[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
AREA CODE EXHAUSTION: WHAT ARE THE SOLUTIONS?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JUNE 26, 2002
__________
Serial No. 107-115
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/ house
__________
U. S. GOVERNMENT PRINTING OFFICE
80-681 WASHINGTON : 2002
___________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Telecommunications and the Internet
FRED UPTON, Michigan, Chairman
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas BART GORDON, Tennessee
CLIFF STEARNS, Florida BOBBY L. RUSH, Illinois
Vice Chairman ANNA G. ESHOO, California
PAUL E. GILLMOR, Ohio ELIOT L. ENGEL, New York
CHRISTOPHER COX, California GENE GREEN, Texas
NATHAN DEAL, Georgia KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming BILL LUTHER, Minnesota
JOHN SHIMKUS, Illinois BART STUPAK, Michigan
HEATHER WILSON, New Mexico DIANA DeGETTE, Colorado
CHARLES ``CHIP'' PICKERING, JANE HARMAN, California
Mississippi RICK BOUCHER, Virginia
VITO FOSSELLA, New York SHERROD BROWN, Ohio
ROY BLUNT, Missouri TOM SAWYER, Ohio
TOM DAVIS, Virginia JOHN D. DINGELL, Michigan,
ROBERT L. EHRLICH, Jr., Maryland (Ex Officio)
CHARLES F. BASS, New Hampshire
LEE TERRY, Nebraska
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Attwood, Dorothy T., Bureau Chief, Wireline Competition
Bureau..................................................... 10
Long, John T., III, President and CEO, Kalamazoo Regional
Chamber of Commerce........................................ 37
Lynch, Loretta M., President, State of California, Public
Utilities Commission....................................... 16
Manning, John, Director, Numbering Services, NeuStar......... 23
Miller, Anna, Director of Numbering Policy, VoiceStream
Wireless Corporation....................................... 28
O'Connor, Michael, Director of Federal Regulatory Policy,
Verizon.................................................... 33
(iii)
AREA CODE EXHAUSTION: WHAT ARE THE SOLUTIONS?
----------
WEDNESDAY, JUNE 26, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Telecommunications
and the Internet,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2322 Rayburn House Office Building, Hon. Fred Upton
(chairman) presiding.
Members present: Representatives Upton, Gillmor, Shimkus,
Wilson, Bass, Markey, Eshoo, McCarthy, Luther, Harman, and
Sawyer.
Staff present: Howard Waltzman, majority counsel; Will
Nordwind, majority counsel; Hollyn Kidd, legislative clerk;
Andy Levin, minority counsel; Brendan Kelsay, minority
professional staff; and Courtney Anderson, minority research
assistant.
Mr. Upton. Let us get started. My colleague Ms. Harman has
a bill on the floor, so we hope that there is unlimited 1
minutes and they go for hours and hours, right? Hope not.
Good morning. Today's hearing is entitled: ``Area Code
Exhaustion: What are the Solutions?'' At the outset, I want to
thank all of our witnesses for their participation. In
particular, I want to thank those witnesses who have traveled
great distances to be with us today, and pay a special welcome
to my own constituent, John Long, President and CEO of the
Kalamazoo Regional Chamber of Commerce.
Today's hearing is about all of the John Longs of the world
who live and work in communities across the country and who
experience the real-world effects of area code exhaust. More to
the point, as John will testify, the Michigan Public Service
Commission has ordered the area which includes my congressional
district to change its area code for the first time in its
history. Beginning next month, we in the southwest portion of
west Michigan will start the change from area code 616 to 269.
As we will hear today, area code changes have real costs
and burdens to our local communities. In addition to the
inconvenience and confusion which going through an area code
change causes to both business and consumers, you will hear
from John about the cost to local businesses, particularly
small businesses, in making the change. You have to change
business stationery, envelopes, business cards, marketing
brochures, the sides of company vehicles, websites, print,
radio, TV advertising, and all.
Of course, my congressional office, with two district
offices, is no exception. While no one in my district is
particularly happy about having to change their area code, the
Michigan Public Service Commission's ruling is final, and the
horse is out of the barn.
However, I have made it my mission to make sure that the
FCC, the States, and the industry have taken the strides
necessary to conserve numbers so that my district and the other
districts will not have to go through another area code in the
foreseeable future. To that end, I have convened this hearing
to get a status on the ongoing efforts at all levels to
conserve numbers.
It is important to note that while it took nearly 50 years
to exhaust the original 144 area codes, from 1947 to 1995, the
years after 1995 saw the activation of well over 100 new area
codes. In large part, the rapid increase in demand for new area
codes is driven by the explosion in the number of communication
devices in the marketplace which use phone numbers, like
wireless phones, second lines in the home for dial-up Internet
access, home fax machines, not to mention ATM machines, credit
card authorization systems used in retail business
establishments, and the advent of direct inward dialing for
large corporations which results in demand by carrier clients
for large blocks of continuous numbers.
Moreover, another contributing factor in the increased
demand for new area codes is the practice of allocating phone
numbers among carriers in blocks of 10,000, which correspond to
the number of numbers contained in one central office code.
While this may have been a well-suited practice before
competition was injected into the local phone market, the 1996
Telecommunications Act unwittingly set up a situation wherein
every ILEC and any CLEC could request numbers in 10,000 number
blocks, and we would have situations where ILECs and CLECs
might not have been utilizing a large number of numbers within
those blocks.
Because of all of these factors, in the late 1990's, the
North American Numbering Plan Administrator began projecting
number exhaustion in our Nation somewhere between 2006 and
2012. Based on these dire predictions, the FCC, the States, and
the industry began to vigorously address number conservation
efforts. More significantly, the FCC ordered States to
implement 1,000 number block assignments, number pooling, and
utilization thresholds.
Based on these efforts, recent North American Numbering
Plan Administrator projections already suggest that the
projected date for number exhaustion has been pushed back past
2020. And this projection may get even rosier as these number
conservation efforts get fully implemented. Today, I want to
get a better sense of where we stand on all of these ongoing
efforts and what the projection scenarios are as a result.
If these projections continue to get rosier, then that is
good news for the John Longs of the world and the communities
that they serve, like those in southwest Michigan. As I stated
earlier, my goal is to see to it that my constituents will not
have to change their area code any time in the foreseeable
future. I look forward to the testimony of today's witnesses
who can help us all figure out the likelihood of achieving that
goal.
I yield to my colleague Ms. Harman, a leader in this effort
as well, from the State of California. Thank you for your
leadership.
Ms. Harman. Thank you, Mr. Chairman. Thank you for talking
to me about this issue over the past year. I also want to thank
the chairman of the full committee, Mr. Tauzin, for talking to
me, meeting with me, meeting with my PUC chair, Loretta Lynch,
about this issue, as you did as well. This is a critical issue
on the minds of my constituents and, as you said, on the minds
of the constituents that all of us represent. And I am very
grateful to you for holding the hearing and inviting all of the
problem solvers to sit before us, and I hope solve the problem.
I also want to apologize in advance. On the floor today the
first bill is a bill to mandate information sharing of
information about terrorist threats by our various Federal
agencies, including the CIA and the FBI. And that obviously is
pretty critical, and the bill would also then require them to
share vertically with our first responders, who will be at the
scene of any potential terrorist attack.
And that's my bill, and so I am going to be running in and
out of here, if it does come up on the floor anytime soon. But
I will be back, because this issue is absolutely critical to
me.
This is an issue that affects a simple thing our
constituents and we do 100 times a day every single day of the
year--dial a phone number. That number represents a life line
for a senior citizen, the survival of a business for an
independent entrepreneur, the ability to stay in touch with
friends and family.
Small businesses, as you said, Mr. Chairman, are especially
hurt. Who can calculate the business lost because a confused
customer could not get through because an old number didn't
work after an area code change? I have had scores of inquiries
from businesses about this.
Our local chambers, just like yours, are extremely
concerned and have this issue on the top of their list every
single time they meet. And we have in California a very skilled
and sturdy Public Utilities Commissioner, Loretta Lynch, who
has long tried, with me and with our State legislators, to work
out a solution.
Changes to telephone numbers are disruptive, costly, and
because of growth in new services, as you said, more and more
common throughout the entire country. We are running out of
numbers in our existing area codes. The amount of new numbers
that we can give out from existing area codes is going down
sharply. And as you said, Mr. Chairman, 14 of the 33 members on
this subcommittee will have area code changes in their
districts in the next 3 years, and that number rises to 20
members in the next 5 years. And I know they have all heard
from their constituents, too, and that's why we're having this
hearing.
What I hope we will do is solve this problem. If not today,
tomorrow would be okay with me. But certainly solve it before
more seniors and more small businesses have to go through the
costly and disruptive effort of dealing with an area code
change.
There are ideas that can work. You mentioned them, too, Mr.
Chairman. For example, probably the best of those ideas is to
have the new area codes go for machines whose telephone numbers
we don't care about--the ATM machine, the gas station pump,
credit card verifier, even our blackberries. Do you know what
the telephone number of your blackberry is? I certainly don't
know what the telephone number of my blackberry is.
But the FCC needs to help figure out how to map these new
codes, so that they use numbers efficiently. You mentioned the
issue of stranded numbers, and the contamination threshold.
This is the place we can go. I learned about this from my very
own Loretta Lynch, and I am sure she's going to address it
later today. But this is a way we could begin to fix this
problem.
The FCC also has to fix its procedures. It can adopt a can-
do attitude to processing and accommodating requests for relief
that are tailored to unique State interests. In California, for
example, we are interested in permanent, specific overlays, and
that is a way that the FCC could help us go.
Oh, here's the ranking member, Mr. Markey. Perfect timing.
At any rate, I certainly know, as a mother of four, that
perfection is not an option. But I do believe that the group
before us can come up with perhaps imperfect but adequate
solutions that meet the needs of all of the members of this
committee, but more important than our needs the needs of all
of the constituents we represent.
Again, I thank you for holding this hearing, and I thank
you for committing yourself to helping solve the problem.
Mr. Upton. Thank you, again.
Recognize the gentleman from Ohio, Mr. Sawyer, for an
opening statement.
Mr. Sawyer. Thank you very much, Mr. Chairman. I am not
going to read an opening statement. I just wanted to make a
couple of observations.
We talked about dialing a telephone 100 times a day. I
haven't dialed a telephone in 10 years. Have you?
Ms. Harman. Okay.
Mr. Sawyer. Okay.
Mr. Upton. You don't still lease your phone?
Mr. Sawyer. I just wanted to thank everybody involved with
this for your effort and your tenacity in bringing this issue
before us. It is important. It touches people's lives. It is
going to require an extraordinary kind of teamwork between the
State commissions and the FCC and the service providers in the
field. And if we can help to facilitate that, that's what we're
here for.
And I yield back the remainder of my time.
Mr. Upton. Recognize the ranking member, Mr. Markey.
Mr. Markey. Thank you, Mr. Chairman, very much.
Mr. Upton. The Red Sox are still in first place, right?
Mr. Markey. No, we're out of first place.
Mr. Upton. Oh, the Yankees lost.
Mr. Markey. It is still too soon to become suicidal, but
we're beginning the slow slide toward serious depression.
So, you know, when I was a boy we went to Den 9 of the
Immaculate Conception Grammar School of the Cub Scouts of
America. We went to the Museum of Science in Boston on a field
trip with Mrs. Carey, and one of the things we saw in 1958 was
this incredible breakthrough where you would actually be able
to punch in the numbers of your phone, you know, and it was
some futuristic thing--sometime in the future--although they
have already invented it, you see. It was an AT&T exhibit here
in 1958.
So we stood there and we were punching in our numbers, you
know. My number was MA4-0815. And then it became DA4-0815, you
know. And then it became 324-0815. Then it became 617-324-0815.
And now it is 781-324-0815. So, you know, as each year went by,
they trusted me with more numbers to memorize. But it took
another 25 years from 1958 before AT&T could figure out how to
actually let us punch in the numbers instead of keep dialing as
they had been dialing for 100 years and renting the phone for
$4 a month times 12 months a year, $48 times 40 years for your
mother, which is like $1,600 for that phone in the living room.
That's a lot of money, huh?
But you just couldn't figure out a way of letting them buy
it from another company and just plugging it in, because it
would have ruined the whole system. Anyway, we have come a long
way over the years. And this subject, this area code
exhaustion, you know, is, without question, a big issue. And
we're trying to find a way in which we can, you know, find a
legislative Viagra to deal with this area code exhaustion.
And this is a subject that is going to be with us for a
long time. And with the leadership of the gentle lady from
California, I think we are going to find a way to deal with the
rapid exhaustion of area codes in the late 1990's as a result
of the success, actually, of this subcommittee in putting on
the books, telecommunications policies, in competition, in
wireline, in wireless, that have resulted in more service
providers and new service for consumers in the
telecommunications marketplace. All of those competitors and
services eat up phone numbers.
It took roughly half a century to use up the original 144
area codes in the system. The passage, in 1993, of legislation
creating new wireless competition, coupled with passage in
early 1996 of the Telecom Act, caused an explosion of growth in
the telecommunications marketplace generating the activation of
over 100 new area codes.
The introduction of these new area codes has not come
without some consternation on the part of some consumers. The
growth of choice and exhaustion of area codes comes hand in
hand. Changes in area codes force many businesses to change
business software, advertising, and marketing campaigns,
business cards, and stationery. This has some cost.
On the other hand, the growth of competition in the
telecommunications marketplace has most often lowered the
overall telecommunications cost for many businesses as such
enterprises gain needed choices in the marketplace.
Now there has been a serious policy debate in recent months
about how best to implement new area codes as well as how to
conserve the existing groups of usable numbers that we have. I
think that recent initiatives of the FCC, many States, as well
as the telecommunications industry itself, have resulted in a
substantial increase in successful number conservation efforts.
In spite of this progress, however, certain States may
still confront the need for new area codes in the very near
future. There are two general methods that can be utilized to
add new area codes or extend the usefulness of existing area
codes--geographic splits and overlays. A geographic split
simply takes one area and divides it in two, thereby
designating a new area code to one community while the other
retains the old area code.
I am now 781. Boston is 617. I am still only 5 miles from
Boston. I have to memorize 781. This is what happened, for
example, in eastern Massachusetts, and it has taken a while and
we have figured it out. Although some customers may face
changing their phone number, both new regions are typically
able to retain seven-digit dialing within the area code from
where they are calling. So you can just keep your old number
memorized, and you don't have to add on the extra three digits.
In contrast, overlays take a new area code and add it to a
region with an existing area code. Existing customers are able
to keep their old numbers and area code, but any new customers
in that area are given numbers from the new overlaying area
code.
In this scenario, 10-digit dialing is the norm, because
within each region two different customers might have identical
seven-digit numbers and only the area code differs. Therefore,
consumers must dial all 10 digits--that is, the area code
included--in order to ensure proper routing of the call.
Many people have suggested overlays that are technology-
specific or for new service providers. In other words, wireless
companies in an area may have its own area code, or all new
customers of a competitive local phone company may have to get
a new area code. This doesn't force people to change their
existing phone number, but it may have serious competitive
disadvantages for competitors.
If a competitor has to convince a consumer to switch to its
service by also convincing that consumer to switch their
existing phone number that they have memorized since they were
8 years old, it may be too high a burden for successful
competition to take root, because people have emotional
relationships with those numbers that their mother had made
them memorize in case they ever get in trouble.
So we have to deal with this very--which was a frequent--
frequent--I get run over by a car and I am lying there in the
road, and this guy picks me up, puts me into the back seat of
his car, rushes me up to the emergency room. I still have this
huge bump up here on my head where I had come down on the
cement, which explains a lot of things.
And I am in the room, and there are two things my mother
told me. I am 5 years old; there are two things my mother told
me. Eddie, two things. If you ever get in trouble and you're in
the emergency room--two things. One, your telephone number is
MA 4-0815. And, second, change your underpants every day or I
am going to be completely embarrassed. Okay? So now I say, ``My
name is Eddie Markey. My phone number is MA4-0815.'' And now I
hear the doctor, he's on the phone, ``Mrs. Markey, you have a
boy. His name is Eddie. He's 5 years old. He's here on the
emergency table. We need permission to operate.''
And I am lying there, all my fingers are broken, and my
head is blasted open. And the nurses are trying to unbuckle my
pants, and I--like my broken fingers, I am trying to hold it up
because I know that memorizing the number is only half of it.
Okay?
Because I haven't changed my underpants in a week, you
know?
I am 5 years old, you know? And so then my last memory is
this chloroform coming over my head.
So anyway, we----
The ability of customers to switch companies without having
to switch their phone numbers is the policy of number
portability. You should be able to keep that number as long as
you live. Number portability. You have such an emotional and
personal attachment to it that it is almost as important as
your name itself.
And so, ladies and gentlemen, there can't be a more
important hearing being conducted on Capitol Hill today.
And I hope that we construct the right policy for the
American people.
Thank you, Mr. Chairman.
Mr. Upton. The gentleman's time has expired.
I recognize the gentleman from New Hampshire, Mr. Bass.
Mr. Bass. Thank you very much, Mr. Chairman. And I will
agree with my friend from Massachusetts, the--I served as a
member of Rotary Club for years and was in every conceivable
official position. But nothing really counted in the affairs of
that club, except for the quality of the food that was served.
The same is true of telephone numbers. People get very
emotional about, as we can tell from others here today, about
changing a phone number after a long time. And Congressman
Market is right. I remember my phone number in Peterboro as
Walnut 4-6412.
Mr. Markey. Now we're talking.
Mr. Bass. And Hudson 7-7725. And, by the way, my number--my
father's number when he was in Congress was Capitol 2-5206. The
number is 225-5206. So what do you think about that?
And I will bet you anything that--I don't know if--God only
knows how many years ago your predecessor probably had the same
number that you did. It was during the Lincoln administration.
Mr. Markey. It is twilight zone stuff.
Mr. Bass. Anyway, Mr. Chairman, I appreciate the
opportunity to participate here today. And as we know, dozens
of States face code exhaustion in the next few years. And I
have noticed, I must say, Massachusetts is certainly one that
has had a lot of changes.
My own State, New Hampshire, originally faced exhaustion of
our single 603 code this year. However, the FCC's conservation
waiver and the return of stranded block numbers from land line
carriers and the Internet service providers that have failed or
scaled back operation has pushed that date out to 2004.
Although this is good news, it still should be noted that
in a State of only 1.3 million people there should be enough
numbers to serve them and the State's business lines for many
years to come, given that each code has theoretically one
number less than a million possible--or close to a million
possible numbers.
Even more perilous than the addition of a new code in New
Hampshire is the prospect of running out of codes and numbers
nationally. Should such a crisis occur, we would need to either
severely ration new numbers, require an additional number to be
added to every area code, additional number to be added to
every area, or NXX code, or even require such fees that would
force numbers and codes to be abandoned. None of these sound
attractive to me.
As I have also noted, the past few years you have seen
action on this issue. Thousand block number pooling is already
being done on wire line requests for new numbers, and number
porting has also cut demand for new accounts. And certainly we
cannot ignore market conditions, and that affects consumer and
commercial demand. Got to add a comma there.
