[Federal Register Volume 83, Number 161 (Monday, August 20, 2018)]
[Rules and Regulations]
[Pages 42045-42052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17843]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 51 and 52

[WC Docket Nos. 17-244, 13-97; FCC 18-95]


Nationwide Number Portability; Numbering Policies for Modern 
Communications

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) adopts final rules based on public comments to promote 
nationwide number portability. These rules eliminate unnecessary toll 
interexchange dialing parity requirements and database query 
requirements that may result in obstacles and inefficiencies in an 
eventual nationwide number portability regime.

DATES: Effective September 19, 2018.

FOR FURTHER INFORMATION CONTACT: For further information about this 
proceeding, please contact Sherwin Siy, FCC Wireline Competition 
Bureau, Competition Policy Division, Room 5-C225, 445 12th St. SW, 
Washington, DC 20554, (202) 418-2783, <a href="/cdn-cgi/l/email-protection#85f6ede0f7f2ecebabf6ecfcc5e3e6e6abe2eaf3"><span class="__cf_email__" data-cfemail="74071c1106031d1a5a071d0d341217175a131b02">[email protected]</span></a>. For 
additional information concerning the Paperwork Reduction Act 
information collection requirements contained in this document, send an 
email to <a href="/cdn-cgi/l/email-protection#11414350517772723f767e67"><span class="__cf_email__" data-cfemail="88d8dac9c8eeebeba6efe7fe">[email protected]</span></a> or contact Nicole Ongele at (202) 418-2991.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in WC Docket Nos. 17-244 and 13-97; FCC 18-95, adopted July 
12, 2018 and released July 13, 2018. The full text of this document is 
available for public inspection during regular business hours in the 
FCC Reference Information Center, Portals II, 445 12th Street SW, Room 
CY-A257, Washington DC 20554. It is available on the Commission's 
website at https://docs.fcc.gov/public/attachments/FCC-18-95A1.pdf.

Synopsis

I. Introduction

    1. The systems we use to make and route telephone calls are 
changing. With this Report and Order (Order), we set the stage for more 
efficient use of the telecommunications network and pave the way for 
nationwide number portability (NNP). We eliminate rules that were 
intended for a market that was divided along more static, segmented 
categories of telecommunications providers. Those rules are far less 
applicable to today's more integrated providers and pricing plans, and 
the North American Numbering Council has identified them as barriers to 
the achievement of NNP.
    2. We forbear from the interexchange dialing parity requirements 
for competitive local exchange carriers (LECs), creating a more level 
playing field with the incumbent LECs who received forbearance from the 
interexchange dialing parity obligations in 2015, and ensuring that 
both categories of LECs will be able to route calls more efficiently in 
a future NNP environment. We also ease the requirement that the second-
to-last carrier handling a call request query the local number 
portability database, allowing any carriers earlier in the chain to 
make the query if they so choose. This greater flexibility allows 
carriers in the call path to determine who is best placed to bear the 
costs of performing the query, and also ensures that any carrier--
including originating carriers--can perform the query, a necessary step 
in certain NNP solutions.
    3. These changes will help set the stage for further progress 
towards implementation of number portability

[[Page 42046]]

on a nationwide basis. The North American Numbering Council (a federal 
advisory committee to the Commission that provides guidance and 
recommendations on numbering policy and operations) recently approved a 
report issued by its Nationwide Number Portability Issues Working 
Group, which builds upon and refines earlier industry and NANC work, 
and recommends further inquiry and analysis on several specific 
questions to further explore NNP. We anticipate that the NANC will 
continue to assist the Commission in investigating these options and 
considerations.

