[Federal Register Volume 61, Number 174 (Friday, September 6, 1996)]
[Rules and Regulations]
[Pages 47284-47355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22045]


      

[[Page 47283]]


_______________________________________________________________________

Part III





Federal Communications Commission





_______________________________________________________________________



47 CFR Parts 51 and 52



Telecommunications Act of 1996: Implementation of Local Competition 
Provisions; Final Rule

  Federal Register / Vol. 61, No. 174 / Friday, September 6, 1996 / 
Rules and Regulations  

[[Page 47284]]



FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 51 and 52

[CC Docket No. 96-98, 95-185, 92-237, FCC 96-333]


Implementation of the Local Competition Provisions of the 
Telecommunications Act of 1996

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In enacting the Telecommunications Act of 1996 (1996 Act) 
Congress sought to establish a pro-competitive, deregulatory national 
policy framework for the telecommunications industry. In adding a new 
Section 251 to the Communications Act of 1934, Congress set forth a 
blueprint for ending monopolies in local telecommunications markets. In 
this Second Report and Order the Commission adopts rules implementing 
certain provisions of Section 251. Specifically, this order adopts 
rules requiring local exchange carriers to provide dialing parity and 
nondiscriminatory access to their competitors; and requiring incumbent 
local exchange carriers to give public notice of certain network 
changes. In addition, this order adopts rules regarding number 
administration and addresses various petitions concerning numbering 
issues. These actions will serve to implement the statute, eliminate 
operational barriers to competition, and provide for effective use of 
numbering resources.

EFFECTIVE DATE: October 7, 1996, except that the collection of 
information subject to approval by the Office of Management and Budget 
(OMB) that are contained in sections 51.211(c), 51.213, 51.217, 
51.305(g), 51.307(e), 51.325, 51.327, 51.329, 51.331, 51.333, 51.335 
and 52.19(b) which are effective November 15, 1996.

FOR FURTHER INFORMATION CONTACT: For information concerning Dialing 
Parity, Nondiscriminatory Access and Network Information Disclosure, 
contact Lisa Boehley, (202) 418-2320, Network Services Division, Common 
Carrier Bureau. For information concerning Numbering Administration 
contact Marian Gordon, (202) 418-2320, Network Services Division, 
Common Carrier Bureau.

SUPPLEMENTARY INFORMATION: This Second Report and Order contains new or 
modified information collections subject to the Paperwork Reduction Act 
of 1995 (PRA). It has been submitted to the Office of Management and 
Budget (OMB) for review under the PRA. OMB, the general public, and 
other federal agencies are invited to comment on the proposed or 
modified information collections contained in this proceeding. This is 
a synopsis of the Commission's Second Report and Order and Memorandum 
Opinion and Order, (FCC 96-333) adopted on August 8, 1996 and released 
on August 8, 1996. The full text of this Order is available for 
inspection and copying during normal business hours in the FCC 
Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C. The 
complete text also may be purchased from the Commission's copy 
contractor, International Transcription Service, Inc., (202) 857-3800, 
2100 M Street N.W., Suite 140, Washington, D.C. 20037.

PAPERWORK REDUCTION ACT: This Second Report and Order contains either a 
new or modified information collection. The Commission, as part of its 
continuing effort to reduce paperwork burdens, invites the general 
public and the Office of Management and Budget (OMB) to comment on the 
information collections contained in this order, as required by the 
Paperwork Reduction Act of 1995, Public Law No. 104-13. OMB 
notification of action is due September 6, 1996. Comments should 
address: (a) whether the new or modified collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents including the use of automated 
collection techniques or other forms of information technology.
    OMB Approval Number: None.
    Title: Implementation of the Local Competition Provisions of the 
Telecommunications Act of 1996--Second Report and Order and Memorandum 
Opinion and Order, CC Dockets No. 96-98 and 95-185.
    Form No.: N/A.
    Type of Review: New Collections.
    Respondents: Business or other for-profit, including small 
businesses, and state and local governments.

----------------------------------------------------------------------------------------------------------------
                                                                      No. of       Est. time per   Total annual 
                          Section/title                             respondents      response         burden    
----------------------------------------------------------------------------------------------------------------
Dialing parity implementation plans.............................           1,350             100         135,000
Justification for noncompliance.................................              20               9             180
Sharing of directory listings...................................             500              36          18,000
Provision of technical information..............................             500              24          12,000
Public notice of network changes................................             500              72          36,000
Burden of proof.................................................              75               8             600
Submission of area code relief plans............................              30              40           1,200
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: 202,980.
    Estimated Costs Per Respondent: $0.
    Needs and Uses: The new or modified information collections in this 
Second Report and Order will be used to ensure that affected 
telecommunications carriers fulfill their obligations under the 
Communications Act, as amended.

Synopsis of Second Report and Order

    Adopted: August 8, 1996.

    Released: August 8, 1996.

                            Table of Contents                           
                                                                        
                          Section                             Paragraph 
                                                                        
I. Introduction and Overview...............................            1
  A. Actions to Implement Section 251(b)(3)................            4
    1. Dialing Parity......................................            4
    2. Nondiscriminatory Access............................           12
  B. Actions to Implement Section 251(c)(5)................           16
  C. Actions Taken to Implement Section 251(e).............           18
II. Dialing Parity Requirements............................           22
  A. In General............................................           22
    1. The Need for Minimum Nationwide Dialing Parity                   
     Standards.............................................           23
      a. Background and Comments...........................           23

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      b. Discussion........................................           25
    2. Scope of the Dialing Parity Requirements............           26
      a. Background........................................           26
      b. Comments..........................................           27
      c. Discussion........................................           29
  B. Implementation of the Toll Dialing Parity Requirements           31
    1. Presubscription Method of Achieving Toll Dialing                 
     Parity................................................           31
      a. Background........................................           31
      b. Comments..........................................           33
      c. Discussion........................................           34
    2. Categories of Domestic, Long Distance Traffic                    
     Subject to Presubscription............................           35
      a. Background........................................           35
      b. Comments..........................................           36
      c. Discussion........................................           37
    3. Separate Presubscription for International Calls....           43
      a. Background and Comments...........................           43
      b. Discussion........................................           45
    4. Full 2-PIC Presubscription Method...................           46
      a. Background........................................           46
      b. Comments..........................................           48
      c. Discussion........................................           49
    5. Deployment of Presub-scription Software in Each End              
     Office................................................           51
      a. Background........................................           51
      b. Comments..........................................           52
      c. Discussion........................................           54
  C. Implementation Schedule for Toll Dialing Parity.......           55
    1. Background and Comments.............................           55
    2. Discussion..........................................           59
  D. Implementation of the Local Dialing Parity                         
   Requirements............................................           64
    1. In General..........................................           64
      a. Background........................................           64
      b. Comments..........................................           65
      c. Discussion........................................           67
    2. Local Dialing Parity Methodologies..................           69
      a. Background and Comments...........................           69
      b. Discussion........................................           71
    3. Non-Uniform Local Calling Areas.....................           72
      a. Background........................................           72
      b. Comments..........................................           73
      c. Discussion........................................           75
  E. Consumer Notification and Carrier Selection Procedures           76
      a. Background........................................           76
      b. Comments..........................................           77
      c. Discussion........................................           80
  F. Cost Recovery.........................................           82
      a. Background........................................           82
      b. Comments..........................................           83
      c. Discussion........................................           92
  G. Unreasonable Dialing Delays...........................           96
III. Nondiscriminatory Access Provisions...................           97
  A. Definition of the Term ``Nondiscriminatory Access''...           97
    1. Background..........................................           97
    2. Comments............................................           98
    3. Discussion..........................................          101
  B. Nondiscriminatory Access to Telephone Numbers.........          106
    1. Definition..........................................          106
    2. Commission Action to Enforce Access to Telephone                 
     Numbers...............................................          107
  C. Nondiscriminatory Access to Operator Services.........          108
    1. Definition of ``Operator Services''.................          108
      a. Background and Comments...........................          108
      b. Discussion........................................          110
    2. Definition of ``Nondiscriminatory Access to Operator             
     Services''............................................          112
      a. Background........................................          112
      b. Comments..........................................          113
      c. Discussion........................................          114
    3. Commission Action to Ensure Nondiscriminatory Access             
     to Operator Services..................................          119
      a. Background and Comments...........................          119
      b. Discussion........................................          121
    4. ``Branding'' Requirements for Operator Services.....          123
      a. Background........................................          123
      b. Comments..........................................          126
      c. Discussion........................................          128
  D. Nondiscriminatory Access to Directory Assistance and               
   Directory Listings......................................          130
    1. Definition of ``Nondiscriminatory Access to                      
     Directory Assistance and Directory Listings''.........          130
      a. Background........................................          130
      b. Comments..........................................          131
      c. Discussion........................................          133
    2. Commission Action to Implement Nondiscriminatory                 
     Access to Directory Assistance and Directory Listings.          138
      a. Background and Comments...........................          138
      b. Discussion........................................          141
    3. Branding of Directory Assistance....................          146
      a. Background and Comments...........................          146
      b. Discussion........................................          148
    4. Alternative Dialing Arrangements for Directory                   
     Assistance............................................          149
      a. Background and Comments...........................          149
      b. Discussion........................................          151
  E. Unreasonable Dialing Delay............................          152
    1. Definition and Appropriate Measurement Methods......          152
      a. Background and Comments...........................          152
      b. Discussion........................................          156
    2. Specific Technical Standard for Dialing Delay.......          163
      a. Background and Comments...........................          163
      b. Discussion........................................          164
IV. Network Disclosure.....................................          165
  A. Scope of Public Notice................................          166
    1. Definition of ``Information Necessary for                        
     Transmission and Routing''............................          166
      a. Background and Comments...........................          166
      b. Discussion........................................          171
    2. Definition of ``Services''..........................          175
      a. Background and Comments...........................          175
      b. Discussion........................................          176
    3. Definition of ``Interoperability''..................          177
      a. Background and Comments...........................          177
      b. Discussion........................................          178
    4. Changes that Trigger the Public Notice Requirement..          179
      a. Background and Comments...........................          179
      b. Discussion........................................          182
    5. Types of Information to be Disclosed................          183
      a. Background........................................          183
      b. Comments..........................................          184
      c. Discussion........................................          188
  B. How Public Notice Should be Provided..................          192
    1. Dissemination of Public Notice Through Industry Fora             
     and Publications......................................          192
      a. Background........................................          192
      b. Comments..........................................          193
      c. Discussion........................................          198
    2. When Should Public Notice of Changes Be Provided?...          203
      a. Background........................................          203
      b. Comments..........................................          206
      c. Discussion........................................          214
  C. Relationship with other Public Notice Requirements and             
   Practices...............................................          237
    1. Relationship of Sections 273(c)(1) and 273(c)(4)                 
     with Section 251(c)(5)................................          237
      a. Background........................................          237
      b. Comments..........................................          238
      c. Discussion........................................          240

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    2. Relationship of Sections 251(a) and 251(c)(5) with               
     Section 256...........................................          241
      a. Background........................................          241
      b. Comments..........................................          242
      c. Discussion........................................          244
  D. Enforcement and Safeguards............................          245
    1. Enforcement Mechanisms..............................          245
      a. Background and Comments...........................          245
      b. Discussion........................................          247
    2. Protection of Proprietary Information, Network and               
     National Security.....................................          249
      a. Background and Comments...........................          249
      b. Discussion........................................          254
V. Numbering Administration................................          261
  A. Designation of an Impartial Number Administrator......          262
    1. Background..........................................          262
    2. Comments............................................          263
    3. Discussion..........................................          264
  B. Delegation of Numbering Administration Functions......          267
    1. Delegation of Matters Related to Implementation of               
     New Area Codes........................................          268
      a. Background........................................          268
      b. Comments..........................................          269
      c. Discussion........................................          271
    2. Area Code Implementation Guidelines.................          273
      a. Background........................................          273
      b. Comments..........................................          275
      c. Discussion........................................          281
    3. Texas Public Utility Commission's Area Code Relief               
     Order for Dallas and Houston..........................          294
      a. Background........................................          294
      b. Petition and Comments.............................          295
      c. Discussion........................................          304
    4. Delegation of Additional Numbering Administration                
     Functions.............................................          309
      a. Background........................................          309
      b. Comments..........................................          311
      c. Discussion........................................          315
    5. Delegation of Existing Numbering Administration                  
     Functions Prior to Transfer...........................          323
      a. Background........................................          323
      b. Comments..........................................          324
      c. Discussion........................................          328
  C. Cost Recovery for Numbering Administration............          336
    1. Background..........................................          336
    2. Comments............................................          337
    3. Discussion..........................................          342
  D. Section 271 Competitive Checklist Requirement that the             
   BOCs Provide Non-Discriminatory Access to Numbers for                
   Entry into In-region InterLATA Services.................          344
    1. Background and Comments.............................          344
    2. Discussion..........................................          345
VI. Final Regulatory Flexibility Analysis..................          346
  A. Need for and Purpose of this Action...................          347
  B. Summary of Issues Raised by the Public Comments in                 
   Response to the Initial Regulatory Flexibility Analysis.          349
  C. Description and Estimate of the Small Entities Subject             
   to the Rules............................................          361
  D. Summary of Projected Reporting, Recordkeeping and                  
   Other Compliance Requirements...........................          378
  E. Report to Congress....................................          398
VII. Ordering Clauses......................................          399
                                                                        

I. Introduction and Overview

    1. In February, 1996, Congress passed and the President signed into 
law, the Telecommunications Act of 1996 (1996 Act).1 The 1996 Act 
erects a ``procompetitive, de-regulatory national framework designed to 
accelerate rapid private sector deployment of advanced 
telecommunications and information technologies and services to all 
Americans by opening all telecommunications markets to competition.'' 
2 Section 101 of the 1996 Act adds new section 251 to the 
Communications Act of 1934. Congress intended that the provisions of 
this new section would help competition grow in the market for exchange 
and exchange access and related telecommunications services. It 
directed the Commission to adopt rules that would implement the 
requirements of this section no later than August 8, 1996.3 We 
note, however, that, under section 251(f), certain rural or small local 
exchange carriers (LECs) are exempt or may seek relief from the rules 
we adopt herein.4
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    \1\ Telecommunications Act of 1996, Public Law No. 104-104, 110 
Stat. 56 (1996) (1996 Act), to be codified at 47 U.S.C. 151 et. seq.
    \2\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 (1996).
    \3\ 47 U.S.C. 251(d)(1).
    \4\ 47 U.S.C. 251(f) (1) and (f)(2). We note that the term 
``United States'' means ``the several States and Territories, the 
District of Columbia, and the possessions of the United States, but 
does not include the Canal Zone.'' 47 U.S.C. 153(50).
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    2. We began this rulemaking proceeding on April 19, 1996.5 The 
First Report and Order, which addressed issues that were raised in this 
docket, decided that the Commission should establish national rules 
implementing section 251.6 The First Report and Order interprets 
and implements, inter alia, sections 251 (a), (b)(1), (b)(4), (b)(5), 
(c)(1), (c)(2), (c)(3), (c)(4), and (c)(6). That order promulgates 
rules to open the local exchange and exchange access markets to 
competition by eliminating legal and technical barriers to such 
competition. This Second Report and Order and Memorandum Opinion and 
Order (Order) promulgates rules to implement the parts of section 251 
that relate to the elimination of certain operational barriers to 
competition. Specifically, this Order addresses local exchange 
carriers' obligations to provide their competitors with dialing parity 
and nondiscriminatory access to certain services and functionalities; 
7 incumbent local exchange carriers' duty to make network 
information disclosures; 8 and numbering administration.9 In 
this Order we also deny the Petition for Expedited Declaratory Ruling 
on the area code relief plan for Dallas and Houston that the Texas 
Public Utility Commission (Texas Commission) filed with this Commission 
on May 9, 1996.10 We also address petitions for clarification or 
reconsideration in the Ameritech and NANP proceedings.11
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    \5\ Implementation of the Local Competition Provisions in the 
Telecommunications Act of 1996, CC Docket No. 96-98, Notice of 
Proposed Rulemaking, FCC 96-182 (released April 19, 1996) (NPRM) 61 
FR 18311 (April 25, 1996).
    \6\ Implementation of the Local Competition Provisions in the 
Telecommunications Act of 1996, CC Docket No. 96-98, Interconnection 
between Local Exchange Carriers and Commercial Mobile Radio Service 
Providers, CC Docket No. 95-185, First Report and Order, FCC 96-235 
(released August 8, 1996) (hereinafter First Report and Order) at 
section II.
    \7\ 47 U.S.C. 251(b)(3).
    \8\ 47 U.S.C. 251(c)(5).
    \9\ 47 U.S.C. 251(e)(1).
    \10\ In the Matter of Area Code Relief Plan for Dallas and 
Houston, Ordered by the Public Utility Commission of Texas, Petition 
for Expedited Declaratory Ruling filed May 9, 1996.
    \11\ See In the Matter of Proposed 708 Relief Plan and 630 
Numbering Plan Area Code by Ameritech--Illinois, IAD File No. 94-
102, Declaratory Ruling and Order, 10 FCC Rcd 4596 (1995) (Ameritech 
Order) 60 FR 19255 (April 17, 1995) and Administration of the North 
American Numbering Plan, CC Docket No. 92-237, Report and Order, 11 
FCC Rcd 2588, 2591 (1995) (NANP Order) 60 FR 38737 (July 28, 1995).
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    3. Dialing parity, nondiscriminatory access, network disclosure, 
and numbering administration issues are critical issues for the 
development of local competition. As stated in the First Report and 
Order, incumbent local exchange carriers have little incentive to

[[Page 47287]]

provide access to potential competitors to their networks. In other 
words, potential competitors in the local and long distance markets 
face numerous operational barriers to entry notwithstanding their legal 
right to enter such markets. The dialing parity, nondiscriminatory 
access, and network disclosure requirements should remove those 
barriers to entry. The rules we adopt herein will benefit consumers by 
making some of the strongest aspects of local exchange carrier 
incumbency--the local dialing, telephone numbers, operator services, 
directory assistance, and directory listing--available to all 
competitors on an equal basis.

A. Actions To Implement Section 251(b)(3)

1. Dialing Parity
    4. Section 251(b)(3) of the 1996 Act directs each local exchange 
carrier (LEC) 12 to provide dialing parity to competing providers 
of telephone exchange and telephone toll service.13 This 
requirement means that customers of these competitors should not have 
to dial extra digits to have their calls routed over that LEC's 
network. To implement this statutory requirement, we adopt broad 
guidelines and minimum federal standards that build upon the 
experiences and accomplishments of state commissions. Although the 1996 
Act requires a LEC to provide dialing parity only to providers of 
telephone exchange and toll services, section 251(b)(3) does not limit 
the type of traffic or service for which dialing parity must be 
afforded to those providers. We conclude, therefore, that section 
251(b)(3) requires LECs to provide dialing parity to providers of 
telephone exchange or toll service with respect to all 
telecommunications services that require dialing to route a call and 
encompasses international, interstate, intrastate, local and toll 
services.
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    \12\ The 1996 Act defines the term ``local exchange carrier'' as 
``any person that is engaged in the provision of telephone exchange 
service or exchange access. Such term does not include a person 
insofar as such person is engaged in the provision of commercial 
mobile service under section 332(c), except to the extent that the 
Commission finds that such provider should be included in the 
definition of such term.'' 47 U.S.C. 153(26). For purposes of the 
dialing parity and nondiscriminatory access obligations that we 
impose pursuant to section 251(b)(3), we find that commercial mobile 
radio service (CMRS) providers are not LECs. See infra para. 29.
    \13\ According to the 1996 Act, the term ``dialing parity'' 
means ``that a person that is not an affiliate of a local exchange 
carrier is able to provide telecommunications services in such a 
manner that customers have the ability to route automatically, 
without the use of any access code, their telecommunications to the 
telecommunications services provider of the customer's designation 
from among 2 or more telecommunications services providers 
(including such local exchange carrier).'' 47 U.S.C. 153(15).
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    (5) With respect to toll service, we further find that section 
251(b)(3) requires, at a minimum, that customers be entitled to choose 
different presubscribed, or preselected, carriers for both their 
intraLATA and interLATA toll calls. In states, like Alaska and Hawaii, 
that have no LATAs,14 customers must be able to choose different 
presubscribed carriers for both their intrastate and interstate toll 
calls. Based on this finding, we adopt a rule requiring all LECs to 
implement intraLATA and interLATA toll dialing parity, using the ``full 
2-PIC'' presubscription method.15 The toll dialing parity 
requirement we adopt is defined by LATA boundaries given that the Bell 
Operating Companies' (BOCs') operations are likely to be shaped by LATA 
boundary restrictions for a period of unforeseeable duration. Given 
that implementation of the 1996 Act over time may diminish the 
significance of LATA boundaries, however, we permit states to redefine 
the toll dialing parity requirement based on state, rather than LATA, 
boundaries where a state deems such a requirement to be pro-competitive 
and otherwise in the public interest.16
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    \14\ 47 U.S.C. 153(25). According to the 1996 Act, a LATA is a 
``local access and transport area.'' It is a ``contiguous geographic 
area--
    (A) established before the date of enactment of the 
Telecommunications Act of 1996 by a Bell operating company such that 
no exchange area includes points within more than 1 metropolitan 
statistical area, consolidated metropolitan statistical area, or 
State, except as expressly permitted under the AT&T Consent Decree; 
or
    (B) established or modified by a Bell operating company after 
such date of enactment and approved by the Commission.''
    \15\  We note that the abbreviation ``PIC'' in the past has 
stood for the term ``primary,'' or ``preferred, interexchange 
carrier.'' While we retain the acronym ``PIC,'' we define the term 
to include any toll carrier for purposes of the presubscription 
rules that we adopt in this Order. For a discussion of the full 2-
PIC presubscription methodology, see infra section II.B(4).
    \16\ To illustrate, if the presubscription requirement were 
based on LATA boundaries, a customer would be entitled to choose a 
primary carrier for all intraLATA toll calls and a separate, or the 
same, primary carrier for all interLATA toll calls. If the 
presubscription requirement were based on state boundaries, a 
customer would be entitled to choose a primary carrier for all 
intrastate toll calls and a separate, or the same, primary carrier 
for all interstate toll calls.
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    6. In order to facilitate the orderly implementation of toll 
dialing parity, we require each LEC, including a BOC, to submit a plan 
to the state regulatory commission for each state in which it provides 
telephone exchange service setting forth the LEC's plan for 
implementing toll dialing parity, including the methods it proposes to 
enable customers to select alternative providers. In the event that a 
state elects not to evaluate such a plan sufficiently in advance of the 
date on which a LEC is required to implement toll dialing parity, we 
require the LEC to file its plan with the Commission. The Commission 
will act upon such a plan within 90 days of the date on which it is 
filed with the Commission.
    7. Under the toll dialing parity implementation schedule we adopt, 
we require each LEC, including a BOC, to implement toll dialing parity 
no later than February 8, 1999. In addition, we require a LEC, 
including a BOC, to provide toll dialing parity throughout a state 
coincident with its provision of in-region, interLATA or in-region, 
interstate toll services in that state. LECs, other than BOCs, that are 
either already offering or plan to begin to provide in-region, 
interLATA or in-region, interstate toll services before August 8, 1997, 
must implement toll dialing parity by August 8, 1997. We note that 
smaller LECs, for which this implementation schedule may be unduly 
burdensome, may petition their state commission for a suspension or 
modification of the application of this requirement.17
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    \17\ 47 U.S.C. 251(f)(2).
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    8. Those states desiring to impose more stringent presubscription 
methodologies, e.g., multi-PIC or smart-PIC,18 will retain the 
flexibility to impose such additional requirements. We also announce 
our intention to issue a Further Notice of Proposed Rulemaking 
addressing the technical feasibility and nationwide availability of a 
separate presubscription choice for international calling based on the 
use of multi-PIC or smart-PIC technologies.
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    \18\ The multi-PIC or smart-PIC presubscription method would 
enable subscribers to select multiple carriers for various 
categories of toll traffic. For a discussion of multi-PIC and smart-
PIC presubscription methodologies, see infra section II.B(4).
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    9. Pursuant to the local dialing parity requirements of section 
251(b)(3), we require a LEC to permit telephone exchange service 
customers, within a defined local calling area, to dial the same number 
of digits to make a local telephone call, notwithstanding the identity 
of the customer's or the called party's local telephone service 
provider. We decline at this time to prescribe additional guidelines to 
address the methods that LECs may use to accomplish local dialing 
parity given our finding that local dialing parity will be achieved 
upon implementation of the number portability and interconnection 
requirements of section 251, as well as

[[Page 47288]]

the provisions requiring nondiscriminatory access to telephone numbers 
found in section 251(b)(3).
    10. We also decline to adopt federal consumer education programs or 
procedures that would inform consumers of the existence of competitive 
telecommunications providers. Instead, we leave decisions regarding 
consumer education and carrier selection procedures to the states. We 
conclude that, in order to ensure that dialing parity is implemented in 
a pro-competitive manner, national rules are needed for the recovery of 
dialing parity implementation costs.
    11. Section 271 of the 1996 Act requires BOCs to provide intraLATA 
toll dialing parity throughout a state coincident with the exercise of 
their authority to offer interLATA services originating within the 
state.19 BOC entry into the interLATA market is conditioned upon 
their offering ``nondiscriminatory access to such services or 
information as are necessary to allow the requesting carrier to 
implement local dialing parity in accordance with the requirements of 
Section 251(b)(3).'' 20
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    \19\ 47 U.S.C. 271(e)(2)(A).
    \20\ 47 U.S.C. 271(c)(2)(B)(xii). We decline to address section 
271(c)(2)(B) issues in this Order. We will consider each BOC's 
application to enter in-region, interLATA services pursuant to 
section 271(c)(2)(B) on a case-by-case basis to determine whether 
the BOC has complied with section 271(c)(2)(B)(xii).
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2. Nondiscriminatory Access
    12. Section 251(b)(3) also requires all LECs to permit competing 
providers of telephone exchange service and toll service 
``nondiscriminatory access to telephone numbers, operator services, 
directory assistance and directory listings.'' 21 We conclude that 
``Nondiscriminatory access,'' as used in section 251(b)(3), encompasses 
both: (1) Nondiscrimination between and among carriers in rates, terms 
and conditions of access; and (2) the ability of competing providers to 
obtain access that is at least equal in quality to that of the 
providing LEC. This definition of ``nondiscriminatory access'' in 
section 251(b)(3) recognizes the more general application of that 
section to all LECs, whereas section 251(c) places more specific duties 
upon incumbent LECs in terms of nondiscriminatory access. We conclude 
that the term ``nondiscriminatory access to telephone numbers'' 
requires all LECs to permit competing providers access to telephone 
numbers that is identical to the access the LEC provides to itself.
---------------------------------------------------------------------------

    \21\ 47 U.S.C. 251(b)(3).
---------------------------------------------------------------------------

    13. We conclude that the term ``operator services,'' for purposes 
of section 251(b)(3), means any automatic or live assistance to a 
consumer to arrange for billing or completion, or both, of a telephone 
call. Such a definition includes busy line verification, emergency 
assistance, operator-assisted directory assistance, and any other such 
services used to arrange for the billing and/or completion of telephone 
calls. We further conclude that any customer of a telephone service 
provider that provides operator services should be able to obtain these 
services by dialing ``0'' or ``0-plus the desired telephone number.'' 
If a dispute arises regarding a competitor's access to operator 
services, the burden will be upon the providing LEC to demonstrate, 
with specificity, that it has permitted nondiscriminatory access and 
that any disparity is not caused by network elements within its 
control. To the extent that operator services use any information 
services and adjuncts that are not ``telecommunications services,'' of 
which resale is required under 251(b)(1), LECs are required to make 
available such services to competing providers in their entirety as a 
requirement of nondiscriminatory access under 251(b)(3).22 
Finally, we find that the refusal of a LEC providing nondiscriminatory 
access to comply with reasonable requests of competing providers to 
``brand'' resold operator services as those of the reseller, or to 
remove its brand, creates a presumption that the LEC is unlawfully 
restricting access to operator services.
---------------------------------------------------------------------------

    \22\ Id.
---------------------------------------------------------------------------

    14. We conclude that the requirement in section 251(b)(3) of 
nondiscriminatory access to directory assistance means that LECs that 
provide directory assistance must permit access to this service to 
competing providers that is at least equal in quality to the access 
that the LEC provides to itself. We impose obligations upon all LECs to 
satisfy the requirement of nondiscriminatory access to directory 
listings. If a LEC provides directory assistance, that LEC must permit 
competing providers to have access to its directory assistance, so that 
any customer of a competing provider can access any listed number on a 
nondiscriminatory basis, notwithstanding the identity of the customer's 
local service provider. Further, we require LECs to share directory 
listings with competing service providers, in ``readily accessible'' 
tape or electronic formats, upon request, and in a timely manner. To 
the extent that all or part of directory assistance services are not 
``telecommunications services,'' of which resale is required under 
251(b)(1), LECs must make available such services in their entirety as 
part of their obligation to permit nondiscriminatory access to 
competing providers.23 This requirement thus extends to any 
information services and adjuncts used to provide directory assistance. 
Finally, as with the branding of resold operator services, we find that 
the refusal of a LEC providing nondiscriminatory access to directory 
assistance to ``brand'' resold directory assistance services as those 
of the reseller, or to remove its brand, creates a presumption that the 
LEC is unlawfully restricting access to directory assistance.
---------------------------------------------------------------------------

    \23\ Id.
---------------------------------------------------------------------------

    15. We also conclude that section 251(b)(3)'s requirement of 
nondiscriminatory access and its prohibition of unreasonable dialing 
delays applies to both the provision of local and toll dialing parity. 
We conclude that the dialing delay experienced by customers of a 
competing provider should not be greater than that experienced by 
customers of a LEC providing dialing parity or nondiscriminatory 
access, for identical calls or call types. Finally, we conclude that 
the statutory obligation to avoid unreasonable dialing delays places a 
duty on LECs that provide dialing parity, or nondiscriminatory access 
to operator services or directory assistance, to process all calls from 
competing providers on the same terms as calls from its own customers.

B. Actions To Implement Section 251(c)(5)

    16. In addition to the duties imposed by section 251(b)(3) on all 
LECs, new section 251(c)(5) imposes upon incumbent LECs the duty to 
``provide reasonable public notice of changes in the information 
necessary for the transmission and routing of services using that local 
exchange carrier's facilities or networks, as well as of any other 
changes that would affect the interoperability of those facilities or 
networks.'' 24 We adopt broad guidelines

[[Page 47289]]

to implement section 251(c)(5). We also specify how public notice must 
be made whenever an upcoming change may affect the way in which a 
competing service provider transmits, routes, or otherwise provides its 
services.
---------------------------------------------------------------------------

    \24\ An incumbent LEC, with respect to an area, is defined under 
the 1996 Act as ``the local exchange carrier that: (A) on the date 
of enactment of the Telecommunications Act of 1996, provided 
telephone exchange service in such area; and (B)(i) on such date of 
enactment, was deemed to be a member of the exchange carrier 
association pursuant to section 69.601(b) of the Commission's 
regulations (47 CFR 69.601(b)); or (ii) is a person or entity that, 
on or after such date of enactment, became a successor or assign of 
a member described in clause (i).'' 47 U.S.C. 251(h)(1).
---------------------------------------------------------------------------

    17. We conclude that ``information necessary for transmission and 
routing'' in section 251(c)(5) means any information in the incumbent 
LEC's possession that affects a competing service provider's 
performance or ability to provide either information or 
telecommunications services. We define ``interoperability'' as the 
ability of two or more facilities, or networks, to be connected, to 
exchange information, and to use the information that has been 
exchanged.

C. Actions Taken To Implement Section 251(e)

    18. New section 251(e)(1) restates the Commission's authority over 
matters relating to the administration of numbering resources by giving 
the Commission ``exclusive jurisdiction over those portions of the 
North American Numbering Plan that pertain to the United States.'' 
25 This section also requires the Commission to ``create or 
designate one or more impartial entities to administer 
telecommunications numbering and to make such numbers available on an 
equitable basis.'' 26 Finally, section 251(e)(2) provides that the 
cost of establishing telecommunications numbering administration 
arrangements ``shall be borne by all telecommunications carriers on a 
competitively neutral basis as determined by the Commission.'' 27 
In this Order, we address whether further action is required to create 
or designate an impartial entity to administer telecommunications 
numbering. We clarify the states' role in number administration, and 
provide direction to states wishing to use area code overlay plans. We 
also clarify how cost recovery for numbering administration will occur. 
We deny the petition for expedited declaratory ruling filed by the 
Texas Commission based on our finding that the Texas Commission's 
wireless-only area code overlay plan violates the guidelines set forth 
in our Ameritech Order. We authorize Bellcore and the incumbent LECs to 
perform number administration functions as they did prior to the 
enactment of the 1996 Act until such functions are transferred to the 
new North American Numbering Plan Administrator.
---------------------------------------------------------------------------

    \25\ 47 U.S.C. 251(e)(1).
    \26\ Id.
    \27\ 47 U.S.C. 251(e)(2).
---------------------------------------------------------------------------

    19. We conclude that we have taken appropriate action to designate 
an impartial number administrator pursuant to section 251(e)(1). We 
further conclude that the Commission should retain its authority to set 
policy with respect to all facets of numbering administration to ensure 
the creation of a nationwide, uniform system of numbering that is 
essential to the efficient delivery of interstate and international 
telecommunications services and to the development of a competitive 
telecommunications services market. While we retain this policy-making 
authority, we authorize the states to resolve matters involving 
implementation of new area codes subject to the guidelines set forth in 
this Order.
    20. In this Order, we also prohibit the use of service-specific or 
technology-specific area code overlay plans. States may employ all-
services overlays only if they also mandate 10-digit dialing for all 
local calls within the area affected by the area code change and ensure 
the availability of at least one central office code in the existing 
area code to every entity authorized to provide local exchange service 
in that area, including CMRS providers.
    21. To fulfill the mandate of section 251(e)(2), we require that 
(1) only ``telecommunications carriers,'' as defined in section 3(44) 
of the 1996 Act, shall contribute to the costs of numbering 
administration; 28 and (2) that such contributions shall be based 
on each contributor's gross revenues from its provision of 
telecommunications services reduced by all payments for 
telecommunications services and facilities that have been paid to other 
telecommunications carriers.
---------------------------------------------------------------------------

    \28\ The term ``telecommunications carrier'' means ``any 
provider of telecommunications services, except that such term does 
not include aggregators of telecommunications services (as defined 
in section 226). A telecommunications carrier shall be treated as a 
common carrier under this Act only to the extent that it is engaged 
in providing telecommunications services, except that the Commission 
shall determine whether the provision of fixed and mobile satellite 
service shall be treated as common carriage.'' 47 U.S.C. 153(44).
---------------------------------------------------------------------------

II. Dialing Parity Requirements

A. In General

    22. With dialing parity a telephone customer can preselect any 
provider of telephone exchange service or telephone toll service 
without having to dial extra digits to route a call to that carrier's 
network. Until now, in most states, telephone customers wishing to have 
their intraLATA toll calls carried by a carrier other than their 
current provider of telephone exchange service had to dial a five- or 
seven-digit prefix or access code before dialing the called party's 
telephone number.29 Presubscription to a carrier other than a 
customer's telephone exchange service provider has not been an option 
for interstate, intraLATA toll calls or in most states for intrastate, 
intraLATA toll calls.30 In states where intrastate, intraLATA toll 
dialing parity is available, a customer may presubscribe to a carrier 
other than his or her provider of telephone exchange service and have 
all of that customer's intrastate, intraLATA toll calls carried by that 
selected carrier simply by dialing ``1'' plus the area code and 
telephone number of the called party.31 The section 251(b)(3) 
dialing parity obligation will foster vigorous local exchange and long 
distance competition by ensuring that each customer has the freedom and 
flexibility to choose among different carriers for different services 
without the burden of dialing access codes.
---------------------------------------------------------------------------

    \29\ Sometimes referred to as ``10XXX'' or ``101XXXX'' dialing, 
callers may reach a long distance carrier in states where such 
dialing arrangements are authorized by dialing a five-digit carrier 
access code (``10XXX,'' with ``XXX'' representing a three-digit 
carrier identification code) or a seven digit carrier access code 
(``101XXXX,'' with ``XXXX'' representing a carrier identification 
code).
    \30\ An ``interstate, intraLATA toll call'' is a call that: (1) 
Crosses a state boundary but does not cross a LATA boundary; and (2) 
is subject to a charge. A call from Philadelphia, Pennsylvania to 
Cherry Hill, New Jersey (currently handled by Bell Atlantic) is an 
example of such a call.
    \31\ It is our understanding that some form of intraLATA toll 
dialing parity is available or has been ordered in Alaska, Arizona, 
Connecticut, Florida, Georgia, Illinois, Kentucky, Michigan, 
Minnesota, New Jersey, New York, Ohio, Pennsylvania, West Virginia, 
Wisconsin and Wyoming. See Ex parte letter from Charles D. Cosson, 
USTA, to William F. Caton, Acting Secretary, Federal Communications 
Commission, filed in CC Docket No. 96-98, July 10, 1996, at 2.
---------------------------------------------------------------------------

The Need for Minimum Nationwide Dialing Parity Standards
a. Background and Comments
    23. Section 251(b)(3) imposes on all LECs the ``duty to provide 
dialing parity to competing providers of telephone exchange service and 
telephone toll service.'' 32 In the NPRM, we sought comment on 
whether the Commission should adopt nationwide dialing parity standards 
and, if so, what those standards should be.33
---------------------------------------------------------------------------

    \32\ 47 U.S.C. 251(b)(3).
    \33\ NPRM at paras. 206, 207, 209-213, 218, 219.
---------------------------------------------------------------------------

    24. A majority of commenters urge the Commission to adopt uniform 
nationwide dialing parity guidelines,

[[Page 47290]]

but commenters differ on how detailed such federal rules should be. For 
example, the Telecommunications Resellers Association maintains that 
specific national standards are needed to ensure that competing 
providers are able to utilize common network designs in multiple 
markets and to prevent incumbent LECs from ``gaming'' or ``manipulating 
the processes'' of the states.34 Ameritech urges the Commission to 
adopt ``broad rules that afford sufficient flexibility to accommodate 
local conditions.'' 35 Other commenters, such as Bell Atlantic, 
opposing the adoption of federal dialing parity standards, assert that 
the proponents of such standards have failed to demonstrate how they or 
consumers have been harmed by ``locally tailored implementation'' of 
dialing parity in the intraLATA toll markets.36 Without such a 
demonstration, argues Bell Atlantic, the Commission should not 
interfere with states' activities.37 Cincinnati Bell Telephone 
Company (CBT) likewise opposes federal standards, maintaining that so 
long as a state regulatory commission adopts a toll dialing parity 
arrangement that ``offers consumers a choice from at least two 
carriers, one of which is the local exchange carrier, the requirements 
of the 1996 Act have been met.'' 38
---------------------------------------------------------------------------

    \34\ Telecommunications Resellers Association reply at 8-9.
    \35\  Ameritech reply at i.
    \36\  Bell Atlantic reply at 2.
    \37\  Id.
    \38\  CBT comments at 5.
---------------------------------------------------------------------------

b. Discussion
    25. We conclude that the purpose of the statutory dialing parity 
requirements--to facilitate the introduction of competition in the 
local and toll markets--is best served by the adoption of broad 
guidelines and minimum federal standards that build upon the states' 
experiences. We conclude that such minimum nationwide standards will 
facilitate competition to the extent that new entrants seeking to offer 
regional or national services will not be subjected to an array of 
differing state standards and timetables.39 We note that our 
conclusion to adopt nationwide dialing parity standards is consistent 
with our conclusion in the First Report and Order that nationwide 
standards to implement other section 251 provisions are necessary to 
facilitate competition by serving as a backdrop against which 
interconnection negotiations and arbitration can occur.40 We are 
persuaded that, contrary to the views of Bell Atlantic, the failure to 
adopt minimum federal standards would harm both new entrants and 
consumers by delaying the introduction of competition and imposing 
additional costs on competitors, including small entities, particularly 
when different network configurations are required in each market. We 
conclude that uniform standards--in some cases minimum, uniform 
standards--will speed competitive entry by more promptly opening the 
local and toll markets to competition.
---------------------------------------------------------------------------

    \39\ We note that section 271(e)(2)(B) precludes most states 
from requiring a BOC to implement intraLATA toll dialing parity in a 
state before the BOC has received authority to provide in-region, 
interLATA services in such state or before three years after 
enactment of the 1996 Act, whichever is earlier. 47 U.S.C. 
271(e)(2)(B).
    \40\ See First Report and Order at section II.
---------------------------------------------------------------------------

2. Scope of the Dialing Parity Requirements
a. Background
    26. Under section 251(b)(3) a LEC must provide dialing parity only 
to competing providers of telephone exchange service and telephone toll 
service.41 The scope of the obligation to provide dialing parity, 
however, is not limited to a particular type of traffic or service. 
Section 251(b)(3) makes no distinction among international, interstate 
and intrastate traffic for purposes of the dialing parity 
provisions.42 The statutory definition of ``dialing parity'' also 
contains no such distinctions and, instead, speaks generally in terms 
of the provision of ``telecommunications services'' by ``a person that 
is not an affiliate of a local exchange carrier.'' 43 Based on the 
absence of any such distinctions in defining the scope of the dialing 
parity requirements, the NPRM tentatively concluded that section 
251(b)(3) creates a duty to provide dialing parity to competing 
providers of telephone exchange service and telephone toll service with 
respect to all telecommunications services that require dialing to 
route a call, and encompasses international as well as interstate and 
intrastate, local and toll services.44
---------------------------------------------------------------------------

    \41\ 47 U.S.C. 251(b)(3).
    \42\ Id.
    \43\  47 U.S.C. 153(15).
    \44\  NPRM at para. 206.
---------------------------------------------------------------------------

b. Comments
    27. Numerous parties express support for the Commission's tentative 
conclusion.45 Several parties qualify their support for this 
conclusion, however, by asserting that the duty to provide dialing 
parity to competing providers of telephone toll service applies to 
international calls only to the extent that it entitles a customer to 
route automatically, without the use of an access code, all of the 
customer's international calls to his or her presubscribed interLATA 
long distance carrier.46 These parties maintain that section 
251(b)(3) does not require LECs to provide customers a separate 
presubscription choice for international calling.47
---------------------------------------------------------------------------

    \45\ See, e.g., MFS comments at 2; California Commission 
comments at 3.
    \46\ See, e.g., Sprint comments at 4-5; SBC comments at 5.
    \47\ Id.
---------------------------------------------------------------------------

    28. A broad range of parties also support the tentative conclusion 
that section 251(b)(3) imposes a duty on the LEC to provide both local 
and toll dialing parity.48 Two parties reject this tentative 
conclusion, arguing that the dialing parity requirements apply only to 
local calling and do not extend to toll services.49 Specifically, 
Lincoln Telephone and the Pennsylvania Commission contend that Congress 
addressed toll dialing parity only in section 271(e)(2) of the 1996 Act 
as it relates to the conditions under which a BOC may enter the in-
region, interLATA toll business and question the Commission's authority 
to implement toll dialing parity requirements.50 U S WEST 
similarly argues that section 251(b)(3) imposes only a duty to provide 
local dialing parity and suggests that the only affirmative obligation 
to provide toll dialing parity is contained in the equal access 
provisions of section 251(g) of the 1996 Act, which, U S WEST states, 
applies only to the BOCs and GTE.51 Lincoln Telephone makes the 
additional argument that competitive providers wishing to enter the 
intraLATA toll market should be required to ``share responsibility for 
serving the entire LATA, rather than simply selecting the lowest cost 
customers from the most profitable exchanges without regard to that 
practice's effect on other customers.'' 52 The imposition of such 
a requirement, according to Lincoln Telephone, would ``reflect a 
commitment to affordable universal service.'' 53
---------------------------------------------------------------------------

    \48\ See, e.g., Excel comments at 6; MCI comments at 2; 
BellSouth comments at 9.
    \49\ Lincoln Telephone comments at 2-3; Pennsylvania Commission 
comments at 1-2.
    \50\ Id.
    \51\ U S WEST comments at 4-5.
    \52\ Lincoln Telephone comments at 5.
    \53\ Id. at 6.
---------------------------------------------------------------------------

c. Discussion
    29. We adopt our tentative conclusion that section 251(b)(3) 
creates a duty to provide dialing parity to competing

[[Page 47291]]

providers of telephone exchange service and telephone toll service with 
respect to all telecommunications services that require dialing to 
route a call, and encompasses international as well as interstate and 
intrastate, local and toll services.54 We note that section 
251(b)(3) does not limit the types of traffic or services for which 
dialing parity must be provided to competing providers of telephone 
exchange and telephone toll service. The reference to these types of 
providers clearly shows that dialing parity must be provided for 
exchange service and toll service. Nothing in the statutory language 
limits the scope of the dialing parity obligation to exchange and toll 
services or distinguishes among the various types of telecommunications 
services in imposing the dialing parity obligations. This conclusion is 
further supported by the statutory definition of dialing parity insofar 
as it refers to the provision of ``telecommunications services'' 
generally without distinction among various types of telecommunications 
services.55 In addition, we are not persuaded that section 251(g) 
relieves certain LECs of the duty to provide toll dialing parity. That 
section contains no reference or cross reference to dialing parity or 
to section 251(b)(3). Section 251(g) preserves the equal access 
obligations already imposed on the BOCs and GTE, but does not exempt 
them or other LECs from the toll dialing parity requirements. Finally, 
we note that CMRS providers are not required to provide dialing parity 
or nondiscriminatory access under section 251(b)(3) because the 
Commission has not determined that CMRS providers are LECs and section 
332(c) of the Communications Act of 1934 provides that a ``person 
engaged in the provision of commercial mobile services * * * shall not 
be required to provide equal access to common carriers for the 
provision of toll services.'' 56
---------------------------------------------------------------------------

    \54\ NPRM at para. 206.
    \55\ The issue of whether a separate presubscription choice is 
required for international, interstate, and intrastate toll calls is 
discussed more fully in section II.B(2) infra.
    \56\ 47 U.S.C. 332(c)(8).
---------------------------------------------------------------------------

    30. Finally, concerning Lincoln Telephone's proposal to require 
competitive providers of intraLATA toll service to serve an entire 
LATA, rather than merely certain low cost customers within a LATA, we 
note that Lincoln Telephone, in essence, is asking us to condition a 
carrier's receipt of dialing parity upon that carrier's assuming the 
obligation of an ``eligible'' telecommunications carrier.57 We 
find neither the language of section 251(b)(3) nor its legislative 
history supports the conclusion that Congress intended to condition a 
carrier's right to receive the benefits of dialing parity upon its 
assuming the obligations of an eligible telecommunications carrier. The 
issue of encouraging carriers to provide universal service throughout a 
service territory is beyond the scope of this proceeding.58 Also, 
for the Commission to make LATA-wide or state-wide service a 
precondition of entry into that LATA or state would be to erect a major 
legal barrier to entry, particularly for smaller telecommunications 
services providers, that is contrary to the basic thrust of the 1996 
Act.
---------------------------------------------------------------------------

    \57\ An eligible telecommunications carrier is a common carrier 
that offers all services that are supported by federal universal 
service support mechanisms under section 254(c) and that uses 
``media of general distribution'' to advertise the availability of 
those services and its charges for them. 47 U.S.C. 214(e)(1). The 
issue of which services should receive support from universal 
service support mechanisms is being addressed by the Commission and 
the Federal-State Joint Board on universal service, as required by 
new section 254 of the Communications Act, as amended by the 1996 
Act. See Federal-State Joint Board on Universal Service, CC Docket 
No. 96-45, Notice of Proposed Rulemaking and Order Establishing 
Joint Board, FCC 96-93, (released March 8, 1996) (Universal Service 
NPRM) (proposing rules to implement section 254 of the 1996 Act) 61 
FR 10499 (March 14, 1996).
    \58\ See Universal Service NPRM.
---------------------------------------------------------------------------

B. Implementation of the Toll Dialing Parity Requirements

1. Presubscription Method of Achieving Toll Dialing Parity

a. Background
    31. The statutory definition of dialing parity provides that the 
customer must have the ability to choose ``from among 2 or more 
telecommunications services providers (including such local exchange 
carrier).'' 59 The definition also provides that customers must be 
able to exercise this choice by being able ``to route automatically 
without the use of access codes, their telecommunications to the 
telecommunications services provider of the customer's designation.'' 
60 Thus, LECs are precluded from relying on access codes as a 
means of providing dialing parity to competitive service 
providers.61 The 1996 Act, however, does not specify what methods 
should be used to implement dialing parity. The NPRM tentatively 
concluded that presubscription represents the most feasible method of 
achieving dialing parity in long distance markets consistent with the 
statutory definition of dialing parity and sought comment as to this 
tentative conclusion.62 In this context, the NPRM defined 
``presubscription'' as the process by which a customer preselects a 
carrier to which all of a particular category or categories of calls on 
the customer's line will be routed automatically.63
---------------------------------------------------------------------------

    \59\ 47 U.S.C. 153(15).
    \60\ Id.
    \61\ Id.
    \62\ NPRM at para. 207.
    \63\ Id.
---------------------------------------------------------------------------

    32. As stated in the NPRM, presubscription to a carrier other than 
the customer's local exchange carrier has not been available for 
interstate, intraLATA toll calls nor has it been available in most 
states for intrastate, intraLATA toll calls.64 Instead, LECs 
automatically carry these calls rather than routing them to a 
presubscribed carrier of the customer's choice. If the state from which 
the customer is calling has authorized competition, but has not ordered 
presubscription in the intraLATA toll market, a customer wishing to 
route an intraLATA toll call to an alternative carrier typically must 
dial the carrier access code of the alternative carrier.
---------------------------------------------------------------------------

    \64\ Id. at para. 208.
---------------------------------------------------------------------------

b. Comments
    33. Nearly all parties concur in the Commission's tentative 
conclusion that presubscription represents the most feasible method of 
achieving toll dialing parity consistent with the statutory definition 
of dialing parity.65 PacTel and Lincoln Telephone suggest that 
presubscription is not required to achieve toll dialing parity so long 
as customers can reach competing toll carriers through the use of 
carrier access codes.66 Finally, BellSouth argues that the toll 
dialing parity requirement is satisfied by ``removing the intraLATA 
default to the incumbent LEC, thus assuring that no additional digits 
need to be dialed in order to reach carriers competing with the 
incumbent LEC for intraLATA toll service.'' 67 BellSouth further 
argues that the Commission should confirm that such arrangements are 
consistent with the statutory dialing parity requirements.68
---------------------------------------------------------------------------

    \65\ See, e.g., Ohio Commission comments at 6; NEXTLINK comments 
at 9.
    \66\ See, e.g., PacTel reply at 10 (``Toll dialing parity, on 
the other hand, should mean that customers can reach competing toll 
carriers on the same dialing basis, including through the use of 
carrier access codes, with an equal number of digits.''); Lincoln 
Telephone comments at 2-3.
    \67\ BellSouth comments at 11 n.23.
    \68\ Id.
---------------------------------------------------------------------------

c. Discussion
    34. We adopt our tentative conclusion that the dialing parity 
requirement for toll calling can best be achieved through 
presubscription because that method would enable customers to route a

[[Page 47292]]

particular category of traffic to a preselected carrier without having 
to dial access codes. We note that the use of access codes to route 
calls among competing providers of telephone toll service is precluded 
under the statutory definition of dialing parity.69 Accordingly, 
we disagree with those parties who contend that toll dialing parity can 
be achieved through the use of access codes in a manner that is 
consistent with the statutory definition of dialing parity.70 We 
also cannot conclude that the toll dialing parity requirement is 
satisfied by removing the intraLATA default, as BellSouth 
maintains.71 Removing the intraLATA default would not satisfy the 
toll dialing parity requirement unless the LEC also uses the full 2-PIC 
presubscription methodology discussed below.72
---------------------------------------------------------------------------

    \69\ See 47 U.S.C. 153(15).
    \70\ Although the use of access codes to access competing 
providers of telephone toll service does not constitute dialing 
parity as defined in 47 U.S.C. 153(15), we do not intend to preclude 
their use where a customer wishes to route a call to a carrier other 
than his or her presubscribed intraLATA toll carrier.
    \71\ We understand BellSouth's reference to ``removing the 
intraLATA default'' to mean that BellSouth would modify its switches 
so they no longer automatically route all intraLATA toll calls to 
BellSouth and thus, would permit customers to choose an alternative 
intraLATA toll carrier.
    \72\ For a discussion of the full 2-PIC methodology, see section 
II.B(4) infra.
---------------------------------------------------------------------------

2. Categories of Domestic, Long Distance Traffic Subject to 
Presubscription
a. Background
    35. In the NPRM, the Commission sought comment as to the categories 
of long distance traffic (e.g., intrastate, interstate, and 
international traffic) for which a customer should be entitled to 
choose presubscribed carriers.73 The NPRM also sought comment on 
specific alternative methods for implementing local and toll dialing 
parity, including various forms of presubscription, in the interstate 
and intrastate long distance and international markets, that are 
consistent with the statutory requirements set forth in the 1996 
Act.74
---------------------------------------------------------------------------

    \73\ NPRM at para. 210.
    \74\ Id. at para. 209.
---------------------------------------------------------------------------

b. Comments
    36. Most parties appear to agree that customers should be entitled 
to presubscribe to two separate carriers for their toll calling.75 
There is a lack of consensus in the record, however, regarding how the 
Commission should define the presubscription requirement. USTA, for 
example, argues that ``[a]ll telecommunications carriers, including 
LECs, should be permitted to define the scope of local service and toll 
service in response to market forces.'' 76 USTA further argues 
that the ``relevant distinction, for the long term, will be between 
intrastate and interstate toll traffic.'' 77 Sprint, on the other 
hand, argues in favor of maintaining a presubscription requirement 
based on LATA boundaries and recommends that customers continue to be 
allowed to choose separate intraLATA and interLATA toll 
carriers.78 Sprint urges us to maintain the LATA distinction, 
asserting that ``competition over the past 12 years has developed 
around the LATA concept, and presubscription has for the most part 
already occurred along these lines.'' 79
---------------------------------------------------------------------------

    \75\ See, e.g., Ohio Consumers' Counsel comments at 2; see also 
MCI comments at 3 (recommending that call types subject to 
presubscription should include: 1-plus/0-plus interexchange, 7-digit 
interexchange and 1+555-1212 calls); cf. GTE comments at 9 
(maintaining that decisions regarding appropriate presubscription 
categories should be left to state regulatory agencies on theory 
that states are best positioned to balance value of additional 
carrier choices against higher administrative and network design 
costs associated with increased number of presubscription choices).
    \76\ Ex parte letter from Charles D. Cosson, USTA, to William F. 
Caton, Acting Secretary, Federal Communications Commission, filed in 
CC Docket No. 96-98, June 17, 1996, at 2.
    \77\ USTA comments at 3 n.2; see also MFS reply at 12-13 (``The 
Commission should recognize that rules for intraLATA presubscription 
are transitory. At some point, when the BOCs and GTE are authorized 
to provide both interLATA and intraLATA service, the distinctions 
between interLATA and intraLATA calls will no longer be meaningful, 
and the Commission should be prepared to revisit and eliminate these 
distinctions.'').
    \78\ Sprint comments at 4.
    \79\ Id. At the same time, Sprint asks that we eliminate the 
intrastate intraLATA/interstate intraLATA distinction and make all 
intraLATA toll calls (both interstate and intrastate) subject to a 
single presubscription.
---------------------------------------------------------------------------

c. Discussion
    37. With respect to toll service, we conclude that section 
251(b)(3) requires, at a minimum, that customers be entitled to choose 
presubscribed carriers for their intraLATA and interLATA toll calls. 
Because of the variations that exist among LATA boundaries and toll 
traffic within, and among, the various states, we have also concluded 
that each state should have the opportunity to determine whether 
customers should be able to presubscribe to carriers for intrastate 
toll service and for interstate toll service in lieu of the intraLATA 
and interLATA toll presubscription dichotomy that we have established 
as a minimum nationwide standard at this time. Although toll dialing 
parity typically has been based on LATA boundaries in multi-LATA states 
where it has been implemented, we do not impose a requirement that toll 
dialing parity be based only on LATA boundaries given our expectation 
that implementation of the 1996 Act eventually will diminish the 
significance of LATA boundaries.80 We are aware that BOCs remain 
subject to certain LATA boundary restrictions for at least the near-
term and that some BOCs may find it technically infeasible, or 
otherwise undesirable, to implement toll dialing parity based on state 
boundaries.81 We thus conclude that states should be able to take 
the relevance of those factors into account, where applicable, and have 
the flexibility to require that toll dialing parity implementation be 
based on state boundaries where they determine that implementing toll 
dialing parity on the basis of state boundaries would be pro-
competitive and otherwise in the public interest. In Alaska and Hawaii, 
states with no LATAs, toll dialing parity will continue to be based on 
state boundaries.
---------------------------------------------------------------------------

    \80\ USTA correctly notes that independent exchange carriers 
have not been subject to the interLATA line of business restrictions 
that were imposed on the BOCs pursuant to the AT&T Consent Decree. 
See United States v. American Telephone and Telegraph Co., 552 F. 
Supp. 226 (D.D.C. 1982). See USTA comments at 3 n.2.
    \81\ For example, where BOCs receive authority to provide in-
region, interLATA services, they are required to provide such 
services through a separate affiliate for at least three years 
pursuant to section 272 of the 1996 Act. See 47 U.S.C. Secs. 272 
(a)(2), (f)(1). Accordingly, it appears that the LATA distinction 
will remain relevant insofar as it will continue to define the 
geographic areas in which a BOC must provide toll services through 
an affiliate and those in which it may provide toll services 
directly.
---------------------------------------------------------------------------

    38. We also direct each LEC to submit to the state regulatory 
commission for each state in which it provides telephone exchange 
service the LEC's plan for implementing toll dialing parity. That plan 
must contain detailed implementation information, including the 
proposed date for dialing parity implementation for that exchange that 
the LEC operates in each state, and the method it proposes for enabling 
customers to select alternative providers of telephone toll service. 
For a LEC, other than a BOC, the plan also must identify the LATA with 
which the LEC proposes to associate.82
---------------------------------------------------------------------------

    \82\ States may require a LEC to provide other categories of 
information in its plan in addition to the information categories 
stated here.
---------------------------------------------------------------------------

    39. We find that the states are best able to evaluate 
implementation plans in a way that will avoid service disruptions for 
subscribers and promote competition in the intrastate toll market. A 
LEC must first obtain state approval of its implementation plan before 
it implements toll dialing parity. If the LEC determines that a state 
commission elects not to evaluate the LEC's toll dialing parity 
implementation plan for

[[Page 47293]]

that state sufficiently in advance of the date on which a LEC is 
required to implement toll dialing parity pursuant to the Commission's 
rules, we direct the LEC to file its plan with the Commission.83 
The Commission will release a public notice of any such LEC filings, in 
order to give interested parties an opportunity to comment. The LEC's 
plan will be deemed approved on the fifteenth day following release of 
the Commission's public notice unless, no later than the fourteenth day 
following the release of the Commission's public notice, either: (1) 
The Common Carrier Bureau notifies the LEC that its plan will not be 
deemed approved on the fifteenth day; or (2) an opposition to the plan 
is filed with the Commission and served on the LEC that filed the plan. 
The opposition must state specific reasons why the plan does not serve 
the public interest.
---------------------------------------------------------------------------

    \83\ See infra para. 62 , which sets forth the dates by which a 
dialing parity implementation plan must be filed with the Commission 
in the event that a state will not be evaluating the plan.
---------------------------------------------------------------------------