While I am aware of the pressure the Congress and the FCC
have placed on wireless carriers to accomplish policy goals,
and the costs those goals incur to them and ultimately
consumers, it cannot go without stating that according to the
New Hampshire Public Utilities Commission wireless number
requests are the prime driver of the State's 2004 exhaustion
date. Invariably, it seems to me, they, too, will have to enact
smaller block pooling and even number portability.
But for them, the issue goes farther and should include
consideration of the long distance rate's center location
through the region and whether this fee system encourages
artificial number demand.
Again, Mr. Chairman, thank you for having this hearing, and
I look forward to the witness testimony. I yield back.
Mr. Upton. Just for the record, you made me all feel bad.
My number was Garden 9-5150.
At this point, recognize the gentleman from Illinois, Mr.
Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman, and I will be brief.
I am sorry I missed some of the opening comments. I am sure
I would have found them entertaining and enlightening.
My concern is that we are careful until we have full
implementation of e-911, and we need to be careful that what we
do with portability or what we do not do with portability--or
even if we do that, it doesn't hurt the implementation of e-
911, and we make sure that that's fully implemented. And there
are costs and challenges with that.
And other than that, locally as everyone fights with the
area code, the basic area code problems, and I don't know when
they mix them in a geographical area that that's very helpful,
although no one wants to give up the ones that they have.
I just look forward to hearing from the panel, and I yield
back my time.
Mr. Upton. Thank you. I would make a point that a number of
subcommittees are sitting this morning. The House is in
session. I will make unanimous consent that all members of the
subcommittee will have an opportunity to put their opening
statement into the record.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Steve Buyer, a Representative in Congress
from the State of Indiana
Thank you, Mr. Chairman, for giving me the opportunity to address
the subcommittee regarding area code exhaustion. Indiana has recently
completed an extensive adjustment to our area codes.
In 1999, the Indiana Utility Regulatory Commission opened an
investigation into number depletion and priority was given to helping
northern Indiana because its problems were the most immediate.
Last summer, the IURC decided to split northern Indiana into three
area codes. The new area codes followed north-south lines and were said
to include equal populations. Unfortunately, while the IURC looked at
numbers to make their decision, they sacrificed the community interest.
For example, half of White County, my home county, will remain
within the 219 area code, the eastern half will be within the 574 area
code, and the town of Brookston is in the 765 area code. Two area codes
now cover one school corporation. Area businesses faced the expensive
task of having to change signs, letterhead, while trying to unmask the
confusion for occasional customers who might not have been alerted to
the change.
While understanding the need for the additional area codes, the
allocation of the area codes should take into account community
interests, and not just population or numerical lines.
My suggestion to this committee and to the panel is to be committed
to protecting the interests of those whom you serve--the customers
throughout this country. While we should not stand in the way of
progress, we cannot let progress change the way we treat our citizens.
______
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman Committee on
Energy and Commerce
Mr. Chairman, thank you for convening today's hearing. Area code
exhaustion is an issue that potentially affects all of our districts.
During the 1990s, we experienced an explosion in demand for phone
numbers. Wireless telecommunications services started the decade at
around 10 million users and ended the decade at ten times that number.
At the same time, the internet brought an explosion in demand from
consumers for second telephone lines, as did fax machines. And then the
entry by competitive carriers into the local telephone market again
made the demand for numbers extraordinary.
Without any reforms, area code exhaustion would occur rapidly in
many densely-populated areas.
The primary area code exhaustion remedies are not much fun.
Somebody always seem to lose with area-code splits because they have to
incur the expense and inconvenience of changing their phone number. And
overlays can often be difficult as a home or business adds additional
numbers.
The FCC made a rather productive move several years ago. The
implementation of number pooling by wireline carriers will go a long
way toward area code conservation. And that is why it is important for
wireless carriers to implement number pooling as well.
Wireless carriers are expected to implement number pooling by
november 24th. The FCC should do all that it can to ensure that
wireless carriers can implement pooling on schedule.
But the FCC also must make sure that wireless carriers have the
ability to implement pooling and implement it properly. Imposing number
portability and number pooling simultaneously could have disastrous
consequences for either reform's success.
And it is not just a question of waiting a couple of months and
then implementing portability. Portability should not be required to be
implemented until pooling is fully implemented. It is critical that
wireless carriers have the time to make sure that they get pooling
right before they have to turn to porting.
In addition to pooling, there are several other initiatives that
the FCC and the states can take to curb area code exhaustion. I look
forward to the testimony today to hear about some of those initiatives.
Mr. Chairman, thank you again for conducting this hearing.
Mr. Upton. And with that, we will hear from our panel.
We're fortunate to have Ms. Dorothy Attwood, the Bureau Chief
of the Wireless Competition Bureau of the FCC with us today;
Ms. Loretta Lynch, President, State of California, Public
Utilities Commission; Mr. John Manning, Director, Numbering
Services, from NeuStar; Ms. Anna Miller, Director of Numbering
Policy, VoiceStream Wireless Corporation, on behalf of CTIA;
Mr. Michael O'Connor, Director of Federal Regulatory Policy of
Verizon, on behalf of USTA; and Mr. John Long, III, President
and CEO of the Kalamazoo Regional Chamber of Commerce, from
Kalamazoo, Michigan.
Ladies and gentlemen, our procedure is you have--first of
all, we appreciate your submitting your statements in advance.
We had a chance to look them over last night. You will each be
given 5 minutes to go through your statement, at which point we
will have questions from the panel.
Ms. Attwood, we'll start with you. Welcome.
STATEMENTS OF DOROTHY T. ATTWOOD, BUREAU CHIEF, WIRELINE
COMPETITION BUREAU; LORETTA M. LYNCH, PRESIDENT, STATE OF
CALIFORNIA, PUBLIC UTILITIES COMMISSION; JOHN MANNING,
DIRECTOR, NUMBERING SERVICES, NEUSTAR; ANNA MILLER, DIRECTOR OF
NUMBERING POLICY, VOICESTREAM WIRELESS CORPORATION; MICHAEL
O'CONNOR, DIRECTOR OF FEDERAL REGULATORY POLICY, VERIZON; AND
JOHN T. LONG, III, PRESIDENT AND CEO, KALAMAZOO REGIONAL
CHAMBER OF COMMERCE
Ms. Attwood. Good morning, Chairman and members of the
subcommittee.
I am Dorothy Attwood. I am Chief of the Wireline
Competition Bureau at the FCC. In light of this hearing, it is
important that I stress that.
Thank you for this opportunity to talk with you about the
efforts and progress made at the Commission to optimize the use
of numbering resources in the United States, and, in
particular, to mitigate the impact of area code and numbering
exhaust. As many of you know, our country has experienced an
explosive demand for telephone numbers in the past decade. The
rapid increase in demand has been spurred by the entry of new
competitive providers into the marketplace and is accentuated
by the introduction of new technologies.
As a result, ensuring the continued availability of
telephone numbers for American consumers and our Nation's
telecommunications providers remains one of the Commission's
highest priorities. In response to this demand, and as directed
by the Telecommunications Act of 1996, the FCC has taken a
series of actions to promote more efficient use of numbering
resources. These actions are designed not only to prevent area
code exhaust in individual communities, but also to prevent the
exhaust of the North American numbering plan as a whole.
The 1996 Act recognized that one of the chief obstacles to
controlling numbering resource problems was an absence of
industry, economic, or significant regulatory control over
requests for numbering resources. The 1996 Act empowered the
Commission to tackle this problem, and the Commission has
developed strong working partnerships with State governments to
promote numbering efficiency.
The Commission has enlisted States' help primarily by
delegating significant authority to them to implement area code
relief. For example, we delegated to States the authority to
determine which form of area code relief--an all services
geographic overlay, an area code split, or even a boundary
realignment--to determine which is best in each circumstance
when area code relief is needed.
In December 2001, this Commission added another relief
option--a specialized overlay which would allow States, under
the right circumstances, to designate a new area code to be
used for a specific service or technology such as wireless
phones, pagers, or data lines.
Because our State partners stand on the front lines of
battles over numbering resources, we know that frequent area
code changes are frustrating, inconvenient, and costly to
consumers. As a result, the Commission has sought solutions
that minimize the impact on consumers and that reduce the need
for area code changes.
Another essential step that the Commission has taken is to
change the way that numbers are allocated to carriers. One of
the major drivers of numbering resource exhaust is our legacy
system of distributing numbers to service providers in blocks
of 10,000--an entire central office code. Until recently,
service providers that needed fewer than 10,000 numbers to
serve their customers could only get an entire central office
code.
Because the unused numbers could not be given to another
carrier to provide service to its customers, those numbers
would lie fallow in the carriers' inventories and remain
unused. The Commission has worked hard to address this
inefficiency in the use of numbering resources, and we have
made significant strides in a few years.
In 1998, the Commission granted authority to the State of
Illinois to experiment with a new system of distributing
numbers to service providers that was designated to eliminate
the vast amount of numbers that were lying unused in the
service providers' inventories. This system is known as
thousands-block number pooling.
In March 2002, national thousands-block number pooling
began. Under the stewardship of a neutral third party
administrator, pooling will be implemented within the largest
100 metropolitan statistical areas, or MSAs, in the next 18
months.
Thousands-block number pooling is a success story. With it,
fewer central office codes and consequently fewer area codes
get used up. It will be even more effective once wireless
carriers begin to participate in pooling later this year.
Indeed, it is predicted that adoption of national number
pooling could extend the life of the NANP by more than 20
years.
In addition to thousands-block number pooling, all
providers in the United States that use NANP numbering
resources now must closely monitor, track, and report on their
number usage based on uniform definitions established by the
Commission.
Also, providers must now demonstrate their need for
additional numbering resources with more than subjective
forecasts. Other measures designed to increase discipline in
numbering resource utilization practices include mandatory
reclamation of unused numbering resources and a requirement
that numbers be assigned by carriers to their customers
sequentially.
The Commission has also delegated to the States the
authority to implement additional measures, such as rationing
of numbers following implementation of area code relief,
hearing and addressing claims of carriers seeking numbering
resources outside of the rationing process, and monitoring
carriers' use of numbering resources.
To facilitate full participation by the States in these and
other numbering resource optimization measures, the Commission
has also provided States access to carrier forecasts and
utilization data for numbering resources within their borders.
Each of these measures should help stave off premature area
code exhaust, but the Commission recognizes that our efforts
cannot stop here.
The Commission seeks to continue to find new approaches to
refine our existing measures. For example, currently only
wireline carriers operating in the top 100 metropolitan
statistical areas are generally required to participate in
thousands-block number pooling.
Wireless carriers were granted additional time, until
November 24, 2002, to participate in pooling, and they have
recently indicated that they are committed to participate in
pooling by this deadline. With this prospect, the benefit of
pooling may be recognized on a larger scale sooner than
expected.
As I mentioned before, the Commission also has expanded the
area code relief options available to States by lifting the ban
on service-specific and technology-specific overlays. The
competitive concerns initially raised primarily by the wireless
community seem to have lessened, although they have not
disappeared altogether.
The Commission also has noted that by temporarily diverting
the demand for numbering resources from existing area codes
service or technology-specific overlays may help ease the
transition to needed area code relief prior to complete
implementation of pooling.
The Commission has seen tangible benefits from the steps
that we and the States have taken. For example, carriers are
better managing their inventories of numbers and returning
blocks of numbers that they do not need. Thus, net assignments,
for example, went from approximately 980 codes per month in the
year of 2000 to approximately 350 codes per month in 2001.
There is still work to be done. The Commission will
continue our efforts to improve numbering resource optimization
by looking at other measures such as individual telephone
number pooling and unassigned number porting, and look forward
to continuing our partnership with the States. Together we can
make significant progress toward avoiding disruption and cost
to consumers, eliminating unnecessary code changes, and
prolonging the life of the NANP.
Thank you, Mr. Chairman and members of the subcommittee,
for allowing me to appear before you today.
[The prepared statement of Dorothy T. Attwood follows:]
Prepared Statement of Dorothy T. Attwood, Chief, Wireline Competition
Bureau, Federal Communications Commission
i. introduction
Good Morning, Chairman Upton, Ranking Member Markey, and Members of
the Subcommittee. I am Dorothy Attwood, Chief of the Wireline
Competition Bureau at the Federal Communications Commission (``FCC'' or
``Commission''). Thank you for this opportunity to talk with you about
the efforts and progress made by the Commission to optimize the use of
numbering resources in the United States and, in particular, to
mitigate the impact of area code and numbering exhaust. Although we
continue to face some challenges on this front, we are firmly committed
to protecting consumers by adopting strategies that prevent premature
area code exhaust.
ii. confronting the numbering challenge
As many of you know, our country has experienced an explosive
demand for telephone numbers in the past decade. The rapid increase in
demand has been spurred by the entry of new competitive providers into
the marketplace, and is accentuated by the introduction of new services
and technologies. Telephone numbers are a vital part of our national,
and indeed the global, communications network. They are an essential
gateway for businesses and governments. Indeed, for many residential
customers, telephone numbers become intertwined with their very
identity and with their sense of community. As a result, ensuring the
continued availability of telephone numbers for American consumers and
our Nation's telecommunications providers remains one of the
Commission's highest priorities.
In response to this demand, and as directed by the
Telecommunications Act of 1996, the FCC has taken a series of actions
to promote more efficient use of numbering resources. These actions are
designed not only to prevent area code exhaust in individual
communities, but also to prevent the exhaust of the North American
Numbering Plan (``NANP''), as a whole. The NANP is the basic numbering
scheme for the United States and its neighbors, Canada and a number of
Caribbean countries. Exhaust of the NANP will occur when the last
available area code is given out. Once this occurs, callers will be
required to dial at least 8 or 11 digits, rather than the current 7 or
10, to make a telephone call. Expanding the NANP in this way would have
enormous societal and monetary costs with estimates ranging from 50
billion to 150 billion dollars.
The 1996 Act recognized that one of the chief obstacles to
controlling numbering resource problems was an absence of industry,
economic or significant regulatory control over requests for numbering
resources. The system that had evolved over the past 60 years did not
promote accountability or efficiency and, in some cases, allowed
carriers to misuse the allocation system. The 1996 Act empowered the
Commission to tackle this problem and the Commission has developed
strong working partnerships with State governments to promote numbering
efficiency.
In developing our approach to numbering resource issues, we have
sought to: 1) minimize negative impacts on consumers; 2) promote
competition by ensuring sufficient access to numbering resources for
all service providers; 3) minimize incentives for carriers to stockpile
excessively large inventories of numbers; 4) avoid, or at least delay,
exhaust of the NANP; and, more broadly, 5) impose the least societal
cost possible, while obtaining the highest benefit for consumers.
iii. partnerships with state governments
To achieve these goals, the Commission has developed important
partnerships with State governments, which enable us to benefit from
their expertise and unique knowledge of local conditions and
considerations. The Commission has enlisted States' help primarily by
delegating significant authority to them to implement area code relief.
For example, we delegated to States the authority to determine which
form area code relief, an all-services geographic overlay, an area code
split, or a boundary realignment, is best in each circumstance, when
area code relief is needed. In December 2001, the Commission added
another relief option, i.e., a specialized overlay which would allow
States, under the right circumstances, to designate a new area code to
be used for a specific service or technology, such as wireless phones,
pagers, or data lines. In addition, the Commission has delegated to
states the authority to conduct trials of new number resource
strategies, such as pooling, as I will discuss shortly.
Because our State partners stand on the front lines of battles over
numbering resources, they know that frequent area code changes are
frustrating, inconvenient and costly to consumers. Area code changes
can be burdensome to communities. As a result, the Commission has
sought solutions that minimize the impact on consumers and that reduce
the need for area code changes. The Commission has also encouraged
States to develop relief plans based on efficient number optimization
guidelines, which will help avoid complete exhaust of the NANP and the
serious monetary and societal costs that such a result would bring on.
Overall, these partnerships with the states have led to innovative and
effective solutions that are responsive to the unique needs of local
communities.
iv. thousands-block number pooling
Another essential step that the Commission has taken is to change
the way that numbers are allocated to carriers. One of the major
drivers of numbering resource exhaust is our legacy system of
distributing numbers to service providers in blocks of 10,000, an
entire central office code. Until recently, service providers that
needed fewer than 10,000 numbers to serve their customers could only
get an entire central office code. Because the unused numbers could not
be given to another carrier to provide service to its customers, those
numbers would lie fallow in the carriers' inventories and remain
unused. Thus, although the actual amount of unused individual telephone
numbers was high, the number of available central office codes began to
decrease at an alarming rate. Of the approximately 1.5 billion
individual telephone numbers currently assigned to carriers, it is
estimated that approximately 40 percent are actually being used by end-
user customers. The Commission has worked hard to address this
inefficiency in the use of numbering resources and we have made
significant strides in just a few years.
In 1998, the Commission granted authority to the State of Illinois
to experiment with a new system of distributing numbers to service
providers that was designed to eliminate the vast amount of numbers
that were lying unused in service providers' inventories. This system,
known as thousands-block number pooling, has changed the landscape of
number use in this country. Following that first number pooling trial,
an additional 32 States were delegated authority to implement number
pooling trials within their borders. In March 2002, the national
thousands-block pooling program began. Under the stewardship of a
neutral, third-party administrator, pooling will be implemented within
the largest 100 metropolitan statistical areas (``MSAs'') in the
country over the next 18 months.
Thousands-block number pooling uses local number portability
technology to enable carriers to accept numbers in blocks of 1,000
rather than 10,000. As a result, the same central office code that
could serve only one service provider a couple of years ago can now
provide numbers for up to 10 different service providers. What this
means is that fewer central office codes, and consequently fewer area
codes, get used up. It is a way of better using the numbering resources
that are already distributed rather than simply going back to the well
for more numbers, a well that is by no means bottomless.
Thousands-block number pooling is a success story. In many
instances, premature exhaust of area codes has been staved off by
pooling. It will be even more effective once wireless carriers begin to
participate in pooling later this year. Indeed, it is predicted that
the adoption of national number pooling could extend the life of the
NANP by more than 20 years.
v. additional optimization measures
In addition to thousands-block pooling, the Commission has taken a
number of other actions that promote efficient number use and that
should prevent disruption for consumers. Most notably, all providers in
the United States that use NANP numbering resources now must closely
monitor, track, and report on their number usage based on uniform
definitions established by the Commission. Additionally, providers must
now demonstrate their need for additional numbering resources with more
than subjective forecasts. Providers that fail to do so will be denied
numbering resources. These measures provide accountability and create
incentives for providers to use numbers efficiently. The Commission has
also adopted other measures designed to increase discipline in
numbering resource utilization practices, such as mandatory reclamation
of unused numbering resources and a requirement that numbers be
assigned by carriers to end-users sequentially to preserve the
availability of unused blocks of numbering resources to facilitate
thousands-block number pooling.
