[Federal Register Volume 67, Number 29 (Tuesday, February 12, 2002)]
[Rules and Regulations]
[Pages 6431-6435]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-3278]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket No. 99-200; CC Docket No. 96-98; FCC 01-362]


Numbering Resource Optimization

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document the Federal Communications Commission (FCC or 
Commission) continues to develop, adopt and implement a number of 
strategies to ensure that the numbering resources of the North American 
Numbering Plan (NANP) are used efficiently, and that all carriers have 
the numbering resources they need to compete in the rapidly expanding 
telecommunications marketplace.

DATES: Effective March 14, 2002, except for Secs. 52.19(c)(3)(i) and 
52.19(c)(4), which contain information collection requirements that 
have not been approved by OMB. The Commission will publish a document 
in the Federal Register announcing the effective date.

ADDRESSES: Federal Communications Commission, Secretary, 445 12th 
Street, SW., Room TW-B204F, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Sanford Williams, (202) 418-2320 or e-
mail at [email protected] or Jennifer Gorny at (202) 418-2320 or 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Report and Order and Second Order on Reconsideration in CC Docket No. 
96-98 and CC Docket No. 99-200 (Third Report and Order), adopted on 
December 12, 2001, and released on December 28, 2001. The full text of 
this document is available for inspection and copying during normal 
business hours in the Commission Reference Center, 445 12th Street, 
SW., Washington, DC 20554. The complete text may also be obtained 
through the World Wide Web at http://www.fcc.gov/Bureaus/CommonCarrier/Orders, or may be purchased from the Commission's copy contractor, 
Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, 
or via e-mail at [email protected].

Synopsis of the Third Report and Order and Second Order on 
Reconsideration in CC Docket No. 96-98 and CC Docket No. 99-200

    1. With the rules adopted in the Third Report and Order, the 
Commission creates national standards to address numbering resource 
optimization. The Third Report and Order, among other things: (1) 
Declines to require paging providers and providers that do not have 
local number portability (LNP) and are operating outside the top 100 
metropolitan statistical areas (MSA) to participate in thousands-block 
number pooling; (2) lifts the ban on service-specific and technology-
specific overlays (collectively, specialized overlays or SOs), and 
provides that the Commission will consider petitions filed by state 
commissions for authority to implement SOs on a case-by-case basis; (3) 
subjects carriers that violate numbering requirements or fail to 
cooperate with an auditor conducting a ``for cause'' or random audit to 
the denial of requests for numbering resources; (4) allows incumbent 
local exchange carriers (LECs) subject to rate-of-return or price cap 
regulation to recover their carrier-specific costs directly related to 
national thousands-block number pooling through the existing cost 
recovery mechanisms of rate-of-return or price cap adjustments, and 
allows all other carriers to recover their carrier-specific costs 
related to pooling in any manner allowed under the Act; and (5) 
clarifies that all non-exempt carriers operating within the top 100 
MSAs must be LNP-capable and must participate in thousands-block number 
pooling.
    2. The Third Report and Order also finds that state commissions 
should be allowed to have password-protected access to the North 
American Numbering Plan Administration (NANPA) database to obtain data 
concerning area codes within their state.
    3. The rules adopted herein facilitate increased carrier 
accountability and incentives to use numbers efficiently, and promote 
the judicious conservation of numbering resources.

Final Paperwork Reduction Analysis

    4. This Third Report and Order contains some new and/or modified 
information collections, which will be submitted to OMB for approval, 
as prescribed by the Paperwork Reduction Act.