    40. If one or more oppositions are filed, the LEC that filed the 
plan will have seven additional days (i.e., until no later than the 
twenty-first day following the release of the Commission's public 
notice) within which to file a reply to the opposition(s) and serve it 
on all parties that filed oppositions. The response shall: (a) Include 
information responsive to the allegations and concerns identified by 
the opposing party; and (b) identify possible revisions to the plan 
that will address the opposing party's concerns. In the case of such 
contested toll dialing parity plans, the Common Carrier Bureau will act 
on the plan within ninety days of the date on which the Commission 
released its public notice.84 In the event the Bureau fails to act 
within 90 days, the plan will not go into effect pending Bureau action. 
If the plan is not contested but did not go into effect on the 
fifteenth day after the Commission released its public notice, and the 
Common Carrier Bureau fails to act on the plan within ninety days of 
the date on which the Commission released its public notice, the plan 
will be deemed approved without further Commission action on the 
ninety-first day after the date on which the Commission released its 
public notice of the plan's filing.
---------------------------------------------------------------------------

    \84\ We delegate to the Chief, Common Carrier Bureau, the 
authority to approve, modify, or require the refiling of each plan 
that is filed with the Commission pursuant to this requirement.
---------------------------------------------------------------------------

    41. A LEC's plan may not accomplish toll dialing parity by 
automatically assigning toll customers to itself, to a customer's 
currently presubscribed interLATA or interstate toll carrier, or to any 
other carrier except when, in a state that already has implemented 
intrastate, intraLATA toll dialing parity, the subscriber has selected 
the same intraLATA and interLATA presubscribed carrier. Finally, when 
LATA boundaries encompass parts of two adjacent states, we permit the 
LEC to implement in each state the procedures that that state approved 
for implementing toll dialing parity within its borders. If a state 
commission elects not to evaluate the LEC's intrastate toll dialing 
parity plan, we direct the LEC to file both its intrastate toll dialing 
plan and its interstate toll dialing plan with the Commission. The 
plans will be acted on in accordance with the procedures outlined 
above.
    42. We note that the minimum intraLATA/interLATA toll 
presubscription requirement that we adopt in this Order is necessarily 
an interim measure. Specifically, we expect that the development of the 
``multi-PIC'' or ``smart-PIC'' presubscription methodology will enable 
customers to presubscribe to multiple carriers for various categories 
of long-distance calling.85 Thus, in time, we anticipate that 
service markets, and the presubscription requirement in particular, 
will be defined by technological, economic and marketing considerations 
and that LATA or state boundary distinctions will diminish for purposes 
of the toll dialing parity requirements. As the record before us 
provides an inadequate basis for adopting more specific requirements 
now, we intend to monitor developments in this area and issue a Further 
Notice of Proposed Rulemaking to address these long range 
considerations so that end users will be able to preselect alternative 
providers for operator services, directory assistance, international 
and other services.
---------------------------------------------------------------------------

    \85\ The terms ``smart-PIC'' and ``multi-PIC'' have been defined 
differently in various contexts. For example, GVNW states that the 
multi-PIC presubscription method would permit customers to choose up 
to three different toll carriers, which, GVNW suggests, might 
include an intraLATA toll, interLATA toll and an international 
service provider. See GVNW comments at 6. GVNW states that the 
smart-PIC presubscription method would allow customers more than 
three carrier choices, ``as when a fourth PIC for interstate, 
intraLATA is needed.'' Id. In a recent state commission decision, 
the terms ``multi-PIC'' and ``smart-PIC,'' deemed to be synonymous, 
were defined as the ability to ``select multiple carriers for 
various subdivisions of their interLATA and intraLATA toll calls.'' 
Local Exchange Competition and Other Competitive Issues, Case No. 
95-845-TP-COL, 164 P.U.R.4th 214 (Ohio Pub. Util. Comm'n Sept. 27, 
1995).
---------------------------------------------------------------------------

3. Separate Presubscription for International Calls
a. Background and Comments
    43. The NPRM sought comment on whether customers should be entitled 
to choose a presubscribed carrier for international calls and on what 
Commission action, if any, is necessary to implement dialing parity for 
such calls.86
---------------------------------------------------------------------------

    \86\ NPRM at para. 210.
---------------------------------------------------------------------------

    44. Most parties maintain that the 1996 Act does not require, and 
the Commission should not mandate, a separate presubscription choice 
for international calling.87 Several parties take the position 
that the toll dialing parity requirement applies to international 
calling only to the extent that it entitles a customer to route 
automatically without the use of an access code the customer's 
international calls to the customer's presubscribed interLATA 
carrier.88 A number of parties contend that the technology 
required to support a separate presubscription choice for international 
calling, the so-called multi-PIC or smart-PIC methodology, is not 
currently available.89 USTA suggests that the cost of providing a 
separate presubscription choice for international calling should be 
weighed against the amount of customer demand for such an option, and 
the harm to consumers that may result from a potentially greater number 
of unauthorized carrier changes.90 AT&T, Ameritech, Sprint and the 
Indiana Commission urge the Commission to revisit the issue of a 
separate presubscription choice for international calling only after it 
is demonstrated to be technically and economically feasible.91
---------------------------------------------------------------------------

    \87\ See, e.g., SBC reply at 3 n.6; AT&T comments at 4 n.4.
    \88\ See, e.g., SBC comments at 5.
    \89\ Ameritech comments at 18-19; Bell Atlantic reply at 3; CBT 
comments at 4-6; SBC comments at 5; U S WEST comments at 6; Sprint 
comments at 4-6; USTA reply at 2; cf. Sprint comments at 6 (noting 
implementation of multi-PIC system by GTE-Hawaiian Telephone Company 
that offers customers a separate international presubscription 
option).
    \90\ USTA comments at 3.
    \91\ Ameritech comments at 18-19; AT&T comments at 5 n.6; Sprint 
comments at 5; Indiana Commission Staff comments at 9.
---------------------------------------------------------------------------

b. Discussion
    45. While we believe that a separate presubscription choice for 
international calling is consistent with the intent of the 1996 Act 
because it could foster additional carrier competition, we recognize 
that technical limitations preclude our imposing such a

[[Page 47294]]

nationwide requirement at this time.92 To the extent that such a 
capability becomes technically feasible and is ordered in a particular 
state, we find that the deployment of a separate presubscription choice 
for international calling is consistent with the 1996 Act. We will 
address in a further notice at a future date the issue of how soon a 
separate presubscription choice for international calling will be 
technically feasible on a nationwide basis.93
---------------------------------------------------------------------------

    \92\ Bell Atlantic reply at 3; CBT comments at 4-6; SBC comments 
at 5; U S WEST comments at 6; Sprint comments at 4-6; USTA reply at 
2.
    \93\ Sprint comments at 6 (noting development of multi-PIC 
system by GTE-Hawaiian Telephone that offers customers a separate 
international presubscription option). It is our understanding that 
GTE Hawaiian Telephone Company has multi-primary interexchange 
carrier capability that enables customers in Hawaii to select three 
long-distance carriers, i.e., an intrastate, interstate, and 
international carrier. See ex parte letter from Clarence Clay M. 
Nagao, Chief Counsel, State of Hawaii Public Utilities Commission, 
Department of Budget and Finance, to Mr. William F. Caton, Acting 
Secretary, Federal Communications Commission, filed in CC Docket No. 
96-98, July 2, 1996. We note that the arrangement by which GTE 
Hawaiian Telephone Company provides a third carrier choice for 
international calling is a unique, interim solution that uses a 
combination of carrier identification codes and switch routing 
databases. This solution is not suitable for nationwide deployment 
because the switch database is too limited in size and the supply of 
CICs too small to support an adequate number of interLATA/
international carrier combinations in many areas of the country. Ex 
parte letter from F.G. Maxson, GTE Service Corporation, to William 
F. Caton, Acting Secretary, Federal Communications Commission, filed 
in CC Docket No. 96-98, August 6, 1996.
---------------------------------------------------------------------------

4. Full 2-PIC Presubscription Method
a. Background
    46. In the NPRM, the Commission sought comment as to whether the 
Commission should adopt a nationwide presubscription methodology for 
implementing the toll dialing parity requirements.94 The NPRM also 
noted that states have adopted a variety of intraLATA toll dialing 
parity requirements and implementation methodologies.95
---------------------------------------------------------------------------

    \94\ NPRM at para. 210.
    \95\ Id.
---------------------------------------------------------------------------

    47. Among the presubscription methodologies that states have 
examined are the ``modified 2-PIC,'' the ``full 2-PIC,'' and the 
``multi-PIC'' or ``smart-PIC'' methods.96 The modified 2-PIC 
method generally allows a customer to presubscribe to a 
telecommunications carrier for all interLATA toll calls and to 
presubscribe to either the customer's presubscribed interLATA carrier 
or the customer's local exchange carrier for all intraLATA toll calls. 
The full 2-PIC method generally allows customers to presubscribe to a 
telecommunications carrier for all interLATA toll calls and to 
presubscribe to another telecommunications carrier (including, but not 
limited to, the customer's local exchange carrier) for all intraLATA 
toll calls. The multi-PIC or smart-PIC methods, as known today, would 
allow customers to presubscribe to multiple carriers, each one of which 
would be selected to transport a specified component of toll traffic.
---------------------------------------------------------------------------

    \96\ Id.
---------------------------------------------------------------------------

b. Comments
    48. Nearly all parties favor adoption of the full 2-PIC 
method.97 Few parties favor deploying the modified 2-PIC 
method.98 Likewise, few commenters favor immediate deployment of 
the multi-PIC method.99 Several parties suggest that the multi-PIC 
or smart-PIC methodology and technology may warrant consideration in 
the future, but is currently unavailable.100 Others maintain that 
the Commission should conclude that the 2-PIC approach is consistent 
with the 1996 Act based on the theory that the 1996 Act does not 
require more than a two-PIC capability to achieve toll dialing 
parity.101
---------------------------------------------------------------------------

    \97\ See, e.g., Michigan Commission Staff comments at 4; MCI 
comments at 5-6, Pennsylvania Commission comments at 2; SBC reply at 
2; PacTel reply at 10-11.
    \98\ See, e.g., Sprint comments at 5; USTA comments at 3.
    \99\ GSA/DOD reply at 4 (In initial comments, ``GSA favored a 
'multi-PIC' arrangement. * * * Although there was conceptual support 
for eventual implementation of the 'multi-PIC' methodology, it is 
clear that the technical and economic feasibility of this approach 
has not yet been demonstrated.''); GVNW comments at 6 (``[T]he FCC 
should not require [the smart-PIC method] on a nationwide basis or 
schedule, as this will result in uneconomic network upgrades, added 
costs for the incumbent LECs, and higher prices to customers and 
competitors'').
    \100\ See, e.g., Ameritech comments at 18-19; AT&T comments at 5 
n.6; CBT comments at 4; GVNW comments at 3; Indiana Commission Staff 
comments at 9; Sprint comments at 5.
    \101\ SBC reply at 3; GTE reply at 12-13.
---------------------------------------------------------------------------

c. Discussion
    49. We adopt in this Order the full 2-PIC method as the minimum 
presubscription standard. Under our rules and pursuant to section 
251(d)(3),102 however, state commissions may impose more stringent 
presubscription requirements, such as multi-PIC or smart-PIC.
---------------------------------------------------------------------------

    \102\ 47 U.S.C. 251(d)(3).
---------------------------------------------------------------------------

    50. We adopt the full 2-PIC method as the minimum presubscription 
standard at this time for several reasons. We conclude that, as 
compared with the modified 2-PIC method, the full 2-PIC method will 
maximize choice for consumers and open the long-distance 
telecommunications markets to a greater number of competitive services 
providers, including smaller providers, and thus is more consistent 
with the congressional objectives underlying enactment of section 
251(b)(3). Second, this method clearly is preferred by the majority of 
state regulators and telecommunications service providers.103 
Third, as compared with the multi-PIC method, the technology for the 
full 2-PIC method is widely available and well defined. By contrast, 
there is no evidence in the record to support a finding that the 
technical and economic feasibility of the multi-PIC method has been 
demonstrated on a nationwide basis. We conclude that this national 
standard should speed competitive entry into the intraLATA and 
intrastate toll markets while providing states that are considering a 
more stringent presubscription method, i.e., multi-PIC or smart-PIC, 
flexibility to impose such additional requirements. Until the 
Commission considers the issue of multi-PIC or smart-PIC methods in a 
further notice, we believe that the states are best situated to 
evaluate the technical feasibility and economic impact of such methods 
on LECs, including smaller LECs, in their jurisdictions.
---------------------------------------------------------------------------

    \103\ See, e.g., Pennsylvania Commission comments at 2; SBC 
reply at 2; PacTel reply at 10-11.
---------------------------------------------------------------------------

5. Deployment of Presubscription Software in Each End Office
a. Background
    51. With end office equal access, presubscription software is 
installed at each end office switch within the LEC's service areas. 
Toll calls are then directly routed at each end office switch to the 
presubscribed provider of telephone toll service. With centralized 
equal access, presubscription software is installed at a central tandem 
switch location. With the latter, toll calls are routed from an end 
office to a tandem switch for presubscription information.104 
Providers of telephone toll service may connect at the tandem to 
receive this traffic rather than at each individual end office that is 
associated with the tandem.
---------------------------------------------------------------------------

    \104\ In this context, presubscription information refers to the 
information that is used by the switch to determine which 
interconnecting carrier carries and bills for the call.
---------------------------------------------------------------------------

b. Comments
    52. MCI raises the issue of whether presubscription software should 
be deployed in each end office or at a single tandem location and 
proposes that the Commission require end office equal access rather 
than centralized equal access.105 Specifically, MCI argues that 
end office equal access represents a superior form of access to the 
extent that

[[Page 47295]]

it enhances redundancy and reduces post dial delays.106 
Centralized equal access should not be permitted, MCI maintains, 
insofar as that approach requires that all end offices receive the 
equal access features from the tandem and any interruption in service 
from the tandem can affect a larger number of subscribers on the 
system.107 In addition, because calls are routed from the end 
office to the tandem and back, MCI contends that centralized equal 
access would result in significant post-dial delay.108 MCI does 
suggest, however, that in areas that ``would not otherwise convert to 
interLATA or intraLATA equal access, centralized equal access provides 
consumers at least a limited form of carrier choice.'' 109
---------------------------------------------------------------------------

    \105\ MCI comments at 5.
    \106\ Id.
    \107\ Id.
    \108\ Id. MCI does not attempt to define or quantify the term 
``significant.''
    \109\ Id. at 5 n.7.
---------------------------------------------------------------------------

    53. Two commenters who are centralized equal access providers 
oppose MCI's position.110 Specifically, Iowa Network Services and 
MIEAC counter that centralized equal access is not inferior to end 
office equal access and repeatedly has been found to serve the public 
interest by the Commission and numerous state regulatory 
commissions.111 MIEAC takes issue with MCI's argument that 
centralized equal access is inferior to end office equal access, noting 
that recent technological advances, and the use of SS7 trunk signaling, 
in particular, have improved call set up times and reduced post dial 
delay.112 Iowa Network Services calls the argument that 
centralized equal access provides less network redundancy a ``red 
herring'' and notes its recent installation of a redundant fiber ring 
facility to connect its participating exchanges, which will allow 
instant rerouting of traffic in the case of a facilities equipment 
failure.113 Iowa Network Services also operates a ``diversity 
access tandem'' that provides switch redundancy should its primary 
tandem fail.114 MIEAC argues that centralized equal access 
networks fully comply with the toll dialing parity requirement of 
section 251(b)(3) insofar as these networks support 2-PIC 
presubscription.115 Finally, MIEAC and Iowa Network Services 
contend that centralized equal access represents an appropriate method 
of providing equal access in rural areas where it otherwise would not 
be technically or economically feasible.116
---------------------------------------------------------------------------

    \110\ See generally Iowa Network Services joint reply; MIEAC 
reply.
    \111\ Iowa Network Services joint reply at 4-7; MIEAC reply at 
2-4.
    \112\ MIEAC reply at 3.
    \113\ Iowa Network Services joint reply at 5.
    \114\ Id.
    \115\ MIEAC reply at 3-4.
    \116\ Id. at 5-7; Iowa Network Services joint reply at 2 (noting 
that centralized equal access fosters intraLATA and interLATA 
competition by making equal access technology available in exchanges 
where installation of end office equal access is economically or 
technically infeasible).
---------------------------------------------------------------------------

c. Discussion

    54. The issue of presubscription software deployment was not raised 
in the NPRM and, as a result, few commenters address it. We conclude 
that the record is not sufficient for us to require LECs, pursuant to 
section 251(b)(3), to provide end office equal access rather than 
centralized equal access to competing providers of telephone toll 
service. No specific information is provided, let alone consensus 
reached in this record, on such threshold issues as the technical and 
economic feasibility of placing the software in one location over 
another. We note that while MCI and Iowa Network Services disagree 
generally on the benefits of deployment locations, neither addresses 
such important implementation issues as whether different switching 
equipment owned by various companies might provide obstacles to 
deployment, or the relevant costs associated with one deployment scheme 
over another. Iowa Network Services, we further note, does not address 
how its proposal would comport with the Commission's generally 
prescribed requirement under which most LECs are required to implement 
equal access at end offices.117 Based on the reasons stated above, 
and based on our concern regarding the harm that could come to small 
telecommunications services providers if we adopt MCI's proposal, we 
decline to adopt at this time a requirement prescribing the location 
for deployment of presubscription software under section 251(b)(3).
---------------------------------------------------------------------------

    \117\ See generally MTS and WATS Market Structure, CC Docket No. 
78-72, Phase III, 100 F.C.C. 2d 860 (1985) 50 FR 52964 (December 27, 
1985).
---------------------------------------------------------------------------

C. Implementation Schedule for Toll Dialing Parity

1. Background and Comments

i. Timetable for BOCs

    55. Section 271(e)(2)(A) requires a BOC to provide intraLATA toll 
dialing parity throughout a state ``coincident with'' its exercise of 
authority to provide in-region, interLATA services in that 
state.118 Section 271(e)(2)(B) precludes most states from imposing 
intraLATA toll dialing parity requirements on a BOC before the earlier 
of the date on which a BOC is authorized to provide in-region, 
interLATA services in a state or three years from the date of enactment 
of the 1996 Act.119 The NPRM sought comment on what implementation 
schedule should be adopted for all LECs.120
---------------------------------------------------------------------------

    \118\ 47 U.S.C. 271(e)(2)(A).
    \119\ 47 U.S.C. 271(e)(2)(B). Exceptions from this requirement 
are made for single-LATA states and states that issued an order by 
December 19, 1995, requiring intraLATA toll dialing parity. Id.
    \120\ NPRM at para. 212.
---------------------------------------------------------------------------

    56. The BOCs generally argue that section 271(e)(2) establishes the 
relevant implementation schedule for all BOCs and, thereby, obviates 
the need for a nationwide implementation schedule for BOCs.121 For 
example, Ameritech argues that, except in single-LATA states and where 
a state has previously ordered intraLATA presubscription, section 
271(e)(2) requires a BOC to implement intraLATA toll dialing parity 
``coincident with its exercise of in-region, interLATA authority'' or 
three years after enactment of the 1996 Act.122 Other parties urge 
the Commission to require BOCs to implement toll dialing parity in 
advance of these dates on the theory that only the states, and not the 
Commission, are constrained by the limitations in section 
271(e)(2)(B).123 Frontier suggests that the Commission mandate 
that dialing parity be made available immediately for interstate, 
intraLATA toll calls.124 AT&T asserts that ``except as provided in 
section 271(e)(2)(B), the Commission should require all Tier 1 LECs to 
implement dialing parity, utilizing the Full 2-PIC method, by January 
1, 1997.'' 125 NYNEX maintains that the Commission should 
recognize and give effect to state orders granting deferrals or waivers 
of the toll dialing parity requirements.126
---------------------------------------------------------------------------

    \121\ See, e.g., Ameritech comments at 19.
    \122\ Id.
    \123\ See, e.g., Sprint comments at 6 n.3.
    \124\ Frontier comments at 2.
    \125\ AT&T comments at 5.
    \126\ NYNEX comments at 3 n.7.
---------------------------------------------------------------------------

ii. Timetable for All Other LECs

    57. For all other LECs, other than BOCs, the 1996 Act provides no 
timetable for implementing toll dialing parity. The NPRM sought comment 
on what implementation schedule should be adopted for all LECs.127
---------------------------------------------------------------------------

    \127\  NPRM at para. 212.
---------------------------------------------------------------------------

    58. USTA argues that there is no need for a uniform implementation 
schedule and suggests that the Commission permit states to adopt their 
own timetables.128 PacTel similarly opposes our adoption of an 
implementation

[[Page 47296]]

schedule and advocates that all LECs be permitted to design their own 
schedules based on ``local conditions and state requirements.'' 
129 In contrast, MCI urges the Commission to adopt an 
implementation schedule based on the concern that incumbent LECs, if 
permitted to design their own timetables, would delay implementation 
because they lack incentive to implement dialing parity quickly. TCC 
proposes that non-BOC incumbent LECs should be required to provide toll 
dialing parity by no later than January 1, 1997.130 NECA argues 
that a LEC's obligation to provide dialing parity should be triggered 
only upon the receipt of a bona fide request from a competitive toll 
provider.131 Finally, MFS suggests that incumbent LECs be required 
to implement intraLATA toll dialing parity within a year of the 
effective date of the rules, or by the date previously ordered by a 
state commission.132 MFS also asks the Commission to adopt rules 
specifying that in any geographic area where a BOC is not required to 
provide intraLATA presubscription pursuant to section 271(e)(2)(A), no 
other LEC in that geographic area will be required to provide toll 
dialing parity until the BOC is required to provide it.133
---------------------------------------------------------------------------

    \128\ USTA reply at 3-4.
    \129\ PacTel reply at 12.
    \130\ TCC comments at 4.
    \131\ NECA reply at 3-4; see also Rural Tel. Coalition comments 
at 6-7; GVNW comments at 5.
    \132\ MFS comments at 6.
    \133\ Id.; cf. Ohio Commission comments at 9 (new entrant LECs 
should be required to implement intraLATA toll dialing parity 
coincident with their offering of local telephone service since new 
entrants can equip their network switches to provide dialing parity 
before installation).
---------------------------------------------------------------------------

2. Discussion
    59. As discussed above, we require all LECs to provide intraLATA 
and interLATA toll dialing parity no later than February 8, 1999. In 
addition, we require a LEC, including a BOC, to provide toll dialing 
parity throughout a state based on LATA boundaries coincident with its 
provision of in-region, interLATA or in-region, interstate toll 
services in that state. As discussed below, for non-BOC LECs that 
currently are providing, or within a year of release of this Order 
begin to provide, in-region, interLATA or in-region, interstate toll 
service, we provide a grace period during which those LECs will be able 
to provide such toll service before having to provide toll dialing 
parity to their customers. Moreover, non-BOC LECs that implement 
intraLATA and interLATA toll dialing parity may choose whichever LATA 
within their state that they deem to be most appropriate to define the 
area within which they will offer intraLATA toll dialing parity. State 
commissions in ruling upon such a choice of LATA association shall 
determine whether the proposed LATA association is pro-competitive and 
otherwise in the public interest. We note, however, as discussed above, 
that states may redefine the toll dialing parity requirement based on 
state, rather than LATA, boundaries where a state deems such a 
requirement to be pro-competitive and otherwise in the public interest.
    60. We decline to adopt the recommendations of parties that urge us 
to require BOCs to provide toll dialing parity in a state before the 
earlier of the date on which those BOCs receive authority to provide 
in-region, interLATA services in that state or February 8, 1999. 
Subject to the requirements of the 1996 Act, we do, however, authorize 
states to determine whether a more accelerated implementation schedule 
should be utilized for LECs operating within their 
jurisdictions.134 Where a state issued an order by December 19, 
1995 requiring a BOC to implement toll dialing parity in advance of the 
implementation deadlines we establish, we do not intend to extend the 
toll dialing parity implementation deadline for the BOC beyond the 
implementation deadline established by that state. In addition, where a 
state issued an order prior to the release of this Order requiring a 
LEC, other than a BOC, to implement toll dialing parity in advance of 
the implementation deadlines we establish, we do not intend to extend 
the toll dialing parity implementation deadline for the LEC beyond the 
implementation deadline established by that state.
---------------------------------------------------------------------------

    \134\ See 47 U.S.C. 271(e)(2)(b).
---------------------------------------------------------------------------

    61. We further conclude that LECs, other than BOCs, that begin 
providing in-region, interLATA or in-region, interstate toll services 
before August 8, 1997, including LECs that currently offer such 
services, are not required to implement toll dialing parity until 
August 8, 1997.135 We do not mandate compliance with the toll 
dialing parity requirement by these LECs ``coincident with'' their 
provision of in-region, interLATA or in-region, interstate toll 
services because it would place certain carriers in violation of this 
order upon its release and would impose an unreasonably short timetable 
on others. To the extent that a LEC is unable to comply with the August 
8, 1997 deadline, that LEC is required to notify the Commission's 
Common Carrier Bureau by May 8, 1997. The notification must state, in 
detail, the justification for the LEC's inability to comply by August 
8, 1997 and set forth the date by which it will be able to implement 
toll dialing parity.136 Finally, we have considered the arguments 
of LECs that seek to make their toll dialing parity obligation 
contingent upon the receipt of a bona fide request and conclude that 
special implementation schedules for smaller LECs are unnecessary 
because these LECs may petition their state commission, pursuant to 
section 251(f)(2), for a suspension or modification of the application 
of the dialing parity requirements.137
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    \135\ We note that the 1996 Act distinguishes between in-region 
services, for which BOCs must receive Commission authority to 
provide under section 271(d)(1), 47 U.S.C. 271(d)(1), and out-of-
region services, which BOCs are currently authorized to provide. See 
47 U.S.C. 271(b)(1), (b)(2). We note that for non-BOC LECs, it is 
the provision of toll services outside of the LEC's study area or 
the provision of interstate toll services that triggers the duty to 
provide toll dialing parity. We use the term in-region, interLATA or 
in-region interstate toll services to include those toll services, 
the provision of which by a LEC triggers the LEC's duty to provide 
toll dialing parity.
    \136\ As recently noted in the context of waiver petitions for 
certain caller identification rules, the Commission will not 
hesitate to take enforcement action, including monetary fines and 
other remedial measures against carriers that are unable to provide 
a compelling justification for failing to comply with Commission 
rules, particularly when they have been given a reasonable period 
within which to comply. See Rules and Policies Regarding Calling 
Number Identification Service--Caller ID, CC Docket No. 91-281, 
Memorandum Opinion and Order, DA 96-875 (1996) 61 FR 20746 (May 8, 
1996).
    \137\ 47 U.S.C. 251(f)(2).
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    62. In summary, we establish the following toll dialing parity 
implementation schedule and filing deadlines for all LECs:
    (a) Each LEC, including a BOC, must implement intraLATA and 
interLATA toll dialing parity based on LATA boundaries no later than 
February 8, 1999. If the state commission elects not to evaluate a 
LEC's toll dialing parity implementation plan,138 the LEC must 
file that plan with the Commission not later than 180 days before 
February 8, 1999.
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    \138\ For a discussion of the content of and procedures relating 
to the toll dialing parity implementation plans, see section II.B(2) 
supra.
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    (b) Except as provided in subparagraph (c) below, a LEC, including 
a BOC, that begins to provide in-region, interLATA toll services or in-
region, interstate toll services in a state before February 8, 1999, 
must implement intraLATA and interLATA toll dialing parity based on 
LATA boundaries coincident with its provision of in-region, interLATA 
or in-region, interstate toll services. If the state commission elects 
not to evaluate its toll dialing parity implementation

[[Page 47297]]

plan, the LEC must file such plan with the Commission not later than 
180 days before the date on which it begins to provide in-region, 
interLATA toll services.
    (c) A LEC, other than a BOC, that begins to provide in-region, 
interLATA or in-region, interstate toll services in a state before 
August 8, 1997, must implement intraLATA and interLATA toll dialing 
parity based on LATA boundaries by August 8, 1997. If the LEC is unable 
to comply with this August 8, 1997, implementation deadline, the LEC 
must notify the Commission's Common Carrier Bureau by May 8, 1997. At 
that time it must state its justification for noncompliance by August 
8, 1997, and set forth the date by which it will be able to implement 
toll dialing parity. If the state commission elects not to evaluate the 
LEC's toll dialing parity implementation plan, the LEC must file such 
plan with the Commission not later than 90 days after publication of 
this Order in the Federal Register.
    63. We further conclude that the 1996 Act does not authorize the 
Commission to give effect to a state order that purports to grant a BOC 
a deferral, waiver or suspension of the BOC's obligation to implement 
dialing parity. We note that section 251(f)(2) provides procedures for 
suspending or modifying application of the dialing parity requirements 
only for certain LECs, i.e., those ``with fewer than 2 percent of the 
Nation's subscriber lines installed in the aggregate nationwide.'' 
139 Given that section 251 contains no comparable procedures for 
larger LECs, we are persuaded that Congress intended the dialing parity 
requirements that we adopt pursuant to section 251(b)(3) to apply, 
without exception, to all LECs with 2 percent or more of the Nation's 
subscriber lines.
---------------------------------------------------------------------------

    \139\ 47 U.S.C. 251(f)(2).
---------------------------------------------------------------------------

D. Implementation of the Local Dialing Parity Requirements

1. In General
a. Background
    64. The NPRM tentatively concluded that, pursuant to section 
251(b)(3), a LEC is required to permit telephone exchange service 
customers within a defined local calling area to dial the same number 
of digits to make a local telephone call, notwithstanding the identity 
of a customer's or the called party's local telephone service 
provider.140 The NPRM sought comment on this tentative 
conclusion.141
---------------------------------------------------------------------------

    \140\ NPRM at para. 211.
    \141\ Id.
---------------------------------------------------------------------------

b. Comments
    65. Nearly all parties concur with the Commission's proposed 
interpretation of the local dialing parity requirements of section 
251(b)(3).142 Ameritech contends, however, that the 1996 Act 
requires only that local calls between competing LECs be dialed without 
the use of an access code.143 Ameritech states that, while the 
Senate version of the dialing parity provision would have required LECs 
to provide customers with the ability ``to dial the same number of 
digits'' when using any carrier providing telephone exchange and 
exchange access service in the same area, Congress narrowed the dialing 
parity obligation in the final legislation to require only that calls 
between competing LECs be dialed without the use of an access 
code.144 In response to Ameritech's proposed interpretation of the 
local dialing parity requirements, the Ohio Consumers' Counsel asserts 
that it does ``not believe that consumers would see any real functional 
difference between having to dial extra digits and having to dial an 
access code'' and, thus, urges that customers not be required to dial 
access codes or extra digits when using a competing provider's 
services.145
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    \142\ See, e.g., ALTS comments at 4; GTE comments at 8; Ohio 
Commission comments at 8.
    \143\ Ameritech comments at 3-4. Notwithstanding its 
interpretation of the local dialing parity requirements, Ameritech 
notes that it has exceeded these requirements by establishing 
interconnection arrangements that allow customers of competing LECs 
to complete calls by dialing the same number of digits. Id. at 4.
    \144\ Id.
    \145\ Ohio Consumers' Counsel reply at 2.
---------------------------------------------------------------------------

    66. Ameritech also asks the Commission to clarify that ``the 
dialing parity obligation applies only to competing carriers that 
provide both telephone exchange service and telephone toll service 
(i.e., competing LECs).'' 146 Finally, USTA urges the Commission 
to clarify that section 251(b)(3) does not include an obligation to 
provide dialing parity to CMRS providers.147 USTA contends that 
the provision of dialing parity to CMRS providers by LECs would 
complicate implementation of ``sender pays'' arrangements that have 
been adopted in certain states if dialing parity were interpreted to 
preclude the use of extra digits and/or recorded announcements 
associated with a ``sender pays'' arrangement.148 USTA expresses 
concern that customers may receive bills for calling CMRS customers 
without advance notice that they are going to be billed for such 
calls.149
---------------------------------------------------------------------------

    \146\ Ameritech comments at 3 n.6 (emphasis in original).
    \147\ USTA comments at 5.
    \148\ Id. In this context, the term ``sender pays'' refers to an 
arrangement under which a customer who originates a call to a CMRS 
customer pays the cost of airtime for terminating the call. Under a 
sender pays arrangement, the customer typically receives information 
regarding the price of the call before the call is placed. Once the 
customer receives this information, the customer then may decide 
whether or not to complete the call. Sender pays arrangements are 
atypical insofar as it is the CMRS customer who generally pays the 
cost of airtime for terminating calls.
    \149\ Id.
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c. Discussion
    67. We adopt our tentative conclusion that, pursuant to section 
251(b)(3), a LEC is required to permit telephone exchange service 
customers within a defined local calling area to dial the same number 
of digits to make a local telephone call, notwithstanding the identity 
of a customer's or the called party's local telephone service provider. 
As we stated in the NPRM, we believe that this interpretation of the 
dialing parity requirement as applied to the provision of telephone 
exchange service would best facilitate the introduction of competition 
in local markets by ensuring that customers of competitive service 
providers are not required to dial additional access codes or personal 
identification numbers in order to make local telephone calls. We 
disagree with Ameritech's view that Congress intended only to preclude 
the use of access codes and did not intend to preclude the dialing of 
extra digits. The fact that Congress ultimately adopted a dialing 
parity definition that precludes ``the use of any access code'' 
150 does not constrain the Commission from precluding the dialing 
of extra digits, including access codes. Given that the statute does 
not define the term ``access code,'' we conclude that our 
interpretation of the local dialing parity requirement will avoid 
potential disputes concerning what is and what is not an ``access 
code.'' We are also persuaded by the argument advanced by the Ohio 
Consumers' Counsel that consumers would not perceive a functional 
difference between having to dial extra digits and having to dial an 
access code when using a competing provider's services.
---------------------------------------------------------------------------

    \150\ 47 U.S.C. 153(15).
---------------------------------------------------------------------------

    68. We conclude that Ameritech's additional argument that the 
dialing parity obligation applies only to competing carriers that 
provide both telephone exchange service and telephone toll service, 
represents an impermissibly narrow reading of the statute. We find that 
the phrase ``providers of telephone exchange service and telephone toll 
service''

[[Page 47298]]

imposes an obligation on LECs to provide dialing parity to providers of 
solely telephone exchange service, to providers of solely telephone 
toll service, or to providers of both telephone toll and exchange 
service. We believe that this interpretation is consistent with both 
the language of the statute and Congress' intent to encourage the entry 
of new competitors in both the local and toll markets.151 We 
reject USTA's argument that the section 251(b)(3) dialing parity 
requirements do not include an obligation to provide dialing parity to 
CMRS providers.152 To the extent that a CMRS provider offers 
telephone exchange service, such a provider is entitled to receive the 
benefits of local dialing parity. Regarding USTA's argument that 
applying section 251(b)(3) in a way that benefits CMRS providers could 
complicate implementation of sender pays arrangements in some states, 
we conclude that the record before us is insufficient to determine 
whether, or under what circumstances, sender pays arrangements, 
including those requiring the dialing of extra digits or recorded 
announcements, are consistent with the 1996 Act. Although we do not 
intend to preclude the states from lawfully enforcing legitimate 
consumer protection policies that do not have an anticompetitive 
impact, we cannot conclude on this record that the arrangements USTA 
describes would be permissible. Finally, given our expectation that 
local dialing parity will be achieved through LECs' compliance with 
other section 251 requirements, we do not adopt a timetable for 
implementing the local dialing parity requirements.
---------------------------------------------------------------------------

    \151\ As the U.S. Court of Appeals for the Fifth Circuit stated 
in Peacock v. Lubbock Compress Company, ``the word `and' is not a 
word with a single meaning, for chameleonlike, it takes its color 
from its surroundings.'' The court held that ``[i]n the construction 
of statutes, it is the duty of the Court to ascertain the clear 
intention of the legislature. In order to do this, Courts are often 
compelled to construe `or' as meaning `and,' and again `and' as 
meaning `or'.'' Peacock v. Lubbock Compress Company, 252 F.2d 892, 
893 (5th Cir. 1958) (citing United States v. Fisk, 70 U.S. 445, 448 
(1865).
    \152\ See section X of the First Report and Order for a 
discussion of the applicability of section 251 to CMRS providers.
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2. Local Dialing Parity Methodologies
a. Background and Comments
    69. In the NPRM, we stated our expectation that the local dialing 
parity obligations would not be achieved through 
presubscription.153 Rather, we anticipated that a customer's 
ability to select a telephone exchange service provider and make local 
telephone calls without dialing extra digits will be accomplished 
through the unbundling, number portability and interconnection 
requirements of section 251.154 The NPRM sought information and 
comment as to how the local dialing parity requirement should be 
implemented.155
---------------------------------------------------------------------------

    \153\ NPRM at para. 207 n.284.
    \154\ Id.
    \155\ NPRM at paras. 209, 211.
---------------------------------------------------------------------------

    70. The parties generally agree that local dialing parity will be 
accomplished through implementation of the unbundling, number 
portability and interconnection requirements of section 251.156 
Parties add to this list the 1996 Act's equal access 
requirements.157 A few parties contend that local dialing parity 
is assured once competing providers of telephone exchange service are 
permitted nondiscriminatory access to telephone numbers.158
---------------------------------------------------------------------------

    \156\ See, e.g., SBC comments at 3 n.4; NEXTLINK comments at 8.
    \157\ See, e.g., BellSouth comments at 9.
    \158\ See, e.g., U S WEST comments at 6.
---------------------------------------------------------------------------

b. Discussion
    71. We anticipate that local dialing parity will be achieved upon 
implementation of the number portability and interconnection 
requirements of section 251. We also concur with the view that the 
ability of competing local exchange service providers to receive 
telephone numbers on a nondiscriminatory basis is critical to the 
achievement of local dialing parity. We believe that the 
interconnection requirements that section 251(c)(2) imposes on 
incumbent local exchange carriers will reduce the likelihood that 
customers of a competing LEC will have to dial an access code to reach 
a customer of the incumbent LEC insofar as the two networks are 
connected. Number portability will ensure that customers switching 
local service providers will not need to dial additional digits to make 
local telephone calls. Likewise, allowing every telecommunications 
carrier authorized to provide local telephone service, exchange access, 
or paging service in an area code to have at least one NXX in an 
existing area code also reduces the potential local dialing disparity 
that may result if competing LECs can only give customers numbers from 
a new area code. We therefore decline to prescribe now any additional 
guidelines addressing the methods that LECs may use to accomplish local 
dialing parity. We also conclude that, contrary to the views expressed 
by some parties, the provision of nondiscriminatory access to telephone 
numbers, by itself, does not fulfill the local dialing parity mandate 
of section 251(b)(3). Given that acquisition of a central office code 
by a LEC would not necessarily ensure that the LEC's customers would be 
relieved of an obligation to dial extra digits, access codes or some 
other special dialing protocol, the provision of nondiscriminatory 
access to telephone numbers does not by itself ensure local dialing 
parity. Rather, we find that under section 251(b)(3) each LEC must 
ensure that its customers within a defined local calling area be able 
to dial the same number of digits to make a local telephone call 
notwithstanding the identity of the calling party's or called party's 
local telephone service provider.
3. Non-Uniform Local Calling Areas
a. Background
    72. The NPRM tentatively concluded that, pursuant to section 
251(b)(3), a LEC is required to permit telephone exchange service 
customers within a defined local calling area to dial the same number 
of digits to make a local telephone call, notwithstanding the identity 
of a customer's or the called party's local telephone service 
provider.159 The NPRM did not address the potential dialing parity 
implications of non-uniform local calling areas 160 nor did it 
address the potential impact of our proposed interpretation of the 
local dialing parity obligation on local calling area 
boundaries.161
---------------------------------------------------------------------------

    \159\ NPRM at para. 211.
    \160\  We use the term ``non-uniform local calling area'' to 
refer to a situation in which a telephone exchange service 
provider's local calling area is either larger or smaller than that 
of another telephone exchange service provider that is providing 
telephone exchange service in the same geographic area.
    \161\  Insofar as parties contend that the section 251(b)(3) 
dialing parity requirements compel the use of a ten-digit dialing 
plan for local calls within an area code overlay (see, e.g., MFS 
comments at 3-5), we note that these concerns are addressed more 
fully below in paragraphs 286 through 287.
---------------------------------------------------------------------------

b. Comments
    73. A number of parties express concern about the potential 
interrelationship between our proposed interpretation of the local 
dialing parity requirements and local calling area boundaries.162 
For example, WinStar cautions the Commission that by requiring that 
customers ``within a defined local calling area'' be able to dial the 
same number of digits to make a local telephone call, certain parties 
may interpret this to require that a competing provider of local 
exchange service must define its local calling area

[[Page 47299]]

to match the local calling area of the incumbent LEC.163 GSA/DOD 
maintains that dialing is not truly at parity if different carriers 
have different definitions of the geographic areas in which calls can 
be made with seven-digit dialing.164 To address the potential 
dialing parity issue that may arise when a new entrant's ``network 
coverage'' is more limited than the incumbent LEC's, GSA/DOD recommends 
that the Commission adopt rules that ensure that local calling areas 
are consistently defined for LEC wholesale and retail services.165
---------------------------------------------------------------------------

    \162\ See, e.g., WinStar comments at 10-11; GSA/DOD comments at 
4-5; Florida Commission comments at 3.
    \163\  WinStar comments at 10-11 (``The Commission should 
proceed carefully to ensure that it does not inadvertently limit 
carriers from experimenting with local calling areas.''); see also, 
U S WEST comments at 6 (where dialing parity disputes arise over 
fact that local calling areas of two competing LECs do not match, 
states should resolve such disputes since they are familiar with 
local calling areas and calling patterns in that state).
    \164\  GSA/DOD comments at 4.
    \165\ Id. at 5.
---------------------------------------------------------------------------

    74. GTE contends that ``[s]o long as new entrants have the 
technical ability to deploy equipment necessary to offer the same 
seven-digit dialing as the incumbent LEC, dialing parity should be 
deemed to exist even if one or more of the new entrants ultimately 
chooses to provide ten-digit dialing.'' 166 To illustrate its 
point that all local calls cannot be dialed using the same number of 
digits, NYNEX notes that in the New York City Metro LATA local calls 
span three different area codes, with seven-digit dialing within an 
area code and ten-digit dialing between area codes.167 Finally, 
the Florida Commission expresses concern regarding the potential 
customer confusion that may result if customers in local calling areas 
are required to dial ten rather than the currently dialed seven digits 
to make local ``Extended Calling Service'' calls.168
---------------------------------------------------------------------------

    \166\  GTE comments at 8 n.10.
    \167\  NYNEX comments at 3 n.6.
    \168\  Florida Commission comments at 3.
---------------------------------------------------------------------------

c. Discussion
    75. A telephone call requiring seven-digit dialing is not 
necessarily a local call 169 and a telephone call requiring ten-
digit dialing is not necessarily a toll call.170 Disparity in 
local dialing plans, by itself, does not contravene our interpretation 
of the local dialing parity requirements unless such plans are anti-
competitive in effect.171 By requiring that all customers ``within 
a defined local calling area'' be able to dial the same number of 
digits to make a local telephone call, we do not intend to require a 
competing provider of local exchange service to define its local 
calling area to match the local calling area of an incumbent LEC. We 
further do not intend to require a competing provider of telephone 
exchange service that voluntarily chooses to provide ten-digit as 
opposed to seven-digit dialing in a local calling area to modify its 
dialing plan in this instance in order to conform to the dialing plan 
of another LEC. No other commenter addressed GSA's proposal that the 
Commission adopt rules that ensure that local calling areas are 
consistently defined for LEC wholesale and retail services. Therefore, 
we conclude that the record is insufficient to permit us to take such 
action at this time.
---------------------------------------------------------------------------

    \169\  We note that several states permit seven-digit dialing 
for toll calls. North American Numbering Plan, Area Codes 1996 
Update, Bellcore (January 1996) at 14. For example, within the 518 
area code a call from Clifton Park, New York to Hague, New York is a 
toll call that can be dialed with seven digits.
    \170\  Section 3(48) defines ``telephone toll service'' as 
``telephone service between stations in different exchange areas for 
which there is made a separate charge not included in contracts with 
subscribers for exchange service.'' 47 U.S.C. 153(48). By contrast, 
charges for calls within a local calling area generally are not 
assessed on a per call basis. Thus, the construct of local calling 
areas serves as the basis by which carriers price their services.
    \171\  See, e.g., the discussion at paras. 281-291 regarding the 
discriminatory and anticompetitive nature of a service-specific or 
technology-specific overlay in connection with area code relief 
plans.
---------------------------------------------------------------------------

E. Consumer Notification and Carrier Selection Procedures

a. Background
    76. Section 251(b)(3) does not specifically require that procedures 
be established to permit consumers to choose among competitive 
telecommunications providers (e.g., through balloting).172 The 
NPRM sought comment as to whether the Commission should require LECs to 
notify consumers about carrier selection procedures or impose any 
additional consumer education requirements.173 We also sought 
comment on an alternative proposal that would make competitive 
telecommunications providers responsible for notifying customers about 
carrier choices and selection procedures through their own marketing 
efforts.174
---------------------------------------------------------------------------

    \172\ 47 U.S.C. 251(b)(3).
    \173\ NPRM at para. 213.
    \174\ Id.
---------------------------------------------------------------------------

b. Comments
    77. Several parties contend that the responsibility for consumer 
education should be borne, at least in part, by the incumbent LECs 
175 and claim that incumbent LECs are uniquely situated to assist 
in this function.176 Conversely, others maintain that 
responsibility for the notification and education of consumers should 
be imposed on the carriers seeking those customers' business, as part 
of those carriers' marketing efforts.177 GSA/DOD favors letting 
carriers ``fight it out among themselves,'' noting that carriers 
themselves will have every incentive to make sure that prospective 
customers are aware of their choices.178 PacTel suggests that 
states are in the best position to assess the informational needs of 
their citizens.179 Several commenters express concern that any 
customer notification requirement must recognize that the details of 
any such notification plan should reflect local circumstances, 
including local carrier selection options, rates and dialing 
plans.180 Ameritech maintains that a ``carrier-neutral customer 
notification of the toll dialing parity selection processes is in the 
public interest and should be a part of the implementation of any toll 
dialing parity plan.'' 181
---------------------------------------------------------------------------

    \175\ See, e.g., ACSI comments at 10; Ameritech comments at 20; 
California Commission comments at 4.
    \176\ See, e.g., Illinois Commission comments at 67; ACSI 
comments at 10 (incumbent LECs should be required to provide bill 
inserts to customers alerting them to opportunity to select 
alternative service provider).
    \177\ See, e.g., CBT comments at 5; Bell Atlantic comments at 5; 
Frontier comments at 4; BellSouth reply at 4; GTE reply at 15.
    \178\ GSA/DOD comments at 6.
    \179\ PacTel comments at 13.
    \180\ See, e.g., Ameritech comments at 21; GTE comments at 12; 
PacTel reply at 13.
    \181\ Ameritech comments at 20.
---------------------------------------------------------------------------

    78. While several commenters urge the Commission to adopt rules for 
balloting,182 the majority of parties urge us to reject this 
option.183 Parties that oppose balloting argue that such decisions 
should be left to the individual states 184 and claim that 
balloting is confusing to customers,185 costly,186 and forces 
consumers to make selections before they might otherwise choose to do 
so.187 Commenters also argue that competition for customers will 
ensure that carriers notify customers as to how their services can be 
obtained.188 In stating its opposition to a balloting requirement, 
MFS observes that:

    \182\ See, e.g., NEXTLINK comments at 9; Excel comments at 7.
    \183\ See, e.g., Ohio Consumers' Counsel comments at 3; SBC 
reply at 1; MFS reply at 12; CBT reply at 3-4.
    \184\ See, e.g., Florida Commission comments at 2; PacTel reply 
at 13.
    \185\ See, e.g., Ohio Commission comments at 7.
    \186\ See, e.g., GTE comments at 13; Sprint comments at 4.
    \187\ Ameritech comments at 20.
    \188\ See, e.g., GTE comments at 13; U S WEST comments at 8.

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[[Page 47300]]

    The long-distance market today differs markedly from the 
situation in the mid-1980's, when non-dominant carriers were 
virtually unknown to most consumers and balloting was mandated as a 
way of educating consumers to their ability to choose a carrier. No 
such education is needed today, because most consumers are well 
aware of their long-distance choices, and the carriers have readily 
---------------------------------------------------------------------------
available means of contacting those who are not.189

    \189\ MFS comments at 6.
---------------------------------------------------------------------------

    79. Commenters also raised a number of issues related to consumer 
notification and carrier selection methods. For example, PacTel asserts 
that ``the default carrier for both existing and new customers who do 
not actively choose an intraLATA toll provider should be the dial-tone 
provider.'' 190 Sprint agrees that ``existing customers who are 
currently obtaining intraLATA toll service from the dial tone provider, 
and do not indicate a desire to change carriers, should remain with 
that intraLATA toll provider.'' 191 Sprint rejects PacTel's 
proposal, however, ``to default new customers who do not choose an 
intraLATA toll provider to the dial tone provider.'' 192 
Concerning whether customers should be assessed a ``PIC change charge'' 
when they select an alternative provider of telephone toll or telephone 
exchange service, parties propose allowing customers a ``grace period'' 
during which they could switch carriers without charge.193 The 
Ohio Consumers' Counsel supports a cap on the cost of initiating both 
local and toll service with a new carrier, noting that a ``customer's 
old carrier should not be able to impose an `exit fee' upon the 
customer who switches.'' 194 Finally, GVNW urges that the 
Commission's rules, complaint procedures and penalties for ``slamming'' 
be applied to any carrier selection procedures that the Commission 
adopts with respect to local exchange service providers.195
---------------------------------------------------------------------------

    \190\ PacTel comments at 11.
    \191\ Sprint reply at 5-6 n.8.
    \192\ Id. On a related issue, AT&T urges the Commission to 
intercede where abuse of the customer notification process occurs, 
such as when a LEC uses its ``provision of exchange service to 
influence toll PIC choices.'' AT&T comments at 6 n.9. AT&T adds that 
the Commission should prohibit LECs from extending interLATA PIC 
``freezes'' to intraLATA traffic. Id.
    \193\ Ohio Commission comments at 7 (proposing 90 day grace 
period with a charge for subsequent changes); Citizens Utilities 
comments at 6-7 (proposing 6 month grace period).
    \194\ Ohio Consumers' Counsel reply at 2.
    \195\ GVNW comments at 7.
---------------------------------------------------------------------------

c. Discussion
    80. We agree with those commenters who observe that competitive 
providers of telephone exchange and telephone toll service have an 
incentive to make consumers aware of the choices available, and we 
perceive no need to prescribe detailed consumer notification or carrier 
selection procedures at this time. We do believe, however, that states 
may adopt such procedures. The states are best positioned to determine 
the consumer education and carrier selection procedures that best meet 
the needs of consumers and telecommunications services providers in 
their states. Thus, states may adopt consumer education and carrier 
selection procedures that will enable consumers to select alternative 
carriers for their local and toll services. We further agree that a 
customer notification requirement should take into consideration local 
circumstances. The states may adopt balloting, consumer education and 
notification requirements for services originating within their states, 
that are not anti-competitive in effect. States also may adopt measures 
to prevent abuse of the customer notification and carrier selection 
processes. All such procedures, however, must be consistent with the 
guidelines set forth above with respect to the requisite categories of 
toll traffic for which consumers must be entitled to presubscribe and 
the toll presubscription method that we require carriers to implement. 
We note that the consumer notification requirements already imposed by 
states' intrastate, intraLATA toll dialing parity orders have required 
LECs to inform customers either once or twice of their opportunity to 
choose an alternative carrier.196 We anticipate that any 
subsequently imposed consumer notification requirements would be no 
more be burdensome, and, in particular, would not require more than two 
notifications to consumers of their opportunity to choose alternative 
carriers to transport their intraLATA toll calls.
---------------------------------------------------------------------------

    \196\ See, e.g., Adoption of rules relating to intra-Market 
Service Area presubscription and changes in dialing arrangements 
related to the implementation of such presubscription, Interim Order 
(Ill. Comm. Comm'n. Apr. 7, 1995).
---------------------------------------------------------------------------

    81. We conclude that ``dial-tone providers'' should not be 
permitted automatically to assign to themselves new customers who do 
not affirmatively choose a toll provider. New customers of a telephone 
exchange service provider who fail affirmatively to select a provider 
of telephone toll service, after being given a reasonable opportunity 
to do so, should not be assigned automatically to the customer's dial-
tone provider or the customer's preselected interLATA toll or 
interstate toll carrier. Rather, we find that consistent with current 
practices in the interLATA toll market, such nonselecting customers 
should dial a carrier access code to route their intraLATA toll or 
intrastate toll calls to the carrier of their choice until they make a 
permanent, affirmative selection. This action eliminates the 
possibility that a LEC could designate itself automatically as a new 
customer's intraLATA or intrastate toll carrier without notifying the 
customer of the existence of alternative carrier choices. Finally, 
notwithstanding our decision to entrust the issues of consumer 
notification and carrier selection to the states, we emphasize that all 
telecommunications carriers remain subject to the requirements of 
section 258 as well as any verification or ``anti-slamming'' 197 
procedures that the Commission may adopt to prevent unauthorized 
changes in a customer's selection of a provider of telephone exchange 
or telephone toll service.198
---------------------------------------------------------------------------

    \197\ The Commission has defined slamming as the unauthorized 
conversion of a customer's interexchange carrier by another 
interexchange carrier, an interexchange resale carrier, or a 
subcontractor telemarketer. Cherry Communications, Inc. Consent 
Decree, 9 FCC Rcd 2986, 2987 (1994).
    \198\ Section 258 makes it unlawful for any telecommunications 
carrier to ``submit or execute a change in a subscriber's selection 
of a provider of telephone exchange service or telephone toll 
service except in accordance with such verification procedures as 
the Commission shall prescribe.'' 47 U.S.C. 258(a). The section 
further provides that:
    [a]ny telecommunications carrier that violates the verification 
procedures described in subsection (a) and that collects charges for 
telephone exchange service or telephone toll service from a 
subscriber shall be liable to the carrier previously selected by the 
subscriber in an amount equal to all charges paid by such subscriber 
after such violation.
    47 U.S.C. 258(b). Section 258 extends the slamming prohibition 
to all telecommunications carriers, not just interexchange carriers, 
as is the case under the Commission's current Part 64 rules. See 47 
CFR Sec. 64.1100.
---------------------------------------------------------------------------

F. Cost Recovery

a. Background
    82. In the NPRM, the Commission noted that the 1996 Act does not 
specify how LECs will recover the costs associated with providing 
dialing parity to competing providers.199 The Commission therefore 
sought comment on: (1) What, if any, standard should be used for 
arbitration to determine the dialing parity implementation costs that 
LECs should be permitted to recover; and (2) how those costs should be 
recovered.200
---------------------------------------------------------------------------

    \199\ NPRM at para. 219.
    \200\ Id.
---------------------------------------------------------------------------

b. Comments
    83. At the outset, we note that there does not appear to be a 
consensus among commenters as to either of the

[[Page 47301]]

two cost recovery issues raised in the NPRM. The parties are generally 
divided into two positions: (1) Interexchange carriers and competitive 
carriers prefer a Commission standard under which carriers could 
recover from competing providers only the specific incremental costs of 
providing intraLATA toll dialing parity; and (2) incumbent LECs and 
several states prefer that no national standards be developed, and that 
cost recovery issues be left either to the states or to intercarrier 
negotiations.
    84. AT&T suggests that carriers only be entitled to recover 
incremental costs directly associated with the implementation of 
dialing parity, and states that the Commission should ``explicitly 
exclude (a) recovery of costs intended to reimburse an incumbent 
carrier for revenues it expects to lose as a result of implementing 
dialing parity * * * as well as (b) costs associated with network 
upgrades that are not necessary to implement dialing parity.'' 201 
AT&T further suggests that the Commission mandate an ``Equal Access 
Recovery Charge'' on all providers of toll service based on minutes of 
use subject to dialing parity, and that this charge be tariffed 
separately from any access charges, approved by the state commission, 
and amortized over a period not to exceed eight years.202
---------------------------------------------------------------------------

    \201\ AT&T comments at 7.
    \202\ Id.
---------------------------------------------------------------------------

    85. MCI appears to agree with AT&T's proposal, stating that 
``incremental costs incurred to implement dialing parity should be 
recovered from all carriers that carry intraLATA toll on a 
presubscribed basis in accordance with cost causative principles.'' 
203 MCI also suggests that dialing parity costs be recovered on a 
minutes-of-use basis, as an addition to the local switching rate 
element, which would be separately identified in a tariff, and that 
Commission rules for cost recovery be ``presumptively correct'' (i.e., 
states can depart from such rules if they can show their mechanism is 
more effective).204 Several parties urge the Commission to draw 
upon its cost recovery paradigms for interLATA equal access, and apply 
the same basic principles to the intraLATA toll market.205
---------------------------------------------------------------------------

    \203\ MCI comments at 3.
    \204\ Id. at 7-8.
    \205\ See, e.g., GVNW comments at 8; MCI comments at 7.
---------------------------------------------------------------------------

    86. Many other competitive providers also advocate various forms of 
incremental cost recovery, on a per-minutes of use basis, to be 
assessed against all providers of presubscribed intraLATA toll 
services; such costs could include, for example, hardware costs, 
software costs, and consumer education costs.206 GSA/DOD asks the 
Commission to ``view LEC claims for large cost compensation with 
considerable skepticism,'' and suggests that the Commission 
``distribute any verifiable incremental costs associated with achieving 
dialing parity as a percentage surcharge on the bills of all carriers, 
including the incumbent LECs.'' 207
---------------------------------------------------------------------------

    \206\ See, e.g., Citizens Utilities comments at 6; GSA/DOD 
comments at 6-8.
    \207\ GSA/DOD comments at 6-7, 8.
---------------------------------------------------------------------------

    87. Taking the opposite view, BOC commenters, together with GTE and 
USTA, argue that there is essentially no need for the Commission to 
adopt cost recovery measures for dialing parity, and that cost recovery 
issues are best left for the states to address.208 Several state 
public utility commissions also argue that, given the state-specific 
nature of intraLATA cost recovery issues, and the omission of a 
specific cost-recovery standard from Congress in section 251(b)(3), the 
individual states are in the best position to address these 
issues.209 In support of these arguments, some state commenters 
have provided the Commission with detailed descriptions of their 
current mechanisms for recovering intraLATA presubscription 
costs.210
---------------------------------------------------------------------------

    \208\ See Bell Atlantic comments at 5; GTE comments at 20-21; 
NYNEX comments at 10-11; PacTel comments at 17; SBC comments at 9; 
USTA comments at 4.
    \209\ See Illinois Commission comments at 72; Indiana Commission 
comments at 9; Ohio Consumers' Counsel comments at 4; and Ohio 
Commission comments at 11.
    \210\ Id.; see also Louisiana Commission comments at 7.
---------------------------------------------------------------------------

    88. Ameritech argues that dialing parity costs ``should be 
recovered under normal regulatory principles from the cost-causer,'' 
and Bell Atlantic argues that ``only carriers who will benefit from 
intraLATA presubscription should pay the costs. Unless interexchange 
carriers bear the full costs of implementing intraLATA presubscription, 
exchange carrier customers who do not switch intraLATA toll carriers 
and do not benefit from presubscription would ultimately be required to 
pay for it.'' 211 On the other extreme, the Telecommunications 
Resellers Association states that incumbent LECs should ``shoulder the 
full financial burden of remedying this competitive imbalance [in the 
intraLATA toll market].'' 212
---------------------------------------------------------------------------

