AT&T claims that, even after QOR software becomes available,
additional time would be necessary to complete the installation, testing, and training necessary
actually to implement QOR.

     45.  Discussion.  We are not persuaded by Bell Atlantic and Pacific that number
portability would be deployed more rapidly if incumbent LECs are permitted to use QOR.  We
find speculative petitioners' arguments that problems will arise in LRN implementation, and that
the Commission therefore should allow the use of QOR.  We agree with AT&T that no party has
demonstrated that schedules for completing installation, testing, training, and other tasks
necessary to implement QOR could be developed and coordinated with the schedules for
completing tasks necessary to implement LRN.  Furthermore, no party has alleged that a field
trial of QOR could be performed earlier than or even contemporaneously with the Chicago trial
for LRN.  To the contrary, as discussed in the next subsection, we have reason to believe that
allowing the use of QOR would delay the Chicago trial and the implementation schedule.  

          d.   Impact on the States

     46.  As discussed in Section II.C above, seven state commissions have specifically
ordered implementation of LRN.  These and a number of other states have invested considerable
time, effort, and resources in developing LRN implementation plans and technical standards. 
Illinois is proceeding with the field trial of LRN in the Chicago MSA.  Illinois, Georgia,
California, Maryland, Colorado, New York, and Texas have undertaken significant efforts to
form LLCs to develop and issue RFPs to construct and maintain a number portability database,
to plan for expanding these state databases into regional databases, and to prepare in each state
for database testing, in order to be ready to support number portability deployment in accordance
with the schedule set forth in the First Report & Order.  These states have been in the forefront
of opening markets to local competition, and we applaud and support their ongoing commitment
to take actions necessary to make local number portability a reality in their jurisdictions.  If we
were to reverse our earlier finding that QOR is not acceptable as a long-term number portability
method, these state activities could be greatly disrupted.  Much of the testing and development of
technical standards already done for implementation of LRN would have to be redone in order to
accommodate a scenario in which both QOR and LRN may be in use in a given state.  Moreover,
the states that have been leaders in number portability implementation would likely be forced to
reopen their state number portability proceedings to reconsider QOR, which could delay
implementation for months while those proceedings are pending.  

          e.   Conclusion

     47.  Congress recognized that there are costs associated with the implementation of
local number portability.  Although carriers may realize some short-term cost savings if
permitted to use QOR instead of LRN, the exact amount of savings from utilizing QOR is
unclear.  Even if the cost savings figures submitted by the LECs were correct, we believe that the
benefits to consumers of such savings do not outweigh the harm that QOR would impose on
competitive LECs, the cost of disrupting state efforts to implement LRN, or any delay in
implementation that might result from such disruption.  Thus, we conclude that permitting
carriers to deploy QOR as a long-term number portability method does not serve the public
interest. 
     

     B.   Implementation Schedule for Wireline Carriers

          1.   Background

     48.  In the First Report & Order, the Commission required local exchange carriers
operating in the 100 largest MSAs to offer long-term service provider portability, according to a
phased deployment schedule commencing on October 1, 1997, and concluding on December 31,
1998.  The Commission noted that, in establishing the deployment schedule, it relied upon
representations of switch vendors regarding the dates by which the necessary switching software
will be generally available for deployment.  In particular, vendors estimated that they could
begin to make software for at least one long-term number portability method generally available
for deployment by carriers around mid-1997.  In addition, a carrier may file a specific request
for number portability beginning January 1, 1999, for areas outside the 100 largest MSAs, and
each LEC must make long-term number portability available in that MSA within six months
after the specific request.  The Commission also directed the carriers that are members of the
Illinois Commerce Commission Local Number Portability Workshop (ICC Workshop) to
conduct in the Chicago MSA, concluding no later than August 31, 1997, a field test of LRN or
another technically feasible long-term number portability method that comports with our
performance criteria.  The Commission noted that Section 251(f)(2) of the Act permits a LEC
with fewer than two percent of the country's total installed subscriber lines to petition a state
commission for suspension or modification of the interconnection requirements of Sections
251(b) and (c).

     49.       The Commission delegated to the Chief, Common Carrier Bureau, the authority to
monitor the progress of LECs implementing number portability, and to direct carriers to take any
actions necessary to ensure compliance with its deployment schedule.  The Commission also
delegated to the Chief, Common Carrier Bureau, the authority to waive or stay any of the dates in
the implementation schedule, for a period not to exceed nine months (i.e., no later than
September 30, 1999, for the MSAs in Phase V of the deployment schedule), as is necessary to
ensure the efficient development of number portability.  In the event a carrier is unable to meet
our deadlines for implementing a long-term number portability method, it may file with the
Commission, at least 60 days in advance of the implementation deadline, a petition to extend the
time by which implementation of long-term number portability in its network will be
completed.  The Commission emphasized, however, that carriers are expected to meet the
prescribed deadlines, and a carrier seeking relief must present extraordinary circumstances
beyond its control in order to obtain an extension of time.  The Commission required a carrier
seeking such relief to demonstrate through substantial, credible evidence the basis for its
contention that it is unable to comply with our deployment schedule.

          2.   Deployment Only in Requested Switches

     50.  Pleadings.  Ameritech urges the Commission to limit initial deployment of
number portability in an MSA to exchanges where bona fide demand exists.  Ameritech argues
that excluding exchanges in rural and less densely populated suburban areas of an MSA, where
competition is not likely to develop immediately, will significantly reduce costs and the demand
on carriers' limited technical personnel and resources, and simplify deployment and testing.

     51.       Ameritech suggests delegating to state commissions the task of supervising the
selection of exchanges where demand exists, and cites as a model the procedure used by the ICC
Workshop in the Chicago MSA, prior to the release of the First Report & Order, under which
each competing LEC submitted to the ICC staff a list of the exchanges in which the LEC sought
number portability as a part of the initial deployment.  The sole criterion for designation of an
exchange was that the carrier anticipated needing immediately the capability to port numbers
from that exchange.  The ICC staff then aggregated the lists and released one consolidated list
to serve as the master deployment plan for the Chicago MSA.  According to Ameritech, this
procedure excluded from deployment 103 out of 206 exchanges in the Chicago MSA, which
serve primarily rural and less densely populated suburban areas and include many areas served
by small independent telephone companies and by switches with older technology.

     52.       According to Ameritech, the incumbent LECs then categorized the unrequested
exchanges according to the type of switch serving that exchange, and planned to convert each
exchange upon a bona fide request according to the following time frames:  (1) remote switches
supported by a host switch equipped for portability ("Equipped Remote Switches") within 30
days; (2) switches that require software but not hardware changes to provide portability
("Hardware Capable Switches") within 60 days; (3) switches that require hardware changes to
provide portability ("Capable Switches Requiring Hardware") within 180 days; and (4) switches
not capable of portability that must be replaced ("Non-Capable Switches") (no agreement was
reached on a time frame).   Ameritech explains that, because unconverted offices would be
identified prior to the initial deployment in the MSA, new LECs could request additional offices
at any time, and thus notify the incumbent LECs to begin planning for conversion of those
offices as soon as possible after the initial deployment in the MSA.  Therefore, claims
Ameritech, additional conversion could, in most cases, occur within 30-60 days after the initial
deployment in the MSA.

     53.  BellSouth also seeks clarification that portability need not be deployed in every
switch within an MSA.  BellSouth reports that industry participants in the Georgia number
portability workshop conducted an exercise similar to that of the ICC Workshop prior to release
of the First Report & Order, in which the competing carriers selected 21 offices in the Atlanta
MSA for initial implementation in late 1997.  Number portability task forces in Indiana,
Michigan, and Ohio, following the work of the ICC Workshop, have also established procedures
under which each competing LEC must submit a list of the exchanges in which it desires number
portability as a part of the initial deployment.  In Maryland, each carrier submitted to the
Maryland commission staff a ranking of the fifty end offices in the Baltimore and Washington,
DC LATAs for which it most desired portability, and the five end offices in the Salisbury and
Hagerstown LATAs for which it most desired portability.  The Maryland commission staff
then prepared a consolidated ranking that became the implementation roll-out schedule for
Maryland.  There were 25 end offices in the Baltimore and Washington, DC LATAs (out of 92
total end offices), and seven end offices in the Salisbury and Hagerstown LATAs (out of 13 total
end offices), that no carrier included in its list of end offices for which it requested number
portability.

     54.  USTA proposes that competing carriers be required to specify, in a request to a
LEC, those switches for which they wish the ability to port numbers.  USTA argues further
that, if a carrier does not receive a request for portability in an end office by April 1, 1997, then
the carrier should be able to obtain from the Commission a waiver of the deployment schedule
until the LEC receives a request.  Upon receiving such a request, the LEC would have nine
months, or a period of time specified by the Chief of the Common Carrier Bureau, to deploy
portability.  USTA also proposes that state commissions and/or state number portability
workshops be empowered generally to alter the timing of deployment for particular switches
within their state boundaries.  USTA and several other rural LEC representatives argue that,
without a procedure to limit deployment to switches for which a competitor has expressed
interest, many rural and small LECs will have to upgrade their networks at significant expense
even though no competitors plan to enter their markets and use number portability.

     55.       GTE urges us to establish a "limited waiver" process for exempting smaller
offices in the 100 largest MSAs from the deployment deadlines where competitive entry in that
area will not be immediate, and implementation would require significant network upgrades. 
A LEC wishing to take advantage of GTE's proposed procedure would first determine whether
any prospective entrant "expresses an immediate interest in entry" in the relevant area, and
whether those prospective entrants, or the state commission, have any objection to waiving the
schedule for that area.  If the prospective entrants and state commission do not object, then the
LEC would present the Commission with a petition for waiver "with the expectation that it will
be granted."  Afterward, the LEC would not have to implement portability until six months
after a request from a competing carrier, assuming the switch already has SS7 and AIN
capabilities.  According to GTE, its proposal would enable LECs to devote their resources to
upgrading offices in the more densely populated and competitive areas, and would recognize that
portability requires expensive upgrades in many smaller offices.

     56.       NEXTLINK presents a "swapping" proposal, under which an incumbent LEC
seeking a waiver for a switch within the 100 largest MSAs instead would deploy switches
outside the 100 largest MSAs which a competitor requests.  NEXTLINK cautions, however,
that we should rely on state commissions to determine the extent of competition in markets in
their states, but not, as suggested by USTA, to determine whether waivers should be granted.

     57.       AT&T does not oppose proposals to limit deployment of number portability to
those switches for which a carrier requests deployment.  Sprint supports Ameritech's proposal,
which does not entail LECs requesting waivers for unrequested offices.  Sprint predicts that as
many as 127 out of a total of 360 of its central offices will not face immediate facilities-based
competition and will be relieved from initial deployment under a procedure whereby carriers
identify the switches for which they desire portability, at an estimated savings of over $15
million in 1997 alone (approximately 25 percent of Sprint's total number portability budget). 
Sprint emphasizes that we should determine a specific time frame within which the carrier must
deploy portability once a bona fide request for portability is received, absent some other
extenuating (and fully documented) circumstances.  Sprint asserts that the state public utilities
commissions in Florida, Ohio, Indiana, and Illinois, have established procedures by which
carriers request deployment in specific exchanges.  Time Warner supports allowing carriers to
apply for waivers of the deployment schedule for the 100 largest MSAs for end offices serving
areas that competitors do not plan to enter initially.

     58.  MCI, in contrast, opposes relaxing the mandate of MSA-wide deployment. 
According to MCI, forcing competitive LECs to defend the need for MSA-wide portability and
to justify deployment in each end office would create an environment of uncertainty for
competitive LECs.  MCI claims that, if competitive LECs must request deployment each time
a new customer requesting service is located in an end office that was not deployed according to
the original deployment schedule, any incentive and ability to market their services widely will
be impaired.  According to MCI, once portability is introduced in an area, the incremental cost
and resources needed to add additional end offices are relatively minor because most costs, i.e.,
SCP hardware and signalling links, OSS modifications, and shared regional database costs, will
have already been incurred.

     59.  Discussion.  We agree with the majority of the parties commenting on this issue
that it is reasonable to focus initial efforts in implementing number portability in areas where
competing carriers plan to enter.  This approach will permit LECs to target their resources where
number portability is needed and avoid expenditures in areas within an MSA in which
competitors are not currently interested.  We further agree that such a procedure will foster
efficient deployment, network planning, and testing, reduce costs, and lessen demands on
software vendors.  Moreover, we believe that limiting deployment to switches in which a
competitor expresses interest in number portability will address the concerns of smaller and rural
LECs with end offices within the 100 largest MSAs that they may have to upgrade their
networks at significant expense even if no competitors desire portability.  Limiting deployment
to switches in which a competitor expresses interest in deployment will be consistent to a large
extent with procedures suggested by Ameritech and BellSouth and already considered by several
state commissions, as well as our past practice in implementing conversion to equal access for
independent telephone companies.

     60.  We therefore conclude that LECs need only provide number portability within the
100 largest MSAs in switches for which another carrier has made a specific request for the
provision of portability.  We leave it to the industry and to state commissions to determine the
most efficient procedure for identifying those switches in which carriers have expressed interest
and which will be deployed with number portability according to the original deployment
schedule for the 100 largest MSAs.  We find, however, that any procedure to identify and request
switches for deployment of number portability must comply with certain minimum criteria to
ensure that minimal burden is imposed upon carriers requesting deployment in particular
switches, and that carriers that receive requests for deployment in their switches have adequate
time to fulfill the requests.  As explained below, we require that: (1) any wireline carrier that is
certified, or has applied for certification, to provide local exchange service in the relevant state,
or any licensed CMRS provider, must be allowed to make a request for deployment; (2) requests
for deployment must be submitted at least nine months before the deadline in the Commission's
deployment schedule for that MSA; (3) carriers must make available lists of their switches for
which deployment has and has not been requested; and (4) additional switches must be deployed
upon request within the time frames described below.

     61.  First, any wireline carrier that is certified (or has applied for certification) to
provide local exchange service in a state, or any licensed CMRS provider, must be given a
reasonable opportunity to make a specific request for deployment of number portability in any
particular switch located in the MSAs in that state designated in the First Report & Order. 
According to the Act, any carrier that desires number portability from a LEC must be able to
obtain portability, in accordance with the requirements established by the Commission.  A
state commission, however, may review whether the requests made by a carrier are unreasonable,
given the state commission's knowledge of that carrier's plans to enter the state.  Based on the
limited information available to us at this time, the states that are reviewing seemingly
unreasonable requests appear to be acting in good faith to accommodate carriers' interests in
number portability capabilities.  If we receive evidence in the future that states are
unreasonably limiting deployment, then we can revisit this issue at that time.

     62.  Second, a carrier must make its specific requests for deployment of number
portability in particular switches at least nine months before the deadline for completion of
implementation of number portability in that MSA.  We conclude that this deadline will enable
a LEC to plan ahead for the deployment of number portability in multiple switches in a given
MSA.  We encourage carriers to make such requests earlier than the nine-month deadline to give
the LEC that operates the switch in which portability is requested more time to implement
number portability capabilities.  In addition, carriers may agree among themselves, or state
commissions may require carriers, to comply with a deadline for submitting requests that is more
than nine months prior to the implementation deadline.

     63.  We encourage carriers, before requests for deployment are submitted, to seek to
reach a consensus on the particular switches that initially will be deployed with number
portability.  We note, moreover, that the state commission may decide, or carriers affected in the
state may agree, that it would be preferable for the state commission to aggregate the requests to
produce a master list of requested switches.  In addition, we conclude that carriers may
negotiate private agreements specifying that a carrier will not request that certain switches be
deployed according to the Commission's schedule if the LEC from which deployment is
requested agrees to deploy other number portability-capable switches, either inside or outside the
100 largest MSAs, at an earlier date than the deadlines in the Commission's schedule.

     64.  Third, after carriers have submitted their requests, a carrier must make readily
available upon request to any interested parties a list of its switches for which number portability
has been requested and a list of its switches for which number portability has not been requested. 
We find that simplifying the task of identifying the switches in each MSA in which number
portability is initially scheduled to be deployed is consistent with our policy of facilitating the
deployment of number portability in areas where new competitors plan to enter.

