18280 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

develop, acquire, install, and utilize

technology and systems for the purposes

of collecting, validating, and verifying

information, processing and

maintaining information, and disclosing

and providing information; adjust the

existing ways to comply with any

previously applicable instructions and

requirements; train personnel to be able

to respond to a collection of

information; search data sources;

complete and review the collection of

information; and transmit or otherwise

disclose the information.

An Agency may not conduct or

sponsor, and a person is not required to

respond to a collection of information

unless it displays a currently valid OMB

control number. The OMB control

numbers for EPA’s regulations are listed

in 40 CFR Part 9 and 48 CFR Chapter

15. Send comments on the Agency’s

need for this information, the accuracy

of the provided burden estimates, and

any suggested methods for minimizing

respondent burden, including through

the use of automated collection

techniques to the Director, OPPE

Regulatory Information Division; U.S.

Environmental Protection Agency

(2137); 401 M St., S.W.; Washington, DC

20460; and to the Office of Information

and Regulatory Affairs, Office of

Management and Budget, 725 17th St.,

N.W., Washington, DC 20503, marked

‘‘Attention: Desk Officer for EPA.’’

Include the ICR number in any

correspondence.

List of Subjects in 40 CFR Part 60

Environmental protection, Air

pollution control, Intergovernmental

relations, Phosphate fertilizers

production, Reporting and

recordkeeping requirements.

Dated: April 8, 1997.

Carol M. Browner,

Administrator.

For the reasons set forth in the

preamble, 40 CFR Part 60 is amended as

follows:

PART 60—[AMENDED]

1. The authority citation for part 60

continues to read as follows:

Authority: 42 U.S.C. 7401, 7411, 7414,

7416, 7601 and 7602.

Subpart X—[Amended]

2. In § 60.241, paragraphs (a) and (d)

are revised to read as follows:

§ 60.241 Definitions.

* * * * *

(a) Granular triple superphosphate

storage facility means any facility curing

or storing fresh granular triple

superphosphate.

* * * * *

(d) Fresh granular triple

superphosphate means granular triple

superphosphate produced within the

preceding 72 hours.

3. In § 60.242, paragraph (b) is added

to read as follows:

§ 60.242 Standard for fluorides.

* * * * *

(b) No owner or operator subject to

the provisions of this subpart shall ship

fresh granular triple superphosphate

from an affected facility.

4. In § 60.243, paragraphs (b) and (c)

are revised and paragraph (d) is added

to read as follows:

§ 60.243 Monitoring of operations.

* * * * *

(b) The owner or operator of any

granular triple superphosphate storage

facility subject to the provisions of this

subpart shall maintain a daily record of

total equivalent P2O5 stored by

multiplying the percentage P2O5

content, as determined by § 60.244(c)(3),

times the total mass of granular triple

superphosphate stored.

(c) The owner or operator of any

granular triple superphosphate storage

facility subject to the provisions of this

subpart shall install, calibrate, maintain,

and operate a monitoring device which

continuously measures and

permanently records the total pressure

drop across any process scrubbing

system. The monitoring device shall

have an accuracy of ± 5 percent over its

operating range.

(d) The owner or operator of any

granular triple superphosphate storage

facility subject to the provisions of this

subpart shall develop for approval by

the Administrator a site-specific

methodology including sufficient

recordkeeping for the purposes of

demonstrating compliance with § 60.242

(b).

5. In § 60.244, paragraph (a)(2) is

revised to read as follows:

§ 60.244 Test methods and procedures.

(a) * * *

(2) Fresh granular triple

superphosphate is at least six percent of

the total amount of triple

superphosphate, or

* * * * *

[FR Doc. 97–9583 Filed 4–14–97; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 52

[CC Docket No. 95–116; FCC 97–74]

Telephone Number Portability

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The First Memorandum

Opinion and Order on Reconsideration,

(Order) released March 11, 1997, affirms

and clarifies the Commission’s rules

implementing section 251(b)(2) of the

Communications Act of 1934, as

amended, which requires all LECs to

offer long-term number portability in

accordance with requirements

prescribed by the Commission in the

First Report and Order, 61 FR 38605

(July 25, 1996). The First Report & Order

also requires all LECs to implement

long-term number portability in the 100

largest Metropolitan Statistical Areas

(MSAs) according to a five-phase

deployment schedule that commences

October 1, 1997, and concludes

December 31, 1998. The Commission

herein concludes, first, that Query on

Release (QOR) is not an acceptable longterm number portability method.

Second, the Commission extends the

completion deadlines in the

implementation schedule for wireline

carriers by three months for Phase I and

by 45 days for Phase II, clarifies the

requirements imposed thereunder,

concludes that LECs need only provide

number portability within the 100

largest MSAs in switches for which

another carrier has made a specific

request for portability, and addresses

issues raised by rural LECs and certain

other parties. Finally, the Commission

affirms and clarifies its implementation

schedule for wireless carriers.

DATES: Effective May 15, 1997.

Information collections, however, which

are subject to approval by the Office of

Mangement and Budget (OMB), shall

become effective upon approval by

OMB, but no sooner than September 12,

1997. A document announcing the

information collections approval by

OMB will be published in the Federal

Register at a later date.

FOR FURTHER INFORMATION CONTACT:

Jeannie Su, Attorney, Common Carrier

Bureau, Policy and Program Planning

Division, (202) 418–1580.