The Commission has also delegated to the states the authority to
implement additional measures, such as rationing of numbers following
implementation of area code relief; hearing and addressing claims of
carriers seeking numbering resources outside of the rationing process;
and monitoring carriers' use of numbering resources. To facilitate full
participation by the states in these and other numbering resource
optimization measures, the Commission has also provided State access to
carrier-reported forecast and utilization data for numbering resources
within their borders.
Each of these measures should help stave off premature area code
exhaust. But the Commission recognizes that our efforts cannot stop
here.
vi. developing new approaches
The Commission continues to seek new approaches and to refine our
existing measures. For example, one of the limitations of pooling is
that it is only effective in areas where a significant number of
service providers can participate. To participate, providers must have
systems that use the local routing number (``LRN''') architecture,
which is the same underlying architecture necessary for local number
portability (``LNP''), or the porting of numbers between carriers.
Currently, only wireline carriers operating in the top 100 metropolitan
statistical areas are generally required to have this capability.
Because wireless providers have been granted additional time to develop
this capability until November 24, 2002, they have not yet begun to
participate in pooling. Wireless carriers, however, have recently
indicated that they are committed to participating in pooling by this
November. With this prospect, the benefits of pooling may be recognized
on a larger scale sooner than expected. The Commission looks forward to
seeing this commitment by the wireless carriers fulfilled in the months
to come.
As I mentioned before, the Commission has also expanded the area
code relief options available to States. Historically, our rules had
prohibited service-specific and technology-specific overlays. When the
Commission first considered service-specific overlays, it concluded
that this approach would place paging and cellular companies at a
distinct competitive disadvantage because their customers would suffer
the cost and inconvenience of having to surrender existing numbers and
go through the process of reprogramming their equipment, changing over
to new numbers, and informing callers of their new numbers. Indeed,
until recently, much of the wireless community opposed service- and
technology-specific overlays because they felt that having a separate
area code would place them at a disadvantage with respect to the
incumbents.
Because the Commission is committed to extending the life of the
current NANP, and in response to requests from state governments, the
Commission has reversed the outright ban on service-specific and
technology-specific overlays. In taking a critical look at whether the
prohibition against these options continued to make sense, the
Commission has considered a number of issues, including the perceived
competitive disadvantages with service- and technology-specific
overlays; whether and how such overlays could be implemented in an
efficient manner; the risk that service- or technology-specific
overlays which provide numbering resources to only a portion of number
users could be underutilized; and whether such overlays could be
implemented in a transitional or other manner that would allay such
efficiency concerns.
The competitive concerns initially raised by the wireless community
seem to have lessened to some extent, although not disappeared
altogether. Moreover, the Commission has noted that by temporarily
diverting a portion of the demand for numbering resources in existing
area codes, service- or technology-specific overlays may help ease the
transition to needed area code relief prior to the complete
implementation of pooling. Such an approach might reduce consumer costs
and inconveniences.
The Commission has also sought comment on whether it could adopt
particular policies to address what is referred to as the ``rate center
problem.'' One of the major contributing factors to numbering resource
exhaust is the existence of multiple rate centers in each area code.
The rate center system was adopted in the 1940s to facilitate the
routing and billing of telephone calls. Because, as a practical matter,
many service providers obtain numbering resources in each rate center,
the Commission has encouraged states to consider and implement rate
center consolidation. Rate center consolidation could appreciably
reduce the drain on numbering resources. The Commission is mindful that
rate center consolidation may be a difficult option for States and
service providers because of the connection between rate centers and
billing and routing, so we look forward to working closely with States
on this option.
In addition to these proposed measures, the Commission continues to
examine alternative mechanisms for establishing a market-based solution
to improve the use of numbering resources. Under a market-based
solution, the Commission might, for example, collect fees from carriers
in exchange for blocks of numbers or hold auctions for numbering
resources. In considering such an approach, the Commission has asked
whether the historical lack of efficiency in this area may be in part
due to the failure of existing rules to recognize the economic value of
numbers. The Commission will consider all these options with an eye
towards promoting efficient use of numbers and minimizing the overall
impact on consumers.
vii. conclusion
The Commission has seen tangible benefits from the steps that the
Commission and the states have taken. For example, carriers are better
managing their inventories of numbers and returning blocks of numbers
that they do not need. As a result of the volume of numbering resources
returned by carriers, net assignments averaged approximately 350 codes
per month in 2001 as compared to approximately 980 codes per month in
2000. But there is still work to be done. The Commission will continue
our efforts to improve numbering resource optimization, and look
forward to our continuing partnership with the States. Together, the
Commission can make significant progress toward our goals of avoiding
disruption and costs to consumers, eliminating unnecessary area code
changes, and prolonging the life of the NANP.
Thank you, Mr. Chairman, for this opportunity to appear before you
today. This concludes my prepared testimony and I would be pleased to
answer any questions you or the other members may have.
Mr. Upton. Thank you very much.
Ms. Lynch, welcome.
STATEMENT OF LORETTA M. LYNCH
Ms. Lynch. Thank you, Mr. Chairman, and members. I
appreciate the opportunity to discuss the Nation's dwindling
supply of telephone numbers and potential solutions we have to
area code exhaust.
Since my time on the California Public Utilities
Commission, I have been a member of the North American
Numbering Council, which is an advisory committee of the FCC,
and have thus become quite familiar with the technical and
economic issues surrounding numbering resources.
California is an excellent example of the numbering crisis
facing consumers across the country. From 1947 to 1997, the
number of area codes in California increased gradually from 3
to 13 over 50 years. During the next 3 years, however, the
number of area codes in California nearly doubled. By the end
of 1999, California was faced with 25 area codes statewide, and
the industry projected we would need 17 more by the end of
2002, effectively tripling California area codes over a 5-year
period.
Today, because of aggressive and successful conservation
efforts in California, we have not split a single area code
since that time. But our grace period may soon be running out
if the FCC does not act soon.
Beginning in 1999, the California Public Utilities
Commission implemented several measures that revolutionized our
numbering policies, with FCC explicit approval, and I would
like to thank Dorothy Attwood especially for being a pioneer at
the FCC in those approvals.
Thanks to that joint Federal-State partnership,
California's area codes still stand at 25, despite dire
predictions to the contrary just 3 years ago. I would like to
outline today the reasons for our success so far and identify
the additional tools that California and other States simply
must have, so that we can manage effectively our limited supply
of telephone numbers as efficiently as possible.
As we all know, the FCC has exclusive jurisdiction over
numbering in the United States. So anything the States can do
must be authorized by the FCC before we can do it.
Let me tell you some of what California has been able to do
in the last 2 years. First, we now consider new area codes and
the need for new area codes based on actual need for new
numbers and not carriers' unaudited forecast demand. Basically,
we now use real need and not their marketing projections before
we give someone new telephone numbers.
Beginning in March 2000, the PUC in California initiated
the first ever utilization study of actual number use in
California in the 310 area code, because at that point the
carriers had projected that the code was out of numbers, that
we were exhausted in 310.
What California found when we actually counted the numbers
available was we found over 3 million unused telephone numbers
in that area code. By the end of 2001, the State, on its own
initiative, completed a utilization study for each of the
State's other 24 area codes, and in every case we found that
each area code actually contained between 40 to 80 percent of
the available numbers classified by the carriers as unused.
Thus, rather than being close to exhaust and running out of
numbers, each and every area code in California had at least 3
million out of the possible 8.9 million numbers still
available. Second, we now distribute telephone numbers to
carriers more efficiently. By far, the most effective number
conservation tool is number pooling.
Number pooling allows telephone companies to receive
numbers in smaller blocks than the traditional 10,000 numbers,
and it enables multiple companies to share a prefix. And,
therefore, we can use our limited numbering resources much more
efficiently. Beginning in 2000, with special FCC authorization,
we began a number pool in 310, and we have now implemented
number pooling effectively and successfully without
disadvantaging the carriers in 19 of California's 25 area
codes. And we will be pooling in five more of those area codes
by the end of the year, with FCC approval.
The technology that enables us to support the assignment of
smaller number blocks and pool is referred to as local number
portability or LNP. LNP was originally mandated by the FCC as a
means to enable customers to retain their telephone numbers
when they switched telephone service to another local provider,
thereby effectuating the main purpose of the Act, which is
competition.
That same technology is used for number pooling. The FCC
required all wireline carriers to become LNP capable by the end
of 1998, and I believe that the essence of competition as
mandated by the Teleco Act is a customer's opportunity to
freely terminate service with one provider and initiate service
with another.
Without LNP, however, a customer is inhibited from changing
carriers because you both have to change your equipment and
your telephone number. Though LNP technology has existed for
several years, the FCC later granted cellular companies an
extension until November of 2002 to become LNP capable. And one
of the main reasons I am here today is to say that we need LNP
capability for wireless carriers in November of 2002 just as
much as we need pooling for wireless carriers in November of
2002.
But in addition to more effectively managing number
distribution for pooling, we also have required companies to
manage the numbers more effectively that they already have. So
they must return numbers if they haven't used them for 6
months. They must show that they will be out of numbers before
they get new numbers. They must show that they have used 75
percent of their numbers before they can get new numbers.
And since we implemented all of these number conservation
measures, the demand for growth prefixes in California has
declined precipitously. However, these efforts alone are not
enough. The most critical numbering and competitive issue
facing the FCC and the States now is the question of whether
wireless carriers will be required to implement LNP this year.
Permanent forbearance from the wireless LNP mandate will
not serve the interests of consumers because the continued
absence of wireless LNP is both--not only inconvenient but
costly to consumers who want to change carriers.
Assuming that wireless carriers start to pool in November
of 2000, the wireless failure to deploy LNP capability and
technology will limit the industry's participation in other
more revolutionary number conservation measures. Both
individual telephone number pooling, ITN, and unassigned number
porting, UNP, require the full use of LNP capability.
California is interested in pursuing these additional
conservation measures, and we have expressed that to the FCC as
well. The FCC has yet to order these further number
conservation measures. But as with number pooling, the
effectiveness of new future technologies to conserve numbers
will be limited permanently if the wireless industry cannot
participate because it has not deployed the necessary
supporting LNP technology.
Working with the FCC, the States have made huge strides in
preserving our area codes over the last 3 years, during the
time of tremendous wireless and communication industry
numbering demand. But local number portability, wireless
pooling, UNP, ITN, and expanded mandatory pooling beyond the
top 100 MSAs, and increased contamination thresholds are
further tools that are critically needed by the States, so that
we can foster true competition in the wireless industry and
preserve the Nation's area codes without expanding the entire
area code and numbering system.
Without timely access to these tools within the next year
or 6 months, the States' efforts to take our number
conservation efforts to the next level are effectively
curtailed. In California, consumers and businesses will feel
these effects first, but ultimately the entire Nation will have
to deal with the burdens of the number crunch if we don't get
the effective tools to expand.
Thank you.
[The prepared statement of Loretta M. Lynch follows:]
Prepared Statement of Loretta M. Lynch, President, California Public
Utilities Commission
Mr. Chairman, Members, thank you for the opportunity to discuss the
nation's dwindling supply of telephone numbers and potential solutions
to area code exhaust.
California is an excellent example of the numbering crisis facing
consumers across the country. From 1947 to January 1997, the number of
area codes in our state increased gradually from 3 to 13. During the
next three years, however, the number of area codes in California
nearly doubled. By the end of 1999, California had 25 area codes
statewide, and the industry projected we would need 17 more area codes
by the end of 2002. Today, because of aggressive and successful
conservation efforts in California, we have not split a single area
code since that time, but our grace period may soon be running out.
Beginning in 1999, the California Public Utilities Commission
(CPUC) implemented several measures that revolutionized the state's
numbering policies. Thanks to these efforts, California's area codes
still stand at 25. Today I'd like to outline for you the reasons for
California's success so far, and identify the additional tools
California and other states need to keep managing our limited supply of
telephone numbers as efficiently as possible.
The traditional system of telephone number allocation was not
designed to provide telephone numbers to any company other than the
incumbent local exchange carrier, or to distribute numbers based on
actual demand for numbers.
In the past, when telecommunication companies needed telephone
numbers to serve their customers, they received blocks of 10,000
numbers, called prefixes. After the Telecommunications Act of 1996,
competitive local exchange carriers entering the market received number
in these 10,000-blocks, just as the incumbents. Under this system, a
company with only 500 customers received a 10,000 number block, the
same quantity of numbers a company with 9,500 customers would receive.
Thus, numbers were taken in these large blocks. As the number of phone
companies proliferated, it created an artificial demand for more
numbers, which in turn fueled the need to open more area codes.
Furthermore, prefixes were assigned to a carrier based on the
carrier's own projections of need. That need, in turn, was premised
upon the carrier's projected sales. In other words, marketing
predictions, not actual number use, formed the basis of each carrier's
forecast number requirements--and the national numbering policy.
california's successful efforts to reduce unnecessary area code
proliferation
The FCC has exclusive jurisdiction over numbering in the United
States. Only by the FCC's delegation of authority to the states can the
states implement number conservation policies. Recognizing the
substantial social and economic burdens associated with constant area
code changes, under the leadership of Governor Davis, in 1999
California aggressively petitioned and received from the FCC additional
delegated authority to slow down unnecessary area code proliferation.
Beginning in December 1999, the CPUC suspended all plans for new area
codes previously approved. Then, in 2000, the CPUC adopted several
number conservation measures that fundamentally changed the area code
landscape in California.
Actual Number Use vs. Forecast
First, the CPUC now considers new area codes based on actual need
for new numbers, not carriers' unaudited forecast demand. Beginning in
March 2000, the CPUC initiated the first-ever utilization study of
actual number use in California, in the 310 area code--where we found
three million unused telephone numbers in an area code that was
supposedly entirely out of available telephone numbers. By the end of
2001, we completed a utilization study for each of the state's other 24
area codes. In every case, we found that each area code actually
contained between 40-80% of the available numbers classified by the
carriers as unused.
More Efficiently Distributing Numbers
Second, the CPUC now distributes new telephone numbers to carriers
more efficiently. By far the most effective number conservation tool is
number pooling. Number pooling allows telephone companies to receive
numbers in smaller blocks than the traditional 10,000 numbers, enabling
multiple providers to share a prefix and therefore use this limited
resource much more efficiently. In March 2000, with special FCC
authorization, California began the first number ``pool'' in the 310
area code. Today, the CPUC has implemented pooling in 19 of
California's 25 area codes, in order to boost the efficiency of phone
number allocation. Five of the remaining six area codes will begin
pooling by the end of this year (661 has not yet been scheduled by the
FCC). By allowing the state to distribute numbers in smaller blocks of
1,000, we can better match the numbering needs of new, smaller
companies without stranding the remaining numbers in the prefix.
The technology that enables the network to support the assignment
of smaller blocks is referred to as Local Number Portability or LNP.
LNP was originally mandated in 1996 by the FCC as a means to enable
customers to retain their telephone numbers when they switch telephone
service to another local provider. This same technology is utilized for
number pooling. The FCC required all wireline carriers to become LNP-
capable by the end of 1998 in the top 100 Metropolitan Statistical
Areas (MSAs) in the country.1 The essence of competition is
a customer's opportunity to freely terminate service with one provider
and initiate service with another. Without LNP, however, a customer is
inhibited from changing carriers because she must change both her
equipment and her telephone number. The need for customers to change
both equipment and telephone numbers inhibits them from changing
carriers, which in turn constrains the very type of choice contemplated
in the 1996 Telecommunications Act.
---------------------------------------------------------------------------
\1\ FCC's Opinion and Order on Telephone Number Portability FCC 97-
74, issued March 6, 1997
---------------------------------------------------------------------------
Though LNP technology has existed for several years and the
wireline carriers became LNP-capable by 1998, the FCC later granted
cellular and PCS companies an extension of time until November 2002 to
become LNP-capable. The FCC further gave paging companies a permanent
exemption from the LNP requirement.2 Thus, at this time,
only wireline carriers 3 can participate in number pooling.
In the California area codes with number pooling, wireline carriers
receive numbers through the number pools, and wireless carriers receive
numbers through a CPUC-administered rationing system, or ``lottery'',
and through ``emergency'' requests to the CPUC. In the remaining area
codes, California must still distribute new numbers in large 10,000-
blocks, which hastens those codes' approach to number exhaust.
---------------------------------------------------------------------------
\2\ Cellular companies, PCS companies, and paging companies
comprise the wireless category.
\3\ ILECs and CLECs
---------------------------------------------------------------------------
Better Management of Numbers Companies Already Have
Third, in addition to more efficiently managing number
distribution, California is also requiring companies to more
efficiently manage the numbers they already have. These new
requirements include:
Requiring companies to return any prefix the carrier has held
for more than six months without using it;
Requiring companies to show they will be out of numbers within
six months before granting requests for additional numbers;
Requiring companies to show they have used at least 75% of the
numbers they hold before they can request additional numbers.
Companies must assign numbers in thousand block sequence,
moving to the next block only after using 75% of their numbers.
These policies have resulted in more numbers available in number
pooling, to be allocated through the lottery, or to be otherwise used
by other companies. Indeed, since the CPUC extended the 75% use
requirement in all California area codes, the demand for growth
prefixes in each month's lottery has declined.
In 1999, based on industry forecasts, the North American Numbering
Plan Administrator projected that 17 of California's 25 area codes
would exhaust by the end of 2002. As you can see by the table comparing
1999 forecast exhaust with more recent projections, through these
efforts, we have prolonged the lives of many of those area codes by
several quarters--and some of them for several years!
But these efforts are not enough to delay area code exhaust
indefinitely. Indeed, as the current Neustar forecast shows, 46 more
codes across the nation will exhaust by the end of 2005. In California
alone, despite the state's aggressive pooling and lottery
implementation, we're facing exhaust in ten area codes by the end of
2005. More area codes may be inevitable, but we can help save consumers
the cost and inconvenience by minimizing them if the FCC gives us a few
more tools to add to the states' toolboxes.
the fcc is at a critical juncture in both fostering meaningful
competition in the wireless industry and helping states preserve the
lives of our existing area codes.
Wireless Carriers Must Implement LNP
The most critical numbering--and competitive--issue facing the FCC
and the states now is the question of whether wireless carriers will be
required to implement LNP technology later this year. On July 26, 2001,
despite having received several previous extensions of time to meet the
LNP implementation deadline, Verizon wireless filed a petition with the
FCC asking the Commission to forbear permanently from imposing the LNP
mandate on wireless carriers. Verizon wireless, supported by most other
wireless carriers, argued that the wireless industry is ``competitive
enough''', and that no consumer demand exists for porting a number from
one wireless carrier to another. The FCC docket in which the petition
is being addressed contains literally hundreds of comments from
individual consumers who want the ability to change from one carrier to
another and to port the customer's telephone number to the new
provider.
The FCC has yet to act on the petition, which, as a matter of law,
will be deemed granted if the FCC does not act on it after one year.
The FCC may grant itself one 3-month extension after which failure to
act again would be deemed to be approved.