     65.  Fourth, carriers must be able to request at any time that number portability be
deployed in additional switches.  LECs must provide portability in these additional switches
upon request, after the deployment deadline mandated by the Commission's schedule for that
MSA, within the time frames that we adopt here, unless requesting carriers specify a later date. 
Although carriers may make specific requests for deployment in additional switches in a
particular MSA at any time, the time frames set forth below will commence after the deadline for
deployment in that particular MSA in our implementation schedule.  We agree with Sprint and
Time Warner that specific time frames within which number portability must be deployed in all
switches that were not initially requested are necessary to ensure that competitive LECs can be
certain that portability will be available in areas in which they plan to compete and can formulate
their business plans accordingly.  Absent this certainty, competing carriers would have an
incentive to request more switches during the initial request process, including those serving
markets which they do not plan to enter in the near future, in order to ensure deployment of
portability in any switch in which they might ever want portability.  We find, therefore, that
establishing specific time frames for deployment in all additional switches will benefit
competitive LECs by ensuring that portability will be available to them at a designated future
time, and will benefit incumbent LECs by reducing their initial deployment burdens.

     66.  We find that the time frames developed by the carriers participating in the ICC
Workshop generally successfully balance the needs of competitive LECs for certainty of
deployment and the burdens faced by incumbent LECs in deploying number portability in
additional switches that require different levels of upgrades.  We therefore adopt, with slight
modification, the time frames developed by the ICC Workshop for the conversion of additional
exchanges:  (1) Equipped Remote Switches within 30 days; (2) Hardware Capable Switches
within 60 days; (3) Capable Switches Requiring Hardware within 180 days; and (4) Non-Capable
Switches within 180 days.  For example, if carriers request deployment in a certain number of
switches in the Pittsburgh, PA MSA nine months before that MSA's Phase III deadline of
June 30, 1998 (i.e., they make requests by September 30, 1998), and a carrier requests on April 1,
1998, deployment in an additional Equipped Remote Switch in Pittsburgh, then the additional
switch must be equipped with number portability capability on or before July 30, 1998 (i.e., 30
days after June 30, 1998).  We note that the ICC Workshop developed the time frames for the
first three switch categories, but did not reach agreement on a time frame for converting a Non-
Capable Switch.  Since we find, as discussed above, that specific time frames for deployment
of all additional switches are necessary, we find that it is reasonable to allow no more time for
deployment of any switches within the 100 largest MSAs than is allowed for deployment of
switches outside the 100 largest MSAs.  Deployment in additional switches will be less
burdensome for carriers with networks within the 100 largest MSAs that have already made
network-wide upgrades, e.g., SCP hardware and OSS modifications, to support number
portability in the initially requested switches.

     67.  Carriers seeking relief from these deadlines may file a petition for waiver under
the procedures set forth in the First Report & Order.  We note that the deadlines for switches in
categories (1) and (2) are shorter than switches in categories (3) and (4) because the former
require less extensive upgrades.  We realize that the shorter deadlines for switches in categories
(1) and (2) do not allow time for carriers to file a petition for waiver under the procedure
established in the First Report & Order on the grounds of extraordinary circumstances that
prevent it from complying with the Commission's deployment requirements.  We therefore will
suspend the deadlines for switches in categories (1) and (2) during the period that the
Commission is considering a carrier's petition for waiver.

     68.  We agree with MCI that, after portability has been introduced in an MSA, the
incremental cost and resources needed to add additional end offices are relatively minor because
most costs, e.g., SCP hardware and signalling links, OSS modifications, and shared regional
database costs, will have already been incurred.  Number portability, consequently, can be
deployed more quickly in the switches for which number portability is requested after the initial
deployment of number portability.  We therefore decline to adopt suggestions by USTA and
GTE to allow a longer time after receipt of a request for deployment of number portability
capability in switches not in the initial deployment.

     69.       We emphasize that a carrier operating a non-portability-capable switch must still
properly route calls originated by customers served by that switch to ported numbers.  When the
switch operated by the carrier designated to perform the number portability database query is
non-portability-capable, that carrier could either send it to a portability-capable switch operated
by that carrier to do the database query, or enter into an arrangement with another carrier to do
the query.

     70.  We conclude that permitting carriers to specify those switches within the 100
largest MSAs in which they desire portability is more workable than the procedures proposed by
some petitioners that would require incumbent LECs to file waiver requests for specific switches
for which the incumbent LECs believe that no competitor is interested.  A waiver procedure
would create a period of uncertainty for both the incumbent LEC and the competitive LEC as to
whether portability would actually be deployed in that switch.  Moreover, a waiver procedure
would burden the incumbent LEC with preparing and filing the petition for waiver, require that
we review the petition, and potentially burden the state commission with determining whether
there is actual competitive interest in the switch.  In addition, these proposals by petitioners
appear to assume generally that no competitive LEC would oppose the waiver petition; if this is
not the case, then a waiver procedure would burden competing carriers with challenging the
waiver.  A waiver procedure would also burden both competing carriers and consumers by
hampering competitive entry into the market while waiting for a determination by the
Commission or a state commission. 

     71.       We believe that the criteria set forth above adequately address MCI's concern that
requesting carriers would bear an unnecessary burden of justifying deployment in each end office
and endure uncertainty as to deployment.  The only burden on requesting carriers is to identify
and request their preferred switches.  In addition, carriers have a time frame for deployment of
the initially unrequested switches within the 100 largest MSAs.  Competitive LECs can thus
market their services as widely as they desire with assurance that number portability will be
available in the areas where, and at the times when, they desire to compete.  As an additional
safeguard against anticompetitive abuses of the procedures to identify and request those switches
for which a carrier desires deployment of number portability, we delegate authority to the Chief,
Common Carrier Bureau, to take action to address any problems that arise over any specific
procedures.

          3.   Extension of Implementation Schedule

     72.  Pleadings.  Several BOCs and GTE argue that the current schedule for
implementation by wireline carriers allows too little time for implementing a technology that
requires such extensive network-wide modifications.  These petitioners argue that the present
schedule could jeopardize network reliability because it does not allow sufficient time to
complete numerous tasks, many of which, they allege, are beyond their control, including:  (1)
review and incorporation of the results from the Chicago trial, and resolution of critical carrier-
specific operational issues that the Chicago trial will not address; (2) development and testing
of number portability-specific and "generic" software upgrades; (3) development and testing of
infrastructure modifications and additions to support number portability capabilities; (4)
modification of operational support systems (OSS); (5) modification of vendor software if
state commissions dictate inconsistent rate centers for identifying and billing calls; and (6)
establishment of regional databases and associated technical standards by the NANC.  On
February 19, 1997, SBC submitted a study it commissioned from Bellcore that purportedly
demonstrates that the deployment schedule set forth in the First Report & Order for Phase I
would threaten network reliability in Houston.

     73.  In their petitions and comments, some of the incumbent LECs recommend
specific ways to relax the deployment schedule for wireline carriers.  U S West suggests
extending the deadline for each phase by three months, claiming this would give carriers not
participating in the Chicago trial the necessary time to study the results of the trial and conduct
tests within their own networks.  BellSouth, CBT, and GTE recommend that the deadlines for
completing implementation of Phases I and II each be extended from 90 to 180 days.  Under
this plan, new Phase I would extend from October 1997 through March 1998; new Phase II
would extend from January 1998 through June 1998, and the remaining phases would remain the
same (e.g., Phase III would still extend from April 1998 through June 1998).  BellSouth claims
that, because its plan would extend only the deadlines for completing implementation of long-
term number portability for Phases I and II, LECs would still start implementation of all phases,
and complete deployment in Phases III through V, according to our original schedule.  In
addition, BellSouth seeks clarification that Phase I implementation may begin at any time during
Phase I (i.e., from October 1997 through March 1998, under its proposed schedule).  GTE
urges us to clarify that LECs will be entitled to a waiver of the deployment deadlines if they
cannot meet the deployment schedule for reasons "outside the control of the LECs."  USTA
proposes allowing each state commission and/or its workshop to evaluate evidence of local
competition in areas within that state, and either accelerate or decelerate the deployment schedule
in those areas, as long as the "overall burden" on carriers implementing number portability is not
increased.

     74.  NYNEX urges us to expedite the Chicago trial, or, in the alternative, to select
other areas to hold field trials.  NYNEX also urges us to encourage states to be flexible in
opting out of the regional database or choosing to construct joint databases, and to work with less
active neighboring states to establish regional databases.  NYNEX also suggests that, during
Phase I of the schedule (fourth quarter of 1997), we allow LECs to deploy long-term number
portability in smaller MSAs as test beds, instead of requiring deployment in the largest MSAs.

     75.  The prospective entrants generally oppose any delay in the implementation
schedule for wireline carriers.  AT&T responds that the Commission's schedule is justified by
specific showings in the record that an industry Service Management System (SMS) could be
deployed, upgrades of carrier networks could be performed, and operational issues could be
addressed in time for completion of widespread deployment (i.e., in 84 MSAs) of long-term
number portability by the third quarter of 1998.  MCI argues that our schedule is reasonably
based on the schedules that several states had already established which ordered deployment to
begin in the third or fourth quarter of 1997.  In ex parte filings, AT&T and MCI both argue
that the late-filed Bellcore study does not provide an adequate basis for extending the
implementation schedule, and that the study is "fatally flawed."

     76.  MCI argues that the safeguards in the First Report & Order -- monitoring of
implementation by the Chief of the Common Carrier Bureau, the Chicago trial, and the waiver
procedure for extending the deployment deadlines if necessary -- will be adequate to avoid
alleged network reliability risks and technical problems.  MCI also urges us to instruct the
LECs that they will not receive a waiver of the schedule if they introduce new services or
technologies that are incompatible with LRN, experience implementation problems as a result,
and then claim more time is needed to modify LRN and resolve the problems caused by the
introduction of incompatible services or technologies.  AT&T, ICG, NEXTLINK, Sprint, and
TRA also argue that a procedure for relief already exists if carriers show that they cannot meet
the implementation schedule.  Therefore, argues NEXTLINK, requests for delay of the
implementation schedule are premature and fail to demonstrate the "extraordinary
circumstances" required by the First Report & Order.  ALTS argues that the incumbent LECs
challenging the technical aspects of the schedule should instead first try to resolve their claims
with the involved carriers and vendors, and then seek Commission intervention with respect to
any remaining issues.  Time Warner argues that, given the incumbent LECs' strong incentive
to delay competition, we should closely scrutinize claims of infeasibility in case-by-case waiver
requests, and deny a waiver if another carrier facing similar technical challenges (e.g., upgrading
similar generic software on similar switches) has met the deployment deadlines.

     77.  ICG claims BellSouth's request to extend the number portability implementation
schedule for Phases I and II is unjustified and would slow implementation in the later phases as
well.  ICG suggests that if we do grant BellSouth's request, however, then the implementation
dates for Phases III, IV, and V should not be changed.  ICG and NEXTLINK oppose U S
West's request that carriers not participating in the Chicago trial receive an extension of the
implementation schedule, arguing that:  the four month period between the completion of the
Chicago trial and the completion of implementation in Phase I is ample time for carriers to
review the results of the Chicago trial, and carriers can schedule their own trials if they want
more time;  LECs need not wait for the outcome of the Chicago trial before testing and
modifying their own networks, as the trial's results will be available as it progresses; and U S
West participates in state and industry fora where implementation and inter-carrier OSS impacts
of number portability have been extensively analyzed.  Similarly, MCI claims that the results
of the Chicago trial will be applicable to all networks, because all carriers use switches from the
same few vendors and have similar network designs.  Finally, MCI claims that USTA's
proposal to allow states to alter the Commission's deployment schedule would let incumbent
LECs influence the states to delay the schedule and thus "cripple" deployment of long-term
number portability in every MSA.

     78.  Discussion.  We grant, with some modifications, the requests by BellSouth and
other parties to extend the deadlines for completion of deployment of long-term number
portability for Phases I and II, as set forth in Appendix E of this First Reconsideration Order. 
On reconsideration, we extend the end date for Phase I by three months.  Thus, deployment in
Phase I will now take place from October 1, 1997, through March 31, 1998.  We take this action
because we are now persuaded that initial implementation of this new number portability
technology is likely to require more time than subsequent deployment once the technology has
been thoroughly tested and used in a live environment.  For example, initial implementation of
this new technology is likely to involve more extensive testing, and may require extra time to
resolve any problems that may arise during the testing.  It therefore is appropriate that Phase I be
longer than subsequent phases in the schedule to allow carriers to take appropriate steps to
safeguard network reliability.

     79.  We also note that the participants in the Chicago trial have recently informed us
that the completion date of the Chicago trial, previously scheduled for August 31, 1997, has been
postponed by approximately one month until September 26, 1997.  While the Chicago trial
participants have committed to providing the Commission with weekly updates on trial progress,
the full report on the Chicago trial that participants had planned to file September 30, 1997, is
now scheduled to be filed October 17, 1997.  Consistent with this notification by the Chicago
trial participants, we hereby extend our deadline for carriers that are members of the ICC
Workshop to conduct a field test of any technically feasible long-term database method for
number portability in the Chicago, Illinois, MSA and to report the results of that trial.  While we
understand that participants in the Chicago trial are prepared to commence implementation in
Chicago immediately upon conclusion of the trial and still expect to meet the original
December 31, 1997, deadline, we recognize that carriers operating in other MSAs may require
additional time to interpret the results of the Chicago trial in light of their individual network
configurations.  Finally, we find some merit in CBT's argument that an extra 90 days for initial
implementation may permit small and mid-size LECs to reduce their testing costs by allowing
time for larger LECs to test and resolve the problems of new technology.  Given all the factors
listed above, we conclude that a three-month extension of the time period for initial deployment
in Phase I markets appropriately safeguards network reliability, and therefore is warranted.

     80.  We also extend the end date for Phase II by 45 days.  Thus, deployment in
Phase II will now take place from January 1, 1998, through May 15, 1998.  We extend Phase II
to alleviate potential problems that may arise if deployment in markets in Phase I and II must be
completed on the same date.  Requiring that implementation be completed in a greater number of
markets by a specific deadline may make that deadline more difficult to meet (e.g., by straining
vendor resources to perform software upgrades in any given period of time).  For the same
reason, we decline to extend Phase II by 90 days as requested by BellSouth, as such an extension
would establish the same deadline for completion of deployment for Phases II and III.  We
conclude that the modest adjustment of the deadline for Phase II adopted in this First
Reconsideration Order will more effectively stagger the deadlines for deployment in different
markets than BellSouth's proposal.

     81.  We clarify, per BellSouth's request, that implementation of number portability for
a phase may begin at any time during that phase, provided that implementation in the designated
markets is completed by the end of that phase.  Contrary to the allegations of Pacific and other
parties, number portability thus need not be introduced "on virtually the same day" in the seven
of the largest MSAs, especially because it may now be phased into the first markets more
gradually over six months, instead of three.  

     82.  We strongly advise carriers to begin implementation early in each phase,
however, as they will not be able to obtain a waiver of the schedule if they cannot demonstrate,
through substantial, credible evidence, at least sixty days before the completion deadline, the
extraordinary circumstances beyond their control that leave them unable to comply with the
schedule, including "a detailed explanation of the activities that the carrier has undertaken to
meet the implementation schedule prior to requesting an extension of time."  This is especially
applicable to Phases I and II, given that we now are granting carriers additional time during those
phases specifically so that they can implement number portability more gradually.  We will not
look favorably upon a waiver request if the carrier has not taken significant action to implement
portability, if the carrier does not place orders with switch manufacturers in a timely manner, or,
for example, if the carrier requests a waiver for a Phase II market because it only began preparing
for implementation for a Phase I market in the first quarter of 1998, and then claims that it has
too many software upgrades to perform from January through May 15, 1998.  Carriers should be
able to identify any specific technical problems that may necessitate an extension of the
deployment deadline for Phase I during the four months between the scheduled end of the
Chicago trial and the deadline for requesting an extension for Phase I, especially because carriers
will be receiving initial feedback from testing in Chicago far in advance of the Chicago trial's
conclusion.  As noted above, the participants in the Chicago trial have committed to providing
weekly progress reports as the trial progresses.  Initial tests of LRN hardware and software on a
subset of switches in the Chicago MSA began in January 1997.  Intra-network and database
testing in Chicago is scheduled to take place for several months before the start of the Chicago
trial mandated by the Commission.