SUPPLEMENTARY INFORMATION:

Regulatory Flexibility Analysis

This is a summary of the

Commission’s Order on Reconsideration
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18281

adopted March 6, 1997, and released

March 11, 1997.

Synopsis of First Memorandum

Opinion and Order on Reconsideration

Introduction

1. On June 27, 1996, the Commission

adopted the First Report and Order and

Further Notice of Proposed Rulemaking

(First Report & Order), 61 FR 38605

(July 25, 1996), 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.’’ 47 U.S.C. 251(b). By this

action, the Commission resolves certain

petitions for reconsideration or

clarification of the Commission’s

number portability rules adopted in the

First Report & Order. First, the

Commission concludes that Query on

Release (QOR) is not an acceptable longterm number portability method.

Second, the Commission extends the

completion deadlines in the

implementation schedule for wireline

carriers by three months for Phase I and

by 45 days for Phase II, clarifies the

requirements imposed thereunder,

concludes that LECs need only provide

number portability within the 100

largest MSAs in switches for which

another carrier has made a specific

request for portability, and addresses

issues raised by rural LECs and certain

other parties. Finally, the Commission

affirms and clarifies its implementation

schedule for wireless carriers.

Background

2. Pursuant to the statutory

requirement of section 251(b), the First

Report & Order requires 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 & Order also

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 the Commission’s

principles. The Commission also

concurrently adopted a Further Notice

of Proposed Rulemaking (Further

NPRM), 61 FR 38687 (July 25, 1996),

seeking comment on cost recovery for

long-term number portability.

Discussion

Issues Relating to Long-Term Number

Portability Methods

Performance Criteria

5. Criterion Four. The Commission

concludes that criterion four should be

removed from the 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 Location

Routing Number (LRN) and Query on

Release (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, the

Commission finds 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,

the Commission finds 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 the

Commission’s 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 the Commission’s

decision to eliminate criterion four, the

Commission concludes that AirTouch’s

requested clarification of criterion four

is moot.

6. Criterion Six. With respect to

criterion six, the Commission affirms its

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. The Commission further

concludes, based on the record in this

proceeding, that criterion six prohibits

the use of QOR as a long-term number

portability method. The Commission

agrees 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.’’ The Commission discusses

each of these conclusions in more detail

below.

Service Degradation

7. After considering petitioners’

arguments and concerns, the

Commission affirms its conclusion in

the First Report & Order that, in

accordance with criterion six, a longterm 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
18282 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

numbers ‘‘without impairment of

quality, reliability, or convenience when

switching from one telecommunications

carrier to another.’’

8. At the outset, the Commission

agrees 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, the Commission

clarifies 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, the

Commission concludes that any postdial 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.

9. The Commission further concludes

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 postdial delay than occurs for calls that are

placed to non-ported numbers. 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. The Commission

agrees with AT&T and MCI that the

proper comparison for incremental postdial 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 the Commission finds

that post-dial delay of 1.3 seconds is

significant, it concludes that QOR

violates the statutory definition of

number portability and criterion six. By

contrast, under LRN, there is no

differential between ported and nonported 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, the

Commission concludes that LRN is

consistent with the statutory definition

of number portability and performance

criterion six.

10. The Commission also rejects

petitioners’ argument that some degree

of added post-dial delay should be

acceptable, provided that it is not

‘‘perceptible’’ to the public. First, the

Commission agrees with AT&T that the

studies submitted by petitioners fail to

demonstrate that 1.3 seconds of postdial delay is imperceptible to the public.

Second, the Commission agrees 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 setup 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,

the Commission has 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, the Commission

declines to designate a threshold below

which added post-dial delay is

permissible. Moreover, given the

Commission’s concerns about these

marketplace perceptions, the

Commission finds 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.

Network Reliability

11. 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.’’ The Commission

agrees 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 postdial delay, but only on calls to ported

numbers. The Commission also notes

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.

The Commission concludes 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.

12. 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 the Commission 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
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18283

should result in ‘‘unreasonable

degradation in service quality or

network reliability when implemented.’’

13. The Commission also concludes

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, the Commission is 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 the Commission 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, the

Commission 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, the

Commission can take appropriate action

at that time. Third, as discussed in more

detail below, the Commission is

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 the Commission’s

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 the

Commission clarifies below, its

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.

Intranetwork Use of QOR

14. Incumbent LECs ask the

Commission 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’’). The

Commission concludes 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. The

Commission agrees 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.

Public Interest Considerations

Overview

15. Petitioners further assert that,

regardless of the Commission’s

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.

16. As an initial matter, the

Commission disagrees 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, the Commission concludes that

QOR violates criterion six, which is

required by the statute. Thus, the

Commission is 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,

the Commission addresses them in

order to establish that its decision to

prohibit QOR is not contrary to the

public interest.

17. Discussion. 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. The Commission

concludes, 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, the

Commission concludes that the harm

that QOR imposes on competitors

outweighs the benefit of allowing

incumbent LECs to defer the cost of

implementing a superior long-term

number portability solution.

18. Moreover, the Commission is not

convinced that the incumbent LEC’s

estimates of the short-term savings

associated with QOR are reliable. The

Commission is 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 the Commission recognizes 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 the Commission from

conducting an independent evaluation

of the reasonableness and reliability of

their projected cost savings and,

consequently, limits the weight the
18284 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

Commission can reasonably assign to

those estimates.