    \211\ Ameritech comments at 10; Bell Atlantic comments at 5.
    \212\ Telecommunications Resellers Association comments at 8.
---------------------------------------------------------------------------

    89. The reply comments reveal substantial disagreement among 
carriers from the two opposing positions. Interexchange carriers and 
competitive carriers reject the suggestion that they shoulder the full 
cost burden for intraLATA dialing parity, and urge that, at a minimum, 
costs be spread among all service providers that enjoy dialing 
parity.213 AT&T states that ``the proposal by Ameritech and Bell 
Atlantic to recover implementation costs exclusively from their 
competitors underscores the need for explicit national rules * * * 
[n]othing could be more * * * harmful to competition, than allowing 
incumbent LECs to charge a fee for new entrants for the ``privilege'' 
of competing with them.'' 214 GSA/DOD also urges the Commission to 
``reject'' the proposals of Bell Atlantic and SBC.215 MFS 
correctly notes that there was ``little consensus'' on this issue, and 
states ``it is entirely inappropriate in a competitive environment that 
an individual carrier's costs be recovered from its competitors.'' 
216 The Ohio Consumer's Counsel states that Ameritech's ``cost-
causer'' proposal ``ignores the fact that the benefits of dialing 
parity are network-wide.'' 217
---------------------------------------------------------------------------

    \213\ See, e.g., Sprint reply at 12; Telecommunications 
Resellers Association reply at 7; WinStar reply at 12.
    \214\ AT&T reply at iii.
    \215\ GSA/DOD reply at 8.
    \216\ MFS reply at 14.
    \217\ Ohio Consumers' Counsel reply at 4.
---------------------------------------------------------------------------

    90. Incumbent LECs maintain that the Commission should not set 
national cost recovery standards, and that this matter remains the 
prerogative of the states.218 GTE ``strongly opposes'' AT&T's 
suggestions, and PacTel states that ``LECs cost recovery should not be 
limited by noncompensatory incremental methodologies or unreasonably 
long amortization requirements.'' 219 SBC asserts that the 
proposals of MCI and AT&T are ``examples of regulatory micro-
management, are inconsistent with Congressional intent, and would also 
* * * place the major burden of dialing parity cost recovery squarely 
on the backs of incumbent LECs.'' 220
---------------------------------------------------------------------------

    \218\ See Bell South reply at 4; Bell Atlantic reply at 5; NYNEX 
reply at 4; PacTel reply at 18; and USTA reply at 5.
    \219\ PacTel reply at iii.
    \220\ SBC reply at 8.
---------------------------------------------------------------------------

    91. GCI states that ``costs should be recovered in a competitively 
neutral manner because all LECs, not just incumbent LECs, must meet 
this obligation.'' 221 Western Alliance contends that ``costs 
incurred to achieve dialing parity should be included in the investment 
recoverable through explicit

[[Page 47302]]

universal (service) supports.'' 222 Finally, NECA argues that 
there is no need for the Commission to prescribe specific cost recovery 
mechanisms.223
---------------------------------------------------------------------------

    \221\ GCI reply at 2.
    \222\ Western Alliance reply at 2 n.6.
    \223\ NECA reply at 2.
---------------------------------------------------------------------------

c. Discussion
    92. We conclude that, in order to ensure that dialing parity is 
implemented in a pro-competitive manner, national rules are needed for 
the recovery of dialing parity costs. We further conclude that these 
costs should be recovered in the same manner as the costs of interim 
number portability, as mandated in our recent Number Portability 
Order.224 Our authority to promulgate national cost recovery rules 
derives from section 251(d) of the 1996 Act and section 4(i) of the 
1934 Act. In section 251(d), Congress directed the Commission to take 
the necessary steps to implement section 251. Section 4(i) of the 1934 
Act authorizes us to take any action we consider ``necessary and 
proper'' to further the public interest in the regulation of 
telecommunications. Because we determine that dialing parity is crucial 
to the development of local exchange competition, we conclude that we 
should establish pricing principles for the recovery of dialing parity 
costs. Accordingly, we reject the arguments of incumbent LECs and 
others who oppose national standards for cost recovery of the network 
upgrades required to achieve dialing parity.
---------------------------------------------------------------------------

    \224\ Telephone Number Portability, CC Docket No. 95-116, FCC 
96-286 (July 2, 1996) (Number Portability Order) 61 FR 38605 (July 
25, 1996).
---------------------------------------------------------------------------

    93. Many of the network upgrades necessary to achieve dialing 
parity, such as switch software upgrades, are similar to those required 
for number portability. Moreover, with both dialing parity and number 
portability, customer inconvenience represents the barrier to effective 
competition Congress intends to eliminate, whether that inconvenience 
results from the dialing of extra digits in the case of dialing parity, 
or notification of family, friends and business contacts when a 
customer is forced to change his or her number. For these reasons, we 
determine that our recent Number Portability Order provides guidance 
regarding which costs incumbent LECs should be able to recover in 
implementing dialing parity, as well as how such costs should be 
recovered. The rules adopted in the Number Portability Order apply only 
to currently-available number portability mechanisms. We sought further 
comment on cost recovery for long-term number portability, because 
long-term number portability will involve a different kind of system 
than currently available solutions. We tentatively concluded that under 
section 251(e)(2), the same cost recovery principles should apply to 
long-term number portability. In the case of dialing parity, there is a 
similar distinction between currently-available solutions (i.e., full 
2-PIC presubscription), and long-term solutions (i.e., multi-PIC or 
smart-PIC methodologies). Like number portability, we may need to 
revisit the issue of an appropriate cost recovery standard once other 
presubscription technologies become available on a nationwide basis.
    94. In the Number Portability Order, we concluded that costs for 
number portability should be recovered on a competitively-neutral 
basis.225 We also concluded that any recovery mechanism should: 
(1) Not give one service provider an appreciable, incremental cost 
advantage over another service provider, when competing for a specific 
subscriber; and (2) not have a disparate effect on the ability of 
competing service providers to earn a normal return.226 We 
therefore reject the arguments of those commenters that assert that 
only new entrants should bear the costs of implementing dialing parity, 
because such an approach would not be competitively neutral. We also 
concluded in the Number Portability Order that LECs could only recover 
the incremental costs of implementing number portability. Because we 
determine that number portability and dialing parity share significant 
technical similarities and overcome similar barriers to competition, we 
conclude that we should impose the same cost standard for dialing 
parity costs that we have adopted for number portability costs. We 
therefore agree with AT&T that LECs may not recover from other carriers 
under a dialing parity cost recovery mechanism any network upgrade 
costs not related to the provision of dialing parity.
---------------------------------------------------------------------------

    \225\ Section 251(e)(2) of the 1996 Act states that ``the cost 
of establishing * * * number portability shall be born by all 
telecommunications carriers on a competitively neutral basis, as 
determined by the Commission.'' This statutory provision does not 
apply to the dialing parity requirement.
    \226\ Number Portability Order at paras. 121-140.
---------------------------------------------------------------------------

    95. In our Number Portability Order, we concluded that the costs of 
long-term number portability that could be recovered through a 
competitively-neutral mechanism included installation of number 
portability-specific switch software, implementation of SS7 and IN or 
AIN capability, and the construction of number portability 
databases.227 We determined that states could use several 
allocators, including gross telecommunications revenues, number of 
lines, and number of active telephone numbers, to spread number 
portability costs across all telecommunications carriers.228 
Applying the same cost recovery principles to dialing parity, we 
conclude that LECs may recover the incremental costs of dialing parity-
specific switch software, any necessary hardware and signalling system 
upgrades, and consumer education costs that are strictly necessary to 
implement dialing parity. These costs must be recovered from all 
providers of telephone exchange service and telephone toll service in 
the area served by a LEC, including that LEC, using a competitively-
neutral allocator established by the state.229 Although, under 
section 251(e)(2), number portability costs must be recovered from all 
telecommunications carriers, section 251(b)(3) only requires that 
dialing parity be provided to providers of telephone exchange service 
and telephone toll service. Therefore, we conclude that a 
competitively-neutral recovery mechanism for dialing parity should only 
allocate costs to this more limited class. States may use any of the 
allocators described in the Number Portability Order, or any other 
allocator that meets the criteria we have established. States should 
apply the principles we adopt today, and the other guidelines for 
recovering costs of currently available number portability measures, in 
establishing more specific cost recovery requirements for dialing 
parity.
---------------------------------------------------------------------------

    \227\ Id. at para. 122.
    \228\ Id. at paras. 134-36.
    \229\ We recognize that, unlike the case for number portability 
costs, states would not be able to establish a cost allocator based 
on numbers of lines because such an allocator could not apportion 
costs on a competitively neutral basis where dialing parity is 
provided to a CMRS provider. We expect that states will establish a 
competitively neutral allocator that can be used to apportion costs 
among all providers.
---------------------------------------------------------------------------

G. Unreasonable Dialing Delays

    96. For a discussion of the section 251(b)(3) prohibition on 
unreasonable dialing delays, as that section applies to the provision 
of local and toll dialing parity, see section III(E) below.

III. Nondiscriminatory Access Provisions

A. Definition of the Term ``Nondiscriminatory Access''

1. Background
    97. Section 251(b)(3) requires all LECs to permit 
``nondiscriminatory access'' to

[[Page 47303]]

telephone numbers, operator services, directory assistance, and 
directory listings to competing providers of telephone exchange 
service, and to competing providers of telephone toll service.230 
In the NPRM, we tentatively concluded that ``nondiscriminatory access'' 
requires each LEC to permit the same degree of access that the LEC 
itself receives for the services specified in section 
251(b)(3).231 The Commission also asked for specific comment on 
whether the nondiscriminatory access provisions of section 251(b)(3) 
also impose a duty on LECs to resell operator and directory assistance 
services to competing providers.232
---------------------------------------------------------------------------

    \230\ 47 U.S.C. 251(b)(3).
    \231\ See NPRM at para. 214.
    \232\ See NPRM at paras. 216, 217.
---------------------------------------------------------------------------

2. Comments
    98. A number of commenters concur that, as proposed in the NPRM, 
``nondiscriminatory access'' should require each LEC to permit the same 
access to these services that the LEC itself receives.233 Bell 
Atlantic argues, however, that access need not be strictly equal, but 
must ``simply be of a type that will permit the other carrier to 
provide comparable services with no difference in quality perceptible 
to callers.'' 234 Bell Atlantic cites the Modification of Final 
Judgment (MFJ) for the proposition that ``equal access'' does not 
require ``strict technical equality of services and facilities,'' but 
rather it requires that consumers should perceive no qualitative 
differences.235 Sprint objects to Bell Atlantic's use of 
``customer perception'' as the nondiscriminatory access standard, 
arguing that this standard would allow the incumbent LEC to 
``discriminate against its competitors in ways not visible to the end 
user.'' 236
---------------------------------------------------------------------------

    \233\ See, e.g., AT&T reply at iii-iv; ACSI comments at 9; 
California Commission comments at 5; Excel comments at 8; Florida 
Commission comments at 5; MCI comments at 2; and Telecommunications 
Resellers Association comments at 5.
    \234\ See Bell Atlantic comments at n.11.
    \235\ Id. at 6, citing United States v. Western Electric Co., 
569 F. Supp. 1057, 1063 (D.D.C. 1983). Bell Atlantic also states 
that the Commission followed this approach in a 1985 ``equal 
access'' order. Id. at 11, citing In the Matter of MTS and WATS 
Market Structure (Phase III), Report and Order, CC Docket No. 78-72, 
100 F.C.C. 2d. 860, 877 (1985) (MTS and WATS Order (III)).
    \236\ Sprint reply at 9-10.
---------------------------------------------------------------------------

    99. Ameritech requests a clarification that a LEC's duty under 
section 251(b)(3) is owed only to ``providers of telephone exchange and 
telephone toll service.'' 237 Ameritech also argues that because 
Congress did not expressly impose a strict equality standard in section 
251(b)(3), as it did in section 251(c)(2)(C) for incumbent LECs, ``the 
only logical interpretation is that LECs are required to provide access 
* * * that is nondiscriminatory among carriers.'' 238 The Ohio 
Consumer's Counsel responds that ``Ameritech is claiming that giving 
all other carriers an equal level of degraded access, i.e., inferior to 
that provided to itself, is 'non-discriminatory.' Surely Congress 
contemplated nothing of the sort, as is recognized even by other 
incumbent LECs.'' 239
---------------------------------------------------------------------------

    \237\ Ameritech comments at 11.
    \238\ Id. at 12-13. Section 251(c)(2)(C) imposes a duty on 
incumbent LECs to provide interconnection that is ``at least equal 
in quality to that provided by the local exchange carrier to itself 
or to any subsidiary, affiliate, or any other party to which the 
carrier provides interconnection.'' 47 U.S.C. 251(c)(2)(C).
    \239\ Ohio Consumers' Counsel reply at 3.
---------------------------------------------------------------------------

    100. As for resale, a number of commenters agree that LECs should 
make operator and directory assistance services available for resale to 
competing providers under section 251(b)(3), in order to further 
nondiscriminatory access to such services.240 On the other hand, 
several commenters contend that this provision does not imply any 
resale requirements.241 AT&T argues that resale is not required 
under section 251(b)(3), because ``to the extent that a local exchange 
carrier provides transmission with, or as part of, its operator 
services, the service must be made available for resale under sections 
251(b)(1) and 251(c)(4) of the Act.'' 242 Bell Atlantic takes a 
similar approach, arguing that, to the extent that a LEC provides 
operator and directory assistance services that are ``telecommunication 
services,'' the service must be made available for resale by LECs under 
section 251(b)(1), and, if the services are telecommunication services 
offered to retail customers, incumbent LECs must offer them for resale 
at wholesale prices under section 251(c)(4).243
---------------------------------------------------------------------------

    \240\ See, e.g., ALTS comments at n.4; MCI reply at 3; MFS reply 
at 10; and Telecommunications Resellers Association comments at ii.
    \241\ See, e.g., GTE comments at 16; Ameritech comments at n.16; 
NYNEX comments at 6-7.
    \242\ AT&T comments at n.13.
    \243\ Bell Atlantic comments at 8.
---------------------------------------------------------------------------

3. Discussion
    101. We conclude that the term ``nondiscriminatory access'' means 
that a LEC that provides telephone numbers, operator services, 
directory assistance, and/or directory listings (``providing LEC'') 
244 must permit competing providers to have access to those 
services that is at least equal in quality to the access that the LEC 
provides to itself. We conclude that ``nondiscriminatory access,'' as 
used in section 251(b)(3), encompasses both: (1) Nondiscrimination 
between and among carriers in rates, terms and conditions of access; 
and (2) the ability of competing providers to obtain access that is at 
least equal in quality to that of the providing LEC.245 LECs owe 
the duty to permit nondiscriminatory access to competing providers of 
telephone exchange service and to providers of telephone toll service, 
as the plain language of the statute requires. Such competing providers 
may include, for example, other LECs, small business entities entering 
the market as resellers, or CMRS providers.
---------------------------------------------------------------------------

    \244\ We use the term ``providing LEC'' throughout this section 
to refer to the LEC that is permitting nondiscriminatory access to 
its services pursuant to section 251(b)(3). The term ``competing 
provider'' refers to a provider of telephone exchange service or a 
provider of telephone toll service that seeks nondiscriminatory 
access from a providing LEC.
    \245\ See also corresponding definition of ``nondiscriminatory'' 
in the First Report and Order at section V for the purposes of 
section 251(c)(2).
---------------------------------------------------------------------------

    102. Section 251(b)(3) requires that each LEC, to the extent that 
it provides telephone numbers, operator services, directory assistance, 
and/or directory listings for its customers, must permit competing 
providers nondiscriminatory access to these services.246 Any 
standard that would allow a LEC to permit access that is inferior to 
the quality of access enjoyed by that LEC itself is not consistent with 
Congress' goal to establish a pro-competitive policy framework.
---------------------------------------------------------------------------

    \246\ See also First Report and Order at section V.
---------------------------------------------------------------------------

    103. We are not persuaded by Bell Atlantic's statement that the 
standard for nondiscriminatory access should focus only upon ``customer 
perceptions'' of service quality. Such a standard overlooks the 
potential for a providing LEC to subject its competitors to 
discriminatory treatment in ways that are not visible to the customer, 
such as the imposition of disparate conditions between similarly-
situated carriers on the pricing and ordering of services covered by 
section 251(b)(3). While invisible to the customer, such conditions can 
severely diminish a competitor's ability to provide exchange and/or 
toll service on the same terms as the LEC permitting the access.
    104. The MTS and WATS Order (III) does not preclude us from 
requiring LECs to permit access that is at least equal in quality to 
the access the LEC itself receives.247 In the MTS and WATS Order 
(III), the Commission simply held that neither ``absolute technical 
equality'' nor an ``overly quantitative and microscopic'' definition of 
equal

[[Page 47304]]

access was desirable.248 We find that the nondiscrimination 
standard established in this Order is consistent with those previous 
decisions. We do not set forth in this Order an overly technical 
definition of nondiscriminatory access.
---------------------------------------------------------------------------

    \247\ MTS and WATS Order (III), 100 F.C.C. 2d at 860. See also 
supra n. 234.
    \248\ MTS and WATS Order (III), 100 F.C.C. 2d at 877.
---------------------------------------------------------------------------

    105. We conclude that, to the extent all or part of any operator or 
directory assistance services, and features that are adjunct to such 
services, are not ``telecommunications services'' within the meaning of 
section 3(44) 249 of the Communications Act of 1934, LECs that 
provide such services must nonetheless make the services and features 
available under section 251(b)(3). We recognize that resale of operator 
services and directory assistance is a primary vehicle through which 
competing providers, especially new entrants and small business 
entities, can make operator services or directory assistance available 
to their customers and that providing LECs are a primary source from 
which competing providers can obtain these services.250 Operator 
and directory assistance services, or the portions of such services, 
that are ``telecommunications services'' are already subject to resale 
requirements under: (1) Section 251(c)(4)(A), which requires incumbent 
LECs ``to offer for resale at wholesale rates any telecommunications 
service that the carrier provides at retail to subscribers who are not 
telecommunications carriers''; and (2) section 251(b)(1), which imposes 
a duty on all LECs not to prohibit the resale of their 
telecommunications services, nor to impose unreasonable or 
discriminatory conditions on the resale of such services.251 
Operator and directory assistance services, however, generally use 
various adjunct information features, e.g., rating tables or customer 
information databases.252 We recognize that without access to such 
information features, competing providers cannot make full use of such 
services. Thus, to ensure that competing providers can obtain 
nondiscriminatory access to operator services and directory assistance, 
we require LECs to make such services available to competing providers 
in their entirety.253
---------------------------------------------------------------------------

    \249\ 47 U.S.C. 153(44).
    \250\ See also infra para. 118, for discussion of the unbundling 
of operator services and directory assistance under section 
251(c)(3).
    \251\ 47 U.S.C. 251(b)(1), (c)(4)(A). Operator services and 
directory assistance are also unbundled network elements subject to 
section 251(c)(3). See First Report and Order at section V. The 1934 
Act, as amended, defines ``telecommunications service'' as ``the 
offering of telecommunications for a fee directly to the public, or 
to such classes of users as to be effectively available directly to 
the public, regardless of the facilities used.'' 47 U.S.C. 153(46). 
``Telecommunications'' is defined as ``the transmission, between or 
among points specified by the user, of information of the user's 
choosing, without change in the form or content of the information 
as sent and received.'' 47 U.S.C. 153(43). ``Information service'' 
is defined as ``the offering of a capability for generating, 
acquiring, storing, transforming, processing, retrieving, utilizing, 
or making available information, via telecommunications * * *.'' 47 
U.S.C. 153(20). See also First Report and Order at section V.
    \252\ ``Rating tables'' are databases that cross-reference area 
codes, numbers called, and time of day to determine the price to be 
charged for telephone calls. Directory assistance may use databases 
that contain customer names, numbers and addresses, and operator 
services may use databases that contain customer billing information 
(e.g., whether a customer will accept collect calls or third party 
billing).
    \253\ See infra paras. 108-151, for further discussion of 
operator services and directory assistance.
---------------------------------------------------------------------------

B. Nondiscriminatory Access to Telephone Numbers

1. Definition
    106. Currently, the largest LEC in each area code serves as the 
Central Office (CO) code administrator for that area. In the NPRM, this 
Commission proposed that the term ``nondiscriminatory access to 
telephone numbers'' means that all LECs providing telephone numbers 
must permit access to telephone numbers to competing providers in the 
same manner that the LECs themselves receive such access.254 The 
few commenters who addressed this issue support the extension of our 
general definition of nondiscriminatory access to cover access to 
telephone numbers.255 We conclude, consistent with the general 
definition of nondiscriminatory access in para. 101, supra, that the 
term ``nondiscriminatory access to telephone numbers'' requires a LEC 
providing telephone numbers to permit competing providers access to 
these numbers that is identical to the access that the LEC provides to 
itself. In addition, as discussed in paras. 261-345, infra, the 
delegation of the administration of numbering resources to a neutral 
administrator will further the statutory objective that all competing 
providers receive nondiscriminatory access to telephone numbers.
---------------------------------------------------------------------------

    \254\ See NPRM at para. 215.
    \255\ See, e.g., Telecommunications Resellers Association reply 
at 5. See supra para. 101, for the general definition of 
``nondiscriminatory access.''
---------------------------------------------------------------------------

2. Commission Action To Enforce Access to Telephone Numbers
    107. In the NPRM, we sought comment on what, if any, Commission 
action is necessary or desirable to implement the requirement under 
section 251(b)(3) that LECs permit nondiscriminatory access to 
telephone numbers.256 Many commenters state that no additional 
Commission actions, beyond those already required by section 251(e), 
are necessary.257 We conclude that issues regarding access to 
telephone numbers will be addressed by our implementation of section 
251(e) herein.258
---------------------------------------------------------------------------

    \256\ NPRM at para. 215.
    \257\ See, e.g., Bell Atlantic comments at 6; CBT comments at 6; 
and U S WEST comments at 8. See generally infra paras. 261-308, for 
a discussion of previous Commission actions in the area of number 
administration.
    \258\ See generally infra paras. 261-345.
---------------------------------------------------------------------------

C. Nondiscriminatory Access to Operator Services

1. Definition of ``Operator Services''
a. Background and Comments
    108. The 1996 Act does not define the term ``operator services.'' 
In the NPRM, the Commission proposed to use the definition of 
``operator services'' in the Telephone Operator Consumer Services 
Improvement Act (TOCSIA) of 1990.259 Section 226(a)(7), which was 
added to the 1934 Act by TOCSIA, defines operator services as: ``any 
automatic or live assistance to a consumer to arrange for billing or 
completion, or both, of a telephone call through a method other than: 
(1) Automatic completion with billing to the telephone from which the 
call originated; or (2) completion through an access code by the 
consumer, with billing of an account previously established with the 
telecommunications service provider by the consumer.'' 260
---------------------------------------------------------------------------

    \259\ 47 U.S.C. 226(a)(7); see NPRM at para. 294.
    \260\ NPRM at para. 216.
---------------------------------------------------------------------------

    109. Bell Atlantic, BellSouth and MCI agree with the proposed 
definition of ``operator services.'' 261 AT&T, however, expresses 
concern that this definition should not be used by incumbent LECs to 
claim that they are then not obligated to make operator services, 
including transmission of information, available for resale at 
wholesale rates, pursuant to section 251(c)(4).262 AT&T thus 
suggests that the Commission adopt the definition as proposed in the 
NPRM, but explicitly state that the definition is applicable only in 
the context of section 251(b)(3).263 AT&T asserts that the 
traditional functions of ``emergency interrupt,'' ``busy line 
verification,'' and ``operator-assisted directory assistance''

[[Page 47305]]

are within the meaning of ``operator services'' in this 
context.264
---------------------------------------------------------------------------

    \261\ See, e.g., Bell Atlantic comments at 8; BellSouth comments 
at n.24; and MCI comments at 8.
    \262\ See AT&T comments at 8. 47 U.S.C. 251(c)(4), inter alia, 
requires incumbent LECs to offer for resale, at wholesale rates, any 
telecommunications service that the carrier provides at retail to 
subscribers who are not telecommunications carriers.
    \263\ Id.
    \264\ Id. at n. 11.
---------------------------------------------------------------------------

b. Discussion
    110. TOCSIA defines operator services to be ``any automatic or live 
assistance to a consumer to arrange for billing or completion, or both, 
of a telephone call through a method other than: (1) Automatic 
completion with billing to the telephone from which the call 
originated; or (2) completion through an access code by the consumer, 
with billing of an account previously established with the 
telecommunications service provider by the consumer.'' 265 Based 
on support in the record and the desirability of having a definition 
consistent with that in the preexisting statute, we conclude that we 
should adopt the definition of operator services as used in TOCSIA for 
purposes of section 251(b)(3), with modifications. For purposes of 
section 251(b)(3), we do not exempt (1) and (2), above, from the 
definition of operator services. Accordingly, the term operator 
services, for purposes of section 251(b)(3), means ``any automatic or 
live assistance to a consumer to arrange for billing or completion, or 
both, of a telephone call.'' Although commenters did not focus on this 
issue, nor suggest that the exemptions be deleted from the TOCSIA 
definition of ``operator services,'' we conclude that we should adopt a 
modified definition of operator services for the purpose of 
implementing section 251(b)(3). When enacted, the TOCSIA definition was 
intended to address services from an aggregator location, rather than 
addressing the types of operator services in general that would be 
essential to competition in telecommunications markets. Operator 
services are becoming increasingly automated, and thus excluding access 
to automatic call completion from the obligations imposed by section 
251(b)(3) could deny competitors access to a service that is essential 
to competition in the local exchange market. We conclude that, for the 
same reason, ``completion by an access code by the consumer,'' a common 
means of completing calls made from payphones, should also be included 
in the definition of operator services for section 251(b)(3).
---------------------------------------------------------------------------

    \265\ 47 U.S.C. 226(a)(7).
---------------------------------------------------------------------------

    111. Adopting a national definition of ``operator services'' based 
on the TOCSIA definition, as modified above, will allow for consistency 
and ease of compliance with the statute, specifically with respect to 
services to which all LECs must permit nondiscriminatory 
access.266 We further conclude that we should state explicitly 
that busy line verification, emergency interrupt, and operator-assisted 
directory assistance are forms of ``operator services,'' because they 
assist customers in arranging for the billing or completion (or both) 
of a telephone call. Thus, if a LEC provides these functions, the LEC 
must offer them on a nondiscriminatory basis to all providers of 
telephone exchange and/or toll service. To avoid confusion with the 
TOCSIA definition at section 226, we state here that this definition 
only applies for purposes of section 251. Finally, unlike the 
definition of operator services in TOCSIA, we point out that our 
definition of ``operator services'' under section 251(b)(3) is 
applicable to both interstate and intrastate operator services.267
---------------------------------------------------------------------------

    \266\ See also infra para. 146.
    \267\ See First Report and Order at section V for discussion of 
application of section 251 to interstate and intrastate matters.
---------------------------------------------------------------------------

2. Definition of ``Nondiscriminatory Access to Operator Services''
a. Background
    112. In the NPRM, we proposed that the phrase ``nondiscriminatory 
access to operator services'' should be interpreted to mean that a 
telephone service customer, regardless of the identity of his or her 
local telephone service provider, must be able to connect to a local 
operator by dialing ``0,'' or ``0 plus'' the desired telephone 
number.268
---------------------------------------------------------------------------

    \268\ See NPRM at para. 216.
---------------------------------------------------------------------------

b. Comments
    113. Several commenters agree with the Commission's interpretation 
of this phrase as proposed in the NPRM.269 PacTel, however, 
requests that we clarify that the ``0'' or ``0 plus'' requirement does 
not mean ``that a customer must be able to access every LEC's operator 
services or directory assistance using the same dialing scheme, but 
rather only the services of the carrier selected to provide local 
service.'' 270 AT&T requests that operator service connection 
methods continue to include dialing ``00'' in order to access the pre-
selected long distance carrier operator.271 CBT asks that we find 
that the nondiscriminatory access requirements only apply when a 
competing local service provider is using either a LEC's local exchange 
services on a resale basis or when the competing provider is using a 
LEC's unbundled switch ports.272 GCI states that, in Alaska, LECs 
currently do not provide ``0'' or ``0 plus'' the telephone number; 
rather, interexchange carriers provide these services. GCI requests 
that arrangements such as those in Alaska not be precluded.273 
Bell Atlantic, USTA, and PacTel request that we state that, while LECs 
must offer their operator services to their competitors, there is no 
duty for a LEC to ensure that the competitors' customers have access to 
these services.274 Finally, U S WEST states that ``regulatory 
agencies should not mandate all carriers provide certain adjunct non-
essential services, including ``0'' and ``0+'' services. Nor should 
regulatory agencies dictate the manner in which adjunct, non-essential 
services are accessed.'' 275
---------------------------------------------------------------------------

    \269\ See, e.g., AT&T comments at 9; MCI comments at 8; and 
Telecommunications Resellers Association comments at 6.
    \270\ See PacTel comments at 16.
    \271\ See AT&T comments at 9.
    \272\ See CBT comments at 6, 7.
    \273\ See GCI reply at 3 n.4.
    \274\ See Bell Atlantic comments at 7; USTA comments at ii; 
PacTel comments at 15.
    \275\ U S WEST comments at 8-9.
---------------------------------------------------------------------------

c. Discussion
    114. We adopt the interpretation of ``nondiscriminatory access to 
operator services'' that we proposed in the NPRM, with the following 
clarifications. First, LECs are required to permit nondiscriminatory 
access to operator services by competing providers, and have no duty, 
apart from factors within their own control, to ensure that a competing 
provider's customers can in fact access the services. We make this 
clarification because the statute does not refer to the customers of 
competing providers, and the record does not support such an 
interpretation of the statutory language. Second, there is no 
requirement that a LEC must provide call handling methods or different 
credit card or other alternate billing arrangements different from 
those it provides to itself or its affiliates. And finally, we find 
that the duty to permit nondiscriminatory access to operator services 
applies only to LECs that provide operator services to their own 
customers.
    115. Once a LEC permits a competing provider to have access to 
operator services, this access may become degraded in the competing 
provider's network by factors outside the control of the providing 
LEC.276 On the other hand, when a LEC unbundles network loop 
elements, the providing LEC may also retain maintenance and control 
responsibilities over such elements.277

[[Page 47306]]

We require that, if a dispute arises between a LEC providing access to 
operator services and a competing provider regarding the delivery of 
such access, the initial burden is upon the providing LEC to 
demonstrate with specificity: (1) That it has provided 
nondiscriminatory access, and (2) that the degradation of access is not 
caused by factors within the control of the providing LEC. Our use of 
the term ``factors'' is not limited to network facilities, but also 
includes human and non-facilities elements used in the provision of 
operator services. A providing LEC must also demonstrate with 
specificity that any degradation in access by competing providers is 
not caused by, inter alia, the providing LEC's inadequate staffing, 
poor maintenance or cumbersome ordering procedures.
---------------------------------------------------------------------------

    \276\ For example, the customers of a competing provider may 
experience dialing delays or call blockage due to inadequate 
facilities or poor call management in the competing provider's 
network.
    \277\ We note that incumbent LECs have an obligation to offer 
operator services and directory assistance on an unbundled basis 
under section 251(c)(3). 47 U.S.C. 251(c)(3). See First Report and 
Order section V.
---------------------------------------------------------------------------

    116. We take into account PacTel's comments in concluding that the 
nondiscriminatory access requirement of section 251(b)(3) does not 
require that a customer be able to access every LEC's operator 
services, but only the operator services offered by that customer's 
chosen local service provider.278 Furthermore, section 251(b)(3) 
neither specifically addresses nor precludes arrangements wherein 
operator services are provided by interexchange carriers, as described 
by GCI. Section 251(b)(3) requires all LECs, but not interexchange 
carriers or other service providers, to permit nondiscriminatory access 
to operator services. Thus, to the extent that an OSP is not within the 
statutory definition of ``local exchange carrier,'' it is not required 
by section 251(b)(3) to permit nondiscriminatory access to its operator 
services.
---------------------------------------------------------------------------

    \278\ The operator services provided by a customer's local 
service provider, for example, could be that provider's own operator 
services, resold operator services of a LEC providing 
nondiscriminatory access, or operator services provided by an 
independent OSP.
---------------------------------------------------------------------------

    117. The ``00'' access method currently allows an end user to 
connect to the operator services of his or her presubscribed long 
distance carrier. Consistent with our definition of nondiscriminatory 
access, we require that, if a LEC allows its customers access to 
operator services of their presubscribed long distance carriers by 
dialing ``00,'' it must permit competing providers to have access to 
any features and functions that are necessary to enable the competing 
provider to allow its customers likewise to obtain access to such 
operator services by dialing ``00.'' We find that CBT's proposal to 
limit a LEC's operator services obligations to only those competitors 
reselling a LEC's services, or using a LEC's unbundled switch ports, is 
inconsistent with the statute. The nondiscriminatory access provisions 
of section 251(b)(3) are not confined to situations in which a 
competing provider resells a LEC's services, or uses unbundled network 
elements of a LEC. We do not agree with U S WEST's statement that it 
would be inappropriate to mandate that all LECs who offer operator 
services must accommodate ``0'' and ``0 plus'' dialing. This service is 
not, as U S WEST states, an ``adjunct, non-essential'' service.
    118. Finally, we note that in the First Report and Order we found 
that operator services as well as directory assistance are network 
elements that an incumbent LEC must make available to requesting 
telecommunications carriers. In the absence of an agreement between the 
parties, unbundled element rates for operator services and directory 
assistance are governed by section 252(d)(1) and our rules 
thereunder.279 The obligation of incumbent LECs to provide 
operator services and directory assistance as unbundled elements is in 
addition to the duties of all LECs (including incumbent LECs) under 
section 251(b)(3) and the rules we adopt herein.280
---------------------------------------------------------------------------

    \279\ See First Report and Order at section V.
    \280\ See First Report and Order at section V.
---------------------------------------------------------------------------

3. Commission Action To Ensure Nondiscriminatory Access to Operator 
Services
a. Background and Comments
    In the NPRM, the Commission sought comment on what, if any, 
Commission action is necessary or desirable to ensure nondiscriminatory 
access to operator services under section 251(b)(3).281 Bell 
Atlantic, GTE and PacTel assert that there is no need for the 
Commission to adopt detailed rules in this area.282 On the other 
hand, Sprint is ``concerned that leaving access to these services to 
carrier negotiations will result in unreasonable delays and 
discriminatory terms and conditions as between the incumbent LEC and 
CLEC.'' 283 MFS and WinStar support an ``unambiguous national 
policy'' of requiring incumbent LECs to make services available to new 
entrants.284 MFS justifies this position by noting ``some 
incumbent LECs say they already provide access, some say they are not 
obligated to offer such offering for resale, some assert that they are 
included in various unbundled elements or that they should not be 
unbundled * * * incumbent LECs should not be allowed to unilaterally 
decide whether, or to what extent to offer access to operator services, 
directory assistance and directory listings.'' 285
---------------------------------------------------------------------------

    \281\ See NPRM at para. 216.
    \282\ See Bell Atlantic comments at 6; GTE reply at 18; and 
PacTel comments at 14.
    \283\ Sprint reply at 8.
    \284\ MFS reply at 10, WinStar reply at 13.
    \285\ MFS reply at 10.
---------------------------------------------------------------------------

    120. The Telecommunications Resellers Association states that 
``[p]rompt and strong Commission response to complaints alleging 
failures by LECs to provide nondiscriminatory access to operator 
services is required to ensure compliance with this requirement.'' 
286 Finally, the Florida Commission asserts that ``[s]tates should 
be allowed to ensure compliance with the Act as it relates to these 
services as defined in the NPRM.'' 287
---------------------------------------------------------------------------

    \286\ Telecommunications Resellers Association comments at 7.
    \287\ See Florida Commission comments at 5.
---------------------------------------------------------------------------

b. Discussion
    121. We conclude that detailed Commission rules are not required to 
implement the requirement under section 251(b)(3) that LECs must permit 
competing providers nondiscriminatory access to operator services. We 
recognize the need for flexibility in order for maximum access to 
operator services when networks interconnect, as there may be a variety 
of technical interconnection methods through which such 
nondiscriminatory access to operator services can be achieved. We view 
the definition of ``nondiscriminatory access to operator services'' set 
forth in paras. 114-118, supra, as the overarching standard to which 
LECs must adhere under section 251(b)(3). As noted, in part III (C)(2), 
once a LEC permits nondiscriminatory access to operator services to its 
competitors, that LEC has no further duty to ensure that the 
competitor's customers can access those services. To the extent that a 
dispute arises regarding a competing provider's access to operator 
services, however, the burden is on the LEC permitting the access to 
demonstrate with specificity that it has provided nondiscriminatory 
access, and that any disparity is not caused by factors within its 
control.
    122. Beyond placing the initial burden of proof on the providing 
LEC, we find that specific enforcement standards for nondiscriminatory 
access to operator services are not required at this time. Rather, 
disputes concerning nondiscriminatory access can be addressed under our 
general

[[Page 47307]]

enforcement authority pursuant to Titles II and V of the Act.288 
The 1996 Act also directs the Commission to establish such procedures 
as are necessary for the review and resolution of complaints against 
the BOCs within the statutory deadlines.289 This requirement will 
be addressed in a separate proceeding.
---------------------------------------------------------------------------

    \288\ See, e.g., 47 U.S.C. 208 (common carrier complaint 
authority); see generally 47 U.S.C. 501-510. See also, First Report 
and Order at section II (authority to take enforcement action).
    \289\ See 47 U.S.C. 271(d)(6)(B).
---------------------------------------------------------------------------

4. ``Branding'' Requirements for Operator Services
a. Background
    123. Section 226(b)(1)(A) of the Act and Part 64 of the 
Commission's rules require an operator services provider (OSP) to 
identify itself audibly and distinctly to the consumer at the beginning 
of each interstate telephone call, before the consumer incurs any 
charge for that call.290 This procedure is commonly referred to as 
``call branding.'' In a recent Report and Order, the Commission amended 
its rules to require ``branding'' to the parties on both ends of a 
collect call.291
---------------------------------------------------------------------------

    \290\ See 47 U.S.C. 226(b)(1)(A); see also 47 CFR 64.703(a)(1).
    \291\ Amendment of Policies and Rules Concerning Operator 
Service Providers and Call Aggregators, CC Docket No. 94-158, Report 
and Order and Further Notice of Proposed Rulemaking, FCC 96-75 
(1996) (OSP Order) 61 FR 15020 (April 4, 1996).
---------------------------------------------------------------------------

    124. In using the term ``branding requirements'' in this context, 
we do not refer to the section 226 requirements obligating OSPs to 
identify themselves to consumers; rather, we refer to the obligations 
beyond section 226, if any, of a LEC to a competing provider that is 
using the LEC's facilities to provide its own operator services, or is 
reselling the operator services of the LEC. In these situations, the 
issue is whose brand should be used.
    125. The NPRM did not ask whether branding of operator services 
should be required under section 251(b)(3). This issue was raised by 
several parties, however, in the context of nondiscriminatory access to 
such services. Specifically, parties raised the question of whether 
competing providers have the right to have resold operator services of 
a LEC ``branded'' in the competing provider's name, in order to ensure 
nondiscriminatory access and consumer perceptions of seamless service.
b. Comments
    126. AT&T states that the Commission should reject claims that LECs 
may refuse to comply with ``reasonable requests to brand resold 
operator services as those of the reseller,'' and that the ``continued 
use of the incumbent LEC's own brand with services that are resold to 
CLEC customers would stifle competition and confuse customers.'' 
292 AT&T further recommends that ``equal opportunities for 
branding'' be made available, asserting that if a LEC brands its own 
operator services, it should ensure that other OSPs have the capability 
to do the same; and if branding is infeasible for the OSP, the LEC 
should not brand its service at all.293 Bell Atlantic and SBC 
object to AT&T's proposal, because one possible outcome would be that 
branding would not be performed on interstate calls, which would 
violate current Federal and state statutes and regulations.294
---------------------------------------------------------------------------

    \292\  AT&T reply at n.20.
    \293\ See AT&T comments at n.12.
    \294\ See Bell Atlantic reply at 5-6; SBC reply at 7.
---------------------------------------------------------------------------

    127. USTA states that when there are no technical limitations to 
branding, each LEC should be responsible for branding its own services, 
and where multiple brands are infeasible, the branding announcement of 
the facilities-based carrier should be used by ``default.'' 295 
Bell Atlantic and CBT contend that the issue of branding operator 
services is best left to inter-carrier negotiations, where technical 
and cost issues can be resolved between the parties.296 PacTel 
notes that ``in a resale environment, we accommodate the CLEC by not 
branding our service at all. If a CLEC wants to brand its own operator 
services, it can establish a facilities-based arrangement and set up 
its own operator services.'' 297
---------------------------------------------------------------------------

    \295\ See USTA reply at 6.
    \296\ See Bell Atlantic reply at 5; CBT reply at 4-5.
    \297\  PacTel reply at 15.
---------------------------------------------------------------------------

c. Discussion
    128. Since these comments are a logical outgrowth of the language 
in our NPRM, we address them herein. We recognize that branding plays a 
significant role in markets where competing providers are reselling the 
operator services of the providing LEC. Continued use of the providing 
LEC's brand with a competing provider's customers clearly advantages 
the providing LEC. Consistent with the requirements that we imposed on 
incumbent LECs in the First Report and Order, we conclude that a 
providing LEC's failure to comply with the reasonable, technically 
feasible request of a competing provider for the providing LEC to 
rebrand operator services in the competing provider's name, or to 
remove the providing LEC's brand name, creates a presumption that the 
providing LEC is unlawfully restricting access to these services by 
competing providers.298 This presumption can be rebutted by the 
providing LEC if it demonstrates that it lacks the capability to comply 
with the competing provider's request. We note also that the Illinois 
Commission recently ordered rebranding of operator services as those of 
the reseller ``[t]o the extent that it is technically feasible,'' and 
we do not preempt its intrastate branding requirements, nor any similar 
requirements that other states may have enacted.299
---------------------------------------------------------------------------

    \298\ See First Report and Order at section VIII .
    \299\ See AT&T Communications of Illinois, and LDDS 
Communications, Inc. d/b/a LDDS Metromedia Communications, Petition 
for a Total Local Exchange Wholesale Service Tariff from Illinois 
Bell Telephone Company d/b/a Ameritech Illinois and Central 
Telephone Company Pursuant to Section 13.505.5 of the Illinois 
Public Utilities Act, Illinois Commission, Dockets 95-0458 and 95-
0531 (consol.), Hearing Examiner's Proposed Order, May 16, 1996, pp. 
52-54.
---------------------------------------------------------------------------

    129. Any inter-carrier branding arrangements under which an 
interstate operator services call made from an aggregator location 
would not be branded would violate section 226 of the Act and part 64 
of our rules. We therefore caution interconnecting carriers that, in 
negotiating branding arrangements for operator services, they must 
insure that such arrangements are consistent with Federal laws and 
regulations requiring interstate OSPs to identify themselves.

D. Nondiscriminatory Access to Directory Assistance and Directory 
Listings

1. Definition of ``Nondiscriminatory Access to Directory Assistance and 
Directory Listings''
a. Background
    130. In the NPRM, the Commission interpreted the phrase 
``nondiscriminatory access to directory assistance and directory 
listings'' to mean that the customers of all telecommunications service 
providers should be able to access each LEC's directory assistance 
service and obtain a directory listing on a nondiscriminatory basis, 
notwithstanding: (1) The identity of a requesting customer's local 
telephone service provider; or (2) the identity of the telephone 
service provider for a customer whose directory listing is 
requested.300
---------------------------------------------------------------------------

    \300\ See NPRM at para. 217.
---------------------------------------------------------------------------

b. Comments
    131. A number of commenters agree with our definition of 
``nondiscriminatory access to directory assistance and directory 
listings'' as

[[Page 47308]]

proposed in the NPRM.301 Many commenters combine their discussions 
of what constitutes nondiscriminatory access for both operator services 
and directory assistance.302 As with operator services, some 
commenters assert that a LEC is not obligated to ensure that a 
competing provider's customers have access to directory assistance and 
directory listings.303 Bell Atlantic, for example, argues that 
``[t]he exchange carrier, naturally, can control only its part of the 
service, not what the other carrier provides.'' 304 CBT asks that 
we find that the nondiscriminatory access requirements only apply when 
a competing local service provider is using a LEC's local exchange 
services on a resale basis or when the competing provider is using a 
LEC's unbundled switch ports.305
---------------------------------------------------------------------------

    \301\ See, e.g., AT&T comments at 9-10; SBC reply at 4; and 
Telecommunications Resellers Association comments at 7.
    \302\ See, e.g., CBT comments at 6. See, e.g., para. 113, supra.
    \303\ See Ameritech comments at 10, USTA comments at 6-7. See 
also supra para. 113.
    \304\  Bell Atlantic comments at 7.
    \305\ See CBT comments at 6, 7.
---------------------------------------------------------------------------

    132. Finally, certain interexchange carriers ask that we require 
that competing providers have access to the White Pages, Yellow Pages, 
and ``customer guide'' sections of directories, in order to satisfy the 
requirement of nondiscriminatory access to directory assistance and 
directory listings.306 Sprint contends that ``CLECs should be 
allowed to insert informational pages containing their business and 
repair numbers in the incumbent LEC's white and yellow pages 
directories at cost.'' 307 SBC strongly disagrees that section 
251(b)(3) requires access to Yellow Pages, ``customer guides,'' and 
informational pages, pointing out that the ``competitive checklist'' 
(section 271) provisions only require incumbent LECs to provide access 
to White Pages listings.308
---------------------------------------------------------------------------

    \306\ See, e.g., AT&T comments at n.14.
    \307\ Sprint comments at 9-10.
    \308\ See SBC reply at 6-7 (citing 47 U.S.C. 
Sec. 271(c)(2)(B)(vii)).
---------------------------------------------------------------------------

c. Discussion
    133. We conclude that we should adopt the definition of 
nondiscriminatory access to directory assistance services proposed in 
the NPRM, with the following modifications. Consistent with our 
conclusion in para. 101, supra, we have modified this definition to 
reflect that this duty is owed to competing providers of telephone 
exchange service and/or telephone toll service, and not to ``all 
telecommunications carriers.'' 309 This duty does not apply if a 
LEC chooses not to offer directory assistance to its own 
customers.310
---------------------------------------------------------------------------

    \309\ See supra para. 101.
    \310\ But see infra paras. 141-145, wherein we require all LECs, 
regardless of whether or not they provide directory assistance to 
their customers, to share subscriber listings, in readily accessible 
formats, as an element of nondiscriminatory access.
---------------------------------------------------------------------------

    134. We agree that once a LEC permits a competitor 
nondiscriminatory access to directory assistance and directory 
listings, the LEC permitting the access is not responsible for ensuring 
that the competitor's customers are able to access these services. As 
with operator services, when a dispute arises as to the adequacy of the 
access received by the competitor's customers, the burden is on the LEC 
permitting access to the service to demonstrate with specificity: (1) 
That it is permitting nondiscriminatory access to directory assistance 
and directory listings; and (2) that the disparity in access is not 
caused by factors within its control. As in paragraph 114, supra, we 
conclude that the term ``factors'' is not confined to physical 
facilities, but also includes human and non-facilities elements such as 
staffing, maintenance and ordering.
    135. The requirements for nondiscriminatory access to directory 
assistance and directory listings are intertwined. Requiring 
``nondiscriminatory access to directory listings'' means that, if a 
competing provider offers directory assistance, any customer of that 
competing provider should be able to access any listed number on a 
nondiscriminatory basis, notwithstanding the identity of the customer's 
local service provider, or the identity of the telephone service 
provider for the customer whose directory listing is requested.311 
We conclude that the obligation to permit access to directory 
assistance and directory listings does not require LECs to permit 
access to unlisted telephone numbers, or other information that a LEC's 
customer has specifically asked the LEC not to make available.312 
In previous orders, such as those addressing nondiscriminatory access 
by interexchange carriers to Billing Name and Address (BNA) 
information, we have taken action to ensure that customer privacy is 
protected.313 In this Order, we require that in permitting access 
to directory assistance, LECs bear the burden of ensuring that access 
is permitted only to the same information that is available to their 
own directory assistance customers, and that the inadvertent release of 
unlisted names or numbers does not occur.314
---------------------------------------------------------------------------

    \311\ See infra para. 141.
    \312\ Cf. 47 U.S.C. 222(f)(3) (definition of ``subscriber list 
information''), which is limited to the listed names of subscribers 
of a carrier.
    \313\ See, e.g., Policies and Rules Concerning Local Exchange 
Carrier Validation and Billing Information for Joint Use Calling 
Cards, CC Docket No. 91-115, Third Order on Reconsideration, 11 FCC 
Rcd 6835 (1996) 61 FR 08879 (March 6, 1996); see also Policies and 
Rules Concerning Local Exchange Carrier Validation and Billing 
Information for Joint Use Calling Cards, CC Docket No. 91-115, 
Second Report and Order, 8 FCC Rcd 4478 (1993) 58 FR 36143 (July 6, 
1993).
    \314\ See also Implementation of the Telecommunications Act of 
1996: Telecommunications Carriers' Use of Customer Proprietary 
Network Information and Other Customer Information, CC Docket No. 
96-115, FCC 96-221 (1996) 61 FR 26483 (May 28, 1996).
---------------------------------------------------------------------------

    136. We find, as we did in paragraph 117, supra, that CBT's 
proposal to limit the application of section 251(b)(3) to competing 
providers of exchange and/or toll service who are providing services on 
a resale basis, or using an incumbent LEC's unbundled switch ports is 
unacceptable. We also take into account PacTel's comments in concluding 
that section 251(b)(3) does not require that a customer be able to 
access any LEC's directory assistance services, but only those services 
provided through its chosen service provider. When a customer contacts 
his or her provider's directory assistance services, the customer's 
provider can obtain access to the directory listings of other carriers; 
thus, the customer should be able to obtain any directory listing 
(other than listings that are protected or not available, such as 
unlisted numbers). We conclude, however, that a LEC that does not 
provide directory assistance to its own customers does not have to 
provide nondiscriminatory access to directory assistance to competing 
providers.
    137. On the basis of the record before us, we conclude that there 
is no need for this Commission to state that the term ``directory 
assistance and directory listings'' includes the White Pages, Yellow 
Pages, ``customer guides,'' and informational pages. As a minimum 
standard, we find that the term ``directory listing'' as used in 
section 251(b)(3) is synonymous with the definition of ``subscriber 
list information'' in section 222(f)(3).315
---------------------------------------------------------------------------

    \315\ The term ``subscriber list information'' at section 
222(f)(3) means any information: (A) Identifying the listed names of 
subscribers of a carrier and such subscribers' telephone numbers, 
addresses, or primary advertising classifications (as such 
classifications are assigned at the time of the establishment of 
such service), or any combination of such listed names, numbers, 
addresses or classifications; and (B) that the carrier or an 
affiliate has published, caused to be published, or accepted for 
publication in any directory format. 47 U.S.C. 222(f)(3) (A), (B).

---------------------------------------------------------------------------

[[Page 47309]]

2. Commission Action To Implement Nondiscriminatory Access to Directory 
Assistance and Directory Listings
a. Background and Comments
    138. In the NPRM, the Commission sought comment on what action, if 
any, is necessary or desirable to implement the nondiscriminatory 
access to directory assistance and directory listings requirements of 
section 251(b)(3).316 Several parties assert that there is no need 
for the Commission to adopt detailed rules addressing this 
issue.317 In its comments, NYNEX described its current 
arrangements for making its directory assistance and directory listing 
services available to facilities-based and non-facilities-based 
carriers.318
---------------------------------------------------------------------------

    \316\ See NPRM at para. 217.
    \317\ See, e.g., Bell Atlantic comments at 6; GTE reply at 18; 
PacTel comments at 16.
    \318\ See NYNEX comments at 7-8.
---------------------------------------------------------------------------

    139.Sprint and MFS urge the Commission to establish national rules 
requiring nondiscriminatory access to directory assistance and 
directory listings for all local service providers.319 
Furthermore, MCI recommends that the Commission establish requirements 
that ensure that ``each provider of local service has access to 
directory listings of other providers, and that these directory 
listings are made available in readily usable format,'' and that these 
listings be provided ``via tape or other electronic means, as is 
frequently the practice today between incumbent LECs whose service 
areas join.'' 320 PacTel and GTE urge the Commission to refrain 
from mandating access to underlying directory assistance 
databases.321 GTE cites ``serious technical and security 
concerns,'' while PacTel argues that (1) the plain language of section 
251(b)(3) does not require access to the underlying databases, and (2) 
LECs are prohibited from disseminating certain directory listing 
information without customers' permission in California and 
Nevada.322 PacTel maintains that the intent of section 251(b)(3) 
is not to permit ``unfettered access to all information on record.'' 
323
---------------------------------------------------------------------------

    \319\ See, e.g., MFS reply at 10; Sprint reply at 8.
    \320\ See MCI comments at 3, 9; see also MCI reply at 3.
    \321\ See GTE reply at 19; PacTel reply at 15.
    \322\ See GTE reply at 19; PacTel reply at 15.
    \323\ PacTel reply at 15.
---------------------------------------------------------------------------

    140. The Telecommunications Resellers Association states that 
``prompt and strong'' Commission action is required to ensure 
compliance with nondiscriminatory access to directory assistance and 
directory listings.324 The Florida Commission asserts that 
``[s]tates should be allowed to ensure compliance with the Act as it 
relates to these services as defined in the NPRM.'' 325
---------------------------------------------------------------------------

    \324\ See Telecommunications Resellers Association comments at 
7.
    \325\ See Florida Commission comments at 5.
---------------------------------------------------------------------------

b. Discussion
    141. We conclude that section 251(b)(3) requires LECs to share 
subscriber listing information with their competitors, in ``readily 
accessible'' tape or electronic formats, and that such data be provided 
in a timely fashion upon request. The purpose of requiring ``readily 
accessible'' formats is to ensure that no LEC, either inadvertently or 
intentionally, provides subscriber listings in formats that would 
require the receiving carrier to expend significant resources to enter 
the information into its systems. We agree with MCI that ``by requiring 
the exchange of directory listings, the Commission will foster 
competition in the directory services market and foster new and 
enhanced services in the voice and electronic directory services 
market.'' 326 Consistent with the definition of ``subscriber list 
information'' in section 222(f)(3), we do not require access to 
unlisted names or numbers.327 Rather, we require the LEC providing 
the listing to share listings in a format that is consistent with what 
that LEC provides in its own directory.
---------------------------------------------------------------------------

    \326\ MCI comments at 9.
    \327\ See 47 U.S.C. 222(f)(3) for the definition of ``subscriber 
list information.''
---------------------------------------------------------------------------

    142. We conclude that the fact that many LECs offer directory 
assistance and listings for purchase or resale to competitors, as NYNEX 
describes, does not obviate the need for any requirements in this area. 
Under the general definition of ``nondiscriminatory access,'' competing 
providers must be able to obtain at least the same quality of access to 
these services that a LEC itself enjoys. Merely offering directory 
assistance and directory listing services for resale or purchase would 
not, in and of itself, satisfy this requirement, if the LEC, for 
example, only permits a ``degraded'' level of access to directory 
assistance and directory listings.328
---------------------------------------------------------------------------

    \328\ See supra paras. 101-105.
---------------------------------------------------------------------------

    143. We further find that a highly effective way to accomplish 
nondiscriminatory access to directory assistance, apart from resale, is 
to allow competing providers to obtain read-only access to the 
directory assistance databases of the LEC providing access. Access to 
such databases will promote seamless access to directory assistance in 
a competitive local exchange market. We note also that incumbent LECs 
must provide more robust access to databases as unbundled network 
elements under section 251(c)(3).329
---------------------------------------------------------------------------

    \329\ See supra para. 118, for a discussion of the relationship 
between section 251(b)(3) and the requirements adopted in the First 
Report and Order mandating unbundled access to operator and 
directory assistance services.
---------------------------------------------------------------------------

    144. We do not agree with PacTel's contention that certain state 
laws restricting the types of information that LECs can disseminate 
preclude us from requiring access to directory assistance databases. It 
is not possible to achieve seamless and nondiscriminatory access to 
directory assistance without requiring access to the underlying 
databases. Consistent with our definition of nondiscriminatory access, 
the providing LEC must offer its competitors access of at least equal 
quality to that it receives itself. Competitors who access such LEC 
databases will be held to the same standards as the database owner, in 
terms of the types of information that they can legally release to 
directory assistance callers. The LEC that owns the database can take 
the necessary safeguards to protect the integrity of its database and 
any proprietary information, or carriers can agree that such databases 
will be administered by a third party. We note also that our holding 
does not preclude states from continuing to limit how LECs can use 
accessed directory information, e.g., prohibiting the sale of customer 
information to telemarketers.330 Rather, we conclude only that 
section 251(b)(3) precludes states from discriminating among LECs by 
imposing different access restrictions on competing providers, thereby 
allowing certain LECs to enjoy greater access to information than 
others.331 Accordingly, states may not impose rules that would

[[Page 47310]]

allow a LEC to discriminate against competing providers.332
---------------------------------------------------------------------------

    \330\ But see section 222(d)(3), which permits customer 
information to be used for telemarketing to the customer `` * * * 
for the duration of the call, if such call was initiated by the 
customer and the customer approves of the use of such information to 
provide such service.'' 47 U.S.C. 222(d)(3). See also our proceeding 
to clarify the obligations of carriers with regard to section 222(c) 
and 222(d). Implementation of the Telecommunications Act of 1996: 
Telecommunications Carriers' Use of Customer Proprietary Network 
Information and other Customer Information, CC Docket, No. 96-115, 
FCC 96-221 (May 17, 1996) 61 FR 26483 (May 28, 1996).
    \331\ Cf. 47 U.S.C. 222(e), which requires telephone exchange 
service providers to ``provide subscriber list information gathered 
in its capacity as a provider of such service on a timely and 
unbundled basis, under nondiscriminatory and reasonable rates, 
terms, and conditions, to any person upon request for the purpose of 
publishing directories in any format.'' See 47 U.S.C. 222(f)(3) for 
the definition of ``subscriber list information.''
    \332\ See First Report and Order at section II for a discussion 
of the applicability of our section 251 rules to intrastate and 
interstate services.
---------------------------------------------------------------------------

    145. We are not adopting specific enforcement standards at this 
time. Disputes regarding nondiscriminatory access will be addressed 
under our Title II and Title V enforcement authority.333
---------------------------------------------------------------------------

    \333\ See supra para. 122. See also 47 U.S.C. 208 (common 
carrier complaint authority) and 47 U.S.C. 501-510.
---------------------------------------------------------------------------

3. Branding of Directory Assistance
a. Background and Comments
    146. To the extent that interstate directory assistance services 
are within the definition of ``operator services'' in section 226(a)(7) 
of the Act,334 the service provider is required to identify itself 
to consumers at the beginning of a call.335 Parties raised the 
issue of whether the competing provider has the right to have resold 
directory assistance services of the LEC ``branded'' in its name, as an 
element of nondiscriminatory access under section 251(b)(3). Thus this 
issue is similar to that of branding of operator services in paras. 
123-129, supra. The NPRM did not ask whether the branding of directory 
assistance should be required under 251(b)(3) but commenters raised 
this issue.
---------------------------------------------------------------------------

    \334\ 47 U.S.C. 226(a)(7).
    \335\ See 47 U.S.C. 226(a)(7), (b)(1). See generally supra 
paras. 123-129.
---------------------------------------------------------------------------

    147. AT&T suggests adding a requirement that if an incumbent LEC 
brands its own directory services, the incumbent should ensure that 
other directory assistance service providers can also brand their 
services.336 CBT argues that branding is impractical and should be 
left to intercarrier negotiations, stating that ``call branding can be 
provided, though not without considerable added effort and expense, to 
facilities-based providers who route traffic from their networks to the 
incumbent LEC's network by trunk group. Providing branding for resold 
services at the line number level is extremely difficult within the 
limits of the public switched network. When dealing with multiple 
resellers, there is no simple method for the incumbent LEC to determine 
by individual line number which brand should be applied.'' 337 
Bell Atlantic also suggests that this issue be left to carrier 
negotiations.338
---------------------------------------------------------------------------

    \336\ See AT&T comments at n.12.
    \337\ CBT reply at 5.
    \338\ See Bell Atlantic reply at 5.
---------------------------------------------------------------------------

b. Discussion
    148. The record shows that this issue is a logical outgrowth of the 
issues related to nondiscriminatory access to directory assistance 
raised in the NPRM and thus should be addressed in this Order. As with 
operator services, we recognize the major role that branding can play 
in an environment where competing providers are reselling the directory 
assistance services of the providing LEC. Consistent with the 
requirements that we imposed on incumbent LECs in the First Report and 
Order, therefore, we conclude that a providing LEC's failure to comply 
with the reasonable, technically feasible request of a competing 
provider for the providing LEC to rebrand directory assistance services 
in the competing provider's name, or to remove the providing LEC's 
brand name, creates a presumption that the providing LEC is unlawfully 
restricting access to these services by competing providers.339 
This presumption can be rebutted by the providing LEC demonstrating 
that it lacks the capability to comply with the request of the 
competing provider.340 Finally, as with operator services, we do 
not preempt any branding requirements that state commissions may have 
enacted for directory assistance services.
---------------------------------------------------------------------------

    \339\ As with operator services, supra, we note that carriers 
must comply with the branding requirements of section 226, to the 
extent that their services are within the section 226 definitions. 
See 47 U.S.C. 226.
    \340\ See First Report and Order at section VIII.
---------------------------------------------------------------------------

4. Alternative Dialing Arrangements for Directory Assistance
a. Background and Comments
    149. In the NPRM, the Commission sought comment on whether the 
customers of competing providers of exchange and/or toll service would 
be able to access directory assistance by dialing `411' or `555-1212,' 
which are nationally-recognized numbers for directory assistance, or 
whether alternative dialing arrangements would be necessary.
    150. No commenters recommended that we require different 
arrangements for dialing directory assistance. AT&T states that while 
alternative protocols may be permitted, no carrier should be required 
to use them.341 Bell Atlantic states that ``[n]o dialing 
arrangements for directory assistance other than 411 and 555-1212 are 
necessary. A facilities-based provider will be able to use these 
numbers and route its customers' calls in whatever way it chooses (to 
its own directory assistance, to that of the incumbent exchange carrier 
or to that or any other provider). When a non-facilities-based provider 
buys exchange service from the incumbent under section 251(c)(4), its 
customers get exactly what the incumbent's receive, 411 and 555-1212 
access to directory assistance.'' 342
---------------------------------------------------------------------------

    \341\ See AT&T comments at 10.
    \342\ Bell Atlantic comments at 8-9.
---------------------------------------------------------------------------

b. Discussion
    151. With respect to the ability of customers to reach directory 
assistance services through 411 or 555-1212 arrangements, we conclude 
that no Commission action is required now. No commenter has proposed 
that we require an alternative dialing arrangement. The record before 
us indicates that permitting nondiscriminatory access to 411 and 555-
1212 dialing arrangements is technically feasible, and there is no 
evidence in the record that these dialing arrangements will cease.