Permanent forbearance from the wireless LNP mandate will not serve
the interests of consumers because continued absence of wireless LNP is
both inconvenient and potentially costly to consumers who wish to
change wireless carriers. This alone demonstrates Verizon's failure to
meet the section 10 forbearance test the FCC must apply to determine
whether forbearance is appropriate. The three pronged-test requires
that the FCC determine whether (1) enforcing the wireless LNP mandate
is unnecessary to ensure that the wireless industry's ``charges,
practices, classifications or regulations . . . are just and
reasonable, and are not unjustly or unreasonably discriminatory,'' (2)
enforcing the mandate is ``not necessary for the protection of
consumers,'' and (3) forbearing from applying the mandate is
``consistent with the public interest.''
Declining to give consumers the very type of choice contemplated in
the 1996 Federal Telecommunications Act can hardly be ``consistent with
the public interest.'' 4 Finally, allowing the wireless
industry not to implement LNP does not ensure that the industry's
``charges, practices, classifications or regulations . . . are just and
reasonable.'' If wireless carriers do not face unfettered competition,
they can capture customers and retain them at the expense of
unreasonable rates, charges, or terms and conditions because the
customer does not want to surrender a telephone number. Despite
assurances to the contrary from the wireless industry, the Verizon
Wireless request does not meet the section 10 forbearance test.
---------------------------------------------------------------------------
\4\ In comments to the FCC, the wireless industry has asserted
vigorously that the FCC should find the Verizon petition to meet the
section 10 forbearance test because it made such a finding in granting
the last extension of the wireless LNP compliance date in February
1999. In granting that last extension, however, the FCC concluded that
doing so was not necessary for the protection of consumers and was
consistent with the public interest because it was temporary, and was
granted only so that wireless providers could ``buildout'' their
networks to provide greater coverage. This, the FCC reasoned, would
benefit consumers more in the short run than holding the industry to
the compliance deadline. At the same time, in granting the extension,
the FCC emphasized that ``the competitive reasons that led us to
mandate wireless number portability in the First Report and Order
remain fundamentally valid . . .'' (Memorandum Opinion and Order, FCC
99-19, WT Docket No. 98-229/CC Docket No. 95-116, Released February 9,
1999, para. 40.)
---------------------------------------------------------------------------
Wireless carriers must meet the November 2002 pooling deadline
Equally important, wireless number portability will be a critical
tool to assist in conserving scarce telephone numbers. Clarification of
Verizon's petition is important here. Verizon asserts that the FCC
should not require compliance with the LNP mandate because LNP is not
necessary for wireless carriers to pool. In its petition, therefore,
Verizon pledges that forbearance from the LNP requirement will not
prevent it from complying with the FCC's concurrent mandate that
wireless providers begin participating in number pooling by November
2002. If it is true that wireless carriers can participate in pooling
without LNP, it is contrary to numerous prior industry claims and begs
the question: why isn't the wireless industry pooling now?
As you know, the 310 area code pioneered California's pooling
effort in 2000. To date, only wireline carriers participate in
pooling--because wireless carriers claimed at the time that lack of LNP
technology prevented them from doing so. Even with aggressive pooling
in 310, it remains one of the area codes closest to number ``exhaust''
in California. The lack of numbers in 310 results in large part from
the tremendous wireless growth and the fact that wireless carriers take
numbers in blocks of 10,000 instead of 1,000 through the number pool.
Ironically, wireless growth continues in large part to drive the need
for new area codes. In the 909--area code, for example, demand by
wireless carriers for numbers outside the rationing/lottery process,
most of which the CPUC has granted, is rapidly depleting the remaining
supply of numbers in that area code and pushing it much more quickly
toward exhaust. This story will be repeated across California and the
nation as time goes on because of steady wireless demand for numbers.
If it is true that the wireless carriers can pool absent LNP
technology, at a minimum the FCC should aggressively apply fines for
wireless carrier non-compliance with meeting the November 2002 pooling
deadline. Without wireless participation in number pooling and if
future demand for numbers mirrors recent years, the North American
Numbering Plan Administrator estimates that 20 of the 25 California
area codes will exhaust by the end of 2008. The area code splits that
would be required would impose unnecessarily severe burdens, costs and
inconvenience on consumers across the nation.
Wireless LNP is critical to other number conservation methods
Assuming that wireless carriers start to pool in November 2002,
wireless failure to deploy LNP technology will limit the industry's
participation in other number conservation measures. Both individual
telephone number pooling (ITN) and unassigned number porting (UNP)
require use of full LNP capability, not just the location routing
number (LRN) platform required for number pooling. California is
interested in pursuing additional conservation measures such as ITN and
UNP, and has expressed that interest informally to FCC staff as well as
in comment to the FCC. The FCC has yet to order these further number
conservation methods. But, as with number pooling, the effectiveness of
UNP and/or ITN will be limited permanently if the wireless industry
cannot participate because it has not deployed the necessary supporting
technology, LNP.
Expanding the Areas Where Pooling and LNP are Mandatory
FCC rules only mandated LNP capability and pooling by all wireline
carriers in the top 100 MSAs. The FCC is currently considering reducing
even that requirement to carriers who receive a bona fide request to
port numbers to another carrier If the FCC eliminates the mandate for
all carriers to be LNP-capable and to participate in pooling in the top
100 MSAs, this action will seriously undermine the effectiveness of
pooling across the nation. Pooling is the single most effective number
conservation tool. Instead of reducing the extent of its prior mandate
for LNP and pooling, the FCC should expand the area in which LNP and
pooling are mandatory to include the largest 200 MSAs in the nation, or
allow all states to designate the areas where pooling is mandatory.
Increasing the contamination threshold
An increased level of allowable contamination rates for poolable
1,000-number blocks (from current 10% to 25%) helps pooling
effectiveness. Without UNP and ITN, especially, fewer numbers would be
stranded and more poolable blocks of 1,000 numbers would be available
to other pooling carriers if the FCC increased the allowable
contamination rates for poolable 1,000-blocks from 10% to 25%.
FCC survey of numbers used for data verification, etc.
The FCC should initiate and fund a survey, in key states like
California, Louisiana, and Michigan, of numbers used primarily for data
verification or which link such machines as bank teller machines or
credit card verification devices. The survey would report the number of
such users, whether that number would justify allocation of an entire
area code, and how that area code should be drawn. The survey would
exclude residential lines, and be formulated to avoid any privacy
concerns. This information would help inform whether a non-geographic
specific area codes for such uses would be appropriate.
Working with the FCC, the states have made huge strides in
preserving our area codes over the last three years--and during a time
of tremendous wireless and communication industry demand for numbers.
Local number portability, wireless pooling, UNP/ITN, expanding
mandatory pooling beyond the top 100--MSAs, and increased contamination
thresholds are further tools critical to fostering true competition in
the wireless industry and preserving the nation's area codes. Without
timely access to these tools, the states' efforts to take our number
conservation efforts to the next level are effectively curtailed. In
California, consumers and businesses likely will feel the effect
first--but ultimately consumers across the nation will suffer.
Change in Projected Exhaust Dates for California Area Codes
------------------------------------------------------------------------
Exhaust Dates*
---------------------- Change in Pooling
Area Code As of As of Exhaust Start
1999 June 2002 Dates Date**
------------------------------------------------------------------------
909......................... 2002 4Q 2003 1Q (+1) Dec-00
310......................... 2000 3Q 2003 2Q (+11) Mar-00
714......................... 2002 1Q 2004 2Q (+9) Oct-00
805......................... 2002 3Q 2004 2Q (+7) Feb-02
323......................... 2002 3Q 2004 4Q (+9) Aug-01
510......................... 2002 4Q 2004 4Q (+8) Jun-01
818......................... 2002 3Q 2004 4Q (+9) Mar-01
408......................... 2003 1Q 2005 1Q (+8) May-01
415......................... 2001 4Q 2005 1Q (+13) Jul-00
760......................... 2002 4Q 2005 2Q (+10) Aug-02
707......................... 2001 3Q 2006 1Q (+18) Mar-02
916......................... 2002 1Q 2006 1Q (+16) Jul-01
530......................... 2002 4Q 2006 2Q (+14) Sep-02
650......................... 2002 3Q 2006 3Q (+16) Jun-01
209......................... 2003 2Q 2006 4Q (+14) Apr-02
559......................... 2003 1Q 2007 2Q (+17) Aug-02
925......................... 2001 4Q 2007 2Q (+22) Sep-01
626......................... 2003 1Q 2008 2Q (+21) May-02
619......................... 2004 4Q 2008 3Q (+15) Oct-01
661......................... 2002 4Q 2008 4Q (+24) Feb-03
213......................... 2004 3Q 2011 3Q (+28) Nov-02
949......................... 2002 4Q 2011 3Q (+35) Apr-02
562......................... 2001 3Q 2015 1Q (+54) Nov-01
831......................... 2005 2Q 2015 1Q (+39) Nov-02
858......................... 2003 4Q 2018 2Q (+58) Dec-01
------------------------------------------------------------------------
* Projected Exhaust dates are determined by North American Numbering
Plan Administrator (NANPA)
** Shading indicates that pooling is in effect.
Mr. Upton. Thank you.
Mr. Manning.
STATEMENT OF JOHN MANNING
Mr. Manning. Good morning, Mr. Chairman, members of the
subcommittee. My name is John Manning, Director with Numbering
Services for NeuStar.
I am here today on behalf of NeuStar, the independent third
party selected by the FCC in 1997, to serve as the North
American Numbering Plan Administrator, or NANPA.
I greatly appreciate the opportunity to appear before you
today to talk about numbering management and NeuStar's role in
the administration of Federal and State numbering policy. As
discussed later in testimony, it is our view that Congress, the
FCC, and the State regulators have taken very strong steps to
ensure the effective mechanisms exist for promoting number
conservation.
These steps, including general numbering resource
management, semiannual utilization and forecast reporting by
service providers, State-level conservation plans and
thousands-block number pooling, have all combined to produce
positive results for consumers. We note this success, however,
with appropriate caution and encourage Congress and the
regulators to continue to prioritize this issue and ensure that
the best tools of managing numbering resources continue to be
made available.
By way of background, NeuStar serves as a neutral third
party provider of clearinghouse, number administration, and
data base services. The core responsibilities include the
administration of the North American numbering plan, local
number portability, and the thousands-block number pooling.
Today I want to talk to you about NeuStar's role with
respect to numbering management and conservation and provide
you some information on the NANP and the responsibilities of
the administrator. The responsibilities of the NANP
Administrator are numerous. I stress here, however, that the
NANPA is not a regulatory agency and does not set policy.
Rather, in administering the NANP, we follow detailed
guidelines developed through industry consensus and regulatory
directives from State public utility commissions and the FCC.
The major area code and central office functions performed
by NANPA are as follows. One, NANPA administers area codes and
central office codes and maintains associated records. Second,
NANPA collects carrier-specific data on utilization of assigned
central office codes and projects for future central office
code demand. Third, NANPA assists the industry and regulators
in their determination of whether and how a new area code
should be introduced when the supply of central office codes
exhausts in an existing area code.
Thirty-six months before an area code is expected to
exhaust NANPA begins the relief process by developing feasible
relief alternatives for consideration by the industry and
ultimately submits the results of industry deliberations to the
relevant State commissions for their consideration and final
determination.
When a State orders the introduction of an area code, NANPA
makes the assignment and, again, convenes the industry to
initiate the process of implementing the new area code. The
process associated with area code relief and implementation
takes time, and there have been numerous instances where rapid
carrier expansion and technology developments have caused
unanticipated demand.
In these instances, area codes may be determined to be in
jeopardy, meaning that the supply of central office codes may
exhaust before a new area code can be introduced. Such a
condition often leads to the rationing of the remaining supply
of central office codes, with a fixed number of codes to be
assigned each month to applicants until a new area code can be
introduced. NANPA, along with the regulators and the industry,
have worked very hard to avoid these situations.
Another area where NANPA helps the regulatory conservation
effort involves supplying the regulators with data to help them
determine which policies to adopt. The data help the regulators
work with NANPA to understand the remaining life of an area
code and take additional steps to deter exhaust.
Finally, one area that we have seen State and Federal
policy have had an impact on the life of area codes involves
thousands-block number pooling. Pooling began at the State
level in the form of State trials in the late 1990's, and
recently industry has begun the implementation of FCC-mandated
national thousands-block pooling.
In the relatively short period since pooling was
introduced, we have seen positive impact on area code exhaust.
Specifically, the number of area codes, including the Illinois
847, and Maine's 207, were able to delay exhaust significantly,
in large part due to the implementation of pooling.
In conclusion, I would like to say that NeuStar, as North
America's Numbering Plan Administrator, number portability, and
the thousands-block numbering pooling administrator, performs a
wide range of tasks and contributes a wealth of information and
expertise in the support of the legislators and Federal-State
regulators who develop, adopt, and implement numbering
policies.
Based upon our experience, we firmly believe that the
Congress and regulators have taken very important steps to
permit the efficient management of the numbering plan in this
country. The tools I have discussed here today have all
combined to deliver positive results for consumers.
We encourage Congress and the regulators to stay the course
and continue to adopt policies that enable us to manage these
critical resources in a stable and predictable fashion,
regardless of trends or the economy or service innovation.
There will always be peaks and valleys in the demand for
numbering resources. By using the tools available today, and by
working with legislators and regulators, we can work to
minimize the impact of these fluctuations in demand on area
code exhaust, while ensuring numbering resources are available
regardless of service or application that consumers demand.
I thank the subcommittee for giving me the opportunity to
testify today, and I look forward to working with you on these
important issues.
[The prepared statement of John Manning follows:]
Prepared Statement of John Manning, NeuStar, Inc.
introduction
Mr. Chairman, Mr. Markey, members of the Committee, I am John
Manning, Director, Numbering Services, NeuStar, Inc. I am here today on
behalf of NeuStar, the independent third party selected by the Federal
Communications Commission (FCC) in 1997 to serve as the North American
Numbering Plan Administrator or NANPA.
I greatly appreciate the opportunity to appear before you today to
talk about numbering management and NeuStar's role in the
administration of federal and state numbering policy. As discussed
below in greater detail, it is our view that Congress, the FCC and the
state regulatory authorities have taken very strong steps to ensure
that effective mechanisms exist for promoting number conservation.
These steps, including general numbering resource management, data
reporting requirements, state level conservation plans, and the recent
addition of National Thousands Block Number Pooling, have combined to
produce positive results for consumers. We note this success, however,
with appropriate caution and encourage Congress and the regulators to
continue to prioritize this issue and ensure that the best tools for
managing numbering resources continue to be made available.
background on neustar, inc.
NeuStar is a Washington, DC-based company that serves as a neutral
third-party provider of clearinghouse, number administration, and
database administration services. Throughout our young life, we have
delivered these essential services and provided highly reliable expert
support for state and federal regulators and members of Congress as
well as industry players in this increasingly diverse and complex
telecommunications market. We have a team of professionals with
extensive experience in clearinghouse and data management, numbering,
and mission critical infrastructure technology. Our core
responsibilities include the administration of the North American
Numbering Plan (NANP), Local Number Portability (LNP), and the National
Thousands-Block Number Pools.
We recognize the seriousness of the public trust that has been
given to us and have implemented our Congressional and regulatory
requirements faithfully, resulting in numbering resource management
that is without question the most efficient and pro-competitive in the
world.
summary
Today I want to talk with you about NeuStar's role with respect to
numbering management and conservation, and provide you some background
on the NANP and the responsibilities of the administrator. First, this
testimony addresses how the numbering plan works along with some
history of how we transitioned from the first area code assignments in
1947 to today. Second, I will discuss the administrator's
responsibilities and provide background on how the area code
assignments process developed into the process that we use today.
Third, I will highlight several of the policies and techniques the
regulators have adopted that are designed to ensure that numbering
resources are managed to the greatest benefit of the public. Finally, I
will discuss the conservation tools available and steps involved with
identifying and handling potential exhaust of area codes.
A key point to make up front is that important strides have been
taken in recent years to strengthen the management of numbering
resources in the United States. The Telecommunications Act of 1996 was
important because for the first time Congress required that numbering
administration be handled by an impartial entity. This decision has
resulted in centralized, cost effective and efficient pro-competitive
handling of numbering resources for North America, making our system
second to none in the world.
In addition, the state and federal regulatory authorities have
taken important steps to identify area codes in jeopardy and to provide
NANPA with tools, such as mandatory utilization and forecast reporting
by service providers, state level conservation plans, and state and
national thousands block number pooling, all of which have helped
manage the supply of numbers throughout the country.
As NANPA, we report on usage and exhaust levels of area codes and,
using the information available to us, project the exhaust of
individual area codes. Even with the data, it is still very difficult
to predict what the next demand trend will be. History has shown us
that there will certainly be innovation that will lead to growth and
increased demand for numbers from unexpected places. History has also
shown us that this growth and demand can have serious implications for
area code exhaust. Congress and the regulatory authorities have,
however, provided us with critical tools to enable the efficient
management of numbering resources regardless of the trends evident in
the marketplace. These tools, including semi-annual number utilization
and forecast reporting by carriers, thousands block number pooling, and
multiple state-level conservation techniques such as rate center
consolidation and other administrative practices, have helped promote
the stable and successful management of numbering resources. We thank
you for your efforts and continued support and attention to these
important issues.
the north american numbering plan: background
In 1947, AT&T and Bell Laboratories invented the North American
Numbering Plan to standardize telephone numbers throughout the U.S. and
make it possible for customers to dial long distance calls. From 1947
through 1984, AT&T administered the area codes, and its Bell Company
subsidiaries managed the supply of central office codes within their
respective service areas. In 1984, with the break-up of AT&T and the
advent of long distance competition, area code administration moved
from AT&T to Bellcore (now Telcordia). The seven regional Bell
Operating Companies (BOCs) took over administration of central office
codes used by all telephone companies operating in their territories.
In 1997, pursuant to the mandate of the Telecommunications Act of 1996,
the FCC designated Lockheed Martin's Information Management Services
division (now NeuStar) as the impartial entity to administer
telecommunications numbering, both area codes and central office codes,
and to make such numbers available to users on an equitable basis. The
FCC selected NeuStar for a 5-year term through a competitive bidding
process.How the North American Numbering Plan Works
Technically speaking, the term ``North American Numbering Plan''
refers to the 10-digit format of phone numbers and the process by which
the numbers are administered.
The format of a NANP number looks like this: NXX-NXX-XXXX
In the above string of characters, the ``N'' represents any 2-9
digit and X represents any digit from 0-9. The first ``NXX'' is called
the Numbering Plan Area (NPA), commonly referred to as an area code.
The second ``NXX'' is called the central office code, often referred to
as the prefix. The final ``XXXX'' is called the line number. The NANPA
administers area codes and central office codes, and individual service
providers administer line numbers within the central office codes
assigned to them. Nineteen separate North American countries share the
resources of the NANP. In addition to the U.S., participants in the
NANP include Canada, Bermuda, and many of the Caribbean islands.
area code administration
In 1947, there were 86 area codes assigned to start the NANP. In
1995, a long anticipated and planned change in the formatting of phone
numbers made many new area codes available. Simultaneously, the entry
of new carriers into local markets, the dramatic growth in the wireless
sector, technological innovation, the introduction of new services such
as electronic facsimile and Internet access (requiring second phone
lines), as well as major legislative and regulatory shifts, including
the passage of the Telecommunications Act of 1996, greatly increased
demand for numbers.