19. 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 LECs collectively estimate they

would save between $624 and $649

million if permitted to use QOR. MCI

has provided figures indicating that the

LECs collectively would save only $50

million, but that figure only includes

estimated savings for four out of the

seven carriers. MCI was unable to

estimate cost savings for three carriers

due to insufficient information in the

record. For three of the carriers for

which MCI was able to provide

estimates, however, these estimates

ranged from 20% to 23% of the

corresponding LEC figure. For the fourth

carrier, MCI argued that QOR actually

would cost more than LRN.

20. 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, the

Commission finds, on balance, that the

incumbent LECs have not substantiated

their claim that deployment of QOR will

produce significant cost savings.

21. 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

the Commission acknowledges that

carriers deploying LRN will incur costs

other than those associated with SCPs,

the Commission agrees with Illuminet

that an STP-based approach should

reduce the relative cost differential

between LRN and QOR.

Conclusion

22. 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, the Commission

believes 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, the

Commission concludes that permitting

carriers to deploy QOR as a long-term

number portability method does not

serve the public interest.

Implementation Schedule for Wireline

Carriers

Background

23. 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 required deployment in

one specified MSA in each of the seven

BOC regions by the end of fourth quarter

1997 (‘‘Phase I’’), 16 additional specified

MSAs by the end of first quarter 1998

(‘‘Phase II’’), 22 additional specified

MSAs by the end of second quarter 1998

(‘‘Phase III’’), 25 additional specified

MSAs by the end of third quarter 1998

(‘‘Phase IV’’), and 30 additional

specified MSAs by the end of fourth

quarter 1998 (‘‘Phase V’’). 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 mid1997. 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

the 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
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18285

modification of the interconnection

requirements of sections 251 (b) and (c).

24. 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 the

Commission’s 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 the deployment

schedule.

Deployment Only in Requested

Switches

25. Discussion. The Commission

agrees 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. The Commission further

agrees that such a procedure will foster

efficient deployment, network planning,

and testing, reduce costs, and lessen

demands on software vendors.

Moreover, the Commission believes 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 the

Commission’s past practice in

implementing conversion to equal

access for independent telephone

companies.

26. The Commission therefore

concludes 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.

The Commission leaves 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. The Commission finds, 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,

the Commission requires 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.

27. 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. 47 U.S.C. 251(b)(2). 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

the Commission 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 the Commission receives

evidence in the future that states are

unreasonably limiting deployment, then

it can revisit this issue at that time.

28. 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. The Commission concludes

that this deadline will enable a LEC to

plan ahead for the deployment of

number portability in multiple switches

in a given MSA. The Commission

encourages 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.

29. The Commission encourages

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. The Commission

notes, 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, the Commission

concludes 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 portabilitycapable switches, either inside or

outside the 100 largest MSAs, at an

earlier date than the deadlines in the

Commission’s schedule. For example,

NEXTLINK suggests waiving the

scheduled deployment deadlines for

switches in the 100 largest MSAs for

which no competitor expresses interest

in deployment, and allowing carriers

instead to deploy switches outside the

100 largest MSAs in which a competitor

expresses interest, according to the

deadlines for those unrequested

switches within the 100 largest MSAs.
18286 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

30. 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. The

Commission finds that simplifying the

task of identifying the switches in each

MSA in which number portability is

initially scheduled to be deployed is

consistent with its policy of facilitating

the deployment of number portability in

areas where new competitors plan to

enter.

31. 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 the Commission adopts

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 the implementation schedule. The

Commission agrees 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. The

Commission finds, 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.

32. The Commission finds 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. The

Commission therefore adopts, 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). The Commission notes

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 NonCapable Switch. Since the Commission

finds, as discussed above, that specific

time frames for deployment of all

additional switches are necessary, the

Commission finds 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.

33. Carriers seeking relief from these

deadlines may file a petition for waiver

under the procedures set forth in the

First Report & Order. The Commission

notes 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. The Commission

realizes 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. The

Commission 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. For example, if a

LEC receives a request for deployment

in an additional switch that is an

Equipped Remote Switch, and five days

later the LEC files a petition for waiver,

then the LEC need not deploy number

portability in the switch until 25 days

after the Commission denies its petition,

or until the date specified in the

Commission’s grant of the petition.

34. The Commission agrees 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. The Commission therefore

declines 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.

35. The Commission emphasizes that

a carrier operating a non-portabilitycapable 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 nonportability-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.

36. The Commission concludes 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 the

Commission 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
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18287

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.

37. The Commission believes 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, the

Commission delegates authority to the

Chief, Common Carrier Bureau, to take

action to address any problems that

arise over any specific procedures.

Extension of Implementation Schedule

38. Discussion. The Commission

grants, 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, the Commission

extends 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. The

Commission takes this action because it

is 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.

39. The Commission also notes that

the participants in the Chicago trial

have recently informed it 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, the

Commission hereby extends the

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 the

Commission understands 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, the Commission recognizes

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, the Commission

finds 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, the Commission concludes that a

three-month extension of the time

period for initial deployment in Phase I

markets appropriately safeguards

network reliability, and therefore is

warranted.

40. The Commission also extends 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. The Commission extends

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, the Commission

declines 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. The Commission

concludes 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.

