[Federal Register Volume 62, Number 180 (Wednesday, September 17, 1997)]
[Rules and Regulations]
[Pages 48774-48787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24426]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket No. 95-116; FCC 97-289]


Telephone Number Portability

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Second Report and Order (Order) released August 18, 1997 
adopts, with minor modifications the recommendations of the North 
American Numbering Council relating to local number portability 
administration. The requirements, standards and procedures adopted in 
this Order are needed to give the telecommunications industry clear 
guidelines as to how to implement long-term local number portability.

DATES: The final rule is effective October 17, 1997. The incorporation 
by reference of certain publications listed in the rule is approved by 
the Director of the Federal Register as of October 17, 1997.

FOR FURTHER INFORMATION CONTACT: Steven Teplitz, Attorney, Common 
Carrier Bureau, Policy and Program Planning Division, (202) 418-1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Report and Order adopted August 14, 1997, and released August 18, 1997. 
The full text of this Order is available for inspection and copying 
during normal business hours in the FCC Reference Center, 1919 M St., 
N.W., Room 239, Washington, D.C. 20554 or at the Office of the Federal 
Register, 800 North Capitol Street, N.W., Suite 700, Washington, D.C. 
The complete text also may be obtained through the World Wide Web, at 
http://www.fcc.gov/Bureaus/Common Carrier/Orders/fcc97-289.wp, or may 
be purchased from the Commission's copy contractor, International 
Transcription Service, Inc., (202) 857-3800, 1231 20th St., N.W., 
Washington, D.C. 20036.

Regulatory Flexibility Analysis

    As required by the Regulatory Flexiblity Act, the Order contains a 
Final Regulatory Flexibility Analysis which is set forth in the Order. 
A brief description of the Final Regulatory Flexibility Analysis 
follows.
    Pursuant to section 604 of the Regulatory Flexibility Act, the 
Commission performed a comprehensive analysis of the Second Report and 
Order with regard to small entities. This analysis includes: (1) a 
succinct statement of the need for, and objectives of, the Commission's 
decisions in the Second Report and Order; (2) a summary of the 
significant issues raised by the public comments in response to the 
initial regulatory flexibility analysis, the final regulatory analysis 
of the First Report and Order and Further Notice of Proposed 
Rulemaking, 61 FR 38605 (July 25, 1996) (First Report & Order) and the 
supplemental final regulatory analysis of the First Memorandum Opinion 
and Order on Reconsideration, 62 FR 18280 (April 15, 1997) (First Order 
on Reconsideration), and a summary of the Commission's assessment of 
these issues; (3) a description of and an estimate of the number of 
small entities to which the Second Report and Order will apply; (4) a 
description of the projected reporting, recordkeeping and other 
compliance requirements of the Second Report and Order, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
compliance with the requirement; and (5) a description of the steps the 
Commission has taken to minimize the significant economic impact on 
small entities consistent with the stated objectives of applicable 
statutes. The requirements and rule adopted in this Second Report and 
Order are necessary to implement the provisions of the 
Telecommunications Act of 1996.

Synopsis of Second Report and Order

Introduction

    1. On June 27, 1996, the Commission adopted the First Report and 
Order and Further Notice of Proposed Rulemaking, 61 FR 38605 (July 25, 
1996) (First Report & Order) in this docket. The First Report & Order 
established rules designed to implement section 251(b) of the 
Communications Act of 1934, as amended (the Act), which requires all 
local exchange carriers (LECs) to offer, ``to the extent technically 
feasible, number portability in accordance with requirements prescribed 
by the Commission.'' 47 U.S.C. Sec. 251(b)(2). Among other things, in 
the First Report & Order, the Commission directed the North American 
Numbering Council (NANC) to make recommendations regarding specific 
aspects of local number portability implementation. The NANC forwarded 
its recommendations to the Commission on May 1, 1997, in a report from 
its Local Number Portability Administration Selection Working Group, 
dated April 25, 1997 (Working Group Report).

[[Page 48775]]

    2. In this Second Report & Order, the Commission adopts the 
recommendations of the NANC as set forth in the Working Group Report, 
with the modifications discussed below. Specifically, we (1) adopt the 
NANC's recommendation that seven regional number portability databases 
be established coinciding with the boundaries of the seven original 
Bell Operating Company (BOC) regions; (2) adopt the NANC's 
recommendation that Lockheed Martin IMS (Lockheed Martin) and Perot 
Systems, Inc. (Perot Systems) serve as the administrators for the 
regional number portability databases; (3) adopt the technical and 
operational standards proposed by the NANC for the provision of number 
portability by wireline carriers; (4) require that the carrier 
immediately preceding the terminating local exchange carrier be 
responsible for ensuring that number portability databases are queried; 
(5) permit LECs to block calls that have not been queried when failure 
to do so is likely to impair network reliability; (6) direct the NANC 
to complete and submit to the Commission recommendations on the sharing 
of numbering information between the regional number portability 
database administrators and the North American Numbering Plan 
Administrator; (7) direct the NANC to develop standards and procedures 
regarding the provision of number portability by CMRS providers; (8) 
adopt, on an interim basis only, the NANC's recommendation that the 
regional limited liability companies (LLCs), already established by 
carriers in each of the original BOC regions, manage and oversee the 
local number portability administrators, subject to review by the NANC; 
(9) direct the NANC to provide national-level oversight of local number 
portability administration; and (10) adopt the NANC's recommendation 
that the Commission create a committee to oversee number portability 
deployment in the top 100 Metropolitan Statistical Areas.

Discussion

Local Number Portability Databases
    Geographic coverage of number portability databases: 3. Databases 
By BOC Region. We adopt the NANC's recommendation that a Number 
Portability Administration Center database be established for each of 
the original BOC regions so as to cover, collectively, the 50 states, 
the District of Columbia and the U.S. territories in the North American 
Numbering Plan Area. Deploying number portability databases by BOC 
region will: (1) build on the efforts of the LLCs, which already have 
chosen local number portability database administrators in each of the 
original BOC regions; (2) make use of the technical and organizational 
experience of the state-sponsored associations and workshops; and (3) 
minimize the cost and complexity of use of the databases by the BOCs. 
Moreover, we find it significant that, according to the NANC, industry 
fora at all levels have agreed to the designation of BOC territories as 
the appropriate Number Portability Administration Center coverage 
areas. We conclude that establishing a database for each of the 
original BOC regions would serve the public interest.
    4. We decline, at this time, to grant CBT's request that it be 
allowed to select one regional Number Portability Administration Center 
for purposes of fulfilling its number portability responsibilities. We 
find that the current record is insufficient to make a finding that 
granting CBT's request will not raise technical difficulties with 
respect to local number portability implementation or have negative 
financial consequences for carriers responsible for conducting the 
queries necessary to route calls to the proper terminating carrier. 
Because the record on this issue is insufficient for us to make a 
determination whether the benefits to CBT of granting its request 
outweigh the potential harm to other carriers, we decline to make such 
a determination at this time. Instead, we direct the NANC to review 
CBT's request and to make a recommendation to the Commission, on or 
before December 15, 1997. Specifically, we direct the NANC to address 
the question of whether LECs with contiguous operating areas that 
overlap more than one number portability database region should be 
allowed to select a single Number Portability Administration Center.
    5. U.S. Territories. We adopt the NANC's recommendation that each 
U.S. territory in the North American Numbering Plan be permitted to 
choose one of the seven regional databases for purposes of implementing 
number portability. Because of their various locations, the U.S. 
territories are not included within any BOC's territory, nor do they 
collectively comprise another, separate region. The NANC's 
recommendation that each territory choose a particular regional 
database provides a reasonable alternative to creating additional 
Number Portability Administration Center regions that are much smaller 
than the Number Portability Administration Center regions that are 
based on BOC regions.
    6. We further find that allowing the U.S. territories to select the 
regional database they will use to provide number portability will not 
significantly change the size or complexity of any one database or 
otherwise undermine the public interest benefits of the regional 
database system. Accordingly, we hereby direct each U.S. territory to: 
(1) select a regional database that carriers in that territory will use 
to provide number portability; and (2) notify the Commission and the 
NANC in writing regarding this selection within 45 days of the release 
of this order. Each territory's selection of a particular database is 
final.
    Selection of database administrators: 7. We adopt the NANC's 
recommendation that Lockheed Martin serve as local number portability 
database administrator for the Northeast, Mid-Atlantic, Midwest and 
Southwest regions, and that Perot Systems serve as the local number 
portability database administrator for the Southeast, Western and West 
Coast regions. As noted above, the First Report & Order directed the 
NANC to select one or more local number portability database 
administrators that are independent, non-governmental entities that are 
not aligned with any particular telecommunications industry segment. We 
find that the criteria utilized by the NANC in reviewing and evaluating 
the selection process employed by the various service providers at the 
regional level were sufficient to ensure that the local number 
portability database administrators ultimately recommended meet the 
Commission's requirements. We further note that no party to the 
proceeding objects to the selections. We, however, may review and, if 
necessary, modify our approval of the recommended local number 
portability administrators in the event that negotiations between 
Lockheed Martin or Perot Systems and the LLCs do not result in 
completed master contracts for each region.
    8. We also adopt the NANC's recommendations that (1) LLCs be 
allowed to elect to have the local number portability database 
administrator for separate regions serve those regions using the same 
platform; and (2) database administrators be allowed to create 
``virtual Number Portability Administration Centers.'' We reiterate our 
conclusion that, absent technical advances or other changed 
circumstances, it would not be in the public interest for number 
portability to be provided in this manner. We clarify, however, that 
our prohibition on the