Each year, the NANPA conducts a study to predict how long each
existing area code will last and how long it will be before we run out
of area codes and have to expand the available NANP. The most recent
study shows that with the timely and rigorous application of
conservation techniques we can extend the life of the Plan until 2025.
responsibilities of the nanp administrator--implementing the tools for
number resource management
The responsibilities of the NANP Administrator are numerous. I
highlight here and explain in detail below, those functions that relate
to area code exhaust. This information is provided to educate the
Subcommittee on the process used to introduce new area codes when
necessary, and the NANPA's role in the process. I stress again here,
however, that the NANPA is not a regulatory agency and does not set
policy. Rather, in carrying out the administration of the NANP, we
follow detailed guidelines developed through industry consensus and
regulatory directives from state public utility commissions and the
FCC.
The federal and state regulators are responsible for identifying
and providing NANPA with the tools necessary to manage the numbering
resource effectively. In many jurisdictions these tools have had a
positive impact on numbering management. The major area code and
central office code functions performed by NANPA are as follows:
1. NANPA administers area codes and central office codes, and maintains
the associated records. Most of this information is available
from NANPA's web site at www.nanpa.com.
2. Through an FCC-mandated process called Number Resource Utilization
and Forecasting (NRUF), NANPA collects carrier-specific data on
utilization of assigned central office codes and projections
for future central office code demand. NANPA uses the data to
forecast the exhaust of each area code and of the NANP as a
whole. As detailed below, NANPA shares the utilization and
forecast data with regulators.
3. NANPA assists the industry and regulators in their determination of
whether and how a new area code should be introduced when the
supply of central office codes exhausts in an existing area
code. This activity, called ``Relief Planning,'' is discussed
in greater detail below.
the relief planning process
Thirty-six months before an area code is expected to be exhausted,
NANPA begins the relief process by developing several feasible
alternative relief methods for consideration by the industry, convening
a meeting for the industry to evaluate the alternative relief plans or
propose plans of their own. The purpose of the meeting is to allow
industry members to reach consensus on at least one plan as the
preferred method of relief for the area code in question. On behalf of
the industry, NANPA submits the results of industry deliberations to
the relevant state commissions for their consideration and final
determination.
In addition to industry input provided through NANPA, many states
conduct public hearings to obtain consumer input on the best plan to
implement. A state may elect to implement one of the options in the
industry's proposed relief plan or it may elect instead to take a
different approach.When a state orders the introduction of a new area
code, NANPA makes the assignment and again convenes the industry to
begin the process of implementing the new area code.
The process associated with area code relief and implementation
takes time, and there have been instances when rapid carrier expansion
and technological developments have caused unanticipated demand. In
these instances, area codes may be determined to be in ``jeopardy,''
meaning that the supply of central office codes could exhaust before a
new area code could be introduced. When an area code is declared to be
in jeopardy, the NANPA and the industry convene to reach consensus upon
procedures for use by NANPA to prevent number exhaust. Normally, these
procedures involve rationing the remaining supply of central office
codes, with a fixed number of codes to be assigned each month to
applicants selected by lottery.
neustar's role in conservation initiatives: the importance of data
collection and the impact of thousands block number pooling
The FCC and state regulators develop conservation policy. When
requested to do so by the regulators, the NANPA and NeuStar have
provided support and expertise to these conservation efforts. One
specific area where the NANPA helps involves supplying the regulators
with data to help them determine which policies to adopt. The data help
the regulators work with NANPA to determine whether and when to declare
an area code in jeopardy and take additional steps to deter exhaust.
Another area where we have seen an impact involves thousands block
number pooling. Pooling began at the state level in the form of state
trials. In 2001, the FCC mandated national thousands block number
pooling and, pursuant to a competitive bidding process, selected
NeuStar as the neutral third party administrator for pooling. In a
relatively short period, we have seen some positive impact due to the
implementation of pooling. Specifically, a number of area codes, such
as Illinois' 847 and Maine's 207, were both able to delay exhaust
significantly due in large part to the implementation of pooling.
conclusion
NeuStar, as the administrator of the North American Numbering Plan,
Number Portability, and National Thousands Block Number Pooling,
performs a wide range of tasks and contributes a wealth of information
and expertise in support of the legislators and federal and state
regulators who develop, adopt and implement numbering policies. We look
forward to continuing to provide the support and expertise necessary to
the members of this Committee as well as the state and federal
regulators.
Based on our experience as the numbering administrator for NANP as
well as the Administrator of Number Portability and National Thousands
Block Number Pooling, we firmly believe that the Congress and
regulators have taken very important steps to permit the efficient
management of the numbering plan in this country. The tools discussed
here, including independent, neutral third party administration, data
collection, and state-level relief planning as well as thousands block
number pooling, have all combined to deliver positive results for
consumers and small business users. We encourage Congress and the
regulators to stay the course and continue to adopt policies that
enable us to manage these critical resources in a stable and
predictable fashion, regardless of trends in the economy or service
innovation. There will always be peaks and valleys of demand for
numbering resources. By using the tools available today and by working
with legislators and regulators, we can work to minimize the impact of
these fluctuations in demand on area code exhaust while ensuring that
numbering resources are available regardless of the service or
application that consumers demand.
I thank the Subcommittee for giving me the opportunity to testify
today and look forward to working with you on these important issues.
Mr. Upton. Thank you very much.
Ms. Miller.
STATEMENT OF ANNA MILLER
Ms. Miller. Thank you, Mr. Chairman and committee members.
I am Anna Miller, Director of Numbering Policy for VoiceStream
Wireless. Additionally, I also serve on the FCC's North
American Numbering Council, Federal Advisory Committee. I also
participate at the Cellular Telecommunication Industry
Association's Numbering Advisory Committee.
I will endeavor in my remarks today to represent the views
of the wireless companies who have actively engaged in
numbering issues at the national level. Telephone numbers are a
scarce resource that wireless carriers need for continuing
growth and competition that benefit more than 130 million
Americans.
The growth of the telecommunication industry, both wireline
and wireless, in the late 1990's resulted in high demand for
telephone numbers and the exhaust of an unprecedented number of
area codes between 1998 and 2001. The results of number exhaust
are unacceptable for the public and public policy.
However, due to the efforts of the FCC, State, public
utility commissions, and industry, all carriers are now
utilizing numbering resources more efficiently, and the threat
of near-term exhaust of the North American numbering plan has
passed.
In the most recent projections, the North American
Numbering Plan Administrator now estimates that the North
American numbering plan exhaust to extend at least until 2025.
NANP exhaust is not foreseeable for at least the next 20 years,
and most likely much longer. The demand for numbers has
declined significantly due to the conservation measures such as
reclamation, 1,000 block pooling, utilization, and utilization
requirements.
On June 5, 2002, the North American Numbering Plan
Administrator released its numbering resource utilization
forecast and NPA exhaust analysis, which now extends the
exhaust date of over 200 area codes.
Most of the area codes that are near exhaust today have
been in that State for years, with their lives artificially
extended by number rationing. It is also clear that for certain
individual area codes that have already exhausted and require
immediate relief, pooling measures will not correct the
jeopardy.
In short, there comes a time, even with prudent
conservation, that all assignable numbers in an existing area
code will be used, and relief through the implementation of a
new area code is needed. Number pooling has proved to be a
crucial element in extending the lives of area codes across the
country, and we believe that pooling will be the Viagra for the
wireless carriers to have adequate numbering resources.
The wireless industry is committed to 1,000 block pooling,
and is devoting considerable resources to meet the technical
challenges surrounding a successful implementation by November
24, 2002. The effectiveness of number pooling will be maximized
by ensuring that both wireless and wireline carriers are served
out of the same area code, so they can pool numbers with each
other.
The 1996 Telecommunications Act gave the FCC exclusive
authority over portions of the North American numbering plan
that pertain to the United States. Congress also required that
telephone numbers be made available on an equitable basis. In a
series of orders, the FCC delegated important parts of its
jurisdiction to the States, primarily the responsibility for
area code relief.
However, the FCC repeatedly has instructed the States that
numbering must be available on a non-discriminatory basis, and
that different dialing requirement are discriminatory, and that
rationing is not a substitute for area code relief.
This year, the FCC allowed States to submit proposals for
specialized overlays, such as technology-specific or service-
specific overlays. The FCC also provided specific guidance
about how it would consider these proposals, including a
provision disfavoring permanent overlays for non-pooling
carriers, because segregating carriers after they become
pooling capable prevents them from sharing numbers with other
carriers and maximizing the benefits of pooling.
In conclusion, the numbering crisis of the late 1990's
created burdens for consumers, businesses, and carriers. Thanks
to the decisive action of the FCC, State utility commissions,
and carriers, the national numbering crisis has passed. Number
pooling, reclamation, usage reporting, and utilization
requirements have dramatically decreased the net new
assignments of numbers to carriers.
The wireless industry is committed to beginning wireless
number pooling by November 24, 2002, and looks forward to
continuing cooperation with the FCC, North American Numbering
Plan Administrator, and pooling administrator, and State
commissioners, to ensure adequate numbering resources are
available.
The wireless industry appreciates this opportunity to
testify before the subcommittee, and I look forward to
answering any questions you may have.
Thank you.
[The prepared statement of Anna Miller follows:]
Prepared Statement of Anna Miller, Director of Numbering Policy,
VoiceStream Wireless
Thank you for the opportunity to appear before you today. I am Anna
Miller, Director of Numbering Policy for VoiceStream Wireless.
Additionally, I serve as one of two wireless industry representatives
on the FCC's North American Numbering Council (``NANC'') Federal
Advisory Committee. I also participate on the Cellular
Telecommunication and Internet Association's (CTIA) Numbering Advisory
Committee. I will endeavor in my remarks today to represent the views
of those wireless companies who have been actively engaged in numbering
issues at the national level.
Numbers are like radio frequency spectrum--a scarce resource
wireless carriers need for continuing the growth and competition that
today benefits more than 130 million Americans. In addition to the
growth in commercial mobile radio service (``CMRS'') over the past five
years, there has been an explosion of demand for the services offered
by new wireline entrants. Wireless phones and devices, fax machines,
data modems to reach the Internet, personal 800 numbers, etc., were
unknown or unaffordable for the average American just a few years ago.
Today, the telecommunications revolution has brought these new and
improved services to millions more Americans. We should not lose sight
of the fact that this increased demand is a positive for our economy
and our quality of life.
Wireless carriers support the efficient utilization of this scarce
resource. We are committed to support and begin the implementation of
thousand-block number pooling by November 24, 2002. I note that the
Cellular Telecommunications & Internet Association (CTIA), representing
all categories of commercial wireless carriers, stated before the FCC
on April 25, 2002: ``The FCC has stated, and CTIA agrees, that timely
implementation of number pooling is critical--both for number resource
optimization and to provide wireless carriers with the numbering
resources they need to grow and compete. CTIA and its members are
committed to meeting the FCC's November 24th deadline for number
pooling.'' Voicestream and other wireless carriers are working
diligently to be ready to accept phone numbers in blocks of 1000 in
order to gain access to an adequate numbering supply.
The implementation schedule calls for the roll-out of pooling to be
completed by March 2004; however numerous technical challenges
currently exist and will have to be addressed through trial and error
as we work to successfully complete number pooling.
Wireless carriers are committed to following the established
utilization thresholds to acquire additional numbering resources. As of
June 30, 2002, the utilization threshold is aggressively held at 65
percent, which means that no carrier can acquire additional number
resources unless they reach a 65 percent utilization rate of the
numbers that they have already been allocated. Industry worked with
FCC, state officials and others to raise the utilization rate to 65
percent. This target is enforced with real teeth--meet it or no new
numbers. Wireless carriers periodically report their utilization needs
and rates of utilization to the North America Numbering Plan
Administrator (``NANPA''). I note that the 65 percent rate represents a
real increase in the utilization thresholds of just a few years ago.
This is illustrated by the significant extension in the projected date
of number exhaust, combined with pooling initiatives, resulting in an
extension from 2012 to at least 2025.
It is important to note that the 65 percent rate represents real
efficiency in number utilization. For a variety of reasons, not all
numbers can be used. For example, numbers beginning with ``0's'' and
``1's'' are not used because they have special purposes. Numbers
referred to as ``N11'' numbers such as 411, 911 are not used, for they
too have special purposes. There are other practical reasons why 100
percent utilization is impossible--for example, numbers are
``reserved'' so, for example, a small business can grow and have the
ease and convenience of a consecutive block of numbers, even if they do
not demand all the numbers when service is initiated. Indeed, 65
percent utilization is considered very high, taking into consideration
all assignable numbers.
Wireless carriers are uniquely efficient due to our large coverage
areas and our growth, resulting in fewer stranded numbers. To
illustrate, a new block of numbers granted to a wireless carrier here
in the Washington, D.C. area can be used by any of the millions of
potential customers in the Washington, D.C. service area. The large
pool of potential customers, and our rapid growth, limits the amount of
time any number assigned to a wireless carrier sits on the shelf
waiting for a customer.
Due to the efforts of the FCC, state officials and industry,
wireless (indeed all) carriers are utilizing number resources more
efficiently, and the threat of near term exhaust of the North American
Numbering Plan (``NANP'') has passed. NANPA released a report in June
summarizing the results of all area codes and the overall picture is
clear that area code exhaust is improving dramatically. NANP exhaust is
not foreseeable for at least twenty years, and most likely much longer.
In its most recent projections, NANPA's estimates for NANP exhaust
extend into 2025 at the earliest, and 2034 at the latest. Notably, this
analysis is based on a constant projected demand of 11,600 new codes
per year, with no consideration made for returned codes, or net code
assignment. In 2001, net code assignment was approximately 5,500, well
under 11,600 per year. To the extent net code assignment remains under
11,600 per year, NANP exhaust could be extended for decades beyond
present calculations. A closer review of the recent data suggests that
the assumed 11,600 codes per year may be too high. Whereas Central
Office code assignments averaged more than 1,300 per month in the first
half of 2000, monthly code assignments averaged less than 1,100 per
month in the latter half of the year. This downward trend continued
into 2001, where code assignments averaged less than 700 per month in
the second half of the year. For 2002, NANPA is on pace to assign only
8,200 codes.
NANPA's most recent area code analysis further confirms the success
of the Commission's optimization measures. On June 5, 2002, NANPA
released its Number Resource Utilization and Forecast (``NRUF'') and
NPA Exhaust Analysis, which extends the exhaust date of 215 NPA codes,
seventeen by more than twelve years.The 1996 Telecommunications Act
unambiguously gave the Federal Communications Commission ``exclusive
authority''' over the portions of the North American Numbering Plan
that pertain to the United States.1 This national framework
for numbering limits the authority that states can exercise over
numbering administration.
---------------------------------------------------------------------------
\1\ Section 251(e)
---------------------------------------------------------------------------
Congress also required that telephone numbers be made available on
an equitable basis; and imposed on all Local Exchange Carriers ``the
duty to provide dialing parity to competing providers of telephone
exchange service and telephone toll service, and the duty to permit all
such providers to have non-discriminatory access to telephone numbers .
. .'' 2 In a series of orders, the FCC delegated important
parts of its exclusive jurisdiction to the states; however, the FCC
repeatedly has instructed the states that numbers must be made
available on a nondiscriminatory basis, that disparate dialing
requirements are discriminatory, and that rationing is not a substitute
for area code relief.3 In short, there comes a time, even
with prudent conservation, that all of the assignable numbers in an
existing area code will be used, and a new area code must be created.
---------------------------------------------------------------------------
\2\ Sec. 251(b)(3).
\3\ In re Numbering Resource Optimization, CC Docket No. 99-200,
Second Report and Order (rel. Dec. 29, 2000) (``Second Report and
Order''). See also In Re Numbering Resource Optimization, CC Docket No.
99-200, FCC No. 00-104, Report and Order and Further Notice of Proposed
Rulemaking (rel. March 31, 2000) (``Numbering Resource Optimization
Order'' or ``NRO Order'').
---------------------------------------------------------------------------
Today, imminent NANP exhaust is no longer an issue. For example, in
California, wireline pooling implementation has improved the forecasted
exhaust dates for 22 of the 25 area codes within the state. But, is
also clear that for certain individual area codes which have already
``exhausted'' and require immediate relief--pooling measures will not
correct the jeopardy.
The results of number exhaust are unacceptable for the public and
public policy. For example, if wireless carriers are out of numbers,
carriers either cannot sign up new customers, or must assign new
customers phone numbers from a distant area code. This can result in
toll charges for calls from a wireline phone to a wireless user at the
same address, not to mention the disparate dialing (seven digits for
wireline to wireline; ten digits for wireline to wireless)--which the
FCC repeatedly has found to be discriminatory and impermissible under
the Communications Act. Conservation methods will not work when all of
the codes in an area code have been assigned. The only remedy is
``relief,'' i.e., the creation of a new area code through either a
split or an overlay. For particular area codes around our nation, no
conservation measure will help.
Different methodologies for creating new area codes are referred to
as ``splits'' and ``overlays.'' Area code splits and overlays each have
advantages and disadvantages. Approximately one-half of the states now
have overlay codes, including Maryland and Virginia in this area. After
a one-time adjustment to 10-digit dialing, future area code relief is
``painless''--new area codes may be required, but the change from 7-
digit dialing to 10-digit dialing would have been accomplished. In
fact, some of us are old enough to remember the conversion from 5-digit
local dialing to 7-digits. With overlay codes, ``0'' and ``1'' are used
as toll indicators.
Area code splits preserve 7-digit dialing for ``local'' calls
within the area code. But about half of the users are assigned a new
area code, and must change their phone number. Calls to the legacy code
require ten digits. And, for technical reasons, splits can't reuse
numbers that are assigned in the adjacent code, needlessly stranding
numbering resources. And, of course, additional area code splits
duplicate these issues.
The wireless industry supports both overlays and geographic splits,
whichever is most appropriate for the area--but there must be timely
relief. The wireless industry supports the use of service overlays in
appropriate circumstances and in accordance with the guidelines
established by the FCC.4 Otherwise, a service overlay wastes
millions of numbers. A Technology-Specific Overlay should be
transitional until wireless carriers are pooling-capable. Segregating
wireless carriers in a separate area code cannot be justified beyond
the implementation date of wireless pooling since a service overlay
that extends beyond pooling implementation segregate wireless carriers
in a service overlay after they have begun to participate in numbering
pooling. Wireless carriers would likely be required to obtain new
numbering resources exclusively from the numbers available for use in
the Service-Specific Overlay, thus, precluding wireless carriers from
enjoying the benefits of pooling.
---------------------------------------------------------------------------
\4\ For example, consumers have enjoyed the benefits of 800
numbers, which have proven to be an efficient allocation of numbering
resources.
