[Federal Register Volume 63, Number 237 (Thursday, December 10, 1998)]
[Rules and Regulations]
[Pages 68197-68208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32808]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket No. 95-116; FCC 98-275]


Telephone Number Portability

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document addresses database issues, location portability, 
500 and 900 number portability, and wireless issues, all of which were 
raised in petitions for reconsideration of the First Report and Order 
in this proceeding, and not addressed in the First Order on 
Reconsideration. We address these because their resolution will foster 
deployment of number portability and promote competition in the local 
telecommunications marketplace.

EFFECTIVE DATE: January 11, 1999.

FOR FURTHER INFORMATION CONTACT: Jonathan Askin, Attorney, Common 
Carrier Bureau, Policy and Program Planning Division, (202) 418-1580, 
or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
adopted October 15, 1998, and released October 20, 1998. The full text 
of this

[[Page 68198]]

Order is available for inspection and copying during normal business 
hours in the FCC Reference Center, 1919 M St., NW, Room 239, 
Washington, DC. The complete text also may be obtained through the 
World Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/
fcc98275.wp, or may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., (202) 857-3800, 1231 20th 
St., NW, Washington, DC 20036.

Regulatory Flexibility Certification

    As required by the Regulatory Flexibility Act, the Order contains a 
Final Regulatory Flexibility Analysis on Reconsideration which is set 
forth in the Order on Reconsideration. A brief description of the 
analysis follows. Pursuant to section 604 of the Regulatory Flexibility 
Act, the Commission performed a comprehensive analysis of the 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 Order; (2) a summary of the significant issues raised 
by the public comments in response to the initial regulatory 
flexibility analysis, a summary of the Commission's assessment of these 
issues, and a statement of any changes made in the Order as a result of 
the comments; (3) a description of and an estimate of the number of 
small entities to which the Order will apply; (4) a description of the 
projected reporting, recordkeeping and other compliance requirements of 
the 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; (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, including a statement of the factual, policy, and 
legal reasons for selecting the alternative adopted in the Order and 
why each one of the other significant alternatives to each of the 
Commission's decisions which affect small entities was rejected.

Synopsis of Second Memorandum Opinion and Order

I. Introduction

    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 and Order) in this docket, which implemented the 
provisions of section 251 of the Communications Act of 1934, as 
amended, that relate to telephone number portability. Specifically, 
section 251(b)(2) requires that all local exchange carriers (LECs) 
provide, ``to the extent technically feasible, number portability in 
accordance with requirements prescribed by the Commission.'' Section 
251(e)(2) provides that ``the costs of establishing . . . number 
portability shall be borne by all telecommunications carriers on a 
competitively neutral basis as determined by the Commission.'' The Act 
defines ``number portability'' as ``the ability of users of 
telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one telecommunications carrier to 
another.'' In the First Report and Order, the Commission determined, 
among other things, that the Commission has authority under section 251 
to promulgate rules regarding long-term and currently available number 
portability, as well as to establish cost recovery methods for each.
    2. Twenty-two parties filed petitions for reconsideration or 
clarification of the First Report and Order; 19 parties filed 
oppositions or comments on the petitions; and 16 parties filed reply 
comments. On March 6, 1997, the Commission adopted a First Memorandum 
Opinion and Order on Reconsideration, 62 FR 18280, April 15, 1997 
(First Order on Reconsideration) in this proceeding, addressing a 
number of issues. In this Second Memorandum Opinion and Order on 
Reconsideration, we address all remaining issues raised by the 
petitioners, except issues relating to cost recovery for currently 
available number portability, which will be addressed in a future 
order. We also address American Mobile Telecommunications' (AMTA) 
petition for reconsideration of the First Order on Reconsideration, 
which raises similar issues to those raised by AMTA in its petition for 
reconsideration of the First Report and Order.

II. Background

    3. In the First Report and Order, the Commission required all LECs 
to begin implementing a long-term service provider portability solution 
that meets the Commission's performance criteria in the 100 largest 
Metropolitan Statistical Areas (MSAs) no later than October 1, 1997, 
and to complete deployment in those MSAs by December 31, 1998, in 
accordance with a phased implementation schedule. In the First Order on 
Reconsideration, the Commission modified this schedule, extending the 
completion dates for the first two phases of the implementation 
schedule and clarifying that, within the 100 largest MSAs, LECs need 
only provide number portability in switches for which another carrier 
has made a specific request for the provision of portability.
    4. In the First Report and Order, the Commission also required all 
cellular, broadband personal communications services (PCS) and covered 
specialized mobile radio (SMR) providers to have the capability of 
delivering calls from their networks to ported numbers anywhere in the 
country by December 31, 1998, and to offer service provider 
portability, including the ability to support roaming, throughout their 
networks by June 30, 1999. In the First Order on Reconsideration, the 
Commission concluded that these commercial mobile radio service (CMRS) 
providers need only deploy local number portability by the June 30, 
1999, deadline in switches in the 100 largest MSAs for which they 
receive a request at least nine months prior to the deadline. On 
September 1, 1998, the Wireless Telecommunications Bureau extended the 
deadline for implementation of number portability by CMRS providers to 
March 31, 2000.
    5. In the First Report and Order, the Commission concluded, inter 
alia, that a system of regional number portability databases, managed 
by independent local number portability administrator(s) (LNPA(s)) 
would serve the public interest. The Commission directed the North 
American Numbering Council (NANC), an advisory committee established 
pursuant to the Federal Advisory Committee Act, to recommend as local 
number portability administrators one or more independent, non-
governmental entities that are not aligned with any particular 
telecommunications industry segment within seven months of the initial 
meeting of the NANC. The Commission also directed the NANC to make 
recommendations regarding, inter alia, the duties of local number 
portability administrator(s), the location of regional databases, and 
technical specifications for the regional databases. In the Second 
Report and Order, 62 FR 48774, September 17, 1997, the Commission 
adopted, with minor modifications, the NANC LNPA Working Group Report, 
containing the recommendations of the NANC regarding the selection of 
LNPAs, the duties of LNPAs, the locations of regional databases, and 
technical specifications for the regional databases.