     83.  Our decision to extend the deadlines for completing Phases I and II of our
deployment schedule reflects the fact that we consider network reliability to be of paramount
importance.  Consistent with that commitment, in the First Report & Order we delegated
authority to the Chief, Common Carrier Bureau, to monitor generally the progress of number
portability implementation and take appropriate action, as well as establishing a procedure for
individual LECs to obtain an extension of the deployment deadlines as necessary for their
specific markets.  The Chief, Common Carrier Bureau, will monitor the weekly reports from
the Chicago trial and any other pertinent developments.  We find that further adjustment of the
deployment schedule in response to these developments is more properly a matter for the Chief,
Common Carrier Bureau, to handle as number portability technology is tested and carriers
discover any actual, specific difficulties.  If significant problems arise during the Chicago trial, or
other significant implementation problems arise during Phase I, the Chief, Common Carrier
Bureau, has the authority to adjust the schedule for the Chicago trial or the deadline for Phase I
implementation, as appropriate, to ensure network reliability.

     84.  Although the findings of the Bellcore study submitted by SBC were vigorously
challenged by AT&T and MCI, it bears mention that extending the Phase I completion date by
three months is responsive to the recommendation in the Bellcore study that we should allow
additional "time for testing, integration, and soaking (limited use of the software in a live
environment for a length of time sufficient to find initial defects) of the software."  In fact, the
Bellcore study specifically recommended that the Commission "[e]xtend the time interval for
introduction of [number portability] by 3 months."  Our extension of Phase I, in combination
with our conclusion that carriers need provide portability only in requested switches, also
allows carriers the flexibility to introduce portability more gradually, beginning with a subset of
switches within the MSA.

     85.  We deny the petitions to extend the deployment deadlines for all markets or
otherwise provide wireline carriers greater flexibility in the schedule to implement long-term
number portability.  Although we conclude that initial implementation of this new number
portability technology may require additional time, we are not persuaded that implementation in
subsequent phases, after the technology has already been tested and installed in the initial
markets, need be delayed to the extent requested by some petitioners.  We find on the basis of the
record in this proceeding that the implementation schedule as revised in this First
Reconsideration Order is reasonable, and that granting any further delay of the schedule at this
time is premature and unnecessary, especially because there is still approximately one year
before LECs must complete deployment for the earliest phase.  Petitioners have only speculated
that unpredictable events may, at some point in the future, generally delay implementation, and
have not shown that a specific factor will render the later schedule impossible to meet for any
particular reason, much less for any particular LEC.  

     86.  For example, despite NYNEX's vague claim that switch vendors cannot meet
current workloads, no party has submitted any evidence refuting the specific vendor
representations cited in the First Report & Order that vendors will be able to begin providing
software for at least one long-term number portability method around mid-1997.  Indeed, GTE
admits that it "has no reason to doubt that [the switch vendors Lucent, Northern Telecom,
Siemens, and Ericsson] can meet their commitments" to "begin supplying LRN software in early-
to-mid 1997."  It is our understanding that the switch vendors Lucent and Nortel are still on
schedule to provide LRN software by mid-1997.

     87.  NYNEX also claims that the time estimated for software upgrades does not
account for the fact that most upgrades will take place on weekends in order to minimize system
disruptions, and generally alleges that "[t]here are probably not enough weekends" to complete
deployment according to the schedule.  NYNEX fails, however, to specify the additional time
that, according to its estimate, would be necessary to complete the necessary upgrades. 
Similarly, GTE claims generally that more time is necessary to install the software for long-term
number portability in all switches and remove transitional number portability capabilities, but
does not estimate the additional time it believes it would need.  GTE also claims in general
terms that the schedule does not accurately reflect the time needed to modify vendor software if
state commissions dictate inconsistent rate centers, but does not explain to what extent the rate
centers are inconsistent and thus need modified software, nor does it show that a specific amount
of additional time will be needed.  

     88.  Petitioners' arguments are even more speculative given that their implementation
obligations are likely to be significantly lighter than they assume, because, as we discuss above,
LECs are required to deploy number portability only in switches for which they receive requests
for number portability capability.  Moreover, even if the problems identified by petitioners do
in fact develop, in our First Report & Order we established a procedure for LECs to obtain an
extension of the deployment deadlines as necessary, and delegated authority to the Chief,
Common Carrier Bureau, to monitor the progress of number portability implementation.

     89.       In addition, contrary to petitioners' claims, the schedule set forth in the First
Report & Order did allow time for factors such as the need to modify OSS (e.g., ordering and
billing systems) and the need to upgrade the number portability-specific and the generic switch
software.  We noted in the First Report & Order that we based the schedule largely on state
commission deployment schedules.  State commissions and workshops, organized under their
auspices and composed of industry representatives, have been and still are working to resolve
deployment issues and many of the associated issues that petitioners now claim warrant delay. 
While studying these issues in detail, those states that established deployment schedules prior to
our First Report & Order nonetheless concluded that deployment could commence in certain
MSAs in those states by mid-1997.  Moreover, since October, 1993, the industry, under the
auspices of the Number Portability Workshop of the Industry Numbering Committee (INC), has
been "assess[ing] the technical feasibility and implementation requirements, impacts, and
attributes of number portability," including the factors identified by petitioners.  We conclude
that state commissions were well aware of the concurrent need to resolve associated issues such
as modification of OSS, and allowed time to resolve these associated issues when setting their
long-term number portability implementation schedules.  While the First Report & Order did not
expressly consider how much time is necessary to modify OSS and to upgrade software, the
schedule the Commission adopted relies upon the prior work and expertise of the state
commissions in establishing those state implementation schedules.  At any rate, the extensions of
Phases I and II, as discussed above, should alleviate any potential concerns about the sufficiency
of time for modifying OSS and upgrading switch software.

     90.  We have concluded that a modest extension of the deployment schedule for
Phase I (and Phase II) markets is warranted to allow more time for testing and modifications to
be made when local number portability is first implemented.  We do not believe, however, that
speculative and unspecified concerns about possible future technical concerns are sufficient to
justify an across-the-board delay in implementing number portability in view of the adverse
effects of delay on competition in local markets.  The Commission found in the First Report &
Order that number portability is essential to effective facilities-based competition in the
provision of local exchange services.  Extending the schedule now for deployment of long-
term number portability, beyond the modifications adopted in this First Reconsideration Order,
based on unsubstantiated concerns will thus hamper the development of that competition. 
Such an extension, moreover, would conflict with the 1996 Act's intent to open monopoly local
telecommunications markets to competition as soon as possible.

     91.  Moreover, we are not persuaded by the argument that we should delay the
implementation schedule to account for problems that some other LECs may experience, due to
differences in LEC networks that may prevent them from deploying number portability at the
same speed.  We believe that Congress, in requiring the provision of number portability "to the
extent technically feasible," did not intend for LECs that are capable of providing number
portability according to our deployment schedule to delay deployment on the grounds that some
other LECs may encounter technical obstacles in adapting their networks.  We recognize, as
Bell Atlantic points out, that the BOCs were permitted to develop and deploy equal access
pursuant to a more relaxed schedule.  The BOCs, however, did not have a statutory mandate to
deploy equal access as soon as it was technically feasible to do so, and no party has shown that
the schedule established by the Modification of Final Judgment (MFJ) for deployment of equal
access could not have been accelerated.

     92.  Furthermore, we find it unnecessary to act on GTE's request that we clarify that
LECs may obtain a waiver if they cannot meet the schedule for reasons beyond their control. 
The waiver procedure established in the First Report & Order for extending deployment
deadlines as necessary provides an effective vehicle for addressing any problems in
implementing number portability that LECs can document.  We note that carriers may file
petitions for waiver of the deployment schedule more than 60 days in advance of an
implementation deadline, and thus receive relief earlier, if they are able to present substantial,
credible evidence at that time establishing their inability to comply with our deadlines.

     93.  We reject USTA's proposal to give every state commission and/or workshop the
authority to extend independently our deployment deadlines according to their assessments of the
level of local competition in an area.  As set forth above, we require carriers to identify the
switches in which they desire number portability capability well before the deadline for
deployment in a particular MSA.  We find that this requirement will enable LECs to deploy
number portability in areas in which local competition is likely to develop at an early stage,
while relieving LECs of the obligation to install the capability in areas that competitive LECs
have no initial interest in serving.  This requirement, in our view, addresses USTA's concerns
by striking a reasonable balance between a LEC's interest in avoiding unnecessary switch
upgrades, and a competitive LEC's interest in having assurances that number portability will be
available in areas where it plans to compete to serve existing LEC customers.

     94.  We decline to expedite the Chicago trial, as requested by NYNEX.  The First
Report & Order scheduled the completion date for the Chicago trial for as early as appeared
reasonably possible at that time.  Given the record before us now, we conclude that it would not
be possible to accelerate the commencement of that trial.  Moreover, we agree with the
Chicago trial participants that it would be inappropriate to shorten or delete any of the planned
testing.

     95.  We also decline to order additional field tests, as requested by NYNEX.  The
requirement that there be a field trial in Chicago is only intended to ensure that at least one field
trial is held to identify technical problems in advance of widespread deployment, which will
provide all carriers, as well as the Commission, with information on implementation.  All carriers
will have an opportunity to monitor testing in Chicago and evaluate the results of the testing on
an ongoing basis.  We find, moreover, that LECs currently have access to additional information
concerning the impact of number portability on their systems, because many LECs are, and have
been for some time, analyzing extensively implementation and inter-carrier OSS impact of
number portability under the auspices of state and industry fora.  As we stated in the First
Report & Order, we do not routinely schedule field trials in rulemaking proceedings; our
requiring a field trial in the Chicago MSA is an exceptional step that we adopted to safeguard
against any risk to the public switched telephone network.  The need for any further trials
should be determined by the industry.
 
     96.  To the extent that other networks differ in design or switch use or other relevant
variables, we do not preclude the testing of either software or hardware in other areas or by other
carriers, either contemporaneously with the Chicago trial or even before that trial begins. 
Indeed, we encourage carriers to test portability within their own networks as early as possible. 
For example, Bell Atlantic plans to do "first office application" testing in Gaithersburg,
Maryland, from July 15, 1997, to August 30, 1997.  The Gaithersburg test, therefore, will have
been completed seven months before Bell Atlantic's March 31, 1998, deadline to complete
implementation in Philadelphia, the market in which it must deploy long-term number portability
in Phase I under our revised schedule.  In any event, carriers should have the opportunity to
perform their own testing, including on "live traffic," well before the date by which they must
request any waiver of the Phase I implementation requirements.

     97.  We also decline to adopt NYNEX's proposal to deploy portability in smaller
MSAs instead of the largest ones during Phase I of the deployment schedule.  At this time,
there is only speculation that starting with the most populous MSAs will result in technical
problems.  Indeed, carriers are further ahead in preparing for number portability in many of the
larger MSAs than in the smaller ones; for example, several state commissions that had addressed
the issue of number portability before issuance of the First Report & Order had ordered that
deployment begin in several major cities that are currently in Phases I or II of our schedule. 
Therefore, switching the deadlines of those larger MSAs with other, smaller MSAs now would,
at a minimum, disrupt planning by competitive LECs and state commissions in those
jurisdictions.  Moreover, our three-month extension of the end date of Phase I, in combination
with our conclusion that carriers need provide portability only in requested switches, will serve
much the same purpose as NYNEX's request by allowing carriers the flexibility to begin
deployment in a subset of switches within each of the Phase I MSAs and gradually increase
coverage over the six-month period.  In addition, we do not prohibit, but rather encourage,
carriers to take whatever additional actions they believe are necessary to safeguard their
networks, including testing deployment of portability in one of their smaller MSAs before or
during Phase I of our deployment schedule.  For example, Bell Atlantic is testing number
portability in the smaller market of Gaithersburg, MD before Phase I.

     98.  We also deny NYNEX's request that we explicitly encourage states to be flexible
in opting out of the regional database or choosing to construct joint databases, or to work with
less active neighboring states to establish regional databases.  We find that the First Report &
Order allows sufficient flexibility for states to opt out of the regional databases.  In addition,
NYNEX's concern that the NANC would not resolve the database issues in time for carriers to
meet the deployment schedule is now largely moot, given the recent activities of the NANC.  The
NANC has committed to making its final recommendations to the Commission on the database
system by May 1, 1997.  The NANC's working groups and task forces relating to number
portability are already organized and holding regular meetings to resolve the database issues. 
The Local Number Portability Administration Selection Working Group projects that all seven
regional databases will be ready for testing on dates ranging from April 18, 1997, to July 1, 1997,
and will be ready to support number portability deployment on or before October 1, 1997, in
accordance with the deployment schedule set forth in the First Report & Order.

     99.  Finally, we clarify that the first performance criterion, that any method "support
existing network services, features, and capabilities," refers only to services existing at the time
of the First Report & Order.  We caution LECs that problems in implementing their chosen
number portability method due to modifications necessitated by the introduction of a new service
or technology will not justify a delay of the deployment schedule.  We decline, however,
specifically to prohibit the introduction of any new service that is incompatible with LRN, as the
First Report & Order did not adopt LRN or mandate use of any specific long-term number
portability method.






          4.   Acceleration of Implementation Schedule  

     100. Pleadings.  Several competitive LECs urge us to accelerate the deployment
schedule in smaller markets.  ACSI contends that the present schedule incorrectly assumes
larger markets will experience competition first.  ACSI claims that in fact many competitors are
focusing on MSAs beyond the largest 50.  Consequently, accelerating the deployment of
number portability in those smaller markets would promote competition in all markets and treat
competitors more equally regardless of the size of market they are entering.  ACSI proposes
that the schedule for the 100 largest markets be accelerated so that all BOCs implement number
portability "according to roughly the same schedule as a function of population served."  ACSI
also proposes requiring non-BOC incumbent LECs to deploy portability in their largest market in
the fourth quarter of 1997, or, at the latest, the first quarter of 1998.  In the alternative, ACSI
urges us to allow carriers with "operational networks in the 100 largest MSAs and the authority
to provide local exchange services" to request, beginning July 1, 1997, the deployment of
number portability on a specified date six or more months in the future.  ACSI would place
upon an incumbent LEC the burden of proving that it cannot provide number portability, and
proposing an alternative date for implementation no more than three months later than the date
requested.  ALTS agrees that incumbent LECs should be required to implement portability in a
region before the scheduled implementation date for that region, if the incumbent LEC is able to
do so.

     101. For markets outside the 100 largest MSAs, KMC contends that we should require
LECs to accept bona fide requests for deployment of portability, after January 31, 1997, and to
require implementation of such requests within six months.  Alternatively, KMC urges us to
require all LECs immediately to accept bona fide requests for markets outside the 100 largest
MSAs, and to satisfy such requests within 24 months, unless the LEC can prove technical
infeasibility.  Another option presented by KMC and ACSI is to permit carriers to submit
requests for markets outside the 100 largest MSAs as early as July 1, 1998, so that
implementation of these requests can begin immediately upon completion of deployment in the
100 largest MSAs.  NEXTLINK urges us to accept requests earlier than the First Report &
Order allows for the provision of number portability for markets outside the 100 largest MSAs,
consult with the relevant state commission regarding the extent of competition in that requested
market, and grant the request if there is "sufficient evidence" of competition.  NEXTLINK
contends that accelerating the schedule will not be overly burdensome because incumbent LECs
may still seek a waiver.

     102. Several BOCs, GTE, USTA, and ALLTEL oppose accelerating the deployment
schedule for markets below the top 100 MSAs.  BellSouth and GTE assert that accelerating
deployment will impede the phased deployment and jeopardize carriers' ability to meet the
original schedule.  GTE, USTA, Sprint, and Pacific argue that resources would be diverted
from deployment in larger markets where competitors are more likely to be interested in
entering.  BellSouth asserts that, if we add new central offices to the schedule, then we should
remove a corresponding number of central offices from the original schedule.  BellSouth also
suggests that, if we add new central offices to the schedule, then failure to implement any of
those additional MSAs according to deadlines on the original schedule should not constitute a
failure to meet a Section 271 checklist requirement.  In response to ACSI's claim that the
Commission's schedule discriminates against smaller markets, GTE asserts that the phased
schedule takes into account the differing levels of local exchange competition in different areas,
the burden on carriers serving multiple regions, and the fact that more significant upgrades may
be necessary for carriers operating in smaller areas.