41. The Commission clarifies, 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.

42. The Commission strongly advises

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 the Commission now is

granting carriers additional time during

those phases specifically so that they

can implement number portability more

gradually. The Commission 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
18288 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

in Chicago is scheduled to take place for

several months before the start of the

Chicago trial mandated by the

Commission.

43. The Commission’s decision to

extend the deadlines for completing

Phases I and II of its deployment

schedule reflects the fact that the

Commission considers network

reliability to be of paramount

importance. Consistent with that

commitment, in the First Report & Order

the Commission 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. The Commission finds

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.

44. 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 the Commission 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.’’ The Commission’s

extension of Phase I, in combination

with its 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.

45. The Commission denies 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

the Commission concludes that initial

implementation of this new number

portability technology may require

additional time, the Commission is 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. The Commission finds 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.

46. Petitioners’ arguments are even

more speculative given that their

implementation obligations are likely to

be significantly lighter than they

assume, because, as the Commission

discusses 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 the First Report & Order the

Commission 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.

47. Furthermore, the Commission

finds it unnecessary to act on GTE’s

request that it 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. In particular, if

problems necessitating delay do arise,

the Chief of the Common Carrier Bureau

may waive or stay any of the dates in

the implementation schedule, as the

Chief determines is necessary to ensure

the efficient development of number

portability, for a period not to exceed

nine months. In the event a carrier is

unable to meet the deadlines for

implementing a long-term number

portability method, it may file with the

Commission, at least 60 days in advance

of the deadline, a petition to extend the

time by which implementation in its

network will be completed. See ALTS

Opposition at 6 n.7 (arguing that

incumbent LECs should try to settle

their claims with carriers and vendors

and develop a record before challenging

the schedule); Sprint Opposition at 13–

14. The Commission notes 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 the deadlines.

48. The Commission rejects USTA’s

proposal to give every state commission

and/or workshop the authority to extend

independently the deployment

deadlines according to their assessments

of the level of local competition in an

area. As set forth above, the Commission

requires carriers to identify the switches

in which they desire number portability

capability well before the deadline for

deployment in a particular MSA. The

Commission finds 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 the Commission’s 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.

49. The Commission declines 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 it now, the

Commission concludes that it would not

be possible to accelerate the

commencement of that trial. Moreover,

the Commission agrees with the Chicago

trial participants that it would be

inappropriate to shorten or delete any of

the planned testing.

50. The Commission also declines 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
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18289

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. The Commission finds, 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 intercarrier OSS impact of number

portability under the auspices of state

and industry fora. As the Commission

stated in the First Report & Order, it

does not routinely schedule field trials

in rulemaking proceedings; its requiring

a field trial in the Chicago MSA is an

exceptional step that the Commission

adopted to safeguard against any risk to

the public switched telephone network.

The need for any further trials should be

determined by the industry.

51. To the extent that other networks

differ in design or switch use or other

relevant variables, the Commission does

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, the Commission encourages

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 the 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.

52. The Commission also declines 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 the

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, the three-month extension of

the end date of Phase I, in combination

with the Commission’s 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 sixmonth period. In addition, the

Commission does not prohibit, but

rather encourages, 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 the

deployment schedule. For example, Bell

Atlantic is testing number portability in

the smaller market of Gaithersburg, MD

before Phase I.

53. The Commission also denies

NYNEX’s request that it 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. The

Commission finds 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.

54. Finally, the Commission clarifies

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. The

Commission cautions 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. The Commission

declines, 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.

Acceleration of Implementation

Schedule

55. Discussion. The Commission

denies 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.

56. For the reasons stated above, the

Commission also rejects ACSI’s request

to require deployment in Phase I in

certain additional markets in which the

incumbent LECs are not BOCs. In

addition, the Commission continues 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, the Commission
18290 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

concludes 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. The Commission

also declines to adopt USTA’s proposal

that state commissions be free to

accelerate the deployment schedule.

While the Commission is sympathetic to

the desires of some states to advance

deployment where actual competitive

interest exists, it concludes 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. The

Commission’s First Report & Order was

silent on the issue of whether states

could accelerate the deployment

schedule. The Commission therefore

grandfathers 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.

57. The Commission does not prohibit

LECs from agreeing to accelerate

implementation, either for specific

MSAs or specific switches within

MSAs. The Commission finds, however,

that acceleration of the 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 the

Commission’s 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.

58. The Commission grants 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. The Commission

therefore modifies its rules to permit

carriers to submit requests for

deployment of number portability in

areas outside the 100 largest MSAs at

any time. The Commission declines,

however, to require that deployment be

completed within six months of request

for requests filed prior to January 1,

1999. This modification to the 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, the

Commission clarifies that, contrary to

KMC and ACSI’s view, the 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 the

Commission 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 the

deployment schedule, thus sharply

increasing the burden on carriers during

that phase.

Exemptions for Rural and/or Smaller

LECs

59. Discussion. As set forth above, the

Commission grants 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.

The Commission finds that this

modification to the rules should address

the concerns of parties that urge it to

waive number portability requirements

for rural and/or smaller LECs serving

areas in the largest 100 MSAs until

receipt of a request.

60. The Commission denies the

petitions that request a blanket waiver

of the number portability requirements

for rural and/or smaller LECs that

receive a request for deployment in one

of their switches. The Commission finds

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 noncarrier-specific testing will likely have

been done, and carriers’ testing costs

will likely be smaller.