[[Page 68199]]

III. Reconsideration Issues

A. Database Issues

1. Treatment of Industry Efforts to Implement Regional Databases Prior 
to Issuance of NANC's Recommendations
a. Discussion
    6. The Commission has adopted the NANC LNPA Working Group Report, 
which contains NANC's recommendations with respect to regional database 
implementation, in a separate order. In particular, in that order, the 
Commission adopted 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.
    7. On February 20, 1998, the Chief of the Common Carrier Bureau 
received a letter from the Chairman of the NANC informing him that the 
Limited Liability Corporations (LLCs) for the Southeast, Western, and 
West Coast regions reported to the NANC on local number portability 
implementation. The LLCs for the Southeast, Western, and West Coast 
regions reported that it was necessary to terminate their contracts 
with Perot Systems, with whom they had experienced repeated performance 
problems, and to enter into contracts with Lockheed Martin to serve as 
the LNPA to expedite implementation of local number portability. The 
NANC members supported unanimously the decision to change vendors as 
``essential in successfully implementing [number portability] in these 
regions.''
    8. We adopt the NANC Perot Recommendation to replace Perot Systems 
with Lockheed Martin as the LNPA in the Southeast, Western and West 
Coast regions. The record indicates that the NPAC database and 
associated facilities needed for long-term number portability in the 
regions where Perot Systems was the database administrator were not 
ready for intercompany testing as late as January 23, 1998, putting in 
jeopardy the dates for which number portability was required to be made 
commercially available in these regions. The record indicates that this 
delay was specifically due to the failure of the designated LNPA, Perot 
Systems, to provide a stable software and hardware platform. We find 
that NANC Perot Recommendation supports timely implementation of local 
number portability.
    9. We find it unnecessary to authorize expressly or approve 
automatically carriers' actions implementing regional database 
solutions that were taken prior to the issuance of the NANC LNPA 
Working Group Report or the Commission's order acting on the NANC LNPA 
Working Group Report. We conclude that the concerns raised by BellSouth 
and U S WEST in this area have become moot in light of subsequent 
industry actions to implement local number portability. Carriers, both 
on their own and through the regionally-based LLCs, have successfully 
worked with the NANC to implement regional SMS database solutions.
2. Scope of the NANC's Responsibilities
a. Discussion
    10. We find moot BellSouth's request that the NANC should address 
only SMS database administration. The recommendations contained in the 
NANC LNPA Working Group Report, adopted by the Commission in the Second 
Report and Order, address technical specifications related to SMS 
database administration only and do not address SMS/SCP pairs.
    11. In addition, we find moot BellSouth's request that carriers, 
and not the NANC, propose standards for interfaces between regional SMS 
and downstream SCP databases. In the Second Report and Order, the 
Commission adopted the NANC's recommended standards for interfaces 
between regional SMS and downstream SCP databases. The carriers sharing 
in the costs of developing, establishing and maintaining the regional 
databases had ample opportunity, through the NANC, to participate in 
the development of interface recommendations.
    12. Finally, we find moot Pacific's request that we direct an 
industry group other than the NANC to address operational and technical 
issues that will arise as number portability is implemented. In the 
Second Report and Order, the Commission found that the NANC represents 
a broad cross-section of the industry, has developed substantial 
expertise in number portability issues, and provides a valuable forum 
in which carriers are able to consider, at the national level, possible 
ways to resolve the issues that arise as number portability is deployed 
within each number portability region. As a result, the Commission 
charged the NANC with the task of addressing technical and operational 
issues related to local number portability that may arise in the 
future.
3. Effect of Implementation of Long-Term Number Portability on Interim 
Number Portability Methods
a. Discussion
    13. We clarify that all LECs must discontinue using transitional 
number portability methods in areas where a long-term number 
portability method has been implemented. In the First Report and Order, 
the Commission concluded that the Act ``contemplates a dynamic, not 
static, definition of technically feasible number portability 
methods.'' Based on this finding, the Commission required LECs to offer 
number portability, as soon as reasonably possible upon receipt of a 
specific request, through remote call forwarding (RCF), direct inward 
dialing (DID) and other comparable methods, because these are the only 
methods that currently are technically feasible. Because transitional 
number portability methods do not meet the performance criteria 
established for long-term number portability, LECs may not continue to 
utilize such measures once long-term solutions have been implemented. 
This conclusion is consistent with the Commission's finding in the 
First Report and Order that the Act ``clearly contemplates that 
[currently available] methods should serve as only temporary measures 
until long-term portability is implemented.''
    14. We also wish to clarify that, under the rules adopted in the 
First Report and Order, RCF and DID are not the exclusive methods of 
providing number portability that LECs are obligated to provide today. 
As the Commission stated in the First Report and Order, ``LECs are 
required to offer number portability through RCF, DID, and other 
comparable methods because they are the only methods that currently are 
technically feasible.'' In specifically identifying RCF and DID as 
technically feasible number portability methods, the Commission did not 
imply that RCF and DID are the only methods through which LECs must 
port numbers until a permanent number portability solution is 
implemented. Clearly, the references to RCF and DID were illustrative 
of the types of measures that LECs must provide on a transitional 
basis. The Commission's rules require that LECs must provide, on a 
transitional basis, any technically feasible method of number 
portability comparable to RCF and DID.
    15. In the two years since adoption of the First Report and Order, 
a number of state commissions have ordered carriers to provide Route 
Indexing--Portability Hub (RI-PH) and Directory Number Route Indexing 
(DNRI), based on