     103. USTA supports KMC's recommendation that LECs be able to submit requests for
deployment in markets outside the 100 largest MSAs earlier than January 1, 1999, but proposes
that such requests be fulfilled on a negotiated timetable subject to the decisions of each state
commission, instead of by December 1998, or within 24 months, as suggested by KMC. 
ALLTEL contends that accelerating the schedule will force carriers to file waivers or seek
suspensions of implementation.  ALLTEL argues, moreover, that smaller providers should not
be required to invest in number portability technologies until they have been proven reliable in
larger markets. 

     104. Discussion.  We deny the petitions for reconsideration that advocate:  (1)
accelerating deadlines for certain MSAs; (2) allowing carriers with operational networks in the
100 largest MSAs and the authority to provide local exchange service to request portability in
any MSA in the 100 largest MSAs beginning July 1, 1997, and requiring LECs to fulfill such
requests on a specified date six or more months in the future; (3) adding MSAs outside the
largest 100 MSAs to the initial deployment schedule; or (4) combining the deadlines of
consolidated MSAs.  The current schedule is based on the projected availability of switch
software, and recognizes the burden on carriers serving multiple regions and the fact that more
significant upgrades may be necessary for carriers operating in smaller areas.  Petitioners have
not made a showing that the necessary software, hardware, and other resources will be available
earlier in areas originally scheduled for later deployment, or will be available in quantities
sufficient to support deployment in additional areas, particularly in areas outside the 100 largest
MSAs.  If such hardware and software is not available for deployment early enough or in
sufficient quantities to support deployment in additional areas, then accelerating deployment
deadlines for smaller MSAs may divert these limited resources from deployment in other, larger
MSAs, and thus delay deployment of number portability where a greater population might
benefit from competition.

     105. For the reasons stated above, we also reject ACSI's request to require deployment
in Phase I in certain additional markets in which the incumbent LECs are not BOCs.  In addition,
we continue to believe that non-BOC incumbent LECs, most of which have more limited
resources than the BOCs, should have additional time to upgrade and test their networks. 
Moreover, we conclude above that LECs need deploy number portability in the 100 largest
MSAs only in switches for which another carrier has made a specific request for the provision of
portability.  Requiring that additional MSAs be deployed in Phase I does not give sufficient
notice to carriers or states to establish switch-requesting procedures in MSAs for which they had
no previous notice that deployment was required in Phase I.  We also decline to adopt USTA's
proposal that state commissions be free to accelerate the deployment schedule.  While we are
sympathetic to the desires of some states to advance deployment where actual competitive
interest exists, we conclude that the  schedule adopted in the First Report & Order, as modified in
this First Reconsideration Order, represents a reasonable balancing of competing interests, and
carriers need to have certainty that these are the requirements with which they must comply.  Our
First Report & Order was silent on the issue of whether states could accelerate the deployment
schedule.  We therefore grandfather any state decisions to accelerate deployment for a particular
market from one phase to an earlier phase that were adopted prior to release of this First
Reconsideration Order.

     106. We do not prohibit LECs from agreeing to accelerate implementation, either for
specific MSAs or specific switches within MSAs.  We find, however, that acceleration of our
schedule is more properly determined by private agreements among carriers.  Competitive LECs
are free to negotiate with incumbent LECs for deployment of number portability ahead of our
schedule.  Moreover, to the extent that carriers agree to "swap" the implementation deadlines
for specific MSAs or switches within MSAs, they can jointly file specific waiver petitions to do
so.

     107. We grant in part the petitions of ACSI, KMC, and NEXTLINK to allow requests
for deployment of number portability in areas outside the 100 largest MSAs to be submitted
earlier than January 1, 1999.  We therefore modify our rules to permit carriers to submit requests
for deployment of number portability in areas outside the 100 largest MSAs at any time.  We
decline, however, to require that deployment be completed within six months of request for
requests filed prior to January 1, 1999.  This modification to our rules will benefit all parties,
because receiving earlier notice to upgrade switches will likely ease a LEC's compliance burden
and help to ensure that competing carriers will receive portability within the time requested. 
Finally, we clarify that, contrary to KMC and ACSI's view, our current schedule does not leave
an implementation gap between December 31, 1998, and July 1, 1999, since implementation of
requests for deployment of number portability in areas outside the 100 largest MSAs filed on or
before January 1, 1999, will occur during the first six months of 1999.  KMC and ACSI's
suggestion that we permit requests for markets outside the 100 largest MSAs beginning July 1,
1998, and require fulfillment of those requests within six months, would actually require that
those smaller markets be completed at the same time as the MSAs in the last phase of our
deployment schedule, thus sharply increasing the burden on carriers during that phase.

          5.   Exemptions for Rural and/or Smaller LECs  

     108. Pleadings.  JSI, NECA, and NTCA/OPASTCO argue that requiring rural LECs to
provide number portability where no competitor has requested it will burden rural LECs
significantly without benefitting the public by increasing competition.  NECA and
NTCA/OPASTCO state that requiring rural LECs to provide portability absent such a request
contravenes our intent to let the pace of competitive entry into local markets determine the need
for number portability.  NTCA/OPASTCO asserts that these small businesses do not have the
resources to test portability technologies.  GTE argues that the same concerns that prompted us
to forego an implementation schedule for areas outside the 100 largest MSAs, i.e., lack of
imminent competition and the need for significant network upgrades, apply to smaller offices
within the 100 largest MSAs.  JSI, NECA, and NTCA/OPASTCO contend that the need for
such an exemption is apparent in Congress' Joint Explanatory Statement which states, "Duties
imposed under new Section 251(b) make sense only in the context of a specific request from
another telecommunications carrier . . . ."

     109. JSI and NTCA/OPASTCO suggest that we exempt rural LECs operating within
the 100 largest MSAs from complying with the implementation deadlines until receipt of a
request for deployment.  Several other parties agree with JSI and NTCA's suggestion, and
would expand the exemption to include:  (1) LECs with less than five percent of their subscribers
in an MSA, or LECs with only 10 percent of their access lines within an MSA; (2) rural LECs
with study areas that only partially overlap one of the 100 largest MSAs; or (3) any carrier
with less than two percent of the nation's access lines.  JSI further argues that we should not
apply our deployment requirements to rural LECs until there is factual evidence that number
portability is technologically feasible, and will not disproportionately burden rural LECs.  GTE
suggests that, if no competitors express an interest in entering the market, and the state
commission does not object, smaller LECs should be allowed to present a waiver to us that, if
approved, would exempt them from portability requirements until six months after a request is
made.  CBT suggests that we exempt from the implementation schedule carriers granted a
suspension or modification of the number portability requirements under Section 251(f)(2) until
the state commission removes the suspension.

     110. USTA urges us to exempt from the deployment schedule rural LECs that are
exempt from interconnection requirements under Section 251(f).  JSI goes further and argues
that Section 251(f)(1) prohibits the imposition of number portability requirements on rural LECs
because rural LECs are automatically exempt from the interconnection requirements of
Section 251(c).  JSI states that this exemption from interconnection requirements permits us to
impose number portability requirements upon rural LECs only to the extent it is technically
feasible for rural LECs to provide portability without upgrading their networks to utilize
databases, installing SS7 or AIN capabilities, or installing and furnishing functions requiring new
switching software.  JSI adds that this exemption may be terminated only by a state
commission.  In addition, JSI argues, the Commission recognized in the First Report & Orderthat carriers meeting the 251(f) criteria may be exempt from number portability requirements.

     111. NTCA/OPASTCO claims that the First Report & Order's Final Regulatory
Flexibility Analysis does not address the impact of the rules on small incumbent LECs, and is
thus inconsistent with the Local Competition Order.  NTCA/OPASTCO suggests that
exempting rural LECs from number portability requirements absent a specific request would
fulfill our responsibility under the Regulatory Flexibility Act. 

     112. Time Warner and MCI oppose any "blanket waiver" of number portability
requirements for smaller and/or rural LECs.  MCI argues that such waivers will "lessen the
likelihood" that competition will ever reach areas served by smaller and rural providers.  MCI
claims that a blanket waiver is unnecessary, because smaller and rural LECs can receive waivers
under the statutory provision or under the procedure described in the First Report & Order. 
Time Warner argues that any blanket waiver, either for technical difficulties or for a carrier's
smaller size, will be overly inclusive and result in unnecessary delay, and that carriers should
have to file individually for waivers that demonstrate why they should be exempt from the
number portability deployment schedule.

     113. Discussion.  As set forth above, we grant the petitions to limit deployment of
portability to those switches for which a competitor has expressed interest in deployment by
concluding that LECs need only provide number portability within the 100 largest MSAs in
switches for which another carrier has made a specific request for the provision of portability. 
We find that this modification to our rules should address the concerns of parties that urge us to
waive number portability requirements for rural and/or smaller LECs serving areas in the largest
100 MSAs until receipt of a request.

     114. We deny the petitions that request a blanket waiver of our number portability
requirements for rural and/or smaller LECs that receive a request for deployment in one of their
switches.  We find that such a blanket waiver is unnecessary and may hamper the development of
competition in areas served by smaller and rural LECs that competing carriers want to enter. 
If, as petitioners allege, competition is not imminent in the areas covered by rural/smaller LEC
switches, then the rural or smaller LEC will not receive requests from competing carriers to
implement portability, and thus will not need to expend its resources, until competition actually
develops in its service area.  In addition, by that time extensive non-carrier-specific testing will
likely have been done, and carriers' testing costs will likely be smaller.

     115. Further, to the extent that portability is requested in a rural or smaller LEC's
switch, and that LEC has difficulty complying with the request, it has two avenues for relief. 
Pursuant to the First Report & Order, a LEC may apply for an extension of time on the basis of
extraordinary circumstances beyond its control that prevent it from complying with the
Commission's deployment schedule.  In addition, under Section 251(f)(2), a LEC with fewer
than two percent of the nation's subscriber lines installed in the aggregate nationwide (an
"eligible LEC") may petition the appropriate state commission for suspension or modification of
the requirements of Section 251(b).  The state commission is required to act on the petition
within 180 days.  We believe eligible LECs will have sufficient time to obtain any appropriate
Section 251(f)(2) relief as provided by the statute, especially since the state commission can
suspend the application of our deployment deadlines to that LEC while it is considering the
LEC's petition for suspension or modification of our requirements.

     116. If, however, a competitor is interested in number portability in a particular switch
operated by a rural or smaller LEC, and the LEC cannot demonstrate extraordinary
circumstances justifying an extension of our deployment requirements, and the state commission
denies a Section 251(f)(2) request for suspension or modification, we find no statutory basis for
excusing such a LEC from its obligations to provide number portability.  Rather, Congress
established a specific procedure under which state commissions are empowered to make case-by-
case decisions on the application of number portability requirements to eligible LECs pursuant to
Section 251(f)(2), based on the particular facts and circumstances presented.  Eligible LECs that
have been granted suspension or modification of number portability requirements under Section
251(f)(2) are not bound by our implementation schedule until the state commission removes the
suspension.

     117. The comments of some parties in this proceeding appear to reflect a
misapprehension of the scope of Section 251(f).  Sections 251(f)(1) and 251(f)(2) apply to
different classes of carriers, and provide different types of relief.  Section 251(f)(1) applies only
to rural LECs, and offers an exemption only from the requirements of Section 251(c).  In
contrast, Section 251(f)(2) applies to all LECs with less than two percent of the nation's
subscriber lines.  In addition, Section 251(f)(2) establishes a procedure for requesting suspension
or modification of the requirements of Sections 251(b) and 251(c).  Number portability is an
obligation imposed by Section 251(b).  Because Section 251(f)(1) does not exempt rural LECs
from the requirements of Section 251(b), there is no exemption for rural LECs of their number
portability obligations under Section 251(f)(1).  The only statutory avenue for relief from the
Section 251(b) requirements specifically for eligible LECs is to request suspension or
modification of the number portability requirements under the procedure established by Section 251(f)(2).

     118. The plain text of the statute refutes JSI's argument that Section 251(f)(1) exempts
rural LECs from number portability requirements.  JSI states that the Section 251(f)(1)
exemption from interconnection requirements permits us to impose number portability
requirements upon rural LECs only to the extent it is technically feasible for rural LECs to
provide portability without having to upgrade their networks to utilize databases, install SS7 or
AIN capabilities, or install and furnish functions requiring new switching software.  JSI adds
that this exemption may be terminated only by a state commission. 

     119. Because Sections 251(b) and 251(c) are separate statutory mandates, the
requirements of Section 251(b) apply to a rural LEC even if Section 251(f)(1) exempts such
LECs from a concurrent Section 251(c) requirement.  To interpret Section 251(f)(1) otherwise
would undercut Section 251(b) and, in this case, would effectively preclude any provision of
long-term number portability by rural LECs until termination of the Section 251(f)(1) exemption
by a state commission.  We find such an interpretation to be contrary to Congress's mandate that
all LECs provide number portability, and Congress's exclusion of the Section 251(b) obligations,
including the duty to provide number portability, from the Section 251(f)(1) exemption for rural
LECs.  

     120. Moreover, under JSI's interpretation, the only carriers that would have to provide
number portability would be incumbent LECs that are not exempt under Section 251(f)(1).  Non-
incumbent LECs, as well as rural incumbent LECs that are exempt under Section 251(f)(1),
would not have to satisfy the requirements of Section 251(b) and, consequently, would not have
to provide number portability.  This directly contradicts Section 251(b)(2), which specifically
requires "all local exchange carriers" to provide number portability.  Section 251(c) sets forth
"additional obligations" that apply only to incumbent LECs, whereas Section 251(b) sets forth
obligations that apply to all LECs.

     121. Even if we were to agree with JSI's statutory interpretation that rural LECs that
are exempt from the Section 251(c) requirements are also exempt from any requirements of
Sections 251(b) and (c) that overlap, petitioners have not demonstrated that the Section 251(b)
and (c) obligations in fact overlap.  To provide long-term number portability under
Section 251(b)(2), LECs obviously must install and use any necessary databases, SS7 or AIN
capabilities, or switching software.  Section 251(c), in contrast, requires incumbent LECs to
provide unbundled access to network elements, including call-related databases.  Number
portability does not require any provision of unbundled access to these elements.  Moreover, to
provide number portability, carriers can interconnect either directly or indirectly as required
under Section 251(a)(1).  Section 251(c), in contrast, imposes an additional requirement on
incumbent LECs to provide "equal" interconnection at "any technically feasible point within the
carrier's network," which a carrier does not need to provide number portability.  Thus,
Sections 251(a) and (b), not Section 251(c), require that carriers interconnect and install and use
necessary network elements to provide number portability.  We therefore deny JSI and USTA's
request to "automatically exempt" rural LECs from our number portability requirements to the
extent that they are exempt from the requirements of Section 251(c) under the provisions of
Section 251(f)(1).

     122. We also deny the requests that we clarify that smaller and/or rural LECs serving
areas that only partially overlap one of the 100 largest MSAs need not deploy number portability
until receipt of a bona fide request.  We believe that, when determining whether a suspension
or modification is necessary to avoid imposing an unduly economically burdensome
requirement, pursuant to Section 251(f)(2), state commissions would likely consider whether an
eligible LEC's presence in the MSA is truly de minimus and whether such a LEC is entitled to a
suspension or modification of the number portability requirements on this basis.