61. 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

shall grant such petition to the extent

that, and for as long as, the state

commission determines that such

suspension or modification: (A) Is

necessary to avoid a significant adverse

economic impact on end users, to avoid

imposing an unduly economically

burdensome requirement, or to avoid

imposing a technically infeasible

requirement; and (B) is consistent with

the public interest, convenience and

necessity. 47 U.S.C. 251(f)(2). The state

commission is required to act on the

petition within 180 days. 47 U.S.C.

251(f)(2). The Commission believes

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 the

deployment deadlines to that LEC while

it is considering the LEC’s petition for

suspension or modification of the

requirements. Section 251(f)(2) provides

that ‘‘[t]he State commission shall act

upon any petition filed under (section

251(f)(2)) within 180 days after

receiving such petition. Pending such

action, the State commission may

suspend enforcement of the requirement

or requirements to which the petition

applies with respect to the petitioning

carrier or carriers.’’ 47 U.S.C. 251(f)(2).

62. 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

the deployment requirements, and the

state commission denies a Section

251(f)(2) request for suspension or

modification, the Commission finds no

statutory basis for excusing such a LEC

from its obligations to provide number

portability. In addition, issuance of a

blanket exemption in this proceeding

would be inconsistent with the Local

Competition Order, 61 FR 45476
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18291

(August 29, 1996), in which the

Commission generally declined to adopt

national rules regarding Section 251(f),

or provide for different treatment of

rural and smaller carriers. 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 the

implementation schedule until the state

commission removes the suspension.

63. 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).

64. 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 the Commission

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.

65. 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. The

Commission finds 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.

66. 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. 47 U.S.C. 251(b)(2).

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.

67. Even if the Commission 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. See 47 U.S.C.

251(c)(3). 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). See

47 U.S.C. 251(a)(1). For example, a

smaller rural carrier and a competing

carrier might interconnect indirectly by

both establishing direct connections

with a third carrier and routing calls to

each other through that third carrier.

The smaller rural carrier could then

provide portability by performing its

own database queries and then routing

the call to the competing carrier through

that third carrier. Another option would

be for the smaller rural LEC to contract

with that third carrier to perform its

queries and the necessary routing.

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. See 47

U.S.C. 251(c)(2). 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. Rural LECs are not

exempt from section 251(a) or (b)

requirements under section 251(f)(1).

See 47 U.S.C. 251(f)(1). The Commission

therefore denies JSI and USTA’s request

to ‘‘automatically exempt’’ rural LECs

from the 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).

68. The Commission also denies the

requests that it 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. The Commission believes 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.

69. Finally, NTCA/OPASTCO

erroneously claims that the First Report

& Order violates the Regulatory

Flexibility Act (RFA) because its Final

Regulatory Flexibility Analysis (FRFA)

does not address the impact of the rules

on small incumbent LECs, and is,

therefore, inconsistent with the Local

Competition Order. As the Commission

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
18292 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

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. The Commission attaches,

nevertheless, a Supplemental Final

Regulatory Flexibility Analysis that

further explains its analysis of the rules’

impact upon rural and smaller carriers

and the basis for selecting the particular

options that the Commission has

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.’’

The Commission also notes that its

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.

Implementation Requirements for

Intermediate (N–1) Carriers

70. Discussion. The Commission

denies Pacific’s request that it require

all N–1 carriers, including

interexchange carriers, to meet the

implementation schedule the

Commission 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

the number portability requirements. 47

U.S.C. 251(b)(2). Moreover, petitioners

have not demonstrated a need for the

Commission to impose such

requirements under its independent

rulemaking authority under sections 1,

2, and 4(i) of the Communications Act

of 1934, as amended. 47 U.S.C. 151, 152,

154(i). In that regard, the Commission is

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 the

Commission stated in the First Report &

Order, it wishes 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,

the Commission declines to address

Pacific’s argument that, if the

terminating carrier is forced to perform

queries, that would violate the fourth

performance criterion. Since the

Commission is eliminating the fourth

performance criterion, Pacific’s

argument is moot.

71. The Commission clarifies,

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.

Implementation Schedule for Wireless

Carriers

72. Background. In the First Report &

Order, the Commission 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. The term

‘‘covered SMR’’ means either 800 MHz

or 900 MHz SMR licensees that hold

geographic area licenses or incumbent

wide area SMR licensees that offer realtime, two-way switched voice service

that is interconnected with the public

switched network, either on a standalone basis or packaged with other

telecommunications services. This term

does not include local SMR licensees

offering mainly dispatch services to

specialized customers in a non-cellular

system configuration, licensees offering

only data, one-way, or stored voice

services on an interconnected basis, or

any SMR provider that is not

interconnected to the public switched

network. 47 CFR 52.1(c). The

Commission notes that several parties

have petitioned for reconsideration of

the definition of ‘‘covered SMR.’’ The

Commission will address this issue in a

subsequent order. 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 these 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, the Commission

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. 47 CFR 52.11 (c), (e). 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. 47 CFR

52.11(d).

73. Discussion. The Commission

declines at this time to alter the

implementation schedule imposed by

the First Report & Order for wireless

carriers. The Commission recognizes

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, the

Commission finds 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. The Commission finds 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. The

Commission also believes 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. The Commission continues 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 the

Commission 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
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18293

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. The Commission finds

that enough flexibility has been

incorporated into the implementation

schedule for wireless carriers, and that

no modification is needed.