E. Unreasonable Dialing Delay

1. Definition and Appropriate Measurement Methods
a. Background and Comments
    152. Section 251(b)(3) prohibits unreasonable dialing 
delays.343 The NPRM sought comment on what constitutes an 
unreasonable dialing delay for purposes of section 251(b)(3) and on 
appropriate methods for measuring and recording such delay.344
---------------------------------------------------------------------------

    \343\ 47 U.S.C. Sec. 251(b)(3).
    \344\ See NPRM at para. 218.
---------------------------------------------------------------------------

    153. U S WEST contends that the phrase ``unreasonable dialing 
delay,'' as it appears in section 251(b)(3), applies only to the 
provision of nondiscriminatory access to operator and directory 
assistance services.345 GCI, on the other hand, asserts that the 
unreasonable dialing delay provision applies to both the dialing parity 
and nondiscriminatory access provisions of section 251(b)(3).346 
MFS, NYNEX and Sprint recommend that we define ``dialing delay'' to 
cover the period from when a user completes dialing to when the call is 
``handed off'' to a connecting LEC, whenever multiple LECs are involved 
in call completion.347 ALTS, however, suggests that we define 
``dialing delay'' to cover the period from when the end user completes 
dialing to the point where a network response is first 
received.348
---------------------------------------------------------------------------

    \345\  U S WEST comments at 11.
    \346\ GCI reply at 2.
    \347\ See Sprint comments at 10; MFS reply at 8; NYNEX comments 
at 9.
    \348\ ALTS comments at 6.
---------------------------------------------------------------------------

    154. Several parties contend, however, that we should not adopt a

[[Page 47311]]

definition of ``dialing delay.'' 349 Bell Atlantic states that 
there is ``no need to try to develop a definition of what constitutes 
`unreasonable dialing delays.' To the extent that this ever becomes an 
issue, it is best handled with a specific factual record.'' 350
---------------------------------------------------------------------------

    \349\ See, e.g., Bell Atlantic comments at 9, U S WEST comments 
at 11.
    \350\ Bell Atlantic comments at 9.
---------------------------------------------------------------------------

    155. Several parties recommend defining ``unreasonable'' as any 
delay that exceeds that of the providing LEC.351 ACSI suggests 
that the Commission ``declare a delay `unreasonable' if the average 
access time for competing providers exceeds the average access time for 
the LEC itself,'' and that ``* * * the LEC and competing providers 
should get equal priority in LEC call processing systems, which would 
result in identical dialing delays, on average, for LECs and competing 
providers.'' 352 Other parties argue that LECs should not be held 
responsible for unreasonable dialing delays that are not caused by 
their networks or are not within their control.353
---------------------------------------------------------------------------

    \351\ See, e.g., Excel comments at 8; Sprint comments at 11.
    \352\ ACSI comments at 10.
    \353\ See, e.g., GTE comments at 19; USTA reply at 6-7.
---------------------------------------------------------------------------

b. Discussion
    156. We conclude that section 251(b)(3) prohibits ``unreasonable 
dialing delays'' for local and toll dialing parity, and for 
nondiscriminatory access to operator services and directory assistance. 
The reference to ``unreasonable dialing delay'' is ambiguous because it 
is in a prepositional phrase at the end of section 251(b)(3), following 
references both to the duty to provide dialing parity and the duty to 
permit nondiscriminatory access to telephone numbers, operator 
services, directory assistance, and directory listings. In light of 
this ambiguity, and the absence of legislative history, we look to the 
purpose of section 251 and to the record to interpret the 
``unreasonable dialing delay'' provision. Examining the statutory 
language in light of the plainly pro-competitive thrust of these 
section 251 requirements, we conclude that Congress intended the 
dialing delay prohibition to apply to both the obligation to provide 
dialing parity and the obligation to permit nondiscriminatory access to 
operator services and directory assistance.354 Further, commenters 
did not distinguish between dialing delay in dialing parity and 
nondiscriminatory access contexts.
---------------------------------------------------------------------------

    \354\ 47 U.S.C. 251(b)(3).
---------------------------------------------------------------------------

    157. We conclude that a ``comparative'' standard for identifying 
``unreasonable dialing delay'' is necessary in order to ensure that, 
when competing providers obtain dialing parity and nondiscriminatory 
access to operator services and directory assistance, such access does 
not come with unreasonable dialing delays. We conclude, therefore, that 
the dialing delay experienced by the customers of a competing provider 
should not be greater than that experienced by customers of the LEC 
providing dialing parity, or nondiscriminatory access, for identical 
calls or call types. For the reasons stated below, we conclude that 
this ``comparative standard'' is more appropriate in this context than 
a specific technical standard.355
---------------------------------------------------------------------------

    \355\ See infra paras. 163-164, for a discussion of specific 
technical standards for dialing delay.
---------------------------------------------------------------------------

    158. In our Number Portability Order,\356\ we indicated that ``at a 
minimum, when a customer switches carriers, that customer must not 
experience a greater dialing delay or call set up time * * * due to 
number portability, compared to when the customer was with the original 
carrier.'' 357 The standard that we are adopting for 
``unreasonable dialing delay'' under section 251(b)(3) is consistent 
with the standard we adopted in the Number Portability Order.
---------------------------------------------------------------------------

    \356\ In the Matter of Telephone Number Portability, CC Docket 
No. 95-116, First Report and Order and Further Notice of Proposed 
Rulemaking, FCC 96-286 (July 2, 1996) (Number Portability Order) 61 
FR 38605 (July 25, 1996).
    \357\ Id. at para. 56.
---------------------------------------------------------------------------

    159. We conclude that the statutory language on unreasonable 
dialing delays places a duty upon LECs providing dialing parity or 
nondiscriminatory access to operator services and directory assistance 
to process all calls from competing providers, including calls to the 
LEC's operator services and directory assistance, on an equal basis as 
calls originating from customers of the providing LEC. In other words, 
calls from a competing provider must receive treatment in the providing 
LEC's network that is equal in quality to the treatment the LEC 
provides to calls from its own customers. We recognize that LECs may 
have the technical ability to identify whether a call is originating 
from a competing provider (e.g., by cross-referencing the Automatic 
Number Identification (ANI), or by identifying the connecting trunk 
group). Thus there may exist on the part of the providing LEC the 
ability to discriminate and to degrade service quality for a competing 
provider's customers by introducing unreasonable dialing delays.
    160. For operator services and directory assistance calls, such 
dialing delay can be measured by identifying the time a call spends in 
queue until the providing LEC processes the call. We recognize that the 
time of arrival of a telephone call can be recorded (1) at the 
originating LEC's switch; (2) upon entering the operator services or 
directory assistance queue; and (3) at the time of answering by the 
providing LEC's operators for such services. We believe that it is 
possible to compare the treatment of calls placed by customers of the 
competing provider with those of calls originating from the providing 
LEC's customers, and thus determine if unreasonable dialing delays are 
occurring. Such a comparison would hold all LECs responsible only for 
delays within their control.
    161. In the event that a dispute arises between a competing 
provider and a providing LEC as to dialing delay, we conclude that the 
burden is on the providing LEC to demonstrate with specificity that it 
has processed the call on terms equal to that of similar calls 
originating from its own customers. Such ``terms'' include the amount 
of time a providing LEC takes to process incoming calls, the priority a 
LEC assigns to calls, and might also take into account the number of 
calls abandoned by the caller of the competing provider. Furthermore, 
to the extent that states have adopted specific performance standards 
for dialing delay between competing providers, we do not preempt such 
standards, and states may enact more detailed standards.
    162. We do not believe that measuring ``unreasonable dialing 
delay'' from the period beginning when a caller completes dialing a 
call and ending when the call is delivered (or ``handed off'') by the 
LEC to another service provider is practical with respect to dialing 
parity or nondiscriminatory access. While we understand that such a 
measurement can be made, and is fully within the control of one LEC, 
prohibiting a providing LEC from introducing dialing delay in the 
originating segment of calls under its control benefits only the 
customers of the providing LEC. The providing LEC already has 
sufficient motivation to provide efficient service to its own 
customers. Finally, we conclude that the proposal to measure dialing 
delay from the completion of dialing to a network response (e.g., when 
a caller receives busy-tone signalling information from the called 
line) is unsatisfactory, because it fails to isolate the segments of a 
call within an individual LEC's control.

[[Page 47312]]

2. Specific Technical Standard for Dialing Delay
a. Background and Comments
    163. In the NPRM, the Commission asked commenters to identify a 
specific period of time that would constitute an ``unreasonable dialing 
delay.'' NYNEX was the sole commenter proposing a quantitative 
measurement. In this regard, however, NYNEX recommends that the 
Commission should issue a recommended maximum period of delay rather 
than a mandatory standard.358 NYNEX states that ``an appropriate 
recommendation for this time period is that it should not exceed 5 
seconds.'' 359 The majority of commenters urge the Commission not 
to impose a specific technical dialing delay standard at this 
time.360 For example, GTE states that ``[n]umber portability, 
dialing parity and other newly required actions will undoubtedly affect 
network performance, including dialing delay, at least during a 
transition period. Any current determination of an unreasonable delay 
will be based on network designs that will bear little resemblance to 
the network structures of tomorrow.'' 361 Finally, the Illinois 
Commission states that it is currently studying the same issue for 
number portability in Chicago, and suggests that the Commission may 
wish to adopt the Illinois Commission's standard upon completion of its 
study.362
---------------------------------------------------------------------------

    \358\ See NYNEX comments at 9-10.
    \359\ Id.
    \360\ See, e.g., Bell Atlantic comments at 9; MFS reply at 8.
    \361\ GTE comments at 19.
    \362\ See Illinois Commission comments at 70.
---------------------------------------------------------------------------

b. Discussion
    164. We conclude that the record does not provide an adequate basis 
for determining a specific technical standard for measuring 
unreasonable dialing delays. Commenters do not address separately the 
dialing delay prohibition as it applies to each of the services covered 
by section 251(b)(3): local and toll dialing parity, and 
nondiscriminatory access to operator services and directory assistance. 
We thus conclude that, until dialing delay can be reliably measured 
after dialing parity is a reality, the ``comparative'' standard adopted 
in paragraph 157, supra, will provide a workable national rule for the 
industry. We intend to revisit the issue at a future date if we should 
find that our ``comparative'' standard is inadequate to ensure fair 
competition.

IV. Network Disclosure

    165. Section 251(c)(5) of the 1996 Act requires incumbent LECs to 
``provide reasonable public notice of changes in the information 
necessary for the transmission and routing of services using that local 
exchange carrier's facilities or networks, as well as of any other 
changes that would affect the interoperability of those facilities or 
networks.''

A. Scope of Public Notice

1. Definition of ``Information Necessary for Transmission and Routing''
a. Background and Comments
    166. In our NPRM, we tentatively concluded that ``information 
necessary for transmission and routing'' should be defined ``as any 
information in the incumbent LEC's possession that affects 
interconnectors' performance or ability to provide services.'' 363
---------------------------------------------------------------------------

    \363\ NPRM at para. 189.
---------------------------------------------------------------------------

    167. Most commenters support the tentative conclusion in the 
NPRM.364 For example, MFS asserts that our definition would 
``minimize the risk that an incumbent LEC could take actions 
inconsistent with (interconnection and interoperability)'' and that the 
term ``should be applied as broadly as possible.'' 365 MCI states 
that a broad definition is ``necessary for new entrants to receive 
notice of technical changes.'' 366 Time Warner also asserts that 
``this broad-based definition * * * is critical to ensuring that 
(incumbent local exchange carriers) fulfill all of the obligations 
imposed upon them by Section 251(c).'' 367
---------------------------------------------------------------------------

    \364\ See, e.g., ACSI comments at 11; ALTS comments at 2; AT&T 
comments at 23; Bell Atlantic comments at 10; GCI comments at 4; 
Illinois Commission comments at 59; MCI comments at 15; MFS comments 
at 12-13; Ohio Commission comments at 4; Telecommunications 
Resellers Association comments at 11; Time Warner comments at 3; U S 
WEST comments at 12.
    \365\ MFS comments at 12-13.
    \366\ MCI comments at 15.
    \367\ Time Warner comments at 3.
---------------------------------------------------------------------------

    168. Some, mostly smaller, incumbent LECs disagree with our 
proposed standard, stating that it is ``too broad,'' ``an onerous 
burden,'' ``not necessary,'' and ``may not be possible.'' 368 
Other incumbent LECs claim that network disclosure requirements should 
be limited to ``changes that affect the interconnection or 
interoperability of the network.'' 369 Their overarching concern 
is that the proposed definition's reference to ``any information'' 
would be interpreted so broadly that virtually any network-related 
information would fall within the ambit of the disclosure 
requirement.370 Some incumbent LECs also express the fear that a 
broad interpretation of the statute ``might expose (them) to unintended 
liability for giving information that the local exchange carrier is not 
qualified to provide'' or that the (local exchange carrier) might be 
held liable for results of decisions that the interconnector made based 
upon this information.'' 371 These incumbent LECs claim that 
competing providers' informational needs would be fulfilled even if 
public disclosure were limited to ``relevant interfaces or protocols.'' 
372 USTA suggests an alternate definition: ``all changes in 
information necessary for the transmission and routing of services 
using the local exchange carrier's facilities, or that affects 
interoperability.''
---------------------------------------------------------------------------

    \368\ GVNW comments at 1; Ameritech comments at 26; Rural Tel. 
Coalition comments at 2.
    \369\ Bell Atlantic reply at 9.
    \370\ GVNW comments at 1; Ameritech comments at 26.
    \371\ GVNW comments at 1-2.
    \372\ Nortel states that the incumbent local exchange carrier 
should only ``provide the interface information,'' and the competing 
service provider should then ``perform its own `reverse engineering' 
in developing its own products so as to be compatible with the 
interface.'' Nortel comments at 5.
---------------------------------------------------------------------------

    169. According to some competing providers, narrowing the scope of 
information that must be publicly disclosed would preserve the 
information advantage that incumbent LECs possessed before the passage 
of the 1996 Act.373 Also, AT&T notes that a narrowly constructed 
disclosure requirement would contradict the language of the statute 
that specifically identifies ``changes that would affect the 
interoperability of those facilities or networks.'' 374 AT&T 
states that some information ``is both necessary for proper 
transmission and routing and can affect the network's 
interoperability'' although it is not directly relevant to the 
interconnection point.375 AT&T presents five examples of technical 
changes that do not directly relate to the interconnection point but 
that nevertheless could have ``profound'' implications for competing 
service providers. These changes include those that (1) alter the 
timing of call processing; (2) require competing service providers to 
install new equipment, such as echo cancelers; (3) affect recognition 
of messages from translation nodes; (4) alter loop impedance levels, 
which could cause service disruptions; and (5) could disable a 
competing service provider's loop testing facilities.376
---------------------------------------------------------------------------

    \373\ See, e.g., Time Warner comments at 3-4.
    \374\ AT&T reply at 25-26.
    \375\ Id.
    \376\ AT&T reply at n.56.

---------------------------------------------------------------------------

[[Page 47313]]

    170. Some incumbent LECs suggest that network disclosure 
requirements should also apply to competing service providers.377 
MCI and MFS contend, however, that the plain language of the statute 
requires imposition of public disclosure requirements only upon 
incumbent LECs. MFS states that the duty to disclose change information 
was imposed upon incumbent local exchange carriers because they have 
sufficient ``control over network standards to harm competition'' and 
the ``requisite size and market power to change their networks in a 
manner that stymies competition.'' 378 MFS argues that imposing 
notification requirements on competing service providers would be an 
``empty exercise'' because ``new entrants * * * can do little, if 
anything, to change their networks in a manner that adversely impacts 
the (incumbent LECs).'' 379 MFS also argues that competing service 
providers have ``powerful economic incentives'' for maintaining 
compatibility with incumbent local exchange networks.380
---------------------------------------------------------------------------

    \377\ Ameritech comments at 29; BellSouth comments at 2; NYNEX 
comments at 15-16; Rural Tel. Coalition comments at n.4.
    \378\ MFS reply at 26.
    \379\ MFS reply at 26-27.
    \380\ Id.
---------------------------------------------------------------------------

b. Discussion
    171. Section 251(c)(5) requires that information about network 
changes must be disclosed if it affects competing service providers' 
performance or ability to provide service. Requiring disclosure about 
network changes promotes open and vigorous competition contemplated by 
the 1996 Act. We find that additional qualifiers that restrict the 
types of information that must be disclosed, such as ``relevant 
information or protocols,'' would create uncertainty in application and 
appear inconsistent with the statutory language. Timely disclosure of 
changes reduces the possibility that incumbent LECs could make network 
changes in a manner that inhibits competition. In addition, notice of 
changes to ordering, billing and other secondary systems is required if 
such changes will have an effect on the operations of competing service 
providers, because the proper operation of such systems is essential to 
the provision of telecommunications services.
    172. We agree with MCI and MFS that the plain language of the 
statute requires imposition of public disclosure requirements only upon 
incumbent LECs.381 In addition, we conclude that imposing this 
requirement upon competing service providers would not enhance 
competition or network reliability. While competing service providers 
must respond to incumbent LEC network changes, competing service 
providers, in general, are not in a position to make unilateral changes 
to their networks because they must rely so heavily on their connection 
to the incumbent LEC's network in order to provide ubiquitous service. 
Accordingly, competing service providers already face sufficient 
incentives to ensure compatibility of their planned changes with the 
incumbent LEC's network. In addition, if an incumbent LEC were 
permitted to obtain such information from a competing service provider, 
the incumbent LEC might be able to obtain the competing service 
provider's business plans and thereby stifle competition.382
---------------------------------------------------------------------------

    \381\ MCI reply at 7; MFS reply at 25, 26.
    \382\ NCTA asserts that incumbent LECs are ``entirely capable of 
providing adequate notice of their network changes without `full 
disclosure of competing service provider's operations and future 
plans.''' NCTA reply at 12.
---------------------------------------------------------------------------

    173. We conclude that our disclosure standard is consistent not 
only with section 251(c)(5), but also with the requirements of the 
``all carrier rule'' 383 and the scope of the Computer III 
384 disclosure requirement, both of which have been applied to 
incumbent LEC activities for some time. In light of these preexisting 
requirements, we find that the standard we proposed in the NPRM is not 
burdensome but reasonable, providing sufficient disclosure to insure 
against anti-competitive acts as well as to ensure certain and 
consistent disclosure requirements.
---------------------------------------------------------------------------

    \383\ Unless clearly specified otherwise, in this Order, we use 
the term ``all carrier rule'' to refer to the Commission's network 
disclosure rule contained in 47 CFR 64.702, as interpreted in the 
Second Computer Inquiry. The all carrier rule obligates ``all 
carriers owning basic transmission facilities (to release) all 
information relating to network design * * * to all interested 
parties on the same terms and conditions, insofar as such 
information affects either intercarrier interconnection or the 
manner in which interconnected (customer-premises equipment) 
operates.'' Amendment of Section 64.702 of the Commission's Rules 
and Regulations (Second Computer Inquiry), Memorandum Opinion and 
Order on Reconsideration, 84 F.C.C.2d 50, 82-83 (1980) 46 FR 19852 
(April 1, 1981), further recon., 88 FCC 2d 512 (1981), aff'd sub 
nom. Computer and Communications Indus. Ass'n v. FCC, 693 F.2d 198 
(D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983). The all carrier 
rule also requires that ``[w]hen such information is disclosed to 
the separate corporation it shall be disclosed and be available to 
any member of the public on the same terms and conditions.'' See 47 
CFR 64.702; Application of The Southern New England Tel. Co., 10 FCC 
Rcd 4558, 4559 n.23 (1995); Competition in the Interstate 
Interexchange Marketplace, Report and Order, 6 FCC Rcd 5880, 5911 
n.270 (1991) (The all carrier rule obligates ``all carriers to 
disclose, reasonably in advance of implementation, information 
regarding any new service or change in the network.''); Competition 
in the Interstate Interexchange Marketplace, Report and Order, 6 FCC 
Rcd. 5880, 5911 n.270. (1991) 56 FR 55235 (October 25, 1991).
    Another of the Commission's rules, 47 CFR 68.110(b), requires 
similar disclosure to customers of network changes ``if such changes 
can be reasonably expected to render any customer's terminal 
equipment incompatible with telephone company communications 
facilities, or require modification or alteration of such terminal 
equipment, or otherwise materially affect its use or performance.'' 
We will refer to this rule specifically by number where necessary.
    \384\ See infra para. 204 and n.449.
---------------------------------------------------------------------------

    174. We have considered the impact of our rules in this section on 
small incumbent LECs, including Rural Tel. Coalition's and GVNW's 
requests for a less inclusive definition of ``information necessary for 
transmission and routing.'' 385 We do not adopt these proposals 
because we are unable to grant such leniency to small businesses and 
simultaneously ensure adequate information disclosure to facilitate the 
development of a pro-competitive environment for every market 
participant, including other small businesses. We note, however, that 
under section 251(f)(1) certain small incumbent LECs are exempt from 
our rules until (1) they receive a bona fide request for 
interconnection, services, or network elements; and (2) their state 
commission determines that the request is not unduly economically 
burdensome, is technically feasible, and is consistent with the 
relevant portions of section 254. In addition, certain small incumbent 
LECs may seek relief from our rules under section 251(f)(2).386
---------------------------------------------------------------------------

    \385\ Rural Tel. Coalition comments at 2; GVNW comments at 1.
    \386\ For a discussion of the implications and operation of 
section 251(f), see First Report and Order at section XII.
---------------------------------------------------------------------------

2. Definition of ``Services''
a. Background and Comments
    175. Commenters, including incumbent LECs, interexchange carriers, 
and industry organizations, unanimously support our tentative 
conclusion that the term ``services,'' as used in section 251(c)(5), 
includes both telecommunications services and information services, as 
defined in sections 3(46) and 3(20), respectively.387 Parties 
agree that it is reasonable to require that providers of both 
telecommunications and information services receive this information. 
ALTS points out that exclusion of information services or 
telecommunications services from our definition would be

[[Page 47314]]

``needlessly restrictive.'' 388 BellSouth also notes that the 
inclusion of information services for public notice purposes should not 
vest information service providers with substantive rights under 
Section 251, except where they are also operating as a 
telecommunications carrier under the 1996 Act.389
---------------------------------------------------------------------------

    \387\ 47 U.S.C. Sec. 153(20), (46). See NPRM at para. 189; ALTS 
comments at 2; Ameritech comments at 25; BellSouth comments at 3; 
District of Columbia Commission comments at 6-7; GCI comments at 4; 
Illinois Commission comments at 59; MCI comments at 15; MFS comments 
at 12; Telecommunications Resellers Association comments at 11; U S 
WEST comments at 12.
    \388\ ALTS comments at 2.
    \389\ BellSouth comments at 3.
---------------------------------------------------------------------------

b. Discussion
    176. We conclude that the term ``services'' includes both 
telecommunications services and information services, as defined in 
sections 3(46) and 3(20) of the Act, respectively. Providers of both 
telecommunications services and information services may make 
significant use of the incumbent LEC's network in making these 
offerings. Accordingly, exclusion of either information services 
providers or telecommunications services providers would be needlessly 
restrictive. We also affirm that the inclusion of information services 
for public notice purposes does not vest information service providers 
with substantive rights under other provisions within section 251, 
except to the extent that they are also operating as telecommunications 
carriers.
3. Definition of ``Interoperability''
a. Background and Comments
    177. The Commission tentatively concluded that the term 
``interoperability,'' as used in section 251(c)(5), should be defined 
as ``the ability of two or more facilities, or networks, to be 
connected, to exchange information, and to use the information that has 
been exchanged.'' 390 This definition of ``interoperability'' was 
taken from the IEEE Standard Dictionary of Electrical and Electronics 
Terms.391 Commenters, including incumbent LECs, interexchange 
carriers, state commissions, and industry associations, are unanimous 
in their support for our tentative conclusion.392 The Ohio 
Commission also suggests that we expand our definition of 
``interoperability'' to ``recognize that the exchange of traffic 
between an (incumbent local exchange carrier) and an interconnector 
must be seamless and transparent to both parties' end users.'' 393 
No alternative definitions for the term ``interoperability'' were 
proposed by commenting parties.
---------------------------------------------------------------------------

    \390\ NPRM at para. 189.
    \391\ See IEEE Standard Dictionary of Electrical and Electronics 
Terms 461 (J. Frank ed. 1984).
    \392\ ALTS comments at 2; Ameritech comments at 25; AT&T 
comments at 23; District of Columbia Commission comments at 6-7; GCI 
comments at 4; Illinois Commission comments at 4; MCI comments at 
15; MFS comments at 12-13; Ohio Commission comments at 4; 
Telecommunications Resellers Association comments at 12; U S WEST 
comments at 12.
    \393\ Ohio Commission comments at 4.
---------------------------------------------------------------------------

b. Discussion
    178. We define the term ``interoperability'' as ``the ability of 
two or more facilities, or networks, to be connected, to exchange 
information, and to use the information that has been exchanged.'' As 
this definition of ``interoperability'' was taken from the IEEE 
Standard Dictionary of Electrical and Electronics Terms, we believe 
that this well established and widely accepted industry standard can be 
applied easily and consistently. We find that the concepts of 
seamlessness and transparency are already adequately incorporated into 
this definition's specific interoperability criteria, and that further 
exposition of these concepts is not necessary.
4. Changes That Trigger the Public Notice Requirement
a. Background and Comments
    179. In the NPRM, we noted that ``public notice is critical to the 
uniform implementation of network disclosure, particularly for entities 
operating networks in numerous locations across a variety of states.'' 
394 We requested comment as to what changes should trigger the 
notice requirement.
---------------------------------------------------------------------------

    \394\ NPRM at para. 190.
---------------------------------------------------------------------------

    180. Several commenters suggest that timely notice should be 
provided whenever an upcoming change in the incumbent LEC's network may 
affect the way in which a competing provider offers its 
service.395 Examples of such changes include, but are not limited 
to, changes in transmission, signalling standards, call routing, 
network configuration and logical elements.396 Also, commenters 
assert that public notice should be required when a change will affect 
the electronic interfaces, data elements, or transactions that support 
ordering, provisioning, maintenance and billing of the network 
facilities.397 The Illinois Commission notes, however, that the 
types of changes that trigger public notice should not be ``micro-
defined'' because overly specific trigger requirements could create 
situations in which carriers would not be required to provide public 
notice if a particular change has not been clearly identified.398 
ALTS also supports a broadly defined class of changes that trigger 
network disclosure requirements, asserting that some changes, such as 
those affecting provisioning and billing for a carrier's service, might 
not otherwise be reported adequately, resulting in service 
disruptions.399
---------------------------------------------------------------------------

    \395\ ACSI comments at 11; ALTS comments at 2-3; AT&T comments 
at 23; Cox comments at 9-10; GCI comments at 5; Ohio Commission 
comments at 4; and Time Warner comments at 4.
    \396\ ACSI comments at 11.
    \397\ See, e.g., AT&T comments at 24; Time Warner comments at 4.
    \398\ Illinois Commission comments at 59.
    \399\ ALTS comments at 2, 3.
---------------------------------------------------------------------------

    181. Ameritech claims that disclosure obligations should only be 
triggered by a new or ``substantially changed'' network interface, or a 
change that ``otherwise affects the routing or termination of traffic 
delivered to or from the incumbent LEC's network.'' 400 Ameritech 
also claims that changes ``that do not impact interconnection and 
interoperability * * * do not need to be disclosed at all.'' 401 
AT&T observes, however, that public notice requirements should also 
apply to some changes that do not directly relate to the interconnect 
point.402
---------------------------------------------------------------------------

    \400\ Ameritech comments at 26, 27.
    \401\ Id.
    \402\ AT&T reply at 26 n.56.
---------------------------------------------------------------------------

b. Discussion
    182. We conclude that an incumbent LEC must provide public notice 
in accordance with the rules and schedules we adopt in this proceeding, 
once the incumbent LEC makes a decision to implement a change that 
either (1) affects competing service providers' performance or ability 
to provide service; or (2) otherwise affects the ability of the 
incumbent LEC's and a competing service provider's facilities or 
network to connect, to exchange information, or to use the information 
exchanged. We believe that a broad standard is appropriate, to reduce 
the possibility that incumbent LECs may fail to disclose information a 
competing service provider may need in order to maintain adequate 
interconnectivity and interoperability in response to incumbent LEC 
network changes. Examples of network changes that would trigger public 
disclosure obligations include, but are not limited to, changes that 
affect: Transmission; signalling standards; call routing; network 
configuration; logical elements; electronic interfaces; data elements; 
and transactions that support ordering, provisioning, maintenance and 
billing. This list is not exclusive but exemplary; incumbent LECs are 
not exempted from public notice requirements for a particular change 
that is not included among these examples.

[[Page 47315]]

5. Types of Information To Be Disclosed
a. Background
    183. In the NPRM, we tentatively concluded that incumbent LECs 
should be required to ``disclose all information relating to network 
design and technical standards, and information concerning changes to 
the network that affect interconnection.'' 403 We also tentatively 
concluded that incumbent LECs specifically must provide: (1) The date 
changes are to occur; (2) where changes are to be made or to occur; (3) 
the type of changes; and (4) the potential impact of changes; and that 
these four categories represented the ``minimum information that a 
potential competitor would need in order to achieve and maintain 
efficient interconnection.'' 404
---------------------------------------------------------------------------

    \403\ NPRM at para. 190. We referred, as an example, to the 
``All Carrier Rule,'' which requires public disclosure of ``all 
information relating to network design and technical standards * * * 
[affecting] interconnection * * * prior to implementation and with 
reasonable advance notification.'' See note 383, supra.
    \404\ NPRM at para. 190.
---------------------------------------------------------------------------

b. Comments
    184. A number of commenters agree with our tentative conclusions 
regarding the breadth of information that must be reported, as well as 
our minimum reporting requirements.405 Ameritech, however, claims 
that our requirement is ``too broad'' and would ``impose an onerous 
burden'' on incumbent LECs, exceeding the statutory requirements of 
section 251(c)(5).406 Ameritech asserts that ``excessive exchange 
of information between competitors is inconsistent with * * * a 
competitive marketplace'' and could spur ``allegations of collusion and 
concerted action.'' 407 Cox and Time Warner, however, state that 
uniform public notice of sufficient information can attenuate 
anticompetitive behavior. ALTS, AT&T and MCI suggest that the 
information that must be disclosed should include, but should not be 
limited to, technical specifications and references to standards 
regarding transmission, signaling, routing and facility assignment as 
well as references to technical standards that are applicable to any 
new technologies or equipment, or which may otherwise affect 
interconnection.
---------------------------------------------------------------------------

    \405\ Illinois Commission comments at 60; ALTS comments at 3; 
AT&T comments at 23-24; District of Columbia Commission comments at 
7; Excel comments at 10; GCI comments at 4-5; MCI comments at 15; 
MFS comments at 12-13; NCTA comments at 12; Telecommunications 
Resellers Association comments at 12.
    \406\ Ameritech comments at 26.
    \407\ Id.
---------------------------------------------------------------------------

    185. A significant cross-section of commenters specifically 
advocates disclosure of the potential impact of changes.408 For 
example, Cox notes that disclosure should, at a minimum, enable a 
competing service provider to understand: ``(1) How its existing 
technical interconnection arrangements will be affected; and (2) how 
the form and content of the information passed between the 
interconnected networks will change.'' 409 ACSI clearly states 
that ``the content of the notice should specifically identify * * * the 
impact of the change on current interconnection or access 
arrangements.'' 410
---------------------------------------------------------------------------

    \408\ ACSI comments at 11; ALTS comments at 3; District of 
Columbia Commission comments at 7; Excel comments at 10; GCI 
comments at 5; MCI comments at 15; MFS comments at 12-13; Ohio 
Commission comments at 5; TCC reply at 23; Telecommunications 
Resellers Association comments at 12; Time Warner comments at 8.
    \409\ Cox reply at 13.
    \410\ ACSI comments at 11.
---------------------------------------------------------------------------

    186. Some incumbent LECs, however, take exception to our tentative 
conclusion to impose on them an obligation to make public disclosure of 
the potential impact of network changes.411 They argue that this 
obligation would require incumbent LECs to become ``experts on the 
operations of other carriers,'' or impose a ``duty to know what (an) 
interconnector's service performance abilities are.'' 412 
Specifically, USTA expresses concern that this requirement ``could be 
misconstrued as a duty to predict what the precise impact might be, or 
to educate a competitor on how to re-engineer their network.'' 413 
Ameritech claims that this requirement is ``unfair,'' and ``of little 
or no value,'' and implies that this requirement creates a ``general 
duty for (incumbent LECs) to operate their competitor's businesses or 
help them market their services.'' 414 BellSouth asserts that 
``the better approach would be to (disclose) information from which an 
interconnecting carrier would be able to determine for itself whether 
its service performance or abilities might be affected.'' 415 
NYNEX alleges that ``(s)uch proposals are over-broad and unnecessary to 
ensure * * * network interconnection/interoperability.'' 416 NYNEX 
rejects responsibility for evaluating the effect that changes it would 
make might have upon competing service providers and asserts that 
``there is no basis for changing the traditional responsibility of each 
carrier to maintain its own network and respond to technological and 
market changes.'' 417 NYNEX also claims that while it has the 
ability to ``make an assessment of the likely impact of a technical 
change at the interface with a competitor's network,'' it would require 
``detailed knowledge of a competitor's network architecture'' in order 
to calculate the impact a change may have on a competing service 
provider's performance.418
---------------------------------------------------------------------------

    \411\ Ameritech comments at 28; BellSouth comments at 3; GVNW 
comments at 3; NYNEX reply at 9; USTA reply at 11.
    \412\ BellSouth comments at 3. See, e.g., Ameritech comments at 
28; GVNW Comments at 3; NYNEX reply at 9.
    \413\ USTA reply at 11.
    \414\ Ameritech comments at 28.
    \415\ BellSouth comments at 3.
    \416\ NYNEX reply at 9.
    \417\ Id.
    \418\ NYNEX reply at 9 n.24.
---------------------------------------------------------------------------

    187. MCI and TCC suggest that an incumbent LEC should also be 
required to designate a contact for additional information in its 
public notice. PacTel argues, in response, that such a requirement 
would be ``impossible to fulfill'' because it would require an 
incumbent LEC to designate a ``single omniscient individual.'' 419 
MFS states that the public notice should also include: ``(a) The 
charges that the incumbent LEC anticipates will apply to the carrier 
for the change; (b) the specific number of circuits affected if the 
change occurs at the time of the notification; (c) the projected 
minimum, maximum, and average down times per affected circuit; (d) 
alternatives available to the interconnector; 420 and (e) any 
other information necessary to evaluate alternatives and effectuate 
necessary changes or challenges.'' 421 The Ohio Commission, in 
contrast, claims that information relating to network design should be 
excepted from public disclosure, and that incumbent LECs should only be 
obliged to disclose information regarding changes to existing 
interconnection arrangements.422
---------------------------------------------------------------------------

    \419\ PacTel reply at 6-7.
    \420\ Although MFS does not elaborate on this requirement, we 
interpret this suggestion as a request that an incumbent LEC 
identify in its public notice a range of proposed competing service 
provider responses to the planned change that will maintain 
interconnectivity and interoperability of the carriers' networks.
    \421\ MFS comments at 14.
    \422\ Ohio Commission comments at 5.
---------------------------------------------------------------------------

c. Discussion
    188. We conclude that we should adopt a requirement of uniform 
public notice of sufficient information to deter anticompetitive 
behavior and that, at a minimum, incumbent LECs should give competing 
service providers complete information about network design, technical 
standards and planned changes to the network. Specifically, public 
notice of changes shall consist of: (1) The date changes are to occur; 
(2) the location at which changes are to occur; (3) types of changes; 
(4) the reasonably foreseeable impact of changes to be

[[Page 47316]]

implemented, and (5) a contact person who may supply additional 
information regarding the changes. Information provided in these 
categories must include, as applicable, but should not be limited to, 
references to technical specifications, protocols, and standards 
regarding transmission, signaling, routing and facility assignment as 
well as references to technical standards that would be applicable to 
any new technologies or equipment, or that may otherwise affect 
interconnection.
    189. We find that making available a contact person will simplify 
the public notification process and reduce the risk that the 
notifications will be misunderstood or misconstrued. Commenters have 
requested that public notices include a variety of specific information 
categories, some of which may not be covered by the specific categories 
identified in the NPRM. Such specific information, however, may be 
inapplicable, unnecessary or proprietary in some circumstances and 
inadequate or confusing in others. Accordingly, we require instead that 
incumbent LECs identify a contact person. Such a contact need not be 
``omniscient,'' but rather should be able to serve as an initial 
contact point for the sharing of information regarding the planned 
network changes.
    190. Providing notice of the reasonably foreseeable potential 
impact of changes does not require incumbent LECs to educate a 
competitor on how to re-engineer its network, or to be experts on the 
operations of other carriers, or impose a duty to know the competing 
service provider's service performance or abilities. Rather, we intend 
that incumbent LECs perform at least rudimentary analysis of the 
network changes sufficient to include in its notice (where appropriate) 
language reasonably intended to alert those likely to be affected by a 
change of anticipated effects. We find that such cautionary language 
will be a valuable, but not burdensome, element of reasonable public 
notice.
    191. We do not limit network disclosure to information pertinent to 
those changes in incumbent LEC network design or technical standards 
that will affect existing interconnection arrangements, as requested by 
the Ohio Commission. Such a limitation is neither consistent with the 
obligations imposed by section 251(c)(5) nor consistent with the 
development of competition. In formulating interconnection and service 
plans, both actual and potential competing service providers need 
information concerning network changes that potentially could affect 
anticipated interconnection, not just those changes that actually 
affect existing interconnection arrangements.

B. How Public Notice Should Be Provided

1. Dissemination of Public Notice Through Industry Fora and 
Publications
a. Background
    192. Section 251(c)(5) requires incumbent LECs to provide 
``reasonable public notice'' of relevant network changes. In the NPRM, 
the Commission requested comment on how this notice should be provided. 
The Commission tentatively concluded that ``full disclosure of the 
required technical information should be provided through industry fora 
or in industry publications.'' 423 The Commission stated that 
``this approach would build on a voluntary practice that now exists in 
the industry and would result in broad availability of the 
information.'' 424 The Commission sought comment on this tentative 
conclusion. The Commission also requested comment on whether a 
reference to information on network changes should be filed with the 
Commission and, if so, where that information should be located.
---------------------------------------------------------------------------

    \423\ The Commission gave as examples the Network Operations 
Forum (NOF) and the Interconnection Carrier Compatibility Forum 
(ICCF). NPRM at para. 191.
    \424\ NPRM at para. 191.
---------------------------------------------------------------------------

b. Comments
    193. Most commenters agree with our tentative conclusion in the 
NPRM that existing industry fora and publications are appropriate 
vehicles for public notice of network changes.425 Bell Atlantic 
notes that ``industry participants with an interest in new interfaces 
routinely monitor publications and announcements for disclosures.'' 
426 Some incumbent LECs support the use of industry fora and 
publications because they are well established, already in place, reach 
the targeted audience, have worked effectively for a number of years, 
or allow for widespread dissemination.427 USTA states that 
``voluntary practices can serve as a platform from which to implement 
this act.'' 428
---------------------------------------------------------------------------

    \425\ ALTS comments at 3-4; Ameritech comments at 28-29, reply 
at 17-18; AT&T comments at 24; Bell Atlantic comments at 10; Cox 
reply at 13; GCI comments at 5; Illinois Commission comments at 62; 
MCI comments at 15; MFS reply at 25; NCTA reply at 11; NYNEX 
comments at 15, reply at 10; PacTel comments at 7, reply at 6; 
Teleport comments at 11; Telecommunications Resellers Association at 
12. See also NPRM at para. 191.
    \426\ Bell Atlantic also states that exchange carriers should be 
able to satisfy their disclosure obligation by indicating their 
intention to deploy specifications at the time that they are 
published by a standards organization. Bell Atlantic comments at 10-
11.
    \427\ Ameritech reply at 17-18; GTE comments at 7.
    \428\ USTA comments at 11-12.
---------------------------------------------------------------------------

    194. Several commenters, however, caution that industry fora and 
publications should not be the only vehicles used for the public 
dissemination of network change information 429 and request 
flexible disclosure methods.430 Although MCI does not object to 
utilizing industry fora and publications, MCI cautions against over 
reliance on these vehicles because it ``do[es] not believe that * * * 
parties affected by technical changes [will] receive information in 
sufficient detail, objectivity, and timeliness.'' 431 Many 
commenters indicate that additional disclosure vehicles are required 
because not all carriers participate in these fora on a regular basis 
(partly as a result of limited resources) 432 or because the BOCs, 
in the past, have used industry fora to limit competitors' access to 
full and timely information in order to put them at a competitive 
disadvantage.433 Several commenters have noted the potential of 
the Internet as a vehicle for providing public notice of network 
changes.434 Others specifically suggest that incumbent LECs should 
be required to file technical change information with the Commission 
``in order to ensure a complete, reliable, and consistent body of 
information that all parties may utilize.'' 435 Some incumbent 
LECs, however, disagree, arguing that the Commission need not become a 
repository of disclosure notices because such Commission filings would 
be ``redundant with existing industry functions and contrary to the 
Commission's current initiative to eliminate unnecessary filings.'' 
436
---------------------------------------------------------------------------

    \429\ E.g., Cox reply at 12; MCI comments at 17; GVNW comments 
at 4; Rural Tel. Coalition comments at 3.
    \430\ E.g., Rural Tel. Coalition comments at 3,5.
    \431\  MCI comments at 17-18.
    \432\ See, e.g., Cox comments at 11, reply at 13; MCI comments 
at 17; GVNW comments at 4; Rural Tel. Coalition comments at 3.
    \433\ MCI comments at 17-18, reply at 7. Bell Atlantic refutes 
this allegation. Bell Atlantic reply at 10.
    \434\ See, e.g., ALTS comments at 3-4; U S WEST comments at 14; 
MCI comments at 17; Time Warner comments at 10 n.12; MFS reply at 
25; TCC reply at 24.
    \435\ MCI comments at 19; MFS comments at 13. See also Time 
Warner comments at 10 (establishing the Commission as a ``central 
point of reference'' could be less burdensome on incumbent LECs than 
other means of providing public notice).
    \436\ BellSouth comments at 4 n.11. See also NYNEX reply at 10; 
PacTel reply at 6.
---------------------------------------------------------------------------

    195. Bell Atlantic suggests that ``direct disclosure to a mailing 
list of interconnectors should also be allowed.'' 437 MFS proposes 
extending direct mail notification to ``any other

[[Page 47317]]

carrier * * * who specifically requests such notice.'' 438 PacTel, 
however, claims that imposing these sorts of requirements would 
``impose excessive and unnecessary costs on (incumbent) LECs.'' 
439
---------------------------------------------------------------------------

    \437\ Bell Atlantic comments at 10.
    \438\ MFS comments at 14, reply at 25.
    \439\ PacTel reply at 6.
---------------------------------------------------------------------------

    196. BellSouth argues that no Commission rule is necessary because 
current voluntary practices are ``sufficient to ensure that this 
information is broadly available.'' 440 Similarly, GVNW suggests 
that information should only be passed to competing service providers 
``case by case * * * as required.'' 441 Several commenters, 
however, disagree. Time Warner, for example, contends that ``the 
Commission must adopt a uniform * * * rule which prescribes a specific 
method by which notification and disclosure must be provided'' and that 
will allow interested parties to gain ready access to the information 
they require.442
---------------------------------------------------------------------------

    \440\ BellSouth comments at 4.
    \441\ GVNW comments at 4.
    \442\ Time Warner comments at 9. See also AT&T reply at 27 n.58. 
(arguing that the very existence of such broad disagreement on this 
issue itself bespeaks the need for a uniform national rule and that 
the absence of a uniform public disclosure requirement would lead to 
``disparate application of a uniform federal statutory duty, unduly 
narrow interpretations of that duty by [independent local exchange 
carriers] * * * and competitive harm to new entrants'').
---------------------------------------------------------------------------

    197. The District of Columbia Commission asserts that state 
commissions may also require information to be filed at the state 
level, and may need the same information in order to comply with 
section 252. As such, state commissions could also be used to make 
information available to small competing service providers. AT&T, 
however, argues that there are no specific differences among the 
various states that are ``material'' to our network disclosure 
requirements.443
---------------------------------------------------------------------------

    \443\ AT&T reply at n.59.
---------------------------------------------------------------------------

c. Discussion
    198. We conclude that incumbent LECs may fulfill their network 
disclosure obligations either (1) by providing public notice through 
industry fora, industry publications, or on their own publicly 
accessible Internet sites; or (2) by filing public notice with the 
Commission's Common Carrier Bureau, Network Services Division, in 
accordance with the format and method requirements of the rules we are 
adopting in this proceeding. In either case, the public notice must 
contain the minimum information categories identified in paragraph 188, 
above. Incumbent LECs using public notice methods other than Commission 
filings must file a certification with the Common Carrier Bureau, 
Network Services Division, identifying the proposed change(s), stating 
that public notice has been given in compliance with this Order, 
identifying the location of the information describing the change and 
stating how the information can be obtained by interested parties. This 
certification must also comply with the rules we adopt in this 
proceeding.
    199. As discussed above, we conclude that industry fora, industry 
publications, and the Internet may be used to make public disclosure of 
network changes and required technical information. We affirm our 
belief that ``this approach would build on a voluntary practice that 
now exists in the industry and would result in broad availability of 
the information.'' 444 Reliance solely on voluntary participation 
in industry fora and publications, however, may inhibit the ability of 
some small carriers to disseminate or receive this information. Because 
of their more limited resources, some smaller incumbent LECs and 
competing service providers do not participate in these fora on a 
regular basis; nevertheless, all carriers, competing service providers, 
and potential competitors must have equal opportunities to provide and 
to receive change information on a national scale. We believe that wide 
availability of pertinent network change information effectively 
removes potential barriers to entry, which could otherwise frustrate 
the efforts of new competitors. As a consequence, we conclude that the 
Commission should function as a ``backstop'' source of information for 
other interested parties. Accordingly, in lieu of disclosure in 
industry fora, publications, or the Internet, an incumbent LEC may file 
network change information directly with the Commission. In the 
alternative, if an incumbent LEC chooses to provide public notice 
through one or more industry fora or publications, or the Internet, we 
require that it also file a certification with the Commission 
containing the information outlined above. We are confident that even 
small incumbent LECs with limited resources will be able to use one of 
these alternatives to give public notice of network changes.
---------------------------------------------------------------------------

    \444\ NPRM at para. 191.
---------------------------------------------------------------------------

    200. An incumbent LEC must maintain both the information disclosed 
in its public notice and any nondisclosed supporting information that 
is nevertheless relevant to the planned change, until the change is 
implemented. As discussed in paragraph 235, infra, once a change is 
implemented in the incumbent LEC's network, information on the change 
must be disclosed under the general interconnection obligations imposed 
by section 251(c)(2).
    201. We find that information filed with the Commission under 
section 251(c)(5) should eventually be made available on the FCC Home 
Page or through other online access vehicles, such as ``LISTSERV'' 
subscription mailings or others, and we intend to explore this option 
fully for the future. In addition, we will explore vigorously the 
possibility that hypertext links from the Commission Home Page to 
incumbent LEC Internet sites could both facilitate public notice and 
centralize access to change information. We find that direct mail 
notification alone does not comport with our interpretation of ``public 
notice'' as used in this proceeding, because such direct mailings do 
not provide notice to the ``public,'' but rather provide individual 
notice to a selected group of recipients. Such mailings could, however, 
supplement other methods of notification.
    202. We also address the impact on small incumbent LECs. We agree 
with GVNW 445 and Rural Tel. Coalition 446 that we can 
mitigate the impact of our rules on small incumbent LECs by allowing 
public notice to be given at several alternative locations. Because 
many of these carriers lack the resources to participate in industry 
fora, we have also provided low cost alternatives, including Internet 
postings or Commission filings. We expect that our requirement that 
either public notice or certification be filed with the Commission will 
allow small entities, both incumbent LECs and new entrants, to locate 
network change information quickly and inexpensively. In any event, 
under section 251(f)(1), certain small incumbent LECs are exempt from 
our rules until (1) they receive a bona fide request for 
interconnection, services, or network elements; and (2) their state 
commission determines that the request is not unduly economically 
burdensome, is technically feasible, and is consistent with the 
relevant portions of section 254. In addition, certain small incumbent 
LECs may seek relief from our rules under section 251(f)(2).447
---------------------------------------------------------------------------

    \445\ GVNW comments at 4.
    \446\ Rural Tel. Coalition comments at 3,5.
    \447\ For a discussion of the implications and operation of 
section 251(f), see First Report and Order, section XII.

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[[Page 47318]]

2. When Should Public Notice of Changes be Provided?
a. Background
    203. Section 251(c)(5) requires an incumbent LEC to provide 
``reasonable public notice'' of certain changes to its network. In the 
NPRM, we tentatively concluded that this statutory language requires 
incumbent LECs: (1) To provide notice of these changes within a 
``reasonable'' time in advance of implementation; and (2) to make the 
information available within a ``reasonable'' time if responding to an 
individual request.448 We sought comment on what constitutes a 
reasonable time in each of these situations, and on whether the 
Commission should adopt a specific timetable for disclosure of 
technical information.
---------------------------------------------------------------------------

    \448\ NPRM at para. 192.
---------------------------------------------------------------------------

    204. In the NPRM, we specifically sought comment on whether we 
should adopt a disclosure timetable similar to that adopted by the 
Commission in the Computer III proceeding.449 In Phase II of that 
proceeding, the Commission required AT&T and the BOCs to disclose 
information about network changes or new network services that affect 
the interconnection of enhanced services with the network at two points 
in time.450 First, these carriers were required to disclose such 
information at the ``make/buy'' point--that is, when the carrier 
decides to make itself, or to procure from an unaffiliated entity, any 
product the design of which affects or relies on the network 
interface.451 Second, carriers were required to release publicly 
all technical information at least twelve months prior to the 
introduction of a new service or network change that would affect 
enhanced service interconnection with the network.452 If a carrier 
could introduce a new service between six and twelve months of the 
make/buy point, public disclosure was permitted at the make/buy point, 
but in no event could the carrier introduce the service earlier than 
six months after the public disclosure.453
---------------------------------------------------------------------------

    \449\ Amendment of Section 64.702 of the Commission's Rules and 
Regulations (Computer III), Phase I, 104 F.C.C.2d 958 (1986) (Phase 
I Order), recon., 2 FCC Rcd 3035 (1987) (Phase I Recon. Order), 
further recon., 3 FCC Rcd 1135 (1988) (Phase I Further Recon. 
Order), second further recon., 4 FCC Rcd 5927 (1989) (Phase I Second 
Further Recon.), Phase I Order and Phase I Recon. Order vacated, 
California v. FCC, 905 F.2d 1217 (9th Cir. 1990) (California I); 
Phase II, 2 FCC Rcd 3072 (1987) (Phase II Order) 52 FR 20714 (1987), 
recon., 3 FCC Rcd 1150 (1988) (Phase II Recon. Order), further 
recon., 4 FCC Rcd 5927 (1989) (Phase II Further Recon. Order), Phase 
II Order, vacated, California I, 905 F.2d 1217 (9th Cir. 1990); 
Computer III Remand Proceedings, 5 FCC Rcd 7719 (1990) 56 FR 00965 
(December 17, 1990) (ONA Remand Order), recon., 7 FCC Rcd 909 
(1992), 57 FR 05391 (January 24, 1992), pets. for review denied 
California v. FCC, 4 F.3d 1505 (9th Cir. 1993) (California II); 
Computer III Remand Proceedings: Bell Operating Company Safeguards 
and Tier 1 Local Exchange Company Safeguards, 6 FCC Rcd 7571 (1991) 
(BOC Safeguards Order), 57 FR 4373 (February 5, 1992); BOC 
Safeguards Order, vacated in part and remanded, California v. FCC, 
39 F.3d 919 (9th Cir. 1994) (California III), cert. denied, 115 
S.Ct. 1427 (1995).
    \450\ Phase II Recon. Order, 3 FCC Rcd at 1164. Although the 
Ninth Circuit vacated the Phase II Recon. Order, the Commission 
reimposed the network disclosure requirements on remand. See BOC 
Safeguards Order, 6 FCC Rcd at 7602-7604.
    \451\ Phase II Recon. Order, 3 FCC Rcd at 1164.
    \452\ Id. at 1164-65.
    \453\ Id. at 1165.
---------------------------------------------------------------------------

    205. The disclosure obligations imposed by section 251(c)(5) are 
broader than those adopted in the Computer III proceeding. While 
Computer III applies only to the BOCs and to AT&T, section 251(c)(5) 
imposes disclosure requirements on all incumbent LECs. Furthermore, 
while the Computer III disclosure requirements apply only to technical 
information related to new or modified network services affecting the 
interconnection of enhanced services to the BOC networks, section 
251(c)(5) mandates disclosure of a much broader spectrum of 
information.454 Accordingly, we sought comment in the NPRM on 
whether the Commission should adopt a timetable comparable to that 
imposed in Computer III for section 251(c)(5) network disclosure 
purposes and, if so, how such a timetable should be implemented.
---------------------------------------------------------------------------

    \454\ See discussion of the definitions of ``information 
necessary for the transmission and routing of services'' and 
``interoperability,'' supra.
---------------------------------------------------------------------------

b. Comments
    206. Most commenters express support for our tentative conclusion 
that section 251(c)(5) requires incumbent LECs to disclose publicly 
information on network changes within a reasonable time in advance of 
implementation.455 No commenters suggest that the timing of 
disclosure is not governed by section 251(c)(5)'s ``reasonableness'' 
standard, although at least two commenters appear to indicate that it 
would be reasonable to implement network changes immediately upon 
disclosure.456 Commenters also support our tentative conclusion 
that an incumbent LEC must make this information available within a 
``reasonable'' time if responding to an individual request.457 
Time Warner requests a concrete standard in this area and suggests that 
the Commission should indicate that, once an incumbent LEC has released 
a public notice of change under section 251(c)(5), it must respond to 
individual requests for detailed, technical information concerning 
network changes under section 251(c)(5) within ten business days of 
receiving the request.458
---------------------------------------------------------------------------

    \455\ See, e.g., Ameritech comments at 29; GCI comments at 5; 
MCI comments at 15; Time Warner comments at 6; U S WEST reply at 1.
    \456\ BellSouth argues that ``the Commission should permit the 
offering of the new interface immediately upon the disclosure of the 
requisite information.'' BellSouth comments at 5; see also Nortel 
comments at 4.
    \457\ See, e.g., MCI comments at 15.
    \458\ Time Warner comments at 11.
---------------------------------------------------------------------------

    207. Commenters were split on whether we should adopt a specific 
disclosure timetable for section 251(c)(5) purposes. Several commenters 
459 oppose the adoption of a specific timetable, primarily arguing 
that: (1) Any regulations adopted under section 251(c)(5) should define 
only minimum guidelines, allowing the states flexibility under section 
251(d)(3) to adopt more stringent disclosure requirements dictated by 
local conditions; (2) a fixed disclosure timetable will needlessly or 
arbitrarily delay the introduction of new services or technical 
advances; (3) overly long advance disclosure periods will put the 
incumbent LECs at a competitive disadvantage because competitors will 
be able to bring planned services to market more quickly; (4) the 
industry already has in place detailed disclosure guidelines that are 
widely followed on a voluntary basis and that obviate the need for 
independent Commission examination of this issue; and (5) the 
Commission's existing ``all carrier'' rule, which contains a flexible 
standard, adequately addresses the obligations imposed by section 
251(c)(5).460 GVNW warns that the interval from the make/buy 
decision to in-service for small LECs is often less than twelve months 
and states that the Commission should not require technology to be 
implemented at a slower pace than is technically feasible merely to 
satisfy a notice requirement.461 Commenters also argue that 
carriers already face powerful incentives to ensure that their networks 
interconnect properly because the reputation of both the incumbent LEC 
and the interconnecting LEC are at stake if service fails.462 In 
addition, BellSouth claims that section 251(c)(5) is ``self-
effectuating and needs no interpretive regulations.'' 463
---------------------------------------------------------------------------

    \459\ See, e.g., Ameritech comments at 29; BellSouth comments at 
2, 5; District of Columbia Commission comments at 6, 7-8; GVNW 
comments at 5; Bell Atlantic reply at 8-9.
    \460\ The requirements of the all carrier rule are discussed in 
note 383 supra.
    \461\ GVNW comments at 4.
    \462\ See, e.g., Ameritech comments at 30.
    \463\ BellSouth comments at 1.