[[Page 68200]]

findings of technical feasibility. To date, LECs in more than half the 
states have either agreed or been ordered to provide RI-PH and DNRI as 
technically feasible methods of providing number portability prior to 
deployment of a database method. We therefore conclude, consistent with 
the Commission's prior findings in this docket and with the rules and 
policies established in the Commission's Local Competition Order, 61 FR 
45476, August 29, 1996, that RCF, DID, DNRI and RI-PH are comparable 
and technically feasible transitional methods of providing number 
portability. We conclude that state commissions may determine that 
additional methods are comparable and technically feasible, as well.
    16. In adopting the requirements for transitional number 
portability in the First Report and Order, the Commission relied on the 
fact that no network modifications would be necessary in order to 
provide number portability on a transitional basis, prior to 
implementation of a long-term database solution. In particular, in 
adopting section 52.27, the Commission concluded that it is not unduly 
burdensome for LECs to provide number portability through RCF and DID 
because these methods are offered as retail services in a number of 
states today.
    17. Since adoption of the First Report and Order, certain new 
entrants have sought other transitional methods of number portability 
that are better suited, in their view, to their particular business 
needs. A number of carriers make available other transitional methods 
of number portability, such as RI-PH and DNRI, only if requested by a 
competing carrier. We conclude that it is not per se unreasonable for a 
LEC to make available transitional number portability methods only upon 
request, provided that the LEC does not deliberately use the request 
process to delay competitive entry. We would expect a LEC to respond 
expeditiously to a request for a particular method of transitional 
number portability.
    18. The First Report and Order did not address the issue of which 
carrier has the right to select the particular transitional method of 
number portability to be provided when there is more than one 
technically feasible method. We amend the Commission's rules, on our 
own motion, to clarify that a LEC is required to furnish the specific 
method of currently available number portability that a competing 
carrier requests, provided that provision of the requested method is 
not unduly burdensome. We believe that the burden of fulfilling a 
competing carrier's request for a specific method of providing number 
portability will be minimal if the functionality described by a 
requested currently available method already exists in the network. As 
the Commission noted in the First Report and Order, the capability to 
provide number portability through currently available methods, such as 
RCF and DID, already exists in most networks, and no additional network 
upgrades should be necessary in order to provide number portability in 
this manner. We clarify this finding by adding that, to the extent no 
network upgrades are necessary in order to provide number portability 
through methods other than RCF or DID, a LEC must make such methods 
available upon request as well.
    19. Given that a number of states have ordered LECs to provide RI-
PH and DNRI, we presume that RI-PH and DNRI are not unduly burdensome 
to provide. We conclude that the burden should be on the LEC providing 
number portability to overcome this presumption. In particular, 
consistent with the pro-competitive goals of the Act, we conclude that 
the LEC shall bear the burden of demonstrating that a particular 
requested transitional number portability method is unduly burdensome, 
and therefore should not be provided to a requesting carrier. In 
determining whether a specific method is unduly burdensome, relevant 
factors are the extent of network upgrades needed to provide the 
requested method, the cost of such upgrades, the business needs of the 
requesting carrier, and the timetable for deployment of a long-term 
number portability method in that particular geographic location.
4. Issues Related to Performance Criteria
a. Discussion
    20. We reject Nextel's request that the Commission establish an 
industry committee to develop a single, nationwide number portability 
methodology. As a threshold matter, we disagree with Nextel's 
underlying premise that number portability methodology decisions will 
be made on a state-by-state basis. In the First Report and Order, the 
Commission specifically concluded that regionally deployed databases 
best serve the public interest. Because the harm that Nextel raised in 
its petition (i.e., the deployment of a different number portability 
plan in each state resulting in dramatically increased costs for multi-
state providers) has not occurred and is not likely to occur, we 
conclude that it is unnecessary to grant Nextel's request.
    21. In addition, we note that, to a great extent, the NANC already 
has served the function that Nextel asserts is necessary. The NANC was 
charged with developing recommendations regarding the implementation of 
number portability, in large part, ``to ensure consistency and to 
provide a national perspective on number portability issues, as well as 
to reduce the costs of implementing a national number portability 
plan.'' Further, the NANC includes representatives from each of the 
constituencies that Nextel identifies: state and federal officials, 
service providers, and equipment manufacturers. Moreover, we point out 
that, to date, the industry and state/regional workshops have chosen 
the Location Routing Number (LRN) methodology as the preferred method 
of number portability, and carriers have proceeded to implement LRN. As 
such, it would appear that states have chosen the same number 
portability method, rather than several incompatible methods, as Nextel 
feared.
    22. We grant AirTouch's request for clarification that carriers may 
arrange with other carriers to perform database dips and other routing 
functions. Contrary to AirTouch's claims, we have not assumed, nor do 
we require, that all carriers must satisfy their number portability 
obligations by upgrading their networks to perform database dips. In 
the Second Report and Order, the Commission concluded that, although 
the carrier in the call routing process immediately preceding the 
terminating carrier shall be responsible for ensuring that number 
portability database dips are performed, that carrier can meet this 
obligation by either querying the number portability database itself or 
by arranging with another entity to perform database dips on its 
behalf.