Final Regulatory Flexibility Analysis

    5. As required by the Regulatory Flexibility Act, as amended, 
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Second Report and Order, Order on Reconsideration 
in CC Docket No. 96-98 and CC Docket No. 99-200, and Second Further 
Notice of Proposed Rulemaking (Second Report and Order), 66 FR 9528 
(Feb. 8, 2001). The Commission sought written public comment on the 
proposals in the Second Report and Order, including comment on the 
IRFA. No comments received addressed the IRFA. This present Final 
Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

[[Page 6432]]

A. Need for, and Objectives of, the Third Report and Order

    6. In the Second Report and Order, we sought public comment on (a) 
the relative advantages of SOs as opposed to all-services overlays, and 
the conditions under which SOs, if adopted, should be implemented to 
promote competitive equity, maximize efficient use of numbering 
resources, and minimize customer inconvenience; (b) whether carriers 
should be held accountable when related carriers fail to comply with 
reporting requirements; (c) whether state commissions should be granted 
direct, password-protected access to the mandatory reporting data 
received by the NANPA; (d) whether to allow extensions (for a fee or 
otherwise) on the 180-day reservation period for numbers; (e) what 
enforcement mechanisms should be applied when a carrier either fails to 
cooperate with an audit, or fails to resolve identified areas of 
noncompliance; (f) whether state commissions should be allowed to 
conduct audits; (g) the costs associated with thousands-block number 
pooling; (h) whether to require carriers to become LNP-capable for the 
purpose of participating in thousands-block number pooling; and (i) 
whether a ``safety valve'' should be established for carriers that need 
additional numbering resources, but fail to meet the utilization 
threshold in a given rate center.
    7. In this Third Report and Order, we continue efforts to utilize 
efficiently the numbering resources in the North American Numbering 
Plan (NANP). Our goal with this Third Report and Order is to build upon 
previous successes in working with the state commissions and the 
telecommunications industry to ensure that the limited numbering 
resources of the NANP do not exhaust prematurely, and to ensure that 
all carriers have the numbering resources they need to compete in the 
telecommunications marketplace. In particular, we address issues raised 
in the Second Report and Order and several petitions for 
reconsideration and/or clarification of the Report and Order and 
Further Notice of Proposed Rulemaking, 65 FR 37703 (June 16, 2000), and 
the Second Report and Order. In addition, we also clarify, on our own 
motion, certain aspects of our numbering resource optimization rules 
and local number portability requirements.

B. Summary of Significant Issues Raised by Public Comments

    8. In a recent letter, the Small Business Administration (SBA) 
contends that in the Final Regulatory Flexibility Analysis for the 
Second Report and Order the Commission failed to ``* * * include a 
description of telecommunications service providers that are directly 
affected by the audit provisions * * *'' and believes that the ``* * * 
oversight may be due to the inconsistency in the text of the Order 
itself. Under the Commission's numbering rules, carriers and service 
providers are two separate classes.'' The SBA then notes that the terms 
``carrier'' and ``service provider'' were used interchangeably within 
the audit provisions of the Second Report and Order.
    9. Although the terms ``carrier'' and ``service provider'' were 
used interchangeably within the audit provisions, the rule on auditing 
procedures in section 52.15(k) of the Commission's rules (in Appendix A 
of the Second Report and Order) clearly applies to telecommunications 
service providers. As discussed in section 52.5(i) of the Commission's 
numbering rules, a service provider is an ``* * * entity that receives 
numbering resources from the NANPA * * *'' Thus, given our findings 
that the rule is clear, we conclude that the description of 
telecommunications service providers in the FRFA for the Second Report 
and Order was adequate, and that no clarifications are needed in the 
FRFA.
    10. In the SBA Letter, the SBA states that, in the FRFA for the 
Second Report and Order, the Commission fails to ``* * * adequately 
consider alternatives to the audit program that would minimize the 
impact on small businesses.'' In the FRFA, the Commission is required 
to discuss significant alternatives that would change the impact on 
small businesses. Because we did not identify any significant 
alternatives to the rules that would influence the impact on small 
businesses, no significant alternatives were discussed in the FRFA for 
the Second Report and Order. The Commission also notes that the small 
businesses that commented on our audit proposal generally were in favor 
of audits.
    11. Commenters responded to several issues addressed in the Second 
Report and Order that concern small entities. Their opinions are 
summarized below. In addition, the Commission has considered any 
potential significant economic impact of the rules on small entities.
    12. Thousands-Block Number Pooling for Non-LNP Capable Carriers. 
Commenters generally agree that the costs to small and rural carriers 
to participate in thousands-block number pooling would outweigh any 
benefits derived from the pooling requirements. The Organization for 
the Promotion and Advancement of Small Telecommunications Companies 
(OPASTCO) fears that the costs may be so prohibitive as to delay the 
implementation of advanced services to rural subscribers. The 
Commission agrees with commenters that there is insufficient evidence 
in the record to conclude that requiring non-LNP capable carriers to 
participate in pooling would result in significant number resource 
savings. Data from the Local Exchange Routing Guide (LERG) shows that 
in the approximately 2,012 rate centers in the 180 MSAs beyond the 
largest 100, approximately 1,320 are rate centers where there are no 
competing service providers and approximately 300 are rate centers 
where there is only one competing service provider. Because these 
carriers hold relatively few numbering resources, we agree that 
requiring them to participate in pooling would not result in 
significant numbering resource optimization benefits.
    13. Independent State Commissions' Authority to Conduct Audits. One 
commenter expressed concern that giving states individual authority to 
conduct audits may expose carriers to two different standards. It 
predicts that this result would impose costs and burdens on small 
carriers that outweigh the benefits of the additional audits. The 
Commission declined to give states the independent authority to conduct 
audits, concluding that most of the audits that states would be given 
authority to conduct would serve the same purpose as the Commission 
audits, thus posing the potential burden of overlapping audits that 
would outweigh the benefits of the additional audits. It is the 
Commission's expectation, however, that the Commission audit staff will 
cooperate with state commissions, including coordinating compliance and 
enforcement activities and sharing information gathered during the 
course of the audits. In addition, this Third Report and Order does not 
modify a state commission's authority to conduct audits under state 
law.

C. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply

    14. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.''

[[Page 6433]]

The term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act, unless the Commission 
has developed one or more definitions that are appropriate for its 
activities. 5 U.S.C. 601(3). Under the Small Business Act, a ``small 
business concern'' is one which: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA. 15 U.S.C. 
632.
    15. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide 
appears to be data the Commission publishes annually in its 
Telecommunications Provider Locator report, derived from filings made 
in connection with the Telecommunications Relay Service (TRS). 
According to data in the most recent report, there are 5,679 interstate 
service providers. These providers 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 service, providers of 
telephone exchange service, and resellers.
    16. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on FCC analyses and determinations in 
other, non-RFA contexts.
    17. Total Number of Telephone Companies Affected. 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 LECs, interexchange carriers, competitive access 
providers, operator service providers, pay telephone operators, and 
resellers. It seems certain that some of these 3,497 telephone service 
firms may not qualify as small entities or small incumbent LECs because 
they are not ``independently owned and operated.'' It seems reasonable 
to conclude that fewer than 3,497 telephone service firms are small 
entity telephone service firms or small incumbent LECs that may be 
affected by these rules.

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

    18. Federal Cost Recovery. In the Third Report and Order, the 
Commission establishes a federal cost recovery mechanism under which 
price cap LECs may recover their extraordinary carrier-specific costs 
directly related to thousands-block number pooling through an exogenous 
adjustment to access charges. This may require carriers to submit cost 
analyses demonstrating that pooling results in a net cost increase 
rather than a cost reduction to qualify for the exogenous adjustment to 
access charges.
    19. Safety Valve. The Commission establishes a safety valve in the 
Third Report and Order to ensure that carriers experiencing rapid 
growth in a given market will be able to meet customer demand. Carriers 
may demonstrate the need for the safety valve by demonstrating to their 
state commission that: (1) The carrier will exhaust its numbering 
resources in a market or rate area within three months (in lieu of the 
6 months-to-exhaust requirement); and (2) projected growth is based on 
the carrier's actual growth in the market or rate area, or on the 
carrier's actual growth in a reasonably comparable market, but only if 
that projected growth varies no more than 15 percent from historical 
growth in the relevant market. A carrier may also be granted relief if 
it demonstrates that it has received a customer request for numbering 
resources in a given rate center that it cannot meet with its current 
inventory. If the customer request is withdrawn or declined, the 
requesting carrier must return the numbering resources to the NANPA or 
Pooling Administrator, and may not retain the numbering resources to 
serve other customers without first meeting our growth numbering 
resource requirements.
    20. Service-Specific and Technology--Specific Area Code Overlays 
(collectively, specialized overlays or SOs). State commissions seeking 
to implement a SO will be required to seek authority on a case-by-case 
basis from the Commission. State commissioners should discuss why the 
numbering resource optimization benefits of the proposed SO would be 
superior to implementation of an all-services overlay. State 
commissions should also specifically address the following: (1) The 
technologies or services to be included in the SO; (2) the geographic 
area to be covered; (3) whether the SO will be transitional; (4) when 
the SO will be implemented and, if a transitional SO is proposed, when 