---------------------------------------------------------------------------
In areas where pooling has been implemented and still the area code
is near exhaust, the wireless industry supports All Service Overlays
provided that there is no ``take back'' of legacy wireless codes. The
premature assignment of a new area code would accelerate the exhaust of
the North American Numbering Plan (``NANP''). For example, the
Connecticut Department of Public Utility Control recently asked the FCC
for authority to implement a transitional, technology-specific overlay
in Connecticut for wireless and certain wireline services. While
Connecticut has approximately 3.4 million residents, a new NPA code
contains approximately 8 million numbers. In Connecticut, a service
overlay would involve the activation of a new NPA code while millions
of numbers went unused within the existing NPA, frustrating existing
number conservation measures. The wireless industry supports the use of
service overlays under the condition that ten-digit dialing is
implemented to avoid the discriminatory effects of the service overlay.
Some have suggested that porting--taking one's number with you when
one changes service providers--directly affects number conservation
efforts. To make this suggestion fails to take into account the
uniquely competitive environment of the wireless industry and the
considerable challenges posed by a mobile, rather than stationary
wireline communications devices. In reality, number pooling provides
considerable more efficiency in number conservation, whereas the local
number portability (LNP) lends little to the practice of actually
conserving numbers.
Back in February of this year, many members of this committee sent
a letter to the FCC requesting a delay in implementation of the
portability mandate until the successful implementation of thousand-
block number pooling. This is a common-sense approach that recognizes
that it is number pooling, not porting, which will achieve the
significant gains in number conservation as well as the immense
technical difficulty in attempting to implement pooling and porting
simultaneously.
The wireless industry is committed to thousand-block number pooling
and will be devoting considerable resources to correct the unforeseen
technical challenges surrounding a successful implementation. But, just
as one wouldn't want to buy a new personal computer, plug it in,
install the basic programs and then install more advanced software
without knowing if the PC's basic programs are working as they should;
so too, do carriers need to be assured that the intricate technical
systems installed for pooling will work smoothly, successfully and
efficiently BEFORE the move on to additional technical improvements for
other consumer services and conveniences such as porting.
CTIA believes that the member's letter remains just as pertinent
today, as potential new problems arise impacting the carriers
simultaneous implementation of E-911. Such questions as to how Public
Safety Answering Points will be able to handle 911 calls from wireless
telephone numbers that have been ported need to be answered--and this
is most effectively and efficiently done correctly if pooling is first
undertaken and completed successfully.
In conclusion, the national numbering crisis has passed, though in
isolated areas the numbering crisis remains real and pressing. Today's
environment reflects healthy growth and competitive demand. Wireless
carriers are committed to being prudent shepherds of numbering
resources. We have a national numbering plan and we need uniform
national administration of this critical resource. The wireless
industry is committed to beginning Wireless Number Pooling
implementation by November 24, 2002 and looks forward to continuing
cooperation with the FCC, NANPA and State Commissioners to ensure
adequate numbering resources are available.
The wireless industry appreciates the opportunity to testify before
the Subcommittee. I look forward to answering any questions you may
have. Thank you.
Mr. Upton. Thank you.
Mr. O'Connor.
STATEMENT OF MICHAEL O'CONNOR
Mr. O'Connor. Good morning, Mr. Chairman and members of the
subcommittee. And thank you for giving Verizon the opportunity
the opportunity to present its views on area code relief.
While Verizon is a member of USTA, my comments this morning
will be those representing Verizon Corporation.
My name is Michael O'Connor, Director of Federal Regulatory
Policy and Planning for Verizon, and I also am a member of the
North American Numbering Council.
Since 1995, the North American Numbering Plan Administrator
has assigned 138 new area codes, raising the national total to
264. By way of contrast, between 1984 and 1994, we added only
18 new area codes. In my view, the recent spike in the number
of new area codes has been driven by two factors.
The first of these factors is an expansion in the number of
technologies that use telephone numbers. For example, Internet
access, pages, wireless, facsimile machines, automated teller
machines, new services such as unified messaging services, all
serve to draw down the available pool of telephone numbers, and
thereby accelerate the need for area code relief, and hasten
the point at which the North American numbering plan would run
out of area codes. The industry calls this North American
numbering plan exhaust.
The second factor accelerating the use of area codes has
been the advent of competition. As new and multiple competitive
local exchange carriers enter the market, they need to be
assigned their own pool of telephone numbers, so that they can
serve their customers.
The 264 currently assigned area codes contain about 2
billion numbers, yet in 2000 the administrator of the North
American numbering plan had estimated that without new measures
to conserve numbers or expand the number of digits in the
dialing patterns that the last available codes might be
assigned as early as 2007. The projected exhaust date was 2015.
Sounds counterintuitive. How can billions of telephone
numbers not be enough? The answer to this puzzle is twofold. It
is geography, and it is number assignment principles. Let me
begin with the geography.
The second 3 digits of a 10-digit telephone number are
known as the exchange or central office code. For our purposes
today, I will sometimes refer to the local exchange code as the
three-digit prefix. Each local exchange code, or three-digit
prefix, contains 10,000 telephone numbers.
The local exchange code tells the network where you live
and, therefore, how to rate the call, whether it be local call
or a toll call. Each local exchange has at least one unique
three-digit prefix identifying to the network the geography
being served by that telephone number.
This leads to the number assignment principles piece of the
puzzle. Many States have hundreds of local exchanges, each
exchange requiring at least one three-digit prefix for each
carrier serving the exchange. Each carrier would be assigned
10,000 telephone numbers even if it were only serving, say, 50
customers.
These number assignment principles, which are economically
efficient in a single carrier environment, prove more wasteful
with the advent of competition. You can see how, in the late
1990's, the need for new area codes, accelerated by technology,
began to reach epidemic proportions with the advent of local
competition.
Well, that's the history. The salient questions for this
morning are, however, what's been done to address the problem?
And what is the current prognosis?
As the chairman has pointed out, and Ms. Attwood and others
have talked about, the centerpiece of the remedy allowed
numbers to be allocated in blocks of 1,000 as opposed to
10,000. This new allocation scheme mitigated the assignment
principle problems outlined above, but at a total cost to
industry of something in the neighborhood of half a billion
dollars.
So was it worth it? Well, in May of 2001, the North
American Numbering Plan Administrator's new forecast of the
exhaust of the North American numbering plan was 2025. And next
month the NANPA will report to the NANC on its 2002 NANPA
exhaust forecast, and it is widely expected that the new date
will be somewhere in the neighborhood of 2035.
There is a temptation to say that that is the end of the
story and North American numbering plan exhaust will be a
project for another generation. And to an extent, that's true.
Carriers, and ultimately consumers, should not be required to
bear any more costs to delay NANPA exhaust for the foreseeable
future.
Nonetheless, growth is a reality, and the geography of
numbering dictates that area code relief, while abating, is
still necessary. The FCC made clear that the new allocation
scheme was a technology for improving the efficacy by which
telephone numbers are used and should not be used as a
substitute for timely area code relief when it becomes
necessary.
Given this reality, the last question I will address is:
how can area code relief be accomplished in the least
disruptive way for consumers, carriers, and regulators? In my
opinion, nationwide 10-digit dialing would be a very productive
endeavor, particularly in terms of the impact on consumers
faced with area code relief.
One of the primary reasons area code relief is disruptive
to consumers is that in the case of an area code split--and
Congressman Markey has outlined the two forms of it already--
about half of the customers need to take a new number. They
have to get a new area code, and they are assigned a new
number.
In the case of an area code overlay, the good news is the
customers get to keep their numbers. The bad news is you have
to move to a 10-digit dialing environment.
Generally, customers have ample time--about 1 year--to
prepare for this type of dialing change. In today's world, 10-
digit dialing is not an onerous requirement. Customers already
dial 10 digits for long distance calls, for most calls to and
from cellular telephones. And, additionally, customers who use
company-based voice mail systems, telephone credit card
services, dial-around services, are used to dialing more than
10 digits, sometimes much more than 10 digits.
Verizon's experience where area code overlays have been
implemented--and this covers millions of customers--is that 10-
digit dialing with an overlay, once it has been implemented, is
a non-event. It seems to be more of a concern ahead of time
than it ever winds up to be afterwards.
It then becomes easy to implement additional overlays with
zero additional disruption to consumers, and there is no
emotional stress for the members of the subcommittee.
Other conservation methods you have heard about today, such
as individual telephone number pooling or unassigned number
porting, would cost the industry billions of dollars to
implement, but would not solve the underlying problem of the
local exchange geography, and, therefore, would not appreciably
delay the need for area code relief.
This concludes my formal testimony. Thank you for giving me
the opportunity today to address the subcommittee.
[The prepared statement of Michael O'Connor follows:]
Prepared Statement of Michael O'Connor, Verizon Communications
Good morning Mr. Chairman and members of the Subcommittee. And
thank you for giving Verizon the opportunity to testify and present its
views on Area Code Exhaustion.
My name is Michael O'Connor, Director of Federal Regulatory Policy
Planning for Verizon. In that capacity, one of my responsibilities is
managing numbering policy issues throughout the Verizon footprint.
Additionally, I currently represent Verizon on the North American
Numbering Council (the NANC) which is a Federal advisory group helping
the FCC with policy questions related to administration of the North
American Numbering Plan (NANP). As an initial matter, l'll define the
North American Numbering Plan--it is the ten-digit model of area codes
and telephone numbers that govern the routing and rating of telephone
calls in the United States. Simply put, it's why we dial seven or ten
digits to complete a call. And the Administrator of that plan works
with industry and regulators to assign new area codes as needed.
Since 1995, the North American Numbering Plan Administrator (NANPA)
has assigned 138 new area codes, raising the national total to 264. By
way of contrast, between 1984 and 1994, we added only 18 area codes. In
my view, the recent spike in the number of new area codes has been
driven by two factors.
The first of these factors is an expansion in the number of
technologies that use of telephone numbers. For example, wireless
phones, pagers, internet access, facsimile machines, automated teller
machines, credit card verification boxes, and newer telephone number
uses such messaging services all serve to draw down the available pool
of telephone numbers and thereby accelerate the need for area code
relief and hasten the point at which the North American Numbering Plan
runs out of area codes. The industry calls this North American
Numbering Plan Exhaust.
The second factor accelerating the use of area codes has been the
advent of competition. As new and multiple Competitive Local Exchange
Carriers (CLECs) enter the market, they need to be assigned their own
pool of telephone numbers so they can serve their customers.
A touch of telephone numbering history will prove useful here. The
current numbering scheme using area codes was adopted by AT&T in 1947.
The goal at the time was to permit automated routing of long distance
phone calls, preventing the need for operators to assist on the routing
of the calls. Under the number allocation system that developed to
support this automated system, telephone numbers were assigned to local
telephone exchange carriers on the basis of physical geography. The
first three numbers in a ten-digit telephone number represent the area
code. Each of the 344 currently assigned area codes has 7.7 million
numbers each. Simple mathematics would suggest that the 2.6 billion
available telephone numbers should be enough. Yet in 2000, the
Administrator of the North American Numbering Plan had estimated that
without new measures to conserve numbers or expand the number of digits
in the dialing patterns that the last available area codes might be
assigned as early as 2007. The projected exhaust date was 2015.
Sounds counterintuitive--how can billions of telephone numbers not
be enough? The answer to the puzzle is two-fold--geography and number
assignment principles.
Let's begin with geography. The second three digits of a ten-digit
telephone number are known as the exchange or central office code. For
our purposes today, I will sometimes refer to the local exchange code
as the three-digit prefix. Each local exchange code or three-digit
prefix contains 10,000 telephone numbers.
The local exchange code tells the network where you live and
therefore, how to rate the call--local or toll. Each local exchange has
at least one, unique three-digit prefix--identifying to the network,
the geography being served by that telephone number.
This leads to the number assignment principles piece of the puzzle.
Many states have hundreds of local exchanges, each exchange requiring
at least one three-digit prefix for each carrier serving the exchange.
Each carrier would be assigned 10,000 telephone numbers in each
exchange it served, even if the carrier were only serving 50 customers.
These number assignment principles, which were economically efficient
in a single carrier environment, proved more wasteful with the advent
of competition. You can see how, in the late 1990's, the need for new
area codes, accelerated by technology, began to reach epidemic
proportions with the advent of local competition.
Well that's the history. The salient questions for this morning
however, are: What has been done to address the problem? What is the
current prognosis?
Recognizing the implications of the exhaust of the North American
Numbering Plan on consumers--the FCC and state utility commissions,
working with industry, devised several remedies to slow the exhaust.
The centerpiece of these remedies allowed telephone numbers to be
allocated in blocks of 1,000 instead of blocks of 10,000.
This new allocation scheme mitigated the assignment principle
problems outlined above. While numerous state trials of the allocation
scheme have been in place for several years, national implementation
began in March of 2002. Approximately seven additional area codes will
become ``pooling-capable'' each month until the entire top 100
Metropolitan Statistical Areas have been completed. The total cost of
the effort to upgrade all the necessary systems will be in the
neighborhood of a half a billion dollars.
So, was it worth it. Well, in May of 2001, the North American
Numbering Plan Administrator's (NANPA's) new forecast of North American
Numbering Plan exhaust was 2025. This was in contrast to the 2015 date
in 2000. Next month, the NANPA will report its 2002 NANP Exhaust
calculation to the North American Numbering Council. While not yet
public, it is widely expected the new date will be approximately 2035.
There is a temptation to say that's the end of the story and North
American Numbering Plan exhaust will be a project for another
generation. And to an extent, that's true. Carriers, and ultimately
consumers, should not be required to bear any more costs to delay
exhaust for the foreseeable future.
Nonetheless, growth is a reality and the geography of numbering
dictates that area code relief, while abating, is still necessary. The
FCC made clear that the new allocation scheme was a technology for
improving the efficacy by which telephone numbers are used and should
not be used as a substitute for timely area code relief when it becomes
necessary.
Given this reality, the last question I will address is, ``How can
area code relief be accomplished in the least disruptive way for
consumers, carriers, and regulators?''
In my opinion, nationwide ten-digit dialing would be a very
productive endeavor--particularly in terms of the impact on consumers
faced with area code relief.
One of the primary reasons area code relief is disruptive to
consumers is that in the case of an area code split--where one part of
the region served gets to keep the old area code and the other half of
the region gets a new code--about half of the consumers will need to
change their phone number. In the case of an area code overlay--where
the new area code serves exactly the same geography as the old area
code--customers are required by FCC rules to dial ten digits for all
calls. The benefit of an overlay versus a split is that customers will
not have to change their area code.
Generally, customers have ample time--about one year--to prepare
for this type of dialing change. In today's world, ten-digit dialing is
not an onerous requirement. Customers already dial ten digits for long
distance calls and for most calls to and from cellular telephones.
Additionally, customers who use phone company-based voice mail systems,
telephone credit card services, dial around services, etc., are used to
dialing more than ten digits--sometimes many more than ten digits.
Verizon's experience where area code overlays have been implemented--
and that covers millions of consumers--is that ten-digit dialing with
an overlay is a non-event.
This concludes my formal testimony. Thank you for giving me the
opportunity today to share Verizon's views on area code exhaust. I
would be happy to answer any questions that the committee may have.
Mr. Upton. Thank you very much.
Mr. Long, welcome.
STATEMENT OF JOHN T. LONG III
Mr. Long. It is very nice to be here. Chairman Upton and
other members of the subcommittee, I am John Long, President
and CEO of the Kalamazoo Regional Chamber of Commerce in
Michigan. I want to thank you for the opportunity to testify
before you today regarding the very important business issue.
Our organization represents nearly 1,800 businesses in the
southwest Michigan region that collectably employ about 65,000
people. It has become increasingly apparent that in order to
compete in today's global marketplace businesses need to
leverage their use of telecommunications technology to the
utmost.
Therefore, any change in the structure of how these
technologies operate goes right to the heart of the ability of
businesses to meet the needs of their customers and clients.
My community is in the process of implementing a geographic
split to meet the challenge of area code exhaustion. The
competing burdens and costs caused by this upcoming change on
local businesses are significant, particularly to small
businesses. There is a significant financial burden to
businesses when they are forced to change their area codes.
This information is included on every business stationery
envelope, their stationery, business cards, marketing
brochures, company vehicles, websites, radio and television
advertising. The impact is even greater on small businesses
because they have more of the overall marketing and operating
budgets tied up in these basic tools of doing business.
In our nonprofit office of 32 employees, we estimate that a
minimum of $60,000 of cost to reprint all of the materials that
currently our area codes. In addition, it is nearly impossible
to measure what kind of impact that the resulting confusion and
inconvenience will have on customers as they try to obtain
information, assistance, or make a purchase using outdated
materials that are in the marketplace.
The cost to change phone and data--fax data can be just as
disruptive, if not more so, than relocating your company to a
new location. Also, this brings us to the second issue that I
have been asked to address--our perspective on the decision to
utilize a geographic split in our region to meet the challenge
of code exhaustion.
Why, you might ask, did we opt for this solution,
especially after considering all of the associated costs I just
outlined. The decision was pretty much made for us through the
circumstance. No one particularly cared to implement an overlay
system.
Prior to coming to Kalamazoo I lived in Maryland where we
underwent a similar process. The community opted to implement
an overlay. The result of that decision turned out to be
extremely confusing to everyone involved. People in the same
road or in the same building could have different area codes.
Businesses that needed to add additional lines or other
means of communication had to develop ways to track which of
their phone lines were designated to which area code.
Consequently, it often caused coordination problems with
internal communication. Households that decided to add
additional phone lines were also forced to use a different area
code.
This brings us to the third point you have asked me to
discuss--the need for numbering conservation and management. I
believe there is an opportunity for the Federal Government to
show some leadership on this very important issue. Again,
that's leadership.
Businesses operate more effectively in an environment of
consistency and predictability. If business leaders are given
guidance about how the problem area of code exhaustion will be
handled from jurisdiction to jurisdiction, we have gone a long
way in helping them plan accordingly for the future.
In today's global economy, very few firms operate within
the confines of one municipality, one county, or one State.
Requiring businesses to try to anticipate how each individual
region or State public service commission will address the
problem of area code exhaustion adds an additional unnecessary
burden.
It would be extremely beneficial if there was a prescribed
method set forth by a Federal authority on how to address this
issue. It should be well thought out and able to be implemented
gradually. This would help businesses to plan effectively for
the future.
So what can we do to achieve this? The archaic practice of
allocating 10,000 phone numbers to new rate centers and markets
throughout the country needs to end. Voluntary participation in
number pooling has shown that this can be an effective tool in
conserving available numbers. We should make this a standard
practice.
Currently, each new provider that enters a market is
treated as its own rate center. The resulting strain on a
system is enormous. I think we need to reduce the allocation to
blocks of no more than 1,000, which we have already started to
do in the year 2002.
We also should consider the opportunity for all businesses
to share those numbers. We need to codify and universally
implement this practice of number pooling to help preserve our
current area code system as long as we can.