B. Location Portability

1. Discussion
    23. We decline to adopt SBC's proposal that the Commission decide 
now that we will not consider location portability until service 
provider number portability is successfully deployed in the 100 largest 
MSAs. The Commission concluded in the First Report and Order that the 
requirement that all LECs provide local number portability (i.e., 
service provider portability) pursuant to section 251(b)(2) does not 
include location portability because the Act's number portability 
mandate is limited to situations when users remain ``at the same 
location'' when switching from one telecommunications carrier to 
another. Although we did not require LECs to

[[Page 68201]]

provide location portability when the First Report and Order was 
issued, we nevertheless concluded that nothing in the Act would 
preclude us from mandating location portability if, in the future, we 
determine that location portability is in the public interest.
    24. The Commission has no current plans to address location 
portability at this time. We need not and do not address the issue of 
whether it may be in the public interest to require the implementation 
of location portability at some point in the future.

C. 500 and 900 Number Portability

    25. In the First Report and Order, the Commission concluded there 
was insufficient evidence in the record to determine whether it is 
technically feasible for LECs to make their assigned 500 and 900 
numbers portable. The Commission directed the Industry Numbering 
Committee (INC) to examine this issue and to file a report of its 
findings with the Commission within twelve months of the effective date 
of the First Report and Order. The Commission stated that ``[u]pon 
receipt of this report, we will take appropriate action under the * * * 
Act.'' The INC released its report on July 2, 1997.
1. Provision of 500 and 900 Number Portability By Carriers Other Than 
LECs
a. Discussion
    26. The number portability requirements of section 251(b)(2) apply 
only to LECs. Specifically, section 251(b)(2) imposes a duty on ``each 
local exchange carrier * * * to provide, to the extent technically 
feasible, number portability in accordance with requirements prescribed 
by the Commission.'' Thus, we cannot rely on section 251 for authority 
to require IXCs or other non-LECs to provide number portability for 500 
and/or 900 number service. We therefore affirm the Commission's 
conclusion in the First Report and Order that IXCs are not required 
under section 251(b)(2) to make their assigned 500 and 900 numbers 
portable to any other carrier offering 500 and 900 number service.
    27. We, however, may possess independent authority under sections 
1, 2 and 4(i) of the Act to require other carriers to provide number 
portability for 500 and/or 900 number service to the extent that such 
portability is in the public interest. Section 1 requires the 
Commission to make available to all people of the United States ``a 
rapid, efficient, Nation-wide, and world-wide wire and radio 
communication service.'' Section 1 of the Act thus gives the Commission 
jurisdiction to ensure that the portability of all telephone numbers 
within the United States, including 500 and 900 numbers, is handled 
efficiently and fairly. 500 and 900 number portability would promote 
this mandate. 500 and 900 number portability also would promote the 
efficient and uniform treatment of numbering that is essential to the 
efficient delivery of interstate and international telecommunications. 
Section 2 gives the Commission authority to regulate interstate common 
carriers, including those that provide 500 and 900 number services. 
Section 4(i) grants the Commission authority to ``perform any and all 
acts, make such rules and regulations, and issue such orders, not 
inconsistent with [the Act], as may be necessary in the execution of 
its functions.'' The conclusion that we may possess independent 
authority to require all carriers to provide number portability for 
their assigned 500 and 900 numbers would be similar to the Commission's 
decision in the First Report and Order to rely on its general 
rulemaking authority to order number portability for CMRS providers, 
and to reserve the Commission's authority to require service and 
location portability, even though the Commission concluded that these 
types of number portability are not specifically required by section 
251(b)(2). This result would also be consistent with our exercise of 
authority under sections 1, 2 and 4(i) to require the Bell Operating 
Companies and GTE to provide number portability for 800 numbers even 
prior to enactment of the 1996 Act.
    28. As the Commission noted in the First Report and Order, most 
users of 500 and 900 number services today have obtained their numbers 
from IXCs. Thus, ``as a practical matter, portability for the vast 
majority of 500 and 900 numbers can occur only if the IXC releases to 
the new carrier management of the 500 or 900 number that is to be 
ported.'' If only LECs were required to make their 500 and 900 numbers 
portable, the vast majority of 500 and 900 numbers would not be 
portable, and competing 500 and 900 service providers would face a 
significant impediment in persuading customers to switch carriers. 
Imposing portability obligations on all 500 and 900 service providers 
would make it possible for all customers of 500 and 900 services to 
switch providers without changing their numbers. This, in turn, would 
promote competition in the 500 and 900 services markets.
    29. We decline to rule at this time, however, on our authority to 
require all carriers to offer 500 and 900 number portability. We will 
first determine whether 500 and/or 900 number portability by all 
carriers is technically feasible. In the event that it is determined 
that 500 and 900 number portability by all carriers is technically 
feasible, we will address our authority to impose the same number 
portability requirements on all carriers that provide 500 and 900 
services.
2. Implementation of 500 and 900 Number Portability
a. Discussion
    We decline to determine at this time whether we have independent 
rulemaking authority to require number portability for 500 and 900 
numbers assigned to all carriers, if that would serve the public 
interest. In its report, the INC expressly limited its analysis to the 
technical feasibility of porting numbers assigned to LECs between LECs; 
it did not address the technical feasibility of LEC-to-non-LEC, non-
LEC-to-LEC, or non-LEC-to-non-LEC portability for 500 or 900 numbers. 
In order to evaluate whether the public interest would be served by 
mandating 500 and 900 number portability for all carriers, we must 
first determine whether number portability for the entire 500 and 900 
number resource is technically feasible. We therefore conclude that we 
should expand the scope of the inquiry that the Commission previously 
delegated to the INC. We direct the NANC, which may refer the issues to 
the INC, to examine the following questions:
    1. Is it technically feasible for all 500 number service providers 
to implement 500 number portability using existing network and 
administrative database capabilities?
    2. If the answer to Question #1 is ``No,'' is technology available 
to develop the appropriate network and administrative database 
capabilities to deploy 500 number portability in the future?
    3. If the answer to Question #2 is ``Yes,'' how long would it take 
to develop and deploy the necessary network infrastructure for 500 
number portability, upon receipt of a regulatory directive?
    4. Is it technically feasible for all 900 number service providers 
to implement 900 number portability using existing network and 
administrative database capabilities?
    5. If the answer to Question #4 is ``No,'' is technology available 
to develop the appropriate network and administrative database 
capabilities to deploy 900 number portability in the future?
    6. If the answer to Question #5 is ``Yes,'' how long would it take 
to