II. Background

    4. Interexchange dialing parity requirements. Dialing parity 
provisions were originally intended to ensure that incumbent LECs 
provided the same access to stand-alone long-distance service providers 
as they did to their own or their affiliates' long-distance offerings. 
These requirements grew out of the equal access requirements included 
in the 1982 Modification of Final Judgment in the federal antitrust 
case against AT&T, which imposed these requirements on the Bell 
Operating Companies (BOCs). The Telecommunications Act of 1996 (1996 
Act) incorporated the MFJ's equal access requirements for these former 
BOCs into the Communications Act (the Act) via section 251(g). The 1996 
Act also created more specific, affirmative equal access requirements 
in Sec.  251(b) that applied to all LECs.
    5. In the 2015 USTelecom Forbearance Order, the Commission forbore 
from the ``application to incumbent LECs of all remaining equal access 
and dialing parity requirements for interexchange services, including 
those under section 251(g) and section 251(b)(3) of the Act.'' As we 
observed in the NPRM, this forbearance was well supported by the 
lessening need for the rules, as stand-alone long-distance services had 
declined, all-distance calling was growing more prevalent, and 
consumers were being offered yet more choices in voice service, 
including increasing growth in interconnected Voice over Internet 
Protocol (VoIP) services. The 2015 USTelecom Forbearance Order left a 
limited number of toll dialing parity requirements in place, however, 
primarily for competitive LECs, and for certain customers of incumbent 
LECs who were then already presubscribed to third-party long-distance 
services at the time of the Order.
    6. N-1 Requirement. The N-1 query requirement mandates that the 
carrier immediately preceding the terminating carrier (the N-1 carrier) 
be responsible for ensuring that the local number portability 
database--the Number Portability Administration Center/Service 
Management System (NPAC/SMS)--is queried. This requirement is specified 
in the North American Numbering Council's Architecture and 
Administrative Plan for Local Number Portability, which is in turn 
incorporated by reference in Sec.  52.26(a) of the Commission's rules. 
(We note that Sec.  52.26(c) of our rules provides information on how 
to obtain a copy of the NANC Architecture Report and Working Group 
Report. This Order updates that information. This simple revision, 
reflecting the new locations of the reports, does not require notice 
and comment.) The rule was put in place in part to ensure that the 
costs of querying the database could be split between originating and 
interexchange carriers, while ensuring that calls would not be left 
unqueried. The rule also allowed local number portability to proceed 
without requiring all carriers across the country to implement it 
simultaneously.
    7. NNP Notice of Proposed Rulemaking (NPRM). In 2017, the 
Commission released the NNP NPRM (82 FR 55970) seeking comment on a 
proposal to forbear from the remaining interexchange dialing parity 
requirements of the Act, as well as a proposal to eliminate the rules 
implementing those requirements. We also sought comment on whether we 
should extend forbearance from the dialing parity requirements to 
customers with pre-existing stand-alone long-distance carriers, whose 
plans had been grandfathered in the 2015 USTelecom Forbearance Order. 
We also sought comment on a proposal to eliminate the N-1 requirement 
for call routing. The NNP NPRM generated significant interest from 
numbering database administrators, trade associations, and service 
providers, representing the views of incumbent and competitive LECs, 
interexchange carriers, and carriers who provide both services. We 
received 21 comments and 11 reply comments in the record in response.

III. Discussion

    8. In this Order, we expand the scope of the forbearance issued in 
the 2015 USTelecom Forbearance Order. While that earlier order forbore 
from applying the dialing parity requirements of the Act to incumbent 
LECs, the requirements remained in place for competitive LECs, and also 
for a limited number of customers who were still presubscribed to 
stand-alone long-distance plans. This Order removes that disparity by 
applying the forbearance to these formerly excluded categories. We also 
ease the N-1 query requirement to ensure that it does not prevent 
originating carriers, or other carriers earlier than the N-1 carrier in 
a call flow, from performing the number portability query if they wish. 
Originating carriers, or parties they contract with, should be able to 
perform these queries, but if they do not, the responsibility for the 
query continues to fall upon the N-1 carrier. This change to our rules 
will allow carriers to have the routing flexibility necessary for 
certain types of NNP.
    9. As explained in the NNP NPRM, our legal authority stems directly 
from section 251(e)(1) of the Communications Act, which gives the 
Commission ``exclusive jurisdiction over those portions of the North 
American Numbering Plan that pertain to the United States'' and 
provides that numbers must be made ``available on an equitable basis.'' 
The rule changes addressed in this Order fall squarely within this 
jurisdiction. In addition, section 10 of the Act states that the 
Commission shall forbear from applying any regulation or provision of 
the Act if it determines that: (1) Enforcement of such regulation or 
provision is not necessary to ensure that the charges, practices, 
classifications, or regulations by, for, or in connection with that 
telecommunications carrier or telecommunications service are just and 
reasonable and are not unjustly or unreasonably discriminatory; (2) 
enforcement of such regulation or provision is not necessary for the 
protection of consumers; and (3) forbearance from applying such 
provision or regulation is consistent with the public interest. As 
discussed below, our forbearance from the remaining toll interexchange 
dialing parity requirements meets these criteria.