[[Page 48776]]

establishment of one national database does not preclude local number 
portability database administrators from using the same computer 
hardware or software to store, utilize or provide access to multiple 
databases by, for example, separating regional databases stored on the 
same computer or system of computers by means of database partitions. 
We underscore, however, that the Chief of the Common Carrier Bureau 
retains delegated authority to take appropriate action regarding any 
existing or potential problems associated with serving one or more 
regions using the same database platform.
    Number of database administrators: 9. By the time the NANC 
submitted its recommendations to the Commission, the seven regional 
LLCs had independently selected two separate database administrators: 
Lockheed Martin and Perot Systems. For that reason, the NANC concluded 
it was unnecessary to address whether more than one administrator 
should be required. We find that the NANC acted reasonably in assessing 
whether having two administrators would be appropriate, and thus we 
decline to disturb this result. Further, we agree, for the reasons 
given by the NANC, that there are clear advantages to having at least 
two experienced number portability database administrators that can 
compete with and substitute for each other, thereby promoting cost-
effectiveness and reliability in the provision of Number Portability 
Administration Center services. While we recognize the likely benefits 
of having at least two administrators, we do not, at this time, adopt a 
requirement that two or any other number of entities serve as local 
number portability database administrators.
    General duties of database administrators: 10. We adopt the NANC's 
recommendations regarding the general duties of the local number 
portability database administrators. The NANC defined these duties 
based on input from the industry at the national, regional and state 
levels, and none of the commenting parties objects to them. These 
duties also appear to be consistent with the types of activities the 
Commission tentatively concluded would be necessary to deploy long-term 
number portability. For example, the Commission tentatively concluded 
that costs for long-term portability would be attributable to the 
``development and implementation of the hardware and software for the 
database,'' to the ``maintenance, operation, security, administration, 
and physical property associated with the database,'' and to the 
``uploading, downloading, and querying'' associated with the database. 
Moreover, the duties appear to be reasonably comprehensive, so as to 
enable the number portability administrators to implement the 
architecture and technical specifications developed by the NANC, and 
neither the Commission nor the parties has identified any record 
evidence that indicates a need to adopt general duties in addition to 
those recommended by the NANC. We also note that the NANC based these 
general duties on the more specific duties described in the Functional 
Requirements Specification (Functional Requirements Specification or 
FRS) and Interoperable Interface Specification (Interoperable Interface 
Specification or IIS) and that the NANC's description of the underlying 
specific duties in the FRS and IIS as ``standard functions'' suggests 
that both the specific and general duties the NANC recommends are 
noncontroversial.
Technical and Operational Standards
    Uniform national standards: 11. We agree with the NANC that the 
adoption of uniform Functional Requirements Specification, 
Interoperable Interface Specification, Provisioning Process Flows, 
policy for the porting of reserved and unassigned numbers, and 
compliance and change management processes would provide significant 
advantages for the implementation of local number portability. We 
conclude that uniform national standards in this area will promote 
efficient and consistent use of number portability methods and 
numbering resources on a nationwide basis, ensure the interoperability 
of networks, and facilitate the ability of carriers to meet number 
portability implementation deadlines. We further conclude that uniform 
national standards should minimize expenditure of time and resources, 
maximize use of local number portability resources for all companies, 
produce timely and cost effective offers of local number portability 
related products, enable switch vendors to spread their costs over a 
larger base of customers, eliminate the need to develop several 
different versions of number portability software, and improve service 
quality for carriers providing service in multiple regions. 
Furthermore, uniform national standards will allow vendors to develop 
standard products rather than multiple versions of hardware and 
software necessary to implement local number portability based on 
regional differences, resulting in more timely and cost effective 
product offerings for local service providers.
    Specific technical standards: 12. We conclude that the NANC's 
recommended technical and operational standards are consistent with the 
Commission's performance criteria for implementing local number 
portability. In adopting the standards as currently set forth in the 
Working Group Report and its appendices as a framework for 
implementation of local number portability, we recognize that ongoing 
changes to these specifications and processes likely will be needed as 
the industry gains operational experience in implementing long-term 
number portability. We urge the industry, working under the auspices of 
the NANC, to maintain, update and modify the technical and operational 
standards as necessary, and to establish a long-term compliance process 
for service providers and local number portability administrators.
    13. Number Portability Administration Center Service Management 
System Provisioning Process Flows (Provisioning Process Flows). We 
adopt the Provisioning Process Flows as set forth in Appendix E to the 
Working Group Report and recommended by the NANC as industry standards 
for use in each Number Portability Administration Center region.
    14. We conclude that the uniform standards for Provisioning Process 
Flows proposed by the NANC are essential to the efficient deployment of 
local number portability across the nation. In particular, we find that 
uniform Provisioning Process Flows will help ensure that communication 
between and among service providers (using local Service Management 
Systems) and local number portability administrators (using Number 
Portability Administration Center Service Management Systems) proceed 
in a clear and orderly fashion so that number portability requests are 
handled in an efficient and timely manner. We note that no commenter 
opposed adoption of these standard Provisioning Process Flows. We 
direct the NANC to make recommendations regarding future modifications 
to the Commission as necessary.
    15. Number Portability Administration Center Service Management 
System Standards--Functional Requirements Specification. We adopt the 
NANC's recommendation that local number portability administrators and 
any entity directly connecting to the Number Portability Administration 
Center Service Management System be required to use

[[Page 48777]]

the Number Portability Administration Center Service Management System 
Functional Requirements Specification as described in the North 
American Numbering Council--Functional Requirements Specification--
Number Portability Administration Center--Service Management System, 
Version 1.1, dated May 5, 1997 (NANC FRS). The NANC FRS will serve as 
an industry standard for use in developing and maintaining the Number 
Portability Administration Center Service Management System in each of 
the seven Number Portability Administration Center regions.
    16. The NANC FRS was developed primarily to support the 
provisioning of wireline number portability. The NANC has not fully 
considered or developed distinct number portability requirements 
applicable to CMRS providers. Therefore, modifications to the NANC FRS 
may be required to support wireless number portability. We direct the 
NANC to recommend modifications to the NANC FRS as necessary to support 
wireless number portability.
    17. Number Portability Administration Center Service Management 
System Standards--Interoperable Interface Specification. We adopt the 
NANC's recommendation that the local number portability administrators 
and any entity directly connecting to the Number Portability 
Administration Center Service Management System use the Number 
Portability Administration Center Service Management System 
Interoperable Interface Specification as described in the North 
American Numbering Council--Interoperable Interface Specification--
Number Portability Administration Center--Service Management System, 
Version 1.0, dated April 7, 1997 (NANC IIS). The NANC IIS will serve as 
an industry standard for use in developing and maintaining the Number 
Portability Administration Center Service Management System interfaces 
in each of the seven Number Portability Administration Center regions.
    18. The NANC IIS was developed primarily to support wireline number 
portability. The NANC has not fully considered or developed unique 
wireless number portability requirements. Therefore, modifications to 
the NANC IIS may be required to support wireless number portability. As 
discussed more fully below, we direct the NANC to recommend 
modifications to the NANC IIS as necessary to support wireless number 
portability.
    19. Policy for the Porting of Reserved and Unassigned Numbers and 
Compliance Process. We adopt the NANC's recommendations relating to the 
porting of reserved and unassigned numbers developed and documented in 
Appendix D to the Working Group Report. Specifically, the NANC 
recommends that customers should be allowed to port telephone numbers 
that they have reserved under a legally enforceable written agreement 
but that have not been activated. The NANC further recommends that such 
reserved numbers: (1) be treated as disconnected telephone numbers when 
the customer is disconnected or when the service is moved to another 
service provider and the reserved numbers are not ported to subsequent 
service providers; and (2) may not be used by another customer. The 
Working Group's Architecture Task Force points out that implementation 
of the capability to port reserved numbers may require modifications to 
operational support systems and may not be available initially. The 
NANC also recommends that service providers not be allowed to port 
unassigned numbers unless and until there is an explicit authorization 
for such porting from a regulator with appropriate jurisdiction.
    20. In adopting the NANC's recommendation for the porting of 
reserved and unassigned numbers policy, we direct the NANC to monitor 
the implementation of this policy, and make appropriate recommendations 
to the Commission, including, if deemed necessary by the NANC, 
guidelines for administering ported unassigned numbers that are no 
longer reserved by the customer that originally ported them.
    21. We also conclude that the NANC has recommended a reasonable 
process for enforcing compliance with the policy pertaining to the 
porting of reserved and unassigned numbers. If a service provider finds 
that it is disadvantaged by instances of non-compliance with the policy 
for the porting of reserved and unassigned numbers by another service 
provider, the NANC recommends several courses of action. First, the 
aggrieved service provider may contact the service provider with which 
it has a dispute to resolve the issue through informal negotiations. 
Should these efforts prove unsuccessful, the aggrieved service provider 
may bring the issue to the regional LLC for resolution via the LLC's 
dispute resolution process, to the NANC, to the state public utilities 
commission, or to other bodies as deemed appropriate by the service 
provider.
    22. Change Management Process. We adopt the NANC's recommendations 
concerning the change management process. We agree with the NANC that 
it is important that a neutral entity oversee the change management 
process, so that: (1) there is consistency in the submission and 
consideration of changes to the architectural, technical and 
operational specifications and procedures; (2) uniform processes are 
implemented; and (3) no individual carriers or industry segments are 
disadvantaged. We find that the NANC's proposed change management 
process will enable the industry to make changes to the architectural, 
technical and operational specifications and procedures in a timely and 
uniform manner. The role of the regional LLCs in managing changes to 
the number portability technical and operational specifications, 
however, is subject to our planned review of the role of the regional 
LLCs in implementing long-term number portability. We direct the NANC 
to continue its oversight of architectural, technical and operational 
change management processes and to make additional recommendations to 
the Commission as necessary. In the event the NANC is dissolved at some 
point in the future, we will, at that time, either establish or select 
an oversight body to perform the change management functions now 
delegated to the NANC.
    23. We also adopt the NANC's recommendations as presented in 
Appendix D to the Working Group Report, with the exception of the 
NANC's recommendation on the blocking of default routed calls.
    24. N-1 Call Routing. The NANC recommends that the carrier in the 
call routing process immediately preceding the terminating carrier, 
designated the ``N-1'' carrier, be responsible for ensuring that 
database queries are performed. We adopt the NANC's recommendation that 
the N-1 carrier be responsible for ensuring that databases are queried, 
as necessary, to effectuate number portability. The N-1 carrier can 
meet this obligation by either querying the number portability database 
itself or by arranging with another entity to perform database queries 
on behalf of the N-1 carrier.
    25. The efficient provisioning of number portability requires that 
all carriers know who bears responsibility for performing queries, so 
that calls are not dropped because the carrier is uncertain who should 
perform the database query, and so that carriers can design their 
networks accordingly or arrange to have database queries performed by 
another entity. Consistent with our finding in the First Memorandum 
Opinion and Order on