[[Page 68202]]

develop and deploy the necessary network infrastructure for 900 number 
portability, upon receipt of a regulatory directive?
    31. The NANC is directed to file a report addressing the questions 
referred to it in this Second Memorandum Opinion and Order on 
Reconsideration within twelve months of the effective date of this 
order. Upon receipt of the NANC's report, we will take appropriate 
action.
    32. We decline to rule at this time on SBC's request that we 
consider economic feasibility, as well as technical feasibility, in 
evaluating the provision of 500 and 900 number portability. As a 
practical matter, we believe that it is premature to determine what 
factors may be appropriate to consider with respect to the possible 
implementation of portability for such numbers, if we ultimately 
conclude we have jurisdiction to order portability of those numbers for 
all carriers.

D. Wireless Issues

    33. In the First Report and Order, the Commission concluded that 
number portability must be provided by cellular, broadband PCS, and 
covered SMR providers.
    34. With respect to wireless carriers, the Commission concluded 
that number portability will facilitate the entry of new service 
providers, such as broadband PCS and covered SMR, into CMRS markets 
currently dominated by cellular providers, and competition from these 
new entrants will provide incentives for incumbent cellular providers 
to lower prices and increase service choice and quality. The Commission 
also noted that number portability will promote competition between 
CMRS and wireline service providers as CMRS providers offer comparable 
local exchange and fixed commercial radio services. The Commission 
determined that it would not adopt a number portability schedule for 
other categories of CMRS providers (including SMR operators that do not 
fit the definition of ``covered SMR'') because these other providers 
offer services that ``currently will have little competitive impact on 
competition between providers of wireless telephony service or between 
wireless and wireline carriers.''
1. Definition of ``Covered SMR''
b. Discussion
    35. The term ``covered SMR'' was intended to include SMR licensees 
that offer services that compete, or potentially compete, with services 
offered by cellular and broadband PCS licensees. The Commission 
concluded that because cellular, broadband PCS, and certain SMR 
providers will compete directly with one another, and potentially will 
compete in the future with wireline carriers, number portability was 
sufficiently important to the development of competition that it should 
be required for these carriers. Within the SMR service, however, it was 
clear that some providers would be offering mass market, two-way, real-
time, interconnected voice services that compete with the offerings of 
traditional cellular and broadband PCS providers, and others would not. 
The definition of covered SMR is intended to distinguish between these 
two groups of SMR providers.
    36. We agree with the petitioners that the existing definition of 
``covered SMR'' imperfectly accomplishes its intended purpose.
    37. We note also that it may be infeasible, from a technical 
standpoint, to require SMR providers whose systems lack an in-network 
switching capability to provide number portability.
    38. For the foregoing reasons, we adopt, with some modification, 
the definition suggested by the petitioners:
    ``Covered CMRS systems offer real-time, two-way switched voice 
service that are interconnected with the public switched network, and 
utilize an in-network switching facility which enables the provider to 
reuse frequencies and accomplish seamless hand-offs of subscriber 
calls.''
    With this change, number portability must be provided by ``covered 
CMRS'' providers, which may hold licenses in cellular, PCS, SMR or any 
other services.
    39. We also clarify, in response to Nextel's petition, that the 
definition of covered CMRS should be applied on a system-by-system 
basis. That is, an entity may hold more than one CMRS license, but the 
entity is required to provide number portability only with respect to 
licenses that satisfy the definition of covered CMRS.
    40. In addition, we reject AMTA's proposal that the covered SMR 
definition apply only to systems serving 20,000 or more subscribers 
nationwide. The approach we adopt above is a functional one, which is 
based on whether the provider offers a certain type of service. We find 
that determining whether an SMR system is required to provide number 
portability based on how many subscribers it serves would be arbitrary, 
and could discourage SMR providers from expanding their systems.
    41. Further, we dismiss SBT's petition for reconsideration as 
untimely. Public notice in this case was given on July 26, 1996, the 
date on which the First Report and Order was published in the Federal 
Register. Therefore, petitions to reconsider that decision were due on 
or before August 26, 1996. Because the time period for filing petitions 
for reconsideration is prescribed by statute, the Commission may not, 
except in extraordinary cases, waive or extend the filing period. SBT 
has not demonstrated that its late-filed petition fits into this narrow 
exception; indeed, SBT has not even moved for leave to file its 
petition. As such, we dismiss SBT's petition.
    42. Finally, we dismiss AMTA's petition for reconsideration of the 
First Order on Reconsideration as moot. By amending, in this Order, the 
Commission's rules to ensure that only those CMRS carriers that compete 
in the market for two-way, interconnected, real-time voice services are 
subject to the Commission's number portability requirements, we grant 
the relief that AMTA requests. Moreover, because we have clarified that 
CMRS licensees providing primarily dispatch service with a non-cellular 
type of system are exempt from the Commission's number portability 
requirements, there is no need to extend the implementation period for 
such licensees.
2. Geographic Scope of Number Portability for Wireless Carriers
a. Discussion
    43. Requiring service provider portability in a wireless 
environment, without imposing any geographic boundaries, could 
theoretically result in de facto nationwide location portability, which 
the Commission explicitly declined to adopt in the First Report and 
Order. Conversely, limiting number portability in a wireless 
environment to those carriers already serving the NPA of the ported 
wireless number may thwart the pro-competitive goals of the Act. A 
single geographic area may now have multiple NPAs due to area code 
overlays. Typically, wireless carriers provide their customers with the 
choice of NPAs when they have more than one switch in the geographic 
market, but some new entrants may only have one or two switches with 
all numbers coming out of the same NPA. Limiting number portability in 
a wireless environment to those carriers already serving the NPA of the 
ported wireless number may discourage customers from switching wireless 
carriers if they cannot port their number to a different NPA even 
though the number continues to be used in the same geographic

