Area code exhaust occurs when nearly all of the central office codes in a given area code have been assigned to telephone companies. This does not mean that all line numbers within the central office codes have been assigned to customers. Typically there are 792 central office codes available for assignment to telephone companies in an area code. Each central office code has approximately 10,000 line numbers available for assignment to individual customers. The combination of the area code and the central office code is used to route calls through the public switched telephone network in the North American Numbering Plan.
Some companies also use the central office code for billing purposes.
Telephone companies base charges for calls on the distance between the rate center where a call originates and the rate center where the call terminates. In the past, local telephone service in any given area was provided by one monopoly carrier, such as Southwestern Bell or Sprint United, and the requirement that the telephone company obtain a central office code for each rate center in an area where it provided service did not strain the supply of central office codes. Now, however, with the advent of competition in the local telephone service market, there can be several telephone companies providing service in a given area, and each one must obtain a central office code for each rate center in that area. This change has caused a shortage in the supply of central office codes. When almost all of the central office codes in an area code are assigned to telephone companies, a new area code must be implemented.