     123. Finally, NTCA/OPASTCO erroneously claims that the First Report & Orderviolates the Regulatory Flexibility Act (RFA) because its Final Regulatory Flexibility Analysis
(FRFA) does not address the impact of our rules on small incumbent LECs, and is, therefore,
inconsistent with the Local Competition Order.  As we stated in the First Report & Order's
FRFA, small incumbent LECs do not qualify as small businesses because they are dominant in
their field of operation.  The Local Competition Order's FRFA likewise set forth the
Commission's view that small incumbent LECs are not subject to regulatory flexibility analyses
because they are not small businesses due to their dominance in their field of operation.  The
Commission in that proceeding specifically stated that it was including small incumbent LECs in
its FRFA only because two parties had especially questioned that conclusion in that proceeding's
Initial Regulatory Flexibility Analysis (IRFA), and it wanted to "remove any possible issue of
RFA compliance."  In contrast, no party commented on the IRFA in this proceeding.  We
attach, nevertheless, as Appendix D a Supplemental Final Regulatory Flexibility Analysis that
further explains our analysis of our rules' impact upon rural and smaller carriers and our basis for
selecting the particular options that we have selected.  This analysis takes into account
NTCA/OPASTCO's specific claim raised in its petition for reconsideration, in order to "remove
any possible issue of RFA compliance."  We also note that our establishment of a procedure
whereby number portability would only be deployed in requested switches effectively grants the
relief sought by NTCA/OPASTCO, the sole petitioner on this issue.

          6.   Implementation Requirements for Intermediate (N-1) Carriers

     124. Pleadings.  Pacific urges us to require all intermediate (N-1) carriers, including
interexchange carriers, to implement the capability to query number portability databases in
order to route calls properly.  Pacific expresses concern that, if an intermediate carrier has not
implemented portability, an interLATA call will be routed to the original terminating LEC,
which must then query the database and reroute the call, in violation of performance criterion
four.  Pacific urges us to clarify that the original terminating LEC will not be responsible for
handling queries not performed by an intermediate carrier that lacks the capability to query
number portability databases.  Pacific further asserts that requiring the original terminating
LEC to query all interLATA and intraLATA calls will increase its implementation costs, and
limit the ability of those LECs to meet the implementation schedule.  NYNEX asserts that
granting Pacific's request will reduce the stress on the terminating LEC's signalling infrastructure
by reducing that LEC's database queries.  NYNEX urges, in the alternative, that we confirm
that terminating LECs may charge N-1 carriers for performing the query, where the N-1 carrier
cannot or will not perform the query itself.  MCI claims that Pacific's request is unnecessary,
since interexchange carriers already plan to deploy number portability as soon as possible.

     125. Discussion.  We deny Pacific's request that we require all N-1 carriers, including
interexchange carriers, to meet the implementation schedule we established for LECs.  Such a
requirement is not mandated by the 1996 Act, which subjects only LECs, not interexchange
carriers engaged in the provision of interexchange service, to our number portability
requirements.  Moreover, petitioners have not demonstrated a need for us to impose such
requirements under our independent rulemaking authority under Sections 1, 2, and 4(i) of the
Communications Act of 1934, as amended.  In that regard, we are not convinced that Pacific's
hypothetical situation, whereby the N-1 carrier would not perform any queries and the original
terminating LEC would thus have to perform all the queries not performed by the originating
LEC, will arise often.  The industry already appears to favor using the N-1 scenario, under which
the N-1 carrier performs the database query, as indicated in the majority of comments on call
processing scenario issues received pursuant to the original Notice of Proposed Rulemaking. 
The vast majority of interLATA calls are routed through the major interexchange carriers, and
the two largest interexchange carriers, at least, claim they plan to deploy portability as soon as
possible.  Therefore, most interLATA calls will be queried by the major interexchange carriers,
not the incumbent LECs.  Moreover, as we stated in the First Report & Order, we wish to allow
carriers the flexibility to choose and negotiate among themselves which carrier shall perform the
database query, according to what best suits their individual networks and business plans. 
Finally, we decline to address Pacific's argument that, if the terminating carrier is forced to
perform queries, that would violate our fourth performance criterion.  Since we are eliminating
our fourth performance criterion, Pacific's argument is moot.

     126. We clarify, however, per NYNEX's request, that if an N-1 carrier is designated to
perform the query, and that N-1 carrier requires the original terminating LEC to perform the
query, then the LEC may charge the N-1 carrier for performing the query, pursuant to guidelines
the Commission will establish in the order addressing long-term number portability cost
allocation and recovery.






          C.   Implementation Schedule for Wireless Carriers

     127. Background.  In the First Report & Order, we required all cellular, broadband
PCS, and covered SMR carriers to have the capability of querying the appropriate number
portability database systems in order to deliver calls from their networks to ported numbers
anywhere in the country by December 31, 1998.  These wireless carriers may implement the
upgrades necessary to accomplish the queries themselves, or they may make arrangements with
other carriers to provide that capability.  In addition, wireless carriers subject to our rules are
required to offer service provider portability throughout their networks, including the ability to
support roaming, by June 30, 1999.  In the First Report & Order, we delegated authority to the
Chief, Wireless Telecommunications Bureau, to waive or stay any of the dates in the
implementation schedule for a period not to exceed nine months, and to establish reporting
requirements in order to monitor the progress of wireless carriers.  In the event a carrier subject
to these requirements is unable to meet the Commission's deadlines for implementing a long-
term number portability method, it must file a petition to extend the time by which
implementation must be completed with the Commission at least 60 days in advance of the
deadline, along with an explanation of the circumstances and the need for such an extension.

     128. Pleadings.  Several parties urge the Commission to modify the number portability
implementation schedule set forth in the First Report & Order for CMRS providers.  AirTouch
and GTE reason that the wireless industry is behind the wireline industry in considering how to
implement number portability and, moreover, faces special technical challenges.  These parties
assert that wireless carriers need to resolve various technical issues before implementing number
portability, including establishing the standard for the intelligent wireless network, and
redesigning network protocols and support systems.  GTE urges the Commission to allow
enough time for wireless carriers to test thoroughly number portability to ensure network
integrity.

     129.      AirTouch, CTIA, and SBC argue that the Commission should not limit to nine
months the authority of the Chief, Wireless Telecommunications Bureau, to grant extensions of
the schedule set forth the First Report & Order.  CTIA argues that the nine-month period
within which the Chief, Wireless Telecommunications Bureau, may waive or stay the schedule is
arbitrary because it is unsupported by the record, is not predicated on any analysis of industry's
ability to comply with the schedule, and may not allow industry and the Wireless
Telecommunications Bureau enough time to determine CMRS carriers' ability to comply. 
GTE urges the Commission to repeal the deadlines set forth in the First Report & Orderaltogether and instead establish target dates.

     130.      BANM and CTIA claim that the schedule for CMRS providers is stricter than that
for wireline service providers because CMRS providers must provide number portability in areas
outside the top 100 MSAs, even if it is not requested.  CTIA urges the Commission to clarify
whether, in addition to supporting nationwide roaming of CMRS customers with ported
numbers, CMRS providers must implement full number portability in every market throughout
the nation, or in only the largest 100 markets and any market where number portability is
requested, by June 30, 1999.  If the Commission requires full number portability in all
markets, CTIA argues, then the wireless schedule should be conformed to the wireline schedule
so that CMRS providers need only provide full number portability in the largest 100 MSAs by
December 31, 1998, and, thereafter, in smaller markets upon creation of a regional database that
includes both LEC and CMRS numbers.

     131.      CTIA also reasons that, if a LEC does not provide number portability in an area, a
regional database for that area may not exist, and the CMRS providers would have to establish
their own individual databases.  BANM also points out that the regional databases that CMRS
providers need to access may not all be in place, given the lack of any deadline for establishment
of the databases and the possibility of statewide databases.  In addition, argues BANM,
because many CMRS providers' service areas are not defined by MSAs, they often will not
match the landline database regions.

     132. BANM urges the Commission to defer wireless number portability until wireline
number portability is complete, and the record shows it is necessary.  BANM claims that the
1996 Act's explicit exclusion of CMRS providers from the definition of a LEC, and standards set
forth in earlier Commission orders, require the Commission to demonstrate a "clear cut need"
before regulating CMRS providers, and that the Commission did not do so.  According to
BANM, the record does not support the Commission's conclusion that CMRS number portability
rules are competitively important or are justified on other grounds.  If the Commission decides
to maintain its rules, however, BANM argues, then no CMRS provider should have to provide
number portability until June 30, 1999, and then only (1) six months after receiving a request,
and (2) after regional or statewide databases are available.

     133. MCI opposes what it characterizes as delay tactics by the CMRS providers and
observes that their arguments are reminiscent of the arguments advanced by portability
opponents in the 800 portability proceeding.  MCI argues that they do not provide a
compelling reason for the Commission to retreat from its CMRS number portability
requirements.  MCI argues that the monitoring and reporting mechanism established during the
implementation of 800 number portability worked well, and the similar mechanism established
for CMRS number portability will provide an opportunity for the industry to address
implementation issues quickly.  MCI opposes petitioners' requests for delay pending further
study, establishing targets rather than deadlines, and granting authority to the Chief of the
Wireless Telecommunications Bureau to defer indefinitely or suspend the portability
requirements.  TRA urges the Commission to resist efforts by CMRS providers to limit
number portability in wireless markets.

     134. Discussion.  We decline at this time to alter the implementation schedule imposed
by the First Report & Order for wireless carriers.  We recognize that the wireless industry has
lagged behind the wireline industry in developing a method for providing number portability,
and that the wireless industry faces special technical challenges in doing so.  Nonetheless, we
find that the schedule for implementation of number portability by cellular, broadband PCS, and
covered SMR providers is reasonable and takes into account the current stage of development for
wireless number portability.  We find that a period of nearly two years is sufficient for wireless
carriers either to implement the upgrades necessary to perform the database queries themselves,
or to make arrangements with other carriers to provide that capability.  We also believe it is
reasonable to expect wireless carriers to implement long-term service provider portability,
including roaming, in their networks in a period of more than two years.  We continue to believe
the monitoring and reporting mechanism established in the First Report & Order will ensure that
wireless carriers will continue to work together to find solutions to technical problems associated
with number portability, and to address quickly any implementation issues which may arise.  As
we provided in the First Report & Order, in the event a wireless carrier is unable to meet the
Commission's deadlines for implementing a long-term number portability method, it may file a
request for extension with the Commission.  If it becomes apparent that the wireless industry is
not progressing as quickly as necessary to meet the deadlines for providing querying capability
and service provider portability, the Wireless Telecommunications Bureau Chief may waive or
stay the implementation dates for a period of up to nine months.  We find that enough
flexibility has been incorporated into the implementation schedule for wireless carriers, and that
no modification is needed.

     135. We also decline to establish target dates in lieu of actual deadlines or to defer
imposing number portability requirements on wireless carriers, as some petitioners have
suggested.  As we stated in the First Report & Order, requiring cellular, broadband PCS, and
covered SMR providers to provide number portability is in the public interest because these
entities are expected to compete in the local exchange market, and number portability will
enhance competition among wireless service providers, as well as between wireless service
providers and wireline service providers.  Service provider portability offered by wireless
service providers will enable customers to switch carriers more readily and encourage the
successful entry of new service providers into wireless markets.  Removing barriers, such as
the requirement that customers must change phone numbers when changing providers, is likely
to foster the development of new services and create incentives for carriers to lower prices and
costs.  In light of these positive competitive results that are likely to be produced, we continue to
believe that number portability should be provided by wireless carriers with as little delay as
possible.  Setting specific deadlines, rather than amorphous "target dates," is consistent with this
goal.

     136. In response to requests by CTIA and BANM, we agree that some clarification of
our requirements under the schedule is necessary.  Contrary to the petitioners' claims, the
schedule for CMRS providers is not stricter than the schedule for wireline service providers. 
Some carriers apparently misunderstood our First Report & Order to require wireless providers
to provide number portability in areas outside the largest 100 MSAs, even if number portability
is not requested in those areas.  We require cellular, broadband PCS, and covered SMR providers
to have the capability to query the number portability databases nationwide, or arrange with other
carriers to perform the queries, by December 31, 1998, in order to route calls from wireless
customers to customers who have ported their numbers.  We clarify that, by June 30, 1999,
CMRS providers must (1) offer service provider portability in the 100 largest MSAs, and (2) be
able to support nationwide roaming.  Although we have not provided a specific phased
deployment schedule for CMRS providers as we have for wireline carriers, we expect that
CMRS providers will phase in implementation in selected switches over a number of months
prior to the June 30, 1999, deadline for deployment.

     137.   In addition, consistent with our modification to the wireline schedule
deployment requirements, CMRS carriers need only deploy local number portability by this
deadline in the 100 largest MSAs in which they have received a specific request at least nine
months before the deadline (i.e., a request has been received by September 30, 1998).  As in
the wireline context, any wireline carrier that is certified, or has applied for certification, to
provide local exchange service in the relevant state, or any licensed CMRS provider, must be
allowed to make a request for deployment; and cellular, broadband PCS, and covered SMR
providers must make available lists of their switches for which deployment has and has not been
requested.  Additional switches within the 100 largest MSAs (i.e., those that are not requested
initially) must be deployed upon request, after the June 30, 1999, deadline for wireless carriers,
within the same time frames that we adopt here for wireline carriers, unless requesting carriers
specify a later date.  The time frames for deployment of additional wireless switches are as
follows:  (1) Equipped Remote Switches within 30 days; (2) Hardware Capable Switches within
60 days; (3) Capable Switches Requiring Hardware within 180 days; and (4) Non-Capable
Switches within 180 days.  As in the wireline context, carriers may submit requests for
deployment of number portability in areas outside the 100 largest MSAs at any time.  CMRS
providers must provide number portability in those smaller areas within six months after
receiving a request or within six months after June 30, 1999, whichever is later.  As a result, the
schedule for wireless providers is comparable to the one for wireline carriers in terms of timing.

     138. We add one further requirement for any procedures that limit deployment in such
fashion to requested wireless switches.  The existing state procedures for limiting deployment of
number portability capabilities within one of the 100 largest MSAs to requested wireline
switches generally appear to require carriers to specify which switches located within the MSA
the carrier wishes to be deployed.  We do not wish to disturb a number of state decisions
concluding that it is preferable to limit the selection of wireline switches for deployment to
switches located within the MSA rather than switches serving subscribers within the MSA.  We
recognize, however, that the wireless switches that provide service to areas within a particular
MSA are more likely to be located outside the perimeter of that MSA than the wireline switches
that provide service to areas within the MSA.  We conclude, therefore, that, when limiting
deployment within one of the 100 largest MSAs to particular requested wireless switches,
carriers must be able to request deployment in any wireless switch that provides service to any
area within that MSA, even if the wireless switch is located outside of the perimeter of that
MSA, or outside any of the 100 largest MSAs.

     139. By June 30, 1999, we expect that regional or statewide local number portability
databases containing both wireless and wireline numbers will be widely available; therefore, we
do not anticipate a need to condition the requirement that number portability be required on
request after June 30, 1999, upon the existence of regional or statewide databases.  If there is a
delay in the development of the databases, the Wireless Telecommunications Bureau Chief has
been delegated authority to waive or stay the deadline for CMRS providers.

     140. In its petition for reconsideration, BANM questions the Commission's authority
and its basis in the record for imposing number portability obligations upon CMRS providers. 
Specifically, BANM claims that we have previously held that our regulatory authority over
CMRS providers is limited to instances in which there is a "clear cut need" for doing so, and that
regulation of number portability is not clearly necessary in the CMRS market.  BANM
advanced essentially the same argument previously in this proceeding, and its reconsideration
petition raises no new issues.  Accordingly, we affirm our prior rejection of this argument.  As
we stated in the First Report & Order, the CT DPUC Petition does not limit our authority to
require CMRS providers to provide number portability to other CMRS or wireline carriers
because that proceeding was restricted to the question of state authority to regulate rates of
CMRS providers.  The CT DPUC Petition did not reach the question of the Commission's
authority to impose number portability requirements on CMRS providers.  We affirm our
determination that we have authority to impose number portability obligations on CMRS
providers based on our findings that this requirement will result in pro-competitive effects, and
furthers our CMRS regulatory policy of establishing moderate, symmetrical regulation of all
services.

