[Federal Register Volume 67, Number 114 (Thursday, June 13, 2002)]
[Rules and Regulations]
[Pages 40619-40621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14775]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket No. 95-116; FCC 02-16]


Telephone Number Portability, Memorandum Opinion and Order on 
Reconsideration and Order on Application for Review

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC 
or Commission) addresses issues raised in petitions for reconsideration 
and clarification of the Commission's Third Report and Order on long-
term number portability (LNP) and affirms the Common Carrier Bureau's 
Cost Classification Order. The document clarifies and affirms matters 
related to the recovery of carrier costs for LNP, which were decided in 
two prior Orders.

DATES: The rules adopted herein shall be effective July 15, 2002, 
except for Sec. 52.33(a)(3), which contains information collection 
requirements that have not been approved by the Office of Management 
and Budget. The Federal Communications Commission will publish a 
document in the Federal Register announcing the effective date.

FOR FURTHER INFORMATION CONTACT: Margaret Dailey (202) 418-2396, fax 
(202) 418-1567, or [email protected]. The address is: Pricing Policy 
Division, Wireline Competition Bureau, Federal Communications 
Commission, The Portals, 445 12th Street, SW, Suite 5-A207, Washington, 
DC 20554.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration and Order on Application for Review in CC Docket No. 
95-116, FCC No. 02-16, in the matter of Telephone Number Portability, 
adopted January 23, 2002, and released February 15, 2002. The full text 
of this item is available for public inspection and copying during 
regular business hours at the FCC Reference Information Center, Portals 
II, 445 12th Street, SW, Room CY-A257, Washington, DC, 20554. This 
document may also be purchased from the Commission's duplicating 
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 [email protected]

Synopsis of the Order on Reconsideration and Order on Application for 
Review

    Section 251(b)(2) of the Communications Act of 1934, as amended 
(the Act), seeks to remove one barrier to competition by requiring all 
local exchange carriers (LECs) ``to provide, to the extent technically 
feasible, number portability in accordance with requirements prescribed 
by the Commission.'' On May 5, 1998, the Commission adopted the Third 
Report and Order in this docket, implementing section 251(e)(2) of the 
Act with regard to the costs of providing long-term number portability 
(LNP). In the Third Report and Order, 63 FR 35150, June 29, 1998, the 
Commission concluded that incumbent LECs may recover their carrier-
specific costs directly related to providing LNP on a competitively 
neutral basis, through two federal charges: (1) A monthly number-
portability charge applicable to end users; and (2) a LNP query-service 
charge, applicable to carriers on whose behalf the LEC performs 
queries. On December 14, 1998, pursuant to authority delegated to it in 
the Third Report and Order, the Common Carrier Bureau issued the Cost 
Classification Order, 64 FR 2493, Jan. 14, 1999, which specifically 
addressed issues related to the determination of costs eligible for 
cost recovery, the apportionment of costs between portability and non-
portability services, and apportionment between end-user charges and 
query service charges. The Order on Reconsideration and Order on 
Application for Review (Order) responds to three types of issues raised 
in petitions for reconsideration and clarification and applications for 
review.
    First, it clarifies numerous points made in the Third Report and 
Order. Specifically, it clarifies that: (1) The LNP administrator may 
assess shared costs on all eligible telecommunications carriers, not 
just carriers with existing LNP contracts; (2) incumbent LECs must 
allocate their shared costs between the query service and end-user 
charges; (3) carriers may not recover LNP costs from other carriers 
through interconnection charges or resale prices; (4) an incumbent LEC 
may assess the LNP end-user charge on resellers and purchasers of 
switching ports as unbundled network elements as long as it provides 
LNP functionality; (5) commercial mobile radio service providers are 
co-carriers, not end users, and, therefore, are not subject to an end-
user charge; (6) carriers who offer Feature Group A access lines may 
assess an end-user surcharge on such lines; (7) small and rural 
incumbent LECs that do not yet provide LNP functionality but provide 
Extended Area Service (EAS) may recover their N minus one (N-1) query 
and LNP Administration costs through end-user charges; (8) incumbent 
LECs may not begin billing carriers for N-1 queries until a number has 
been ported from an NXX; and, (9) after the five-year recovery period 
for implementation costs of LNP through the end-user charge, any 
remaining costs will be treated as normal network costs.
    Second, it affirms several issues decided in the Third Report and 
Order and the Cost Classification Order. Specifically, it affirms that: 
(1) The Commission has exclusive jurisdiction over the distribution and 
recovery of costs associated with intrastate and interstate number 
portability; (2) carriers not subject to rate-of-return regulation or 
price caps may recover their carrier-specific costs in any lawful 
manner consistent with their obligations under the Communications Act; 
(3) Centrex lines may be assessed one end-user LNP charge per line and 
a private branch exchange (PBX) trunk may be charged nine end-user LNP 
charges per PBX trunk; (4) Plexar may be assessed one LNP charge per 
line; (5) incumbent LECs may impose an end-user charge in service areas 
where the switch is number-portability-capable; (6) price cap LECs and 
rate-of-return LECs should treat the query services charge as a new 
service within the meaning of Sec. 61.38 of the Commission's rules; (7) 
carriers may only recover carrier-specific costs directly related to 
the provision of LNP; (8) carriers must distinguish clearly