A. Forbearance From Toll Interexchange Dialing Parity Requirement and 
Elimination of Implementing Rules

    10. Forbearance from Interexchange Dialing Parity Provisions for 
Competitive LECs. In the NNP NPRM, we noted that the same rationales of 
the 2015 USTelecom Forbearance Order seemed to apply to the toll 
interexchange dialing parity requirements that remained in place for 
competitive LECS. We sought comment on whether these mandates, located 
in section 251(b)(3), served any purpose. The overwhelming consensus in 
the record is that they do not. Wireline customers have more choices, 
and stand-alone long-distance service is indeed less prevalent and 
significant than it was in decades past. Customers

[[Page 42047]]

for wireline voice services have more choices than they did in the 
past, including interconnected VoIP from both facilities-based and 
over-the-top providers. For example, the most recent Voice Telephone 
Services Report shows that interconnected VoIP subscriptions increased 
at a compound annual growth rate of 10 percent, while retail switched 
access lines declined at 12 percent per year from 2013 to 2016. This 
represents a continuing trend, with reports showing interconnected VoIP 
subscriptions increasing at a compound annual growth rate of 15 percent 
and retail switched access declining at 10 percent a year from December 
2010 to December 2014. These findings, indicate increased options for 
consumers besides switched access, regardless of whether they may 
currently be served by a competitive or an incumbent LEC. The NNP NPRM 
sought comment on whether forbearance from these provisions would 
affect competitive LECs or their customers. No comments in the record 
indicate that the remaining dialing parity provisions for competitive 
LECs aid competition, ensure just and reasonable practices, or prevent 
unjust or unreasonable discrimination. No comments in the record 
indicate customer complaints stemming from the 2015 forbearance from 
these requirements for incumbent LECs, and commenters likewise did not 
disagree with our finding that extending the forbearance to competitive 
LECs would produce similarly benign results.
    11. We therefore find that enforcement of the section 251(b)(3) 
dialing parity requirements for competitive LECs is not necessary to 
ensure that the charges, practices, classifications, or regulations by, 
for, or in connection with a telecommunications carrier or 
telecommunications service are just and reasonable and are not unjustly 
or unreasonably discriminatory. Nor is their enforcement necessary for 
the protection of consumers, since consumers can leave their 
competitive LEC for non-switched access services if that LEC makes 
choosing a separate long-distance provider difficult. As described in 
the 2015 USTelecom Forbearance Order, wireline customers today have 
more choices than they did in 1982 or 1996, including interconnected 
VoIP services. Similarly, demand for stand-alone long-distance has 
continued to decline for both mass-market and business customers.
    12. Extending to competitive LECs the forbearance granted in 2015 
to incumbent LECs also promotes fairness in the application and 
enforcement of these requirements that would otherwise be lacking. 
Furthermore, forbearing from a requirement that no longer serves its 
purpose promotes the public interest by reducing the costs of 
regulatory compliance. We therefore find that forbearing from the 
dialing parity requirements of section 251(b)(3) serves the public 
interest.
    13. USTelecom notes that extending this forbearance to competitive 
LECs is not sufficient to achieve NNP. NNP is naturally a multi-stage 
process requiring a series of changes to various aspects of policy and 
possible other rules. We recognize this, but as many commenters have 
pointed out, the stage for NNP can be set incrementally, while 
forbearing from unnecessary requirements in the interim. As noted in 
the NNP NPRM, forbearing from these requirements could allow for more 
efficient routing than would otherwise be possible under a number of 
NNP models. USTelecom itself notes eliminating an unnecessary 
requirement may increase regulatory flexibility and make a wider range 
of solutions possible in the future.
    14. Grandfathered dialing parity requirements. The NNP NPRM also 
sought comment on eliminating the dialing parity requirements that had 
been ``grandfathered'' after the adoption of the 2015 USTelecom 
Forbearance Order. We find that the number of customers with 
grandfathered stand-alone long-distance plans continues to decline, and 
thus extending forbearance from the dialing parity requirements to 
these plans, as well will further encourage NNP. In the interest of 
maintaining a level playing field, forbearance applies to all 
customers. Thus, neither incumbent nor competitive LECs are required to 
abide by the toll dialing parity requirements for customers who have 
preexisting stand-alone long-distance plans.
    15. WTA and ITTA both note that the same factors that spurred 
forbearance from the dialing parity requirements in the 2015 USTelecom 
Forbearance Order apply even more prominently now: The stand-alone 
long-distance market remains small, and the number of preexisting plans 
among incumbent LEC customers will only have fallen since 2015. There 
is no evidence in the record to indicate that the trends observed in 
the 2015 USTelecom Forbearance Order have slowed or reversed course.
    16. Although GCI and Aureon argue that the Commission should 
maintain the exemption from forbearance for preexisting plans in more 
rural areas, we find the decline in the total number of these plans and 
our need to modernize our systems to allow for NNP are compelling 
reasons to extend forbearance. We recognize that there are a limited 
number of interexchange carriers in parts of Alaska and Iowa and, in 
certain cases, the incumbent LEC remains the only option for voice 
service. We must, however, take these first steps to eliminate outdated 
and rarely-used regulations if we are to realize the consumer and 
competitive benefits of NNP.
    17. This Order also does not affect the applicability of section 
258(a) or our slamming rules, as GCI argues. Section 258(a) prohibits 
carriers from changing a subscriber's choice of exchange service 
without going through the proper verification procedures, and also 
explicitly permits state regulators to enforce anti-slamming 
provisions. Those provisions continue to operate to prevent incumbent 
LECs from changing subscribers' selections of other providers without 
following the necessary verification procedures. While the 2015 
USTelecom Forbearance Order expressed concern that forbearance from 
equal access requirements might allow increased pressure from incumbent 
LECs, it did not presume to forbear from section 258, and we do not so 
presume now. Those anti-slamming provisions continue to operate as 
before, and will continue to be enforced.
    18. Eliminating toll dialing parity rules. The NNP NPRM also sought 
comment on eliminating the Commission's toll dialing parity rules 
promulgated under section 251(b)(3). No commenters found any reason for 
these rules to stay in place while we forbear from the interexchange 
dialing parity requirements of section 251(b)(3). We agree that in 
light of our decision to forbear from section 251(b)(3), there is no 
sound justification to retain these rules. Therefore, to eliminate any 
possible confusion and to streamline the Commission's rules, we 
therefore eliminate those provisions.