74. The Commission also declines 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 the Commission 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, the Commission continues 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.

75. In response to requests by CTIA

and BANM, the Commission agrees that

some clarification of the 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 the 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. The

Commission requires 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. The Commission clarifies 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

the Commission has not provided a

specific phased deployment schedule

for CMRS providers as it has for

wireline carriers, the Commission

expects that CMRS providers will phase

in implementation in selected switches

over a number of months prior to the

June 30, 1999, deadline for deployment.

76. In addition, consistent with the

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 the

Commission adopts 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) NonCapable 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.

77. The Commission adds 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. The Commission does 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. The Commission

recognizes, 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. The Commission concludes,

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.

78. By June 30, 1999, the Commission

expects that regional or statewide local

number portability databases containing

both wireless and wireline numbers will

be widely available; therefore, the

Commission does 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.

79. 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 the Commission has

previously held that its 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, the

Commission affirms its prior rejection of

this argument. As the Commission

stated in the First Report & Order, the

CT DPUC Petition does not limit its
18294 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

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. The Commission

affirms its determination that it has

authority to impose number portability

obligations on CMRS providers based on

the findings that this requirement will

result in pro-competitive effects, and

furthers its CMRS regulatory policy of

establishing moderate, symmetrical

regulation of all services.

80. BANM has not introduced any

new evidence or arguments that cause

the Commission to reconsider its

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. The Commission also rejects

BANM’s argument that it failed to make

a determination on the technical

feasibility of wireless number

portability. The record in this

proceeding supports the prior

conclusion that cellular, broadband

PCS, and covered SMR providers will be

able to resolve any technical issues

necessary to implement number

portability.

Deferral of Implementation Until

Resolution of Cost Recovery Issues

81. 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, the Commission adopted a

Further Notice of Proposed Rulemaking

(Further NPRM) that seeks comment on

appropriate cost recovery mechanisms

for long-term number portability. The

Commission has not yet issued the

Second Report & Order addressing these

issues, although it intends to do so in

the near future.

82. Discussion. The Commission is

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

NPRM in this proceeding that involve

the LECs’ recovery of their costs of

providing number portability. As stated

above, the Commission plans 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 its

resolution of the cost recovery issues

posed in the Further NPRM. That

speculative assertion is unfounded. The

Commission anticipates 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, the Commission

expects 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 the

Commission reaches in the Second

Report & Order with respect to their

recovery of long-term number

portability costs. The Act does not

mandate that the Commission 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 the Commission has

adopted specific cost recovery rules may

be inconsistent with the statutory

mandate that carriers must provide

number portability ‘‘to the extent

technically feasible.’’

83. The Commission also concludes

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 the Commission’s brief deferral of

long-term number portability cost

recovery issues. The Commission

further agrees 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, the Commission

reaches the same conclusions.

Ordering Clauses

84. 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 CFR 52, is

amended as set forth in Appendix B

hereto.

85. It is further ordered that the

Petitions for Reconsideration and/or

Clarification are granted to the extent

indicated herein and otherwise are

denied.

86. It is further ordered that the

policies, rules, and requirements set

forth herein are adopted, effective May

15, 1997, except for collections of

information subject to approval by the

Office of Management and Budget

(OMB), which are effective September

12, 1997.

87. 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.

Rule Changes

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;
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18295

(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 longterm 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.

(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 (‘‘NonCapable 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

§ 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 (‘‘NonCapable 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

Chicago, IL ..................................... 3

Philadelphia, PA ............................ 4

Atlanta, GA .................................... 8

New York, NY ................................ 2

Los Angeles, CA ............................ 1

Houston, TX ................................... 7

Minneapolis, MN ........................... 12

PHASE II—1/1/98–5/15/98

Detroit, MI ...................................... 6

Cleveland, OH ................................ 20

Washington, DC ............................. 5

Baltimore, MD ................................ 18

Miami, FL ....................................... 24

Fort Lauderdale, FL ....................... 39

Orlando, FL .................................... 40

Cincinnati, OH ............................... 30

Tampa, FL ...................................... 23

Boston, MA .................................... 9

Riverside, CA ................................. 10

San Diego, CA ................................ 14

Dallas, TX ....................................... 11

St. Louis, MO ................................. 16

Phoenix, AZ ................................... 17

Seattle, WA .................................... 22

PHASE III—4/1/98–6/30/98

Indianapolis, IN ............................. 34

Milwaukee, WI ............................... 35

Columbus, OH ............................... 38

Pittsburgh, PA ................................ 19

Newark, NJ ..................................... 25

Norfolk, VA .................................... 32

New Orleans, LA ........................... 41

Charlotte, NC ................................. 43

Greensboro, NC .............................. 48

Nashville, TN ................................. 51

Las Vegas, NV ................................ 50

Nassau, NY ..................................... 13

Buffalo, NY .................................... 44

Orange Co, CA ............................... 15

Oakland, CA ................................... 21

San Francisco, CA ......................... 29

Rochester, NY ................................ 49

Kansas City, KS ............................. 28

Fort Worth, TX .............................. 33

Hartford, CT ................................... 46

Denver, CO ..................................... 26

Portland, OR .................................. 27

PHASE IV—7/1/98–9/30/98

Grand Rapids, MI .......................... 56

Dayton, OH .................................... 61

Akron, OH ...................................... 73

Gary, IN .......................................... 80

Bergen, NJ ...................................... 42
18296 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