the SO will become an all-services overlay; (5) whether the SO will 
include take-backs; (6) whether there will be 10-digit dialing in the 
SO and the underlying area code(s); (7) whether the SO and underlying 
area code(s) will be subject to rationing; and (8) whether the SO will 
cover an area in which pooling is taking place.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    21. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    22. Thousands-Block Number Pooling for Non-LNP Capable Carriers. In 
this Third Report and Order, we decline to extend pooling requirements 
to paging carriers and non-LNP capable carriers outside of the largest 
100 MSAs that have not received a request to deploy LNP from a 
competing carrier. We believe the costs associated with the alternative 
of requiring all carriers, including small entities, to participate in 
pooling would greatly outweigh any numbering resource optimization 
benefits. In addition, these costs imposed on smaller and rural 
carriers may delay efforts in bringing advanced services to rural 
subscribers. Thus, we reaffirm our current rules that certain carriers, 
e.g., paging carriers and carriers outside of the largest 100 MSAs who 
have not received a request to deploy LNP from a competing carrier, are 
exempted from pooling requirements.
    23. Service-Specific and Technology-Specific Area Code Overlays. In 
this order, we lift the prohibition on SOs and will consider proposals 
submitted by state commissions to implement SOs on a case-by-case 
basis. Such an approach allows state commissions to consider the 
surrounding local circumstances, including the needs of small, local 
businesses, in deciding whether or how to provide area code

[[Page 6434]]

relief. In the alternative, we examined a requirement mandating that 
state commissions impose all-services area code overlays as the primary 
method for area code relief. However, the Commission believes that 
states should have the flexibility to determine the best form of area 
code relief.

Report to Congress

    24. The Commission will send a copy of this Third Report and Order, 
including this FRFA, in a report to be sent to Congress pursuant to the 
Congressional Review Act. In addition, the Commission will send a copy 
of this Third Report and Order, including this FRFA, to the Chief 
Counsel for Advocacy of the SBA. A copy of this Third Report and Order 
and FRFA (or summaries thereof) will also be published in the Federal 
Register.
    25. Pursuant to Sections 1, 3, 4, 201-205, 251 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-
205, and 251, this Third Report and Order is hereby Adopted and Part 52 
of the Commission's rules Are Amended and Adopted as set forth in the 
rule changes.
    26. The policies, rules and requirements adopted herein are adopted 
and shall be effective March 14, 2002, except for Secs. 52.19(c)(3)(i) 
and 52.19(c)(4), which contain information collection requirements that 
have not been approved by OMB. The Commission will publish a document 
in the Federal Register announcing the effective date.
    27. Incumbent local exchange carriers seeking to recover carrier-
specific costs directly related to national thousands-block number 
pooling as described herein may file the necessary tariffs to take 
effect no earlier than April 2, 2002.
    28. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Third Report and Order 
and Second Order on Reconsideration in CC Docket No. 96-98 and CC 
Docket No. 99-200, including the 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.
William F. Caton,
Acting Secretary.

Rule Changes

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. Sec. 151, 152, 154, 155 unless otherwise noted. Interpret or 
apply secs. 3, 4, 201-05, 207-09, 218, 225-7, 251-2, 271 and 332, 48 
Stat. 1070, as amended, 1077; 47 U.S.C. 153, 154, 201-205, 207-09, 
218, 225-7, 251-2, 271 and 332 unless otherwise noted.


    2. In Sec. 52.15, revise paragraphs (g)(4) and (k)(2) and add 
paragraphs (g)(5) and (k)(3) to read as follows:


Sec. 52.15  Central office code administration.