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[[Page 47319]]

    208. Several other commenters argue that, while a disclosure 
timetable may be necessary, the Computer III requirements are too 
rigid. The District of Columbia Commission notes that any eventual 
disclosure timetable must balance ``the need to ensure the earliest 
possible disclosure of information needed by competitors (against) the 
need to impose the least administrative burden on'' incumbent 
LECs.464 Accordingly, the District of Columbia Commission 
maintains that state commissions should be afforded flexibility to set 
timetables that are appropriate in light of local conditions.465 
Several commenters note existing industry notification timing standards 
adopted and issued by the Industry Carriers Compatibility Forum 
(``ICCF'') 466 and argue that widespread industry use of these 
standards has obviated the need for an additional Commission-imposed 
timetable.467 MCI, however, cautions that these existing industry 
guidelines are inadequate because industry fora, in general, have 
historically been controlled by the RBOCs.468 U S WEST supports 
disclosure at the ``make/buy'' point, but argues that additional notice 
should not be required for deployment of standard interfaces and 
services.469 While MCI supports adoption of the Computer III 
timetable in this proceeding, it requests that, in addition: (1) We 
impose a mandatory 6-month disclosure period for network changes that 
can be implemented within 6 months of the ``make/buy'' point; and (2) 
we clarify that incumbent LECs must disclose relevant information they 
discover after services have been introduced, if such information would 
have been subject to prior disclosure.470 AT&T also supports the 
general parameters of the Computer III timetable, but requests that we 
specifically impose a one year minimum advance disclosure obligation on 
changes to network elements or operations support system 
technology.471 Similarly, while ACSI notes that the Computer III 
timetable is a ``useful starting place,'' it argues for a minimum one-
year notice period for modification of the physical form of 
interconnection, with an additional 6 month period in which use of the 
changes by a competing service provider is permissive only.472
---------------------------------------------------------------------------

    \464\ District of Columbia Commission comments at 8.
    \465\ Id.
    \466\ Industry Carriers Compatibility Forum, Recommended 
Notification Procedures to Industry for Changes in Access Network 
Architecture, ICCF 92-0726-004, Rev. 2 (January 5, 1996).
    \467\ USTA comments at 13; NYNEX comments at 16-17; SBC comments 
at 14.
    \468\ MCI reply at 7.
    \469\ U S WEST comments at 13.
    \470\ MCI comments at 20-21.
    \471\ AT&T comments at 25.
    \472\ ACSI comments at 12.
---------------------------------------------------------------------------

    209. Cox argues that disclosure should be made at the ``earliest 
possible time'' and, in particular, at the time the decision is made 
internally to implement a change, with the ``make/buy'' point being 
considered the ``absolute latest date'' on which disclosure is 
permitted.473 In addition, Cox requests that we obligate incumbent 
LECs to disclose any unimplemented network changes that are subject to 
the section 251(c)(5) notice requirement at the outset of 
interconnection negotiations.474
---------------------------------------------------------------------------

    \473\ Cox comments at 10-11.
    \474\ Id. at 11.
---------------------------------------------------------------------------

    210. MFS proposes a tripartite scheme, loosely based on the 
Computer III timetable, that classifies certain changes as ``major,'' 
``location,'' or ``minor.'' 475 ``Major'' changes, would be 
defined as those ``introducing any change in network equipment, 
facilities, specifications, protocols, or interfaces that will require 
other parties to make any modification to hardware or software in order 
to maintain interoperability.'' Major changes would be subject to 18 
months advance notice. ``Location'' changes would be defined as those 
``that require changes in the geographic location to which traffic is 
routed, or at which unbundled network elements can be obtained, but 
(that) do not otherwise change the manner of interconnection or of 
access''; such changes could be implemented on 12 months notice. 
``Minor'' changes, including those in ``numbering, routing 
instructions, signalling codes, or other information necessary for the 
exchange of traffic that do not require construction of new facilities 
or changes in hardware or software'' could be made upon notice in 
accord with the time intervals prescribed by the ICCF.476
---------------------------------------------------------------------------

    \475\ MFS comments at 15-16.
    \476\ These intervals are prescribed in the ICCF Recommended 
Notification Procedures. See note 466 supra.
---------------------------------------------------------------------------

    211. Many commenters recognize the need for a concrete disclosure 
timetable. AT&T argues that the broad disagreement among commenters 
itself is evidence that section 251(c)(5) is not self-
effectuating.477 AT&T opposes the state-by-state approach 
advocated by the District of Columbia Commission, as well as the case-
by-case approach advocated by Rural Tel. Coalition, because these 
approaches could lead to the disparate application of the uniform 
statutory duty imposed by section 251(c)(5). AT&T notes that the record 
does not reflect any material conditions that vary among states or 
justify differing rules. In addition, AT&T disputes the applicability 
of the ICCF timetable, since that document sets forth only guidelines 
to be used by the independent LECs in notifying the BOCs of network 
changes.478
---------------------------------------------------------------------------

    \477\ AT&T reply at 27.
    \478\ Id.
---------------------------------------------------------------------------

    212. Of the commenters supporting concrete federal standards, most 
support the adoption of the Computer III disclosure timetable.479 
PacTel notes that existing Commission disclosure requirements are 
familiar to the industry and adequate to meet the requirements of 
section 251(c)(5); accordingly it supports the establishment of ``safe 
harbor'' rules based on Computer III and the disclosure requirements 
contained in our existing rules.480 As discussed above, although 
it advocates certain revisions, U S WEST agrees that ``disclosure 
pursuant to the Computer [III] Rules would seem to satisfy the 
requirements of the (1996) Act.'' 481 GTE notes that the ``make/
buy'' point is an appropriate disclosure trigger because it ensures 
both the delivery of timely information to parties that use the 
networks and the promotion of carriers' development efforts to support 
network innovation.482
---------------------------------------------------------------------------

    \479\ See, e.g., Teleport comments at 11; GCI comments at 5; 
AT&T reply at 27.
    \480\ PacTel comments at 5. See 47 CFR 64.702(d)(2), 68.110(b).
    \481\ U S WEST comments at 12-13.
    \482\ GTE reply at 7-8 and comments cited at 7 n.15.
---------------------------------------------------------------------------

    213. Several commenters urge us to adopt rules prohibiting an 
incumbent LEC from disclosing network changes to certain preferred 
entities, including long distance or equipment manufacturing 
affiliates, prior to public disclosure.483
---------------------------------------------------------------------------

    \483\ See, e.g., Time Warner comments at 8; NCTA reply at 12; 
Ohio Consumer's Council reply at 5-6.
---------------------------------------------------------------------------

c. Discussion
    214. We find that it would be unreasonable to expect other 
telecommunications carriers or information services providers to be 
able to react immediately to network changes that the incumbent LEC may 
have spent months or more planning and implementing; accordingly we 
reject requests to permit incumbent LECs to implement changes 
immediately on disclosure. In order to clarify incumbent LECs' 
obligations to disclose these changes a ``reasonable time in advance of 
implementation,'' we adopt a disclosure timetable based on that 
developed in the Computer III proceeding. Under this timetable,

[[Page 47320]]

incumbent LECs will be required to disclose planned changes, subject to 
the section 251(c)(5) disclosure requirements, at the ``make/buy'' 
point,484 but a minimum of twelve months before implementation. If 
the planned changes can be implemented within twelve months of the 
make/buy point, then public notice must be given at the make/buy point, 
but at least six months before implementation.
---------------------------------------------------------------------------

    \484\ The definition of the ``make/buy'' point for section 
251(c)(5) purposes is discussed infra at paras. 216-217.
---------------------------------------------------------------------------

    215. With respect to changes that can be implemented within six 
months of the make/buy point, incumbent LECs may wish to provide less 
than six months notice. In such a case, the incumbent LEC's 
certification or public notice filed with the Commission, as 
applicable, must also include a certificate of service: (1) Certifying 
that a copy of the incumbent LEC's public notice was served on each 
provider of telephone exchange service that interconnects directly with 
the incumbent LEC's network a minimum of five business days in advance 
of the filing; and (2) providing the name and address of all such 
providers of local exchange service upon which the notice was served. 
The Commission will issue public notice of such short-term filings. 
Such short term notices will be deemed final on the tenth business day 
after the release of the Commission's public notice unless a provider 
of information services or telecommunications services that directly 
interconnects with the incumbent LEC's network files an objection to 
the change with the Commission and serves it on the incumbent LEC no 
later than the ninth business day following the release of the 
Commission's public notice. If such an objection is filed, the 
incumbent LEC will have the opportunity to respond within an additional 
five business days and the Common Carrier Bureau, Network Services 
Division, will issue, if necessary, an order determining the reasonable 
public notice period.

i. The Section 251(c)(5) Timetable

    216. Without adequate notice of changes to an incumbent LEC's 
network that affect the ``information necessary for the transmission 
and routing'' of traffic, a competing service provider may be unable to 
maintain an adequately high level of interoperability between its 
network and that of the incumbent LEC. This inability could degrade the 
quality of transmission between the two networks or, in a worse case, 
could interrupt service between the two service providers.485 
Under the rules we adopt today, incumbent LECs must disclose changes 
subject to section 251(c)(5) at the ``make/buy'' point, i.e., the time 
at which the incumbent LEC decides to make for itself, or procure from 
another entity, any product the design of which affects or relies on a 
new or changed network interface,486 but at least twelve months in 
advance of implementation of a network change. In Computer III, the 
Commission defined ``product'' in the enhanced services context to be 
``any hardware or software for use in the network that might affect the 
compatibility of enhanced services with the existing telephone network, 
or with any new basic services or capabilities.'' 487 We believe 
that this definition can be used to craft a definition of ``product'' 
for purposes of section 251(c)(5). Accordingly, for purposes of network 
disclosure under section 251(c)(5), we define ``product'' to be ``any 
hardware or software for use in an incumbent LEC's network or in 
conjunction with an incumbent LEC's facilities that, when installed, 
could affect the compatibility of the network, facilities or services 
of an interconnected provider of telecommunications or information 
services with the incumbent LEC's network, facilities or services.''
---------------------------------------------------------------------------

    \485\ Because the incumbent LECs control the vast majority of 
both facilities and customers in most markets, the impact of such 
difficulties, at least at present, would be felt most acutely by a 
competing service provider.
    \486\ BOC Safeguards Order, 6 FCC Rcd at 7603. The Commission 
has stated that, ``make/buy applies not only to a carrier's decision 
to make or buy products to implement a change in the network, but 
also to any decision to make or buy products that would rely on such 
changes.'' Phase II Order, 2 FCC Rcd at 3087. The precise definition 
of the ``make/buy'' point has been clarified in some detail. See, 
e.g., id.; Phase I Order, 104 F.C.C.2d at 1080-86; Computer and 
Business Equip. Mfrs. Assoc. Petition for Declaratory Ruling 
Regarding Section 64.702(d)(2) of the Commission's Rules and the 
Policies of the Second Computer Inquiry, Report and Order (``CBEMA 
Order''), 93 F.C.C.2d 1226, 1243-44 (1983).
    \487\ Phase I Order, 104 F.C.C.2d at 1084.
---------------------------------------------------------------------------

    217. We recognize that some network changes that affect 
interconnection, e.g., some location changes, may not require an 
incumbent LEC to make or buy any products. Disclosure of such changes, 
however, may be required under section 251(c)(5). For purposes of 
section 251(c)(5), therefore, we clarify that the ``make/buy'' point 
includes the point at which the incumbent LEC makes a definite decision 
to implement a network change in order to begin offering a new service 
or change the way in which it provides an existing service. Such a 
``definite decision'' requires the incumbent LEC to move beyond 
exploration of the costs and benefits of a change or the feasibility of 
a change. Instead, a ``definite decision'' is reached when the 
incumbent LEC determines that the change is warranted, establishes a 
timetable for anticipated implementation, and takes the first step 
toward implementation of the change within its network.488
---------------------------------------------------------------------------

    \488\ Cf. Phase II Order, 2 FCC Rcd at 3087.
---------------------------------------------------------------------------

    218. We recognize that many changes to an incumbent LEC's network 
that are subject to disclosure under section 251(c)(5) can be fully 
implemented less than twelve months after the make/buy point. 
Accordingly, if the service using the network changes can be initiated 
within twelve months after the make/buy date, public notice must be 
given on the make/buy date, but at least six months before 
implementation of the planned changes.
    219. We agree with several commenters that competing service 
providers should not require a full six months to respond to some 
categories of relatively minor network changes and that we would 
needlessly slow the pace of technical advance were we to require a full 
six months notice in such a case. As evidence of this fact, several 
commenters have submitted or referred us to industry guidelines 
developed by ICCF, which detail recommended notice periods of 45 days 
to six months for certain network changes.489 Based on the record 
before us, we agree that six months may be too long a minimum in some 
circumstances. We conclude, however, that neither the ICCF guidelines 
nor any other categorization scheme adequately encompasses every 
potential change affecting interconnection that an incumbent LEC may 
wish to make to its network. In addition, for changes that can be 
implemented in less than six months, the length of time required for 
notice to be considered ``reasonable'' may vary considerably based on 
advances in technology, the specific implementation plan developed by 
an incumbent LEC, the particular capabilities of interconnecting 
carriers to adapt, and the willingness of the incumbent LEC to be 
forthcoming with information. Based on these considerations, we find 
that a fixed timetable for such short-term notices would not be 
appropriate.
---------------------------------------------------------------------------

    \489\ ICCF Recommended Notification Procedures. See supra note 
466.
---------------------------------------------------------------------------

    220. Accordingly, with respect to changes subject to section 
251(c)(5) disclosure that the incumbent LEC wishes to implement on less 
than six months' notice, we require that the incumbent LEC's Commission 
filing, whether certification or public notice, also include a 
certificate of service: (1)

[[Page 47321]]

Certifying that a copy of the incumbent LEC's public notice was served 
on each provider of telephone exchange service that interconnects 
directly with the incumbent LEC's network a minimum of five business 
days in advance of the filing; and (2) providing the name and address 
of all such providers of local exchange service upon which the notice 
was served. Such filings must be clearly titled ``Short Term Public 
Notice (or Certification of Short-Term Public Notice) Pursuant to Rule 
51.333(a).''
    221. The Commission will issue a public notice of such short-term 
filings separate from its public notice of other section 251(c)(5) 
filings. Unlike six-month or twelve-month notices, certain interested 
parties will have an opportunity to file objections to such short-term 
public notices. Specifically, short term notices will be deemed final 
on the tenth business day after the release of the Commission's public 
notice unless a provider of information services or telecommunications 
services that directly interconnects with the incumbent LEC's network 
files an objection to the change with the Commission and serves it on 
the incumbent LEC no later than the ninth business day following the 
release of the Commission's public notice. Such an objection must 
state: (1) Specific reasons why the objector is unable to implement 
adjustments to accommodate the incumbent LEC's changes by the date the 
incumbent LEC has specified, including specific technical information, 
questions, or other assistance required that would allow the objector 
to accommodate those changes; (2) specific steps the objector is taking 
to implement changes to accommodate the incumbent LEC's changes on an 
expedited basis; (3) the earliest possible date by which the objector 
anticipates that it can accommodate the incumbent LEC's changes, 
assuming it receives the assistance requested in item (1) (not to 
exceed six months from the date the incumbent LEC gave its original 
public notice); (4) the affidavit of the objector's president, chief 
executive officer, or other corporate officer or official with suitable 
authority to bind the corporation and knowledge of details of the 
objector's inability to adjust its network on a timely basis that he or 
she has read the objection, that the statements contained in it are 
true, that there is good ground to support the objection, and that it 
is not interposed for purposes of delay; and (5) any other information 
relevant to the objection. Because the power to interpose such 
objections could vest competing service providers with extensive power 
to delay implementation of changes, we caution competing service 
providers that we will not hesitate to intervene where necessary to 
ensure that objections are not posed merely to delay implementation of 
incumbent LEC network changes and that abuse of the Commission's 
processes for such a purpose would expose a competing service provider 
to sanctions.490
---------------------------------------------------------------------------

    \490\ See 47 CFR 1.17, 1.52.
---------------------------------------------------------------------------

    222. If one or more objections are filed, the incumbent LEC will 
have five additional business days (i.e., until no later than the 
fourteenth business day following the release of the Commission's 
public notice) within which to file a response to the objection(s) and 
serve it on all objectors. Such a response shall: (1) Include 
information responsive to the allegations and concerns identified by 
objectors; (2) state whether the implementation date(s) proposed by the 
objector(s) would be acceptable; (3) indicate any specific technical 
assistance that the incumbent LEC is willing to give to the 
objector(s); and (4) state any other information relevant to the 
incumbent LEC's response. In the case of such contested short-term 
public notices, the Common Carrier Bureau will issue an Order fixing a 
reasonable public notice period. In the alternative, if the incumbent 
LEC does not file a response within the five-day time period allotted, 
or if the response accepts the latest date stated by an objector in 
response to item (3) of its objection, then the incumbent LEC's public 
notice shall be deemed amended to specify implementation on the latest 
date stated by an objector in item (3) of its objection without further 
Commission action.
    223. At the make/buy point, incumbent LEC plans should be 
sufficiently developed that the incumbent LEC could provide adequate 
and useful information to competing service providers. At earlier 
stages of the planning process, options are still being explored and 
alternatives weighed. Disclosure at such an early stage could cause 
interconnecting carriers to waste resources in an effort to respond to 
network changes that may not occur or that occur ultimately in a 
significantly different way. As the process of implementing the planned 
changes into the network goes forward, specific information may also 
require revision. Accordingly, we require an incumbent LEC to keep its 
public notice information complete, accurate, and up-to-date in 
whatever forum it has chosen for disclosure.
    224. We agree with several commenters that incumbent LECs should 
not make preferential disclosure to selected entities prior to 
disclosure at the make/buy point. Accordingly, we prohibit disclosure 
to separate affiliates, separated affiliates,491 or unaffiliated 
entities (including actual or potential competing service providers), 
until the time of public notice.
---------------------------------------------------------------------------

    \491\ 47 U.S.C. 274.
---------------------------------------------------------------------------

ii. Other Disclosure Proposals

    225. We find that section 251(d)(3) does not require the Commission 
to preserve state authority over the timing of public notice of changes 
to the ``information necessary for the transmission and routing'' of 
traffic. Section 251(d)(3) prevents the Commission from ``preclud[ing] 
the enforcement of any (state commission) regulation, order or 
policy,'' to the extent that such regulation, order or policy 
``establishes (LEC) access and interconnection obligations,'' 492 
is ``consistent with the requirements of (section 251)'' 493 and 
does not ``substantially prevent implementation of this section and the 
purposes of this part.'' 494
---------------------------------------------------------------------------

    \492\ 47 U.S.C. 251(d)(3)(A).
    \493\ 47 U.S.C. 251(d)(3)(B).
    \494\ 47 U.S.C. 251(d)(3)(C).
---------------------------------------------------------------------------

    226. Public notice requirements that varied widely from state to 
state could subject both incumbent LECs and potential competing service 
providers to burdensome, duplicative, and potentially inconsistent 
obligations that would impermissibly hamper the achievement of the 
goals of section 251. Such varied filings requirements would obligate 
incumbent LECs to file in, and potential interconnecting carriers to 
canvass, a multitude of state-level fora in order to glean information 
concerning network changes. Incumbent LECs that operate in multiple 
states could be required to disclose a single network-wide change 
piecemeal in a variety of state filings; interconnecting carriers would 
then need to retrieve the information, also piecemeal, from many 
different locations. Neither section 251(c)(5) nor a fixed disclosure 
timetable limits the range of network changes an incumbent LEC might 
make; rather incumbent LECs remain free to make any otherwise 
permissible change upon appropriate notice. Accordingly, particularly 
with respect to entities whose operations span several states, clear, 
national rules are essential to the uniform implementation of network 
disclosure.495
---------------------------------------------------------------------------

    \495\ See NCTA comments at 12.

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[[Page 47322]]

    227. Several commenters argue that a fixed disclosure timetable 
will needlessly or arbitrarily delay the introduction of technical 
advances or new services. It is our intention in this proceeding, 
however, to develop disclosure rules that minimize unnecessary delay by 
providing competing service providers with adequate, but not excessive, 
time to respond to changes to an incumbent LEC's network that affect 
interconnection. The primary concern reflected in section 251(c)(5) is 
continued interconnection and interoperability. If proper planning 
occurs, however, the delay associated with this goal should be minimal.
    228. At least one commenter argues that, because incumbent LECs and 
competing service providers have a common interest in ensuring that 
their networks function together properly--an interest that removes 
incentives to withhold vital interconnection information and obviates 
the need for fixed, enforceable advance disclosure obligations 
496--any fixed timetables for disclosure should be negotiated 
between carriers as part of individual interconnection agreements. We 
disagree. The mere fact that interconnection failures can adversely 
affect both an incumbent LEC and a competing service provider does not 
remove the incumbent LEC's incentives to delay release of information 
concerning network changes solely in order to inconvenience its 
competitors. The impact of such failures would fall disproportionately 
on the competing service provider because, at least in the near term, 
the incumbent LEC's network will connect most of the customers in its 
service area directly, without using any facilities of a competing 
service provider. Indeed, we believe that this is the reason that 
Congress chose to place this obligation on incumbent LECs only and not 
on all LECs. In addition, notice of network changes provided to an 
interconnecting carrier, pursuant to a privately negotiated agreement, 
will not necessarily be provided to members of the public who are not 
parties to the specific agreement.497 Accordingly, while carriers 
may negotiate individual notice arrangements (consistent with the 
preferential disclosure prohibitions discussed in paragraph 224, above) 
as part of private interconnection agreements, we are unable to rely on 
such private notice to satisfy section 251(c)(5)'s duty to provide 
reasonable public notice.
---------------------------------------------------------------------------

    \496\ Ameritech comments at 30, reply at 17.
    \497\ Although the contents of privately negotiated 
interconnection agreements themselves must be disclosed to the 
public through state level filings, see 47 U.S.C. 252(h), 
information exchanged pursuant to the terms of such an 
interconnection agreement might not be provided at all to this 
Commission, state commissions or the public.
---------------------------------------------------------------------------

    229. Although advance disclosure periods will place competing 
service providers on notice of certain products and services the 
incumbent LECs intend to bring to market, we do not believe that this 
information will automatically translate into a competitive advantage 
for the competing service providers. The incumbent LEC's network 
disclosure obligations are intended to allow competing service 
providers to make required changes to their own networks in order to 
maintain interoperability and uninterrupted, high quality service to 
the public. These obligations are designed to prevent incumbent LECs 
from using their currently substantial percentages of subscribers and 
highly developed networks anticompetitively to prevent the entry of 
potential competitors.
    230. Several commenters have argued that existing practices under 
industry issued, ICCF guidelines 498 or the Commission's ``all 
carrier'' rule,499 satisfy the requirements of section 251(c)(5) 
and that no further Commission action is necessary. We disagree. The 
guidelines that commenters bring to our attention are neither 
compulsory nor enforceable at the Commission. We cannot rely on 
continued goodwill among carriers that soon may be locked in 
competition to assure timely disclosure of network changes. Similarly, 
we cannot trust in the ``mutually satisfactory arrangements for timely 
information exchange'' that GVNW alleges IXCs and small LECs reached to 
ease the conversion to equal access.500 Our new rules, and the new 
market dynamics, may not produce such agreements.
---------------------------------------------------------------------------

    \498\ ICCF Recommended Notification Procedures. See supra note 
466.
    \499\ See supra n.383.
    \500\  GVNW comments at 5.
---------------------------------------------------------------------------

    231. While we are aware of no specific complaints concerning the 
functioning of the ``all carrier rule,'' the advent of competition for 
basic telephone service in the local market will require rules that are 
specific, easily enforced and very clear. In this respect, we believe 
that the all carrier rule standard lacks adequate specificity to 
function efficiently in the section 251 context. Requiring carriers to 
litigate the meaning of ``reasonable'' notice through our complaint 
process on a case-by-case basis might slow the introduction and 
implementation of new technology and services, and burden both carriers 
and the Commission with potentially lengthy, fact-specific enforcement 
proceedings. A fixed timetable will create a clear, specific standard 
that will be more easily and quickly enforceable and that will better 
facilitate the development of competition and serve the public 
interest.
    232. At least one commenter urges us to adopt the Computer III 
timetable merely as a ``safe harbor'' provision.501 If we were to 
do so, however, we would open the notice process to many of the same 
risks that lead us to reject the all carrier rule. Under ``safe 
harbor'' rules, competing service providers' notice complaints could 
become bifurcated into an initial inquiry as to whether an incumbent 
LEC met the safe harbor provisions of the timetable. If the answer were 
in the negative, a second, fact-specific inquiry as to whether notice 
was nevertheless reasonable, would then follow. The delay in resolving 
such disputes would not serve the public interest. We believe the 
better course is to adopt a binding, fixed standard applicable to 
notice by all incumbent LECs.
---------------------------------------------------------------------------

    \501\ PacTel comments at 6.
---------------------------------------------------------------------------

    233. MFS's proposed regulatory structure based on a tripartite 
scheme, classifying changes as ``major,'' ``location,'' or ``minor,'' 
subject to advance disclosure of 18 months, 12 months, and according to 
industry standards, respectively, is flawed in several respects. 
Initially, section 251(c)(5) disclosure applies to a broad spectrum of 
potential network changes and we are not confident that MFS's 
definitions, or any similar definitions, could adequately capture and 
clarify every potential alteration affecting interconnection that an 
incumbent LEC could make to its network. Categorization debates would 
inevitably arise among carriers concerning the status of specific, 
planned changes. Reasonable public notice is a function of the length 
of time an incumbent LEC will take to implement a change and the length 
of time an interconnecting carrier will need to respond. Fixed 18-month 
and 12-month disclosure periods will not be flexible enough to take 
advantage of advances in technology that may permit increasingly rapid 
implementation of and reaction to network changes. Also, we find that 
the extended notice periods MFS proposes are too long. MFS provides no 
evidence or explanation to support its assertion that competing service 
providers will need a minimum of 18 months notice of major 
changes,502 and the record

[[Page 47323]]

contains broad support for the 12 month notice period from Computer 
III.503 While we intend that competing service providers have 
adequate notice of planned network changes, we acknowledge the valid 
concerns of some commenters that overextended advance notification 
intervals could needlessly delay the introduction of new services, 
provide the interconnecting carrier with an unfair competitive 
advantage, or slow the pace of technical innovation.504
---------------------------------------------------------------------------

    \502\ Cf. NYNEX reply at 10-11 (Such a long notice period would 
``hamstring technological progress and deny customer benefits''); U 
S WEST reply at 2-3.
    \503\ See, e.g., AT&T comments at 24-25 (Noting that the time 
periods from Computer III are familiar to incumbent LECs and a one-
year minimum for certain changes would be sufficient advance notice 
to alternative LECs); MCI comments at 16 (agreeing 12 months advance 
notice is sufficient); Cox comments at 11 (``The proposal in the 
[NPRM] represents the minimum possible standard for disclosure'').
    \504\ Cf. Phase II Order, 2 FCC Rcd at 3087 (``[W]hile we 
believe enhanced service providers are entitled to receive network 
information on a timely basis, we are also concerned that premature 
disclosure of this information could impair carriers' development 
efforts and inhibit network innovation'').
---------------------------------------------------------------------------

iii. Application to Network Changes in Progress

    On the effective date of the rules implementing incumbent LECs' 
network disclosure obligations under section 251(c)(5), some incumbent 
LECs may be implementing network changes that the new rules otherwise 
would have required them to disclose. With respect to these changes, we 
do not perceive a need to delay implementation, and no commenter has 
requested that we do so. We do require, however, that incumbent LECs 
give public notice of such changes as soon as it is practical, and that 
notice in accordance with the section 251(c)(5) network disclosure 
rules be given: (1) before the incumbent LEC begins offering service 
using the changes to its network; and (2) no later than 30 days after 
the effective date of the rules adopted in this Order.
    235. We similarly find no need to adopt rules obligating incumbent 
LECs to make any formal, initial public disclosure of comprehensive 
information concerning their networks to provide background information 
against which connecting carriers could then evaluate changes. In the 
First Report and Order, we have concluded that, under section 
251(c)(2), incumbent LECs are under an obligation to provide, 
interconnection for purposes of transmitting and routing telephone 
exchange traffic alone, exchange access traffic alone, or both.505 
Implicit in this obligation under section 251(c)(2) is the obligation 
to make available to requesting carriers information indicating the 
location and technical characteristics of incumbent LEC network 
facilities. Accordingly, actual or potential competing service 
providers needing this type of baseline information may request it from 
the incumbent LEC under section 251(c)(2); subsequent changes to this 
information will be addressed by the section 251(c)(5) rules we adopt 
today.
---------------------------------------------------------------------------

    \505\ First Report and Order at section IV.
---------------------------------------------------------------------------

iv. Small Business Considerations

    236. We have considered the impact of our rules on small incumbent 
LECs. We agree with GVNW that many network changes may not require 
twelve months advance disclosure. Accordingly, we have provided for six 
month, or shorter, notice periods, when such changes can be 
accomplished quickly. In addition, we note that, under section 
251(f)(1), certain small incumbent LECs are exempt from our rules until 
(1) they receive a bona fide request for interconnection, services, or 
network elements; and (2) their state commission determines that the 
request is not unduly economically burdensome, is technically feasible, 
and is consistent with the relevant portions of section 254. In 
addition, certain small incumbent LECs may seek relief from our rules 
under section 251(f)(2).506
---------------------------------------------------------------------------

    \506\ For a discussion of the implications and operation of 
section 251(f), see First Report and Order, section XII.
---------------------------------------------------------------------------

C. Relationship With Other Public Notice Requirements and Practices.

1. Relationship of Sections 273(c)(1) and 273(c)(4) With Section 
251(c)(5).
a. Background
    237. Section 273(c)(1) requires each BOC to maintain and file with 
the Commission ``full and complete information with respect to the 
protocols and technical requirements for connection with and use of its 
telephone exchange facilities,'' in accordance with Commission 
rules.507 Section 273(c)(4) obligates the BOCs to provide timely 
information on the planned deployment of telecommunications equipment 
to interconnecting carriers providing telephone exchange 
service.508 We sought comment in the NPRM on the relationship 
between these sections and the network disclosure obligations contained 
in section 251(c)(5).509
---------------------------------------------------------------------------

    \507\ 47 U.S.C. 273(c)(1). The Commission will address section 
273 in a separate rulemaking proceeding.
    \508\ 47 U.S.C. 273(c)(4).
    \509\ NPRM at para. 193.
---------------------------------------------------------------------------

b. Comments
    238. Ameritech states that the requirements of section 251(c)(5) 
``should be reconciled with [the] related obligations'' set forth in 
section 273(c)(1) and 273(c)(4).'' 510 Bell Atlantic suggests that 
sections 251(c)(5) and 273(c)(1) cover the same type of technical 
information.511 Bell Atlantic further recommends that we find that 
``timely'' release of the information covered by section 273(c)(4) 
means that the information should be made available ``a sufficient time 
in advance that the competing service providers may make any necessary 
changes to their networks.'' 512 SBC comments that the disclosure 
obligations imposed by sections 251(c)(5), 273(c)(1), and 273(c)(4) are 
``substantially similar.'' 513 MCI argues that section 273(c)(1) 
imposes on the RBOCs substantially the same information disclosure 
obligations that 251(c)(5) imposes on the incumbent LECs in general, 
with the exception that 273(c)(1) explicitly obligates the RBOCs to 
file the information with the Commission.514 MCI further argues 
that section 273(c)(4)'s ``timely'' disclosure requirement goes beyond 
that contained in section 251(c)(5).515
---------------------------------------------------------------------------

    \510\ Ameritech comments at 31.
    \511\ Bell Atlantic comments at 12.
    \512\ Id. Bell Atlantic advocates the same ``reasonable advance 
notice'' standard for use in connection with section 251(c)(5).
    \513\ SBC comments at 13-14.
    \514\ MCI comments at 19.
    \515\ Id.
---------------------------------------------------------------------------

    239. USTA suggests that ``there is no basis to impose different 
requirements on the BOCs for purposes of compliance with section 
273(c)(1) than those they are required to follow for section 251(c)(5). 
This is in fact one area in which uniformity would provide a benefit to 
the industry and would be administratively simple.'' 516 In 
contrast, the Rural Tel. Coalition argues that the requirements of 
section 273 apply only to the BOCs and ``are not expected to correlate 
with the requirements of 251(c)(5) that apply to all incumbent LECs.'' 
517 The Rural Tel. Coalition states that the Commission should 
fashion flexible notice requirements under these sections, recognizing 
differences in size, market power, and ability to impact competing 
service providers' operations that exist among the BOCs and independent 
LECs, and competing service providers.518 AT&T also disagrees with 
USTA, arguing that the Commission filing contemplated by section 
273(c)(1) is more detailed than

[[Page 47324]]

the disclosure mandated in section 251(c)(5).519
---------------------------------------------------------------------------

    \516\ USTA comments at 13.
    \517\ Rural Tel. Coalition comments at 4.
    \518\ Id. at 4-5.
    \519\ AT&T comments at 24, reply at 28.
---------------------------------------------------------------------------

c. Discussion
    240. Because the BOCs clearly meet the 1996 Act's definition of an 
``incumbent LEC,'' 520 the minimum disclosure requirements of 
section 251(c)(5) apply to the BOCs. We will address the specific 
implications of section 273, including the question whether section 273 
imposes additional disclosure requirements on the BOCs, in a separate 
rulemaking proceeding.
---------------------------------------------------------------------------

    \520\ 47 U.S.C. 251(h).
---------------------------------------------------------------------------

2. Relationship of Sections 251(a) and 251(c)(5) With Section 256
a. Background
    241. Section 251(a) sets forth general duties of telecommunications 
carriers, including the duty to interconnect directly or indirectly 
with the facilities and equipment of other telecommunications carriers, 
and the duty not to install network features, functions or capabilities 
that do not comply with the guidelines and standards established 
pursuant to section 255 521 and 256.522 Section 251(c)(5) 
sets forth the duty of all incumbent LECs to provide reasonable public 
notice of changes in the information necessary for the transmission and 
routing of services using the incumbent LEC's network.523 The goal 
of section 256, entitled ``Coordination for Interconnectivity,'' is 
``to promote nondiscriminatory accessibility by the broadest number of 
users and vendors of communications products and services to public 
telecommunications networks used to provide telecommunications 
service'' and defines the Commission's role in achieving this 
goal.524 In the NPRM, we sought comment on the relationship of 
sections 251(a) and 251(c)(5) with section 256.525
---------------------------------------------------------------------------

    \521\ Section 255, ``Access by Persons with Disabilities,'' will 
be addressed in a separate rulemaking proceeding.
    \522\ 47 U.S.C. 251(a).
    \523\ 47 U.S.C. 251(c)(5).
    \524\ 47 U.S.C. 256.
    \525\ NPRM at para. 193.
---------------------------------------------------------------------------

b. Comments
    242. We received few comments on this issue. USTA states that, ``in 
developing oversight procedures for public telecommunications network 
interconnectivity standards under Section 256, the Commission can 
assist in alerting the industry to general types of technology changes 
which may lead to specific upgrades or modifications by individual 
carriers.'' 526 In addition, USTA notes that all 
telecommunications carriers are obligated by section 251(a)(2) to 
comply with standards prescribed under sections 255 and 256 and, 
accordingly, cautions that the section 256 process should be conducted 
with carriers' section 251(a)(2) obligations in mind.527 USTA 
therefore suggests the possibility that an industry group could develop 
a set of uniform guidelines for use by all carriers in providing notice 
of changes that could affect interconnection or 
interoperability.528
---------------------------------------------------------------------------

    \526\ USTA comments at 13.
    \527\ Id. at 13-14.
    \528\ Id. at 14.
---------------------------------------------------------------------------

    243. Ameritech comments that section 251(c)(5) is only one part of 
the overall regulatory structure for coordinating network planning by 
the industry and facilitating interconnection and 
interoperability.529 Based on this analysis, Ameritech argues that 
the notification obligations section 251(c)(5) imposes should be 
extended to all LECs under section 256.530
---------------------------------------------------------------------------

    \529\ Ameritech comments at 31.
    \530\ Id. 
---------------------------------------------------------------------------

c. Discussion
    244. Section 251(a)(2) imposes a duty on all telecommunications 
carriers to act in ways that are not inconsistent with any guidelines 
and standards established under section 256. Section 251(c)(5) imposes 
network disclosure obligations on incumbent LECs that are related to 
the goals of section 256, inasmuch as section 251(c)(5) sets forth one 
specific procedure to promote interconnectivity. We do not decide here 
whether compliance with section 251(c)(5) is sufficient to satisfy 
section 256, however. The Network Reliability and Interoperability 
Council will develop recommendations to the Commission on the 
implementation of section 256.531 We intend to address carrier and 
Commission obligations under section 256 in a future rulemaking 
proceeding.
---------------------------------------------------------------------------

    \531\ At its meeting on July 15, 1996, the Network Reliability 
and Interoperability Council discussed (1) barriers to 
interconnectivity; (2) how the FCC most efficiently can oversee 
network planning to assure interoperability; (3) need for standards-
setting; and (4) the overall reliability of networks. See 
Communications Daily, June 11, 1996 (announcing July 15 meeting); 
Public Notice, NYNEX CEO Seidenberg to Head New Network Reliability 
and Interoperability Council, 1996 WL 185795 (F.C.C. April 18, 
1996).
---------------------------------------------------------------------------

D. Enforcement and Safeguards

1. Enforcement Mechanisms
a. Background and Comments
    245. In the NPRM, we sought comment on what enforcement mechanism, 
if any, we should use to ensure compliance with the section 251(c)(5) 
public notice requirement.532 Bell Atlantic, in conjunction with 
its advocacy of a flexible disclosure standard based on 
``reasonableness,'' suggests that the Commission review complaints of 
premature implementation on a case-by-case basis and, where necessary, 
issue cease-and-desist orders.533 Ameritech and GTE argue that no 
specific, additional enforcement mechanisms are necessary, because 
there is no evidence that existing industry practices are producing 
network conflicts or hardships, or are otherwise not working.534 U 
S WEST suggests that, if carriers fail to make timely disclosure, 
additional enforcement options can be considered in the future.535 
In contrast, NCTA states that we must adopt meaningful sanctions to 
enforce our new network disclosure rules, including significant 
monetary sanctions whenever a competitor's service is disrupted because 
of an incumbent LEC's failure to comply with the notice 
requirements.536 Cox argues that any incumbent LEC found to 
violate section 251(c)(5)'s disclosure requirements should be required 
to inform all affected customers of interconnecting carriers that the 
incumbent LEC's actions caused any adverse effects attributable to the 
improperly disclosed network changes.537
---------------------------------------------------------------------------

    \532\ NPRM at para. 193.
    \533\ Bell Atlantic comments at 12.
    \534\ Ameritech comments at 29; GTE reply at 10.
    \535\ U S WEST reply at 3.
    \536\ NCTA comments at 12.
    \537\ Cox comments at 12.
---------------------------------------------------------------------------

    246. MFS states that the Commission should adopt rules that would: 
(1) Require each incumbent LEC to respond to Commission questions 
regarding the information previously made available regarding any 
network changes within the scope of section 251(c)(5), and to 
supplement the information if requested by the Commission; (2) 
establish a procedure for temporarily blocking any proposed network 
change until the Commission has time to investigate any alleged 
violations, with respect to either provision of notice, or the nature 
of the network change; and (3) allow the Commission, for good cause, to 
issue an order, without prior notice or hearing, requiring an incumbent 
LEC to cease and desist from making any specified changes for a period 
of up to 60 days to permit Commission investigation of alleged 
violations.538 Time Warner

[[Page 47325]]

suggests that any failure to comply with the rules we establish should 
be addressed through our existing section 208 complaint 
process.539
---------------------------------------------------------------------------

    \538\ MFS comments at 16. MFS does not explain what type of 
network change might require Commission investigation or what type 
or level of allegations we should considered sufficient in issuing 
cease and desist orders.
    \539\ Time Warner comments at 11.
---------------------------------------------------------------------------

b. Discussion
    247. It is essential to the development of local competition that 
incumbent LECs comply with the network disclosure obligations of 
section 251(c)(5). Even if a competing provider of local exchange 
service had made significant inroads into the incumbent LEC's customer 
base, it would have to transmit a substantial number of its customers' 
calls to the incumbent LEC's network for termination. If these calls 
cannot be terminated reliably, customers will be more reluctant to use 
the competing provider's services.
    248. We recognize the importance of compliance with our network 
disclosure rules, and note that many of the specific enforcement 
sanctions offered by commenters may have merit. The commenters' 
suggestions indicate a belief that the Commission should delay or 
prohibit the implementation of changes if we receive sufficiently 
credible allegations of notice violations. Our existing enforcement 
authority would permit us to impose such a sanction and we will not 
hesitate to do so in appropriate circumstances. The Commission, 
however, also has a range of other penalties it could impose to ensure 
incumbent LEC compliance with the network disclosure rules. The record 
currently before us does not reveal a need for us to mandate specific 
enforcement procedures in the section 251(c)(5) context. Rather, we 
will intervene in appropriate ways if necessary to ensure adequate 
disclosure of public notice information, should sanctions become 
necessary to encourage full compliance with our network disclosure 
rules.540 In addition, we intend to explore how we can increase 
the efficiency of the current section 208 formal complaint process in a 
separate rulemaking proceeding.
---------------------------------------------------------------------------

    \540\ See, e.g., 47 U.S.C. 154(i), 154(j), 206-209, 218; 47 CFR 
0.91, 0.291.
---------------------------------------------------------------------------

2. Protection of Proprietary Information, Network and National Security
a. Background and Comments
    249. In the NPRM, we sought comment on the extent to which 
safeguards may be necessary to ensure that information regarding 
network security, national security and the proprietary interests of 
manufacturers and others is not compromised by the section 251(c)(5) 
network disclosure process.541
---------------------------------------------------------------------------

    \541\ NPRM at para. 194.
---------------------------------------------------------------------------

    250. BellSouth states that, to address these concerns, the 
Commission should permit disclosing incumbent LECs to require the 
recipient of such information to execute a confidentiality agreement, 
which could be drafted to include liquidated damages, indemnification, 
or other appropriate remedial provisions.542 In addition, 
BellSouth requests that the Commission confirm that incumbent LECs are 
not obligated to disclose proprietary information of third parties, but 
may instead require competing service providers to negotiate directly 
with the third party for access.543
---------------------------------------------------------------------------

    \542\ BellSouth comments at 5. See Illinois Commission comments 
at 63.
    \543\ Id. at 6.
---------------------------------------------------------------------------

    251. GVNW suggests that we limit incumbent LEC disclosure only to 
references to industry and manufacturers' specifications that are 
widely available, and to other information required to interconnect at 
the interface, which would reduce the amount of proprietary or 
sensitive information that would be subject to disclosure.544 In 
addition, GVNW and the Rural Tel. Coalition state that an incumbent LEC 
should not be obligated to disclose the specific location of physical 
plant facilities except under strict nondisclosure agreements, in order 
to preserve the LEC's competitive position and protect against 
potential terrorist disruptions.545
---------------------------------------------------------------------------

    \544\ GVNW comments at 5. Ameritech advocates a similar 
narrowing of the disclosure obligation. Ameritech comments at 26 
n.52.
    \545\ Id.; Rural Tel. Coalition comments at 4.
---------------------------------------------------------------------------

    252. Noting that the telecommunications equipment market is 
competitive, Nortel states that a manufacturer would be seriously 
disadvantaged if its proprietary information were disclosed to 
competitors.546 In addition, Nortel argues that, in such a case, 
manufacturers would face substantially reduced incentives to develop 
advanced products.547 Motorola, Inc., expresses its agreement with 
both BellSouth and Nortel 548 and comments that disclosure of 
proprietary information may undermine the competitive position of U.S. 
manufacturers in the global market.549 Motorola, Inc., also asks 
us to clarify that no disclosure is required of technical information 
at ``testing'' or ``trial'' stages,550 where typically a carrier 
is evaluating new technology in the field.551
---------------------------------------------------------------------------

    \546\ Nortel comments at 3; Motorola, Inc. reply at 5. Citing 
similar concerns, GTE urges us to strike a balance between the 
information necessary to ensure seamless interconnection and the 
protection of proprietary information. GTE comments at 6.
    \547\ Id.
    \548\ Motorola, Inc. comments at n.4.
    \549\ Motorola, Inc. reply at n.5.
    \550\ Id. at 6.
    \551\ Id.
---------------------------------------------------------------------------

    253. Sprint, in ex parte comments, states that nondisclosure 
agreements related to the marketing of new services that will be 
available from both carriers may be appropriate.552 Sprint also 
notes, however, that many routine network upgrades, such as 
establishment of new central offices, remote offices, or tandems, 
elimination of tandem locations, changes in the incumbent LEC's SS 7 
network, and basic software upgrades, may not require the use of 
nondisclosure agreements.553 While agreeing that network and 
national security issues deserve the highest attention, Teleport 
expresses concern that proprietary interest claims could be used to 
keep essential network interconnection information from potential 
competitors.554
---------------------------------------------------------------------------

    \552\ Ex parte letter from Jay C. Keithley, Sprint, to Mr. 
William F. Caton, Acting Secretary, Federal Communications 
Commission, filed in CC Docket No. 96-98, June 26, 1996, at 2.
    \553\ Id.
    \554\ Teleport comments at 12.
---------------------------------------------------------------------------

b. Discussion
    254. Having reviewed the record, we conclude that the judicious use 
of nondisclosure agreements will help protect incentives to develop 
innovative network improvements, and will also protect against 
potential threats to both national and network security by limiting the 
flow of detailed information concerning the operation of the national 
telecommunications network.555 Accordingly, we will permit the use 
of nondisclosure agreements, subject to certain restrictions.
---------------------------------------------------------------------------

    \555\ Should these agreements prove inadequate for this purpose, 
we would revisit this issue.
---------------------------------------------------------------------------

    255. Incumbent LECs have a statutory obligation to provide 
``reasonable public notice of changes in the information necessary for 
the transmission and routing of services using that (incumbent LEC's) 
facilities or network, as well as of any other changes that would 
affect the interoperability of those facilities and networks,'' 
556 as defined in this proceeding. Under another provision of the 
1996 Act, however, the BOCs and any entities that they own or otherwise 
control must protect ``the proprietary information submitted for 
procurement decisions from release not specifically authorized by the 
owner of such information.'' 557 Thus a rule requiring a BOC to 
provide

[[Page 47326]]

change information publicly, without any provision for the use of a 
nondisclosure agreement, could place a BOC in the position of having to 
choose between compliance with the Commission's rule and compliance 
with section 273(e)(5). We also find that requiring disclosure to the 
public of competitively sensitive, proprietary, or trade secret 
information without allowing for the possible use of nondisclosure 
agreements would be inconsistent with section 251(c)(5)'s requirement 
that incumbent LECs provide ``reasonable public notice'' (emphasis 
added). It would not be ``reasonable'' to require such disclosures 
because they have significant implications with respect to network and 
national security, as well as the development of competition and 
innovative network improvements. Accordingly, we find that section 
251(c)(5) requires incumbent LECs to provide notice of planned changes 
to the public sufficient to allow an interested party to assess the 
possible ramifications of the change and evaluate whether it needs to 
seek disclosure of additional information. The five categories of 
information disclosure we mandate here will meet this standard.
---------------------------------------------------------------------------

    \556\ 47 U.S.C. 251(c)(5).
    \557\ 47 U.S.C. 273(e)(5).
---------------------------------------------------------------------------

    256. We do not anticipate that the minimum public notice 
requirements we are adopting will obligate carriers to disclose 
competitively sensitive, proprietary, or trade secret information in 
the public arena. In addition, despite the concerns of Motorola, Inc., 
Nortel, and others, we do not anticipate that the level of information 
required by a competing service provider either to transmit and to 
route services, or to maintain interoperability will, in the ordinary 
case, include proprietary information. In the event that such 
information is required, however, an incumbent LEC's public notice must 
nevertheless identify the type of change planned in sufficient detail 
to place interested persons on notice that they may potentially be 
affected, and must state that the incumbent LEC will make further 
information available to persons signing a nondisclosure agreement. We 
believe that suitably fashioned nondisclosure agreements can 
appropriately balance the competing service provider's need for 
knowledge of network changes with the interests of the incumbent LEC 
and equipment manufacturers in retaining control of proprietary 
information.
    257. Accordingly, to the extent that otherwise proprietary or 
confidential information of an incumbent LEC falls within the scope of 
the network disclosure obligation of section 251(c)(5), it must be 
provided by that incumbent LEC on a timely basis. If an interconnecting 
carrier or information service provider requires genuinely proprietary 
information belonging to a third party in order to maintain 
interconnection and interoperation with the incumbent LEC's network, 
the incumbent LEC is permitted to refer the competing service provider 
to the owner of the information to negotiate directly for its release. 
While the incumbent LEC might represent the most expedient source of 
the required information, third parties would be less able to protect 
themselves from misuse of their proprietary information and preserve 
potential remedies if the incumbent LEC were to disclose directly a 
third party's proprietary information directly in response to a 
request.
    258. We are concerned that protracted negotiation periods over the 
terms of a suitable nondisclosure agreement, or the payment of fees or 
royalties, could consume a significant portion of a competing service 
provider's notice period. The rules we adopt today require that, except 
under short-term public notice procedures, an incumbent LEC must give 
public notice of network changes a minimum of either six months or 
twelve months in advance of implementation. We find that these periods 
will provide adequate notice to interconnecting carriers and 
information service providers, to ensure that a high level of 
interconnectivity and interoperability can be maintained between 
networks. These periods, however, are not excessive and will not allow 
excessive time for the negotiation of the terms of nondisclosure 
agreements. Because section 251(c)(5) places an affirmative obligation 
on the incumbent LEC to ensure reasonable public notice of changes to 
its network, we require that disclosure of information designated by 
the incumbent LEC as proprietary, whether owned by the incumbent LEC or 
a third party, be accomplished on appropriate terms as soon as possible 
after an actual or potential competing service provider makes a request 
to the information owner for disclosure. Specifically, upon receipt by 
the incumbent LEC of a competing service provider's request for 
disclosure of confidential or proprietary information, the applicable 
public notice period will be tolled to allow the interested parties to 
agree on suitable terms for a nondisclosure agreement. This tolling is 
consistent with the incumbent LEC's public notice obligations and will 
preserve the competing service provider's ability to implement required 
changes in its own network to accommodate those planned by the 
incumbent LEC. In accordance with its obligation to keep the public 
notice information complete, accurate, and up-to-date, the incumbent 
LEC must, if necessary, amend its public notice: (1) On the date it 
receives a request from a competing service provider for disclosure of 
confidential or proprietary information, to state that the notice 
period is tolled; and (2) on the date the nondisclosure agreement is 
finalized, to specify a new implementation date.
    259. Given these incentives, we conclude that it is unnecessary 
either to adopt a precise definition of ``competitively sensitive'' or 
``proprietary'' information, or to mandate the terms of nondisclosure 
agreements. The Computer III rules, upon which we have modeled the 
disclosure timetable for use in the section 251(c)(5) context, 
explicitly permit the use of nondisclosure agreements in connection 
with carrier disclosure of planned changes to the enhanced services 
industry at the ``make/buy'' point.558 In that proceeding also, 
the Commission explicitly rejected requests to prescribe a specific 
type of agreement, instead holding that:

    \558\ Phase II Order, 2 FCC Rcd at 3092.
---------------------------------------------------------------------------

    we do not think it necessary or helpful for us to dictate the 
terms of these private agreements. Nondisclosure agreements are 
widely used in telecommunications, as well as in other fields. We 
believe it better to leave the exact specifications of the terms of 
such agreement to the parties. We would of course be prepared to 
intervene should parties bring to our attention evidence of 
noncompliance with the requirements established in this 
proceeding.559

    \559\ Id. at 3092-93.
---------------------------------------------------------------------------

Although we recognize that legitimate concerns exist regarding the 
security of proprietary information, the potential exists for some 
incumbent LECs to use such concerns as either a shield against the 
entry of competitors into their markets, or a sword to hamper the 
competitor's business operations. We emphasize that incumbent LECs are 
required to provide adequate access to even proprietary information if 
a competing service provider needs that information to make adjustments 
to its network to maintain interconnection and interoperation.
    260. We agree with Motorola, Inc., that market and technical trials 
are not subject to disclosure under section 251(c)(5). Trials are not 
considered regular service and, because the validity of the incumbent 
LEC's trial results rests, in part, on successful interconnection, the 
incumbent LEC has sufficient incentives ensure that competing service 
providers receive

[[Page 47327]]

adequate information. Notice of trials may be given, as needed, on a 
private, contractual basis.