B. Allowing Alternatives to N-1 Call Routing

    19. The NNP NPRM proposed eliminating the N-1 requirement, since it 
may lead to unnecessary and inefficient routing of calls in an NNP 
environment. However, as anticipated when it was adopted, and as noted 
in the record, standardization around having the N-1 carrier perform 
the number portability database query has allowed for more uniformity 
and prevented confusion. In the interest of providing flexibility for 
anticipated changes to the number porting system, while preserving the 
certainty and stability of existing systems, we ease, but do not 
eliminate, the rule.

[[Page 42048]]

    20. We noted in the NNP NPRM that preventing queries by the 
originating carrier could lead to inefficiencies, and that some reports 
had indicated that eliminating the N-1 rule would be beneficial. 
However, we are persuaded by the record that carriers will benefit from 
the certainty of having a default rule that clearly names a responsible 
party in the absence of an agreement otherwise. We therefore amend our 
rules to allow upstream carriers to perform number portability database 
queries, but require the N-1 carriers to perform the queries if the 
upstream carriers have not.
    21. The NANC Architecture Report states that an N-1 carrier ``is 
responsible for ensuring queries are performed on an N-1 basis.'' 
However, as we have noted, requiring the N-1 carrier to perform the 
query can lead to inefficiencies in call routing in an NNP environment. 
Neustar, Incompas, the Voice on the Net Coalition (VON Coalition), and 
Charter all agree that the N-1 requirement is no longer necessary and 
urge the Commission to eliminate it to prevent the possible routing 
complications that could come with NNP. Neustar further points out that 
the N-1 requirement actually provides little distinction for most 
calls, since few consumers have an interexchange carrier that is 
different from their originating (local) provider. In those situations, 
the N-1 carrier is the originating carrier, meaning that the N-1 
requirement is unnecessary. NCTA and Comcast suggest waiting to 
eliminate the rule until after transition to the new Number Portability 
Administration Center has occurred, a process that is now complete.
    22. Many other commenters urge more caution, however, noting that 
elimination of the rule without some specification about who must 
perform the query could lead to confusion and possible call completion 
issues. Others disagree. In light of the record, we believe it best to 
chart a middle course: We eliminate any requirement that would prevent 
an upstream carrier from voluntarily making queries rather than the N-1 
carrier. In other words, we revise the N-1 rule as a default in the 
absence of other agreements. This revision accords with CenturyLink and 
iconectiv's interpretation of the NANC Architecture Report that the 
current rule for N-1 queries operates as a default rule. Although we 
disagree with those commenters and find a change is necessary, the 
result gives carriers the flexibility to efficiently route calls in an 
NNP environment.
    23. Retaining the N-1 rule as a backstop also addresses commenters' 
concerns that eliminating the N-1 rule would effectively mandate 
originating carriers to perform queries, raising their costs due to 
increased querying and potential upgrades necessary to handle this 
increased volume. Moreover, we permit, but do not require, originating 
carriers to make the database query. Should originating carriers 
decline to perform the number portability database query for 
interexchange calls, the rule will continue to require interexchange 
carriers to bear the cost of the query. Furthermore, the N-1 carrier 
will have fulfilled its responsibility to ensure the query is performed 
if any carrier preceding it in the call flow has already performed the 
query. While we anticipate that in NNP scenarios this will most likely 
be the originating carrier, the rule would not prevent other parties 
from performing the query as well. Therefore, we adjust the N-1 rule, 
eliminating Sec.  52.26(a)'s incorporation by reference of the NANC 
Architecture Report's version of the rule and amending the rule to 
allow queries by carriers other than the N-1 carrier.

