[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
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001








                    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.]



                                 