[[Page 68203]]

market. As noted, wireless carriers are not obligated to port numbers 
until March 31, 2000. Furthermore, the NANC is currently examining the 
myriad of complex issues surrounding wireless number portability. 
Consequently, we defer a decision on this matter pending further 
analysis by the NANC. We encourage AirTouch to participate in the 
NANC's standards development process to ensure consideration of 
AirTouch's concerns.
3. Preemption of State Number Portability Requirements for CMRS 
Providers
a. Discussion
    44. We reject the request for preemption of state number 
portability requirements for CMRS carriers. While, under certain 
circumstances, the Commission has authority to preempt state law, the 
record is devoid of any evidence that such action is warranted at this 
time. Pursuant to the Supremacy Clause of the U.S. Constitution, 
Congress has the power to preempt state laws or regulations.
    45. The petitioners have failed to identify any specific state 
number portability requirements that apply to CMRS carriers that 
conflict with federal number portability mandates or objectives. Nor is 
there a basis in the current record for concluding that it will be 
impossible for carriers to comply with federal and state CMRS number 
portability requirements. Thus, we decline to consider the preemption 
of state number portability requirements for CMRS carriers based on the 
record before us.
    46. In addition, despite the conclusory assertions of the 
petitioners to the contrary, the record does not indicate that there 
are, or will be, state number portability requirements applicable to 
CMRS carriers that will conflict with the requirements of any other 
state, such that CMRS carriers will be required to accommodate multiple 
portability architectures and/or service requirements. Indeed, the 
framework for implementing number portability is designed, in part, to 
minimize such burdens. For example, in the First Report and Order, the 
Commission directed one entity--the NANC--to develop recommendations 
for technical and operational standards with respect to regional number 
portability databases. Accordingly, we expect there will be a high 
degree of national uniformity in this regard. Moreover, as discussed 
above, the industry and state/regional workshops chose a single method 
as the preferred method for number portability. In short, it is 
unlikely that CMRS systems that span state lines will be required to 
accommodate multiple portability architectures that differ 
significantly from one another.

IV. Ordering Clauses

    47. 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, and 47 CFR 52 is amended.
    48. It is further ordered that the Petitions for Reconsideration 
and/or Clarification are granted to the extent indicated herein and 
otherwise are denied.
    49. It is further ordered that the policies, rules, and 
requirements set forth herein are adopted, effective 30 days after 
publication of a summary of this Second Reconsideration Order in the 
Federal Register.
    50. It is further ordered that the Petition for Reconsideration of 
Small Business in Telecommunications is hereby dismissed.
    51. It is further ordered that the Petition for Reconsideration 
filed by the Ameritech Mobile Telecommunications Association, Inc. on 
May 15, 1997, is dismissed as moot.
    52. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Second Memorandum Opinion and Order on Reconsideration, including the 
Second Supplemental Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 52

    Communications common carriers, Telecommunications, Telephone

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Final Rules

    Part 52 of Title 47 of the Code of Federal Regulations (CFR) is 
amended as follows:

PART 52--NUMBERING

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

    Authority: Sec. 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, 
251-2, 271 and 332 unless otherwise noted.

    2. Section 52.21 is amended by revising paragraphs (c) and (q) to 
read as follows:


Sec. 52.21  Definitions.

* * * * *
    (c) The term covered CMRS means broadband PCS, cellular, and 800/
900 MHz SMR licensees that hold geographic area licenses or are 
incumbent SMR wide area licensees, and offer real-time, two-way 
switched voice service, are interconnected with the public switched 
network, and utilize an in-network switching facility that enables such 
CMRS systems to reuse frequencies and accomplish seamless hand-offs of 
subscriber calls.
* * * * *
    (q) The term transitional number portability measure means a method 
that allows one local exchange carrier to transfer telephone numbers 
from its network to the network of another telecommunications carrier, 
but does not comply with the performance criteria set forth in 52.3(a). 
Transitional number portability measures are technically feasible 
methods of providing number portability including Remote Call 
Forwarding (RCF), Direct Inward Dialing (DID), Route Indexing--
Portability Hub (RI-PH), Directory Number Route Indexing (DNRI) and 
other comparable methods.
    3. Section 52.27 is revised to read as follows:


Sec. 52.27  Deployment of transitional measures for number portability.