The second strategy we should pursue is to utilize
technology-specific overlays. There is no reason that lines
that carry data such as modems, ATMs, and other automated phone
connections between machines need to use area codes that have
traditionally been used by people.
I also am advocating that we implement an overlay strategy
for new wireless phone technology. These technologies are not
as firmly entrenched within the Nation's communities as are
traditional phone systems. And, finally, I believe we should
set a time line and begin planning on a national level for the
eventual introduction of a local number portability system.
With recent technology advances, it is reasonable to
believe that within the next few years we should be able to
accomplish this goal. The time has come to embrace this crucial
strategy for the future. If people were able to use their
established phone numbers wherever they go, regardless of
service provider, it would greatly alleviate the break-neck
pace at which the Nation is currently consuming numbers within
area codes.
And it also would relieve the strain on some of our members
of our committee because I know it is difficult to keep
remembering the number that your mom promised you to memorize.
So I thank you for your time and kind consideration of my
testimony. Thank you.
[The prepared statement of John T. Long III follows:]
Prepared Statement of John T. Long III, CEO and President, Kalamazoo
County Chamber of Commerce
My name is John T. Long. I am the Chief Executive Officer and
President of the Kalamazoo County Chamber of Commerce, in Michigan. Our
organization represents nearly 1,700 businesses in the southwest
Michigan region that collectively employ about 60,000 people. Our
members are primarily small businesses--80 percent of them have less
than 25 employees--18 percent are sole proprietors.
I have served as a Chamber executive for a total of 12 years. I
came to the southwest Michigan region about three years ago, and prior
to that served as the CEO and President of the Talbot County Chamber on
the eastern shore of Maryland
Thank you for providing me the opportunity to address you today
regarding this very important business issue. It has become
increasingly apparent, that in order to compete in today's global
marketplace, businesses need to leverage their use of
telecommunications technology to the utmost. On a daily basis this
country's firms have come to rely on telephones, cell phones, pagers,
fax machines, credit-card processing machines, e-mail and Web-based
Internet technologies to conduct their business effectively. Therefore,
any changes to the structure of how these technologies operate goes
right to the heart of the ability of businesses to meet the needs of
their customers and clients.
I have been asked to specifically address three issues on this
topic today:
1. The burdens on, and costs of, the impending area code change on
local businesses in the Kalamazoo regional area;
2. Our Chamber's perspective on the options considered, and ultimately
adopted, in the 616 area code proceeding at the Michigan State
Public Utility Commission; and
3. Any general observations, from the perspective of local businesses,
on the need for numbering conservation and management.
On the first issue, regarding the impending burdens and costs of
our upcoming area code change on local business--they are significant,
particularly to small business.
A business' telephone and fax machine numbers are critically
important to its ability to effectively communicate to current and
potential customers, vendors, suppliers and governmental officials.
That becomes readily apparent when you recognize that these numbers
are included on every business' stationery, envelopes, business cards,
marketing brochures, the sides of company vehicles, websites, and
included in all print, radio and television advertising. It is part of
a company's identity. The cost to change this information for each and
every one of these items adds up rapidly. The impact is even greater on
small businesses, because they have more of their overall marketing and
operating budgets tied up in these basic tools of doing business.
Internally, there are other costs as well. The databases of many
firms, particularly smaller ones, are not equipped to make global
changes to the area code fields of each customer or contact they
contain. That means significant staff time must be devoted to manually
changing each of the entries residing in these business' databases. On
top of that the cost of production for notification cards, mail
processing and postage must be accounted for, in order to notify all
customers, clients and other necessary parties about the change in area
code.
In our nonprofit office of 32 employees we estimate that, at a
minimum, it will cost us about $60,000 to reprint all of the materials
that currently contain our old 616 area code.
The other challenge is the time and effort it takes to try to
reclaim, or replace, as much of the material with the old data on it as
possible that has been distributed. In addition, it is nearly
impossible to measure what kind of impact that the resulting customer
confusion and inconvenience will have, as they try to obtain
information, assistance, or make a purchase using outdated materials
which a business is unable to reclaim or replace.
The cost to change phone and fax data can be just as disruptive--if
not more so--than relocating your company to a new location.
Which brings us to the second issue I have been asked to
address:Our perspective on the decision to utilize a geographic split
in our region to meet the challenge of the exhaustion of the 616 area
code, rather than using an overlay approach.
The problem of area code exhaustion forced our community into
making an extremely difficult choice. Keep the area code we currently
have and add a new one for those requesting new phone lines, or give up
an area code we have all used for decades. We ultimately decided to
utilize a geographic split. Why, you might ask, did we opt for this
solution? Especially after considering all of the associated costs I
just outlined. The decision was pretty much made for us due to
circumstances.
No one particularly cared to implement an overlay system. As I
mentioned earlier, prior to coming to Kalamazoo, I lived in Maryland,
where we underwent a similar process. That community opted to implement
an overlay. The result of that decision turned out to be extremely
confusing to everyone involved. People on the same road, or in the same
building could have different area codes. Businesses that needed to add
additional lines, or other means of communication, had to develop ways
to track which of their phone lines were designated to which area code.
Consequently, it often caused coordination problems with internal
communications. Households that decided to add computer lines, cell
phones, or additional phone lines were also forced to use a different
area code. To make matters worse, callers were then forced to dial ten-
digit numbers instead of the traditional seven they had been accustomed
to.
In Kalamazoo we decided we didn't want to deal with these issues.
We also wanted to take a long-term view of the situation. By adopting a
new area code we believe we have given ourselves a longer timeframe to
work within before we once again exhaust the number of phone lines
associated with our new area code. We also knew that the community of
Grand Rapids to our north was adamantly opposed to giving up the 616
area code. Because Grand Rapids is a much larger metropolitan area, we
didn't want to be forced into accepting the overlay option. We also
knew we didn't have the population base or political clout to keep the
616 area code in our community and force others to move to a geographic
split--so we went down the path of least resistance.
However, just because this is the method we chose to adopt, don't
think we are happy with all of the additional costs, inconvenience and
potential confusion that await us.
Which brings us to the third point you have asked me to discuss--
our observations on the need for numbering conservation and management.
I believe there is an opportunity for the federal government to
show some leadership on this very important issue. Businesses usually
operate more effectively in an environment of consistency and
predictability. If business leaders are given the ability to know, up
front, how the problem of area code exhaustion will be handled, from
jurisdiction to jurisdiction, we have gone a long way in helping them
to plan accordingly for the future. In today's global economy very few
firms operate within the confines of one municipality, one county, or
one state. Requiring businesses to try to anticipate how each
individual region or state public service commission will address the
problem of area code exhaustion adds an additional, unnecessary burden.
It would be extremely helpful if there were a prescribed method set
forth by a federal authority on how to address this issue as it arises
from region to region. It should be well thought out, and able to be
implemented gradually, so as to ease the difficulties that can be
experienced during an area code transition. This would help businesses
to plan effectively for the future.
So, what types of things can the federal government do to achieve
this?
Obviously, as with any item in short supply, one of the first
things reasonable people should do is to implement conservation
measures. The archaic practice of allocating 10,000 phone numbers to
new rate centers that are established within various markets throughout
the country needs to end. Voluntary participation in number pooling has
shown that this can be an effective tool in conserving available
numbers within area codes. We should make this a standard practice.
While many think the proliferation of the use of new technology by
individuals, such as cellular phones, additional computer lines,
pagers, and home offices is the driving force behind the shortage of
available numbers within area codes, it isn't. The number of phone
numbers being allocated to these devices pales in comparison to the
millions of available numbers being gobbled up by the inefficient
allocation of blocks of 10,000 numbers to new rate centers. Currently,
with each new provider--such as companies offering services for
cellular phones, pagers, local calling, and Internet accounts--that
enters a market being treated as it own rate center the resulting
strain on the system is enormous. I think we need to reduce this
allocation to blocks of no more than 1,000 numbers. We have a good
start toward that goal with the FCC's action in 2000, which ordered
carriers to install switch software enabling phone number blocks of
1,000 instead of 10,000. We need to codify and universally implement
this practice of number pooling to help preserve our current area code
system as long as we can.
The second strategy we should pursue is to utilize an overlay for
specific technologies. There is no reason that lines that carry data
such as, modems, ATMs and other automated phone connections between
machines need to use area codes that have traditionally been used by
individuals. I am also advocating that we implement an overlay strategy
for new wireless phone technologies. These technologies are not as
firmly entrenched within the nation's communities as our traditional
phone systems. Additionally, to maximize the conservation of numbers,
we need to make sure that all such geographic splits strictly follow
rate center boundaries.
And finally, I believe we should set a timeline, and begin planning
on a national level, for the eventual introduction of a Local Number
Portability system. With the great strides that have been made in the
area of telecommunications technology it is reasonable to believe that
within the next few years we should be able to accomplish this goal.
The time has come to embrace this crucial strategy for the future. If
people were able to use their established phone numbers wherever they
go, regardless of service provider--just like a social security
number--it would greatly alleviate the breakneck pace at which this
nation is currently consuming numbers within area codes.
I thank you for your time and kind consideration of my testimony
today.
Mr. Upton. We'll let you know that Mr. Markey still needs
that help today.
Mr. Manning, it is my understanding there is, what, 269
area codes now in place. Is that right?
Mr. Manning. Well, in actuality, sir, there is a few more
assigned. It depends on how you count them----
Mr. Upton. A few more assigned, okay.
Mr. Manning. [continuing] and ones actually in service.
Mr. Upton. Because, you know, in my district we add this
new one coming up here soon that's in place next year. But how
many--using some--that type of formula, how many are we going
to have in place by the end of 1903? And how many again do you
expect that we'll have in--new ones or total in place by 2004?
What is the trend line that we're on?
Mr. Manning. I would have to look at the specific area code
by area code data to determine exactly the number of area codes
we'll be adding over the next couple of years, and that
certainly can be done. What we have done is projected those
area codes that under present conditions and looking at future
forecasts are going to be exhausting over the next several
years.
When you look at that, what we have found from the recent
projections is a number of those area codes are moving out in
terms of their projections, due to the variety of issues and
items that we have discussed here. But you can expect at least
in this year alone we have assigned just two area codes in 2002
so far, so we're beginning to feel the effects of all of these
measures on the assignments of resources today.
Mr. Upton. Part of it I know that--one of the reasons there
is a slowdown is because of the--in the top 100 MSAs we have
gone down to 1,000 block numbers. Have you thought about doing
something along the lines that Mr. Long suggested, and that is
look for some differential between individuals using equipment
versus machine-to-machine communication, and how easy or hard
would that be, to try and implement something like that--ATMs,
gas stations.
Mr. Manning. The principal avenue in doing that is
basically being able to determine how those numbers are used
and identify what a specific number is used for. Presently, our
organization does not have that information. The service
providers would generally know how those numbers are being
used.
An inventory would have to be taken basically on an area
code by area code basis to quantify the quantity of numbers
that you're dealing with that meet whatever specification
parameters that you put together to see how many potential
numbers there are that you could eventually mine out, put into
another area code or another resource, and then turn around and
make it available to consumers.
Ms. Attwood. I was just going to say I think that it is a
really facially appealing notion, and I think that it is
certainly worth exploring, and it is certainly something I know
Chairman Lynch has been very active in trying to pursue. But I
think it is important to understand that it is not as easy as
it sounds. And as a technical matter, the idea that we could
differentiate between the lines is something that at this point
that translation is not at all clear.
I think it is sort of analytically akin to saying if we
could find those consumers that really don't care about their
numbers being changed, we could save a lot of numbers. And
that's absolutely true, but differentiating among those lines
really is going to take a lot more work on all of our parts.
But it is an idea worth exploring.
Mr. Upton. Ms. Attwood, I know that they looked at the
1,000 block changes in the top 100 MSAs. Is there any
consideration--since it has appeared to work pretty well from
everyone's standard, do you think there is some possibility
that we'll expand it to all MSAs versus just the top 100?
Ms. Attwood. Certainly, the idea of expanding the benefits
of number pooling are actively being looked at. And we are in
the process of an 18-month rollout to get to all 100 of those
MSAs. But I think, as some of the witnesses have accounted
for--there are also costs associated with expanding number
pooling. Carriers have to bear those costs. Ultimately,
consumers bear those costs as we move.
And so there is a cost-benefit analysis, but I think we're
seeing such great strides in conservation using--focusing on
the top 100 MSAs that absolutely in the future I think we're
going to be seeing not only increasing geographically but also
going down to exploring issues of single number porting and
pooling.
Mr. Upton. Mr. Long, I know that the--you and I are very
aware of this exchange change coming, area code change coming.
What do you think the sentiment is among Kalamazoo area
businesses? Do you think more than half of them realize that
this is going to--is coming in the next couple of weeks and in
place early next year? Or do you think they are going to just
get caught up and on it, and say, ``Oh, my gosh, wish we had
known that before we ordered this stationery.''
Mr. Long. Well, I think it is really been a quiet--it is
really been a quiet concern. You haven't hit businesses,
really, standing up, and causing demonstrations on the corner.
But we started to talk to many of the businesses quite a while
ago when this was first initiated and started to say to them,
``Look at your scheduling, look at your ordering time lines,
and decide now how are you going to handle that. If you're
going to be--if you're going to need to order stationery, try
to put it off to a specific time, or bring it up--or bring it
forward. If you're going to get involved in computer systems,
be aware of it now.''
And I think that's probably one of the things that's really
going to impact the small businesses, even though they are not
even thinking about it now, and that's the impact in the
computers and the various ways that they have to change the
phone numbers in the computers.
We also have businesses that do a lot of work with faxing,
and the system that has those fax numbers all loaded in their
memory base all needs to be changed. And I think what usually
happens is businesses think that they can handle it, and are
ready to handle it, but then it really impacts them quite a lot
more.
I had a situation in Kalamazoo. A charter company, a bus
charter company--it is a family owned company, it is an
African-American owned company. And their impact on changing
the addresses, the phone numbers on their buses, changing the
phone numbers on many of the--on all of their materials really
surprised them. I talked to them a couple of days ago, and this
impact has been great, probably 15 percent of their operating
cost.
And so it impacts them greatly, and what generally happens
is no matter how much you tell folks about these kind of
things, certain things will come up and snap at them. And I
think that's what is going to happen in the computer portion of
it.
Mr. Upton. Well, thank you very much.
Mr. Sawyer.
Mr. Sawyer. Thank you, Mr. Chairman. I really want to
compliment you on having put together a tremendous panel here.
The discussion has been very useful.
Mr. Upton. I want you to know we tried to do this last
September, and we had other events take over.
Mr. Sawyer. I understand. I have some questions that I have
prepared. But because Ms. Harman has really been such a leader
on the issues that surround this, and she cannot be here, she
has asked me to ask some questions on her behalf. So understand
that that's what I am doing here.
Let me begin with you, Ms. Attwood. Could you just give me
quick responses to the specific actions that were outlined by
California? What about wireless local number portability?
Ms. Attwood. Well, there is no question that come November
24 there will be pooling by wireless carriers. The fact that
there will be pooling will greatly allow additional
conservation measures. For example, we'll be able to go to the
1,000 block pooling, and that should in fact even improve the
projections that we have done to date on area code relief.
With the question of number porting, local number porting,
we have before us at the Commission a request by Verizon
Wireless and other members of the wireless community to delay
the deadline of November 24. And the significance of that
request really goes to the additional conservation measures
that Chairman Lynch mentioned, the individual number porting
solutions. They don't go to the existing or current rollout of
number pooling at the 1,000 level.
So I could let the wireless representative speak to the
merits of the forbearance petition before us. I can just
comment that parties in this, and members of this committee,
have divided on the question of whether we ought to extend that
deadline or permit there to be a continuation, and there are
benefits--arguments made on both sides.
Mr. Sawyer. What about raising the contamination threshold?
Ms. Attwood. First of all, I just have to object. We need
to come up, Loretta, with a better name than contaminated
numbers.
I think--in this day and age--I think really what you are
talking about is an additional conservation measure, and I
think more study needs to be done. The 10 percent threshold was
determined on the basis of the studies and the industry
projections at the time. It really wasn't controverted. We have
nothing currently before us at the Commission suggesting an
increase to a 25 percent level.
I think, as I understand the information that California
has been able to look at, it looks like, at least with respect
to California, there might be some benefit in considering an
increase in that level. But there are costs associated with
increasing it, because when you do increase that level you are
talking about porting flows and porting volumes, impacting
those, increasing potential errors in porting the numbers back,
and so we really need to look at it more closely.
And, again, the 10 percent level was one that the industry
felt comfortable with--it was the recommendation. So, but we're
perfectly willing to explore that further.
Mr. Sawyer. Well, what about unassigned number porting?
Ms. Attwood. Well, again, unassigned number porting has
real potential. It is something that we view, at least as of
now, in the future because right now the costs associated with
1,000 block pooling have, are just been being borne now by the
industry and all of the associated implementation of that, and
I--but I think that California is really in the lead in trying
to continue the pressure on these alternatives and look into
the future.
Mr. Sawyer. Mr. Manning, as neutral numbering
administrator, do you agree with Ms. Miller that the crisis has
passed and that demand for numbers is on the decline?
Mr. Manning. Well, in remarks in my testimony, I remarked
to the idea that we have peaks and valleys. Certainly, in 1999
and 2000, we were at a peak in terms of what we were seeing in
the industry, and I would certainly say we may be, on a
national level, at a valley. But I think if you go around this
room here today, I think you will get your own assessment of
what is considered a peak and a valley. And many of the States
are facing some very serious issues with number exhaust, and
for that reason the issue is foremost.
Mr. Sawyer. So the pressure has waned, but you are
suggesting that it is not waning for long.
Mr. Manning. Well, I would suggest from a numbering--
national numbering perspective we may see a little bit better
light at the end of the tunnel because of what we have seen.
But all in all, when you really focus on it, you look at it on
an area code by area code basis, and everybody faces that
particular problem and must deal with those issues.
So even through from a national perspective we may be a
little bit better picture, when you look at it on a local
basis, depending upon where you are, that picture could be
fairly difficult to deal with.
Mr. Sawyer. Thank you.
Mr. Upton. Mr. Shimkus. No, Mr. Bass.
Mr. Bass. I will yield.
Mr. Upton. Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. I want to enter in
the record an article from the St. Louis Post Dispatch on
September 2, 2000, pretty close to when we were--and it really
identifies all of this stuff, especially this 10,000 block
issue down to 1,000. I am going to just read a few sections of
it.
Yet Aiken--he is an investor--already has been given
690,000 unused phone numbers in the 618 area code. He needs
telephone numbers in each of the 69 districts known in the
industry as rate centers in his proposed service area. Those
numbers come in blocks of 10,000. So 69 times--and then, the
third point is, even in the 847, the Illinois area code closest
to exhaustion of the number supply, only about half of the
available numbers actually are in use.
And then, the plan known as number pooling, which is what
we are talking about, calls for numbers to be assigned in 1,000
number blocks rather than in 10,000 number blocks. And it--
there is nothing that fires up people more than the fact that
their area code may be changed or moved, so I think it is
commendable that we move and break down these blocks.