* * * * *
    (g) * * *
    (4) Non-compliance. The NANPA shall withhold numbering resources 
from any U.S. carrier that fails to comply with the reporting and 
numbering resource application requirements established in this part. 
The NANPA shall not issue numbering resources to a carrier without an 
Operating Company Number (OCN). The NANPA must notify the carrier in 
writing of its decision to withhold numbering resources within ten (10) 
days of receiving a request for numbering resources. The carrier may 
challenge the NANPA's decision to the appropriate state regulatory 
commission. The state commission may affirm, or may overturn, the 
NANPA's decision to withhold numbering resources from the carrier based 
on its determination that the carrier has complied with the reporting 
and numbering resource application requirements herein. The state 
commission also may overturn the NANPA's decision to withhold numbering 
resources from the carrier based on its determination that the carrier 
has demonstrated a verifiable need for numbering resources and has 
exhausted all other available remedies.
    (5) State access to applications. State regulatory commissions 
shall have access to service provider's applications for numbering 
resources. The state commissions should request copies of such 
applications from the service providers operating within their states, 
and service providers must comply with state commission requests for 
copies of numbering resource applications. Carriers that fail to comply 
with a state commission request for numbering resource application 
materials shall be denied numbering resources.
* * * * *
    (k) * * *
    (2) The Enforcement Bureau will oversee the conduct and scope of 
all numbering audits conducted under the Commission's jurisdiction, and 
determine the audit procedures necessary to perform the audit. 
Numbering audits performed by independent auditors pursuant to this 
section shall be conducted in accordance with generally accepted 
auditing standards and the American Institute of Certified Public 
Accountants' standards for compliance attestation engagements, as 
supplemented by the guidance and direction of the Chief of the 
Enforcement Bureau.
    (3) Requests for ``for cause'' audits shall be forwarded to the 
Chief of the Enforcement Bureau, with a copy to the Chief of the Common 
Carrier Bureau. Requests must state the reason for which a ``for 
cause'' audit is being requested and include documentation of the 
alleged anomaly, inconsistency, or violation of the Commission rules or 
orders or applicable industry guidelines. The Chief of the Enforcement 
Bureau will provide carriers up to 30 days to provide a written 
response to a request for a ``for cause'' audit.

    3. In Sec. 52.19, revise paragraph (c)(3) introductory text, and 
(c)(3)(i) and add paragraph (c)(4) to read as follows:


Sec. 52.19  Area code relief.

* * * * *
    (c) * * *
    (3) An all services area code overlay, which occurs when a new area 
code is introduced to serve the same geographic area as one or more 
existing area code(s), subject to the following conditions:
    (i) No all services area code overlay may be implemented unless all 
numbering resources in the new overlay area code are assigned to those 
entities requesting assignment on a first-come, first-serve basis, 
regardless of the identity of, technology used by, or type of service 
provided by that entity, except to the extent that a technology- or 
service-specific overlay is authorized by the Commission. No group of 
telecommunications carriers shall be excluded from assignment of 
numbering resources in the existing area code, or be assigned such 
resources only from the all services overlay area code, based solely on 
that group's provision of a specific type of telecommunications service 
or use of a particular technology; and
* * * * *
    (4) A technology-specific or service-specific overlay, which occurs 
when a new area code is introduced to serve the same geographic area as 
one or more existing area code(s) and numbering resources in the new 
area code overlay are assigned to a specific technology(ies) or 
service(s). State commissions may not implement a technology-specific 
or service-specific overlay without express authority from the 
Commission.

[[Page 6435]]


    4. In Sec. 52.21, add paragraph (r) to read as follows:


Sec. 52.21  Definitions.

* * * * *
    (r) The term 100 largest Metropolitan Statistical Areas (MSAs) 
refers to the MSAs set forth in the appendix to this part and any 
subsequent MSAs identified by U.S. Census Bureau data to be in the 
largest 100 MSAs.

[FR Doc. 02-3278 Filed 2-11-02; 8:45 am]
BILLING CODE 6712-01-P