V. Numbering Administration

    261. The Commission has repeatedly recognized that access to 
telephone numbering resources is crucial for entities wanting to 
provide telecommunications services because telephone numbers are the 
means by which telecommunications users gain access to and benefit from 
the public switched telephone network.560 In enacting the 1996 
Act, Congress also recognized that ensuring fair and impartial access 
to numbering resources is a critical component of encouraging a 
robustly competitive telecommunications market in the United States. 
Congress has required the Commission to designate an impartial 
administrator of telecommunications numbering and has conferred upon 
the Commission exclusive jurisdiction over those portions of the North 
American Numbering Plan (NANP) that pertain to the United 
States.561
---------------------------------------------------------------------------

    \560\ See Administration of the North American Numbering Plan, 
CC Docket No. 92-237, Report and Order, 11 FCC Rcd 2588, 2591 (1995) 
(NANP Order) 60 FR 38737 (July 28, 1995).
    \561\ 47 U.S.C. 251(e)(1).
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A. Designation of an Impartial Number Administrator

1. Background
    262. Section 251(e)(1) requires the Commission to ``create or 
designate one or more impartial entities to administer 
telecommunications numbering and to make such numbers available on an 
equitable basis.'' 562 In the NPRM, we tentatively concluded that 
action taken by the Commission in its July 1995 NANP Order satisfied 
this requirement.563 In that Order, the Commission directed that 
functions associated with NANP administration be transferred to a new 
administrator of the NANP, unaligned with any particular segment of the 
telecommunications industry. In the NPRM, we sought comment on whether 
this action satisfied the section 251(e)(1) requirement that we 
designate an impartial administrator.
---------------------------------------------------------------------------

    \562\ Id.
    \563\ See NANP Order. The NANP Order was initiated in response 
to Bellcore's stated desire to relinquish its role as NANP 
administrator. See Letter from G. Heilmeier, President and CEO, 
Bellcore to the Commission (August 19, 1993). Bellcore, however, 
will continue performing its NANP Administration functions until 
those functions are transferred to a new NANP administrator pursuant 
to the NANP Order.
---------------------------------------------------------------------------

2. Comments
    263. There is nearly unanimous agreement that action taken by the 
Commission in the NANP Order satisfies the requirement of Section 
251(e)(1).564 GTE states that the NANP Order ``will ensure that 
numbering mechanisms are applied in a carrier-neutral fashion, 
consistent with the objectives of the 1996 Act.'' 565 Parties, 
contending that number administration now performed by Bellcore 
potentially disadvantages non-BOC providers of telecommunications 
services by delay or denial of numbering resources to them, 
nevertheless urge the Commission to move quickly to implement the NANP 
Order fully.566 Moreover, some argue that to give the NANP Order 
full effect, the North American Numbering Council (NANC) must be 
convened promptly.567 CTIA states that until that time, 
``contentious numbering issues will either go unresolved, leading to 
additional pressure on already burdened numbering resources, or these 
issues will be resolved by the remnant of a monopoly era system.'' 
568 One commenter, Beehive, argues that the NANP Order does not 
meet the requirements of section 251(e)(1) because it does not address 
toll free number administration.569
---------------------------------------------------------------------------

    \564\ See, e.g., Ameritech comments at 22; District of Columbia 
Commission comments at 1; GCI comments at 5; NYNEX comments at 18; 
AT&T reply at 2-3.
    \565\ See, e.g., GTE reply at 34.
    \566\ See, e.g., CTIA comments at 4; MCI comments at 10.
    \567\ See, e.g., AT&T comments at 11. The North American 
Numbering Council (NANC) is a Federal Advisory Committee created for 
the purpose of addressing and advising the Commission on policy 
matters relating to administration of the NANP. NANC will provide 
the Commission advice reached through consensus to foster efficient 
and impartial number administration.
    \568\ See, e.g., CTIA comments at 4.
    \569\ Beehive comments at 2-4.
---------------------------------------------------------------------------

3. Discussion
    264. We conclude that the action taken in the NANP Order satisfies 
the section 251(e)(1) requirement that the Commission create or 
designate an impartial numbering administrator. The NANP Order requires 
that functions associated with NANP administration be transferred to a 
new NANP administrator. In the NANP Order, the Commission articulated 
its intention to undertake the necessary procedural steps to create the 
NANC.570 Additionally, it directed the NANC to select as NANP 
administrator an independent, nongovernment entity that is not closely 
associated with any particular industry segment.571 These actions 
satisfy section 251(e)(1).
---------------------------------------------------------------------------

    \570\ NANP Order, 11 FCC Rcd at 2608.
    \571\ Id. at 2610, 2614, 2617.
---------------------------------------------------------------------------

    265. Commenters' arguments that we have not fulfilled our duty 
pursuant to section 251(e)(1) because the NANC has not been convened 
and has not selected a new NANP administrator are not persuasive. In 
the NANP Order, we required that there be a new, impartial number 
administrator and established the model for how that administrator will 
be chosen. We thus have taken ``action necessary to establish 
regulations'' leading to the designation of an impartial number 
administrator as required by section 251(e)(1).
    266. We disagree with Beehive's contention that the NANP Order does 
not meet the requirements of section 251(e)(1) because it does not 
address toll free number administration. In the NANP Order, we directed 
the NANC to provide recommendations on the following question: ``What 
number resources, beyond those currently administered by the NANP 
Administrator should the NANP Administrator administer?'' 572 Our 
purpose in directing NANC to address this question was to develop a 
record with respect to commenters' suggestions that the new 
administrator assume additional responsibilities beyond those of the 
current NANP administrator, if necessary, to facilitate competition in 
telecommunications services. By asking this question and seeking 
recommendations from the NANC, we set into motion a process designed to 
foster competition in all telecommunications services, including toll 
free, through neutral numbering administration. While the NANP Order 
outlines broad objectives for number administration for all 
telecommunications services, the specific details of implementation for 
toll free services are addressed in the ongoing toll free proceeding, 
CC Docket No. 95-155.
---------------------------------------------------------------------------

    \572\ Id. at 2610.
---------------------------------------------------------------------------

B. Delegation of Numbering Administration Functions

    267. In this section, we address the role of state public utility 
commissions in numbering administration. We authorize states to perform 
the task of implementing new area codes subject to our numbering 
administration guidelines contained in the Ameritech Order and further 
clarified in this Order. We also incorporate the petition for 
declaratory ruling, the application for review, and the record in that 
proceeding and address the Texas Commission's pleadings regarding its

[[Page 47328]]

plan for area code relief in Dallas and Houston which includes wireless 
overlays. We view prompt examination of the Texas Commission's plan as 
necessary because the area codes currently assigned to these cities 
have already reached exhaust.573
---------------------------------------------------------------------------

    \573\ Area code exhaust occurs when nearly all of the NXXs in a 
given numbering plan area (NPA) have been consumed. Area code 
exhaust is a subset of number exhaust, which describes the situation 
in which numbers used for any purpose to support telecommunications 
services are consumed. NPAs are known commonly as area codes. The 
second three digits of a telephone number are known as the NXX code 
or Central Office code (CO code) . Typically there are 792 NXX codes 
available for assignment in an area code (every possible combination 
of three digits excluding numbers beginning with a 0 or 1 and 
numbers ending with 11).
---------------------------------------------------------------------------

1. Delegation of Matters Related to Implementation of New Area Codes
a. Background
    268. Section 251(e)(1) confers upon the Commission ``exclusive 
jurisdiction over those portions of the North American Numbering Plan 
that pertain to the United States,'' but states that ``(n)othing in 
this paragraph shall preclude the Commission from delegating to state 
commissions or other entities all or any portion of such 
jurisdiction.'' 574 In response to this provision, the Commission 
tentatively concluded in the NPRM that it should authorize state 
commissions to address matters involving the implementation of new area 
codes so long as they act consistently with the Commission's numbering 
administration guidelines.575
---------------------------------------------------------------------------

    \574\ 47 U.S.C. 251(e)(1).
    \575\ NPRM at para. 256.
---------------------------------------------------------------------------

b. Comments
    269. Most parties contend that the Commission should ``retain (its) 
plenary authority over all facets of (numbering) administration with 
delegation to states of only certain limited functions.'' 576 
PageNet urges that any delegation ``should be clearly defined as to 
scope, review standards, and decision time limits.'' 577 
Similarly, Time Warner recommends that any such delegation be 
accomplished in conformity with the Commission's guidelines.578 
Bell Atlantic/NYNEX Mobile, while stating that states may be in the 
best position to implement area code relief tailored to the particular 
needs of their residents, warns that the Commission must intervene 
promptly when any state ``departs from federal numbering policies 
prohibiting discrimination against any type of carrier.'' 579
---------------------------------------------------------------------------

    \576\ ALTS comments at 8; See also Frontier comments at 5; GCI 
comments at 5; Indiana Commission Staff comments at 3; NYNEX 
comments at 18.
    \577\ PageNet comments at 6.
    \578\ Time Warner comments at 18.
    \579\ Bell Atlantic/NYNEX Mobile reply at 2.
---------------------------------------------------------------------------

    270. While some commenters argue that the Ameritech Order strikes a 
``proper jurisdictional balance,'' permitting state commissions to make 
initial determinations regarding area code administration, subject to 
Commission review,'' others request further clarification of the 
federal and state role in numbering.580 The Texas Commission 
specifically requests that the ``FCC clarify the states' roles in 
number administration by expanding on statements in the Ameritech Order 
and elsewhere regarding the balance of authority between the FCC and 
the states.'' 581
---------------------------------------------------------------------------

    \580\ See Ameritech Order, 10 FCC Rcd 4596. 60 FR 19255 (January 
23, 1995). See, e.g., AT&T reply at 7; Bell Atlantic comments at 9; 
Pennsylvania Commission comments at 5; ACSI comments at 12.
    \581\ Texas Commission comments at 6.
---------------------------------------------------------------------------

c. Discussion
    271. We retain our authority to set policy with respect to all 
facets of numbering administration in the United States. By retaining 
authority to set broad policy on numbering administration matters, we 
preserve our ability to act flexibly and expeditiously on broad policy 
issues and to resolve any dispute related to numbering administration 
pursuant to the 1996 Act. While we retain this authority, we note that 
the numbering administration model established in the NANP Order will 
allow interested parties to contribute to important policy 
recommendations.
    272. We authorize the states to resolve matters involving the 
implementation of new area codes. State commissions are uniquely 
positioned to understand local conditions and what effect new area 
codes will have on those conditions. Each state's implementation method 
is, of course, subject to our guidelines for numbering administration, 
including the guidelines enumerated in the Ameritech Order and in this 
Order as detailed below. We note that this authorization for states to 
resolve matters involving implementation of new area codes is effective 
immediately. Because of the need to avoid disruption in numbering 
administration, there is good cause for this action pursuant to 5 
U.S.C.553(d)(3). Some states have implemented new area codes prior to 
our release of this order. We ratify their actions insofar as they are 
consistent with these guidelines.
2. Area Code Implementation Guidelines
a. Background
    273. When almost all of the central office (CO) codes in an area 
code are consumed, a new area code must be assigned to relieve the 
unmet demand for telephone numbers. Prior to the enactment of the 1996 
Act, state commissions approved plans developed and proposed by the 
LECs, as CO code administrators, for implementing new area codes. New 
area codes can be implemented in three ways. Traditionally, states have 
preferred to implement new area codes through a geographic split, in 
which the geographic area using an existing area code is split into two 
parts, and roughly half of the telephone customers continue to be 
served through the existing area code and half must change to a new 
area code. States can, however, simply require a rearrangement of 
existing area code boundaries to accommodate local needs. The third 
method available to them is called an area code overlay, in which the 
new area code covers the same geographic area as an existing area code; 
customers in that area may thus be served through either code.
    274. In the Ameritech Order, the Commission recognized the states' 
role in area code relief, attempted to clarify the balance of 
jurisdiction over numbering administration between the Commission and 
the states, and enumerated guidelines governing number administration. 
Additionally, the Ameritech Order declared that Ameritech's proposed 
wireless-only area code overlay would be unreasonably discriminatory 
and anti-competitive in violation of the Commission's guidelines and 
the Communications Act of 1934. The NPRM sought comment on whether the 
Commission should reassess the jurisdictional balance between the 
Commission and the states that was crafted in the Ameritech Order in 
light of Congress' grant to the Commission of exclusive jurisdiction 
over numbering administration, with permission to assign to the states 
any portion of that authority.582 The NPRM also sought comment on 
what action the Commission should take when a state appears to be 
acting inconsistently with the Commission's numbering administration 
guidelines.583
---------------------------------------------------------------------------

    \582\ See 47 U.S.C. 251(e)(1).
    \583\ NPRM at para. 257.

---------------------------------------------------------------------------

[[Page 47329]]

b. Comments
    275. Several commenters request that we clarify the Ameritech Order 
to prohibit service-specific overlays.584 Others request 
clarification about all area code overlays, not just service-specific 
overlays. NCTA, for example, argues that all overlays deter the 
development of local competition. If competitors are relegated to new 
area codes, it says, potential customers will be forced to change their 
telephone numbers to obtain service from competitors.585 NCTA adds 
that a customer is unlikely to trade a familiar code for a number that 
may appear to involve a toll charge, or to purchase additional lines 
from a competitor if those lines receive a different area code than 
other lines in their home or business.586 Customers who do change 
to competing LECs, it claims, will have to dial ten or eleven digits to 
place local calls to incumbent LEC customers in the same local calling 
area. By contrast, NCTA maintains that incumbent LEC customers will be 
able to reach most other local customers through traditional seven-
digit dialing.587 Sprint agrees that all overlays are anti-
competitive and argues that the industry should adopt a geographic 
split approach.588
---------------------------------------------------------------------------

    \584\ See, e.g., Cox comments at 6 n.11; PageNet comments at 23; 
SBC comments at 11; WinStar reply at 16; Vanguard reply at 5.
    \585\ NCTA comments at 9.
    \586\ Id.
    \587\ Id. See also MFS comments at 8-9.
    \588\ Sprint reply at 13. See also Cox reply at 3-5; MCI 
comments at 11; WinStar reply at 17.
---------------------------------------------------------------------------

    276. MCI urges the Commission to allow an overlay only when it is 
the only practical alternative, and suggests that such circumstances 
might include: (a) Exhaust in a small metropolitan area; (b) multiple 
nearly-simultaneous area code exhausts; or (c) when exhaust is so 
imminent that a split cannot be implemented quickly enough.589 
Numerous commenters suggest that the Commission should clarify the 
Ameritech Order by imposing conditions on the adoption of area code 
overlays.590 Suggested conditions include: (a) Mandatory ten-digit 
dialing for all calls within the overlay area; 591 (b) permanent 
service provider local number portability; 592 and (c) the 
reservation for each competing LEC authorized to operate within a 
numbering plan area (NPA) of at least one NXX code from the original 
area code.593
---------------------------------------------------------------------------

    \589\ MCI comments at 12.
    \590\ See, e.g., Cox comments at 5, 6 n.12; MFS comments at 8-9; 
California Commission comments at 8; MCI comments at 12-14; NCTA 
comments at 10; WinStar reply at 17.
    \591\ See, e.g., MFS comments at 8-9; California Commission 
comments at 8; MCI comments at 12-13; WinStar reply at 17; PageNet 
comments at 8.
    \592\ See, e.g., MFS comments at 8-9; Cox comments at 5; 
California Commission comments at 8; MCI comments at 12-14 (overlays 
should be conditioned upon the substantial mitigation of the cost of 
interim local number portability to competing LECs pending the 
implementation of permanent local number portability); NCTA comments 
at 10; WinStar reply at 17.
    \593\ See, e.g., MFS comments at 8-9; MCI comments at 12-13 (all 
remaining NXXs in the old NPA should be assigned to competitors).
---------------------------------------------------------------------------

    277. Cox asserts that area code overlays should be prohibited until 
the competitive concerns they raise are addressed by the implementation 
of number portability.594 Similarly, PageNet asserts that number 
portability may render the concept of an area code meaningless; once 
location portability is feasible, numbers will be ported from one area 
code to another.595 When this happens, it says, public preference 
for a particular area code will disappear.596
---------------------------------------------------------------------------

    \594\ Cox comments at 3-4.
    \595\ The term ``port'' means the transfer of a telephone number 
from one carrier's switch to another carrier's switch, which enables 
a customer to retain his or her number when transferring from one 
carrier to another. See Number Portability Order at n.32.
    \596\ PageNet reply at 4.
---------------------------------------------------------------------------

    278. In the view of some, the Ameritech Order does not prohibit all 
area code overlays and they request clarification that overlays are an 
appropriate response to area code exhaust.597 In Bell Atlantic/
NYNEX Mobile's view, for example, the Commission should not prohibit 
overlays when they may be the best solution to area code 
exhaust.598 PacTel agrees that overlays are valuable and, in some 
metropolitan areas, are preferable to geographic splits because: (1) 
Overlays do not require existing customers to change their numbers; (2) 
overlays maintain existing communities of interest in their existing 
geographical area code boundaries; (3) overlays do not change the 
boundaries of existing area codes; and (4) overlays take less time to 
implement than a split.599 These are significant considerations 
for states facing number exhaust at an accelerated pace, it 
says.600
---------------------------------------------------------------------------

    \597\ See, e.g., Bell Atlantic/NYNEX Mobile reply at 4-6; 
BellSouth comments at 20.
    \598\ Bell Atlantic/NYNEX Mobile reply at 4-6.
    \599\ PacTel reply at 31-32.
    \600\ Id.
---------------------------------------------------------------------------

    279. According to some commenters, issues pertaining to area code 
relief plans should be addressed in the first instance by state 
commissions, with the understanding that the Commission can intervene 
if necessary.601 Similarly, the Texas Commission argues that the 
Ameritech Order can and should be interpreted to allow for 
``innovative'' means of area code relief crafted to balance the 
interests, benefits, and burdens for all interested parties. Should the 
Commission determine that the Ameritech Order does not permit such an 
interpretation, the Texas Commission requests that the Ameritech Order 
be overruled.602 By contrast, Vanguard warns against allowing 
states too much latitude in interpreting the Ameritech Order. It argues 
that, if the Commission does not set boundaries for state action, the 
Commission's procompetitive objectives will remain unrealized as state 
regulators deprive Commission initiatives of their effect.603
---------------------------------------------------------------------------

    \601\ See, e.g., NYNEX reply at 12; GTE reply at 34.
    \602\ Texas Commission comments at 5. See our discussion below 
at paras. 294-295 for the Texas Commission's proposed means of area 
code relief.
    \603\ Vanguard comments at 3-4.
---------------------------------------------------------------------------

    280. Bell Atlantic/NYNEX Mobile states that, if states act 
inconsistently with Commission guidance on numbering policies, the 
Commission should intervene promptly.604 The District of Columbia 
Commission urges that ``on a showing that a particular state is acting 
in violation of FCC guidelines, the FCC may revoke its delegation of 
jurisdiction to that state.'' 605 PageNet says the Commission 
should impose a strict time limit on state commission review of relief 
plans.606 Sprint advises that any party ``retains the right to 
appeal any detrimental state commission mandate to the FCC, and * * * 
the FCC will act promptly on such appeals.'' 607
---------------------------------------------------------------------------

    \604\ Bell Atlantic/NYNEX Mobile reply at 2.
    \605\ District of Columbia Commission comments at 2.
    \606\ PageNet comments at 7-8.
    \607\ Sprint comments at 15.
---------------------------------------------------------------------------

c. Discussion
    281. In this Order, we are authorizing the states to continue the 
task of overseeing the introduction of new area codes subject to the 
Commission's numbering administration guidelines.608 We are 
reiterating the guidelines enumerated in the Ameritech Order and 
clarifying the Ameritech Order to prohibit all service-specific or 
technology-specific overlays, and to impose conditions on the adoption 
of an all-services overlay. Existing Commission guidelines, which were 
originally enumerated in the Ameritech Order, state that numbering 
administration should: (1) Seek to facilitate entry into the 
communications marketplace by making numbering resources available on 
an efficient and timely basis; (2) not unduly favor or disadvantage any 
particular industry segment or group of consumers; and (3)

[[Page 47330]]

not unduly favor one technology over another.609 The Commission's 
conclusion in the Ameritech Order that Ameritech's proposed wireless-
only overlay plan would be unreasonably discriminatory and 
anticompetitive in violation of sections 201(b) and 202(a) of the 
Communications Act of 1934 has also provided guidance to local central 
office code administrators and state commissions implementing area code 
relief.610 We find that the guidelines and the reasoning 
enumerated in that decision should continue to guide the states and 
other entities participating in the administration of numbers because 
these guidelines are consistent with Congress' intent to encourage 
vigorous competition in the telecommunications marketplace. In 
addition, we codify in this Order the directives of the NANP Order that 
ensure fair and impartial numbering administration.611
---------------------------------------------------------------------------

    \608\ See para. 272, supra. 
    \609\ Ameritech Order, 10 FCC Rcd at 4604.
    \610\ Id. at 4608, 4610-12.
    \611\ See generally NANP Order. Although we resolve specific 
issues relating to area code implementation in this Order, many 
other important numbering administration issues will be addressed in 
other proceedings. For example, the use of N11 codes, (e.g., 211, 
311, 411, 511, 611, 711, 811, 911) will be addressed in The Use of 
N11 Codes and Other Abbreviated Dialing Arrangements, CC Docket No. 
92-105.
---------------------------------------------------------------------------

    282. We disagree with the suggestion of some parties that we 
prohibit or severely restrict the states' right to choose overlay 
plans. For example, PageNet urges the Commission to impose specific 
time constraints on states and to require default area code plans if 
states do not take action within those time constraints. Such 
restrictions would not be consistent with our dual objectives of 
encouraging competition through fair numbering administration while at 
the same time delegating to the states the right to implement area 
codes.
    283. As we note above, states are uniquely situated to determine 
what type of area code relief is best suited to local circumstances. 
Certain localities may have circumstances that would support the use of 
area code overlays. Most significantly, area code overlays do not 
require any existing customers to change their telephone number, in 
contrast to geographic splits. Additionally, in some metropolitan areas 
continuously splitting area codes will result in area codes not 
covering even single neighborhoods, a situation that can only be 
avoided by implementing overlays. Finally, area code overlays can be 
implemented quickly. States may make decisions regarding the relative 
merits of area code splits and overlays so long as they act 
consistently with the Commission's guidelines. We emphasize that the 
burdens created by area code overlays will be greatest during the 
transition to a competitive marketplace. As competition in 
telecommunications services takes root, consumers will become more 
accustomed to ten-digit dialing and to area code overlays and the 
states will face less resistance in their efforts to implement new area 
codes than they will in the near term.
    284. Nevertheless, we find that it is necessary to clarify the 
Commission's numbering administration guidelines as they apply to area 
code relief. Recent action taken by the Texas Commission has 
demonstrated that state commissions might interpret our existing 
guidelines in a manner that is inconsistent with those 
guidelines.612 Thus, while we conclude that geographic area code 
splits and boundary realignments are presumptively consistent with the 
Commission's numbering administration guidelines, we clarify our 
guidelines with respect to how area code overlays can be lawfully 
implemented.
---------------------------------------------------------------------------

    \612\ As discussed at paras. 304-308 infra, we find that the 
Texas Commission's Order addressing area code relief in Dallas and 
Houston is inconsistent with the Ameritech Order. 
---------------------------------------------------------------------------

    285. First, we conclude that any overlay that would segregate only 
particular types of telecommunications services or particular types of 
telecommunications technologies in discrete area codes would be 
unreasonably discriminatory and would unduly inhibit competition. We 
therefore clarify the Ameritech Order by explicitly prohibiting all 
service-specific or technology-specific area code overlays because 
every service-specific or technology-specific overlay plan would 
exclude certain carriers or services from the existing area code and 
segregate them in a new area code. Among other things, the 
implementation of a service or technology-specific overlay requires 
that only existing customers of, or customers changing to, that service 
or technology change their numbers. Exclusion and segregation were 
specific elements of Ameritech's proposed plan, each of which the 
Commission held violated the Communications Act of 1934.
    286. To ensure that competitors, including small entities, do not 
suffer competitive disadvantages, we also conclude that, if a state 
commission chooses to implement an all-services area code overlay, it 
may do so subject to two conditions. Specifically, we will permit all-
services overlay plans only when they include: (1) Mandatory 10-digit 
local dialing by all customers between and within area codes in the 
area covered by the new code; and (2) availability to every existing 
telecommunications carrier, including CMRS providers, authorized to 
provide telephone exchange service, exchange access, or paging service 
in the affected area code 90 days before the introduction of a new 
overlay area code, of at least one NXX in the existing area code, to be 
assigned during the 90-day period preceding the introduction of the 
overlay.613 Clarifying the conditions that must exist in order to 
implement an area code overlay will reduce the likelihood that states 
will act inconsistently with the Commission's guidelines and the 
consequent need for the Commission to review area code relief plans.
---------------------------------------------------------------------------

    \613\ One NXX will give each carrier the ability to give at 
least some of its customers numbers in a familiar area code. 
Guaranteeing more than one NXX in this situation is difficult 
because by the time the need for the overlay becomes imminent, few 
NXX codes remain unassigned in the familiar area code.
---------------------------------------------------------------------------

    287. We are requiring mandatory 10-digit dialing for all local 
calls in areas served by overlays to ensure that competition will not 
be deterred in overlay area codes as a result of dialing disparity. 
Local dialing disparity would occur absent mandatory 10-digit dialing, 
because all existing telephone users would remain in the old area code 
and dial 7 digits to call others with numbers in that area code, while 
new users with the overlay code would have to dial 10 digits to reach 
any customers in the old code. When a new overlay code is first 
assigned, there could be nearly 8 million numbers assigned in the old 
code, with just a few thousand customers using the new overlay code. If 
most telephone calls would be to customers in the original area code, 
but only those in the new code must dial ten-digits, there would exist 
a dialing disparity, which would increase customer confusion. Customers 
would find it less attractive to switch carriers because competing 
exchange service providers, most of which will be new entrants to the 
market, would have to assign their customers numbers in the new overlay 
area code, which would require those customers to dial 10 digits much 
more often than the incumbent's customers, and would require people 
calling the competing exchange service provider's customer to dial 10 
digits when they would only have to dial 7 digits for most of their 
other calls. Requiring 10 digit dialing for all local calls avoids the 
potentially anti-competitive effect of all-services area code overlays.
    288. Allowing every telecommunications carrier authorized

[[Page 47331]]

to provide telephone exchange service, exchange access, or paging 
service in an area code to have at least one NXX in the existing NPA 
will also reduce the potential anti-competitive effect of an area code 
overlay. This requirement would reduce the problems competitors face in 
giving their customers numbers drawn from only the new ``undesirable'' 
area codes while the incumbent carriers continue to assign numbers in 
the ``desirable'' old area code to their own customers.614
---------------------------------------------------------------------------

    \614\ The new overlay area code may be considered less desirable 
by customers during the beginning of its life because it is less 
recognizable. For example, business users that have a telephone 
number in the overlay area code because they have switched carriers 
or obtained new telephone lines might be thought to be in a distant 
location due to the ``unrecognized'' area code. Thus, incumbent 
carriers would have a competitive advantage because most of their 
customers would remain in the old, more recognizable code. This 
effect would persist until customers become accustomed to the new 
overlay code.
---------------------------------------------------------------------------

    289. Incumbent LECs have an advantage over new entrants when a new 
code is about to be introduced, because they can warehouse NXXs in the 
old NPA.615 Incumbents also have an advantage when telephone 
numbers within NXXs in the existing area code are returned to them as 
their customers move or change carriers. Thus, to advance competition, 
we require that, when an area code overlay is implemented, each 
provider of telephone exchange service, exchange access, and paging 
service must be assigned at least one NXX in the old NPA.
---------------------------------------------------------------------------

    \615\ See supra n.573.
---------------------------------------------------------------------------

    290. A number of commenters suggested that the Commission permit 
area code overlays only if permanent number portability has been 
implemented in the applicable NPA.616 We decline to do so. We 
recognize that the implementation of permanent service provider number 
portability will reduce the anticompetitive impact of overlays by 
allowing end users to keep their telephone numbers when they change 
carriers. Requiring the existence of permanent service provider number 
portability in an area before an overlay area code may be implemented, 
however, would effectively deny state commissions the option of 
implementing any all-services overlays while many area codes are facing 
exhaust. While permanent number portability is being implemented, end 
users will be allowed to keep their telephone numbers when they change 
carriers, under the Commission's mandate of interim number 
portability.617
---------------------------------------------------------------------------

    \616\ Teleport Communications Group, Inc. (TCG) has raised this 
issue in a petition for declaratory ruling filed with the Commission 
on July 12, 1996. TCG's petition for declaratory ruling asks the 
Commission to: (1) Require that overlay area code plans may not be 
implemented unless permanent number portability and mandatory 10-
digit dialing exist, and that geographic area code splits must be 
used absent these conditions; (2) require the implementation of 
TCG's ``Number Crunch'' proposal, which would permit NXX assignments 
across multiple rate centers in blocks of one thousand numbers; and 
(3) require as part of a BOC's application to provide in-region 
interLATA services pursuant to section 271 of the 1996 Act a 
demonstration that numbering resources are available to competing 
local carriers. We will address TCG's petition in a separate 
proceeding. See Petition for Declaratory Ruling to Impose 
Competitively Neutral Guidelines for Numbering Plan Administration, 
filed by Teleport Communications Group, Inc. (July 12, 1996).
    \617\ See Number Portability Order. 
---------------------------------------------------------------------------

    291. If a state acts inconsistently with federal numbering 
guidelines designed to ensure the fair and timely availability of 
numbering resources to all telecommunications carriers, parties wishing 
to dispute a proposed area code plan may file a petition for 
declaratory ruling, rulemaking, or other appropriate action with the 
Commission. Pursuant to section 5(c)(1) of the Communications Act of 
1934, as amended,618 authority is delegated to the Common Carrier 
Bureau to act on such petitions. We expect that with the clarifications 
we provide in this Order, there will be a reduced need for such 
petitions. Unless it becomes necessary to do so, we decline to follow 
the recommendations of parties urging that we enumerate more specific 
procedures to be invoked if states fail to follow our numbering 
guidelines. We expect that the need for our review of any state 
commissions' actions with respect to area code relief should diminish 
as states gain more experience with the area code relief process 
generally and with area code overlays in particular, particularly as 
states become more familiar with the Commission's guidelines in this 
area.
---------------------------------------------------------------------------

    \618\ 47 U.S.C. 155(c)(1).
---------------------------------------------------------------------------

    292. Finally, we address petitions for clarification or 
reconsideration that were filed in the Ameritech and NANP proceedings. 
On February 22, 1995, Comcast Corporation filed a Petition for 
Clarification or Reconsideration of the Ameritech Order regarding the 
Commission's jurisdiction over numbering administration.619 In its 
petition, Comcast seeks clarification of the Ameritech Order to the 
extent that it implies the Commission does not have broad statutory 
authority over the assignment of numbering resources, and seeks 
reconsideration of any implication in the Ameritech Order that the 
Commission's authority is limited by or subordinate to state 
interests.620 Because section 251(e)(1) gives the Commission 
exclusive jurisdiction over numbering matters in the United States, any 
uncertainty about the Commission's and the states' jurisdiction over 
numbering administration that may have existed prior to the 1996 Act 
has now been eliminated. In light of the enactment of section 
251(e)(1), Comcast's request that the Commission reconsider its 
conclusion in the Ameritech Order that the Commission does not retain 
plenary jurisdiction over numbering issues in the United States is 
moot. Accordingly, we dismiss Comcast's petition.
---------------------------------------------------------------------------

    \619\ See Petition for Clarification or Reconsideration, filed 
by Comcast Corporation (February 22, 1995). PageNet and Nextel 
Communications, Inc. (``Nextel'') filed Comments in support of 
Comcast's petition.
    \620\ Comcast Petition at 1. According to Comcast, footnote 18 
of the Ameritech Order explicitly overruled dicta in a prior 
Commission decision that stated that the Commission had plenary 
jurisdiction over CO code allocation. Id. at 3.
---------------------------------------------------------------------------

    293. In the NANP Order the Commission discussed the states' 
authority over area code changes and central office code 
administration. In response the National Association of Regulatory 
Utility Commissioners filed a Request for Clarification and the 
Pennsylvania Public Utility Commission filed a Petition for Limited 
Clarification and/or Reconsideration.621 NARUC and the 
Pennsylvania Commission have asked the Commission to clarify that, 
while the Commission intended in the NANP Order to transfer the 
incumbent LEC functions associated with CO code assignment and area 
code exhaust to the new NANP Administrator, the Commission did not 
intend to alter the role of the States in overseeing those 
functions.622 Because section 251(e)(1) gives the Commission 
exclusive jurisdiction over numbering matters in the United States, and 
because we clarify the role of the states in numbering administration 
in this Order,623 we dismiss the petitions of NARUC and the 
Pennsylvania Commission as moot.
---------------------------------------------------------------------------

    \621\ See Request for Clarification, filed by the National 
Association of Regulatory Utility Commissioners (NARUC Petition) 
(August 28,1995); Petition for Limited Clarification and/or 
Reconsideration, filed by the Pennsylvania Commission (Pennsylvania 
Commission Petition) (August 28, 1995). Nextel filed Comments in 
response to the petitions.
    \622\ See NARUC Petition at 5; Pennsylvania Commission Petition 
at 3. The Pennsylvania Commission also seeks clarification or 
reconsideration of the Commission's NANP Order to the extent that it 
suggests the Commission would interfere with or preempt a state's 
ability to address local number portability. Id. at 3-4. We do not 
address the states' role with respect to number portability here 
because this issue has already been addressed by the Commission. See 
Number Portability Order at para. 5.
    \623\ See supra paras. 281-291, and infra paras. 309-322.

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[[Page 47332]]

3. Texas Public Utility Commission's Area Code Relief Order for Dallas 
and Houston
a. Background
    294. On May 9, 1996, the Texas Commission filed two substantively 
identical pleadings: (1) a petition for expedited declaratory ruling 
pursuant to 47 CFR 1.2; and (2) an application for expedited review 
pursuant to 47 CFR 1.115.624 The Texas Commission states that in 
July 1995, MCI petitioned it for an investigation into numbering 
practices of Southwestern Bell Telephone Company (SWB) 625 related 
to exhaustion of telephone numbers in the 214 area code serving the 
Dallas metropolitan area.626 SWB proposed to relieve numbering 
exhaustion by implementing all-services overlays, which would require 
ten-digit local dialing within Houston and Dallas metropolitan 
areas.627 In October 1995, an administrative law judge heard 
evidence regarding numbering relief plans and issued a written proposal 
for decision in November 1995. In December 1995, the Texas Commission 
determined that public comment on the matter was necessary; in January 
1996 it conducted public forums in both Dallas and Houston.628 In 
March 1996, the Texas Commission issued an Order setting out an area 
code relief plan.629 On May 17, 1996, we released a public notice 
establishing a pleading cycle for comments on the Texas Commission's 
pleadings.630
---------------------------------------------------------------------------

    \624\ The Texas Commission explains that it is filing both 
pleadings simultaneously, hoping that the Commission will find one 
or the other an appropriate vehicle by which to determine 
expeditiously whether a Texas Commission order (PUCT Order) 
pertaining to a proposed area code relief plan is acceptable. For 
ease of reference, all citations will be to the Texas Commission 
petition (PUCT petition) unless citations to both pleadings are 
needed for clarification. In this order, we are ruling on the PUCT 
petition. Therefore, action on the Texas Commission's application, a 
procedurally distinct but substantively identical pleading, is 
unnecessary.
    \625\ We note that, although SWB was the LEC proposing the 
originally disputed area code relief plan, SBC filed comments on the 
Texas Commission's proposed plan. SWB is a subsidiary of SBC.
    \626\ PUCT petition at 2. The Texas Office of Public Utility 
Council filed a similar petition in August 1995 regarding SWB's 
numbering practices related to the exhaustion of telephone numbers 
in the 713 area code in Houston. The Texas Commission consolidated 
the petitions into Texas Public Utilities Commission Docket No. 
14447 because similar issues were presented.
    \627\ Id. 
    \628\ Id. 
    \629\ Id. 
    \630\ See Pleading Cycle Established for Comments on Public 
Utility Commission of Texas' Petition for Expedited Declaratory 
Ruling and Application for Expedited Review of Area Code Plan for 
Dallas and Houston, Public Notice, DA 96-794 (released May 17, 
1996). Comments were due June 6, 1996, and reply comments were due 
June 21, 1996. Nineteen parties filed comments, and twelve parties 
filed replies, in response to the Texas Commission's petitions.
---------------------------------------------------------------------------

b. Petition and Comments
    295. The Texas Commission ordered a plan that combines an immediate 
landline geographic split with a prospective wireless overlay in the 
Dallas and Houston metropolitan areas.631 In its pleadings to the 
FCC, the Texas Commission alleges that it specifically considered the 
Ameritech Order in crafting its plan.632 The Texas Commission's 
Order required SWB to request new area codes from the NANP 
administrator (Bellcore) for the prospective wireless overlays. 
Bellcore refused to supply the new area codes unless ordered to do so 
by the FCC.633 According to the Texas Commission, Bellcore 
incorrectly relied on the Ameritech Order to support a position that 
wireless overlays are, per se, invalid and wasteful.634
---------------------------------------------------------------------------

    \631\ PUCT petition at 2-3.
    \632\ Id. at 3. In the Ameritech Order, the Commission held that 
three elements of a proposed wireless-only overlay each violated the 
prohibition in section 202(a) of the Communications Act of 1934 
against unjust or unreasonable discrimination, and also represented 
unjust and unreasonable practices under section 201(b). Those 
objectionable elements were: (1) Ameritech's proposal to continue 
assigning NPA 708 codes (the old codes) to wireline carriers, while 
excluding paging and cellular carriers from such assignments (the 
``exclusion'' proposal); (2) Ameritech's proposal to require only 
paging and cellular carriers to take back from their subscribers and 
return to Ameritech all 708 telephone numbers previously assigned to 
them, while wireline carriers would not be required to do so (the 
``take back'' proposal); and (3) Ameritech's proposal to assign all 
numbers from the new NPA (630) to paging and cellular carriers 
exclusively (the ``segregation'' proposal). See Ameritech Order, 10 
FCC Rcd at 4608, 4611.
    \633\ PUCT petition at 3.
    \634\ Id. 
---------------------------------------------------------------------------

    296. On March 21, 1996, Bellcore sent a letter to the Network 
Services Division of the Common Carrier Bureau, FCC, explaining its 
view that the Texas Commission plan violated the Ameritech 
Order.635 In that letter, Bellcore asserts that the Ameritech 
Order is controlling precedent because section 251(e)(1) confers 
exclusive jurisdiction over numbering administration on the Commission. 
Bellcore further opposes use of NPAs for service-specific overlays, 
because such assignments, it says, are inefficient, wasteful, and 
potentially discriminatory.636 The Network Services Division 
responded to the letter on April 11, 1996, agreeing that the Ameritech 
Order forbids service-specific overlays such as those ordered by the 
Texas Commission and supporting Bellcore's decision, as acting NANP 
Administrator, not to make the requested NPA assignments for use in 
Dallas and Houston as a wireless-specific overlay.637
---------------------------------------------------------------------------

    \635\ PUCT petition, Attachment B.
    \636\ Id.
    \637\ PUCT petition at 3-4.
---------------------------------------------------------------------------

    297. The Texas Commission acknowledges that the FCC has exclusive 
jurisdiction over numbering pursuant to section 251(e)(1) of the 1996 
Act.638 The Texas Commission states that the NPRM might provide 
additional clarification on these issues, but that, currently, it is 
uncertain whether the FCC intended to preempt the Texas Order, and asks 
that the Commission consider the specific facts of this matter.639 
It contends that it carefully deliberated the issues and made a 
balanced and equitable decision that is consistent with the Ameritech 
Order. Therefore, it insists, any preemption is unwarranted.640
---------------------------------------------------------------------------

    \638\ Id. at 5.
    \639\ The Texas Commission argues that the April 11, 1996, 
letter did not rule directly on the validity of its Order. Moreover, 
noting that, in the NPRM, the Commission references the April 11 
Common Carrier Bureau letter, Texas says that the NPRM states that 
the Commission (rather than the Network Services Division) agreed 
with Bellcore's decision not to make the area code assignments 
requested by SWB. NPRM at para. 257, n.358. Therefore, in Texas' 
view, the Common Carrier Bureau letter is an action taken pursuant 
to delegated authority that affirmatively adopts Bellcore's decision 
and preempts its order. The Texas Commission argues that this action 
should be reviewed by the Commission. PUCT petition at 4.
    \640\ PUCT petition at 5. In its petition for declaratory 
ruling, the Texas Commission requests that we declare: (1) That the 
refusal of the Chief, Network Services Division, Common Carrier 
Bureau, to direct the NANP administrator to assign area codes to SWB 
for use as wireless overlays in Dallas and Houston was erroneous; 
(2) that the NANP administrator is directed to assign such codes to 
SWB; and (3) that the Texas Commission's March 13, 1996 Order 
directing a combination wireline area code split and wireless 
overlay in Dallas and Houston is lawful. Id. at 10. In its 
application for expedited review, it requests that we: (1) Review 
and reverse the Network Services Division's action in its letter to 
the NANP administrator; (2) order the NANP administrator to assign 
the requested area codes for use as wireless overlays in Dallas and 
Houston; and (3) uphold the Texas Commission's Order pursuant to 
analysis of Commission precedent. PUCT application at 10.
---------------------------------------------------------------------------

    298. According to the Texas Commission, the Ameritech Order does 
not, on its face, prohibit all service-specific overlays.641 
Instead, it says, the Ameritech Order requires a fact-specific 
examination of each situation to determine whether the proposed 
numbering plan violates the statutory prohibition of unreasonable and 
unjust discrimination.642 Further, in the Texas Commission's view, 
its Order ``strikes the optimal balance'' and is ``evenhanded'' in its 
effect on carriers

[[Page 47333]]

and customers.643 The Texas Commission alleges that it weighed 
different proposals offered by several parties, and that, although a 
geographic split was found superior to an all-services overlay, neither 
plan alone was found to be the best solution.644 For this reason, 
it chose a two-step, integrated relief plan involving a landline 
geographic split and a prospective wireless overlay.645 The Texas 
Commission argues that its plan permits intra-NPA seven-digit dialing, 
unlike an all-services overlay, which would have required ten-digit 
intra-NPA dialing. Also, it says that its plan will reduce customer 
confusion and provide greater competitive fairness to service 
providers.646
---------------------------------------------------------------------------

    \641\ PUCT petition at 5-6.
    \642\ Id. at 6.
    \643\ Id. at 6-9. In the Ameritech Order, we stated that any 
area code relief plan that becomes effective should strike an 
optimal balance among three objectives Ameritech had identified: (1) 
An optimal dialing plan for customers; (2) as minimal a burden as 
feasible; and (3) an uninterrupted supply of codes and numbers. We 
further found that the optimal balance must assure that any burden 
associated with the introduction of the new numbering code falls in 
as evenhanded a way as possible upon all carriers and customers 
affected by its introduction. Ameritech Order, 10 FCC Rcd at 4611.
    \644\ PUCT petition at 7.
    \645\ Id.
    \646\ Id.
---------------------------------------------------------------------------

    299. Many parties contend that the Texas Commission's plan violates 
Commission policy as outlined in the Ameritech Order and request its 
clarification.647 Still others argue that the plan violates 
section 201(b) or section 202(a),648 as well as section 251(e)(1), 
which confers exclusive jurisdiction over numbering administration on 
the Commission that we have not assigned to any other entity.649 
Still others argue that the plan violates section 253, which provides 
that no state requirement may prohibit or have the effect of 
prohibiting the ability of any entity to provide any telecommunications 
service.650
---------------------------------------------------------------------------

    \647\ See, e.g., AT&T comments at 5; Century Cellunet comments 
at 3-4; Cox comments at 3-4; GTE comments at 8-14; HCTC comments at 
3-10; MCI comments at 3-4; Nextel comments at 3-6; PageNet comments 
at 6-10; PCIA comments at 4-6; ProNet comments at 7-14; Sprint 
comments at 4-5; Sprint Spectrum comments at 5-11; Teleport comments 
at 4-12; US West comments at 9-10; Vanguard comments at 2-3; SBC 
comments at 5-12.
    \648\ See, e.g., AT&T comments at 5; HCTC comments at 3-10; 
PageNet comments at 9; ProNet comments at 1; Sprint comments at 4-5; 
Sprint Spectrum comments at 6-11.
    \649\ See, e.g., Century Cellunet comments at 4; GTE comments at 
7; PCIA comments at 6-7; U S WEST comments at 4-5. See also Teleport 
comments at 13.
    \650\  Sprint Spectrum comments at 4.
---------------------------------------------------------------------------

    300. In Sprint Spectrum's view, for example, the proposed wireless 
overlays will undermine the ability of telecommunications carriers to 
provide service because they allow existing customers of wireless 
incumbents to retain 7-digit dialing for most calls if they do not 
switch to a new entrant. Similarly, it says, current customers of 
wireline incumbents will retain 7-digit dialing to businesses and 
residences in either the suburban or metropolitan area, unless they 
switch to a new wireless provider.651 Sprint Spectrum maintains 
that, by creating a distinction between services offered by incumbent 
providers and those seeking entry into the market using wireless 
technology, the Texas Commission has created a disincentive for new 
wireless providers to seek entry into these telecommunications 
markets.652 Similarly, PageNet argues that this interference with 
customer choice, and the inhibition of wireline/wireless competition, 
are contrary to the objectives stated in the Ameritech Order, and urges 
the Commission to expressly declare the Texas Commission's plan 
prohibited.653
---------------------------------------------------------------------------

    \651\ Sprint Spectrum comments at 4-5 and 11-12.
    \652\ Id. at 12.
    \653\ PageNet comments at 6-10. See also SBC comments at 12-16.
---------------------------------------------------------------------------

    301. Twelve reply comments were received. The Texas Commission 
contends that it had jurisdiction to issue its order containing its 
proposed area code relief plan, and the 1996 Act does not deprive the 
Texas Commission of that jurisdiction.654 The Texas Commission 
argues that the exclusion, segregation, and take-back facets of the 
wireless-only overlay proposal should not be considered separate and 
independent grounds for finding an NPA relief plan unlawful.655 
The Texas Commission maintains that we should not order an alternative 
form of relief such as an all-services overlay,656 and that we 
should not find unlawful the Texas Commission's proposed consideration 
of take-back of wireless numbers during the geographic split if the 
wireless overlays are deemed unlawful.657
---------------------------------------------------------------------------

    \654\ Texas Commission reply at 2-7.
    \655\ Id. at 7-8.
    \656\ Id. at 9-10.
    \657\ Id. at 10-11.
---------------------------------------------------------------------------

    302. The Texas Public Utility Counsel filed reply comments in 
support of the Texas Commission's proposed area code relief plan. The 
Texas Public Utility Counsel maintains that the proposed wireless-only 
overlay is neither discriminatory nor unreasonable under sections 
202(a) and 201(b) of the Communications Act of 1934.658 Further, 
the Texas Public Utility Counsel claims that the wireless carriers' 
interpretation of the Ameritech Order is unreasonably strict and would 
preclude all forms of area code relief.659
---------------------------------------------------------------------------

    \658\ Texas Public Utility Counsel reply at 9-11.
    \659\ Id. at 12-15.
---------------------------------------------------------------------------

    303. In reply, several parties continue to maintain that the Texas 
Commission's proposed prospective wireless-only overlay is 
unlawful.660 Most of these commenters contend that an all-services 
overlay can be an appropriate method of area code relief.661
---------------------------------------------------------------------------

    \660\ See, e.g., CTIA reply at 2-3; Vanguard reply at 1-4; MCI 
reply at 3-5; ProNet reply at 1; Sprint reply at 1-2. SBC states 
that the Texas Commission overlays are unlawful, and argues that we 
should expressly state that service-specific overlays are per se 
unlawful. SBC reply at 1.
    \661\ ProNet reply at 2-4; BellSouth reply at 2-6; US WEST reply 
at 1-6; SBC reply at 2-4.
---------------------------------------------------------------------------

c. Discussion
    304. We conclude that the Texas Commission's wireless-only overlay 
violates our Ameritech Order on its face. It is also inconsistent with 
our clarification of the Ameritech Order contained in this Order, 
wherein we specifically prohibit wireless-only overlays.
    305. The Texas Commission itself admits to the presence of 
exclusion and segregation in its plan.662 In the Ameritech Order, 
we clearly indicated that the presence of any one of the following 
elements including: (1) Exclusion; (2) segregation; or (3) take-back, 
renders a service-specific overlay plan unacceptable and violative of 
the Communications Act.663 Texas' plan features all these 
elements. Like the plan proposed in the Ameritech Order, the Texas 
Commission's plan would unreasonably discriminate against wireless 
carriers. It is thus unreasonably

[[Page 47334]]

discriminatory under section 202(a) and would constitute an 
unreasonable practice in violation of section 201(b) of the 
Communications Act of 1934. Moreover, in this Order, we have clarified 
the Ameritech Order by prohibiting all service-specific and technology-
specific area code overlays. Service-specific and technology-specific 
overlays do not further the federal policy objectives of the NANP. They 
hinder entry into the telecommunications marketplace by failing to make 
numbering resources available on an efficient, timely basis to 
telecommunications services providers. As we describe in detail above, 
service-specific overlays would provide particular industry segments 
and groups of consumers an unfair advantage. We have also stated that 
administration of the NANP should be technology neutral; service-
specific overlays that deny particular carriers access to numbering 
resources because of the technology they use to provide their services 
are not technology neutral.
---------------------------------------------------------------------------

    \662\ The record also indicates that the plan also calls for 
some take-back of existing wireless numbers. The Texas Commission 
states that two groups of wireless customers will experience take-
back due to the geographic split. Those with Type 1 cellular and 
Type 1-like paging connections will experience take-back for 
``technical and practical implementation-related reasons. PUCT Order 
at 12 n.9. In addition, the Texas Commission envisions that after 
the date on which NXX codes are activated for the prospective 
wireless overlay, wireless carriers holding NXX codes from the prior 
area codes will not be allowed to assign any additional numbers from 
those prior area codes, regardless of the fill factor of the NXX 
codes. Remaining unused numbers in those NXX codes will be returned 
to the NPA administrator. PUCT Order at 6.
    \663\ See Ameritech Order, 10 FCC Rcd at 4608. ``[W]e find as a 
matter of law that each of these three Ameritech proposals violates 
the prohibition in the Act against unjust or unreasonable 
discrimination.'' (Emphasis added). See also id. at 4611. In 
discussing whether Ameritech's plan constituted an unjust or 
unreasonable practice and therefore violated section 201(b) of the 
Act, we stated that three facets of Ameritech's plan--its exclusion, 
segregation, and take-back proposals--would each impose significant 
competitive disadvantages on the wireless carriers, while giving 
certain advantages to wireline carriers.
---------------------------------------------------------------------------

    306. We find the Texas Commission's arguments in support of its 
proposed wireless-only overlay unpersuasive. It argues, for example, 
that the wireless overlay will extend the life span for the area code 
relief plan. What extends the life span of a relief plan, however, is 
not so much the wireless overlay as the introduction of a new NPA with 
its 792 additional NXXs. This being the case, the Texas Commission 
provides no compelling reason for isolating a particular technology in 
the new NPA. The Texas Commission also states that there will be less 
confusion regarding NPA assignments, but a plan calling for overlay for 
one service and a split for another is likely to lead to increased 
customer confusion regarding NPA assignments, because parties making 
calls would have to be aware of what type of service the party being 
called has in order to know whether to dial the ten-digit number or 
just the last seven digits. The Texas Commission also argues that its 
plan allows for continued seven-digit dialing for intra-NPA calls, but 
we note that the same would be true if a geographic split for all 
services and technologies was imposed. Although an all-services overlay 
would have required ten-digit intra-NPA dialing, there would not be 
discrimination based on technology.
    307. Several parties raise concerns about dialing disparity 
resulting from the implementation of the Texas Commission's plan. It is 
these concerns about dialing disparity in the context of an overlay 
that have led us to require mandatory ten-digit dialing as part of any 
all services overlay plan.
    308. Some parties also advance concerns about the Texas 
Commission's statements that, if the proposed wireless-only overlay 
were found to be unlawful, it would consider a mandatory pro-rata take-
back of wireless numbers under the geographic split plan in order to 
balance the remaining burdens of inconvenience and confusion caused by 
the number changes necessitated by a split. We do not take action here 
to prevent the Texas Commission from taking back some wireless numbers 
in the course of introducing a geographic split plan. In a geographic 
split, roughly half of the customers in the existing NPA, including 
wireless customers, will have to change their telephone numbers. We 
recognize that wireless customers may need to have their equipment 
reprogrammed to change their telephone number, and that this will 
inconvenience wireless customers to some extent. This illustrates the 
fact that geographic splits also have burdensome aspects. Our goal is 
to have technology-blind area code relief that does not burden or favor 
a particular technology. Requiring approximately half of the wireless 
customers and wireline customers to change telephone numbers in a 
geographic split is an equitable distribution of burdens. This is the 
kind of implementation detail that is best left to the states.
4. Delegation of Additional Numbering Administration Functions
a. Background
    309. In the NANP Order, we transferred CO code administration to 
the new NANP administrator. We stated that a ``requirement that CO code 
administration be centralized in the NANP administrator simply 
transfers the functions of developing and proposing NPA relief plans 
from the various LEC administrators to the new NANP Administrator'' and 
that ``[s]tate regulators will continue to hold hearings and adopt the 
final NPA relief plans as they see fit.'' 664
---------------------------------------------------------------------------

    \664\ NANP Order, 11 FCC Rcd at 2622.
---------------------------------------------------------------------------

    310. In the NPRM, we tentatively concluded that, pursuant to 
section 251(e)(1), the Commission should authorize states to address 
matters related to implementation of new area codes, and we are doing 
so in this Order. In the NPRM, we also sought comment on whether the 
Commission should authorize states or other entities to address any 
additional number administration functions. We address this issue here.
b. Comments
    311. Some commenters raise issues about the proper role of the 
states in number administration both before and after transfer of 
number administration functions to the NANP. BellSouth, for example, 
argues that we should authorize states to address additional number 
administration functions until their transfer to the NANP. 
Specifically, BellSouth recommends that states should take active 
oversight in CO code implementation activities, including the power to 
allow for cost recovery.\665\
---------------------------------------------------------------------------

    \665\ BellSouth comments at 20.
---------------------------------------------------------------------------

    312. SBC expresses concern regarding the expeditious transfer and 
centralization of CO code administration into the new NANP. In SBC's 
view, such transfer is appropriate, but before it can take place, all 
relevant issues must first be fully addressed and resolved. SBC states 
that code administrators need local knowledge of authorized carriers, 
service areas, and toll and local calling areas for the transfer to be 
effective. SBC asserts that, because CO code administration has 
significant impacts on local areas in terms of relief plans and dialing 
plans, state regulatory commissions should be included in any 
decision.\666\ In reply, MFS, stating that the Commission should not 
``be swayed'' by SBC's singular concerns about the complexity of CO 
code assignments and the need for state involvement, argues against any 
potential delay in the transfer of numbering responsibilities.\667\ 
Similarly, WinStar, stating that such delay would be contrary to the 
letter and spirit of the 1996 Act, argues against any delay in 
transferring numbering administration from the LECs to the NANP 
administrator.\668\
---------------------------------------------------------------------------

    \666\ SBC comments at 11-13.
    \667\ MFS reply at 4.
    \668\ WinStar reply at 15-16.
---------------------------------------------------------------------------

    313. Some parties argue that, when the new NANP administrator is 
established, the Commission should allow state commissions to handle 
the current functions of the LEC, including development of area code 
relief plans and assignment of CO codes.\669\ According to the Florida 
Commission, if the state commissions do not decide to handle these 
functions, the NANP administrator should be responsible for these 
processes.\670\ Cox, however, does not support delegation of CO code 
assignment responsibility to the states and contends that if the 
Commission does authorize the states to perform this function, it 
should adopt specific

[[Page 47335]]

policies for CO code assignment requiring that such assignments be made 
on a non-discriminatory basis.\167\ The Pennsylvania Commission states 
that, after the new NANP administrator assumes LEC administrative 
responsibilities, the Commission should allow states to continue their 
regulatory oversight role. Specifically, the Pennsylvania Commission 
asserts that the Commission should delegate to state commissions 
regulatory oversight of CO code assignment, including local number 
portability and local dialing parity measures.\672\
---------------------------------------------------------------------------

    \669\ See, e.g., Florida Commission comments at 6-7; Indiana 
Commission Staff comments at 6.
    \670\ Florida Commission comments at 6-7.
    \671\ Cox states that the policies should state that carriers 
and states currently administering CO codes are not permitted to 
deny codes to new entrants, and are not permitted to levy ``code 
opening'' charges to avoid imposing barriers on the entry and 
expansion of new competitors. Cox comments 8-9. In its reply, Cox 
notes that incumbent LECs have argued that there is no need for 
Commission intervention in the assignment of CO codes. Cox argues 
that, in practice, despite the existence of ``neutral'' CO code 
assignment guidelines, significant potential for discriminating 
against new entrants remains. Until an impartial entity is 
responsible for assigning CO codes, Cox contends, there is a need 
for specific Commission rules preventing discrimination. Cox would 
prefer that CO codes be administered by a neutral administrator, and 
believes that the possibility that a neutral administrator will lack 
some local knowledge does not form an insurmountable barrier to a 
swift transition from the current regime. Cox reply at 10-11.
    \672\ Pennsylvania Commission comments at 7.
---------------------------------------------------------------------------

    314. In the Indiana Commission Staff's view, we should authorize 
state commissions to make decisions regarding the implementation or 
changing of dialing patterns consistent with non-discriminatory and 
competitive guidelines, and changes in dialing patterns should be 
incorporated into the area code relief planning process. The Indiana 
Commission Staff asserts that states are in a better position to 
determine what impact changes in dialing will have on the local 
area.\673\ Conversely, Vanguard argues the Commission should satisfy 
its Congressional mandate by establishing national numbering and 
dialing parity guidelines.\674\
---------------------------------------------------------------------------

    \673\ Indiana Commission Staff comments at 7.
    \674\ Vanguard reply at 2-3.
---------------------------------------------------------------------------

c. Discussion
    315. We conclude that the states may continue to implement or 
change local dialing patterns subject to any future decision by the 
Commission regarding whether to require uniform nationwide dialing 
patterns.\675\ The Commission will retain broad policy-making 
jurisdiction over numbering. We further conclude that states that wish 
to be responsible for initiating area code relief planning, a function 
currently performed by the LECs as CO code administrators, may do so 
now and after transfer of CO code administration from the LECs to the 
new NANP administrator. Again, because of the need to avoid disruption 
in numbering administration, we find good cause to make this 
authorization effective immediately pursuant to 5 U.S.C. 553(d)(3). We 
decline, however, to delegate to the states on a permanent basis 
oversight of CO code administration. Finally, we decline to authorize 
states to handle CO code assignment functions.
---------------------------------------------------------------------------

    \675\ Uniform nationwide dialing, which would require uniform 
dialing patterns throughout the United States, was raised in the 
NANP NPRM, Docket No. 92-237, 9 FCC Rcd 2068, 2075 (1994), 59 FR 
24103 (April 4, 1994), but was not addressed in the NANP Order and 
remains unaddressed by the Commission.
---------------------------------------------------------------------------

    316. Currently, state commissions are responsible for determining 
the number of digits that must be dialed for intra-NPA toll calls and 
inter-NPA local calls.\676\ For example, while most states require 1 
plus 10-digit dialing for all intra-NPA toll calls, California and New 
Jersey permit such toll calls to be completed with 7-digit dialing. 
Illinois requires 7-digit dialing for all intra-NPA calls, whether 
local or toll. Similarly, a number of states, including the District of 
Columbia, Maryland, and parts of Virginia require 10-digit dialing for 
all inter-NPA local calls and permit 10-digit or 1 plus 10-digit 
dialing for all intra-NPA local calls.
---------------------------------------------------------------------------

    \676\ In every state, intra-NPA local calls can be dialed using 
7-digits, while all inter-NPA calls require 1 plus 10-digit dialing. 
For a list of standard and permissible dialing patterns in each 
state, see North American Numbering Plan, Numbering Plan Area Codes 
1996 Update, Bellcore (January 1996) at 11-16.
---------------------------------------------------------------------------

    317. States are in the best position at this time to determine 
dialing patterns because of their familiarity with local circumstances 
and customs regarding telephone usage. For example, one state 
commission might want to allow its residents to dial 7-digits for all 
intra-NPA calls, whether toll or local, whereas another state 
commission might wish to require 10-digit dialing for intra-NPA calls 
to ensure that its residents recognize that they are making a toll call 
rather than a local call. Therefore, states may continue to implement 
appropriate local dialing patterns, subject to the Commission's 
numbering administration guidelines, including the Commission's 
requirement in this Order of 10-digit dialing for all calls within and 
between NPAs in any area where an area code overlay has been 
implemented.
    318. Two state commissions specifically ask the Commission to 
authorize states to perform functions associated with initiating and 
planning area code relief, as distinct from adopting final area code 
relief plans.\677\ We agree that states should be authorized to 
initiate and plan area code relief. Currently, when an incumbent LEC in 
its role as CO code administrator predicts that NPA exhaust is 
imminent, it initiates the NPA relief planning process by holding 
industry meetings, developing an appropriate area code relief plan or 
plans, and proposing that plan or several alternative plans for the 
state commission's consideration and adoption.\678\ Thus, state 
commissions do not initiate and develop area code relief plans,\679\ 
but states adopt, codify or reject the final plan.\680\
---------------------------------------------------------------------------

    \677\ Indiana Commission Staff comments at 6-7; Florida 
Commission comments at 5.
    \678\ See, e.g., Illinois Bell Telephone Company Petition for 
Approval of NPA Relief Plan for 708 Area Code by Establishing a 630 
Area Code, Order, No. 94-0315 (Ill. Comm. Comm'n March 20, 1995).
    \679\ The process of area code relief initiation and development 
varies by state. In most cases the incumbent LEC (as CO code 
administrator) declares that the supply of CO codes in a particular 
area code is about to exhaust, and invites all telecommunications 
entities with interests in the area code at issue to meet and 
attempt to reach consensus on a plan for area code relief. Issues 
before the industry include whether to propose an area code overlay 
or a geographic split. If the industry can agree on the proposal, it 
is submitted to the state commission for adoption. If the industry 
cannot agree, the incumbent LEC may submit a number of alternatives 
to the state commission from which to choose.
    \680\ State commissions have, however, recently begun to reject 
or significantly alter LEC proposals as area code relief has become 
more controversial. See, e.g., Illinois Bell Telephone Company 
Petition for Approval of NPA Relief Plan for 708 Area Code by 
Establishing a 630 Area Code, Order, No. 94-0315 (Ill. Comm. Comm'n 
March 20, 1995); AirTouch V. Pacific Bell, Case 94-09-058, MCI V. 
Pacific Bell, Case 95-01-001, Decision No. 95-08-052 (Cal. Pub. 
Util. Comm'n August 11, 1995); Petition of MCI Telecommunications 
Corp. for an Investigation of the Practices of Southwestern Bell 
Telephone Co. Regarding the Exhaustion of Telephone Numbers in the 
214 Numbering Plan Area and Request for a Cease and Desist Order 
Against Southwestern Bell Telephone Co., Petition of the Office of 
the Public Utility Counsel for an Investigation of the Practices of 
Southwestern Bell Telephone Co. Regarding the Exhaustion of 
Telephone Numbers in the 713 Numbering Plan Area and Request for a 
Cease and Desist Order Against Southwestern Bell Telephone Co., 
Order on Rehearing, Docket No. 14447 (Tex. Pub. Util. Comm'n. April 
29, 1996).
---------------------------------------------------------------------------

    319. We conclude that states wishing to become responsible for 
initiating area code relief planning, a function currently performed by 
the LECs as CO code administrators, may do so, even after transfer of 
CO code administration from the LECs to the new NANP administrator. We 
find that enabling states to initiate and develop area code relief 
plans is generally consistent with our previous delegation of new area 
code implementation matters to the state commissions based on their 
unique familiarity with local circumstances. We

[[Page 47336]]

make this delegation, however, only to those states wishing to perform 
area code relief initiation and development. We recognize that many 
state commissions may not wish to perform these functions because, 
inter alia, the initiation and development of area code relief can 
require specialized expertise and staff resources that some state 
commissions may not have. Those states that seek to perform any or all 
of these functions must notify the new NANP administrator within 120 
days of the selection of the NANP administrator. Those states wishing 
to perform functions relating to initiation and development of area 
code relief prior to the transfer of such functions to the new NANP 
administrator must notify promptly the entity currently performing CO 
code administration. States should inform the entities of the specific 
functions upon which the state wishes to take action. Area code relief 
initiation and development functions will be transferred to and 
performed by the new NANP administrator for those states that do not 
seek to perform such functions. We emphasize that, pursuant to our 
decision to authorize the states to address matters related to the 
implementation of area code relief, all state commissions will continue 
to be responsible for making the final decision on how new area codes 
will be implemented, subject to this Commission's guidelines.
    320. While we authorize states to resolve specific matters related 
to initiation and development of area code relief plans, we do not 
delegate the task of overall number allocation, whether for NPA codes 
or CO codes. To do so would vest in fifty-one separate commissions 
oversight of functions that we have already decided to centralize in 
the new NANPA. A nationwide, uniform system of numbering, necessarily 
including allocation of NPA and CO code resources, is essential to 
efficient delivery of telecommunications services in the United 
States.\681\
---------------------------------------------------------------------------