    (a) All LECs shall provide transitional number portability 
measures, as defined in section 52.21(q) of this chapter, 47 CFR 
52.21(q), as soon as reasonably possible upon receipt of a specific 
request from another telecommunications carrier, until such time as the 
LEC implements a long-term database method for number portability in 
that area.
    (b) A LEC must provide the particular transitional number 
portability measure requested by a telecommunications carrier, except 
as set forth in paragraph (c) of this section.
    (c) A LEC that does not provide a requested transitional number 
portability measure must demonstrate that provision of the requested 
transitional number portability measure either is not technically 
feasible or if technically feasible, is unduly burdensome.
    (1) Previous successful provision of a particular transitional 
number portability measure by any LEC constitutes substantial evidence 
that the particular method is technically feasible.

[[Page 68204]]

    (2) In determining whether provision of a transitional number 
portability measure is unduly burdensome, relevant factors to consider 
are the extent of network upgrades needed to provide that particular 
method, the cost of such upgrades, the business needs of the requesting 
carrier, and the timetable for deployment of a long-term number 
portability method in that particular geographic location.
    (d) LECs must discontinue using transitional number portability 
measures in areas where a long-term number portability method has been 
implemented.
    4. Section 52.31 is amended by revising paragraphs (a), (b), and 
(e) as follows:


Sec. 52.31  Deployment of long-term database methods for number 
portability by CMRS providers.

    (a) By March 31, 2000, all covered CMRS providers must provide a 
long-term database method for number portability, including the ability 
to support roaming, in compliance with the performance criteria set 
forth in section 52.23(a) of this chapter, 47 CFR 52.23. A licensee may 
have more than one CMRS system, but only the systems that satisfy the 
definition of covered CMRS are required to provide number portability.
    (b) By December 31, 1998, all covered CMRS providers must have the 
capability to obtain routing information, either by querying the 
appropriate database themselves or by making arrangements with other 
carriers that are capable of performing database queries, so that they 
can deliver calls from their networks to any party that has retained 
its number after switching from one telecommunications carrier to 
another.
* * * * *
    (e) The Chief, Wireless Telecommunications Bureau, may establish 
reporting requirements in order to monitor the progress of covered CMRS 
providers implementing number portability, and may direct such carriers 
to take any actions necessary to ensure compliance with this deployment 
schedule.

Second Supplemental Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act (RFA), 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 Notice, including 
comment on the IRFA. The comments received on the IRFA were discussed 
in the First Report and Order's Final Regulatory Flexibility Analysis 
(FRFA-First Report and Order), which was incorporated as Appendix C to 
the First Report and Order in this docket. The FRFA-First Report and 
Order conforms to the RFA. On reconsideration of the First Report and 
Order, parties commented on the FRFA-First Report and Order. The 
comments received on the FRFA-First Report and 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. This Second 
Supplemental Final Regulatory Flexibility Analysis (Second Supplemental 
FRFA) is incorporated as an appendix to the Second Order on 
Reconsideration in this docket. This Second Supplemental FRFA also 
conforms to the RFA.

A. Need for and Objectives of Second Order on Reconsideration

    2. The need for and objectives of the requirements adopted in this 
Second Order on Reconsideration are the same as those discussed in the 
Final Regulatory Flexibility Analysis in the First Report and 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 (the 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 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 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.

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

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

C. Summary of the FRFA-First Report and Order

    4. In the FRFA-First Report and Order, we concluded that incumbent 
LECs do not qualify as small businesses because they are dominant in 
their field of operation, and, accordingly, we did not address the 
impact of the Commission's 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. 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. This 
standard also applies in determining whether an entity is a small 
business for purposes of the Regulatory Flexibility Act.
    5. We did recognize that the Commission's 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 and 
Order.
    6. Finally, we discussed the steps we had taken to minimize the 
impact on small entities, consistent with the Commission's stated 
objectives. We concluded that our actions in the First Report and 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

[[Page 68205]]

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

    7. Implementation Schedule. In the First Report and 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 and 
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.
    8. 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 seeking 
relief asked 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.
    9. 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 This Second Order on Reconsideration

    10. Consistent with our prior practice, we shall continue to 
exclude small incumbent LECs from the definition of a small entity for 
the purpose of this Second Supplemental FRFA. Accordingly, our use of 
the terms ``small entities'' and ``small businesses'' does not 
encompass ``small incumbent LECs.'' Nevertheless, we include small 
incumbent LECs in our Second Supplemental FRFA. We use the term ``small 
incumbent LECs'' to refer to any incumbent LECs that arguably might be 
defined by SBA as ``small business concerns.''
    11. Total Number of Telephone Companies Affected. Many of the 
decisions and rules adopted herein may have a significant effect on a 
substantial number of the small telephone companies identified by SBA. 
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, competitive 
access providers, cellular carriers, mobile service carriers, operator 
service providers, pay telephone operators, PCS providers, covered SMR 
providers, and resellers. 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.'' 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 conclude, 
therefore, that fewer than 3,497 telephone service firms are small 
entity telephone service firms or small incumbent LECs that may be 
affected by this Order on Reconsideration.
    12. Wireline Carriers and Service Providers. SBA has developed a 
definition of small entities for telephone communications companies 
other than 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 SBA's 
definition, a small business telephone company other than a 
radiotelephone company is one employing fewer than 1,500 persons. 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. 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 
wireline carriers and service providers that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 2,295 small entity telephone communications 
companies other than radiotelephone companies that may be affected by 
the decisions and rules