Middlesex, NJ ................................ 52

Monmouth, NJ ............................... 54

Richmond, VA ............................... 63

Memphis, TN ................................. 53

Louisville, KY ................................ 57

Jacksonville, FL ............................. 58

Raleigh, NC .................................... 59

West Palm Beach, FL ..................... 62

Greenville, SC ................................ 66

Honolulu, HI .................................. 65

Providence, RI ................................ 47

Albany, NY .................................... 64

San Jose, CA ................................... 31

Sacramento, CA ............................. 36

Fresno, CA ..................................... 68

San Antonio, TX ............................ 37

Oklahoma City, OK ....................... 55

Austin, TX ...................................... 60

Salt Lake City, UT ......................... 45

Tucson, AZ .................................... 71

PHASE V—10/1/98–12/31/98

Toledo, OH ..................................... 81

Youngstown, OH ........................... 85

Ann Arbor, MI ............................... 95

Fort Wayne, IN .............................. 100

Scranton, PA .................................. 78

Allentown, PA ............................... 82

Harrisburg, PA ............................... 83

Jersey City, NJ ................................ 88

Wilmington, DE ............................. 89

Birmingham, AL ............................ 67

Knoxville, KY ................................ 79

Baton Rouge, LA ............................ 87

Charleston, SC ............................... 92

Sarasota, FL .................................... 93

Mobile, AL ..................................... 96

Columbia, SC ................................. 98

Tulsa, OK ....................................... 70

Syracuse, NY .................................. 69

Springfield, MA ............................. 86

Ventura, CA ................................... 72

Bakersfield, CA .............................. 84

Stockton, CA .................................. 94

Vallejo, CA ..................................... 99

El Paso, TX ..................................... 74

Little Rock, AR .............................. 90

Wichita, KS .................................... 97

New Haven, CT .............................. 91

Omaha, NE ..................................... 75

Albuquerque, NM .......................... 76

Tacoma, WA .................................. 77

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 (NPRM). The

Commission sought written public comment

on the proposals in the NPRM. 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) 5 U.S.C. 601

et seq. The SBREFA is title II of the Contract

With America Advancement Act of 1996

(CWAAA), Public Law 104–121, 110 Stat.

847 (1996). 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 Order and 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, the

rules implement the statutory requirement

that all LECs provide telephone number

portability when technically feasible. In this

First Reconsideration Order, the Commission

grants in part and denies 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, the Commission concludes

that QOR is not an acceptable long-term

number portability method. Second, the

Commission extends the implementation

schedule for wireline carriers, clarifies the

requirements imposed thereunder, and

addresses issues raised by rural LECs and

certain other parties. The Commission

concludes 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, the Commission

affirms and clarifies the implementation

schedule for wireless carriers.

B. Analysis of Significant Issues Raised in

Response to the FRFA

3. Summary of the FRFA. In the FRFA, the

Commission concluded that incumbent LECs

do not qualify as small businesses because

they are dominant in their field of operation,

and, accordingly, the Commission did not

address the impact of the rules on incumbent

LECs. The Commission 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. 15 U.S.C. 632. 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). 15

U.S.C. 632. 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. 13 CFR 121.201.

This standard also applies in determining

whether an entity is a small business for

purposes of the Regulatory Flexibility Act.

4. The Commission did recognize that

these 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, the Commission estimated that 2,100

carriers could be affected. The Commission

also discussed the reporting requirements

imposed by the First Report & Order.

5. Finally, the Commission discussed the

steps it had taken to minimize the impact on

small entities, consistent with stated

objectives. The Commission concluded that

the actions in the First Report & Order would

benefit small entities by facilitating their

entry into the local exchange market. The

Commission 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. The

Commission noted that, in general, it

attempted to keep burdens on local exchange

carriers to a minimum. For example, the

Commission adopted a phased deployment

schedule for implementation in the 100

largest MSAs, and then elsewhere upon a

carrier’s request; the Commission

conditioned the provision of currently

available measures upon request only; the

Commission did not require cellular,

broadband PCS, and covered SMR providers,

which may be small businesses, to offer

currently available number portability

measures; and it 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 the

Commission’s 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 the Commission’s

prior practice, they are excluded from the

definition of ‘‘small entity’’ and ‘‘small

business concerns.’’ As the Commission

stated in the Local Competition Order, it has

found incumbent LECs to be ‘‘dominant in

their field of operation’’ since the early

1980’s, and that it consistently has certified

under the RFA (5 U.S.C. 605(b)) that

incumbent LECs are not subject to regulatory

flexibility analyses because they are not

small businesses. The Commission has made

similar determinations in other areas.

Accordingly, the use of the terms ‘‘small

entities’’ and ‘‘small businesses’’ does not

encompass small incumbent LECs. Although

the Commission is not fully persuaded on the

basis of this record that the prior practice has

been incorrect, in light of the special

concerns raised by NTCA/OPASTCO in this

proceeding, for regulatory flexibility analysis

purposes, the Commission 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, the Commission will include small

incumbent LECs in the Supplemental FRFA

in this First Reconsideration Order to remove

any possible issue of RFA compliance.
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18297

2. Other Issues

8. Although not in response to the FRFA,

certain parties urge the Commission 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 the

Commission’s rules on the basis of rural and/

or smaller LEC status. The Commission

discusses 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. See 5 U.S.C.