IV. Procedural Matters

    24. Final Regulatory Flexibility Act Analysis. Pursuant to the 
Regulatory Flexibility Act of 1980, as amended, the Commission's Final 
Regulatory Flexibility Analysis for the Order is included in part V.
    25. Paperwork Reduction Act. This document does not contain new 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does 
not contain any new or modified information collection burden for small 
business concerns with fewer than 25 employees, pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4).
    26. Congressional Review Act. The Commission will send a copy of 
this Report and Order to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act (CRA), see 5 U.S.C. 
801(a)(1)(A).
    27. Materials in Accessible Formats. To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an email to <a href="/cdn-cgi/l/email-protection#8aece9e9bfbabecaece9e9a4ede5fc"><span class="__cf_email__" data-cfemail="264045451316126640454508414950">[email protected]</span></a> or 
call the Consumer and Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (tty).
    28. Additional Information. For additional information on this 
proceeding, contact Sherwin Siy, FCC Wireline Competition Bureau, 
Competition Policy Division, (202) 418-2783, <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="d586bdb0a7a2bcbbfb86bcac95b3b6b6fbb2baa3">[email protected]</a>.

V. Final Regulatory Flexibility Analysis

    29. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the NNP NPRM. The Commission sought written public 
comment on the proposals in the NPRM, including comments on the IFRA. 
This present Final Regulatory Flexibility Analysis (FRFA) conforms to 
the RFA.

A. Need for, and Objectives of, the Final Rules

    30. In this Order, we modernize our systems by setting the stage 
for more efficient use of the telecommunications network, and pave the 
way for nationwide number portability (NNP). We eliminate rules that 
were intended for a market that was divided along more static, 
segmented categories of telecommunications providers. Those rules are 
far less applicable to today's more integrated providers and pricing 
plans and may lead to complications that stand in the way of achieving 
NNP.
    31. We forbear from the interexchange dialing parity requirements 
for competitive local exchange carriers (LECs), creating a more level 
playing field with the incumbent LECs who received forbearance from 
their interexchange dialing parity obligations through the 2015 
USTelecom Forbearance Order. Specifically, we revise Sec.  51.205 and 
remove Sec. Sec.  51.209, 51.213 and 51.215. We also amend Sec.  
52.26(a) to allow originating carriers to perform number portability 
database queries in the Number Portability Administration Center/
Service Management System (NPAC/SMS), but require the N-1 carriers to 
perform the queries if the originating carriers have not. This allows 
greater flexibility for different carriers to determine who is best 
placed to bear the cost of performing the query.

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

    32. The Commission did not receive comments specifically addressing 
the rules and policies proposed in the IRFA.

C. Response to Comments by Chief Counsel for Advocacy of the Small 
Business Administration

    33. The Chief Counsel did not file any comments in response to the 
proposed rules in this proceeding.

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

    34. The RFA directs agencies to provide a description and, where

[[Page 42049]]