[[Page 48778]]

Reconsideration, 62 FR 18280 (April 15, 1997) (First Order on 
Reconsideration), we conclude that the Location Routing Number system 
functions best if the N-1 carrier bears responsibility for ensuring 
that the call routing query is performed. Under the Location Routing 
Number system, requiring call-terminating carriers to perform all 
queries may impose too great a burden on terminating LECs. In addition, 
obligating incumbent LECs to perform all call routing queries could 
impair network reliability.
    26. We note, however, that the requirement that the N-1 carrier be 
responsible for ensuring completion of the database query applies only 
in the context of Location Routing Number as the long-term number 
portability solution. In the event that Location Routing Number is 
supplanted by another method of providing long-term number portability, 
we may modify the call routing process as necessary. We note further 
that if the N-1 carrier does not perform the query, but rather relies 
on some other entity to perform the query, that other entity may charge 
the N-1 carrier, in accordance with guidelines the Commission will 
establish to govern long-term number portability cost allocation and 
recovery.
    27. Default Routing. The NANC recommends that we permit carriers to 
block ``default routed calls'' coming into their networks. A ``default 
routed call'' situation would occur in a Location Routing Number system 
as follows: when a call is made to a telephone number in an exchange 
with any ported numbers, the N-1 carrier (or its contracted entity) 
queries a local Service Management System database to determine if the 
called number has been ported. If the N-1 carrier fails to perform the 
query, the call is routed, by default, to the LEC that originally 
serviced the telephone number. The original LEC, which may or may not 
still be serving the called number, can either query the local Service 
Management System and complete the call, or ``block'' the call, sending 
a message back to the caller that the call cannot be delivered. The 
NANC found that compelling LECs to query all default routed calls could 
impair network reliability, and that allowing carriers to block default 
routed calls coming into their networks is necessary to protect against 
overload or congestion that could result from an inordinate number of 
calls being routed by default to the original LEC. In light of these 
network reliability concerns, we will allow LECs to block default 
routed calls, but only in specific circumstances when failure to do so 
is likely to impair network reliability.
    28. In the First Report & Order, we required CMRS providers to have 
the capability of querying number portability database systems in order 
to deliver calls from their networks to ported numbers anywhere in the 
country by December 31, 1998. We established this deadline so that CMRS 
providers would have the ability to route calls from their customers to 
a wireline customer who has ported his or her number, by the time a 
substantial number of wireline customers have the ability to port their 
numbers between wireline carriers. Under this deployment schedule, the 
initial deployment of long-term local number portability for wireline 
carriers will occur prior to the date by which CMRS providers must be 
able to perform database queries. During this period, CMRS providers 
are not obligated by our rules to perform call routing queries or to 
arrange for other entities to perform queries on their behalf. Thus, if 
wireline LECs are allowed to block default routed calls, calls 
originating on wireless networks (to the extent that the CMRS provider 
is the N-1 carrier) could be blocked. For this reason, we will only 
allow LECs to block default routed calls when performing database 
queries on default routed calls is likely to impair network 
reliability. We also require LECs to apply this blocking standard to 
calls from all carriers on a nondiscriminatory basis. In the event that 
a CMRS or other service provider believes that a LEC is blocking calls 
under circumstances unlikely to impair network reliability, such 
service provider may bring the issue before the NANC. We direct the 
NANC to act expeditiously on these issues. Although CMRS providers are 
not responsible for querying calls until December 31, 1998, we urge 
them to make arrangements with LECs as soon as possible to ensure that 
their calls are not blocked. We note that if a LEC performs database 
queries on default routed calls, the LEC may charge the N-1 carrier, 
pursuant to guidelines the Commission will establish regarding long-
term number portability cost allocation and recovery.
    29. Disconnected Ported Numbers. The NANC also recommends that when 
a ported telephone number is disconnected, that telephone number be 
released or ``snapped-back'' to the original service provider assigned 
the NXX. We find this NANC recommendation reasonable and the result of 
industry-wide consensus. Accordingly, we adopt the recommendation. We 
ask the NANC to prepare recommendations to clarify the policy if it 
determines that there is confusion among the industry regarding its 
application.
    30. High Volume Call-In Networks. The Working Group's Architecture 
Task Force did not reach consensus on how to provide local number 
portability to high volume call-in networks. Currently, a service 
provider may move a customer's telephone number(s) to a high volume 
call-in network when the service provider determines that the customer 
regularly generates large volumes of terminating traffic over a short 
period of time, so that the surge in telephone calls will not overload 
the network. A high volume call-in network allows all such customers to 
be assigned numbers in an NPA-NXX (e.g., 213-520) dedicated for high 
volume call-in. Switches in the network can be designed to segregate 
traffic for high volume call-in numbers and route it via trunk groups 
that are dedicated to the network and do not overflow to other trunk 
groups. The dedicated trunks are engineered to handle a particular 
traffic load and, in this way, traffic volumes are limited, and traffic 
to high calling volume numbers cannot congest the network.
    31. The Location Routing Number method for local number portability 
requires a database query to be performed on calls to portable NPA-NXXs 
before route selection takes place. If high volume call-in network 
numbers are portable, they could generate large volumes of queries that 
could congest the Service Control Points. Also, if a high volume call-
in network number is ported and a location routing number is returned 
in the database response, the call will not be routed via trunks 
dedicated to high volume call-in networks. This congestion can in turn 
affect other services and compromise the design of high volume call-in 
network networks.
    32. We find that additional study is necessary before we allow 
porting of numbers to high volume call-in networks. We, therefore, urge 
the industry, under the auspices of the NANC, to study this matter 
further and prepare recommendations on how best to incorporate high 
volume call-in networks into the local number portability scheme. We 
direct the NANC to continue to examine this matter and make 
recommendations to the Commission.
Numbering Information Sharing
    33. We acknowledge and applaud the steps already taken by the NANC 
to coordinate its efforts with those of the Industry Numbering 
Committee to develop a work plan and guidelines to