601(3) (incorporating by reference the

definition of ‘‘small business concern’’ in 15

U.S.C. 632). 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. 15 U.S.C. 632. 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. The

Commission first discusses generally the total

number of small telephone companies falling

within both of those SIC categories. Then, the

Commission discusses the number of small

businesses within the two subcategories that

may be affected by these rules, and attempt

to refine further those estimates to

correspond with the categories of telephone

companies that are commonly used under the

rules.

10. Consistent with the prior practice, the

Commission 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, the Commission includes

small incumbent LECs in this Supplemental

FRFA. Accordingly, the use of the terms

‘‘small entities’’ and ‘‘small businesses’’ does

not encompass ‘‘small incumbent LECs.’’ The

Commission uses the term ‘‘small incumbent

LECs’’ to refer to any incumbent LECs that

arguably might be defined by SBA as ‘‘small

business concerns.’’ See 13 CFR § 121.201

(SIC 4813).

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.’’ 15

U.S.C. 632(a)(1). 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. The

Commission believes that these 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. The Commission discusses those

subcategories below in further detail. The

Commission believes, on the other hand, that

these 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. 13 CFR 121.201. Standard Industrial

Classification (SIC) Code 4812. 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, the Commission is 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, the Commission estimates 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 the Commission is aware appears to be

the data that the Commission collects

annually in connection with the

Telecommunications Relay Service (TRS).

According to the Commission’s 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, the Commission

is 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, the

Commission estimates 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 the

Commission is aware appears to be the data

that the Commission collects annually in

connection with the TRS. According to the

Commission’s 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, the Commission is 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, the Commission

estimates 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. 13 CFR

121.201, Standard Industrial Classification

(SIC) Code 4812. 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 and

operated. Although it seems certain that

some of these carriers are not independently

owned and operated, the Commission is

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, the

Commission estimates 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
18298 Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations

companies other than radiotelephone

(wireless) companies. The most reliable

source of information regarding the number

of cellular service carriers nationwide of

which the Commission is aware appears to be

the data that the Commission collects

annually in connection with the TRS.

According to the Commission’s 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, the Commission is 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, the

Commission 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 SBAapproved 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, the

Commission concludes 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 CFR

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. The

Commission does 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. The

Commission assumes, 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, the Commission concludes

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, the Commission

assumes, 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. 47 CFR 76.901(e).

Based on the Commission’s most recent

information, the Commission estimates 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, the Commission

estimates 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.’’ 47 U.S.C. 543(m)(2). 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,

the Commission is 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, the

Commission analyzes 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. See 5 U.S.C.

604(a)(4). As a part of this discussion, the

Commission mentions some of the types of

skills that will be needed to meet the new

requirements. The Commission also

describes the steps taken to minimize the

economic impact of its decisions on small

entities and small incumbent LECs, including

the significant alternatives considered and

rejected. See 5 U.S.C. 604(a)(5).

24. The Commission provides this

summary analysis to provide context for the

analysis in this Supplemental FRFA. To the

extent that any statement contained in this

Supplemental FRFA is perceived as creating

ambiguity with respect to the 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,

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 by December 31, 1998, set forth

in appendix F of the First Report & Order. In

this First Reconsideration Order, the

Commission extends the end dates for Phase

I of the 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,
Federal Register / Vol. 62, No. 72 / Tuesday, April 15, 1997 / Rules and Regulations 18299

1998, and in Phase II from January 1, 1998,

through May 15, 1998. The Commission also

clarifies 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, the Commission lightens 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. The Commission notes that the

majority of parties representing small or rural

LECs specified as the relief sought that the

Commission only impose implementation

requirements where competing carriers have

shown interest in portability. Moreover, the

Commission’s extension of Phases I and II of

the 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, the Commission rejects several

alternatives put forth by parties that might

impose greater burdens on small entities and

small incumbent LECs. The Commission

rejects 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. The

Commission also rejects 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

the Commission establishes, 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, the Commission clarifies

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, the Commission

considers it unnecessary to create a general

exemption for all small and/or rural LECs, as

suggested by some parties. The Commission

has effectively granted the small and rural

LEC petitioners’ requests that it 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 the Commission now requires

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). 47

U.S.C. 251(f)(2). The Commission’s 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 the Commission 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, the Commission’s

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 the Commission’s decision, in the Local

Competition Order the Commission adopted

several rules that may facilitate the efficient

resolution of such inquiries, provide

guidance, and minimize uncertainty. In the

Local Competition Order, the Commission

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, the

Commission concluded that section 251(f)

adequately provides for varying treatment for

smaller or rural LECs where such variances

are justified. As a result, the Commission

stated, it expects 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, the Commission

lightens the burden on smaller and rural

wireless carriers by modifying these rules so

that CMRS providers, like wireline providers,

need only provide portability in requested

switches, both within and outside the 100

largest MSAs. The Commission also declines

at this time to alter further the

implementation schedule imposed by the

First Report & Order for wireless carriers

because the Commission finds 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.

[FR Doc. 97–8483 Filed 4–14–97; 8:45 am]

BILLING CODE 6712–01–P