feasible, an estimate of the number of small entities that may be 
affected by the final rules adopted pursuant to the NNP NPRM. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small-business concern'' under the 
Small Business Act. Pursuant to 5 U.S.C. 601(3), the statutory 
definition of a small business applies ``unless an agency, after 
consultation with the Office of Advocacy of the Small Business 
Administration and after opportunity for public comment, establishes 
one or more definitions of such term which are appropriate to the 
activities of the agency and publishes such definition(s) in the 
Federal Register.'' A ``small-business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    35. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three comprehensive small entity size standards that could 
be directly affected herein. First, while there are industry specific 
size standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the SBA's Office of 
Advocacy, in general a small business is an independent business having 
fewer than 500 employees. These types of small businesses represent 
99.9% of all businesses in the United States which translates to 28.8 
million businesses.
    36. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
Nationwide, as of Aug 2016, there were approximately 356,494 small 
organizations based on registration and tax data filed by nonprofits 
with the Internal Revenue Service (IRS).
    37. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2012 Census of Governments indicates that there 
were 90,056 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 37,132 General purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,184 Special purpose governments (independent school 
districts and special districts) with populations of less than 50,000. 
The 2012 U.S. Census Bureau data for most types of governments in the 
local government category shows that the majority of these governments 
have populations of less than 50,000. Based on this data we estimate 
that at least 49,316 local government jurisdictions fall in the 
category of ``small governmental jurisdictions.''
    38. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. Census data for 2012 shows 
that there were 3,117 firms that operated that year. Of this total, 
3,083 operated with fewer than 1,000 employees. Thus, under this size 
standard, the majority of firms in this industry can be considered 
small.
    39. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable NAICS 
Code category is for Wired Telecommunications Carriers, as defined in 
paragraph 11 of this FRFA. Under that size standard, such a business is 
small if it has 1,500 or fewer employees. Census data for 2012 show 
that there were 3,117 firms that operated that year. Of this total, 
3,083 operated with fewer than 1,000 employees. The Commission 
therefore estimates that most providers of local exchange carrier 
service are small entities that may be affected by the rules adopted.
    40. Incumbent Local Exchange Carriers (incumbent LECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The closest 
applicable NAICS Code category is Wired Telecommunications Carriers as 
defined in paragraph 11 of this FRFA. Under that size standard, such a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 3,117 firms operated in that year. Of this total, 
3,083 operated with fewer than 1,000 employees. Consequently, the 
Commission estimates that most providers of incumbent local exchange 
service are small businesses that may be affected by the rules and 
policies adopted. One thousand three hundred and seven (1,307) 
Incumbent Local Exchange Carriers reported that they were incumbent 
local exchange service providers. Of this total, an estimated 1,006 
have 1,500 or fewer employees.
    41. Competitive Local Exchange Carriers (competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate NAICS Code category is Wired 
Telecommunications Carriers, as defined in paragraph 11 of this FRFA. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. U.S. Census data for 2012 indicate that 3,117 firms 
operated during that year. Of that number, 3,083 operated with fewer 
than 1,000 employees. Based on this data, the Commission concludes that 
the majority of Competitive LECs, CAPs, Shared-Tenant Service 
Providers, and Other Local Service Providers are small entities. 
According to Commission data, 1,442 carriers reported that they were 
engaged in the provision of either competitive local exchange services 
or competitive access provider services. Of these 1,442 carriers, an 
estimated 1,256 have 1,500 or fewer employees. In addition, 17 carriers 
have reported that they are Shared-Tenant Service Providers, and all 17 
are estimated to have 1,500 or fewer employees. In addition, 72 
carriers have reported that they are Other Local Service Providers. Of 
this total, 70 have 1,500 or fewer employees. Consequently, the 
Commission estimates that most providers of competitive local exchange 
service, competitive access providers, Shared-Tenant Service Providers, 
and Other Local Service Providers are small

[[Page 42050]]

entities that may be affected by the adopted rules.
    42. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition for Interexchange Carriers. The closest 
NAICS Code category is Wired Telecommunications Carriers as defined in 
paragraph 11 of this FRFA. The applicable size standard under SBA rules 
is that such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 359 companies reported that their primary 
telecommunications service activity was the provision of interexchange 
services. Of this total, an estimated 317 have 1,500 or fewer employees 
and 42 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of interexchange service providers are 
small entities that may be affected by rules adopted.
    43. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. The 
Telecommunications Resellers industry comprises establishments engaged 
in purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure. Mobile 
virtual network operators (MVNOs) are included in this industry. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, all operated with fewer than 
1,000 employees. Thus, under this category and the associated small 
business size standard, the majority of these prepaid calling card 
providers can be considered small entities.
    44. Toll Resellers. The Commission has not developed a definition 
for Toll Resellers. The closest NAICS Code Category is 
Telecommunications Resellers. The Telecommunications Resellers industry 
comprises establishments engaged in purchasing access and network 
capacity from owners and operators of telecommunications networks and 
reselling wired and wireless telecommunications services (except 
satellite) to businesses and households. Establishments in this 
industry resell telecommunications; they do not operate transmission 
facilities and infrastructure. Mobile virtual network operators (MVNOs) 
are included in this industry. The SBA has developed a small business 
size standard for the category of Telecommunications Resellers. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, 1,341 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of these resellers can be 
considered small entities. According to Commission data, 881 carriers 
have reported that they are engaged in the provision of toll resale 
services. Of this total, an estimated 857 have 1,500 or fewer 
employees. Consequently, the Commission estimates that the majority of 
toll resellers are small entities.
    45. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a definition for small businesses specifically applicable to 
Other Toll Carriers. This category includes toll carriers that do not 
fall within the categories of interexchange carriers, operator service 
providers, prepaid calling card providers, satellite service carriers, 
or toll resellers. The closest applicable NAICS Code category is for 
Wired Telecommunications Carriers as defined above. Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees. Census data for 2012 shows that there were 3,117 
firms that operated that year. Of this total, 3,083 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of Other Toll Carriers can 
be considered small. According to internally developed Commission data, 
284 companies reported that their primary telecommunications service 
activity was the provision of other toll carriage. Of these, an 
estimated 279 have 1,500 or fewer employees. Consequently, the 
Commission estimates that most Other Toll Carriers are small entities 
that may be affected by the rules.
    46. Prepaid Calling Card Providers. The SBA has developed a 
definition for small businesses within the category of 
Telecommunications Resellers. Under that SBA definition, such a 
business is small if it has 1,500 or fewer employees. According to the 
Commission's Form 499 Filer Database, 500 companies reported that they 
were engaged in the provision of prepaid calling cards. The Commission 
does not have data regarding how many of these 500 companies have 1,500 
or fewer employees. Consequently, the Commission estimates that there 
are 500 or fewer prepaid calling card providers that may be affected by 
the rules.
    47. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves, such as cellular services, paging services, wireless internet 
access, and wireless video services. The appropriate size standard 
under SBA rules is that such a business is small if it has 1,500 or 
fewer employees. For this industry, Census data for 2012 show that 
there were 967 firms that operated for the entire year. Of this total, 
955 firms had fewer than 1,000 employees. Thus under this category and 
the associated size standard, the Commission estimates that the 
majority of wireless telecommunications carriers (except satellite) are 
small entities. Similarly, according to internally developed Commission 
data, 413 carriers reported that they were engaged in the provision of 
wireless telephony, including cellular service, Personal Communications 
Service (PCS), and Specialized Mobile Radio (SMR) services. Of this 
total, an estimated 261 have 1,500 or fewer employees. Consequently, 
the Commission estimates that approximately half of these firms can be 
considered small. Thus, using available data, we estimate that the 
majority of wireless firms can be considered small.
    48. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions.
    49. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Commission data, 
413 carriers reported that they were engaged in wireless telephony. Of 
these, an estimated 261 have 1,500 or fewer employees and 152 have more 
than 1,500 employees. Therefore, a little less

