[Federal Register Volume 68, Number 191 (Thursday, October 2, 2003)]
[Rules and Regulations]
[Pages 56781-56783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24941]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket 99-200; FCC 03-140]


Numbering Resource Optimization

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission denied the petition for 
forbearance filed by the Cellular Telecommunications and Internet 
Association (CTIA) and found that forbearance was not warranted.

FOR FURTHER INFORMATION CONTACT: Cara Voth, Attorney, Wireline 
Competition Bureau, Telecommunications Access Policy Division, (202) 
418-7400, TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Order in CC Docket No. 99-200, FCC 03-140 
released on June 26, 2003. The full text of this document is available 
for public inspection during regular business hours in the FCC 
Reference Center, Room CY-A257, 445 Twelfth Street SW., Washington, DC 
20554.

I. Introduction

    In this Order, the Commission denied the petition for forbearance 
filed by the Cellular Telecommunications and Internet Association 
(CTIA) on June 28, 2002. CTIA sought forbearance from further scheduled 
increases to the numbering resources utilization threshold. CTIA argued 
that forbearance should be granted because the projected life of the 
North American Numbering Plan (NANP) has been extended, and increases 
to the current utilization threshold will raise the cost of providing 
service and increase the risk that numbering resources will not be 
available to carriers when needed. All commenters opposed CTIA's 
forbearance request. The Commission denied CTIA's Petition and found 
that forbearance was not warranted.

II. Discussion

    1. We find that CTIA's forbearance petition does not satisfy the 
forbearance criteria set forth in section 10(a) of the Act. 
Specifically, we find that the numbering resources utilization 
threshold, and the scheduled increases up to the 75% cap, are necessary 
to ensure that carriers will obtain numbering resources in a just and 
reasonable manner, i.e., only when and where they are needed to provide 
services. We further find that requiring carriers to manage their 
numbering inventories at increasing thresholds is a preventative 
measure that is necessary to protect consumers from premature area code 
changes and exhaust of the NANP. We also find that it is consistent 
with the public interest to increase the threshold because it will 
continue to require carriers to use numbering resources more 
efficiently, which will benefit carriers and consumers.

Charges, Practices, Classifications and Regulations

    2. The scheduled increases to the threshold ensure that carriers 
will obtain additional numbering resources only when they are needed 
and utilize their numbering inventories on an increasingly efficient 
basis. Such efficiency is necessary to avoid the waste of finite 
numbering resources that are essential to providing telecommunications 
service. Conversely, freezing the threshold at its current level could 
accelerate NANP exhaust and burden customers with premature area code 
changes, contrary to the public interest.
    3. As the Commission first concluded in the Numbering Resource 
Optimization First Report and Order, 65 FR 43251, July 13, 2000, the 
utilization threshold requirement, coupled with the MTE requirement, 
deters carriers from stockpiling excessive inventories and helps ensure 
that carriers optimize the use of existing numbering resources. Due in 
part to these measures, the projected life of the NANP has been 
significantly extended. Even CTIA lauds the success of these measures. 
Furthermore, the Pennsylvania Commission submits that forbearance

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from increasing the utilization threshold could result in the 
unnecessary stranding of over 1.3 million individual telephone numbers 
in Pennsylvania's NPAs. Thus, we find that the Commission's numbering 
resources utilization threshold and its scheduled increases are 
necessary to ensure that carrier practices with regard to numbering 
resources are not unjust or unreasonable.
    4. We also disagree with CTIA's suggestion that scheduled increases 
are rendered unnecessary by the Commission's already existing authority 
under sections 201 and 202 of the Act to address unjust or unreasonable 
carrier practices. While we agree that we have authority pursuant to 
these sections to address matters regarding carriers' access to 
numbering resources, the existence of such authority does not, by 
itself, negate the necessity of retaining scheduled increases to the 
utilization threshold. Targeted rules, such as the utilization 
threshold and its scheduled increases, provide an additional measure to 
ensure that carriers optimize the use of existing numbering resources 
on an ongoing basis to prevent premature NANP exhaust. As mentioned 
above, telephone numbers are a finite resource. Therefore, we must 
maintain proactive and predictable measures that preserve the NANP in 
addition to depending on our authority to initiate case-by-case 
enforcement investigations. We find that because of the concerns 
described above, we would not be justified in forbearing now, even if 
we were to ``revisit the issue at a later date if necessary to preserve 
the NANP'' as CTIA suggests.