My question to my staff was--a small investor who wants to
get into the telephone business--I am not sure they would want
to do that these days right now--is there any--you put together
a business plan, and you have to raise capital. So you have to
have a market area. You have got to have numbers if you are
going to do that.
So this guy has to apply based upon what is required. The
question: has anyone--has there been a question raised to the
FCC about what is a--if you want local competition, what is a
startup number or numbers that they need to be somewhat
competitive? I mean, if you go down to 1,000 number blocks, if
he, instead of having 690,000, if he has 69,000, or if he has
6,900, has anyone raised the issue of we--we have been involved
in this big debate about competition in the market.
But if we flip on the other side and we limit the amount--
or is there a limiting, or can they just continue to apply for
more based upon their need, if we go down to 1,000 blocks?
Ms. Attwood. They can continue to apply, but I--if you----
Ms. Lynch. I can just tell you some of the data we have
seen in California. We have had carriers come in asking with
only 500 customers. And if they are a wireless carrier, they
get 10,000 numbers.
Mr. Shimkus. Right.
Ms. Lynch. And if they are a wireline carrier, they get
1,000 until they can show us that they have more customers. So
one of the benefits to the local small business of pooling and
of porting is that there are more numbers in that area code
available, and maybe more numbers in the rate center, which
would be a particular geographical area.
Mr. Shimkus. Yes. I think what happened in the 618 debate
is that they actually, then, went back to the person who held
all of these numbers, and they gave him back like 10 percent of
the numbers, which kind of forestalled a crisis. But they still
may be holding twice as many as what they need, so I applaud
this move and it should relieve some of the pressure from the
chamber of commerce and people who don't want to give up their
issue.
I raised a point, and I would like to ask Mr. O'Connor and
Ms. Miller about the cost in the implementation of local number
portability. And the--also, the additional cost and capital
investment for the implementation of e-911. Usually, when we
have these type of hearings, Anna Eshoo is here ranting and
screaming and hollering, which she----
Mr. Sawyer. Not Anna.
Mr. Shimkus. [continuing] which I appreciate, but her--of
her desire to get e-911 rolled out sooner rather than later.
There are technical problems and costs incurred. Are we not
prioritizing well? And are we having--should we also talk about
the cost of implementing e-911 and the cost of implementing
local number portability, and realize that we may not be able
to do both at the same time, and we ought to say which one is a
priority before we worry about local number portability? And,
again, I will throw that to--and then anyone who may want to
talk, but Mr. O'Connor first, and Ms. Miller.
Mr. O'Connor. Well, on that particular question,
Congressman, I think I will defer to Ms. Miller because----
Mr. Shimkus. Verizon doesn't have a position? They are
happy with e-911 and the costs incurred?
Mr. O'Connor. Verizon has e-911 and is completely LNP
capable, local number portability capable.
Mr. Shimkus. Does Verizon have--but Verizon doesn't have
the second stage of identifying location.
Mr. O'Connor. Correct. Not Verizon wireline business, no.
Mr. Shimkus. Right. But I am talking about wireless. You
know, the second stage is for people to geographically, through
GPS, to identify where you are at.
Mr. O'Connor. Right. And on the wireless side, I don't
represent wireless, but----
Mr. Shimkus. That is right.
Mr. O'Connor. [continuing] being part of the corporation
and being familiar with the petition, I know that a wireless
concern--and I really think Anna can address this with probably
more specificity than I can--is that doing local number
portability and e-911 at the same time is extremely problematic
for the industry.
Mr. Shimkus. And Ms. Miller?
Ms. Miller. Yes. I am not VoiceStream Wireless' expert on
911, but we are working diligently to implement 911. I am
familiar from participation on industry committees with
problems associated with 911 and the implementation of wireless
number portability and----
Mr. Shimkus. My point is just we ought to just make sure--
sometimes these issues, we address them separately but they are
not really separate, especially in capital investment of
corporations and the costs they have to incur.
Mr. Chairman, I will just end up by saying, if we have
local number portability, we in essence will eventually evolve
to an overlaid system. We know that. And so that is the other
debate that we have. If you allow people to transport, we are
going to have area codes that are mixed throughout the country.
And that may be something we want; that may be something we
don't want. And that is still part of the same debate.
And I will yield back my time. Thank you, Mr. Chairman.
Mr. Upton. Thank you.
Mr. Bass.
Mr. Bass. Thank you, Mr. Chairman.
Ms. Lynch, on the Internet, you have had some Internet
companies that have gone bankrupt in California that had
exchange codes. What happens when that happens? Can the State
PUC take it over and reassign it, reclaim it? And if so, how
fast do they do it? And is there any legislative action or
anything required here?
Ms. Lynch. Well, technically, they need to go through the
plan administrator, who is Mr. Manning.
Mr. Bass. Right.
Ms. Lynch. But we----
Mr. Bass. Maybe I would like to address the same question
to him, then, after----
Ms. Lynch. But we went after those kinds of companies more
quickly, because when we did the utilization studies, just to
count the numbers that were in use and the ones that were
unused in each telephone company and each area code in
California, we found that many of the companies really didn't
know how they were using their numbers. They had vast different
categories, and they called them all used when in fact they
weren't used.
They were waiting for an expansion of a university that
wasn't planned for 10 years, things like that, and they would
just keep 50,000 numbers on hand in case that university wanted
to expand and still use the same prefix. And so we started
going after some of those unused numbers.
In doing so, we found companies that had stopped doing
business in California, and no one had gotten around to saying,
``Give us the numbers back.'' So, frankly, we pushed the NANPA
to push those companies to take the numbers back, and then we
then pushed NANPA to help us reassign those numbers to folks
who needed them.
Mr. Bass. So it is NANPA's responsibility, really, to
regulate that facet of number allocation?
Mr. Manning. Well, it is part of the number assignment and
reclamation process. We work very closely with States like
California and others to identify resources that are not being
used, primarily central office codes. And in most instances we
find that a carrier going out of service, we can identify that
carrier, and we can get those resources back.
Mr. Bass. Quickly or not? Can you--do you have a fast way
of doing it?
Mr. Manning. It can happen fairly quickly.
Mr. Bass. By that, what do you mean? A year?
Mr. Manning. Oh, no. No. We can do this in a matter of a
couple months to get the resource on back, and then turn it
around and make it available. There are, naturally, instances
where it might take a little bit longer. What we have
experienced in the industry to date is a lot of local service
providers going out of service, and we have been working with
States and the industry to go after those codes, get them
returned, or, at least in instances where there are ported
numbers out of those codes, to find new code holders for those
resources.
Mr. Bass. Is this a significant number of--this is a
significant issue for you. It is helping----
Mr. Manning. Yes, sir. It is a significant issue, really,
quite lately with the economic situation and the like. that we
have turned a lot of our resources, as well as State resources,
to trying to reclaim as many of these codes as possible and
make them available.
Mr. Bass. Thank you, Mr. Chairman.
Mr. Upton. Thank you.
Mrs. Wilson.
Mrs. Wilson. Thank you, Mr. Chairman. I appreciate your
having this hearing. This is a very important issue in New
Mexico as well.
Last summer Albuquerque was faced with area code
exhaustion, and last May the New Mexico Public Utility
Commission, which we call our PRC, ruled to adopt new area
codes for the Albuquerque and Santa Fe areas while allowing the
rest of the State to keep the current 505 area code, which
sparked a huge controversy in the State of New Mexico with
Albuquerque and Santa Fe being the largest of the metropolitan
areas, and actually the ones that are growing quite fast.
There was a great deal of angst and hoopla that caused
NeuStar to reconsider and revisit the area code issue. And
NeuStar did discover that New Mexico area codes were much
more--or New Mexico's phone numbers were much more available
than originally thought. And so the addition of a new area code
has been delayed until a new study, which is due out at the end
of this month, is completed. And I am glad that we have been
able to delay this, because it is a huge inconvenience and cost
for people if it is avoidable by managing this system better.
This is an important issue for small business and also for
people who just don't want to change their phone numbers or
don't want to have to use 10 digits if we don't have to call
the next town over. So I think better management of this system
is probably an answer, and I am glad to hear some of the ideas
put forward today.
Mr. Chairman, there was a previously scheduled hearing that
I know we had to delay that you had scheduled, and it got
bumped. But the president of the 505 Coalition in New Mexico
was going to testify at that previous hearing, and with your
permission I would like to submit his testimony for the record.
Mr. Upton. Without objection. This was actually, I think,
scheduled twice. I think we--9/11, and then I think we had this
little thing called anthrax, and it just seemed like this was
the one that got bumped because of those things.
Mrs. Wilson. But I would ask unanimous consent to submit
his prepared testimony for the record.
Mr. Upton. Without objection.
Mrs. Wilson. He was unable to come back today, but I think
it is--New Mexico is an interesting case study and how some of
this might be able to be avoided with better management to the
system.
I yield the balance of my time, Mr. Chairman. Thank you.
Mr. Upton. Great.
Tom, do you have--I have got a couple of questions. Do you
have a couple of quick questions?
Mr. Sawyer. You go, and then I will go.
Mr. Upton. Okay. We're hoping that Ms. Harman comes back
from the work on the legislation. But if a vote is called, my
guess is that that will probably end things for the morning.
A couple of things. As I listen to the testimony and
comments of my colleagues, I think, really, in a couple of ways
we are quite lucky. One, to a degree I guess you could say, the
declining growth of the wireless industry, what's happening,
all of the changes in technology, I look at my own computer and
I don't need a fax machine anymore. I don't need that second
line.
I look at, with broadband, different providers that are out
there, different things that happen. And, obviously, with the
1,000 block pooling, we're seeing some positive changes in
terms of where we were in the late 1990's, which could have
created the flags like we had with Y2K.
My goodness, we're going to have to add another digit to
the code, or we're going to have to do the 10-digit dialing for
everyone. And we're going to run out of numbers, and it is
going to be a massive problem before we get very long, and
it'll cost trillions of dollars maybe to try and fix it if we
went beyond much longer.
And I am just wondering if you all have any other ideas
beyond the 1,000 block pooling, looking at all MSAs. I do think
that Mr. Long's comment about individual use technology versus,
you know, machines talking to each other makes a lot of sense,
particularly when you just think about all of those machines
that are out there, whether they be on the gas station pump or
anything else, where we could make some sizable reductions, and
maybe each one of you can just go down the line and just, if
you have got any other ideas that you think ought to be on the
table for folks to think about, so we never get to that Y2K
brink, but with area codes in some different setting 20, 30
years from now.
Ms. Attwood. Well, I think the testimony indicated a lot of
it. I don't want to rehash, although I think we have identified
things like looking at the contamination level. I hate to use
that, but looking at that, looking at whether there should be
individual porting, looking at whether there ought to be
unassigned numbers--oh, yes, that's a good one, too--my helpful
staff.
Something not in our control--the Federal control, but at
the State level--and we're working closely with States--is rate
center consolidation. We're talking about the need to make that
geographic area bigger, so that we can in fact see some more
additional optimization measures. That's a good one.
Ms. Lynch. Chairman Upton, I think you have put your finger
on it, because when I joined the NANC just 2\1/2\ years ago,
they were talking about being on the brink. They were talking
about expanding the entire system as of 2012, and basically
that train had almost left the station. Effective numbering
conservation meant that that train stayed at the station. And,
in fact, now it is getting further and further into the future
that we have to think about that.
But even with the declining economy and the give-back of
numbers, NeuStar's current forecasts show that 46 more codes
across the Nation will exhaust by the end of 2005--in the next
3 years, 46 more codes. And I would submit 10 of--well, I know
that 10 of those are in California that are at risk. And I
would submit that most of those codes need not be split. In
fact, those splits will be unnecessary, because California went
around and counted up the numbers and found out that there are
millions of unused numbers.
Now we need mechanisms to get those numbers back, and Ms.
Attwood noted some of the mechanisms. But I would suggest that
the FCC do a study, and I think that your area code in
Michigan, and, Mrs. Wilson, your area code----
Mr. Upton. I am going to call Ed Markey's old phone number
and see if anybody answers.
Ms. Lynch. And 505 in New Mexico and----
Mr. Upton. Eddie. I will ask for Eddie.
Ms. Lynch. [continuing] hopefully 310 in California will be
part of that study. We found, when we started to do utilization
studies--everybody said it couldn't be done, because the
companies didn't keep the numbers that way. Well, it was done,
and we did it relatively quickly and relatively effectively.
Why doesn't the FCC do a study of how many of those
computer-to-computer or machine-to-machine numbers are out
there? You know, OnStar, that GM product where you press a
button in your car----
Mr. Upton. It is a good one.
Ms. Lynch. [continuing] I mean, you can just go talk to GM.
I bet you they know how many computer-to-computer numbers they
have got. I bet you that fax companies know how many computer-
to-computer numbers they have got. I don't think it is actually
as difficult as might be portrayed, but let us take a couple of
area codes and find out.
And I would just--and then, in addition, of course, LNP
capability. If we moved to LNP capability, as the wireline
industry already has, as the wireless industry promised to do
and has now received effectively a 5-year exemption, that will
also solve a lot of our problems.
So we have several small measures, but the next big hurdle,
which I would submit half the industry has already done, is LNP
capability. And if we can get over that hurdle for the wireless
guys, then we will have many more years to deal with the
number-to-number area code issue effectively.
Mr. Upton. I know my time has expired. But does anyone have
a particular comment they want to make before I yield to Mr.
Sawyer? Yes, Ms. Miller.
Ms. Miller. Yes, I would like to make a comment. I think
another major threshold for the wireless industry is the
implementation of 1,000 block pooling from wireless carriers.
And many States had been proactive with implementing pooling.
There has been benefits there for the land line industry. The
wireless industry is one of the fastest-growing industry
segments in telecommunications, and we look forward to being
able to utilize all of those unutilized land line numbers.
So I think that the benefits of wireless number pooling
have not yet been fully realized or reflected in the
information that's submitted to the NAPA and used to forecast
NAPA exhaust.
I also would like to point out that Congress mandated
number portability as a policy to eliminate a barrier to
competition in the land line industry between incumbent and
competitive local exchange carriers. And, really, the land line
industry implemented number portability.
They were fully implemented in the top 100 MSAs by the end
of 1998, but it is my belief that there is no real evidence
that number portability is a number conservation or number
optimization measure, because it was during that period between
1998 and 2000 that we had this unprecedented use/exhaust of
area codes.
So based on land line experience, I am not convinced that
number portability is necessarily a number optimization benefit
or measure. But I really believe that the implementation of
number pooling will significantly benefit the wireless industry
and better utilize area codes.
And I wanted to follow up, too, with my question for Mr.
Gillmor. In that context, wireless carriers do have limited
resources. There has been a lot of regulatory mandates that the
wireless industry is trying to implement, and, quite frankly,
there are capacity issues and workload issues with trying to do
a simultaneous implementation of number pooling and number
portability.
And in terms of priorities, we really would like to focus
our resources on e-911, and also with the implementation of
number pooling, because we believe that it is a very beneficial
number conservation measure.
Mr. Upton. Okay. Thank you.
Mr. Sawyer.
Mr. Sawyer. Your answer just flows right into the kind of
question I wanted to ask next. The questions that you're
answering are coming largely from the point of view as a
business decision, and that's important. We're looking at these
same issues from the point of view of policy decisions and how
we can make this whole system work together.
And following up on Mr. Shimkus' question, the question of
capital formation is a critical question within even the
largest and fastest-growing of industries. So what I would like
you to do is talk about that question of capital formation as
we look at the kinds of things that we're talking about here
with pooling and local number portability, and at the same time
the lifting of the spectrum cap in order to move to 3G, and
from the point of view of limited resources, capital formation,
and the struggle to make the best kind of business decisions.
Ms. Miller. I don't feel qualified to address all of those
issues in terms of overall business strategy. Certainly, I am
not an expert in spectrum management. But I do know and have
worked intensely through the North American Numbering Council
working groups to address the implementation issues associated
with number portability to come up with what it will take for
the wireless industry to accomplish that, to work with the
wireless industry in fully understanding everything that needs
to be done to accomplish 1,000 block number pooling.
And it is a tremendous impact for the wireless industry--
the implementation of number portability I think is even more
challenging than the land line industry because of the need to
support nationwide roaming. And, basically, because of the need
to support nationwide roaming, wireless carriers are--outside
the top 100 MSAs are affected, as well as those inside the top
100 MSAs.
So they actually, in order to do roaming, they have to
spend money to make their switches LNP capable to support
roamers. So the requirement for number portability for the
wireless industry is much more expansive for wireless carriers,
because even those outside the top 100 MSAs that roam have to
make changes to support portability. And also, those changes
are necessary to support pooled numbers.
So from a priority standpoint, my--you know, my primary
goal is number conservation, and for the wireless industry to
have adequate access to numbering resources so that we can grow
and compete. So from a priority standpoint, I see 1,000 block
number pooling as being more beneficial to number conservation
in the wireless industry at this point.
But I am certainly open--I know that California and other
States have done an excellent job in using number pooling to
extend the life of the area codes, and that down the road it--
you know, on a nationwide basis, probably number pooling will
take care of most of the problems. But there are certain areas
in this country where, because of competition and the dense
population, that I think some of the other items that have been
discussed this morning could be evaluated.
And I participated also on some of the other States'
discussions on technology-specific overlays and agree with the
challenge in identifying----
Mr. Sawyer. Real quickly, before my time runs out again,
could I ask Ms. Lynch to comment on your sense of the role of
local number portability.
Ms. Lynch. Sure. I think it is key and critical to move to
the next level to make sure that we don't have to expand the
system, and also to prevent those businesses that have to
switch from undergoing such a burden. But there is a point at
which we have to look at capital investment, and the FCC
already did that.
In granting the wireless industry its second extension in
February 1999, it did so explicitly saying that they were
granting the extension only so that wireless providers could
build out their networks to provide greater coverage. They have
got that extension twice before, precisely so that they could
put their money elsewhere.
I would submit now it is time for them to put their money
in LNP capability, so that the Nation's businesses don't have
to bear the burden versus the wireless carriers.
Mr. Sawyer. Thank you both for your responses. Appreciate
it.
Mr. Upton. Mr. Bass, do you have any other questions?
Mr. Bass. No further questions, Mr. Chairman.
Mr. Upton. Mr. Sawyer, any more? Well, I am going to leave
the record open, because I know that Ms. Harman really had a
number of questions, and she has been a leader in pushing me to
have this hearing. It was out of both of our control to have
this last fall, and a couple of times we had it rescheduled.
So if you wouldn't mind, if she does have additional
questions, we'll submit them to you in writing. If you could
respond back in a fairly short order, we'll make sure that we
include it as part of the record.
We appreciate your assistance in coming long distances,
including a redeye, I think, right? Is that right? And it is
very enlightening for all of us, and we look forward to working
with all of you.
Thank you.
[Whereupon, at 11:50 a.m., the subcommittee was adjourned.]