     141. We recognize that the 1996 Act excludes CMRS providers from the definition of
a LEC, thereby excluding them from the Section 251(b) obligation to provide number portability,
unless the Commission concludes that CMRS providers should be included in the definition of
local exchange carrier.  In our Local Competition Order, we declined to find that CMRS
providers should be treated as LECs for purposes of other LEC obligations under Section 251. 
As we explained in the First Report & Order, however, we possess independent authority under
Sections 1, 2, 4(i), and 332 of the Communications Act of 1934, as amended, to require CMRS
providers to provide number portability as we deem appropriate.  These provisions of the
Communications Act authorize us to ensure that the portability of telephone numbers within the
United States is handled efficiently and fairly, as part of our obligation to ensure that "a rapid,
efficient, Nation-wide, and world-wide wire and radio communication service" is available. 
Section 1 also establishes a significant federal interest in ensuring the efficient and uniform
treatment of numbering, because such a system is essential to the efficient delivery of interstate
and international telecommunications.  In addition, Sections 2 and 332(c)(1) of the Act give
the Commission authority to regulate commercial mobile service providers as common carriers,
except for the provisions of Title II that we specify are inapplicable.  We found in the First
Report & Order that implementation of long-term service provider portability by CMRS carriers
will have an impact on the efficient use and uniform administration of the numbering resource. 
Section 4(i), moreover, grants the Commission authority to "perform any and all acts, make such
rules and regulations, and issue such orders, not inconsistent with [the Communications Act of
1934, as amended], as may be necessary in the execution of its functions."  We conclude that
the public interest is served by requiring the provision of number portability by CMRS providers
because number portability will promote competition between providers of local telephone
services and thereby promote competition between providers of interstate access services.

     142. BANM has not introduced any new evidence or arguments that cause us to
reconsider our conclusion in the First Report & Order that provision of number portability by
CMRS carriers is important to competition.  Previously in this proceeding, several PCS providers
attested to the importance of number portability in fostering competition in the CMRS
industry.  The record in this proceeding contains convincing evidence that service provider
portability would enhance competition between wireless service providers, as well as between
wireless and wireline service providers, by removing the requirement that a customer must
change numbers when changing service providers.  We also reject BANM's argument that we
failed to make a determination on the technical feasibility of wireless number portability.  The
record in this proceeding supports our prior conclusion that cellular, broadband PCS, and
covered SMR providers will be able to resolve any technical issues necessary to implement
number portability.  


     D.   Deferral of Implementation Until Resolution of Cost Recovery Issues

     143. Background.  Section 251(e)(2) of the Act requires that the costs of establishing
number portability "be borne by all telecommunications carriers on a competitively neutral basis
as determined by the Commission."  In conjunction with the First Report & Order, we adopted
a Further Notice of Proposed Rulemaking (Further Notice) that seeks comment on appropriate
cost recovery mechanisms for long-term number portability.  We have not yet issued the Second
Report & Order addressing these issues, although we intend to do so in the near future.

     144. Pleadings.  U S West argues that, as a matter of law and policy, the Commission
must put in place a mechanism for full cost recovery prior to requiring any carrier to implement
number portability.  According to U S West, it is not enough for the Commission to establish a
cost recovery mechanism before carriers actually commence the provision of long-term number
portability, because carriers will begin incurring costs now to meet the implementation
schedule.  U S West asserts that carriers have a statutory and constitutional right to recover
their "full" costs of number portability in a timely manner, because the number portability
requirement is a federal mandate.  Furthermore, U S West claims that deferring the
establishment of cost recovery to a future proceeding will cause "distorting effects" on
investment decisions, the use of number portability facilities, and the relationships among
providers and between providers and their customers.  U S West also asserts that deferring
cost-recovery issues is inconsistent with the Commission's own precedent, because the
Commission recently made its E911 requirements for wireless carriers contingent upon adoption
of a cost recovery mechanism.  JSI makes similar arguments with respect to rural LECs.  

     145.  Sprint argues that delaying the implementation of a long-term number portability
solution until a cost recovery mechanism is in place is unwarranted because there is no basis for
concluding that cost recovery issues will not be resolved before LECs must deploy long-term
number portability in Phase I markets.  Moreover, claims Sprint, any cost recovery method
adopted by the Commission may allow carriers to recover the reasonable costs of implementation
that were already incurred.  ALTS points out that U S West was subject to an equal access
requirement long before the Equal Access and Network Reconfiguration (EANR) access element
was approved.  ALTS also argues that U S West's constitutional claim is premature, because U
S West cannot show that it will necessarily fail to recover a constitutionally mandated amount. 

     146. Discussion.  We are not persuaded by the requests of U S West and JSI that LECs
should be permitted to suspend ongoing preparations to meet the deployment schedule until the
Commission has acted on the issues raised in the Further Notice in this proceeding that involve
the LECs' recovery of their costs of providing number portability.  As stated above, we plan to
adopt a Second Report & Order in this proceeding in the near future implementing the statutory
provision that expenses incurred as a result of number portability be "borne by all
telecommunications carriers on a competitively neutral basis."  U S West appears to suggest
that it necessarily will be barred from assessing charges in the future that are intended to recover
costs that it incurs in connection with the implementation of long-term number portability prior
to our resolution of the cost recovery issues posed in the Further Notice.  That speculative
assertion is unfounded.  We anticipate that the Second Report & Order will be adopted well
before a LEC is required by the deployment schedule to commence the provision of long-term
number portability to the public in the Phase I markets.  Moreover, we expect that LECs will
maintain records of the costs that they incur in implementing the requirements of the First Report
& Order in this proceeding.  Those records will enable the LECs to comply with the decisions we
reach in the Second Report & Order with respect to their recovery of long-term number
portability costs.  The Act does not mandate that we complete action on cost recovery issues
prior to the LECs' commencement of the planning and other steps required to deploy long-term
number portability consistent with the schedule adopted in the First Report & Order.  Indeed,
permitting carriers to suspend their ongoing preparations to meet the deployment schedule for
number portability until we have adopted specific cost recovery rules may be inconsistent with
the statutory mandate that carriers must provide number portability "to the extent technically
feasible."  

     147.   The fact that we made the implementation of E911 contingent on the adoption of
cost recovery mechanisms by state and local governments does not require us to defer
implementation of number portability until a federal cost recovery mechanism is adopted.  In
other instances, we have made cost recovery determinations after LECs had incurred costs in
compliance with our orders and have permitted carriers to recover such previously-incurred costs
as part of a cost-recovery scheme.

     148. We also conclude that U S West has not described, much less documented, the
specific "distorting effects" on investment decisions, the use of number portability facilities, and
the relationships among providers and between providers and their customers that it claims will
ensue from our brief deferral of long-term number portability cost recovery issues.  We further
agree with ALTS that U S West's constitutional claim is premature,  because it is impossible
for any party to establish that a cost recovery mechanism that has not yet been adopted is
unconstitutional.  Finally, because the arguments advanced by JSI on behalf of rural carriers
with respect to these cost recovery issues repeat the points asserted by U S West, we reach the
same conclusions.

IV.     ORDERING CLAUSES

     149. Accordingly, IT IS ORDERED that, pursuant to the authority contained in
Sections 1, 4(i), 4(j), 201-205, 218, 251, and 332 of the Communications Act as amended, 47
U.S.C.  151, 154(i), 154(j), 201-205, 218, 251 and 332, Part 52 of the Commission's rules, 47
C.F.R.  52, is AMENDED as set forth in Appendix B hereto.

     150. IT IS FURTHER ORDERED that the Petitions for Reconsideration and/or
Clarification ARE GRANTED to the extent indicated herein and otherwise ARE DENIED.

     151. IT IS FURTHER ORDERED that the policies, rules, and requirements set forth
herein ARE ADOPTED, effective 30 days after publication of a summary of this First
Reconsideration Order in the Federal Register, except for collections of information subject to
approval by the Office of Management and Budget (OMB), which are effective 150 days
following publication in the Federal Register.

     152. IT IS FURTHER ORDERED that the Motion to Accept Late-Filed Comments of
Telecommunications Resellers Association and the Motion to Accept Late-Filed Reply
Comments of U S West ARE GRANTED.


                         FEDERAL COMMUNICATIONS COMMISSION



                         William F. Caton
                         Acting Secretary
                   APPENDIX A - LIST OF PARTIES


Petitions for Reconsideration/Clarification, filed 8/26/96:

AirTouch Communications, Inc.  [AirTouch]
American Communications Services, Inc.  [ACSI]
American Mobile Telecommunications, Inc.  [AMTA]
Bell Atlantic
Bell Atlantic NYNEX Mobile, Inc.  [BANM]
BellSouth Corporation and BellSouth Telecommunications, Inc.  [BellSouth]
Cellular Telecommunications Industry Association  [CTIA]
Cincinnati Bell Telephone Company  [CBT]
GTE Service Corporation  [GTE]
John Staurulakis, Inc.  [JSI]
KMC Telecom, Inc.  [KMC]
MCI Telecommunications Corporation and MCIMetro  [MCI]
National Exchange Carrier Association, Inc.  [NECA]
National Telephone Cooperative Association and Organization for the 
     Promotion and Advancement of Small Telecommunications Companies 
     [NTCA/OPASTCO]
Nextel Communications, Inc.  [Nextel]
NEXTLINK Communications LLC  [NEXTLINK]
NYNEX Telephone Companies  [NYNEX]
Pacific Telesis Group, Pacific Bell, Nevada Bell, Pacific Bell Mobile Services  [Pacific]
SBC Communications Inc.  [SBC]
United States Telephone Association  [USTA]
U S West, Inc.  [U S West]

Petitions for Reconsideration/Clarification, late-filed 8/30/96:

Small Business in Telecommunications, Inc.  [SBT]


Oppositions/Comments to Petitions for Reconsideration, filed 9/27/96:

ALLTEL Telephone Services Corporation  [ALLTEL]
AT&T Corp.  [AT&T]
Association for Local Telecommunications Services  [ALTS]
Bell Atlantic
BellSouth
CTIA
CBT
GTE
IntelCom Group (USA), Inc.  [ICG]
MCI
NEXTLINK
NYNEX
RAM Mobile Data USA Limited Partnership  [RMD]
Rural Telecommunications Group  [RTG]
Pacific 
Sprint Corporation  [Sprint]
Time Warner Communications Holdings, Inc.  [Time Warner]
USTA

Oppositions/Comments to Petitions for Reconsideration, late-filed 9/30/96:

Telecommunications Resellers Association  [TRA]


Replies, filed 10/7/96:

Ameritech
NEXTLINK
Teleport Communications Group  [TCG]
Rural Cellular Association  [RCA]
NTCA/OPASTCO


Replies, filed 10/10/96:

ACSI
Bell Atlantic
BellSouth
CBT
GTE 
MCI 
NYNEX 
Pacific
SBC
USTA 
U S West
                      APPENDIX B - FINAL RULES

          AMENDMENTS TO THE CODE OF FEDERAL REGULATIONS

Part 52 of Title 47 of the Code of Federal Regulations is amended as follows:

                      PART 52 - NUMBERING

1.   Section 52.23 is amended by revising paragraphs (a)(4) through (a)(8), removing
paragraph (a)(9), and revising paragraphs (b) and (g) to read as follows:

 52.23        Deployment of long-term database methods for number portability by
               LECs.

     (a)  *  *  *

          (4)  Does not result in unreasonable degradation in service quality or network
reliability when implemented;

          (5)  Does not result in any degradation in service quality or network reliability
when customers switch carriers;

          (6)  Does not result in a carrier having a proprietary interest;

          (7)  Is able to migrate to location and service portability; and 

          (8)  Has no significant adverse impact outside the areas where number portability
is deployed.

          (b)(1)  All LECs must provide a long-term database method for number
portability in the 100 largest Metropolitan Statistical Areas (MSAs) by December 31, 1998, in
accordance with the deployment schedule set forth in the Appendix to this part, in switches for
which another carrier has made a specific request for the provision of number portability, subject
to paragraph (b)(2) of this section.

          (b)(2)  Any procedure to identify and request switches for deployment of number
portability must comply with the following criteria:

               (i)  Any wireline carrier that is certified (or has applied for certification) to
provide local exchange service in a state, or any licensed CMRS provider, must be permitted to
make a request for deployment of number portability in that state;

               (ii)  Carriers must submit requests for deployment at least nine months
before the deployment deadline for the MSA;

               (iii)  A LEC must make available upon request to any interested parties a
list of its switches for which number portability has been requested and a list of its switches for
which number portability has not been requested; and

               (iv)  After the deadline for deployment of number portability in an MSA in
the 100 largest MSAs, according to the deployment schedule set forth in the Appendix to this
part, a LEC must deploy number portability in that MSA in additional switches upon request
within the following time frames:

                    (A)  For remote switches supported by a host switch equipped for
portability ("Equipped Remote Switches"), within 30 days;

                    (B)  For switches that require software but not hardware changes to
provide portability ("Hardware Capable Switches"), within 60 days;

                    (C)  For switches that require hardware changes to provide
portability ("Capable Switches Requiring Hardware"), within 180 days; and

                    (D) For switches not capable of portability that must be replaced
("Non-Capable Switches"), within 180 days.

                            * * * * *

     (g)  Carriers that are members of the Illinois Local Number Portability Workshop
must conduct a field test of any technically feasible long-term database method for number
portability in the Chicago, Illinois, area.  The carriers participating in the test must jointly file
with the Common Carrier Bureau a report of their findings within 30 days following completion
of the test.  The Chief, Common Carrier Bureau, shall monitor developments during the field
test, and may adjust the field test completion deadline as necessary.

2.   Section 52.31 is amended by revising paragraph (a) to read as follows:

 52.31        Deployment of long-term database methods for number portability by
               CMRS Providers.

     (a)  By June 30, 1999, all cellular, broadband PCS, and covered SMR providers must
provide a long-term database method for number portability, in the MSAs identified in the
Appendix to this part in compliance with the performance criteria set forth in section 52.23(a), in
switches for which another carrier has made a specific request for the provision of number
portability, subject to paragraph (a)(1) of this section.

          (1)  Any procedure to identify and request switches for deployment of number
portability must comply with the following criteria:

               (i)  Any wireline carrier that is certified (or has applied for certification) to
provide local exchange service in a state, or any licensed CMRS provider, must be permitted to
make a request for deployment of number portability in that state;

               (ii)  For the MSAs identified in the Appendix to this part, carriers must
submit requests for deployment by September 30, 1998;

               (iii)  A cellular, broadband PCS, or covered SMR provider must make
available upon request to any interested parties a list of its switches for which number portability
has been requested and a list of its switches for which number portability has not been requested;

               (iv)  After June 30, 1999, a cellular, broadband PCS, or covered SMR
provider must deploy additional switches serving the MSAs identified in the Appendix to this
part upon request within the following time frames:

                    (A)  For remote switches supported by a host switch equipped for
portability ("Equipped Remote Switches"), within 30 days;

                    (B)  For switches that require software but not hardware changes to
provide portability ("Hardware Capable Switches"), within 60 days;

                    (C)  For switches that require hardware changes to provide
portability ("Capable Switches Requiring Hardware"), within 180 days; and

                    (D) For switches not capable of portability that must be replaced
("Non-Capable Switches"), within 180 days.

               (v)  Carriers must be able to request deployment in any wireless switch
that serves any area within that MSA, even if the wireless switch is outside that MSA, or outside
any of the MSAs identified in the Appendix to this part.

          (2)  By June 30, 1999, all cellular, broadband PCS, and covered SMR providers
must be able to support roaming nationwide.