[[Page 48779]]

implement number pooling, and we direct the NANC to continue to work 
with the Industry Numbering Committee and any other industry bodies it 
deems appropriate in developing numbering information sharing 
guidelines. We also direct the NANC to address the needs of CMRS 
providers to ensure that number conservation efforts do not unfairly 
discriminate against such carriers. We further direct the NANC to make 
recommendations to the Commission as necessary to develop guidelines 
for numbering information sharing.
Number Portability and CMRS Providers
    34. We recognize the significant time constraints imposed on the 
NANC for the development of recommended standards and procedures so 
that wireline carriers can meet the Commission's implementation 
schedule, which commences October 1, 1997. We are also aware that under 
our number portability deployment schedule, CMRS providers are not 
required to have the capability of querying number portability database 
systems in order to deliver calls from their networks to ported numbers 
until December 31, 1998 and are not required to have the ability to 
port numbers until June 30, 1999. We, therefore, conclude that it was 
reasonable for the NANC to defer making recommendations at this time 
with respect to the implementation of local number portability by CMRS 
providers. Our adoption of the NANC's recommendations set forth in its 
May 1, 1997 transmittal, however, should not be viewed in any way as an 
indication that we believe our plan for implementing local number 
portability is complete. The industry, under the auspices of the NANC, 
will probably need to make modifications to local number portability 
standards and processes as it gains experience in implementing number 
portability and obtains additional information about incorporating CMRS 
providers into a long-term number portability solution and 
interconnecting CMRS providers with wireline carriers already 
implementing their number portability obligations.
    35. We find that adoption of the current NANC recommendations 
should not be deferred pending resolution of all wireless concerns. 
While delaying implementation of number portability until all wireless 
concerns are fully addressed might result in an easier transition to a 
number portability environment for CMRS providers, we believe that such 
delay would be contrary to the public interest because a far greater 
number of wireline customers could not, during the period of delay, 
switch local providers without also changing telephone numbers. At the 
same time, we recognize that it will probably be necessary to modify 
and update the current local number portability standards and 
procedures in order to support wireless number portability. Thus, we 
direct the NANC to develop standards and procedures necessary to 
provide for CMRS provider participation in local number portability. We 
further direct the NANC to present its wireless recommendations to the 
Commission as soon as possible, but not later than nine months after 
the release of this Second Report & Order. CMRS providers will need 
clear guidelines as to how to query the Service Management System 
databases to determine proper call routing, as well as how to implement 
wireless number portability. The NANC must also consider other issues 
of concern to CMRS providers, such as how to account for differences 
between service area boundaries for wireline versus wireless services 
and how to implement number portability in a roaming environment. In 
revising local number portability standards to incorporate the concerns 
of the wireless industry, the NANC should remain cognizant of the goals 
of ensuring the interoperability of networks and nondiscrimination as 
applied to CMRS providers. In particular, in making its 
recommendations, the NANC is to ensure that CMRS providers are not 
unfairly disadvantaged by virtue of the fact that wireline number 
portability is being implemented before number portability for CMRS 
providers.
    36. CTIA reports that it and other industry groups are currently 
developing technical solutions for implementing wireless number 
portability. We direct the NANC to monitor these industry efforts and 
to make recommendations to the Commission for modifications to the 
various technical and operational standards as necessary for CMRS 
providers to efficiently implement number portability and to allow CMRS 
providers to interconnect with a wireline number portability 
environment.
Local Number Portability Oversight Procedures
    37. We adopt, with certain modifications, the NANC's 
recommendations regarding the oversight and management of the local 
number portability administrators. Specifically, we adopt, on an 
interim basis, the NANC's recommendation that the LLCs provide 
immediate oversight and management of the local number portability 
administrators. The LLCs should serve in this role until the Commission 
concludes a rulemaking to examine the issue of local number portability 
administrator oversight and management including, but not limited to, 
the question of whether the LLCs should continue to act in this 
capacity. The Commission will initiate such a rulemaking no later than 
June 30, 1998. In addition, we adopt the NANC's recommendation that it 
provide ongoing general oversight of number portability administration, 
including oversight of the individual LLCs, subject to Commission 
review. We also adopt the NANC's recommendation that the Commission 
create a committee, chaired by the Chief of the Common Carrier Bureau, 
to oversee number portability deployment in the top 100 MSAs.
    38. Oversight by the LLCs. We conclude that, at least in the short 
term, the LLCs should provide immediate oversight for the regional 
local number portability administrators. Specifically, we conclude 
that: (1) there are advantages to allowing LLCs to provide immediate 
oversight of the local number portability administrators; (2) we have 
no basis for concluding that the LLCs will not treat all carriers 
fairly; and (3) the record regarding local number portability 
administrator oversight does not permit us to conclude that other 
proposals would be preferable to LLC oversight.
    39. We agree with the NANC that there will likely be a need to 
modify some requirements to permit database system enhancements and 
other modifications as local number portability is deployed throughout 
each region. Without a single entity to oversee such modifications in 
each region, local number portability administrators would likely be 
faced with varied, if not conflicting, proposals from the carriers 
utilizing the database regarding how the modifications should be 
implemented. The need for the local number portability administrator to 
reconcile such varied proposals, in turn, could potentially delay the 
administrator from making necessary modifications.
    40. We conclude that the LLCs are the entities that are best able 
to provide immediate oversight of the local number portability 
administrators at this time. Because the LLCs were responsible for 
negotiating the master contracts with their respective local number 
portability administrators, each LLC is the entity with the greatest 
expertise regarding the structure and operation of the database for its 
region. Therefore, with respect to each region, using an entity other 
than

[[Page 48780]]

the LLC to provide immediate oversight of the local number portability 
administrator would waste the LLC's valuable expertise and run the risk 
that necessary modifications to the database system may be delayed.
    41. Bell Atlantic and other parties object to LLC oversight and 
management of the local number portability administrators based 
primarily on the fact that, because new entrants will outnumber 
incumbent LECs in each region, the new entrants that belong to the 
individual LLCs will be able to outvote the incumbent LEC members if 
they so choose. They suggest that, with respect to decisions that do 
not require unanimity by the LLCs, new entrant members of an LLC could 
vote in ways that give new entrants competitive advantages over 
incumbent LECs in the provision of number portability.
    42. Any decision making process that operates on the basis of 
majority votes runs the risk that the group will decide to take action 
that disadvantages some members. Requiring unanimity for all oversight 
decisions, however, could make such oversight a cumbersome, time-
consuming process. In light of the concerns expressed by incumbent 
LECs, we adopt the NANC's recommendation that LLCs provide immediate 
oversight of the local number portability administrators, but such 
oversight shall be on an interim basis. Specifically, the LLCs may 
serve in this role only until such time as the Commission concludes 
further proceedings to examine the issue of local number portability 
administrator oversight and management in general and, in particular, 
the question of whether the LLCs should continue to act in this 
capacity. The Commission will initiate such further proceedings no 
later than June 30, 1998. We note that Phase I of the Commission's 
long-term number portability implementation schedule will be completed 
March 31, 1998. We believe, therefore, that initiating a proceeding no 
later than June 30, 1998 will enable the parties and the Commission to 
acquire practical experience with number portability implementation, 
and to determine whether problems arise as a result of oversight and 
management envisioned by LLCs.
    43. We will permit LLC oversight, on an interim basis, for several 
reasons. First, the current record does not support a finding that the 
LLCs will act in a fashion that is not fair to all carriers. To the 
contrary, two incumbent LECs applaud the LLCs' efforts to date, and 
BellSouth states affirmatively that the LLCs have remained neutral 
during the administrator selection and contracting phases of number 
portability deployment. We also note that the Maryland Public Service 
Commission, in an order regarding the conflict between Bell Atlantic 
and the Mid-Atlantic LLC, required Bell Atlantic to sign a non-
disclosure form before it could review the LLC's standard user 
agreement with Lockheed Martin. The Maryland Commission also directed 
the regulated members of the Mid-Atlantic LLC to secure a release from 
Lockheed and to furnish a copy of the proposed standard user agreement 
to Bell Atlantic. Further, the Maryland Commission directed the Mid-
Atlantic LLC and Bell Atlantic to negotiate to resolve any areas of 
disagreement regarding the user agreement. If the parties cannot 
resolve their differences regarding the user agreement, the Maryland 
Commission has said that it will resolve these differences for them. 
Because the record contains no other specific allegations of 
anticompetitive activities by the LLCs, we are not persuaded on the 
basis of the current record that partiality by LLCs is likely to occur 
in the immediate future.
    44. Second, we agree with WorldCom, Sprint and AT&T that there are 
significant protections to ensure fair and impartial actions by the 
LLCs. As the NANC states, membership in the LLCs is open to any local 
exchange carrier that intends to port numbers, LLC meetings are 
generally open to the public, and members of the LLCs have agreed to 
require a supermajority or unanimity with respect to voting on certain 
important decisions, such as execution of the master contract. Further, 
the NANC explains that all carriers that need to access the database 
for rating, routing, or billing purposes will have the same access to 
the local number portability administrator's service, even if the 
carrier is not a member of the LLC. We also observe that the LLCs have 
agreed to follow any and all directives from state and federal 
regulators. In addition, we note that oversight by the NANC and by 
state and federal regulators provides additional protection against the 
possibility of partiality by the LLCs in their oversight of the local 
number portability administrators.
    45. Third, we reject the arguments of Bell Atlantic and NYNEX and 
others that permitting the LLCs to oversee the number portability 
database administrators would be inconsistent with the First Report & 
Order because the LLCs are not, in their view, neutral. In the First 
Report & Order, we specified that the local number portability 
administrators must be ``independent, non-governmental entities that 
are not aligned with any particular telecommunications industry 
segment.'' Contrary to the arguments of Bell Atlantic and NYNEX, this 
neutrality requirement applies to number portability database 
administrators, not to entities that oversee the administrators. In any 
event, because we find that there is no basis in the current record for 
us to conclude that the LLCs will act in a fashion that is not fair to 
all carriers, we also cannot conclude that the LLCs' interim oversight 
and management of the number portability administrators will prevent 
the administrators from acting impartially.
    46. We wish to underscore, however, that we remain committed to 
ensuring that number portability administration is carried out in an 
impartial manner. In the First Report & Order, we delegated authority 
to the Chief of the Common Carrier Bureau to monitor the progress of 
number portability implementation for wireline carriers and to take 
appropriate action to ensure compliance with the implementation 
schedule. We expressly delegate authority to the Chief of the Common 
Carrier Bureau to monitor the activities of the carriers that comprise 
the LLCs and to take any action necessary to remedy possible partiality 
by those carriers with respect to the LLCs' oversight and management of 
the local number portability administrators.
    47. We also decline, at this time, to grant Bell Atlantic and 
NYNEX's request that local number portability administrators be 
required to provide number portability services under tariff as a means 
of avoiding competitive abuses by new entrants through the LLCs. Bell 
Atlantic argues that because the Commission ordered the administrator 
of the 800 number database to provide access to its database under 
tariff, the Commission must do the same with respect to local number 
portability databases. We find that Bell Atlantic's reliance on our 
decision in the 800 number database context is misplaced. In that 
decision, we found that ``[o]n balance * * * the better course for 
now'' was to require that access to the 800 database be tariffed 
because we determined that such treatment was necessary to ensure that 
800 database access was provided at reasonable rates and on 
nondiscriminatory terms. We do not find the same concerns applicable to 
access to local number portability databases. First, section 251 of the 
Act requires that the cost of number portability ``shall be borne by 
all telecommunications carriers on a competitively neutral basis as 
determined by the Commission.'' 47