[[Page 40620]]

costs incurred for narrowly defined portability functions from costs 
incurred to adapt their systems to implement LNP; (9) costs carriers 
incur as an incidental consequence of LNP are ordinary costs of doing 
business and represent general network upgrades; and (10) costs that do 
not meet the two-part cost recovery test may not be recovered through 
LNP cost recovery mechanisms. It also affirms (11) the adoption of the 
end-user revenue allocator but permits national and multi-region 
carriers to allocate, among the seven LNP regions identified in the 
Telecommunications Reporting Worksheet their end-user revenue, based 
upon the percentage of subscribers served in each region, upon 
certification that they are unable to precisely divide their traffic 
and resulting end-user revenue; (12) the rules adopted in the Third 
Report and Order concerning levelized charges; and (13) the two-part 
cost recovery test.
    Third, it denies certain requests concerning cost recovery. 
Specifically, it denies requests that certain costs associated with LNP 
be calculated based on avoided costs and TELRIC.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 605(b), there will 
not be a significant economic impact on a substantial number of small 
business entities resulting from this Order on Reconsideration and 
Order on Application for Review. All clarifications are of a minor, 
procedural nature except one clarification that will result in a 
positive net impact on small entities. Small and rural incumbent LECs 
that do not yet provide LNP functionality but do provide service under 
EAS arrangements may recover their N-1 query and LNP administration 
costs through end-user charges. Because this will allow small and rural 
incumbent LECs to recover their costs, it will have a de minimus impact 
on the affected small entities.

Paperwork Reduction Analysis

    The action contained herein has been analyzed with respect to the 
Paperwork Reduction Act of 1995 and found to impose new or modified 
reporting and/or recordkeeping requirements or burdens on the public. 
Implementation of these new or modified reporting and/or recordkeeping 
requirements will be subject to approval by the Office of Management 
and Budget (OMB) as prescribed by the Act, and will go into effect upon 
announcement of OMB approval in the Federal Register.
    The specific requirements that are subject to OMB approval are 
Sec. 52.33(a)(3) and the requirement that carriers electing to report 
end-user revenue based upon percentage of 2 subscribers served in each 
LNP region must file a certification that they are unable to report 
based upon actual end-user revenue in each LNP region.