                            * * * * *

3.   The Appendix to Part 52 is revised to read as follows:            APPENDIX to Part 52 - Deployment Schedule
   for Long-Term Database Methods for Local Number Portability

     Implementation must be completed by the carriers in the relevant MSAs during
     the periods specified below:



Phase I -- 10/1/97-3/31/98
Phase II -- 1/1/98-5/15/98
Phase III -- 4/1/98-6/30/98


Chicago, IL      3
Detroit, MI      6
Cleveland, OH   20

Indianapolis, IN     34
Milwaukee, WI   35
Columbus, OH    38


Philadelphia, PA      4
Washington, DC   5
Baltimore, MD   18

Pittsburgh, PA  19
Newark, NJ      25
Norfolk, VA     32


Atlanta, GA      8
Miami, FL       24
Fort Lauderdale, FL  39
Orlando, FL     40
New Orleans, LA 41
Charlotte, NC   43
Greensboro, NC  48
Nashville, TN   51




Las Vegas, NV   50



Cincinnati, OH  30




Tampa, FL       23



New York, NY     2
Boston, MA       9
Nassau, NY      13
Buffalo, NY     44


Los Angeles, CA  1
Riverside, CA   10
San Diego, CA   14
Orange Co, CA   15
Oakland, CA     21
San Francisco, CA    29




Rochester, NY   49


Houston, TX      7
Dallas, TX      11
St. Louis, MO   16
Kansas City, KS 28
Fort Worth, TX  33




Hartford, CT    46


Minneapolis, MN 12
Phoenix, AZ     17
Seattle, WA     22
Denver, CO      26
Portland, OR    27


Phase IV -- 7/1/98-9/30/98
Phase V -- 10/1/98-12/31/98


Grand Rapids, MI    56
Dayton, OH      61
Akron, OH       73
Gary, IN        80
Toledo, OH       81
Youngstown, OH   85
Ann Arbor, MI    95
Fort Wayne, IN  100


Bergen, NJ 42
Middlesex, NJ   52
Monmouth, NJ    54
Richmond, VA    63

Scranton, PA     78
Allentown, PA    82
Harrisburg, PA   83
Jersey City, NJ  88
Wilmington, DE   89


Memphis, TN     53
Louisville, KY  57
Jacksonville, FL    58
Raleigh, NC     59
West Palm Beach, FL                62
Greenville, SC  66

Birmingham, AL   67
Knoxville, KY    79
Baton Rouge, LA  87
Charleston, SC   92
Sarasota, FL     93
Mobile, AL       96
Columbia, SC     98










Honolulu, HI    65
Tulsa, OK        70


Providence, RI  47
Albany, NY      64
Syracuse, NY     69
Springfield, MA  86


San Jose, CA    31
Sacramento, CA  36
Fresno, CA      68
Ventura, CA      72
Bakersfield, CA  84
Stockton, CA     94
Vallejo, CA      99






San Antonio, TX 37
Oklahoma City, OK   55
Austin, TX      60
El Paso, TX      74
Little Rock, AR  90
Wichita, KS      97



New Haven, CT    91


Salt Lake City, UT  45
Tucson, AZ      71
Omaha, NE        75
Albuquerque, NM  76
Tacoma, WA       77

      APPENDIX C - DESCRIPTION OF NUMBER PORTABILITY METHODS




     1.   Location Routing Number (LRN)

     Under AT&T's LRN proposal, a carrier seeking to route a call to a ported number
queries or "dips" an external routing database, obtains a ten-digit location routing number
for the ported number, and uses that location routing number to route the call to the end
office switch which serves the called party.  The carrier dipping the database may be the
originating carrier, the terminating carrier, or the N-1 carrier (the carrier prior to the
terminating carrier).  Under the LRN method, a unique location routing number is
assigned to each switch.  For example, a local service provider receiving a seven-digit local
call, such as 887-1234, would examine the dialed number to determine if the NPA-NXX is a
portable code.  If so, the seven-digit dialed number would be prefixed with the NPA and a
ten-digit query (e.g., 679-887-1234) would be launched to the routing database.  The
routing database then would return the LRN (e.g., 679-267-0000) associated with the dialed
number which the local service provider uses to route the call to the appropriate switch. 
The local service provider then would formulate an SS7 call set-up message with a generic
address parameter, along with the forward call indicator set to indicate that the query has
been performed, and route the call to the local service provider's tandem for forwarding.

     LRN is a "single-number solution" because only one number (i.e., the number
dialed by the calling party) is used to identify the customer in the serving switch.  Each
switch has one network address -- the location routing number.  The record and the
Industry Numbering Committee (INC) indicate that LRN supports custom local area
signalling services (CLASS), emergency services, and operator and directory services, but
may result in some additional post-dial delay.  LRN can support location and service as
well as service provider portability.  Finally, LRN supports wireless-wireline and wireless-
wireless service provider portability.


     2.   Query on Release (QOR) 

     Also known as "Look Ahead," QOR is a method which performs queries only for
calls to ported numbers.  Prior to querying a routing database, the switch from which the
call originates reserves the appropriate call path through the SS7 network and attempts to
complete a call to the switch where the NPA-NXX of the dialed number resides.  If the
number is ported, the call is released back to a previous switch in the call path, which
performs a query to determine the LRN of the new serving switch.  The call then is routed
to the serving switch.  The switch that redirects the call also performs the query, thus
eliminating the need for the carrier to which the number was originally assigned to provide
routing information.  Pacific Bell indicates that QOR can support both location and
service portability, since any call can be released back and routed through a non-
incumbent provider's network.
                            APPENDIX D
  
        SUPPLEMENTAL FINAL REGULATORY FLEXIBILITY ANALYSIS

     1.   As required by Section 603 of the Regulatory Flexibility Act (RFA),  5 U.S.C.
 603, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of
Proposed Rulemaking (Notice).  The Commission sought written public comment on the
proposals in the Notice.  In addition, pursuant to Section 603, a Final Regulatory Flexibility
Analysis (FRFA) was incorporated in the First Report & Order.  That FRFA conformed to
the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA)  The Supplemental Final Regulatory Flexibility Analysis in this First
Memorandum Opinion and Order on Reconsideration (First Reconsideration Order)
(Supplemental FRFA) also conforms to the RFA.


     A.   Need for and Objectives of this First Reconsideration Orderand the Rules Adopted Herein

     2.   The need for and objectives of the rules adopted in this First Reconsideration
Order are the same as those discussed in the FRFA in the First Report & Order.  In
general, our rules implement the statutory requirement that all LECs provide telephone
number portability when technically feasible.  In this First Reconsideration Order, we
grant in part and deny in part several of the petitions filed for reconsideration and/or
clarification of the First Report & Order, in order to further the same needs and objectives. 
First, we conclude that QOR is not an acceptable long-term number portability method. 
Second, we extend our implementation schedule for wireline carriers, clarify the
requirements imposed thereunder, and address issues raised by rural LECs and certain
other parties.  We conclude that LECs need only provide number portability within the 100
largest MSAs in switches for which another carrier has made a specific request for the
provision of portability.  Finally, we affirm and clarify our implementation schedule for
wireless carriers.


     B.   Analysis of Significant Issues Raised in Response to the FRFA

     3.   Summary of the FRFA.  In the FRFA, we concluded that incumbent LECs
do not qualify as small businesses because they are dominant in their field of operation,
and, accordingly, we did not address the impact of our rules on incumbent LECs.  We
noted that the RFA generally defines the term "small business" as having the same
meaning as the term "small business concern" under the Small Business Act.  A small
business concern is one that (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).  According to the SBA's regulations, entities engaged in
the provision of telephone service may have a maximum of 1,500 employees in order to
qualify as a small business concern.  This standard also applies in determining whether an
entity is a small business for purposes of the Regulatory Flexibility Act.

     4.   We did recognize that our rules may have a significant economic impact on a
substantial number of small businesses insofar as they apply to telecommunications
carriers other than incumbent LECs, including competitive LECs, as well as cellular,
broadband PCS, and covered SMR providers.  Based upon data contained in the most
recent census and a report by the Commission's Common Carrier Bureau, we estimated
that 2,100 carriers could be affected.  We also discussed the reporting requirements
imposed by the First Report & Order.

     5.   Finally, we discussed the steps we had taken to minimize the impact on small
entities, consistent with our stated objectives.  We concluded that our actions in the First
Report & Order would benefit small entities by facilitating their entry into the local
exchange market.  We found that the record in this proceeding indicated that the lack of
number portability would deter entry by competitive providers of local service because of
the value customers place on retaining their telephone numbers.  These competitive
providers, many of which may be small entities, may find it easier to enter the market as a
result of number portability, which will eliminate this barrier to entry.  We noted that, in
general, we attempted to keep burdens on local exchange carriers to a minimum.  For
example, we adopted a phased deployment schedule for implementation in the 100 largest
MSAs, and then elsewhere upon a carrier's request; we conditioned the provision of
currently available measures upon request only; we did not require cellular, broadband
PCS, and covered SMR providers, which may be small businesses, to offer currently
available number portability measures; and we did not require paging and messaging
service providers, which may be small entities, to provide any number portability.

          1.   Treatment of Small Incumbent LECs

     6.   Comments.  NTCA/OPASTCO claims that the First Report & Order's Final
Regulatory Flexibility Analysis does not address the impact of the rules on small incumbent
LECs, and is thus inconsistent with the Local Competition Order.  NTCA/OPASTCO
suggests that exempting rural LECs from number portability requirements absent a bona
fide request would fulfill our responsibility under the Regulatory Flexibility Act. 

     7.   Discussion.  Because the small incumbent LECs subject to these rules are
either dominant in their field of operations or are not independently owned and operated,
consistent with our prior practice, they are excluded from the definition of "small entity"
and "small business concerns."  As we stated in the Local Competition Order, we have
found incumbent LECs to be "dominant in their field of operation" since the early 1980's,
and we consistently have certified under the RFA that incumbent LECs are not subject to
regulatory flexibility analyses because they are not small businesses.  We have made
similar determinations in other areas.  Accordingly, our use of the terms "small entities"
and "small businesses" does not encompass small incumbent LECs.  Although we are not
fully persuaded on the basis of this record that our prior practice has been incorrect, in
light of the special concerns raised by NTCA/OPASTCO in this proceeding, for regulatory
flexibility analysis purposes, we will include small incumbent LECs in this Supplemental
FRFA and use the term "small incumbent LECs" to refer to any incumbent LECs that
arguably might be defined by SBA as "small business concerns."   Out of an abundance
of caution, therefore, we will include small incumbent LECs in the Supplemental FRFA in
this First Reconsideration Order to remove any possible issue of RFA compliance.

          2.   Other Issues

     8.   Although not in response to the FRFA, certain parties urge us to waive
number portability requirements for rural and/or smaller LECs serving areas in the
largest 100 MSAs until receipt of a bona fide request, or to grant an exemption from our
rules on the basis of rural and/or smaller LEC status.  We discuss these issues above in the
First Reconsideration Order.


     C.   Description and Estimates of the Number of Small Entities
          Affected by this First Reconsideration Order

     9.   For the purposes of this First Reconsideration Order, the RFA defines a
"small business" to be the same as a "small business concern" under the Small Business
Act, 15 U.S.C.  632, unless the Commission has developed one or more definitions that are
appropriate to its activities.  Under the Small Business Act, a "small business concern" is
one that:  (1) is independently owned and operated; (2) is not dominant in its field of
operation; and (3) meets any additional criteria established by the SBA.  SBA has defined
a small business for Standard Industrial Classification (SIC) categories 4812
(Radiotelephone Communications) and 4813 (Telephone Communications, Except
Radiotelephone) to be small entities with fewer than 1,500 employees.  We first discuss
generally the total number of small telephone companies falling within both of those SIC
categories.  Then, we discuss the number of small businesses within the two subcategories
that may be affected by our rules, and attempt to refine further those estimates to
correspond with the categories of telephone companies that are commonly used under our
rules.

     10.  Consistent with our prior practice, we shall continue to exclude small
incumbent LECs from the definition of a small entity for the purpose of this Supplemental
FRFA.  Nevertheless, as mentioned above, we include small incumbent LECs in our
Supplemental FRFA.  Accordingly, our use of the terms "small entities" and "small
businesses" does not encompass "small incumbent LECs."  We use the term "small
incumbent LECs" to refer to any incumbent LECs that arguably might be defined by SBA
as "small business concerns."

     11.  Total Number of Telephone Companies Affected.  Many of the decisions and
rules adopted herein may have a significant effect on a substantial number of the small
telephone companies identified by SBA.  The United States Bureau of the Census ("the
Census Bureau") reports that, at the end of 1992, there were 3,497 firms engaged in
providing telephone services, as defined therein, for at least one year.  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, PCS providers, covered SMR
providers, and resellers.  It seems certain that some of those 3,497 telephone service firms
may not qualify as small entities or small incumbent LECs because they are not
"independently owned and operated."  For example, a PCS provider that is affiliated
with an interexchange carrier having more than 1,500 employees would not meet the
definition of a small business.  We believe that our rules may affect certain subcategories
within that estimate, i.e., wireline carriers and service providers, including local exchange
carriers and competitive access providers; and wireless carriers, including cellular service
carriers, broadband PCS licensees, and SMR licensees.  We discuss those subcategories
below in further detail.  We believe, on the other hand, that our rules will not affect certain
subcategories within that estimate, i.e., interexchange carriers, operator service providers,
pay telephone operators, mobile service carriers, and resellers, and, moreover, will not
affect small cable system operators.

     12.  Wireline Carriers and Service Providers.  SBA has developed a definition of
small entities for telephone communications companies other than radiotelephone
(wireless) companies.  The Census Bureau reports that, there were 2,321 such telephone
companies in operation for at least one year at the end of 1992.  According to SBA's
definition, a small business telephone company other than a radiotelephone company is one
employing fewer than 1,500 persons.  All but 26 of the 2,321 non-radiotelephone
companies listed by the Census Bureau were reported to have fewer than 1,000 employees. 
Thus, even if all 26 of those companies had more than 1,500 employees, there would still be
2,295 non-radiotelephone companies that might qualify as small entities or small
incumbent LECs.  Although it seems certain that some of these carriers are not
independently owned and operated, we are unable at this time to estimate with greater
precision the number of wireline carriers and service providers that would qualify as small
business concerns under SBA's definition.  Consequently, we estimate that there are fewer
than 2,295 small entity telephone communications companies other than radiotelephone
companies that may be affected by the decisions and rules adopted in this First
Reconsideration Order.

     13.  Local Exchange Carriers.  Neither the Commission nor SBA has developed a
definition of small providers of local exchange services (LECs).  The closest applicable
definition under SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies.  The most reliable source of information regarding
the number of LECs nationwide of which we are aware appears to be the data that we
collect annually in connection with the Telecommunications Relay Service (TRS). 
According to our most recent data, 1,347 companies reported that they were engaged in the
provision of local exchange services.  Although it seems certain that some of these carriers
are not independently owned and operated, or have more than 1,500 employees, we are
unable at this time to estimate with greater precision the number of LECs that would
qualify as small business concerns under SBA's definition.  Consequently, we estimate that
there are fewer than 1,347 small incumbent LECs that may be affected by the decisions and
rules adopted in this First Reconsideration Order.

     14.  Competitive Access Providers.  Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to providers of competitive
access services (CAPs).  The closest applicable definition under SBA rules is for telephone
communications companies other than radiotelephone (wireless) companies.  The most
reliable source of information regarding the number of CAPs nationwide of which we are
aware appears to be the data that we collect annually in connection with the TRS. 
According to our most recent data, 57 companies reported that they were engaged in the
provision of competitive access services.  Although it seems certain that some of these
carriers are not independently owned and operated, or have more than 1,500 employees,
we are unable at this time to estimate with greater precision the number of CAPs that
would qualify as small business concerns under SBA's definition.  Consequently, we
estimate that there are fewer than 57 small entity CAPs that may be affected by the
decisions and rules adopted in this First Reconsideration Order.

     15.  Wireless (Radiotelephone) Carriers.  SBA has developed a definition of small
entities for radiotelephone (wireless) companies.  The Census Bureau reports that there
were 1,176 such companies in operation for at least one year at the end of 1992. 
According to SBA's definition, a small business radiotelephone company is one employing
fewer than 1,500 persons.  The Census Bureau also reported that 1,164 of those
radiotelephone companies had fewer than 1,000 employees.  Thus, even if all of the
remaining 12 companies had more than 1,500 employees, there would still be 1,164
radiotelephone companies that might qualify as small entities if they are independently
owned are operated.  Although it seems certain that some of these carriers are not
independently owned and operated, we are unable at this time to estimate with greater
precision the number of radiotelephone carriers and service providers that would qualify
as small business concerns under SBA's definition.  Consequently, we estimate that there
are fewer than 1,164 small entity radiotelephone companies that may be affected by the
decisions and rules adopted in this First Reconsideration Order.