[[Page 48781]]

U.S.C. 251(e)(2). Thus, the method for calculating the amount any 
particular carrier will pay for obtaining services from a local number 
portability database administrator will be determined by the 
Commission, not by the LLC. Second, as noted above, the local number 
portability administrators, pursuant to the master contracts negotiated 
by the LLC, will offer access to their databases to all carriers on the 
same terms and conditions, whether or not the carrier is a member of an 
LLC.
    48. In addition, we cannot conclude from the current record that, 
as a practical matter, CMRS providers will be excluded from 
participating in the LLCs' management and oversight activities as they 
affect CMRS providers. As stated above, in order to complete the tasks 
associated with wireline number portability in accordance with the 
Commission's schedule, the NANC directed its attention to developing 
recommendations primarily relating to the wireline portion of the 
industry and did not fully address wireless concerns. Further, the NANC 
recognized that certain requirements, such as the FRS and IIS, must be 
revised to incorporate the work of CTIA and others on the technical 
aspects of the provision of number portability by CMRS providers. We 
share CTIA's concern that number portability be administered in an 
impartial manner, and we strongly encourage both the NANC and the LLCs 
to review their policies to ensure that they have not, even 
inadvertently, limited the participation of CMRS providers in the LLCs 
or other aspects of number portability administration. While there is 
no evidence in the record that any CMRS provider has been denied 
membership in an LLC, we encourage the LLCs to make membership 
available to all carriers that intend to port numbers, whether those 
carriers intend to do so immediately or sometime in the future. We do 
not believe, however, that CTIA's arguments justify rejection or 
modification of the NANC's recommendations at this time.
    49. Other proposals for local number portability administrator 
oversight suggested by incumbent LECs include: (1) adopting specific 
rules to govern the operation of the local number portability 
administrators; (2) delegating oversight of the local number 
portability administrators to an industry or standards body that 
operates by consensus; (3) requiring local number portability 
administrators to file their master agreements with the Commission; (4) 
delegating local number portability administrator oversight to a 
national LLC. As a general matter, the parties making these proposals 
offer little more than bare assertions that these alternatives would be 
preferable to LLC oversight, without explanation or justification for 
their conclusions. We find that the current record does not support a 
finding that any of these proposals would be preferable to LLC 
oversight. Consequently, we lack sufficient analysis regarding these 
proposals to make a reasoned decision regarding their adoption.
    50. The LLCs are currently requiring that database administrators 
provide uniform terms and conditions to all carriers. WorldCom asks 
that the Commission expressly endorse the LLCs' requirement that number 
portability administrators provide same terms and conditions to all 
carriers that must provide number portability in a region, regardless 
of whether a particular carrier belongs to the LLC. We agree with 
WorldCom that no carrier should be able to use the terms and conditions 
of obtaining number portability database services to gain a competitive 
advantage over other carriers. In the First Report & Order, we 
determined that it is in the public interest for the number portability 
databases to be administered by one or more neutral third parties 
because neutral third party administration ``ensures the equal 
treatment of all carriers and avoids any appearance of impropriety or 
anti-competitive conduct.'' Thus, our order expressed an expectation 
that a neutral administrator would ensure equal treatment of all 
carriers; we did not affirmatively require uniform treatment. Based on 
the information presently available, the LLC requirement for uniform 
terms and conditions appears to be reasonable. Nevertheless, given the 
limited record, we do not preclude further consideration of this issue 
if any party can demonstrate that the LLCs' requirement that database 
administrators provide uniform terms and conditions to all carriers is 
unfair to them.
    51. Oversight by the NANC Generally. We adopt the NANC's 
recommendation that it provide general oversight of number portability 
administration on an ongoing basis. Specifically, we establish a 
procedure whereby parties may bring matters regarding number 
portability administration to the NANC so that it may recommend a 
resolution of those matters to the Commission.
    52. The NANC represents a broad cross section of carriers with 
interests in numbering and number portability issues and has developed 
substantial expertise while formulating its recommendations regarding 
number portability implementation. Application of this expertise will 
be critical in addressing future issues regarding number portability 
deployment, including implementation of number portability by CMRS 
providers and coordination of number portability administration with 
numbering administration. Further, we find that the NANC provides a 
valuable forum in which carriers are able to consider, at the national 
level, possible ways to resolve issues that arise as number portability 
is deployed within each number portability region. Such issues include, 
but are not limited to, ensuring that the local number portability 
administrators operate impartially, and achieving national uniformity 
and interoperability in number portability administration. In our view, 
such ongoing work of the NANC, especially during the early phases of 
deployment, will provide invaluable assistance to the Commission in 
ensuring timely implementation of number portability. Although the 
Commission retains ultimate authority over number portability matters, 
carriers that are not satisfied with a decision of an LLC or local 
number portability administrator regarding the administration of number 
portability, and cannot obtain relief from either of those entities, 
may bring their concerns before the NANC.
    53. The Commission strongly encourages all parties to attempt to 
resolve issues regarding number portability deployment among themselves 
and, if necessary, under the auspices of the NANC. If any party objects 
to the NANC's proposed resolution, the NANC shall submit its proposed 
resolution of the disputed issue to the Commission as a recommendation 
for Commission review. In light of the parties' record of successful 
cooperation to implement number portability, we believe that this 
approach will enable the parties to resolve such issues most 
efficiently and effectively. Such issues may include, but are not 
limited to, amendments to or interpretations of the NANC's 
recommendations approved in this order, disputes regarding the LLCs' 
oversight and management of the number portability database 
administrators, or any other matter involving the administration of 
local number portability. In the interest of expediting this process, 
the Commission hereby establishes the following procedures to govern 
NANC recommendations submitted for Commission review:
    (1) Following the adoption of a recommendation regarding the 
administration of number portability,

[[Page 48782]]

the NANC shall issue a written report summarizing the positions of the 
parties and the basis for the recommendation adopted by the NANC. The 
NANC Chair will transmit the written report of such recommendation to 
the Chief of the Common Carrier Bureau (Chief). The Chief will issue a 
public notice describing the report and provide a reasonable 
opportunity for interested parties to comment on the NANC's 
recommendation. Recommendations adopted by the NANC and forwarded to 
the Commission may be implemented by the parties pending Commission 
review.
    (2) Within 90 days of the conclusion of the comment cycle 
established by the Chief of the Common Carrier Bureau for review of a 
NANC recommendation, the Chief, after consultation with the Chief of 
the Wireless Telecommunications Bureau, may issue an order adopting, 
modifying or rejecting the recommendation. If the Chief does not act 
within 90 days of the conclusion of the comment cycle, the 
recommendation will be deemed to have been adopted by the Bureau.
    54. We reject USTA's request that we establish direct appeal 
provisions for carriers that wish to contest the decisions of the LLCs 
or the local number portability administrators regarding the 
administration of number portability. As stated above, most of the 
commenting parties agree that the LLCs and local number portability 
administrators have worked efficiently and fairly to implement local 
number portability, and none of the commenting parties identifies with 
precision any future circumstances in which the LLCs and local number 
portability administrators would fail to work efficiently and fairly. 
Moreover, by this order, the Commission establishes a procedure through 
which aggrieved parties may have their concerns addressed in the LLCs' 
own dispute resolution process, by the NANC, and ultimately by the 
Commission. Given the success of carriers and the local number 
portability administrators in resolving difficult implementation 
issues, as well as the availability of the NANC to recommend 
resolutions of matters brought before it to the Commission, we decline 
to establish special provisions for bringing such matters before state 
or federal regulators.
    55. Implementation Oversight Committee. We also adopt the NANC's 
recommendation that the Commission create a committee to monitor number 
portability deployment in the top 100 MSAs. We agree with the NANC that 
such monitoring will be especially important during the initial phase 
of number portability deployment, as this initial phase will involve 
more extensive testing and will lay the groundwork for successful 
deployment in later phases. Consequently, we are creating a committee, 
comprised of members of the NANC's Local Number Portability Working 
Group, representing a broad cross-section of the telecommunications 
industry, and chaired by the Chief of the Common Carrier Bureau, to 
monitor compliance with the Commission's orders during deployment of 
number portability in the top 100 MSAs. This committee will not provide 
advice or recommendations to the Commission, but will gather 
information to monitor number portability deployment in the top 100 
MSAs.