[[Page 68206]]

adopted in this Order on Reconsideration.
    13. Local Exchange Carriers. Neither the Commission nor SBA has 
developed a definition of small providers of local exchange services 
(LECs). The closest applicable definition under SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of LECs nationwide of which we are aware appears to be the data that we 
collect annually in connection with the Telecommunications Relay 
Service (TRS) Worksheet. According to our most recent data, 1,347 
companies reported that they were engaged in the provision of local 
exchange 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 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 that may be affected by the 
decisions and rules adopted in this Order on Reconsideration.
    14. Interexchange Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies. The most reliable 
source of information regarding the number of IXCs nationwide of which 
we are aware appears to be 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. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of IXCs that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 130 small entity IXCs that may be affected by the 
decisions and rules adopted in this Order on Reconsideration.
    15. Competitive Access Providers. Neither the Commission nor SBA 
has developed a definition of small entities specifically applicable to 
providers of competitive access services (CAPs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies. The most reliable 
source of information regarding the number of CAPs nationwide of which 
we are aware appears to be the data that we collect annually in 
connection with the TRS Worksheet. According to our most recent data, 
57 companies reported that they were engaged in the provision of 
competitive access 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 CAPs that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 57 small entity CAPs that may be affected by 
the decisions and rules adopted in this Order on Reconsideration.
    16. Operator Service Providers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of operator services. The closest applicable definition under 
SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies. The most reliable source of 
information regarding the number of operator service providers 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with the TRS Worksheet. According to our most 
recent data, 25 companies reported that they were engaged in the 
provision of operator services. Although it seems certain that some of 
these companies are not independently owned and operated, or have more 
than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of operator service providers that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 25 small entity 
operator service providers that may be affected by the decisions and 
rules adopted in this Order on Reconsideration.
    17. Pay Telephone Operators. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to pay 
telephone operators. The closest applicable definition under SBA rules 
is for telephone communications companies other than radiotelephone 
(wireless) companies. The most reliable source of information regarding 
the number of pay telephone operators nationwide of which we are aware 
appears to be the data that we collect annually in connection with the 
TRS Worksheet. According to our most recent data, 271 companies 
reported that they were engaged in the provision of pay telephone 
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 pay telephone operators that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 271 small entity pay telephone operators that may be 
affected by the decisions and rules adopted in this Order on 
Reconsideration.
    18. 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. 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 entity radiotelephone companies that may be affected 
by the decisions and rules adopted in this Order on Reconsideration.
    19. Cellular Service Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of cellular services. The closest applicable definition under 
SBA rules is for radiotelephone (wireless) companies. The most reliable 
source of information regarding the number of cellular service carriers 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with the TRS Worksheet. According to our 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 service carriers that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate

[[Page 68207]]

that there are fewer than 792 small entity cellular service carriers 
that may be affected by the decisions and rules adopted in this Order 
on Reconsideration.
    20. Mobile Service Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
mobile service carriers, such as paging companies. The closest 
applicable definition under SBA rules is for radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of mobile service carriers nationwide of which we are aware appears to 
be the data that we collect annually in connection with the TRS 
Worksheet. According to our most recent data, 138 companies reported 
that they were engaged in the provision of mobile 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 mobile service 
carriers that would qualify under SBA's definition. Consequently, we 
estimate that there are fewer than 138 small entity mobile service 
carriers that may be affected by the decisions and rules adopted in 
this Order on Reconsideration.
    21. Broadband Personal Communications Service (PCS). 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 businesses'' 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% 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.
    22. 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 rules adopted in this Order 
on Reconsideration. 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 this Supplemental FRFA, that all of the extended implementation 
authorizations may be held by small entities, which may be affected by 
the decisions and rules adopted in this Order on Reconsideration.
    23. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we conclude that the number of geographic area SMR 
licensees affected by the rule adopted in this Order on Reconsideration 
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 this FRFA, that all of the licenses 
may be awarded to small entities who, thus, may be affected by the 
decisions in this Order on Reconsideration.
    24. Resellers. Neither the Commission nor SBA has developed a 
definition of small entities specifically applicable to resellers. The 
closest applicable definition under SBA rules is for all telephone 
communications companies. The most reliable source of information 
regarding the number of resellers nationwide of which we are aware 
appears to be the data that we collect annually in connection with the 
TRS Worksheet. According to our most recent data, 260 companies 
reported that they were engaged in the resale of telephone 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 resellers that would qualify as small business concerns under SBA's 
definition. Consequently, we estimate that there are fewer than 260 
small entity resellers that may be affected by the decisions and rules 
adopted in this Second Order on Reconsideration.

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

    25. There are no significant reporting, recordkeeping or other 
compliance requirements imposed on small entities by this Second Order 
on Reconsideration on other entities.

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

    26. The Commission's actions in this Second Order on 
Reconsideration 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 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.
    27. 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 
Order on Reconsideration furthers our commitment to minimizing 
regulatory burdens on small entities. Based on the record before us, we 
do not find that any of the recommendations we adopt in the Second 
Order on Reconsideration will have a

[[Page 68208]]

disproportionate impact on small entities.
    28. Report to Congress: The Commission will send a copy of the 
Second Order on Reconsideration, including the Second Supplemental 
FRFA, in a report to be sent to Congress pursuant to the Small Business 
Regulatory Fairness Act of 1996. A copy of the Second Order on 
Reconsideration and this Second Supplemental FRFA (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.

[FR Doc. 98-32808 Filed 12-9-98; 8:45 am]
BILLING CODE 6712-01-P