    \681\ Ameritech Order, 10 FCC Rcd at 4602.
---------------------------------------------------------------------------

    321. With specific regard to CO code allocation, two BOCs and one 
state commission have asked us to delegate oversight of this function 
to the states on a permanent basis. We decline. In addition to the 
problems noted in the preceding paragraph, we are concerned that such 
an arrangement could complicate and increase the NANP administrator's 
workload, and could also lead to inconsistent application of CO code 
assignment guidelines. The oversight and dispute resolution process 
established in the NANP Order, whereby for the U.S. portions of NANP 
administration the NANC will have initial oversight and dispute 
resolution duties, with the Commission as the final arbiter, provides 
an adequate process for overseeing CO code administration.682 This 
process also guarantees state participation in the oversight process 
through their representation on the NANC.
---------------------------------------------------------------------------

    \682\ See NANP Order, 11 FCC Rcd at 2605-2610.
---------------------------------------------------------------------------

    322. Finally, we decline to authorize states to perform CO code 
assignment functions as suggested by the Florida Commission for two 
reasons set forth in the NANP Order.683 First, centralizing CO 
code assignment in one neutral entity will increase the efficiency of 
CO code assignment because it will preclude varying interpretations of 
CO code assignment guidelines. Consistent application of assignment 
guidelines will also diminish the administrative burden, which can be a 
potential barrier to entry, facing those carriers seeking codes in 
various states that would otherwise have to associate with a number of 
separate code assignment bodies rather than one. Second, a centralized 
CO code administration mechanism would allow the Commission and 
regulators from other NANP member countries to keep abreast of CO code 
assignments and predict potential problem areas, such as exhaust, 
sooner than is possible under the current system.
---------------------------------------------------------------------------

    \683\ Id. at 2620-2623.
---------------------------------------------------------------------------

5. Delegation of Existing Numbering Administration Functions Prior to 
Transfer
a. Background
    323. Prior to the enactment of the 1996 Act, Bellcore, as the NANP 
Administrator, the incumbent LECs, as central office code 
administrators, and the states performed the majority of functions 
related to the administration of numbers.684 In the NPRM, the 
Commission tentatively concluded that it should authorize Bellcore, the 
incumbent LECs and the states to continue performing each of their 
functions related to the administration of numbers as they existed 
prior to enactment of the 1996 Act until such functions are transferred 
to the new NANP administrator pursuant to the NANP Order.685 We 
address this issue here.
---------------------------------------------------------------------------

    \684\ For a discussion of NANP administration functions, see 
NANP Order, 11 FCC Rcd at 2595.
    \685\ NPRM at para. 258.
---------------------------------------------------------------------------

b. Comments
    324. Several commenters agree with our tentative conclusion to 
authorize Bellcore, the LECs, and states to continue performing the 
numbering administration functions they currently perform until such 
functions are transferred to the new NANP administrator.686 
Generally, these commenters contend that this is the most efficient and 
least disruptive solution, and that it should be implemented in the 
interest of numbering administration continuity. Using this approach, 
NYNEX says, the Commission can intervene and exercise its authority as 
specific future matters may warrant.687 AT&T states that current 
functions should continue until transferred, provided that those 
functions are not expanded and that the Commission ensures prompt 
compliance with the NANP Order.688 MFS supports interim delegation 
of current functions, but asserts that states should have the authority 
to implement interim changes in number administration as long as their 
actions are consistent with our numbering policy objectives.689
---------------------------------------------------------------------------

    \686\ See, e.g., MFS comments at 9; ACSI comments at 13; 
Ameritech comments at 24; AT&T comments at 12; Bell Atlantic 
comments at 9; BellSouth comments at 20; District of Columbia 
Commission comments at 3; Florida Commission comments at 6; GTE 
comments at 30; NYNEX comments at 18-19; Pennsylvania Commission 
comments 6-7; PacTel comments at 25; Texas Commission comments at 6; 
SBC comments at 9.
    \687\ NYNEX comments at 18-19. NYNEX asserts that we should 
reject arguments in favor of implementation of an interim 
arrangement so that incumbent LECs no longer have responsibility for 
NXX code administration. Incumbent LECs currently assign the NXXs 
according to industry standards, and under Commission oversight, 
NYNEX notes. Therefore, there is no need for a short-lived transfer 
of the responsibilities to another party.
    \688\ AT&T comments at 12.
    \689\ By way of example, MFS notes that California is 
considering sharing CO code assignment with LECs until that function 
is transferred to the NANP administrator. MFS comments at 9.
---------------------------------------------------------------------------

    325. The California Commission states that it is considering 
serving as CO code administrator until the NANC has developed its 
policy on numbering administration. It urges the Commission to allow 
states with unique number administration problems to resolve these 
issues in the interim.690 PacTel states that it has proposed a 
partial transfer of CO code administration to the California Commission 
or a third party. In the alternative, it says, the California 
Commission could serve as an interim CO code administrator until the 
NANC completes its work, or until the California Commission selects a 
permanent administrator. In PacTel's view, these options are consistent 
with our proposal to permit the LECs, Bellcore, and the states to 
continue performing each of their respective

[[Page 47337]]

functions related to number administration until those functions are 
transferred to the new entity.691 PacTel asserts that California's 
plan to share code assignment functions between PacTel and the 
California Commission until the transfer to the new NANP administrator 
should be identified as a ``safe harbor'' under the Act.692
---------------------------------------------------------------------------

    \690\ California Commission comments at 7-8.
    \691\ PacTel comments at 25.
    \692\ PacTel reply at 28.
---------------------------------------------------------------------------

    326. Other commenters oppose the Commission's proposal to authorize 
Bellcore, the incumbent LECs, and the states to continue performing 
those numbering administration functions they performed prior to 
enactment of section 251(e)(1) on an interim basis until such functions 
are transferred to the new NANP administrator.693 They express 
concern about the appearance of incumbent LEC dominance and 
discrimination in the assignment and administration of scarce numbering 
resources. The Indiana Commission Staff recommends that area code 
planning and implementation be removed from the responsibility of the 
LECs in favor of state commissions. In its view, delegating the 
planning and implementation process to state commissions will foster a 
``more competitive spirit'' among the industry. The Indiana Commission 
Staff envisions that state commissions could obtain periodic reports 
from the present incumbent LEC administrator as well as Bellcore on 
projected exhaust dates for area codes.694 Sprint states that, as 
long as Bellcore and the LECs serve as NANP and CO code administrators, 
they should be required to apply identical standards and procedures for 
processing all numbering requests, irrespective of the identity of the 
party submitting the request.695
---------------------------------------------------------------------------

    \693\ See, e.g., CTIA comments at 5; Indiana Commission Staff 
comments at 6; NCTA reply at 10; Teleport comments at 4.
    \694\ Indiana Commission Staff comments at 6.
    \695\ Sprint comments at 14.
---------------------------------------------------------------------------

    327. Cox recommends that, in the event the Commission authorizes 
the state commissions to handle CO assignment, such assignment must be 
made on a nondiscriminatory basis, and states or the carriers currently 
administering the CO codes should not be permitted to deny codes to new 
entrants or to levy ``code opening'' charges. In Cox's view, the 
Commission should adopt specific CO code guidelines because: (a) There 
is evidence of continued discrimination in CO code assignment; and (b) 
without Commission guidance, states will develop inconsistent regimes. 
Cox notes that Commission action is especially important here because 
CO code assignments have not been transferred to a neutral 
party.696 Similarly, several commenters argue in CC Docket No. 95-
185 that many incumbent LECs are charging paging carriers and other 
CMRS providers discriminatory fees for activating CO codes, as well as 
unreasonable and discriminatory recurring monthly charges for blocks of 
numbers.697
---------------------------------------------------------------------------

    \696\ Cox comments at 7-9.
    \697\ With regard to the specific issue of paging carriers being 
charged recurring monthly fees for blocks of numbers, it is 
necessary to incorporate the record from CC Docket No. 95-185, In 
the Matter of Interconnection Between Local Exchange Carriers and 
Commercial Mobile Radio Service Providers. See, e.g., AirTouch 
Communications comments, CC Docket No. 95-185, at 22 n.22; Arch 
Communications Group comments, CC Docket No. 95-185, at 7-8, 15, 23-
24; PageNet comments, CC Docket No. 95-185, at 22 and App. C.
---------------------------------------------------------------------------

c. Discussion
    328. Until such functions are transferred to the new NANP 
administrator, we authorize Bellcore and the incumbent LECs to continue 
performing the number administration functions they performed prior to 
the enactment of the 1996 Act. Again, because of the need to avoid 
disruption in numbering administration, we find that there is good 
cause to make these authorizations effective immediately pursuant to 5 
U.S.C. 553(d)(3). We also conclude that any incumbent LEC charging 
competing carriers fees for assignment of CO codes may do so only if it 
charges the same fee to all carriers, including itself and its 
affiliates.
    329. Numbering administration is a complex task that Bellcore, the 
incumbent LECs, and, to some extent, the states have been performing 
for over a decade. It is crucial that efficient and effective 
administration of numbers continues as the local market opens to 
competition. This delegation is the most practicable way that numbering 
administration can continue without disruption. During the transition 
period, those parties with experience should continue to perform the 
administrative functions that they have become uniquely equipped to 
handle. Thus, we authorize Bellcore to continue to perform its 
functions as the North American Numbering Plan Administrator in the 
same manner it did at the time of enactment of the 1996 Act. We also 
allow the incumbent LECs to continue to perform the CO code 
administration functions that they performed at the time of enactment 
of the 1996 Act. Finally, we allow the states, if they performed any 
number administration functions prior to enactment of the 1996 Act, to 
continue to do so until such functions are transferred to the new NANP 
administrator.
    330. Some commenters argue that we should not authorize Bellcore 
and the incumbent LECs to perform numbering administration functions on 
a transitional basis because continued administration of numbers by 
these entities, which are not neutral administrators, will permit 
discriminatory treatment of the incumbents' competitors with respect to 
access to number resources. While we recognize these concerns, we see 
no alternative to the action we take here. Transfer of numbering 
administration functions will be a complex task, one that cannot be 
accomplished immediately even on transitional basis. The Commission, 
for example, does not have the resources to administer numbers on a 
day-to-day basis.
    331. In this regard, we note that a proposal has been made to the 
California Commission to transfer CO code administration to the 
California Commission or a third party or, in the alternative, to have 
the California Commission serve as the interim CO code administrator 
until the NANC completes its work or until the California Commission 
selects a permanent administrator.698 We conclude that the record 
does not support allowing states to change the way CO code 
administration is performed during the transition to the new NANP 
administrator. Uniform CO code administration is critical to efficient 
operation of the public switched network for proper delivery of 
telecommunications services. The transfer of CO code administration to 
the states pending the transition to the new NANP administrator would 
not foster that consistency because states wishing to assume such 
responsibilities would lack the necessary experience to perform them 
with speed and accuracy. The California Commission does not refute this 
persuasively. We therefore urge parties wishing to alter the 
administration of certain numbers or to change the assignment of 
responsibilities for administering numbers pending transfer of these 
functions to the new NANP administrator to raise these issues with the 
Commission on a case-by-case basis in separate proceedings. In their 
filings, these parties should state who would bear the cost of a 
temporary delegation and how such a delegation could be implemented 
without confusion to carriers and customers.
---------------------------------------------------------------------------

    \698\ California Commission comments at 7-8.
---------------------------------------------------------------------------

    332. Some commenters have expressed concern that numbering

[[Page 47338]]

administration will be performed in a discriminatory and 
anticompetitive manner as long as interested parties exercise these 
functions. For this reason, some commenters urge the Commission to 
adopt guidelines for CO code administration with which the incumbent 
LECs must comply prior to transfer of CO code administration to a new 
NANP administrator. Specifically, they ask the Commission to prohibit 
incumbent LECs from levying disparate ``code opening'' fees on 
different carriers. We conclude that charging different ``code 
opening'' fees for different providers or categories of providers of 
telephone exchange service constitutes discriminatory access to 
telephone numbers and therefore violates section 251(b)(3)'s 
requirement of nondiscrimination. Charging different ``code opening'' 
fees for different providers or categories of providers of any 
telecommunications service (not just telephone exchange service) also 
violates section 202(a)'s prohibition of unreasonable discrimination 
and also constitutes an ``unjust practice'' and ``unjust charge'' under 
section 201(b).699 Further, it is inconsistent with the principle 
stated in section 251(e)(1), which states that numbers are to be 
available on an equitable basis. Incumbent LECs have control over CO 
codes, a crucial resource for any competitor attempting to enter the 
telecommunications market; incumbent LECs must therefore treat other 
carriers as the incumbent LECs would treat themselves. To ensure that 
numbering administration does not become a barrier to competition in 
the telecommunications marketplace prior to the transfer of NANP 
administration functions to a neutral number administrator, we conclude 
that any incumbent LEC charging competing carriers fees for assignment 
of CO codes may only do so if the incumbent LEC charges one uniform fee 
for all carriers, including itself or its affiliates.
---------------------------------------------------------------------------

    \699\ 47 U.S.C. 251(b)(3); 47 U.S.C. 202(a).
---------------------------------------------------------------------------

    333. We are explicitly extending this protection, pursuant to 
section 202, from discriminatory ``code opening'' fees to 
telecommunications carriers, such as paging carriers, that are not 
providers of telephone exchange service or telephone toll service, and 
therefore are not covered by Section 251(b)(3).700 Paging carriers 
are increasingly competing with other CMRS providers, and they would be 
at an unfair competitive disadvantage if they alone could be charged 
discriminatory code activation fees. For the reasons stated above, we 
explicitly forbid incumbent LECs from assessing unjust, discriminatory, 
or unreasonable charges for activating CO codes on any carrier or group 
of carriers. To the extent that recurring per-number charges represent 
charges for interconnection, they are governed by the principles set 
out in the First Report and Order in this proceeding. Moreover, the 
Commission has already stated that telephone companies may not impose 
recurring charges solely for the use of numbers.701
---------------------------------------------------------------------------

    \700\ Paging is not ``telephone exchange service'' within the 
meaning of the Act because it is neither ``intercommunicating 
service of the character ordinarily furnished by a single exchange'' 
nor ``comparable'' to such service. See 47 U.S.C. 153(47).
    \701\ See The Need to Promote Competition and Efficient Use of 
Spectrum for Radio Common Carrier Services, Memorandum Opinion and 
Order, 59 R.R.2d 1275, 1284 (1986).
---------------------------------------------------------------------------

    334. We emphasize that incumbent LEC attempts to delay or deny CO 
code assignments for competing providers of telephone exchange service 
would violate section 251(b)(3), where applicable, section 202(a), and 
the Commission's numbering administration guidelines found, inter alia, 
in the Ameritech Order, the NANP Order, and this Order. The Commission 
expects the incumbent LECs to comply strictly with those guidelines and 
act in an evenhanded manner as long as they retain their number 
administration functions. Specifically, incumbent LECs should apply 
identical standards and procedures for processing all numbering 
requests, regardless of the identity of the party making the request.
    335. Indeed, our delegation of matters related to numbering 
administration during the transition to a new NANP administrator is 
generally governed by the Commission's existing objectives and 
guidelines related to number administration as well as those enumerated 
in this proceeding. We will monitor closely the actions of Bellcore and 
the LECs with respect to numbering administration to ensure that they 
perform their tasks impartially and expeditiously until such tasks are 
transferred.

C. Cost Recovery for Numbering Administration

1. Background
    336. In section 251(e)(2), Congress mandates that ``[t]he cost of 
establishing telecommunications numbering administration arrangements 
and number portability shall be borne by all telecommunications 
carriers on a competitively neutral basis as determined by the 
Commission.'' 702 In the NANP Order, the Commission: (1) Directed 
that the costs of the new impartial numbering administrator be 
recovered through contributions by all communications providers; (2) 
concluded that the gross revenues of each communications provider will 
be used to compute each provider's contribution to the new numbering 
administrator; and (3) concluded that the NANC will address the details 
concerning recovery of the NANP administration costs.703 In the 
NPRM, we found that we did not need to take further action because the 
Commission had already determined that cost recovery for numbering 
administration arrangements must be borne by all telecommunications 
carriers on a competitively neutral basis.704
---------------------------------------------------------------------------

    \702\ 47 U.S.C. 251(e)(2).
    \703\ NANP Order, 11 FCC Rcd at 2627-2629.
    \704\ NPRM at para. 259.
---------------------------------------------------------------------------

2. Comments
    337. Several parties believe that the Commission should take 
further action with regard to cost recovery for numbering 
administration.705 BellSouth states that, states should have the 
power to authorize cost recovery in conjunction with oversight of 
central office code implementation activities, until transfer of 
numbering administration to the NANP.706
---------------------------------------------------------------------------

    \705\ See, e.g., BellSouth comments 20; Telecommunications 
Resellers Association comments at 10; NCTA comments at 11.
    \706\ BellSouth comments at 20.
---------------------------------------------------------------------------

    338. Telecommunications Resellers Association urges us to 
reconsider the assessment that the costs associated with the 
administration of telecommunications numbering should be borne by 
telecommunications carriers on a competitively neutral basis. It 
asserts that reliance upon gross revenues would result in a double or 
greater recovery from resale carriers and their customers.707
---------------------------------------------------------------------------

    \707\ Telecommunications Resellers Association comments at 10.
---------------------------------------------------------------------------

    339. Similarly, NCTA urges us to require that companies providing 
telecommunications services in addition to other services fund NANP 
administration based on a percentage of their gross telecommunications 
revenues, and not their revenues from other services. Otherwise, NCTA 
argues, diversified companies that have relatively little need for NXXs 
but large gross revenues from other sources may have to fund a 
disproportionately large share of NANP administration expenses. Also, 
NCTA notes that the 1996 Act requires ``telecommunications carriers'' 
to contribute to cost recovery for number administration, but that the 
NANP Order requires recovery from all ``communications providers.'' 
NCTA requests clarification that only

[[Page 47339]]

``telecommunications carriers'' as defined by the 1996 Act must 
contribute to cost recovery for number administration.708
---------------------------------------------------------------------------

    \708\ NCTA comments at 11.
---------------------------------------------------------------------------

    340. Other commenters do not believe that it is necessary for the 
Commission to take additional action with regard to cost recovery for 
numbering administration.709 These parties generally agree that 
the cost recovery approach taken in the NANP Order satisfies the 1996 
Act's requirements with respect to ensuring nondiscriminatory access to 
telephone numbers. Several reiterate that the costs of number 
administration must be borne by all carriers on a competitively neutral 
basis. GTE states that the NANP Order conclusions satisfy the cost 
recovery requirement of the 1996 Act, if we ensure that those 
conclusions are implemented in a manner that does not unduly favor or 
disadvantage any particular industry segment or technology.710
---------------------------------------------------------------------------

    \709\ See, e.g., ACSI comments at 13; ALTS comments at 8; CTIA 
comments at 8; Frontier comments at 5 n.14; GCI comments at 6; GTE 
comments at 31; Ohio Consumers' Council comments at 5; PacTel 
comments at 26.
    \710\ GTE comments at 31. See also PacTel comments at 26.
---------------------------------------------------------------------------

    341. In its reply comments, PacTel rejects MCI's suggestion that 
costs of implementing number portability should be reduced or 
eliminated. In PacTel's view, interim number portability is an 
essential element of achieving equitable number administration and all 
parties that benefit from this process should contribute to full cost 
recovery.711
---------------------------------------------------------------------------

    \711\ PacTel reply at 33.
---------------------------------------------------------------------------

3. Discussion
    342. Because of ambiguity between the language of the 1996 Act and 
language in the NANP Order, we are persuaded that further action is 
necessary to meet the 1996 Act's requirement that cost recovery for 
number administration be borne by all telecommunications carriers on a 
competitively neutral basis, and to conform the cost recovery 
requirements specified in the NANP Order to the 1996 Act. First, we 
require that: (1) Only ``telecommunications carriers,'' as defined in 
section 3(44), be ordered to contribute to the costs of establishing 
numbering administration; and (2) such contributions shall be based 
only on each contributor's gross revenues from its provision of 
telecommunications services.712 We note that we have considered 
the economic impact of our rules in this section on small incumbent 
LECs and other small entities. We conclude that by basing contributions 
only on each contributor's gross revenues from its provision of 
telecommunications services (instead of, for example, imposing a flat 
fee contribution on all telecommunications carriers), we more equitably 
apportion the burden of cost recovery for numbering administration.
---------------------------------------------------------------------------

    \712\ 47 U.S.C. 251(e)(2) also requires that the cost of 
establishing telecommunications number portability shall be borne by 
all telecommunications carriers on a competitively neutral basis. We 
note that cost recovery for number portability was addressed in the 
Number Portability Order.
---------------------------------------------------------------------------

    343. Section 251(e)(2) requires that the costs of 
telecommunications numbering administration be borne by all 
telecommunications carriers on a competitively neutral basis. 
Contributions based on gross revenues would not be competitively 
neutral for those carriers that purchase telecommunications facilities 
and services from other telecommunications carriers because the 
carriers from whom they purchase services or facilities will have 
included in their gross revenues, and thus in their contributions to 
number administration, those revenues earned from services and 
facilities sold to other carriers. Therefore, to avoid such an outcome, 
we require all telecommunications carriers to subtract from their gross 
telecommunications services revenues expenditures for all 
telecommunications services and facilities that have been paid to other 
telecommunications carriers.713 It should be noted that this 
requirement is solely for the purpose of determining a carrier's 
contribution to numbering administration costs and not for any other 
purpose, interpretation, or meaning of any other Commission rule such 
as those contained in parts 32, 36, 51, 64, 65, or 69 of the 
Commission's rules.
---------------------------------------------------------------------------

    \713\ See Assessment and Collection of Regulatory Fees for 
Fiscal Year 1995, Report and Order, 10 FCC Rcd 13512, at 13558-59 
(1995) (Regulatory Fees Order). 61 FR 40155 (August 1, 1996). In the 
Regulatory Fees Order, we stated that, in order to avoid imposing a 
double payment burden on resellers, we would permit interexchange 
carriers to subtract from their reported gross interstate revenues 
any payments made to underlying carriers for telecommunications 
facilities or services. Id. Our action here is consistent with that 
taken in the Regulatory Fees Order. We note that the gross 
telecommunications services revenues referenced in this discussion 
are not limited to gross interstate revenues.
---------------------------------------------------------------------------

D. Section 271 Competitive Checklist Requirement That the BOCs Provide 
Non-Discriminatory Access to Numbers for Entry Into In-region InterLATA 
Services

1. Background and Comments
    344. Section 271(c)(2)(B) contains a competitive checklist of 
requirements governing the access to functions, facilities and services 
or interconnection that BOCs must provide or generally offer to other 
competing telecommunications carriers if the BOC wants authority to 
provide in-region interLATA service. Pursuant to the competitive 
checklist, BOCs desiring to provide in-region interLATA 
telecommunications services must afford, ``(u)ntil the date by which 
telecommunications numbering administration guidelines, plans or rules 
are established, non-discriminatory access to telephone numbers for 
assignment to the other carrier's telephone exchange service customers 
* * * (and) (a)fter that date, (must) compl(y) with such guidelines, 
plan or rules.'' 714 In the NPRM, we stated that these measures 
foster competition by ensuring telecommunications numbering resources 
are administered in a fair, efficient, and orderly manner.715 
Ameritech asks us to clarify that, by complying with the NANP Order, a 
BOC satisfies the competitive checklist requirement of 
nondiscriminatory access to numbers.716 MCI argues that we must 
ensure that the BOCs comply with section 271(c)(2)(B) and assign NXX 
codes in a competitively neutral manner.717
---------------------------------------------------------------------------

    \714\ 47 U.S.C. 271(c)(2)(B)(ix).
    \715\ NPRM at para. 251.
    \716\ Ameritech comments at 23. See also NYNEX comments at 18.
    \717\ MCI comments at 10. We also note that in its petition for 
declaratory ruling filed July 12, 1996, TCG has asked the Commission 
to require, as part of a BOC's application to provide in-region 
interLATA services pursuant to section 271, a demonstration that 
numbering resources are available to competing local carriers. See 
supra n.616.
---------------------------------------------------------------------------

2. Discussion
    345. We decline to address section 271(c)(2)(B) issues in this 
Order. We will consider each BOC's application to enter in-region 
interLATA services pursuant to section 271(c)(2)(B) on a case by case 
basis, and will look specifically at the circumstances and business 
practices governing CO code administration in each applicant's state to 
determine whether the BOC has complied with section 271(c)(2)(B)(ix).

VI. Final Regulatory Flexibility Analysis

    346. As required by Section 603 of the Regulatory Flexibility Act 
(RFA), 5 U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA) 
was incorporated in the Notice of Proposed Rulemaking (NPRM) in this 
proceeding. The Commission sought written public comments on the 
proposals in the NPRM, including the IRFA. The

[[Page 47340]]

Commission's Final Regulatory Flexibility Analysis (FRFA) in this Order 
conforms to the RFA, as amended by the Contract With America 
Advancement Act of 1996, (CWAAA), Public Law No. 104-121, 110 Stat. 847 
(1996).718
---------------------------------------------------------------------------

    \718\ Subtitle II of the CWAAA is ``The Small Business 
Regulatory Enforcement Fairness Act of 1996'' (SBREFA), codified at 
5 U.S.C. 601 et. seq.
---------------------------------------------------------------------------

A. Need for and Purpose of This Action

    347. The Commission, in compliance with section 251(d)(1), 
promulgates the rules in this Order to ensure the prompt implementation 
of section 251, which is the local competition provision. Congress 
sought to establish through the 1996 Act ``a pro-competitive, de-
regulatory national policy framework'' for the United States 
telecommunications industry.719 Three principal goals of the 
telecommunications provisions of the 1996 Act are: (1) Opening the 
local exchange and exchange access markets to competition; (2) 
promoting increased competition in telecommunications markets that 
already are open to competition, including, particularly, the long 
distance services market; and (3) reforming our system of universal 
service so that universal service is preserved and advanced as the 
local exchange and exchange access markets move from monopoly to 
competition.
---------------------------------------------------------------------------

    \719\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 (1996).
---------------------------------------------------------------------------

    348. The rules adopted in this Order implement the first of these 
goals--opening the local exchange and exchange access markets to 
competition by eliminating certain operational barriers to competition. 
The objective of the rules adopted in this Order is to implement as 
quickly and effectively as possible the national telecommunications 
policies embodied in the 1996 Act and to promote the pro-competitive, 
deregulatory markets envisioned by Congress.720 We are mindful of 
the balance that Congress struck between this goal and its concern for 
the impact of the 1996 Act on small local exchange carriers, 
particularly rural carriers. This balance is evidenced in section 
251(f).
---------------------------------------------------------------------------

    \720\ Id.
---------------------------------------------------------------------------

B. Summary of Issues Raised by Public Comments Made in Response to the 
Initial Regulatory Flexibility Analysis

    349. Summary of Initial Regulatory Flexibility Analysis (IRFA). In 
the NPRM, the Commission performed an IRFA.721 In the IRFA, the 
Commission found that the rules it proposed to adopt in this proceeding 
may have a significant impact on a substantial number of small 
businesses as defined by section 601(3) of the RFA. The Commission 
stated that its regulatory flexibility analysis was inapplicable to 
incumbent LECs because such entities are dominant in their field of 
operation. The Commission noted, however, that it would take 
appropriate steps to ensure that special circumstances of smaller 
incumbent LECs are carefully considered in our rulemaking. Finally, the 
IRFA solicited comment on alternatives to our proposed rules that would 
minimize the impact on small entities consistent with the objectives of 
this proceeding.
---------------------------------------------------------------------------

    \721\ NPRM at paras. 274-287.
---------------------------------------------------------------------------

1. Treatment of Small LECs
    350. Comments. The Small Business Administration (SBA), Rural Tel. 
Coalition, and CompTel maintain that the Commission violated the RFA 
when it sought to exclude incumbent LECs from regulatory flexibility 
consideration without first consulting the SBA to establish a 
definition of ``small business.'' 722 Rural Tel. Coalition and 
CompTel also argue that the Commission failed to explain its statement 
that ``incumbent LECs are dominant in their field'' or how that finding 
was reached.723 Rural Tel. Coalition states that the lack of such 
analysis is inappropriate because incumbent LECs are now facing 
competition from a variety of sources, including wireline and wireless 
carriers. Rural Tel. Coalition recommends that the Commission abandon 
its determination that incumbent LECs are dominant, and perform the 
regulatory flexibility analysis for incumbent LECs having fewer than 
1500 employees.724
---------------------------------------------------------------------------

    \722\ SBA RFA comments at 3-5; Rural Tel. Coalition reply at 38-
39; CompTel reply at 46.
    \723\ Rural Tel. Coalition reply at 39.
    \724\ Rural Tel. Coalition reply at 40.
---------------------------------------------------------------------------

    351. Discussion. In essence, the SBA and the Rural Tel. Coalition 
argue that we exceeded our authority under the RFA by certifying all 
incumbent LECs as dominant in their field of operations, and therefore 
concluding on that basis that they are not small businesses under the 
RFA. They contend that the authority to make a size determination rests 
solely with the SBA, and that by excluding a group from the scope of 
regulatory flexibility analysis the Commission makes an unauthorized 
size determination.725 Neither the SBA nor the Rural Tel. 
Coalition cite any specific authority for this latter proposition.
---------------------------------------------------------------------------

    \725\ SBA RFA comments at 4-5 (citing 15 U.S.C. 632(a)(2)); 
Rural Tel. Coalition reply at 38.
---------------------------------------------------------------------------

2. Other Issues
    352. We have found incumbent LECs to be ``dominant in their field 
of operations'' since the early 1980's and consequently have 
consistently since that time certified under the RFA 726 that 
incumbent LECs are not subject to regulatory flexibility analyses 
because they are not small businesses.727 We have made similar 
determinations in other areas.728 We recognize the SBA's special 
role and expertise with regard to the RFA, and intend to continue to 
consult with the SBA to ensure that the Commission is fully 
implementing the RFA. Although we are not fully persuaded on the basis 
of this record that our prior practice has been incorrect, in light of 
the special concerns raised by the SBA, the Rural Tel. Coalition, and 
CompTel in this proceeding, we will, nevertheless, include small 
incumbent LECs in this FRFA to remove any possible issue of RFA 
compliance. We, therefore, need not address directly the Rural Tel. 
Coalition's arguments that incumbent LECs are not dominant.729
---------------------------------------------------------------------------

    \726\ See 5 U.S.C. 605(b).
    \727\ See, e.g., Expanded Interconnection with Local Telephone 
Company Facilities, 6 FCC Rcd 5809 (1991); MTS and WATS Market 
Structure, 2 FCC Rcd 2953, 2959 (1987) (citing MTS and WATS Market 
Structure, 93 F.C.C.2d 241, 338-39 (1983)).
    \728\ See, e.g., Implementation of Sections of the Cable 
Television Consumer Protection Act of 1992: Rate Regulation, 10 FCC 
Rcd 7393, 7418 (1995). 60 FR 63492 (December 11, 1995).
    \729\ Rural Tel. Coalition reply at 39-40.
---------------------------------------------------------------------------

    353. Comments. Parties raised several other issues in response to 
the Commission's IRFA in the NPRM. The SBA and CompTel contend that 
commenters should not be required to separate their comments on the 
IRFA from their comments on the other issues raised in the 
NPRM.730 SBA maintains that separating RFA comments and discussion 
from the rest of the comments ``isolates'' the regulatory flexibility 
analysis from the remainder of the discussion, thereby handicapping the 
Commission's analysis of the impact of the proposed rules on small 
businesses.731 The SBA further suggests that our IRFA failed to: 
(1) Give an adequate description of the projected reporting, 
recordkeeping, and other compliance requirements of the proposed rules, 
including an estimate of the classes of small entities which will be 
subject to the requirement and the professional skills necessary to 
prepare such reports or records;732 and (2) describe significant 
alternatives that

[[Page 47341]]

minimize the significant economic impact of the proposal on small 
entities, including exemption from coverage of the rule.733 SBA 
also asserts that none of the alternatives in the NPRM are designed to 
minimize the impact of the proposed rules on small businesses.
---------------------------------------------------------------------------

    \730\ SBA RFA comments at 2-3; CompTel reply at 46.
    \731\ Id.
    \732\ SBA RFA comments at 5-6, citing 5 U.S.C. 603(b)(4).
    \733\ SBA RFA comments at 7-8, citing 5 U.S.C. 603(c).
---------------------------------------------------------------------------

    354. The Idaho Public Utilities Commission argues that the 
Commission's rules will be devised for large carriers and therefore 
will be ``de facto'' burdensome to Idaho's incumbent LECs and probably 
to potential new entrants, which may be small companies.734 
Therefore, Idaho requests that state commissions retain flexibility to 
address the impact of our rules on smaller incumbent LECs.
---------------------------------------------------------------------------

    \734\ Idaho Commission comments at 15.
---------------------------------------------------------------------------

    355. The Small Cable Business Association (SCBA) contends that the 
Commission's IRFA is inadequate because it does not state that small 
cable companies are among the small entities affected by the proposed 
rules.735 In its comments on the IRFA, SCBA refers to its proposal 
that the Commission establish the following national standards for 
small cable companies: (1) The definition of ``good faith'' 
negotiation; (2) the development of less burdensome arbitration 
procedures for interconnection and resale; and (3) the designation of a 
small company contact person at incumbent LECs and state commissions. 
The SCBA also asserts that the Commission must adopt national standards 
to guide state commissions in their implementation of section 
251(f),736 the rural telephone company exemption. The First Report 
and Order and its FRFA discusses issues raised by the SCBA regarding 
its proposal that the Commission establish national standards for 
certain provisions of the rules that affect small cable companies. 
Accordingly, we do not repeat those analyses in this FRFA.
---------------------------------------------------------------------------

    \735\ SCBA RFA comments at 1.
    \736\ Id. at 1-2.
---------------------------------------------------------------------------

    356. Discussion. We disagree with the SBA's assessment of our IRFA. 
Although the IRFA referred only generally to the reporting and 
recordkeeping requirements imposed on incumbent LECs, our Federal 
Register notice set forth in detail the general reporting and 
recordkeeping requirements as part of our Paperwork Reduction Act 
statement.737 The IRFA also sought comments on the many 
alternatives discussed in the body of the NPRM, including the statutory 
exemption for certain rural telephone companies.738 The numerous 
general public comments concerning the impact of our proposal on small 
entities in response to our notice, including comments filed directly 
in response to the IRFA,739 have enabled us to prepare this FRFA. 
Thus, we conclude that the IRFA was sufficiently detailed to enable 
parties to comment meaningfully on the proposed rules and, thus, for us 
to prepare this FRFA. We have been working with, and will continue to 
work with the SBA, to ensure that both our IRFAs and FRFAs fully meet 
the requirements of the RFA.
---------------------------------------------------------------------------

    \737\ NPRM, summarized at 61 FR 18311, 18312 (April 25, 1996).
    \738\ 47 U.S.C. 251(f).
    \739\ See SBA RFA comments; Rural Tel. Coalition reply at 38-41; 
Idaho Public Utilities Commission comments at 15; SCBA RFA comments; 
CompTel reply at 45-46.
---------------------------------------------------------------------------

    357. The SBA also objects to the NPRM's requirement that responses 
to the IRFA be filed under a separate and distinct heading, and 
proposes that we integrate RFA comments into the body of general 
comments on a rule.740 Almost since the adoption of the RFA, we 
have requested that IRFA comments be submitted under a separate and 
distinct heading.741 Neither the RFA nor the SBA's rules prescribe 
the manner in which comments may be submitted in response to an IRFA 
742 and, in such circumstances, it is well established that an 
administrative agency can structure its proceedings in any manner that 
it concludes will enable it to fulfill its statutory duties.743 
Based on our past practice, we find that separation of comments 
responsive to the IRFA facilitates our preparation of a compulsory 
summary of such comments and our responses to them, as required by the 
RFA. Comments on the impact of our proposed rules on small entities 
have been integrated into our analysis and consideration of the final 
rules. We therefore reject SBA's argument that we improperly required 
commenters to include their comments on the IRFA in a separate section.
---------------------------------------------------------------------------

    \740\ SBA RFA comments at 2.
    \741\ See, e.g., Inquiry into the Development of Regulatory 
Policy in Regard to Direct Broadcast Satellites, 86 F.C.C.2d 719, 
755 (1981).
    \742\ See 5 U.S.C. 603 (IRFA requirements).
    \743\ See Vermont Yankee Nuclear Power Corp. v. Natural 
Resources Defense Council, Inc., 435 U.S. 519, 524-25 (1978) (citing 
FCC v. Schreiber, 381 U.S. 279, 290 (1965) and FCC v. Pottsville 
Broadcasting Co., 309 U.S. 134, 138 (1940)).
---------------------------------------------------------------------------

    358. We also reject SBA's assertion that none of the alternatives 
in the NPRM were designed to minimize the impact of the proposed rules 
on small businesses and the Idaho Public Utilities Commission's 
assertion that our rules will be burdensome on new entrants. For 
example, we proposed that incumbent LECs be required to disclose all 
information relating to network design and technical standards and 
information concerning changes to the network that affect 
interconnection facilities.744 This proposal allows a potential 
competitor, that may be a small entity, to collect the information 
necessary to achieve and maintain efficient interconnection. Thus, the 
competitor can enter the market by relying, in part or entirely, on the 
incumbent LEC's facilities. Reduced operational entry barriers are 
designed to provide reasonable opportunities for new entrants, 
particularly small entities, to enter the market by minimizing the 
initial investment needed to begin providing service.
---------------------------------------------------------------------------

    \744\ NPRM paras. 189-190.
---------------------------------------------------------------------------

    359. In addition, we disagree with the Idaho Public Utilities 
Commission's contention that the rules devised by the Commission will 
be burdensome to the majority of Idaho's incumbent LECs. We believe 
section 251(f) and the rules we have crafted provide states with 
significant flexibility to ``deal with the needs of individual 
companies in light of public interest concerns,'' as requested by the 
Idaho Commission. We note that, pursuant to section 251(f), smaller 
LECs may petition their state commissioners for suspension or 
modification of the implementation schedule for toll dialing parity 
established under section 251(b)(3). Although we have required 
incumbent LECs to continue performing their current functions related 
to the administration of numbers, this requirement will expire when 
numbering administration is transferred to the new North American 
Number Plan (NANP) Administrator, pursuant to Section 251(e). As 
incumbent LECs are currently performing these functions and we have 
received no comments from incumbent LECs objecting to this requirement, 
we do not consider it burdensome for them to continue to perform these 
tasks during the transition period.
    360. In addition, we disagree with SCBA's assertion that the IRFA 
was deficient because it did not identify small cable operators as 
entities that would be affected by the proposed rules. The IRFA in the 
NPRM states: ``Insofar as the proposals in this Notice apply to 
telecommunications carriers other than incumbent LECs (generally 
interexchange carriers and new LEC entrants), they may have a 
significant impact on a substantial number of small entities.'' 
745 The phrase ``new LEC entrants'' clearly encompasses small 
cable operators that become providers of

[[Page 47342]]

local exchange service. The NPRM even identifies cable operators as 
potential new entrants.746 Thus, the record shows that we have 
identified small cable operators as entities that would be affected by 
the proposed rules.
---------------------------------------------------------------------------

    \745\ NPRM para. 277.
    \746\ NPRM para. 6.
---------------------------------------------------------------------------

C. Description and Estimate of the Small Entities Subject to the Rules

    361. The RFA defines ``small entity'' to include the definition of 
``small business concern'' under the Small Business Act, 15 U.S.C. 
632.747 Under the Small Business Act, a ``small business concern'' 
is one that: (1) Is independently owned and operated; (2) is not 
dominant in its field of operation; and (3) meets any additional 
criteria established by the Small Business Administration.748 The 
SBA has defined companies listed under Standard Industrial 
Classification (SIC) categories 4812 (Radiotelephone Communications) 
749 and 4813 (Telephone Communications, Except Radiotelephone) to 
be small entities when they have fewer than 1,500 employees.750 
The SBA has defined companies listed under the SIC category 7379 
(Business Services, not otherwise classified) to be small entities when 
they have annual receipts of less than five million dollars.751 
These standards also apply in determining whether an entity is a small 
business for purposes of the RFA.
---------------------------------------------------------------------------

    \747\ See 5 U.S.C. 601(6) (incorporating by reference the 
definition of ``small business concern'' in 5 U.S.C. 632).
    \748\ See 15 U.S.C. 632(1)(a).
    \749\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 4812.
    \750\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 4813.
    \751\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 7379.
---------------------------------------------------------------------------

    362. The rules we adopt today regarding dialing parity and 
nondiscriminatory access apply to all LECs. The rules regarding public 
disclosure of changes to local networks apply to all incumbent LECs. 
Finally, the rules regarding numbering administration impose financial 
obligations on all telecommunications carriers. These rules also affect 
IXCs, providers of cellular, broadband PCS, and geographic area 800 MHz 
and 900 MHz specialized mobile radio services, including licensees who 
have obtained extended implementation authorizations in the 800 MHz or 
900 MHz SMR services, either by waiver or under Sec. 90.629 of the 
Commission's rules,752 which may be small business concerns. 
However, these rules will apply to SMR licensees only if they offer 
real-time, two-way voice service that is interconnected with the public 
switched network. Additional business entities affected by this 
rulemaking include providers of telephone toll service, providers of 
telephone exchange service, independent operator service providers, 
independent directory assistance providers, independent directory 
listing providers, independent directory database managers, and 
resellers of these services. These entities could be small business 
concerns.
---------------------------------------------------------------------------

    \752\ 47 CFR 90.629.
---------------------------------------------------------------------------

    363. Consistent with our prior practice, we shall continue to 
exclude small incumbent LECs from the definition of a small entity for 
the purpose of this FRFA. Nevertheless, as mentioned above, we include 
small incumbent LECs in our FRFA. Accordingly, our use of the terms 
``small entities'' and ``small businesses'' does not encompass ``small 
incumbent LECs.'' We use the term ``small incumbent LECs'' to refer to 
any incumbent LECs that arguably might be defined by SBA as ``small 
business concerns.'' 753
---------------------------------------------------------------------------

    \753\ See 13 CFR Sec. 121.210 (SIC 4813).
---------------------------------------------------------------------------

    364. Local Exchange Carriers. Neither the Commission nor SBA has 
developed a definition of small providers of local exchange services. 
The closest applicable definition under SBA rules is for telephone 
communications companies other than radiotelephone (wireless) 
companies, SIC category 4813. For the purposes of revenue reporting, 
1,347 companies reported doing business as LECs at the end of 
1994.754 Although it seems certain that some of these carriers are 
not independently owned and operated, or have more than 1,500 
employees, we are unable at this time to estimate with any more 
particularity the number of LECs that would qualify as small business 
concerns. Consequently, we estimate that there are fewer than 1,347 
small incumbent LECs that may be affected by the decisions and rules 
adopted in this Order.
---------------------------------------------------------------------------

    \754\ Federal Communications Commission, CCB, Industry Analysis 
Division, Telecommunications Industry Revenue: TRS Fund Worksheet 
Data, Tbl. 21 (Average Total Telecommunications Revenue Reported by 
Class of Carrier) (February 1996).
---------------------------------------------------------------------------

    365. Interexchange Carriers. Neither the Commission nor SBA has 
developed a definition of small entities that would apply specifically 
to providers of interexchange services (IXCs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies, SIC category 4813. The 
most reliable source of information regarding the number of IXCs 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with Telecommunications Relay Service (TRS). 
According to our most recent data, 97 companies reported that they were 
engaged in the provision of interexchange services.755 Although it 
seems certain that some of these carriers are not independently owned 
and operated, or have more than 1,500 employees, we are unable at this 
time to estimate with greater precision the number of IXCs that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 97 small entity 
IXCs that may be affected by the decisions and rules adopted in this 
Order.
---------------------------------------------------------------------------

    \755\ Id.
---------------------------------------------------------------------------

    366. Cellular Service Providers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of cellular services. The closest applicable definition under 
SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies. The most reliable source of 
information regarding the number of cellular service carriers 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with TRS. According to our most recent data 789 
companies reported that they were engaged in the provision of cellular 
services.756 Although it seems certain that some of these carriers 
are not independently owned and operated, or have more than 1,500 
employees, we are unable at this time to estimate with greater 
precision the number of cellular service carriers that would qualify as 
small business concerns under SBA's definition. Consequently, we 
estimate that there are fewer than 789 small entity cellular service 
carriers that may be affected by the decision and rules adopted in this 
Order.
---------------------------------------------------------------------------

    \756\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 4812.
---------------------------------------------------------------------------

    367. Broadband PCS Licensees. The broadband PCS spectrum is divided 
into six frequency blocks designated A through F. Pursuant to 47 CFR 
24.720(b), the Commission has defined ``small entity'' in the auctions 
for Blocks C and F as a firm that had average gross revenues of less 
than $40 million in the three previous calendar years. This regulation 
defining ``small entity'' in the context of broadband PCS auctions has 
been approved by the SBA.757 The

[[Page 47343]]

Commission has auctioned broadband PCS licenses in Blocks A, B, and C. 
We do not have sufficient data to determine how many small businesses 
bid successfully for licenses in Blocks A and B. There were 90 winning 
bidders that qualified as small entities in the Block C auction. Based 
on this information, we conclude that the number of broadband PCS 
licensees affected by the decisions in this Order includes, at a 
minimum, the 90 winning bidders that qualified as small entities in the 
Block C broadband PCS auction.
---------------------------------------------------------------------------

    \757\ See Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, PP Docket No. 93-253, Fifth Report and 
Order, 9 FCC Rcd 5532, 5581-84 (1994) 59 FR 37566 (July 22, 1994).
---------------------------------------------------------------------------

    368. At present, no licenses have been awarded for Blocks D, E, and 
F of broadband PCS spectrum. Therefore, there are no small businesses 
currently providing these services. A total of 1,479 licenses will be 
awarded, however, in the D, E, and F Block broadband PCS auctions, 
which are scheduled to begin on August 26, 1996. Eligibility for the 
493 F Block licenses is limited to entrepreneurs with average gross 
revenues of less than $125 million. We cannot estimate the number of 
these licenses that will be won by small entities, nor how many small 
entities will win D or E Block licenses. Given the facts that nearly 
all radiotelephone companies have fewer than 1,000 employees 758 
and that no reliable estimate of the number of prospective D, E, and F 
Block licensees can be made, we assume, for purposes of our evaluations 
and conclusions in this FRFA, that all of the licenses will be awarded 
to small entities, as that term is defined by the SBA. Broadband PCS 
licensees are affected by the decisions and rules adopted in this Order 
to the extent that they provide telephone exchange service.
---------------------------------------------------------------------------

    \758\ See United States Department of Commerce, Bureau of the 
Census, Standard Industrial Classification Manual (1992) (1992 
Census) SIC Code 4812.
---------------------------------------------------------------------------

    369. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission 
has defined ``small entity'' in auctions for geographic area 800 MHz 
and 900 MHz SMR licenses as a firm that had average gross revenues of 
less than $15 million in the three previous calendar years. This 
definition of a ``small entity'' in the context of 800 MHz and 900 MHz 
SMR has been approved by the SBA.759
---------------------------------------------------------------------------

    \759\ See Amendment of Parts 2 and 90 of the Commission's Rules 
to Provide for the Use of 200 Channels Outside the Designated Filing 
Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the 
Specialized Mobile Radio Pool, PR Docket No. 89-583, Second Order on 
Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639, 2693-
702 (1995) 60 FR 48913 (September 21, 1995); Amendment of Part 90 of 
the Commission's Rules to Facilitate Future Development of SMR 
Systems in the 800 MHz Frequency Band, PR Docket No. 93-144, First 
Report and Order, Eighth Report and Order, and Second Further Notice 
of Proposed Rulemaking, 11 FCC Rcd 1463 (1995) 61 FR 6212 (February 
16, 1996).
---------------------------------------------------------------------------

    370. The rule adopted in this Order applies to SMR providers in the 
800 MHz and 900 MHz bands that either hold geographic area licenses or 
have obtained extended implementation authorizations. We do not know 
how many firms provide 800 MHz or 900 MHz geographic area SMR service 
pursuant to extended implementation authorizations, nor how many of 
these providers have annual revenues of less than $15 million. Since 
the RFA amendments were not in effect until the record in this 
proceeding was closed, the Commission was unable to request information 
regarding the number of small businesses in this category. We do know 
that one of these firms has over $15 million in revenues. We assume, 
for purposes of our evaluations and conclusions in this FRFA, that all 
of the remaining extended implementation authorizations may be held by 
small entities, which may be affected by the decisions and rules 
adopted in this Order.
    371. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we conclude that the number of geographic area SMR 
licensees affected by the rule adopted in this Order includes these 60 
small entities. No auctions have been held for 800 MHz geographic area 
SMR licenses. Therefore, no small entities currently hold these 
licenses. A total of 525 licenses will be awarded for the upper 200 
channels in the 800 MHz geographic area SMR auction. The Commission, 
however, has not yet determined how many licenses will be awarded for 
the lower 230 channels in the 800 MHz geographic area SMR auction. 
There is no basis to estimate, moreover, how many small entities within 
the SBA definition will win these licenses. Because nearly all 
radiotelephone companies have fewer than 1,000 employees and no 
reliable estimate of the number of prospective 800 MHz licensees can be 
made, we assume, for purposes of our evaluations and conclusions in 
this FRFA, that all of the licenses will be awarded to small entities, 
as defined by the SBA. Those SMR licensees that provide telephone 
exchange service will be affected by the decisions in this Order.
    372. Providers of Telephone Toll Service, Providers of Telephone 
Exchange Service. Neither the Commission nor the SBA has developed a 
definition of small entities applicable to providers of telephone toll 
service and telephone exchange service. According to the 1992 Census, 
there were approximately 3,497 firms engaged in providing telephone 
services, as defined therein, for at least a year.760 This number 
contains a variety of different categories of carriers, including local 
exchange carriers, interexchange carriers, competitive access 
providers, cellular carriers, mobile service carriers, operator service 
providers, pay telephone operators, PCS providers, covered SMR 
providers, providers of telephone toll service, providers of telephone 
exchange service, and resellers. It seems certain that some of those 
3,497 telephone service firms may not qualify as small businesses 
because they are not ``independently owned and operated.'' 761 It 
seems reasonable to conclude, therefore, that fewer than 3,497 
telephone service firms are providers of telephone toll service or 
providers of telephone exchange service and are small entities that may 
be affected by this Order.
---------------------------------------------------------------------------

    \760\ See United States Department of Commerce, Bureau of the 
Census, 1992 Census of Transportation, Communications, and 
Utilities; Establishment and Firm Size, at Firm Size 1-123 (1995) 
(1992 Census).
    \761\ 15 U.S.C. 632(a)(1).
---------------------------------------------------------------------------

    373. Independent Operator Service Providers, Independent Directory 
Assistance Providers, Independent Directory Listing Providers, and 
Independent Directory Database Managers. We were unable to obtain 
reliable data regarding the number of entities that provide these 
telecommunications services or how many of these are small entities. 
The Commission has not developed a definition of small entities 
applicable to telecommunications service providers. Therefore, the 
closest applicable definition of a small entity providing 
telecommunications services is the definition under SBA rules 
applicable to business services companies, SIC 7389, which defines a 
small entity to be a business services company with annual receipts of 
less than five million dollars. U.S. Census data provides that 46,289 
firms providing business services had annual receipts of 5 million 
dollars or less.762 Because it seems unlikely that all of the 
business services firms would meet the other criteria, it seems 
reasonable to conclude that fewer than 46,289 firms may be small 
entities that might be affected by our Order.
---------------------------------------------------------------------------

    \762\ 1992 Census, Table 2D, SIC Code 7389.
---------------------------------------------------------------------------

    374. Resellers. Neither the Commission nor SBA has developed a 
definition of small entities specifically applicable to resellers. The 
closest

[[Page 47344]]

applicable SBA definition for a reseller is a telephone communications 
company, SIC category 4813. However, the most reliable source of 
information regarding the number of resellers nationwide of which we 
are aware appears to be the data that the Commission collects annually 
in connection with TRS. For the purposes of revenue reporting, 206 
companies reported doing business as resellers at the end of 
1994.763 Although it seems certain that some of these companies 
are not independently owned and operated, or have more than 1,500 
employees, we are unable at this time to estimate with greater 
precision the number of resellers that would qualify as small entities 
or small incumbent LEC concerns under SBA's definition. Consequently, 
we estimate that there are fewer than 206 small entity resellers that 
may be affected by the decisions and rules adopted in this Order.
---------------------------------------------------------------------------

    \763\ Federal Communications Commission, CCB, Industry Analysis 
Division, Telecommunications Industry Revenue: TRS Fund Worksheet 
Data, Tbl. 21 (Average Total Telecommunications Revenue Reported by 
Class of Carrier) (February 1996).
---------------------------------------------------------------------------

    375. Telephone Companies. U.S. Census data provides that, at the 
end of 1992, there were 3,497 firms engaged in providing telephone 
services, as defined therein, for at least a year.764 This number 
contains a variety of different categories of carriers, including local 
exchange carriers, interexchange carriers, competitive access 
providers, cellular carriers, mobile service, carriers, operator 
service providers, pay telephone operators, PCS providers, covered SMR 
providers, providers of telephone toll service, providers of telephone 
exchange service, and resellers. It seems certain that some of those 
3,497 telephone service firms may not qualify as small businesses 
because they are not ``independently owned and operated.'' 765 It 
seems reasonable to conclude, therefore, that fewer than 3,497 
telephone service firms are telephone companies and small entities that 
may be affected by this Order.
---------------------------------------------------------------------------

    \764\ See United States Department of Commerce, Bureau of the 
Census, 1992 Census of Transportation, Communications, and 
Utilities; Establishment and Firm Size, at Firm Size 1-123 (1995) 
(1992 Census).
    \765\ 15 U.S.C. 632(a)(1).
---------------------------------------------------------------------------

    376. Cable System Operators. SBA has developed a definition of 
small entities for cable and other pay television services, which 
includes all such companies generating less than $11 million in 
revenues annually. This definition includes cable systems operators, 
closed circuit television services, direct broadcast satellite 
services, multipoint distribution systems, satellite master antenna 
systems, and subscription television services. According to the Census 
Bureau, there were 1,323 such cable and other pay television services 
generating less than $11 million in revenue that were in operation for 
at least one year at the end of 1992.766 The Commission has 
developed its own definition of a small cable system operator for the 
purposes of rate regulation, which has been approved by SBA.767 
Under the Commission's rules, a ``small cable company is one serving 
fewer than 400,000 subscribers nationwide.'' Based on our most recent 
information, we estimate that there were 1,439 cable operators that 
qualified as small cable system operators at the end of 1995. Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with the other cable operators. 
Consequently, we estimate that there are fewer than 1,439 small entity 
cable companies that may be affected by the decisions and rules adopted 
in this Order.
---------------------------------------------------------------------------

    \766\ 1992 Census, supra, at Firm Size 1-123.
    \767\ Small Bus. Admin., 13 CFR part 121--Small Business Size 
Regulations, Proposed Rules, 60 FR 57982, 57988 (November 24, 1995).
---------------------------------------------------------------------------

    377. The Communications Act of 1934 also contains a definition of a 
small cable system operator, which is ``a cable operator that, directly 
or through an affiliate, serves in the aggregate fewer than 1 percent 
of all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' 768 There were 63,196,310 basic cable subscribers 
at the end of 1995, and 1,450 cable system operators serving fewer than 
1 percent (631,960) of subscribers.769 Although it seems certain 
that some of these cable system operators are affiliated with entities 
whose gross annual revenues exceed $250,000,000, we are unable at this 
time to estimate with greater precision the number of cable systems 
operators that would qualify as small cable operators under the 
definition in the Communications Act of 1934.
---------------------------------------------------------------------------

    \768\ 47 U.S.C. Sec. 543(m)(2).
    \769\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for December 30, 1995).
---------------------------------------------------------------------------

D. Summary of Projected Reporting, Recordkeeping and Other Compliance 
Requirements and Their Effect on Small Businesses and Steps Taken to 
Minimize the Significant Economic Impact on Small Entities and 
Alternatives Considered

    378. Structure of the Analysis. In this section of the FRFA, we 
analyze the projected reporting, recordkeeping, and other compliance 
requirements that may apply to small entities as a result of this 
Order.770 As a part of this discussion, we mention some of the 
types of skills that will be needed to meet the new requirements. We 
also describe the steps taken to minimize the economic impact of our 
decisions on small entities, including the significant alternatives 
considered and rejected.771 Due to the size of this Order, we set 
forth our analysis separately for individual sections of the Order, 
using the same headings as were used above in the corresponding 
sections of the Order.
---------------------------------------------------------------------------

    \770\ See 5 U.S.C. 604(a)(4).
    \771\ See 5 U.S.C. 604(a)(5).
---------------------------------------------------------------------------

    379. To the extent that any statement contained in this FRFA is 
perceived as creating ambiguity with respect to our rules or statements 
made in preceding sections of this Order, the rules and statements set 
forth in those preceding sections shall be controlling.
    380. Dialing Parity Requirements. The dialing parity provisions of 
section 251(b)(3) entitle customers to choose different carriers for 
their local exchange, intraLATA toll, and interLATA toll services 
without the burden of dialing access codes. Each LEC is required to 
provide dialing parity to providers of telephone exchange and telephone 
toll service with respect to all telecommunications services that 
require dialing to route a call. This obligation encompasses 
international, interstate, intrastate, local and toll services.
    381. Summary of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. In order to comply with the guidelines and 
minimum federal standards established in this Order, each LEC must 
implement toll dialing parity utilizing the ``full 2-PIC'' 
presubscription method and following the mandated timetable for 
implementation of toll dialing parity. Although no timetable was 
adopted for implementing local dialing parity it is expected that it 
will be achieved through LECs' compliance with other section 251 
requirements. LECs may recover the incremental costs of implementing 
local and toll dialing parity such as the costs of dialing parity-
specific switch software, hardware, signalling system upgrades and 
necessary consumer education. These costs will be recovered from all 
providers of telephone exchange service and telephone toll service in 
the area served by the LEC, including the LEC, through the use of a 
competitively-neutral allocator established by each state. Compliance 
with these

[[Page 47345]]

requirements may entail the use of engineering, technical, operational, 
and accounting skills.
    382. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities and Small Incumbent LECs, and Alternatives Considered. 
This Order adopts broad guidelines and minimum federal standards for 
toll dialing parity so that LECs and competing providers of telephone 
toll service, many of whom will be small business entities, will not be 
subject to an array of differing state standards and timetables 
requiring them to research and tailor their operations to the unique 
requirements of each state.
    383. First, we required all LECs to implement toll dialing parity 
based on LATA boundaries.772 Non-BOC LECs, including many smaller 
LECs, that implement intraLATA and interLATA toll dialing parity may 
choose whichever LATA within their state that they deem to be most 
appropriate to define the area within which they will offer intraLATA 
toll dialing parity. State commissions, in ruling upon such a choice of 
LATA association, shall determine whether the proposed LATA association 
is in the public interest. Because many smaller LECs have not been 
subject to LATA boundary distinctions, we also gave states the 
flexibility to take such factors into account and to require that toll 
dialing parity be based on state rather than LATA boundaries in their 
jurisdictions. Insofar as a state determines that presubscription 
should occur along state, rather than LATA, boundaries, we anticipate 
that such a determination will assist smaller LECs, in particular, by 
permitting those LECs to define their service markets based on a 
geographic distinction that is familiar to consumers.
---------------------------------------------------------------------------

    \772\ See supra para. 37.
---------------------------------------------------------------------------

    384. In addition, we adopted the ``full 2-PIC'' nationwide 
presubscription method for implementing the toll dialing parity 
requirements.773 In making this decision we considered a number of 
methodologies, including the ``modified 2-PIC,'' ``the multi-PIC'' and 
the ``smart-PIC'' methods. We concluded that the ``modified 2-PIC'' 
would limit the number of competitive service providers that could 
participate in the market and that the ``multi-PIC'' method had not yet 
proven to be technically and economically feasible. As the ``full 2-
PIC'' method is widely available and well defined, we noted that LECs, 
many of which are small entities, would not be forced to purchase and 
maintain an expensive, untested, and new technology. The Order provides 
that, until the Commission considers the use of the ``multi-PIC'' or 
``smart-PIC methods,'' states may impose such additional requirements 
only after evaluating the technical feasibility and economic impact of 
those requirements on smaller LECs in their jurisdictions.
---------------------------------------------------------------------------

    \773\ See supra paras. 49-50.
---------------------------------------------------------------------------

    385. We instituted a federal toll dialing parity implementation 
schedule rather than allowing states to implement their own 
schedules.774 This federally-mandated plan will provide certainty 
for competitors, some of which may be small business entities, seeking 
to become telephone toll service providers. Both LECs and competing 
providers of telephone toll service will be able to develop business 
plans and advertising strategies based upon specific timelines. This 
ability to plan ahead is cost-efficient and levels the playing field 
for all seeking to participate in the marketplace.
---------------------------------------------------------------------------

    \774\ See supra para. 62.
---------------------------------------------------------------------------

    386. We also concluded that a LEC may not accomplish toll dialing 
parity by automatically assigning toll customers to itself, to a 
customer's currently presubscribed interLATA or interstate toll 
carrier, or to any other carrier except when, in a state that already 
has implemented intrastate, intraLATA toll dialing parity, the 
subscriber has selected the same interLATA and intraLATA, or interstate 
and intrastate, presubscribed carrier.775 This requirement 
prevents a carrier from automatically designating itself as a toll 
carrier without notifying the customer of the opportunity to choose an 
alternative carrier, one or more of which may be a small business.
---------------------------------------------------------------------------

    \775\ See supra para. 81.
---------------------------------------------------------------------------

    387. Lastly, we implemented national rules for the recovery of 
dialing parity costs.776 Although it was suggested that these 
costs be borne only by new entrants, and not incumbent LECs, we 
determined that the network upgrades necessary to achieve dialing 
parity should be recovered on a competitively-neutral basis. A 
competitively neutral cost recovery mechanism prevents incumbent LECs 
from imposing excessive fees upon competing entrants, some of which may 
be small businesses. The imposition of excessive fees could constitute 
an impediment to entry into the intraLATA toll market by small entities 
that lack extensive financial resources and could reinforce the 
marketplace dominance of established LECs. A competitively-neutral cost 
recovery mechanism also benefits small LECs that might otherwise have 
been unduly burdened by a cost allocation plan requiring an equal 
payment from each entity.
---------------------------------------------------------------------------

    \776\ See supra para. 92.
---------------------------------------------------------------------------

    388. Nondiscriminatory Access Provisions. Under section 251(b)(3), 
all LECs are required to allow competing providers of telephone 
exchange service and telephone toll service access to telephone 
numbers, operator services, directory assistance, and directory 
listings that is at least equal in quality to the access the LEC itself 
receives, without unreasonable dialing delays. LECs are required to 
make available to competing providers operator services and directory 
assistance and all adjunct features necessary for the use of these 
services.
    389. Summary of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. In order to comply with the nondiscriminatory 
access provisions all LECs must share subscriber listing information 
with their competitors in ``readily accessible'' tape or electronic 
formats. This information must be provided upon request and in a timely 
manner.777 In addition, each LEC must process all calls from 
competing providers, including calls to the LEC's operator services and 
directory assistance, on an equal basis as calls originating from the 
providing LEC.778 LECs that refuse to comply with reasonable, 
technically feasible requests from competing providers for 
``rebranding'' of resold operator services or directory assistance are 
presumed to be unlawfully restricting access to these services.779 
Compliance with these requests may require the use of engineering, 
computer, accounting, and legal skills.
---------------------------------------------------------------------------

    \777\ See supra para. 141.
    \778\ See supra para. 159.
    \779\ See supra paras. 128, 148.
---------------------------------------------------------------------------

    390. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Small Incumbent LECs, and Alternatives Considered. The 
entitlement to access, on a nondiscriminatory basis, to telephone 
numbers, operator services, directory assistance and directory listings 
will benefit providers competing with incumbent LECs. Many of these 
competitors will be small business entities. The requirement that LECs 
make their operator assistance and directory listing services available 
to competitors may allow those competitors to save the time and money 
it would take to build similar information resources. Additionally, 
these competing providers will benefit because they will be able to 
offer consumers at least the same quality of operator service and 
directory assistance that is provided by the established LEC.