Final Regulatory Flexibility Analysis

    56. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 
603, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated 
into the Notice of Proposed Rulemaking in this docket (NPRM). The 
Commission sought written public comment on the proposals in the NPRM, 
including comment on the IRFA. The comments received on the IRFA were 
discussed in the First Report & Order's Final Regulatory Flexibility 
Analysis (FRFA-First Report & Order), which was incorporated as 
Appendix C to the First Report & Order in this docket. The FRFA-First 
Report & Order conforms to the RFA. 5 U.S.C. 604. On reconsideration of 
the First Report & Order, parties commented on the FRFA-First Report & 
Order. The comments received on the FRFA-First Report & Order were 
discussed in the Supplemental Final Regulatory Flexibility Analysis 
(Supplemental FRFA) incorporated into the First Order on 
Reconsideration in this docket. The Supplemental FRFA conforms to the 
RFA. 5 U.S.C. 604. The Final Regulatory Flexibility Analysis (FRFA-
Second Report & Order) is incorporated as an appendix to the Second 
Report & Order in this docket, in which the Commission adopts, to the 
extent described therein, the recommendations of the North American 
Numbering Council (NANC) regarding the implementation of local number 
portability. The First Report & Order directed the NANC to make these 
recommendations and forward them to the Commission, which then 
requested public comment on the recommendations. The FRFA-Second Report 
& Order also conforms to the RFA. 5 U.S.C. 604.

A. Need for and Objectives of Second Report and Order

    57. The need for and objectives of the requirements adopted in the 
Second Report and Order are the same as those discussed in the Final 
Regulatory Flexibility Analysis in the First Report & Order. The 
Commission, in compliance with sections 251(b)(2) and 251(d)(1) of the 
Communications Act of 1934, as amended by the Telecommunications Act of 
1996 (1996 Act), adopts requirements and procedures intended to ensure 
the prompt implementation of telephone number portability with the 
minimum regulatory and administrative burden on telecommunications 
carriers. These requirements are necessary to implement the provision 
in the 1996 Act requiring local exchange carriers (LECs) to offer 
number portability, if technically feasible. In implementing the 
statute, the Commission has the responsibility to adopt requirements 
that will implement most quickly and effectively the national 
telecommunications policy embodied in the 1996 Act and to promote the 
pro-competitive, deregulatory markets envisioned by Congress. Congress 
has recognized that number portability will lower barriers to entry and 
promote competition in the local exchange marketplace. Specifically, we 
adopt the recommendations of the NANC regarding the selection of local 
number portability administrators, the location of regional databases, 
the overall national architecture and technical specifications for the 
regional databases, and the duties of local number portability 
administrators in administering the number portability regional 
databases.

B. Summary of Significant Issues Raised By Public Comments in Response 
to the IRFA, FRFA-First Report & Order and Supplemental FRFA

    58. The comments received on the IRFA were discussed in the FRFA-
First Report & Order incorporated into the First Report & Order. The 
comments received on the FRFA-First Report & Order were discussed in 
the Supplemental FRFA incorporated into the First Order on 
Reconsideration. No additional comments were sought or received for 
purposes of the FRFA-Second Report & Order.

C. Summary of the FRFA-First Report & Order

    59. In the FRFA-First Report & Order, we concluded that incumbent 
LECs do not qualify as small businesses because they are dominant in 
their field of

[[Page 48783]]

operation, and, accordingly, we did not address the impact of our 
requirements on incumbent LECs. We noted that the RFA generally defines 
the term ``small business'' as having the same meaning as the term 
``small business concern'' under the Small Business Act. 15 U.S.C. 632. 
A small business concern is one that (1) is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA). According to the SBA's regulations, entities 
engaged in the provision of telephone service may have a maximum of 
1,500 employees in order to qualify as a small business concern. 13 CFR 
121.201. This standard also applies in determining whether an entity is 
a small business for purposes of the Regulatory Flexibility Act.
    60. We did recognize that our requirements may have a significant 
economic impact on a substantial number of small businesses insofar as 
they apply to telecommunications carriers other than incumbent LECs, 
including competitive LECs, as well as cellular, broadband personal 
communications services (PCS), and covered specialized mobile radio 
(SMR) providers. Based upon data contained in the most recent census 
and a report by the Commission's Common Carrier Bureau, we estimated 
that 2,100 carriers could be affected. We also discussed the reporting 
requirements imposed by the First Report & Order.
    61. Finally, we discussed the steps we had taken to minimize the 
impact on small entities, consistent with our stated objectives. We 
concluded that our actions in the First Report & Order would benefit 
small entities by facilitating their entry into the local exchange 
market. We found that the record in this proceeding indicated that the 
lack of number portability would deter entry by competitive providers 
of local service because of the value customers place on retaining 
their telephone numbers. These competitive providers, many of which may 
be small entities, may find it easier to enter the market as a result 
of number portability, which will eliminate this barrier to entry. We 
noted that, in general, we attempted to keep burdens on local exchange 
carriers to a minimum. For example, we adopted a phased deployment 
schedule for implementation in the 100 largest MSAs, and then elsewhere 
upon a carrier's request; we conditioned the provision of currently 
available measures upon request only; we did not require cellular, 
broadband PCS, and covered SMR providers, which may be small 
businesses, to offer currently available number portability measures; 
and we did not require paging and messaging service providers, which 
may be small entities, to provide any number portability.

D. Summary of the Supplemental FRFA

    62. Implementation Schedule. In the First Report & Order, we 
required local exchange carriers operating in the 100 largest MSAs to 
offer long-term service provider portability, according to a phased 
deployment schedule commencing on October 1, 1997, and concluding by 
December 31, 1998, set forth in Appendix F of the First Report & Order. 
In the First Order on Reconsideration, we extended the end dates for 
Phase I of our deployment schedule by three months, and for Phase II by 
45 days. Thus, deployment will now take place in Phase I from October 
1, 1997, through March 31, 1998, and in Phase II from January 1, 1998, 
through May 15, 1998. We also clarified that LECs need only provide 
number portability within the 100 largest MSAs in switches for which 
another carrier has made a specific request for the provision of 
portability. LECs must make available lists of their switches for which 
deployment has and has not been requested. The parties involved in such 
requests identifying preferred switches may need to use legal, 
accounting, economic and/or engineering services.
    63. In the First Order on Reconsideration, we reduced the burdens 
on rural and smaller LECs by establishing a procedure whereby, within 
as well as outside the 100 largest MSAs, portability need only be 
implemented in the switches for which another carrier has made a 
specific request for the provision of portability. If competition is 
not imminent in the areas covered by rural/small LEC switches, then the 
rural or smaller LEC should not receive requests from competing 
carriers to implement portability, and thus need not expend its 
resources until competition does develop. By that time, extensive non-
carrier-specific testing will likely have been done, and rural and 
small LECs need not expend their resources on such testing. We noted 
that the majority of parties representing small or rural LECs specified 
as the relief sought that we only impose implementation requirements 
where competing carriers have shown interest in portability. Moreover, 
our extension of Phases I and II of our deployment schedule may permit 
smaller LECs to reduce their testing costs by allowing time for larger 
LECs to test and resolve the problems of this new technology.
    64. In the First Order on Reconsideration, we rejected several 
alternatives put forth by parties that might impose greater burdens on 
small entities and small incumbent LECs. We rejected requests to 
accelerate the deployment schedule for areas both within and outside 
the 100 largest MSAs. We also rejected the procedures proposed by some 
parties that would require LECs to file waiver requests for their 
specific switches if they believe there is no competitive interest in 
those switches, instead of requiring LECs to identify in which switches 
of other LECs they wish portability capabilities. The suggested waiver 
procedures would burden the LEC from whom portability is requested with 
preparing and filing the petition for waiver. In addition, a competing 
carrier that opposes the waiver petition would be burdened with 
challenging the waiver. In contrast, under the procedure we establish, 
the only reporting burden on requesting carriers is to identify and 
request their preferred switches. Carriers from which portability is 
being requested, which may be small incumbent LECs, only incur a 
reporting burden if they wish to lessen their burdens further by 
requesting more time in which to deploy portability. Finally, we 
clarified that CMRS providers, like wireline providers, need only 
provide portability in requested switches, both within and outside the 
100 largest MSAs.