[[Page 42051]]

than one third of these entities can be considered small.
    50. Cable and Other Subscription Programming. This industry 
comprises establishments primarily engaged in operating studios and 
facilities for the broadcasting of programs on a subscription or fee 
basis. The broadcast programming is typically narrowcast in nature 
(e.g. limited format, such as news, sports, education, or youth-
oriented). These establishments produce programming in their own 
facilities or acquire programming from external sources. The 
programming material is usually delivered to a third party, such as 
cable systems or direct-to-home satellite systems, for transmission to 
viewers. The SBA has established a size standard for this industry 
stating that a business in this industry is small if it has 1,500 or 
fewer employees. The 2012 Economic Census indicates that 367 firms were 
operational for that entire year. Of this total, 357 operated with less 
than 1,000 employees. Accordingly we conclude that a substantial 
majority of firms in this industry are small under the applicable SBA 
size standard.
    51. Cable Companies and Systems (Rate Regulation). The Commission 
has developed its own small business size standards for the purpose of 
cable rate regulation. Under the Commission's rules, a ``small cable 
company'' is one serving 400,000 or fewer subscribers nationwide. 
Industry data indicate that there are currently 4,600 active cable 
systems in the United States. Of this total, all but nine cable 
operators nationwide are small under the 400,000-subscriber size 
standard. In addition, under the Commission's rate regulation rules, a 
``small system'' is a cable system serving 15,000 or fewer subscribers. 
Current Commission records show 4,600 cable systems nationwide. Of this 
total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 
systems have 15,000 or more subscribers, based on the same records. 
Thus, under this standard as well, we estimate that most cable systems 
are small entities.
    52. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 
one 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 are approximately 52,403,705 cable 
video subscribers in the United States today. Accordingly, an operator 
serving fewer than 524,037 subscribers shall be deemed a small operator 
if its annual revenues, when combined with the total annual revenues of 
all its affiliates, do not exceed $250 million in the aggregate. Based 
on available data, we find that all but nine incumbent cable operators 
are small entities under this size standard. We note that the 
Commission neither requests nor collects information on whether cable 
system operators are affiliated with entities whose gross annual 
revenues exceed $250 million. 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.
    53. All Other Telecommunications. ``All Other Telecommunications'' 
is defined as follows: ``This U.S. industry is comprised of 
establishments that are primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing internet services or voice over internet 
protocol (VoIP) services via client supplied telecommunications 
connections are also included in this industry.'' The SBA has developed 
a small business size standard for ``All Other Telecommunications,'' 
which consists of all such firms with gross annual receipts of $32.5 
million or less. For this category, Census Bureau data for 2012 show 
that there were 1,442 firms that operated for the entire year. Of those 
firms, a total of 1,400 had annual receipts less than $25 million. 
Consequently, we conclude that the majority of All Other 
Telecommunications firms can be considered small.

E. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    54. In this Order, we forbear from the toll interexchange dialing 
parity requirements for competitive LECs creating a more level playing 
field with the incumbent LECs who received forbearance from their 
interexchange dialing parity obligations through the 2015 USTelecom 
Forbearance Order. Specifically, we revise Sec.  51.205 and remove 
Sec. Sec.  51.209, 51.215 and 51.215. We also amend the Sec.  52.26(a) 
requirement that the second-to-last carrier handling a call request is 
responsible for ensuring that the NPAC/SMS is queried, explaining that 
carriers earlier in the chain are allowed to make the query if they so 
choose. The revisions and elimination of rules remove impediments to 
NNP and do not impose any reporting, recordkeeping, or other compliance 
requirements.

F. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    55. The RFA requires an agency to describe any significant, 
specifically small business alternatives that it has considered in 
developing its approach, which may include the following four 
alternatives (among others): ``(1) the establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.''
    56. The rules adopted herein remove dialing parity requirements for 
competitive LECs and allows the second-to-last carrier handling a call 
request to query the NPAC/SMS in a manner that allows more flexibility. 
As a result, the economic impact on affected carriers should be minimal 
because they impose no new requirements.

G. Report to Congress

    57. The Commission will send a copy of the Order, including this 
FRFA, in a report to be sent to Congress pursuant to the Congressional 
Review Act. In addition, the Commission will send a copy of the Order, 
including this FRFA, to the Chief Counsel for Advocacy of the SBA. A 
copy of the Order and FRFA (or summaries thereof) will also be 
published in the Federal Register.

VI. Ordering Clauses

    29. It is ordered, pursuant to sections 1, 4(i), 10, 201(b), and 
251(e) of the Communication Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 160, 201(b), and 251(e) that this Report and Order is adopted.
    30. It is further ordered that parts 51 and 52 of the Commission's 
rules, 47 CFR 51.205, 51.209, 51.213, 51.215, 52.26 are amended as set 
forth in the

[[Page 42052]]

``Final Rules'' section below, and that this amendment shall be 
effective 30 days after publication of this Report and Order in the 
Federal Register.
    31. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Parts 51 and 52

    Communications common carriers, Telecommunications, Telephone.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer, Office of the Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 51 and 52 as follows:

PART 51--INTERCONNECTION

0
1. The authority citation for part 51 is revised to read as follows:

    Authority: 47 U.S.C. 151-55, 201-05, 207-09, 218, 225-27, 251-
52, 271, 332 unless otherwise noted.


0
2. Revise Sec.  51.205 to read as follows:


Sec.  51.205  Dialing parity: General.

    A local exchange carrier (LEC) shall provide local dialing parity 
to competing providers of telephone exchange service, with no 
unreasonable dialing delays. Dialing parity shall be provided for 
originating telecommunications services that require dialing to route a 
call.


Sec.  51.209  [Removed]

0
3. Remove Sec.  51.209.


Sec.  51.213  [Removed]

0
4. Remove Sec.  51.213.


Sec.  51.215  [Removed]

0
5. Remove Sec.  51.215.

PART 52--NUMBERING

0
6. The authority citation for part 52 is revised to read as follows:

    Authority: 47 U.S.C. 151-55, 201-05, 207-09, 218, 225-27, 251-
54, 271, 303(r), 332, 1302.

0
7. Amend Sec.  52.26 by:
0
a. Revising paragraph (a);
0
b. Redesignating paragraphs (b)(1) through (3) as paragraphs (b)(2) 
through (4);
0
c. Adding a new paragraph (b)(1); and
0
d. Revising paragraph (c).
    The revisions and addition read as follows:


Sec.  52.26  NANC Recommendations on Local Number Portability 
Administration.

    (a) Local number portability administration shall comply with the 
recommendations of the North American Numbering Council (NANC) as set 
forth in the report to the Commission prepared by the NANC's Local 
Number Portability Administration Selection Working Group, dated April 
25, 1997 (Working Group Report) and its appendices, which are 
incorporated by reference pursuant to 5 U.S.C. 552(a) and 1 CFR part 
51. Except that: Sections 7.8 and 7.10 of Appendix D and the following 
portions of Appendix E: Section 7, Issue Statement I of Appendix A, and 
Appendix B in the Working Group Report are not incorporated herein.
    (b) * * *
    (1) Each designated N-1 carrier (as described in the Working Group 
Report) is responsible for ensuring number portability queries are 
performed on a N-1 basis where ``N'' is the entity terminating the call 
to the end user, or a network provider contracted by the entity to 
provide tandem access, unless another carrier has already performed the 
query;
* * * * *
    (c) The Director of the Federal Register approves this 
incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. Copies of the Working Group Report and its appendices can be 
inspected during normal business hours at the following locations: FCC 
Reference Information Center, 445 12th Street SW, Room CY-A257, 
Washington, DC 20554 or at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call (202) 741-6030, or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html. The Working 
Group Report and its appendices are also available on the internet at 
https://docs.fcc.gov/public/attachments/DOC-341177A1.pdf.

[FR Doc. 2018-17843 Filed 8-17-18; 8:45 am]
BILLING CODE 6712-01-P


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