Ordering Clauses

    Accordingly, It is ordered that, pursuant to sections 1, 2, 4(i), 
201-205, 215, 251(b)(2), 251(e)(2), and 332 of the Communications Act 
of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 201-205, 215, 
251(b)(2), 251(e)(2), and 332, this Memorandum Opinion and Order on 
Reconsideration and Order on Application for Review (``Order'') and the 
revisions to part 52 of the Commission's rules, 47 CFR part 52, are 
hereby adopted. The rules adopted herein shall be effective July 15, 
2002, except for Sec. 52.33(a)(3), which contains information 
collection requirements that have not been approved by the Office of 
Management and Budget. The Federal Communications Commission will 
publish a document in the Federal Register announcing the effective 
date.
    It is further ordered that, pursuant to sections 1, 2, 4(i), 201-
205, 215, 251(b)(2), 251(e)(2), and 332 of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 152, 154(i), 201-205, 215, 251(b)(2), 
251(e)(2), and 332, the Petitions for Reconsideration and/or 
Clarification and the Applications for Review are granted to the extent 
indicated herein and otherwise are denied.
    It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Order, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 52

    Communications common carriers, Cost recovery, Number portability, 
Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 52 as follows:

PART 52--NUMBERING

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

    Authority: Secs 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 52.33 is amended by revising paragraphs (a) introductory 
text, (a)(1) introductory text, and (a)(1)(ii), and by adding new 
paragraph (a)(3), to read as follows:


Sec. 52.33  Recovery of carrier-specific costs directly related to 
providing long-term number portability.

    (a) Incumbent local exchange carriers may recover their carrier-
specific costs directly related to providing long-term number 
portability by establishing in tariffs filed with the Federal 
Communications Commission a monthly number-portability charge, as 
specified in paragraph (a)(1) of this section, a number portability 
query-service charge, as specified in paragraph (a)(2) of this section, 
and a monthly number-portability query/administration charge, as 
specified in paragraph (a)(3) of this section.
    (1) The monthly number-portability charge may take effect no 
earlier than February 1, 1999, on a date the incumbent local exchange 
carrier selects, and may end no later than 5 five years after the 
incumbent local exchange carrier's monthly number-portability charge 
takes effect.
* * * * *
    (ii) An incumbent local exchange carrier may assess on carriers 
that purchase the incumbent local exchange carrier's switching ports as 
unbundled network elements under section 251 of the Communications Act, 
and/or Feature Group A access lines, and resellers of the incumbent 
local exchange carrier's local service, the same charges as described 
in paragraph (a)(1)(i) of this section, as if the incumbent local 
exchange carrier were serving those carriers' end users.
* * * * *
    (3) An incumbent local exchange carrier serving an area outside the 
100 largest metropolitan statistical areas that is not number-
portability capable but that participates in an extended area service 
calling plan with any one of the 100 largest metropolitan statistical 
areas or with an adjacent number portability-capable local exchange 
carrier may assess each end user it serves one monthly number-
portability query/administration charge per line to recover the costs 
of queries, as specified in paragraph (a)(2) of this section, and 
carrier-specific costs directly related to the carrier's allocated 
share of the regional local number portability administrator's costs, 
except that per-

[[Page 40621]]

line monthly number-portability query/administration charges shall be 
assigned as specified in paragraph (a)(1) of this section with respect 
to monthly number-portability charges.
    (i) Such incumbent local exchange carriers may assess a separate 
monthly number-portability charge as specified in paragraph (a)(1) of 
this section but such charge may recover only the costs incurred to 
implement number portability functionality and shall not include costs 
recovered through the monthly number-portability query/administration 
charge.
    (ii) The monthly number-portability query/administration charge may 
end no later than five years after the incumbent local exchange 
carrier's monthly number-portability query/administration charge takes 
effect. The monthly number-portability query/administration charge may 
be collected over a different five-year period than the monthly number-
portability charge. These five-year periods may run either 
consecutively or concurrently, in whole or in part.
* * * * *
[FR Doc. 02-14775 Filed 6-12-02; 8:45 am]
BILLING CODE 6712-01-P