E. Description and Estimates of the Number of Small Entities Affected 
by the Second Report and Order

    65. For the purposes of the Second Report and Order, the RFA 
defines a ``small business'' to be the same as a ``small business 
concern'' under the Small Business Act, 15 U.S.C. 632, unless the 
Commission has developed one or more definitions that are appropriate 
to its activities. 5 U.S.C. 601(3). Under the Small Business Act, a 
``small business concern'' is one that: (1) is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) meets 
any additional criteria established by the SBA. 15 U.S.C. 632. SBA has 
defined a small business for Standard Industrial Classification (SIC) 
categories 4812 (Radiotelephone Communications) and 4813 (Telephone 
Communications, Except Radiotelephone) to be small entities with fewer 
than 1,500 employees. 13 CFR 121.201.
    66. The requirements adopted in the Second Report and Order 
governing regional databases to be utilized for long-term number 
portability apply to all LECs, including incumbent LECs as well as new 
LEC entrants, and also

[[Page 48784]]

apply to interexchange carriers, cellular, broadband PCS, and covered 
SMR providers. According to the SBA definition, incumbent LECs do not 
qualify as small businesses because they are dominant in their field of 
operation. Accordingly, we will not address the impact of these 
requirements on incumbent LECs.
    67. Our actions in the Second Report & Order will generally benefit 
small entities by facilitating their entry into the local exchange 
market. The record in this proceeding indicates that the lack of number 
portability would deter entry by competitive providers of local service 
because of the value customers place on retaining their telephone 
numbers. The Second Report and Order adopts the technical and 
operational standards and procedures needed to implement local number 
portability. Competitive providers, many of which may be small 
entities, may find it easier to enter the market as a result of number 
portability, which will eliminate this barrier to entry. We note that, 
in general, we attempted to keep burdens on local exchange carriers to 
a minimum.
    68. Our requirements, however, may have a significant economic 
impact on a substantial number of small businesses insofar as they 
apply to telecommunications carriers other than incumbent LECs. In 
particular, the requirements may have such an impact upon new entrant 
LECs, as well as cellular, broadband PCS, and covered SMR providers. 
These impacts are discussed further below.
    69. Total Number of Telephone Companies Affected. The United States 
Bureau of the Census (``the Census Bureau'') reports that, at the end 
of 1992, there were 3,497 firms engaged in providing telephone 
services, as defined therein, for at least one year. This number 
contains a variety of different categories of carriers, including local 
exchange carriers, interexchange carriers, cellular carriers, mobile 
service carriers, broadband PCS providers, and covered SMR providers. 
It seems certain that some of those 3,497 telephone service firms may 
not qualify as small entities or small incumbent LECs because they are 
not ``independently owned and operated.'' 15 U.S.C. 632(a)(1). For 
example, a PCS provider that is affiliated with an interexchange 
carrier having more than 1,500 employees would not meet the definition 
of a small business. It seems reasonable to tentatively conclude that 
fewer than 3,497 telephone service firms are small entity telephone 
service firms or small incumbent local exchange carriers.
i. Common Carrier Services and Related Entities
    70. According to the Telecommunications Industry Revenue: 
Telecommunications Relay Service Fund Worksheet Data (TRS Worksheet), 
there are 2,847 interstate carriers. These carriers include, inter 
alia, local exchange carriers, wireline carriers and service providers, 
interexchange carriers, competitive access providers, operator service 
providers, pay telephone operators, providers of telephone toll 
service, providers of telephone exchange service, and resellers.
    71. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
except radiotelephone (wireless) companies. The Census Bureau reports 
that, there were 2,321 such telephone companies in operation for at 
least one year at the end of 1992. According to the SBA's definition, a 
small business telephone company other than a radiotelephone company is 
one employing fewer than 1,500 persons. 13 CFR 121.201; SIC Code 4812. 
All but 26 of the 2,321 non-radiotelephone companies listed by the 
Census Bureau were reported to have fewer than 1,000 employees. Thus, 
even if all 26 of those companies had more than 1,500 employees, there 
would still be 2,295 non-radiotelephone companies that might qualify as 
small entities or small incumbent LECs. We do not have information on 
the number of carriers that are not independently owned and operated, 
and thus are unable at this time to estimate with greater precision the 
number of wireline carriers and service providers that would qualify as 
small business concerns under the SBA's definition. Consequently, we 
estimate that there are fewer than 2,295 small telephone communications 
companies other than radiotelephone companies.
    72. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange services 
(LECs). The closest applicable definition under the SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. 13 CFR 121.201; SIC Code 4813. The most reliable source of 
information regarding the number of LECs nationwide is the data that we 
collect annually in connection with the TRS Worksheet. According to our 
most recent data, 1,347 companies reported that they were engaged in 
the provision of local exchange services. We do not have information on 
the number of carriers that are not independently owned and operated, 
nor what carriers have more than 1,500 employees, and thus are unable 
at this time to estimate with greater precision the number of LECs that 
would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 1,347 small 
incumbent LECs.
    73. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for telephone communications 
companies except radiotelephone (wireless) companies. 13 CFR 121.201; 
SIC 4813. The most reliable source of information regarding the number 
of IXCs nationwide is the data that we collect annually in connection 
with the TRS Worksheet. According to our most recent data, 130 
companies reported that they were engaged in the provision of 
interexchange services. We do not have information on the number of 
carriers that are not independently owned and operated, nor have more 
than 1,500 employees, and thus we are unable at this time to estimate 
with greater precision the number of IXCs that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 130 small entity IXCs.
ii. Wireless and Commercial Mobile Services
    74. Wireless (Radiotelephone) Carriers. SBA has developed a 
definition of small entities for radiotelephone (wireless) companies. 
The Census Bureau reports that there were 1,176 such companies in 
operation for at least one year at the end of 1992. According to SBA's 
definition, a small business radiotelephone company is one employing 
fewer than 1,500 persons. 13 CFR 121.201; SIC Code 4812. The Census 
Bureau also reported that 1,164 of those radiotelephone companies had 
fewer than 1,000 employees. Thus, even if all of the remaining 12 
companies had more than 1,500 employees, there would still be 1,164 
radiotelephone companies that might qualify as small entities if they 
are independently owned are operated. Although it seems certain that 
some of these carriers are not independently owned and operated, we are 
unable at this time to estimate with greater precision the number of 
radiotelephone carriers and service providers that would qualify as 
small business concerns under SBA's definition. Consequently, we 
estimate that there are fewer than 1,164 small

[[Page 48785]]

entity radiotelephone companies that may be affected by the decisions 
and requirements adopted in the Second Report and Order.
    75. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities applicable to cellular 
licensees. The closest applicable definition of small entity is the 
definition under the SBA rules applicable to radiotelephone (wireless) 
companies (SIC 4812). The most reliable source of information regarding 
the number of cellular services carriers nationwide of which we are 
aware appears to be the data that the Commission collects annually in 
connection with the TRS Worksheet. According to the most recent data, 
792 companies reported that they were engaged in the provision of 
cellular services. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of cellular services carriers that would qualify 
as small business concerns under the SBA's definition. Consequently, we 
estimate that there are fewer than 792 small cellular service carriers.
    76. Broadband PCS Licensees. The broadband PCS spectrum is divided 
into six frequency blocks designated A through F, and the Commission 
has held auctions for each block. The Commission defined ``small 
entity'' for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar years. 
For Block F, an additional classification for ``very small business'' 
was added and is defined as an entity that, together with their 
affiliates, has average gross revenues of not more than $15 million for 
the preceding three calendar years. These regulations defining ``small 
entity'' in the context of broadband PCS auctions have been approved by 
the SBA. No small businesses within the SBA-approved definition bid 
successfully for licenses in Blocks A and B. There were 90 winning 
bidders that qualified as small entities in the Block C auctions. A 
total of 93 small and very small business bidders won approximately 40 
percent of the 1,479 licenses for Blocks D, E, and F. However, licenses 
for blocks C through F have not been awarded fully; therefore, there 
are few, if any, small businesses currently providing PCS services. 
Based on this information, we conclude that the number of small 
broadband PCS licensees will include the 90 winning C Block bidders and 
the 93 qualifying bidders in the D, E, and F blocks, for a total of 183 
small PCS providers as defined by the SBA and the Commission's auction 
rules.
    77. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission 
has defined ``small entity'' in auctions for geographic area 800 MHz 
and 900 MHz SMR licenses as a firm that had average annual gross 
revenues of less than $15 million in the three previous calendar years. 
This definition of a ``small entity'' in the context of 800 MHz and 900 
MHz SMR has been approved by the SBA. The requirements adopted in the 
Second Report and Order may apply to SMR providers in the 800 MHz and 
900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. 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. We 
assume, for purposes of the FRFA-Second Report & Order, that all of the 
extended implementation authorizations may be held by small entities, 
which may be affected by the decisions and requirements adopted in the 
Second Report and Order.
    78. The Commission's auctions for geographic area licenses in the 
900 MHz SMR band concluded in April of 1996. There were 60 winning 
bidders who qualified as small entities in the 900 MHz auction. Based 
on this information, we conclude that the number of geographic area SMR 
licensees affected by the requirements adopted in the Second Report and 
Order includes these 60 small entities. No auctions have been held for 
800 MHz geographic area SMR licenses. Therefore, no small entities 
currently hold these licenses. A total of 525 licenses will be awarded 
for the upper 200 channels in the 800 MHz geographic area SMR auction. 
However, the Commission has not yet determined how many licenses will 
be awarded for the lower 230 channels in the 800 MHz geographic area 
SMR auction. There is no basis, moreover, on which to estimate how many 
small entities will win these licenses. Given that nearly all 
radiotelephone companies have fewer than 1,000 employees and that no 
reliable estimate of the number of prospective 800 MHz licensees can be 
made, we assume, for purposes of the FRFA-Second Report & Order, that 
all of the licenses may be awarded to small entities who, thus, may be 
affected by the decisions in the Second Report and Order.

F. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    79. There are several reporting requirements imposed by the Second 
Report and Order that are likely to require the services of persons 
with technical expertise to prepare the reports. Most of these 
reporting requirements, however, are imposed on the NANC, a federal 
advisory committee, as opposed to a ``small entity'' within the meaning 
of the RFA. 5 U.S.C. 601(3); Small Business Act, 15 U.S.C. 632; 5 
U.S.C. 601(5). In particular, the Commission directs the NANC to 
present its recommendation regarding the provision of number 
portability by wireless carriers within nine months of the release of 
the Second Report and Order. Further, the NANC is directed to review 
the request of Cincinnati Bell Telephone that it be allowed to select 
one of the regional number portability databases for purposes of 
fulfilling its number portability responsibilities and to make a 
recommendation to the Commission by December 15, 1997. Moreover, as 
part of its general oversight of the local number portability 
administrators, the NANC is directed to submit recommendations 
concerning local number portability to the Commission from time to 
time. Following the adoption of a recommendation regarding the 
administration of number portability, the NANC is directed to issue a 
written report to the Commission summarizing the positions of the 
parties and the basis for the recommendation adopted by the NANC. In 
addition, pursuant to the Second Report & Order, each U.S. territory 
(i.e., Puerto Rico, U.S. Virgin Islands, Guam and the Commonwealth of 
the Northern Mariana Islands) is directed to: (1) select a regional 
database that carriers in that territory will use to provide number 
portability; and (2) notify the Commission and the NANC in writing 
regarding this selection within 45 days of the release of the Second 
Report and Order. There are no significant reporting, recordkeeping or 
other compliance requirements imposed by the Second Report and Order on 
other entities.

G. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered

    80. The Commission's actions in the Second Report and Order will 
benefit small entities by facilitating their entry into the local 
exchange market. The record in this proceeding indicates that the lack 
of number portability would

[[Page 48786]]

deter entry by competitive providers of local service because of the 
value customers place on retaining their telephone numbers. These 
competitive providers, many of which may be small entities, may find it 
easier to enter the market as a result of number portability which will 
eliminate this barrier to entry.
    81. In general in this docket, we have attempted to keep burdens on 
local exchange carriers to a minimum. The regulatory burdens we have 
imposed are necessary to ensure that the public receives the benefit of 
the expeditious provision of service provider number portability in 
accordance with the statutory requirements. We believe that the Second 
Report & Order furthers our commitment to minimizing regulatory burdens 
on small entities. For example, the NANC had recommended that we allow 
LECs to block calls whenever a carrier transmitting a call to a 
terminating LEC fails to query the number portability database to 
determine if a number has been ported. This recommendation would have 
required carriers transmitting calls to terminating LECs to reconfigure 
their networks to perform database queries or to pay another entity to 
perform a database query on their behalf. Permitting LECs to block 
unqueried calls could have negatively affected CMRS providers, who are 
not required to query calls or make arrangements to do so until 
December 31, 1998. We, therefore, only allow terminating LECs to block 
calls, when failure to do so is likely to impair network reliability. 
The volume of calls transferred to terminating LECs by small entities 
is unlikely to reach a level that could impair network reliability. As 
a result, terminating LECs are unlikely to block calls handled by small 
entities. Furthermore, carriers can make arrangements with other 
entities to perform database queries on their behalf. Based on the 
record before us, we do not find that any of the recommendations we 
adopt in the Second Report & Order will have a disproportionate impact 
on small entities.
    82. Report to Congress: The Commission will send a copy of the 
Second Report & Order, including the FRFA-Second Report & Order, in a 
report to be sent to Congress pursuant to the Small Business Regulatory 
Fairness Act of 1996. 5 U.S.C. 801(a)(1)(A). A copy of the Second 
Report & Order and the FRFA-Second Report & Order (or summary thereof) 
will also be published in the Federal Register and will be sent to the 
Chief Counsel for Advocacy of the Small Business Administration.

Ordering Clauses

    83. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 4(i), 4(j), 201-205, 218, 251, and 332 of the 
Communications Act as amended, 47 U.S.C. 151, 154(i), 154(j), 201-205, 
218, 251 and 332, part 52 of the Commission's Rules, 47 CFR part 52, is 
amended as set forth below.
    84. It is further ordered that the policies, rules and requirements 
set forth in the Second Report and Order are adopted, effective October 
17, 1997.
    85. It is further ordered that the Secretary shall send a copy of 
the Second Report and Order, including the final regulatory flexibility 
certification set forth in Appendix C, to the Chief Counsel for 
Advocacy of the Small Business Administration, in accordance with 
paragraph 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq.

List of Subjects in 47 CFR Part 52

    Communications common carriers, Incorporation by reference, 
Telecommunications, Telephone.

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

Rule Changes

    Part 52 of title 47 of the Code of Federal Regulations is amended 
as follows:

PART 52--NUMBERING

    1. The authority citation for part 52 continues to read as follows:

    Authority: Sections 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 
U.S.C. 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, 271 and 332 unless otherwise noted.

    2. A new Section 52.26 is added to read as follows:


Sec. 52.26  NANC Recommendations on Local Number Portability 
Administration.

    (a) Local number portability administration shall comply with the 
recommendations of the North American Numbering Council (NANC) as set 
forth in the report to the Commission prepared by the NANC's Local 
Number Portability Administration Selection Working Group, dated April 
25, 1997 (Working Group Report) and its appendices, which are 
incorporated by reference pursuant to 5 U.S.C. 552(a) and 1 CFR part 
51. Except that: Section 7.10 of Appendix D of the Working Group Report 
is not incorporated herein.
    (b) In addition to the requirements set forth in the Working Group 
Report, the following requirements are established:
    (1) If a telecommunications carrier transmits a telephone call to a 
local exchange carrier's switch that contains any ported numbers, and 
the telecommunications carrier has failed to perform a database query 
to determine if the telephone number has been ported to another local 
exchange carrier, the local exchange carrier may block the unqueried 
call only if performing the database query is likely to impair network 
reliability;
    (2) The regional limited liability companies (LLCs), already 
established by telecommunications carriers in each of the original Bell 
Operating Company regions, shall manage and oversee the local number 
portability administrators, subject to review by the NANC, but only on 
an interim basis, until the conclusion of a rulemaking to examine the 
issue of local number portability administrator oversight and 
management and the question of whether the LLCs should continue to act 
in this capacity; and
    (3) The NANC shall provide ongoing oversight of number portability 
administration, including oversight of the regional LLCs, subject to 
Commission review. Parties shall attempt to resolve issues regarding 
number portability deployment among themselves and, if necessary, under 
the auspices of the NANC. If any party objects to the NANC's proposed 
resolution, the NANC shall issue a written report summarizing the 
positions of the parties and the basis for the recommendation adopted 
by the NANC. The NANC Chair shall submit its proposed resolution of the 
disputed issue to the Chief of the Common Carrier Bureau as a 
recommendation for Commission review. The Chief of the Common Carrier 
Bureau will place the NANC's proposed resolution on public notice. 
Recommendations adopted by the NANC and forwarded to the Bureau may be 
implemented by the parties pending review of the recommendation. Within 
90 days of the conclusion of the comment cycle, the Chief of the Common 
Carrier Bureau may issue an order adopting, modifying or rejecting the 
recommendation. If the Chief does not act within 90 days of the 
conclusion of the comment cycle, the recommendation will be deemed to 
have been adopted by the Bureau.
    (c) The Director of the Federal Register approves this 
incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. Copies of the Working Group Report and its

[[Page 48787]]

appendices can be obtained from the Commission's contract copier, 
International Transcription Service, Inc., 1231 20th St., N.W., 
Washington, D.C. 20036, and can be inspected during normal business 
hours at the following locations: 1919 M Street, N.W., Room 239 (FCC 
Reference Center), Washington, D.C. 20554 or at the Office of the 
Federal Register, 800 North Capitol Street, N.W., Suite 700, 
Washington, D.C. The Working Group Report and its appendices are also 
available on the Internet at http://www.fcc.gov/ccb/Nanc/.

[FR Doc. 97-24426 Filed 9-16-97; 8:45 am]
BILLING CODE 6712-01-P