[[Page 47346]]

Small entities will be able to compete with established LECs more 
quickly and with less initial investment. Their services will have an 
opportunity to become equally valuable and equally marketable to 
consumers. We have declined to support alternatives that would have 
allowed LECs to degrade or limit access to these services, because such 
behavior would bar competitive entry into the telecommunications 
services market.
    391. Network Disclosure. Pursuant to section 251(c)(5) incumbent 
LECs are required to provide ``reasonable public notice'' of changes in 
their network which would affect a competing service provider's 
performance or ability to provide service or otherwise affect carriers' 
interoperability. The types of changes that incumbent LECs must 
disclose include, but are not limited to, changes that affect 
transmission, signalling standards, call routing, network 
configuration, electronic interfaces or data elements.
    392. Summary of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. To implement this disclosure requirement, this 
Order imposes a new filing requirement on incumbent LECs that plan to 
make changes to their networks. An incumbent LEC has a choice of filing 
certain information with the Commission or of filing a short 
certification with the Commission that the equivalent information has 
been disclosed elsewhere. In either case, the incumbent LEC is also 
responsible for maintaining the accuracy of the information. Compliance 
with this requirement may require the use of engineering, technical, 
computer, and legal skills.
    393. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Small Incumbent LECs, and Alternatives Considered. This 
recordkeeping submission requirement should, in fact, ease the burden 
on smaller entities in their endeavor to remain abreast of changes to 
the incumbent LEC network with which they interconnect. In our Order, 
we authorize the use of industry forums, industry publications, and the 
Internet, to make public disclosure of network changes and required 
technical information by incumbent LECs. We believe that ``this 
approach would build on a voluntary practice that now exists in the 
industry and would result in broad availability of the information.'' 
780 By making information broadly available, we hope to facilitate 
the participation of entities, such as small businesses, that lack the 
resources to participate in industry forums. We originally postulated 
that public notice should be provided exclusively through industry fora 
or industry publications.781 Upon further consideration, however, 
we broadened the means by which an incumbent LEC could satisfy our 
public notice requirement to include two alternative low-cost 
mechanisms--use of the Internet or filing with the Commission.782 
These additional options will be beneficial to small incumbent LECs 
because they will allow those small LECs to meet their network 
disclosure obligations without incurring the costs associated with 
attending industry conferences or publishing the information in an 
industry magazine or journal.
---------------------------------------------------------------------------

    \780\ NPRM at para. 191.
    \781\ See supra para. 192.
    \782\ See supra para. 198.
---------------------------------------------------------------------------

    394. Numbering Administration. Section 251(e) confers upon the 
Commission exclusive authority over all matters relating to the 
administration of numbering resources that pertain to the United 
States. To implement section 251(e)(1) the Commission plans to 
designate a North American Numbering Plan (NANP) Administrator that 
will administer telecommunications numbering in the United States 
equitably and impartially. Pursuant to 251(e)(2) the cost of 
establishing and maintaining the NANP Administrator will be borne by 
all telecommunications carriers on a competitively neutral basis.
    395. Summary of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. The Commission has authorized state public 
utility commissions to perform the task of implementing new area codes 
subject to Commission guidelines. If a state commission chooses to 
initiate and plan area code relief, it must inform the NANP 
Administrator of the functions the commission will perform. All 
telecommunications carriers will be required to contribute to the costs 
of establishing numbering administration. Compliance with this 
requirement will require engineering, technical, operational, and 
accounting skills.
    396. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Small Incumbent LECs, and Alternatives Considered. 
Although the Commission has authorized states to implement new area 
codes, it has stipulated that states may not implement them in a manner 
that will unduly favor or disadvantage any particular industry segment 
or group of consumers.783 Accordingly, the Commission has 
prohibited service-specific or technology specific area code overlays, 
because they would exclude certain services or carriers, that may be 
small business entities, from the existing area code and would 
segregate their operations in a new area code.784 If states choose 
to implement all-service overlays, the Commission has required that 
there be 10-digit dialing for all local calls in areas served by such 
overlays to ensure that competition will not be deterred as a result of 
dialing disparity.785 Without mandatory 10-digit dialing, 
customers might find it less attractive to switch carriers because 
competing LECs, many of which may be new entrants to the market and may 
include small businesses, would have to assign their customers numbers 
in the new overlay area code. This would require those customers to 
dial 10 digits much more often than the incumbents' customers. 
Requiring 10-digit dialing for all local calls avoids the potentially 
anti-competitive effect of all-service area code overlays. In addition, 
to advance competition, the Commission has required that where an area 
code overlay is implemented, every entity authorized to provide local 
exchange service in the old area code, which may include small 
businesses, must be assigned at least one NXX in that area code.
---------------------------------------------------------------------------

    \783\ See supra para. 281.
    \784\ See supra para. 285.
    \785\ See supra para. 286.
---------------------------------------------------------------------------

    397. Under the 1996 Act each telecommunications carrier must 
contribute to cover the cost of numbering administration. Many 
alternatives for allocating these costs were considered to ensure that 
each carrier would contribute to a fund to cover the cost of numbering 
administration on a competitively neutral basis. The contributions will 
be based on the carrier's gross revenues from its provision of 
telecommunications services reduced by all payments for 
telecommunications services or facilities that are paid to other 
telecommunications carriers. Such a competitively neutral cost 
allocation plan benefits small incumbent LECs that might have been 
unduly burdened by a cost apportionment plan requiring an equal payment 
from each entity.786
---------------------------------------------------------------------------

    \786\ See supra para. 343.
---------------------------------------------------------------------------

E. Report to Congress

    398. The Commission shall send a copy of this Final Regulatory 
Flexibility Analysis, along with this Order, in a report to Congress 
pursuant to the Small Business Regulatory Enforcement Fairness Act of 
1996, 5 U.S.C. 801(a)(1)(A). A copy of this FRFA will

[[Page 47347]]

also be published in the Federal Register.

VII. Ordering Clauses

    Pursuant to sections 1-4, 201-209, 214, 218, 224, 251, 252, 303(r) 
and 332 of the Communications Act of 1934, as amended, and Section 601 
of the Telecommunications Act of 1996, 47 U.S.C. 151-154, 201-209, 214, 
218, 224, 251, 252, 303(r), and 332, parts 51 and 52 of the 
Commission's rules, 47 CFR parts 51, 52 are amended as set forth below.
    400. It is further ordered that the policies, rules, and 
requirements set forth herein are adopted as set forth below.
    401. It is further ordered, pursuant to sections 416(a) and 413 of 
the Communications Act of 1934, as amended, 47 U.S.C. 416(a) and 413, 
that the Secretary shall serve this Second Report and Order and 
Memorandum Opinion and Order on all local exchange carriers, as defined 
in section 3(26) of the Communications Act of 1934, as amended, 47 
U.S.C. 153(26), that have designated in writing an agent in the 
District of Columbia, upon whom service of all notices and process and 
all orders, decisions, and requirements of the Commission may be made 
for and on behalf of the local exchange carrier, as required by section 
413 of the Communications Act of 1934, as amended, 47 U.S.C. 413.
    402. It is further ordered that, pursuant to the authority 
contained in section 408 of the Communications Act, as amended, 47 
U.S.C. 408, all authorizations for state commissions, Bellcore, and 
local administrators, including LECs, to perform certain numbering 
administration functions, consistent with the terms as defined in this 
Order, are effective August 8, 1996. Because of the need to avoid 
disruption in numbering administration, we find that there is good 
cause for this action pursuant to 5 U.S.C. 553(d)(3). All other 
policies, rules, and requirements set forth herein are effective 
October 7, 1996, except for collections of information subject to 
approval by the Office of Management and Budget (``OMB''), which are 
effective November 15, 1996.
    403. It is further ordered that, pursuant to sections 4, 5, and 405 
of the Communications Act of 1934, as amended, 47 U.S.C. 154, 155, and 
405, In the Matter of Proposed 708 Relief Plan and 630 Numbering Plan 
Area Code by Ameritech--Illinois, IAD File no. 94-102, Declaratory 
Ruling and Order, 10 FCC Rcd. 4596 (1995) IS CLARIFIED to the extent 
indicated herein at paragraph numbers 281-293.
    404. It is further ordered that, pursuant to the authority 
contained in sections 4(i), 251(e)(1), and 405 of the Communications 
Act of 1934, as amended, 47 U.S.C. 154(i), 251(e)(1) and 405, Comcast 
Corporation's Petition for Clarification or Reconsideration of In the 
Matter of Proposed 708 Relief Plan and 630 Numbering Plan Area Code by 
Ameritech--Illinois, IAD File no. 94-102, Declaratory Ruling and Order, 
10 FCC Rcd. 4596 (1995), IS DISMISSED as moot.
    405. It is further ordered that, pursuant to the authority 
contained in sections 4(i), 251(e)(1), and 405 of the Communications 
Act, as amended, 47 U.S.C. 154(i), 251(e)(1), and 405, the Petition for 
Limited Clarification and/or Reconsideration filed by the Pennsylvania 
Public Utilities Commission and the Request for Clarification filed by 
the National Association of Regulatory Utility Commissioners of In the 
Matter of Administration of the North American Numbering Plan, CC 
Docket No. 92-237, Report and Order, 11 FCC Rcd 2588 (1995) are hereby 
dismissed.
    406. It is further ordered that the relief requested in the 
petition for declaratory ruling filed by the Texas Public Utilities 
Commission is denied.
    407. It is further ordered that, pursuant to section 5(c)(1) of the 
Communications Act of 1934, as amended, 47 U.S.C. 155(c)(1), authority 
is delegated to the Chief, Common Carrier Bureau, to act on petitions 
filed by parties wishing to dispute proposed area code plans, to act on 
toll dialing parity implementation plans filed by LECs seeking to 
implement toll dialing parity, and to issue orders fixing reasonable 
public notice periods in the case of contested short term disclosure by 
incumbent local exchange carriers of network changes under 251(c)(5).
    408. It is further ordered that, to the extent that issues from CC 
Docket No. 95-185, In the Matter of Interconnection Between Local 
Exchange Carriers and Commercial Mobile Service Providers, are resolved 
here, we incorporate the relevant portions of the record in that docket 
pertaining to paging carriers being charged fees for the opening of 
central office codes and for blocks of numbers.

List of Subjects

47 CFR Part 51

    Collocation, Interconnection, Network elements, Pricing standard, 
Proxies, Reciprocal compensation, Resale, Transport and termination.

47 CFR Part 52

    Area codes, Cost recovery, Database architecture and 
administration, Local exchange carrier, Local number portability, Long-
term database methods, Numbering, Telecommunications, Transitional 
methods.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

    Note: This attachment will not be published in the Code of 
Federal Regulations.

Attachment--List of Parties

Comments: (Filed on or Before May 20, 1996)

American Communications Services, Inc. (ACSI)
Ameritech
Association for Local Telecommunications Services (ALTS)
AT&T Corporation (AT&T)
Beehive Telephone Company, Inc. (Beehive)
Bell Atlantic Telephone Companies (Bell Atlantic)
BellSouth Corporation (BellSouth)
Cellular Telecommunications Industry Association (CTIA)
Cincinnati Bell Telephone Company (CBT)
Citizens Utilities Company (Citizens Utilities)
Cox Communications, Inc. (Cox)
District of Columbia Public Service Commission (District of Columbia 
Commission)
Excel Telecommunications (Excel)
Florida Public Service Commission (Florida Commission)
Frontier Corporation (Frontier)
General Communication, Inc. (GCI)
General Services Administration/Department of Defense (GSA/DOD)
GTE Service Corporation (GTE)
GVNW Inc./Management (GVNW)
Illinois Commerce Commission (Illinois Commission)
Indiana Utility Regulatory Commission (Indiana Commission Staff)
Lincoln Telephone and Telegraph Company (Lincoln Telephone)
Louisiana Public Service Commission (LPSC)
MCI Telecommunications Corporation (MCI)
MFS Communications Company, Inc. (MFS)
Michigan Public Service Commission (Michigan Commission Staff)
National Cable Television Association, Inc. (NCTA)
New Jersey, Staff of Board of Public Utilities (New Jersey 
Commission)
NEXTLINK Communications, L.L.C. (NEXTLINK)
Northern Telecom inc. (Nortel)
NYNEX Telephone Companies (NYNEX)
Office of the Ohio Consumers' Counsel (Ohio Consumers' Counsel)
Omnipoint Communications, Inc. (Omnipoint)
Pacific Telesis Group (PacTel)
Paging Network, Inc. (PageNet)
Pennsylvania Public Utility Commission (Pennsylvania Commission)
People of the State of California and the Public Utility Commission 
of the State of California (California Commission)

[[Page 47348]]

Public Utilities Commission of Ohio (Ohio Commission)
Rural Telephone Coalition (Rural Tel. Coalition)
SBC Communications Inc. (SBC)
Small Cable Business Association (SCBA)
Sprint Corporation (Sprint)
Telecommunications Resellers Association
Telecommunications Carriers for Competition (TCC)
Teleport Communications Group Inc. (Teleport)
Texas Public Utilities Commission (Texas Commission)
The Western Alliance (Western Alliance)
Time Warner Communications Holdings, Inc. (Time Warner)
U S WEST, Inc. (U S WEST)
United States Telephone Association (USTA)
Vanguard Cellular Systems, Inc. (Vanguard)
WinStar Communications, Inc. (WinStar)

Replies: (Filed on or Before June 3, 1996)

A-Plus Network, Inc. (A-Plus)
ACSI
American Electric Power Service Corp.
Ameritech
AT&T
Bell Atlantic
Bell Atlantic/NYNEX Mobile
BellSouth
California Commission
Carolina Power and Light Co.
CBT
Citizens Utilities
Consolidated Edison Company of New York (Con Ed)
Cox
Delmarva Power and Light (Delmarva)
District of Columbia Commission
General Communication, Inc. (GCI)
GSA/DOD
GTE Service Corporation (GTE)
Iowa Network Services, Inc., SDN Inc., and KIN Network, Inc. (Iowa 
Network Services)
Joint Cable Companies
Koch
MCI
MFS
Minnesota Independant Equal Access Corporation (MIEAC)
Motorola, Inc.
Municipal Utilities
National Exchange Carriers Association (NECA)
NCTA
New England Electric Companies
New Mexico Public Service Corporation
NEXTLINK
NYNEX
Ohio Consumers' Counsel
Ohio Edison Company
PacTel
PageNet
Puerto Rico Telephone Company
Rural Tel. Coalition
SBC
Sprint
TCC
Telecommunications Resellers Association
Teleport
U S WEST
USTA
Vanguard
Western Alliance
WinStar

Parties Filing Comments in the Texas PUC Matter

Comments

AT&T
BellSouth
Century Cellunet, Inc. (Century Cellunet)
Competitive Telecommunications Association (CompTel)
Cox
GTE
Houston Cellular Telephone Company (HCTC)
Intelcom Group (U.S.A.), Inc. (Intelcom)
MCI
MFS
Nextel Communications, Inc. (Nextel)
PageNet
Personal Communications Industry Association (PCIA)
ProNet, Inc. (ProNet)
SBC
Sprint Spectrum
Sprint
Teleport
US West
Vanguard

Reply Comments

BellSouth
CTIA
MCI
Omnipoint Communications, Inc. (Omnipoint)
ProNet
SBC
Sprint
Teleport
Texas Commission
Texas Office of Public Utility Counsel (Texas Public Utility 
Counsel)
U S WEST
Vanguard

Parties Filing Comments in CC Docket No. 95-185

Arch Communications Group, Inc.
AirTouch Communications
PageNet

Rule Changes

    Parts 51 and 52 of Title 47 of the Code of Federal Regulations are 
amended as follows:

PART 51--INTERCONNECTION

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

    Authority: Sections 1-5, 7, 201-05, 207-09, 218, 225-27, 251-54, 
271, 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C. Secs. 151-55, 
157, 201-05, 207-09, 218, 225-27, 251-54, 271, 332, unless otherwise 
noted.

    2. Section 51.5 is amended by adding the following definitions in 
alphabetical order to read as follows:


Sec. 51.5  Terms and definitions.

* * * * *
    Dialing Parity. The term ``dialing parity'' means that a person 
that is not an affiliate of a local exchange carrier is able to provide 
telecommunications services in such a manner that customers have the 
ability to route automatically, without the use of any access code, 
their telecommunications to the telecommunications service provider of 
the customer's designation from among 2 or more telecommunications 
service providers (including such local exchange carrier).
* * * * *
    Information services. The term ``information services'' means the 
offering of a capability for generating, acquiring, storing, 
transforming, processing, retrieving, utilizing, or making available 
information via telecommunications, and includes electronic publishing, 
but does not include any use of any such capability for the management, 
control, or operation of a telecommunications system or the management 
of a telecommunications service.
* * * * *
    Local Access and Transport Area (LATA). A ``Local Access and 
Transport Area'' is a contiguous geographic area--
    (1) Established before February 8, 1996 by a Bell operating company 
such that no exchange area includes points within more than 1 
metropolitan statistical area, consolidated metropolitan statistical 
area, or State, except as expressly permitted under the AT&T Consent 
Decree; or
    (2) Established or modified by a Bell operating company after 
February 8, 1996 and approved by the Commission.
* * * * *
    Service provider. A ``service provider'' is a provider of 
telecommunications services or a provider of information services.
* * * * *
    State. The term ``state'' includes the District of Columbia and the 
Territories and possessions.
* * * * *
    Telecommunications service. The term ``telecommunications service'' 
refers to the offering of telecommunications for a fee directly to the 
public, or to such classes of users as to be effectively available 
directly to the public, regardless of the facilities used.
    Telephone exchange service. A ``telephone exchange service'' is:
    (1) A service within a telephone exchange, or within a connected 
system of telephone exchanges within the same exchange area operated to 
furnish to subscribers intercommunicating service of the character 
ordinarily furnished by a single exchange, and which is covered by the 
exchange service charge, or
    (2) A comparable service provided through a system of switches, 
transmission equipment, or other facilities (or combination thereof) by

[[Page 47349]]

which a subscriber can originate and terminate a telecommunications 
service.
    Telephone toll service. The term ``telephone toll service'' refers 
to telephone service between stations in different exchange areas for 
which there is made a separate charge not included in contracts with 
subscribers for exchange service.
    Unreasonable dialing delay. For the same type of calls, dialing 
delay is ``unreasonable'' when the dialing delay experienced by the 
customer of a competing provider is greater than that experienced by a 
customer of the LEC providing dialing parity, or nondiscriminatory 
access to operator services or directory assistance.
* * * * *
    3. A new Sec. 51.205 is added to subpart C to read as follows:


Sec. 51.205  Dialing parity: general.

    A local exchange carrier (LEC) shall provide local and toll dialing 
parity to competing providers of telephone exchange service or 
telephone toll service, with no unreasonable dialing delays. Dialing 
parity shall be provided for all originating telecommunications 
services that require dialing to route a call.
    4. A new Sec. 51.207 is added to subpart C to read as follows:


Sec. 51.207  Local dialing parity.

    A LEC shall permit telephone exchange service customers within a 
local calling area to dial the same number of digits to make a local 
telephone call notwithstanding the identity of the customer's or the 
called party's telecommunications service provider.
    5. A new Sec. 51.209 is added to subpart C read as follows:


Sec. 51.209  Toll dialing parity.

    (a) A LEC shall implement throughout each state in which it offers 
telephone exchange service intraLATA and interLATA toll dialing parity 
based on LATA boundaries. When a single LATA covers more than one 
state, the LEC shall use the implementation procedures that each state 
has approved for the LEC within that state's borders.
    (b) A LEC shall implement toll dialing parity through a 
presubscription process that permits a customer to select a carrier to 
which all designated calls on a customer's line will be routed 
automatically. LECs shall allow a customer to presubscribe, at a 
minimum, to one telecommunications carrier for all interLATA toll calls 
and to presubscribe to the same or to another telecommunications 
carrier for all intraLATA toll calls.
    (c) A LEC may not assign automatically a customer's intraLATA toll 
traffic to itself, to its subsidiaries or affiliates, to the customer's 
presubscribed interLATA or interstate toll carrier, or to any other 
carrier, except when, in a state that already has implemented 
intrastate, intraLATA toll dialing parity, the subscriber has selected 
the same presubscribed carrier for both intraLATA and interLATA toll 
calls.
    (d) Notwithstanding the requirements of paragraphs (a) and (b) of 
this section, states may require that toll dialing parity be based on 
state boundaries if it deems that the provision of intrastate and 
interstate toll dialing parity is procompetitive and otherwise in the 
public interest.
    6. A new Sec. 51.211 is added to subpart C to read as follows:


Sec. 51.211  Toll dialing parity implementation schedule.

    (a) A LEC that does not begin providing in-region, interLATA or in-
region, interstate toll services in a state before February 8, 1999, 
must implement intraLATA and interLATA toll dialing parity throughout 
that state on February 8, 1999 or an earlier date as the state may 
determine, consistent with section 271(e)(2)(B) of the Communications 
Act of 1934, as amended, to be in the public interest.
    (b) A Bell Operating Company (BOC) that provides in-region, 
interLATA toll services in a state before February 8, 1999 shall 
provide intraLATA toll dialing parity throughout that state coincident 
with its provision of in-region, interLATA toll services.
    (c) A LEC that is not a BOC that begins providing in-region, 
interLATA or in-region, interstate toll services in a state before 
August 8, 1997, shall implement intraLATA and interLATA toll dialing 
parity throughout that state by August 8, 1997. If the LEC is unable to 
comply with the August 8, 1997 implementation deadline, the LEC must 
notify the Commission's Common Carrier Bureau by May 8, 1997. In the 
notification, the LEC must state its justification for noncompliance 
and must set forth the date by which it proposes to implement intraLATA 
and interLATA toll dialing parity.
    (d) A LEC that is not a BOC that begins providing in-region, 
interLATA or in-region, interstate toll services in a state on or after 
August 8, 1997, but before February 8, 1999 shall implement intraLATA 
and interLATA toll dialing parity throughout that state no later than 
the date on which it begins providing in-region, interLATA or in-
region, interstate toll services.
    (e) Notwithstanding the requirements of paragraphs (a) through (d) 
of this section, a LEC shall implement toll dialing parity under a 
state order as described below:
    (1) If the state issued a dialing parity order by December 19, 1995 
requiring a BOC to implement toll dialing parity in advance of the 
dates established by these rules, the BOC must implement toll dialing 
parity in accordance with the implementation dates established by the 
state order.
    (2) If the state issued a dialing parity order by August 8, 1996 
requiring a LEC that is not a BOC to implement toll dialing parity in 
advance of the dates established by these rules, the LEC must implement 
toll dialing parity in accordance with the implementation dates 
established by the state order.
    (f) For LECs that are not Bell Operating Companies, the term in-
region, interLATA toll service, as used in this section and 
Sec. 51.213, includes the provision of toll services outside of the 
LEC's study area.
    7. A new Sec. 51.213 is added to subpart C to read as follows:


Sec. 51.213  Toll dialing parity implementation plans.

    (a) A LEC must file a plan for providing intraLATA toll dialing 
parity throughout each state in which it offers telephone exchange 
service. A LEC cannot offer intraLATA toll dialing parity within a 
state until the implementation plan has been approved by the 
appropriate state commission or the Commission.
    (b) A LEC's implementation plan must include:
    (1) A proposal that explains how the LEC will offer intraLATA toll 
dialing parity for each exchange that the LEC operates in the state, in 
accordance with the provisions of this section, and a proposed time 
schedule for implementation; and
    (2) A proposal for timely notification of its subscribers and the 
methods it proposes to use to enable subscribers to affirmatively 
select an intraLATA toll service provider.
    (3) A LEC that is not a BOC also shall identify the LATA with which 
it will associate for the purposes of providing intraLATA and interLATA 
toll dialing parity under this subpart.
    (c) A LEC must file its implementation plan with the state 
commission for each state in which the LEC provides telephone exchange 
service, except that if a LEC determines that a state commission has 
elected not to review the plan or will not complete its review in 
sufficient time for the LEC to meet the toll dialing parity

[[Page 47350]]

implementation deadlines in Sec. 51.211, the LEC must file its plan 
with the Commission:
    (1) No later than 180 days before the date on which the LEC will 
begin providing toll dialing parity in the state, or no later than 180 
days before February 8, 1999, whichever occurs first; or
    (2) For LECs that begin providing in-region, interLATA or in-
region, interstate toll service (see Sec. 51.211(f)) before August 8, 
1997, no later than December 5, 1996.
    (d) The Commission will release a public notice of any LEC 
implementation plan that is filed with the Commission under paragraph 
(c) of this section.
    (1) The LEC's plan will be deemed approved on the fifteenth day 
following release of the Commission's public notice unless, no later 
than the fourteenth day following the release of the Commission's 
public notice; either
    (i) The Common Carrier Bureau notifies the LEC that its plan will 
not be deemed approved on the fifteenth day; or
    (ii) An opposition to the plan is filed with the Commission and 
served on the LEC that filed the plan. Such an opposition must state 
specific reasons why the LEC's plan does not serve the public interest.
    (2) If one or more oppositions are filed, the LEC that filed the 
plan will have seven additional days (i.e., until no later than the 
twenty-first day following the release of the Commission's public 
notice) within which to file a reply to the opposition(s) and serve it 
on all parties that filed an opposition. The response shall:
    (i) Include information responsive to the allegations and concerns 
identified by the opposing party; and
    (ii) Identify possible revisions to the plan that will address the 
opposing party's concerns.
    (3) If a LEC's plan is opposed under paragraph (d)(1)(ii) of this 
section, the Common Carrier Bureau will act on the plan within ninety 
days of the date on which the Commission released its public notice. In 
the event the Bureau fails to act within ninety days, the plan will not 
go into effect pending Bureau action. If the plan is not opposed, but 
it did not go into effect on the fifteenth day following the release of 
the Commission's public notice (see paragraph (d)(1)(i) of this 
section), and the Common Carrier Bureau fails to act on the plan within 
ninety days of the date on which the Commission released its public 
notice, the plan will be deemed approved without further Commission 
action on the ninety-first day after the date on which the Commission 
released its public notice of the plan's filing.
    8. A new Sec. 51.215 is added to subpart C to read as follows:


Sec. 51.215  Dialing parity: cost recovery.

    (a) A LEC may recover the incremental costs necessary for the 
implementation of toll dialing parity. The LEC must recover such costs 
from all providers of telephone exchange service and telephone toll 
service in the area served by the LEC, including that LEC. The LEC 
shall use a cost recovery mechanism established by the state.
    (b) Any cost recovery mechanism for the provision of toll dialing 
parity pursuant to this section that a state adopts must not:
    (1) Give one service provider an appreciable cost advantage over 
another service provider, when competing for a specific subscriber 
(i.e., the recovery mechanism may not have a disparate effect on the 
incremental costs of competing service providers seeking to serve the 
same customer); or
    (2) Have a disparate effect on the ability of competing service 
providers to earn a normal return on their investment.
    9. A new Sec. 51.217 is added to subpart C to read as follows:


Sec. 51.217  Nondiscriminatory access: Telephone numbers, operator 
services, directory assistance services, and directory listings.

    (a) Definitions. As used in this section, the following definitions 
apply:
    (1) Competing provider. A ``competing provider'' is a provider of 
telephone exchange or telephone toll services that seeks 
nondiscriminatory access from a local exchange carrier (LEC) in that 
LEC's service area.
    (2) Nondiscriminatory access. ``Nondiscriminatory access'' refers 
to access to telephone numbers, operator services, directory assistance 
and directory listings that is at least equal to the access that the 
providing local exchange carrier (LEC) itself receives. 
Nondiscriminatory access includes, but is not limited to:
    (i) Nondiscrimination between and among carriers in the rates, 
terms, and conditions of the access provided; and
    (ii) The ability of the competing provider to obtain access that is 
at least equal in quality to that of the providing LEC.
    (3) Providing local exchange carrier (LEC). A ``providing local 
exchange carrier'' is a local exchange carrier (LEC) that is required 
to permit nondiscriminatory access to a competing provider.
    (b) General rule. A local exchange carrier (LEC) that provides 
operator services, directory assistance services or directory listings 
to its customers, or provides telephone numbers, shall permit competing 
providers of telephone exchange service or telephone toll service to 
have nondiscriminatory access to that service or feature, with no 
unreasonable dialing delays.
    (c) Specific requirements. A LEC subject to paragraph (b) of this 
section must also comply with the following requirements:
    (1) Telephone numbers. A LEC shall permit competing providers to 
have access to telephone numbers that is identical to the access that 
the LEC provides to itself.
    (2) Operator services. A LEC must permit telephone service 
customers to connect to the operator services offered by that 
customer's chosen local service provider by dialing ``0,'' or ``0'' 
plus the desired telephone number, regardless of the identity of the 
customer's local telephone service provider.
    (3) Directory assistance services and directory listings.--(i) 
Access to directory assistance. A LEC shall permit competing providers 
to have access to its directory assistance services so that any 
customer of a competing provider can obtain directory listings, except 
as provided in paragraph (c)(3)(iii) of this section, on a 
nondiscriminatory basis, notwithstanding the identity of the customer's 
local service provider, or the identity of the provider for the 
customer whose listing is requested.
    (ii) Access to directory listings. A LEC shall provide directory 
listings to competing providers in readily accessible magnetic tape or 
electronic formats in a timely fashion upon request. A LEC also must 
permit competing providers to have access to and read the information 
in the LEC's directory assistance databases.
    (iii) Unlisted numbers. A LEC shall not provide access to unlisted 
telephone numbers, or other information that its customer has asked the 
LEC not to make available. The LEC shall ensure that access is 
permitted only to the same directory information that is available to 
its own directory assistance customers.
    (iv) Adjuncts to services. Operator services and directory 
assistance services must be made available to competing providers in 
their entirety, including access to any adjunct features (e.g., rating 
tables or customer information databases) necessary to allow competing 
providers full use of these services.
    (d) Branding of operator services and directory assistance 
services. The refusal of a providing local exchange

[[Page 47351]]

carrier (LEC) to comply with the reasonable request of a competing 
provider that the providing LEC rebrand its operator services and 
directory assistance, or remove its brand from such services, creates a 
presumption that the providing LEC is unlawfully restricting access to 
its operator services and directory assistance. The providing LEC can 
rebut this presumption by demonstrating that it lacks the capability to 
comply with the competing provider's request.
    (e) Disputes.--(1) Disputes involving nondiscriminatory access. In 
disputes involving nondiscriminatory access to operator services, 
directory assistance services, or directory listings, a providing LEC 
shall bear the burden of demonstrating with specificity:
    (i) That it is permitting nondiscriminatory access, and
    (ii) That any disparity in access is not caused by factors within 
its control. ``Factors within its control'' include, but are not 
limited to, physical facilities, staffing, the ordering of supplies or 
equipment, and maintenance.
    (2) Disputes involving unreasonable dialing delay. In disputes 
between providing local exchange carriers (LECs) and competing 
providers involving unreasonable dialing delay in the provision of 
access to operator services and directory assistance, the burden of 
proof is on the providing LEC to demonstrate with specificity that it 
is processing the calls of the competing provider's customers on terms 
equal to that of similar calls from the providing LEC's own customers.
    10. Section 51.305 is amended by adding a new paragraph (g) to read 
as follows:


Sec. 51.305  Interconnection.

* * * * *
    (g) An incumbent LEC shall provide to a requesting 
telecommunications carrier technical information about the incumbent 
LEC's network facilities sufficient to allow the requesting carrier to 
achieve interconnection consistent with the requirements of this 
section.
    11. Section 51.307 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 51.307  Duty to provide access on an unbundled basis to network 
elements.

* * * * *
    (e) An incumbent LEC shall provide to a requesting 
telecommunications carrier technical information about the incumbent 
LEC's network facilities sufficient to allow the requesting carrier to 
achieve access to unbundled network elements consistent with the 
requirements of this section.
    12. A new Sec. 51.325 is added to subpart D to read as follows:


Sec. 51.325  Notice of network changes: Public notice requirement.

    (a) An incumbent local exchange carrier (``LEC'') must provide 
public notice regarding any network change that:
    (1) Will affect a competing service provider's performance or 
ability to provide service; or
    (2) Will affect the incumbent LEC's interoperability with other 
service providers.
    (b) For purposes of this section, interoperability means the 
ability of two or more facilities, or networks, to be connected, to 
exchange information, and to use the information that has been 
exchanged.
    (c) Until public notice has been given in accordance with 
Secs. 51.325 through 51.335, an incumbent LEC may not disclose to 
separate affiliates, separated affiliates, or unaffiliated entities 
(including actual or potential competing service providers or 
competitors), information about planned network changes that are 
subject to this section.
    (d) For the purposes of Secs. 51.325 through 51.335, the term 
services means telecommunications services or information services.
    13. A new Sec. 51.327 is added to subpart D to read as follows:


Sec. 51.327  Notice of network changes: content of notice.

    (a) Public notice of planned network changes must, at a minimum, 
include:
    (1) The carrier's name and address;
    (2) The name and telephone number of a contact person who can 
supply additional information regarding the planned changes;
    (3) The implementation date of the planned changes;
    (4) The location(s) at which the changes will occur;
    (5) A description of the type of changes planned (Information 
provided to satisfy this requirement must include, as applicable, but 
is not limited to, references to technical specifications, protocols, 
and standards regarding transmission, signaling, routing, and facility 
assignment as well as references to technical standards that would be 
applicable to any new technologies or equipment, or that may otherwise 
affect interconnection); and
    (6) A description of the reasonably foreseeable impact of the 
planned changes.
    (b) The incumbent LEC also shall follow, as necessary, procedures 
relating to confidential or proprietary information contained in 
Sec. 51.335.
    14. A new Sec. 51.329 is added to subpart D read as follows:


Sec. 51.329  Notice of network changes: Methods for providing notice.

    (a) In providing the required notice to the public of network 
changes, an incumbent LEC may use one of the following methods:
    (1) Filing a public notice with the Commission; or
    (2) Providing public notice through industry fora, industry 
publications, or the carrier's publicly accessible Internet site. If an 
incumbent LEC uses any of the methods specified in paragraph (a)(2) of 
this section, it also must file a certification with the Commission 
that includes:
    (i) A statement that identifies the proposed changes;
    (ii) A statement that public notice has been given in compliance 
with Secs. 51.325 through 51.335; and
    (iii) A statement identifying the location of the change 
information and describing how this information can be obtained.
    (b) Until the planned change is implemented, an incumbent LEC must 
keep the notice available for public inspection, and amend the notice 
to keep the information complete, accurate and up-to-date.
    (c) Specific filing requirements. Commission filings under this 
section must be made as follows:
    (1) The public notice or certification must be labeled with one of 
the following titles, as appropriate: ``Public Notice of Network Change 
Under Rule 51.329(a),'' ``Certification of Public Notice of Network 
Change Under Rule 51.329(a),'' ``Short Term Public Notice Under Rule 
51.333(a),'' or ``Certification of Short Term Public Notice Under Rule 
51.333(a).''
    (2) Two paper copies of the incumbent LEC's public notice or 
certification, required under paragraph (a) of this section, must be 
sent to ``Secretary, Federal Communications Commission, Washington, DC 
20554.'' The date on which this filing is received by the Secretary is 
considered the official filing date.
    (3) In addition, one paper copy and one diskette copy must be sent 
to the ``Chief, Network Services Division, Common Carrier Bureau, 
Federal Communications Commission, Washington, DC 20554.'' The diskette 
copy must be on a standard 3\1/2\ inch diskette, formatted in IBM-
compatible format to be readable by high-density floppy drives 
operating under MS DOS 5.X or later compatible versions, and shall be 
in a word-processing format designated, from time-to-time, in public

[[Page 47352]]

notices released by the Network Services Division. The diskette must be 
submitted in ``read only'' mode, and must be clearly labeled with the 
carrier's name, the filing date, and an identification of the 
diskette's contents.
    15. A new Sec. 51.331 is added to subpart D read as follows:


Sec. 51.331  Notice of network changes: timing of notice.

    (a) An incumbent LEC shall give public notice of planned changes at 
the make/buy point, as defined in paragraph (b) of this section, but at 
least 12 months before implementation, except as provided below:
    (1) If the changes can be implemented within twelve months of the 
make/buy point, public notice must be given at the make/buy point, but 
at least six months before implementation.
    (2) If the changes can be implemented within six months of the 
make/buy point, public notice may be given pursuant to the short term 
notice procedures provided in Sec. 51.333.
    (b) For purposes of this section, the make/buy point is the time at 
which an incumbent LEC decides to make for itself, or to procure from 
another entity, any product the design of which affects or relies on a 
new or changed network interface. If an incumbent LEC's planned changes 
do not require it to make or to procure a product, then the make/buy 
point is the point at which the incumbent LEC makes a definite decision 
to implement a network change.
    (1) For purposes of this section, a product is any hardware or 
software for use in an incumbent LEC's network or in conjunction with 
its facilities that, when installed, could affect the compatibility of 
an interconnected service provider's network, facilities or services 
with an incumbent LEC's existing telephone network, facilities or 
services, or with any of an incumbent carrier's services or 
capabilities.
    (2) For purposes of this section a definite decision is reached 
when an incumbent LEC determines that the change is warranted, 
establishes a timetable for anticipated implementation, and takes any 
action toward implementation of the change within its network.
    16. A new Sec. 51.333 is added to subpart D to read as follows:


Sec. 51.333  Notice of network changes: short term notice.

    (a) Certificate of service. If an incumbent LEC wishes to provide 
less than six months notice of planned network changes, the public 
notice or certification that it files with the Commission must include 
a certificate of service in addition to the information required by 
Sec. 51.327(a) or Sec. 51.329(a)(2), as applicable. The certificate of 
service shall include:
    (1) A statement that, at least five business days in advance of its 
filing with the Commission, the incumbent LEC served a copy of its 
public notice upon each telephone exchange service provider that 
directly interconnects with the incumbent LEC's network; and
    (2) The name and address of each such telephone exchange service 
provider upon which the notice was served.
    (b) Implementation date. The Commission will release a public 
notice of such short term notice filings. Short term notices shall be 
deemed final on the tenth business day after the release of the 
Commission's public notice, unless an objection is filed, pursuant to 
paragraph (c) of this section.
    (c) Objection procedures. An objection to an incumbent LEC's short 
term notice may be filed by an information service provider or 
telecommunication service provider that directly interconnects with the 
incumbent LEC's network. Such objections must be filed with the 
Commission, and served on the incumbent LEC, no later than the ninth 
business day following the release of the Commission's public notice. 
All objections to an incumbent LEC's short term notice must:
    (1) State specific reasons why the objector cannot accommodate the 
incumbent LEC's changes by the date stated in the incumbent LEC's 
public notice and must indicate any specific technical information or 
other assistance required that would enable the objector to accommodate 
those changes;
    (2) List steps the objector is taking to accommodate the incumbent 
LEC's changes on an expedited basis;
    (3) State the earliest possible date (not to exceed six months from 
the date the incumbent LEC gave its original public notice under this 
section) by which the objector anticipates that it can accommodate the 
incumbent LEC's changes, assuming it receives the technical information 
or other assistance requested under paragraph (c)(1) of this section;
    (4) Provide any other information relevant to the objection; and
    (5) Provide the following affidavit, executed by the objector's 
president, chief executive officer, or other corporate officer or 
official, who has appropriate authority to bind the corporation, and 
knowledge of the details of the objector's inability to adjust its 
network on a timely basis:

    ``I, (name and title), under oath and subject to penalty for 
perjury, certify that I have read this objection, that the 
statements contained in it are true, that there is good ground to 
support the objection, and that it is not interposed for purposes of 
delay. I have appropriate authority to make this certification on 
behalf of (objector) and I agree to provide any information the 
Commission may request to allow the Commission to evaluate the 
truthfulness and validity of the statements contained in this 
objection.''

    (d) Response to objections. If an objection is filed, an incumbent 
LEC shall have until no later than the fourteenth business day 
following the release of the Commission's public notice to file with 
the Commission a response to the objection and to serve the response on 
all parties that filed objections. An incumbent LEC's response must:
    (1) Provide information responsive to the allegations and concerns 
identified by the objectors;
    (2) State whether the implementation date(s) proposed by the 
objector(s) are acceptable;
    (3) Indicate any specific technical assistance that the incumbent 
LEC is willing to give to the objectors; and
    (4) Provide any other relevant information.
    (e) Resolution. If an objection is filed pursuant to paragraph (c) 
of this section, then the Chief, Network Services Division, Common 
Carrier Bureau, will issue an order determining a reasonable public 
notice period, provided however, that if an incumbent LEC does not file 
a response within the time period allotted, or if the incumbent LEC's 
response accepts the latest implementation date stated by an objector, 
then the incumbent LEC's public notice shall be deemed amended to 
specify the implementation date requested by the objector, without 
further Commission action. An incumbent LEC must amend its public 
notice to reflect any change in the applicable implementation date 
pursuant to Sec. 51.329(b).
    17. A new Sec. 51.335 is added to subpart D to read as follows:


Sec. 51.335  Notice of network changes: confidential or proprietary 
information.

    (a) If an incumbent LEC claims that information otherwise required 
to be disclosed is confidential or proprietary, the incumbent LEC's 
public notice must include, in addition to the information identified 
in Sec. 51.327(a), a statement that the incumbent LEC will make further 
information available to those signing a nondisclosure agreement.

[[Page 47353]]

    (b) Tolling the public notice period. Upon receipt by an incumbent 
LEC of a competing service provider's request for disclosure of 
confidential or proprietary information, the applicable public notice 
period will be tolled until the parties agree on the terms of a 
nondisclosure agreement. An incumbent LEC receiving such a request must 
amend its public notice as follows:
    (1) On the date it receives a request from a competing service 
provider for disclosure of confidential or proprietary information, to 
state that the notice period is tolled; and
    (2) On the date the nondisclosure agreement is finalized, to 
specify a new implementation date.

PART 52--NUMBERING

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

    Authority: Sec. 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 U.S.C. 
Sec. 151, 152, 154, 155 unless otherwise noted. Interpret or apply 
secs. 3, 4, 201-05, 207-09, 218, 225-7, 251-2, 271 and 332, 48 Stat. 
1070, as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 218, 
225-7, 251-2, 271 and 332 unless otherwise noted.

    19. Subpart B of part 52 is redesignated as subpart C and amended 
by redesignating Secs. 52.1 through 52.99 as Secs. 52.21 through 52.99; 
and a new subpart A and subpart B are added to part 52 to read as 
follows:

Subpart A--Scope and Authority

Sec.
52.1  Basis and purpose.
52.3  General.
52.5  Definitions.

Subpart B--Administration

52.7  Definitions.
52.9  General requirements.
52.11  North American Numbering Council.
52.13  North American Numbering Plan Administrator.
52.15  Central office code administration.
52.17  Costs of number administration.
52.19  Area code relief.

Subpart C--Number Portability

52.21  Definitions.
52.23  Deployment of long-term database methods for number 
portability by LECs.
52.25  Database architecture and administration.
52.27  Deployment of transitional measures for number portability.
52.29  Cost recovery for transitional measures for number 
portability.
52.31  Deployment of long-term database methods for number 
portability by CMRS providers.
52.32-52.99  [Reserved]

Subpart A--Scope and Authority


Sec. 52.1  Basis and purpose.

    (a) Basis. These rules are issued pursuant to the Communications 
Act of 1934, as amended, 47 U.S.C. 151 et. seq.
    (b) Purpose. The purpose of these rules is to establish, for the 
United States, requirements and conditions for the administration and 
use of telecommunications numbers for provision of telecommunications 
services.


Sec. 52.3  General.

    The Commission shall have exclusive authority over those portions 
of the North American Numbering Plan (NANP) that pertain to the United 
States. The Commission may delegate to the States or other entities any 
portion of such jurisdiction.


Sec. 52.5  Definitions.

    As used in this part:
    (a) Incumbent local exchange carrier. With respect to an area, an 
``incumbent local exchange carrier'' is a local exchange carrier that:
    (1) On February 8, 1996, provided telephone exchange service in 
such area; and
    (2) (i) On February 8, 1996, was deemed to be a member of the 
exchange carrier association pursuant to Sec. 69.601(b) of this chapter 
(47 CFR 69.601(b)); or
    (ii) Is a person or entity that, on or after February 8, 1996, 
became a successor or assign of a member described in paragraph 
(a)(2)(i) of this section.
    (b) North American Numbering Council (NANC). The ``North American 
Numbering Council'' is an advisory committee created under the Federal 
Advisory Committee Act, 5 U.S.C., App (1988), to advise the Commission 
and to make recommendations, reached through consensus, that foster 
efficient and impartial number administration.
    (c) North American Numbering Plan (NANP). The ``North American 
Numbering Plan'' is the basic numbering scheme for the 
telecommunications networks located in Anguilla, Antigua, Bahamas, 
Barbados, Bermuda, British Virgin Islands, Canada, Cayman Islands, 
Dominica, Dominican Republic, Grenada, Jamaica, Montserrat, St. Kitts & 
Nevis, St. Lucia, St. Vincent, Turks & Caicos Islands, Trinidad & 
Tobago, and the United States (including Puerto Rico, the U.S. Virgin 
Islands, Guam and the Commonwealth of the Northern Mariana Islands).
    (d) State. The term ``state'' includes the District of Columbia and 
the Territories and possessions.
    (e) State commission. The term ``state commission'' means the 
commission, board, or official (by whatever name designated) which 
under the laws of any state has regulatory jurisdiction with respect to 
intrastate operations of carriers.
    (f) Telecommunications. ``Telecommunications'' means the 
transmission, between or among points specified by the user, of 
information of the user's choosing, without change in the form or 
content of the information as sent and received.
    (g) Telecommunications carrier. A ``telecommunications carrier'' is 
any provider of telecommunications services, except that such term does 
not include aggregators of telecommunications services (as defined in 
47 U.S.C. 226(a)(2)).
    (h) Telecommunications service. The term ``telecommunications 
service'' refers to the offering of telecommunications for a fee 
directly to the public, or to such classes of users as to be 
effectively available directly to the public, regardless of the 
facilities used.

Subpart B--Administration


Sec. 52.7  Definitions.

    As used in this subpart:
    (a) Area code or numbering plan area (NPA). The term ``area code or 
numbering plan area'' refers to the first three digits (NXX) of a ten-
digit telephone number in the form NXX-NXX-XXXX, where N represents any 
one of the numbers 2 through 9 and X represents any one of the numbers 
0 through 9.
    (b) Area code relief. The term ``area code relief'' refers to the 
process by which central office codes are made available when there are 
few or no unassigned central office codes remaining in an existing area 
code and a new area code is introduced.
    (c) Central office (CO) code. The term ``central office code'' 
refers to the second three digits (NXX) of a ten-digit telephone number 
in the form NXX-NXX-XXXX, where N represents any one of the numbers 2 
through 9 and X represents any one of the numbers 0 through 9.
    (d) Central office (CO) code administrator. The term ``central 
office code administrator'' refers to the entity or entities 
responsible for managing central office codes in each area code.
    (e) North American Numbering Plan Administrator (NANPA). The term 
``North American Numbering Plan Administrator'' refers to the entity or 
entities responsible for managing the NANP.

[[Page 47354]]

Sec. 52.9  General requirements.

    (a) To ensure that telecommunications numbers are made available on 
an equitable basis, the administration of telecommunications numbers 
shall, in addition to the specific requirements set forth in this 
subpart:
    (1) Facilitate entry into the telecommunications marketplace by 
making telecommunications numbering resources available on an 
efficient, timely basis to telecommunications carriers;
    (2) Not unduly favor or disfavor any particular telecommunications 
industry segment or group of telecommunications consumers; and
    (3) Not unduly favor one telecommunications technology over 
another.
    (b) If the Commission delegates any telecommunications numbering 
administration functions to any State or other entity pursuant to 47 
U.S.C. 251(e)(1), such State or entity shall perform these functions in 
a manner consistent with this part.


Sec. 52.11  North American Numbering Council.

    The duties of the North American Numbering Council (NANC), may 
include, but are not limited to:
    (a) Advising the Commission on policy matters relating to the 
administration of the NANP in the United States;
    (b) Making recommendations, reached through consensus, that foster 
efficient and impartial number administration;
    (c) Initially resolving disputes, through consensus, pertaining to 
number administration in the United States;
    (d) Recommending to the Commission an appropriate entity to serve 
as the NANPA;
    (e) Recommending to the Commission an appropriate mechanism for 
recovering the costs of NANP administration in the United States, 
consistent with Sec. 52.17;
    (f) Carrying out the duties described in Sec. 52.25; and
    (g) Carrying out this part as directed by the Commission.


Sec. 52.13  North American Numbering Plan Administrator.

    (a) The North American Numbering Plan Administrator (NANPA) shall 
be an independent and impartial non-government entity.
    (b) The duties of the NANPA shall include, but are not limited to:
    (1) Ensuring that the interests of all NANP member countries are 
considered;
    (2) Processing number assignment applications associated with, but 
not limited to: area codes, N11 codes, carrier identification codes 
(CICs), ``500'' central office codes, ``900''central office codes, 
``456'' central office codes, Signalling System 7 network codes, and 
Automatic Number Identification Integration Integers (ANI II);
    (3) Assigning the numbers and codes described in paragraph (b)(2) 
of this section;
    (4) Maintaining and monitoring administrative number databases;
    (5) Assuming additional telecommunications number administration 
activities, as assigned; and
    (6) Ensuring that any action taken with respect to number 
administration is consistent with this part.


Sec. 52.15  Central office code administration.

    (a) Central Office Code Administration shall be performed by the 
NANPA, or another entity or entities, as designated by the Commission.
    (b) Duties of the entity or entities performing central office code 
administration may include, but are not limited to:
    (1) Processing central office code assignment applications and 
assigning such codes in a manner that is consistent with this part;
    (2) Accessing and maintaining central office code assignment 
databases;
    (3) Contributing to the CO Code Use Survey (COCUS), an annual 
survey that describes the present and projected use of CO codes for 
each NPA in the NANP;
    (4) Monitoring the use of central office codes within each area 
code and forecasting the date by which all central office codes within 
that area code will be assigned; and
    (5) Planning for and initiating area code relief, consistent with 
Sec. 52.19.
    (c) Any telecommunications carrier performing central office code 
administration:
    (1) Shall not charge fees for the assignment or use of central 
office codes to other telecommunications carriers, including paging and 
CMRS providers, unless the telecommunications carrier assigning the 
central office code charges one uniform fee for all carriers, including 
itself and its affiliates; and
    (2) Shall, consistent with this subpart, apply identical standards 
and procedures for processing all central office code assignment 
requests, and for assigning such codes, regardless of the identity of 
the telecommunications carrier making the request.


Sec. 52.17  Costs of number administration.

    All telecommunications carriers in the United States shall 
contribute on a competitively neutral basis to meet the costs of 
establishing numbering administration.
    (a) For each telecommunications carrier, such contributions shall 
be based on the gross revenues from the provision of its 
telecommunications services.
    (b) The contributions in paragraph (a) of this section shall be 
based on each contributor's gross revenues from its provision of 
telecommunications services reduced by all payments for 
telecommunications services and facilities that have been paid to other 
telecommunications carriers.


Sec. 52.19  Area code relief.

    (a) State commissions may resolve matters involving the 
introduction of new area codes within their states. Such matters may 
include, but are not limited to: Directing whether area code relief 
will take the form of a geographic split, an overlay area code, or a 
boundary realignment; establishing new area code boundaries; 
establishing necessary dates for the implementation of area code relief 
plans; and directing public education and notification efforts 
regarding area code changes.
    (b) State commissions may perform any or all functions related to 
initiation and development of area code relief plans, so long as they 
act consistently with the guidelines enumerated in this part, and 
subject to paragraph (b)(2) of this section. For the purposes of this 
paragraph, initiation and development of area code relief planning 
encompasses all functions related to the implementation of new area 
codes that were performed by central office code administrators prior 
to February 8, 1996. Such functions may include: declaring that the 
area code relief planning process should begin; convening and 
conducting meetings to which the telecommunications industry and the 
public are invited on area code relief for a particular area code; and 
developing the details of a proposed area code relief plan or plans.
    (1) The entity or entities designated by the Commission to serve as 
central office code administrator(s) shall initiate and develop area 
code relief plans for each area code in each state that has not 
notified such entity or entities, pursuant to paragraph (b)(2) of this 
section, that the state will handle such functions.
    (2) Pursuant to paragraph (b)(1) of this section, a state 
commission must notify the entity or entities designated by the 
Commission to serve as central office code administrator(s) for its 
state that such state commission intends to perform matters related to 
initiation and development of area code relief

[[Page 47355]]

planning efforts in its state. Notification shall be written and shall 
include a description of the specific functions the state commission 
intends to perform. Where the NANP Administrator serves as the central 
office code administrator, such notification must be made within 120 
days of the selection of the NANP Administrator.
    (c) New area codes may be introduced through the use of:
    (1) A geographic area code split, which occurs when the geographic 
area served by an area code in which there are few or no central office 
codes left for assignment is split into two or more geographic parts;
    (2) An area code boundary realignment, which occurs when the 
boundary lines between two adjacent area codes are shifted to allow the 
transfer of some central office codes from an area code for which 
central office codes remain unassigned to an area code for which few or 
no central office codes are left for assignment; or
    (3) An area code overlay, which occurs when a new area code is 
introduced to serve the same geographic area as an existing area code, 
subject to the following conditions:
    (i) No area code overlay may be implemented unless all central 
office codes in the new overlay area code are assigned to those 
entities requesting assignment on a first-come, first-serve basis, 
regardless of the identity of, technology used by, or type of service 
provided by that entity. No group of telecommunications carriers shall 
be excluded from assignment of central office codes in the existing 
area code, or be assigned such codes only from the overlay area code, 
based solely on that group's provision of a specific type of 
telecommunications service or use of a particular technology;
    (ii) No area code overlay may be implemented unless there exists, 
at the time of implementation, mandatory ten-digit dialing for every 
telephone call within and between all area codes in the geographic area 
covered by the overlay area code; and
    (iii) No area code overlay may be implemented unless every 
telecommunications carrier, including CMRS providers, authorized to 
provide telephone exchange service, exchange access, or paging service 
in that NPA 90 days before introduction of the new overlay area code, 
is assigned during that 90 day period at least one central office code 
in the existing area code.


Sec. 52.21  [Amended]

    20. Newly redesignated section 52.21 is amended by removing 
paragraph (f) and redesignating paragraphs (g) through (k) as 
paragraphs (f) through (j); removing (l) and redesignating paragraphs 
(m) through (r) as paragraphs (k) through (p); and removing paragraphs 
(s), (t), and (u) and redesignating paragraph (v) as paragraph (q).

[FR Doc. 96-22045 Filed 9-5-96; 8:45 am]
BILLING CODE 6712-01-P