     16.  Cellular Service Carriers.  Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to providers of cellular services.  The
closest applicable definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.  The most reliable source of information
regarding the number of cellular service carriers nationwide of which we are aware
appears to be the data that we collect annually in connection with the TRS.  According to
our most recent data, 792 companies reported that they were engaged in the provision of
cellular services.  Although it seems certain that some of these carriers are not
independently owned and operated, or have more than 1,500 employees, we are unable at
this time to estimate with greater precision the number of cellular service carriers that
would qualify as small business concerns under SBA's definition.  Consequently, we
estimate that there are fewer than 792 small entity cellular service carriers that may be
affected by the decisions and rules adopted in this First Reconsideration Order.

     17.  Broadband PCS Licensees.  The broadband PCS spectrum is divided into six
frequency blocks designated A through F, and the Commission has held auctions for each
block.  The Commission defined "small entity'' for Blocks C and F as an entity that has
average gross revenues of less than $40 million in the three previous calendar years.  For
Block F, an additional classification for "very small business" was added and is defined as
an entity that, together with their affiliates, has average gross revenues of not more than
$15 million for the preceding three calendar years.   These regulations defining "small
entity'' in the context of broadband PCS auctions have been approved by the SBA.  No
small businesses within the SBA-approved definition bid successfully for licenses in Blocks
A and B.  There were 90 winning bidders that qualified as small entities in the Block C
auctions.  A total of 93 small and very small business bidders won approximately
40 percent of the 1,479 licenses for Blocks D, E, and F.  However, licenses for blocks C
through F have not been awarded fully; therefore, there are few, if any, small businesses
currently providing PCS services.  Based on this information, we conclude that the number
of small broadband PCS licensees will include the 90 winning C Block bidders and the 93
qualifying bidders in the D, E, and F blocks, for a total of 183 small PCS providers as
defined by the SBA and the Commission's auction rules. 

     18.  SMR Licensees.  Pursuant to 47 C.F.R.  90.814(b)(1), the Commission has
defined "small entity" in auctions for geographic area 800 MHz and 900 MHz SMR
licenses as a firm that had average annual gross revenues of less than $15 million in the
three previous calendar years.  This definition of a "small entity" in the context of 800
MHz and 900 MHz SMR has been approved by the SBA.  The rules adopted in this First
Reconsideration Order may apply to SMR providers in the 800 MHz and 900 MHz bands
that either hold geographic area licenses or have obtained extended implementation
authorizations.  We do not know how many firms provide 800 MHz or 900 MHz
geographic area SMR service pursuant to extended implementation authorizations, nor
how many of these providers have annual revenues of less than $15 million.  We assume,
for purposes of this Supplemental FRFA, that all of the extended implementation
authorizations may be held by small entities, which may be affected by the decisions and
rules adopted in this First Reconsideration Order.

     19.  The Commission's auctions for geographic area licenses in the 900 MHz
SMR band concluded in April of 1996.  There were 60 winning bidders who qualified as
small entities in the 900 MHz auction.  Based on this information, we conclude that the
number of geographic area SMR licensees affected by the rules adopted in this First
Reconsideration Order includes these 60 small entities.  No auctions have been held for 800
MHz geographic area SMR licenses.  Therefore, no small entities currently hold these
licenses.  A total of 525 licenses will be awarded for the upper 200 channels in the 800 MHz
geographic area SMR auction.  However, the Commission has not yet determined how
many licenses will be awarded for the lower 230 channels in the 800 MHz geographic area
SMR auction.  There is no basis, moreover, on which to estimate how many small entities
will win these licenses.  Given that nearly all radiotelephone companies have fewer than
1,000 employees and that no reliable estimate of the number of prospective 800 MHz
licensees can be made, we assume, for purposes of this Supplemental FRFA, that all of the
licenses may be awarded to small entities who, thus, may be affected by the decisions in this
First Reconsideration Order.

     20.  Cable System Operators.  SBA has developed a definition of small entities for
cable and other pay television services, which includes all such companies generating less
than $11 million 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, there were 1,432 such cable and other pay television services
generating $11 million or less in annual receipts that were in operation for at least one year
at the end of 1992.  

     21.  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 1,468 small entity cable system operators that may be
affected by the decisions and rules adopted in this First Reconsideration Order.

     22.  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."  There were 63,196,310 basic cable subscribers at the end of 1995, and
1,450 cable system operators serving fewer than one percent (631,960) of subscribers. 
Although it seems certain that some of these cable system operators are affiliated with
entities whose gross annual revenues exceed $250,000,000, we 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.


     D.   Summary Analysis of the Projected Reporting, Recordkeeping,
          and Other Compliance Requirements and Steps Taken to
          Minimize the Significant Economic Impact of this First
          Reconsideration Order on Small Entities and Small Incumbent
          LECs, Including the Significant Alternatives Considered and
          Rejected

     23.  Structure of the Analysis.  In this Section of the Supplemental FRFA, we
analyze the projected reporting, recordkeeping, and other compliance requirements that
may apply to small entities and small incumbent LECs as a result of this First
Reconsideration Order.  As a part of this discussion, we mention some of the types of
skills that will be needed to meet the new requirements.  We also describe the steps taken to
minimize the economic impact of our decisions on small entities and small incumbent
LECs, including the significant alternatives considered and rejected.

     24.  We provide this summary analysis to provide context for our analysis in this
Supplemental FRFA.  To the extent that any statement contained in this Supplemental
FRFA is perceived as creating ambiguity with respect to our rules or statements made in
the First Report & Order or preceding Sections of this First Reconsideration Order, the
rules and statements set forth in the First Report & Order and those preceding Sections of
this First Reconsideration Order shall be controlling.

          1.   Implementation Schedule

     25.  Summary of Projected Reporting, Recordkeeping and Other Compliance
Requirements.  In the First Report & Order, we required local exchange carriers operating
in the 100 largest MSAs to offer long-term service provider portability, according to a
phased deployment schedule commencing on October 1, 1997, and concluding by
December 31, 1998, set forth in Appendix F of the First Report & Order.  In this First
Reconsideration Order, we extend the end dates for Phase I of our deployment schedule by
three months, and for Phase II by 45 days.  Thus, deployment will now take place in
Phase I from October 1, 1997, through March 31, 1998, and in Phase II from January 1,
1998, through May 15, 1998.  We also clarify that LECs need only provide number
portability within the 100 largest MSAs in switches for which another carrier has made a
specific request for the provision of portability.  LECs must make available lists of their
switches for which deployment has and has not been requested.  The parties involved in
such requests identifying preferred switches may need to use legal, accounting, economic
and/or engineering services.  

     26.  Steps Taken to Minimize Significant Economic Impact on Small Entities and
Small Incumbent LECs, and Alternatives Considered.  In this First Reconsideration Order,
we lighten the burdens on rural and smaller LECs by establishing a procedure whereby,
within as well as outside the 100 largest MSAs, portability need only be implemented in the
switches for which another carrier has made a specific request for the provision of
portability.  If, as petitioners allege, competition is not imminent in the areas covered by
rural/small LEC switches, then the rural or smaller LEC should not receive requests from
competing carriers to implement portability, and thus need not expend its resources until
competition does develop.  By that time, extensive non-carrier-specific testing will likely
have been done, and rural and small LECs need not expend their resources on such
testing.  We note that the majority of parties representing small or rural LECs specified
as the relief sought that we only impose implementation requirements where competing
carriers have shown interest in portability.  Moreover, our extension of Phases I and II of
our deployment schedule may permit smaller LECs to reduce their testing costs by
allowing time for larger LECs to test and resolve the problems of this new technology.

     27.  Indeed, in this First Reconsideration Order, we reject several alternatives
put forth by parties that might impose greater burdens on small entities and small
incumbent LECs.  We reject requests put forth by ACSI, KMC, ICG, NEXTLINK, and
ALTS to accelerate the deployment schedule for areas both within and outside the 100
largest MSAs.  We also reject the procedures proposed by some parties that would
require LECs to file waiver requests for their specific switches if they believe there is no
competitive interest in those switches, instead of requiring LECs to identify in which
switches of other LECs they wish portability capabilities.  The suggested waiver
procedures would burden the LEC from whom portability is requested with preparing and
filing the petition for waiver.  In addition, a competing carrier that opposes the waiver
petition would be burdened with challenging the waiver.  In contrast, under the procedure
we establish, the only reporting burden on requesting carriers is to identify and request
their preferred switches.  Carriers from which portability is being requested, which may be
small incumbent LECs, only incur a reporting burden if they wish to lessen their burdens
further by requesting more time in which to deploy portability.  Finally, we clarify that
CMRS providers, like wireline providers, need only provide portability in requested
switches, both within and outside the 100 largest MSAs.

          2.   Exemptions for Rural or Small LECs

     28.  Summary of Projected Reporting, Recordkeeping and Other Compliance
Requirements.   Section 251(f)(2) provides that LECs with fewer than two percent of the
nation's subscriber lines may petition a state commission for a suspension or modification
of any requirements of Sections 251(b) and 251(c).  Section 251(f)(2) is available to all
LECs, including competitive LECs, which may be small entities.  A small incumbent LEC
or a competitive LEC, which may be a small entity, seeking under 251(f)(2) to modify or
suspend the number portability requirements imposed by Section 251(b)(2), bears the
burden of proving that the number portability requirements would:  (1) create a significant
adverse economic impact on telecommunications users; (2) be unduly economically
burdensome; or (3) be technically infeasible.  The parties involved in such a proceeding
may need to use legal, accounting, economic and/or engineering services.

     29.  Steps Taken to Minimize Significant Economic Impact on Small Entities and
Small Incumbent LECs, and Alternatives Considered.   As explained above in the First
Reconsideration Order, we consider it unnecessary to create a general exemption for all
small and/or rural LECs, as suggested by some parties.  We have effectively granted the
small and rural LEC petitioners' requests that we waive number portability requirements
for rural and/or small LECs serving areas in the largest 100 MSAs until receipt of a bona
fide request, since we now require all competing carriers specifically to request, of any
LEC, the particular switches in which they desire portability.  To the extent that
portability is requested in a rural or small LEC's switch, and that LEC has difficulty
complying with the request, it may apply for an extension of time on the basis of
extraordinary circumstances beyond its control that prevent it from complying with the
Commission's deployment schedule or, if eligible, it may petition the appropriate state
commission for suspension or modification of the requirements of Section 251(b).  Our
grant of petitioners' requests to limit deployment to requested switches, however, decreases
the likelihood that smaller and rural LECs will have to apply for extensions of time or file
petitions under section 251(f)(2).

     30.  As we stated in the Local Competition Order, the determination whether a
Section 251(f)(2) suspension or modification should be continued or granted lies primarily
with the relevant state commission.  By largely leaving this determination to the states, the
Local Competition Order stated, our decisions permit this fact-specific inquiry to be
administered in a manner that minimizes regulatory burdens and the economic impact on
small entities and small incumbent LECs.  However, to minimize further regulatory
burdens and minimize the economic impact of our decision, in the Local Competition
Order we adopted several rules that may facilitate the efficient resolution of such inquiries,
provide guidance, and minimize uncertainty.  In the Local Competition Order, we found
that the rural LEC or smaller LEC must prove to the state commission that the financial
harm shown to justify a suspension or modification would be greater than the harm that
might typically be expected as a result of competition.  Finally, we concluded that Section
251(f) adequately provides for varying treatment for smaller or rural LECs where such
variances are justified.  As a result, we stated, we expect that Section 251(f) will
significantly minimize regulatory burdens and economic impacts from the rules adopted in
the First Report & Order and this First Reconsideration Order.

          3.   Reporting Requirements by the Chief, Wireless
               Telecommunications Bureau, on Carriers' Progress

     31.  Summary of Projected Reporting, Recordkeeping and Other Compliance
Requirements.  In the First Report & Order, the Commission delegated authority to the
Chief, Wireless Telecommunications Bureau, to require reports from cellular, PCS, and
covered SMR providers in order to monitor the progress of these providers toward
implementing long-term number portability.  These reporting requirements were not
defined in sufficient detail in the First Report & Order to obtain approval from the Office
of Management and Budget.  Separate approval will be requested when the specific
requirements are imposed by the Wireless Telecommunications Bureau.

     32.  Steps Taken to Minimize Significant Economic Impact on Small Entities and
Small Incumbent LECs, and Alternatives Considered.  Although no party to this proceeding
suggested that changes to these reporting requirements would affect small entities or small
incumbent LECs, several parties requested that the Chief, Wireless Telecommunications
Bureau, be given greater authority to act to increase flexibility in the schedule.  As
explained above in this First Reconsideration Order, we lighten the burden on smaller and
rural wireless carriers by modifying our rules so that CMRS providers, like wireline
providers, need only provide portability in requested switches, both within and outside the
100 largest MSAs.   We also decline at this time to alter further the implementation
schedule imposed by the First Report & Order for wireless carriers because we find that
enough flexibility has been incorporated into the implementation schedule for wireless
carriers, and that no modification is needed.




     E.   Report to Congress

     33.  The Commission shall send a copy of this Supplemental FRFA, along with this
First Reconsideration Order, in a report to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A).  A copy of this
Supplemental FRFA will also be published in the Federal Register.
               APPENDIX E - IMPLEMENTATION SCHEDULE

     Implementation must be completed by the carriers in the relevant MSAs
     during the periods specified below:



Phase I -- 10/1/97-3/31/98
Phase II -- 1/1/98-5/15/98
Phase III -- 4/1/98-6/30/98


Chicago, IL      3
Detroit, MI      6
Cleveland, OH   20

Indianapolis, IN     34
Milwaukee, WI   35
Columbus, OH    38


Philadelphia, PA      4
Washington, DC   5
Baltimore, MD   18

Pittsburgh, PA  19
Newark, NJ      25
Norfolk, VA     32


Atlanta, GA      8
Miami, FL       24
Fort Lauderdale, FL 
 39
Orlando, FL     40
New Orleans, LA 41
Charlotte, NC   43
Greensboro, NC  48
Nashville, TN   51




Las Vegas, NV   50



Cincinnati, OH  30




Tampa, FL       23



New York, NY     2
Boston, MA       9
Nassau, NY      13
Buffalo, NY     44


Los Angeles, CA  1
Riverside, CA   10
San Diego, CA   14
Orange Co, CA   15
Oakland, CA     21
San Francisco, CA    29




Rochester, NY   49


Houston, TX      7
Dallas, TX      11
St. Louis, MO   16
Kansas City, KS 28
Fort Worth, TX  33




Hartford, CT    46


Minneapolis, MN 12
Phoenix, AZ     17
Seattle, WA     22
Denver, CO      26
Portland, OR    27



Phase IV -- 7/1/98-9/30/98
Phase V -- 10/1/98-12/31/98


Grand Rapids, MI    56
Dayton, OH      61
Akron, OH       73
Gary, IN        80
Toledo, OH       81
Youngstown, OH   85
Ann Arbor, MI    95
Fort Wayne, IN  100


Bergen, NJ 42
Middlesex, NJ   52
Monmouth, NJ    54
Richmond, VA    63

Scranton, PA     78
Allentown, PA    82
Harrisburg, PA   83
Jersey City, NJ  88
Wilmington, DE   89


Memphis, TN     53
Louisville, KY  57
Jacksonville, FL    58
Raleigh, NC     59
West Palm Beach, FL                62
Greenville, SC  66

Birmingham, AL   67
Knoxville, KY    79
Baton Rouge, LA  87
Charleston, SC   92
Sarasota, FL     93
Mobile, AL       96
Columbia, SC     98










Honolulu, HI    65
Tulsa, OK        70


Providence, RI  47
Albany, NY      64
Syracuse, NY     69
Springfield, MA  86


San Jose, CA    31
Sacramento, CA  36
Fresno, CA      68
Ventura, CA      72
Bakersfield, CA  84
Stockton, CA     94
Vallejo, CA      99






San Antonio, TX 37
Oklahoma City, OK   55
Austin, TX      60
El Paso, TX      74
Little Rock, AR  90
Wichita, KS      97



New Haven, CT    91


Salt Lake City, UT  45
Tucson, AZ      71
Omaha, NE        75
Albuquerque, NM  76
Tacoma, WA       77