Consumer Protection

    5. We conclude that retaining the scheduled increases to the 
numbering resource utilization threshold is necessary for the 
protection of consumers, and we disagree with CTIA that forbearance in 
this instance would benefit consumers. One of the overarching goals of 
the Commission's numbering optimization orders is to protect consumers 
from the expense and inconvenience resulting from frequent area code 
changes, and to prevent what would be a costly premature expansion of 
the NANP. We agree with the Pennsylvania, California and Michigan 
commissions that freezing the utilization threshold could burden 
customers with premature area code changes as a result of earlier NANP 
exhaust. We find that by increasing the threshold, we are minimizing 
the opportunity for carriers to stockpile unused numbers when other 
carriers are in need of such resources to serve their customers. Higher 
utilization levels will help to maximize the use of all available 
numbers which, in turn, will delay the exhaust of individual area 
codes.
    6. Furthermore, we agree with the states that maintain that 
evolving technologies, as well as expanding services, could cause the 
demand for numbers to spike past the previous levels. For example, as 
voice over Internet protocol (VoIP) providers continue to penetrate the 
telecommunications market, the demand for numbers may increase. Such 
demand could burden existing numbering resources. Therefore, we find 
that requiring carriers to manage their numbering inventories at higher 
thresholds is a preventative measure that is necessary to ensure that 
consumers will not have to bear the burden of premature area code 
changes and NANP expansion.
    7. We disagree with CTIA's claim that we should forbear from 
further increases because they will lead to increased carrier and 
consumer costs. CTIA has not presented any data or detailed cost-
benefit analysis to support this assertion. In fact, CTIA readily 
concedes that it is ``impossible to quantify the administrative costs 
carriers will incur from managing numbers at higher utilization 
levels.'' Moreover, the New York and California commissions have 
maintained utilization thresholds at 75% without any indication that 
there have been adverse effects on consumers. We are not convinced that 
increases to the utilization threshold would result in significantly 
more costs because the scheduled increases to the threshold are limited 
to 5% annually and are capped at 75%. We note that previously CTIA 
proposed and supported 5% annual increases to the utilization 
threshold. Moreover, in a recent ex parte filing, CTIA appears to 
depart from its position that the Commission should freeze the 
threshold at 65% by indicating that a 70% threshold would be an 
acceptable utilization level. Thus, it appears that CTIA now claims 
only that the difference between a 70% and 75% utilization threshold 
would be unnecessarily burdensome, in which case carriers would be 
required to use only 50 more numbers per thousands-block. We reject 
CTIA's claim that scheduled increases to the utilization threshold will 
raise costs while providing little benefit.
    8. We also disagree with CTIA's claim that forbearance is warranted 
as a consumer benefit because it will allow carriers more time to 
``age'' telephone numbers. We find that the numbering utilization 
threshold has little or no affect on the aging process. Because 
carriers have the flexibility to age numbers up to 90 days regardless 
of the utilization threshold, carriers will be able to replenish their 
inventories of unused numbers with numbers that have been aged on an 
ongoing basis. Carriers, therefore, must make a business decision as to 
how long to age their numbering resources. In the Numbering Resource 
Optimization First Report and Order, the Commission stated that it 
believes that carriers can reuse numbers in significantly less than 90 
days. Certain states have maintained utilization thresholds higher than 
the current threshold without any indication that there have been 
adverse effects on the aging process or on consumers. Therefore, we 
find that carriers' ability to age numbers within the Commission's 
prescribed limits will not be negatively affected by further increases 
in the numbering resources utilization threshold.
    9. Moreover, we believe that CTIA's claim regarding the aging 
process is merely another attempt at arguing that increases to the 
utilization threshold are burdensome because they require carriers to 
use numbers more efficiently. Requiring carriers to use numbering 
resources more efficiently, however, is the goal that increases to the 
utilization threshold were designed to achieve. We find that freezing 
the utilization threshold at its current level would have a detrimental 
effect on numbering resource optimization and, in turn, on consumers 
because it would provide opportunity for carriers to stockpile unused 
numbers that could be assigned to other requesting customers.

Public Interest

    10. We conclude that it is in the public interest to retain 
scheduled increases to the utilization threshold because it will 
continue to result in more efficient use of numbering resources, 
further extend the life of the NANP, and facilitate impartial numbering 
administration by encouraging all carriers to use numbers in their 
existing inventory before requesting new ones. In the Numbering 
Resource Optimization Second Report and Order, the Commission adopted 
60% only as an ``initial'' utilization threshold. The Commission chose 
this initial threshold because it was demonstrably achievable and it 
would give carriers the opportunity to transition to the 75% ceiling 
without compromising their ability to obtain numbering resources to 
serve customers. The Commission found, as we do here, that a 
utilization threshold ceiling of 75% was appropriate because it

[[Page 56783]]

balanced the Commission's goals of encouraging carriers to use numbers 
currently in their inventories before applying for additional resources 
with carriers' need to retain flexibility in managing their 
inventories. The Commission was concerned that many carriers were not 
doing enough to groom their numbering inventories to minimize waste of 
the NANP's finite numbering resources. Today, many areas continue to 
face a heightened demand for numbering resources and, therefore, a 
utilization threshold of 75% remains in the public interest to ensure 
that carriers continue to use their numbering resources more 
efficiently.
    11. We disagree with CTIA's claim that we should forbear because 
doing so will bring about reduced regulatory costs that will promote 
competitive market conditions. As stated above, any reductions in 
regulatory costs that would result from forbearance are speculative, 
and would relate to relatively few numbers in a carrier's inventory. 
Thus any cost savings would only be minimal, at best. Even if we 
granted forbearance from further increases, carriers would still have 
to continue to bear the costs associated with complying with the 
current utilization level. We have not been shown, nor are we 
convinced, that the marginal costs related to compliance with increases 
to the utilization threshold have any effect on competitive market 
conditions. In fact, we find that forbearance would result in lost 
efficiencies in numbering resource optimization. When such costly 
inefficiencies are balanced against the minimal regulatory costs that 
may be saved by carriers as a result of freezing the current 
utilization threshold, it is clear that forbearance is not consistent 
with the public interest.
    12. Finally, we find unsupportable CTIA's alternative claim that 
increases to the utilization threshold will result in certain carriers 
not having enough numbers available to them to meet customer demand. 
Once the utilization threshold reaches 75%, carriers will have 25% of 
their resources available to assign to new customers. Moreover, 
sufficient mechanisms, such as the safety valve, are in place to ensure 
that carriers with a verifiable need for additional numbers can get 
them even if they do not meet the utilization threshold requirements. 
For example, if, as CTIA suggests is the case for some carriers, a 
carrier has to use a large amount of numbers for E911 routing purposes, 
and as a result does not have a sufficient amount of telephone numbers 
to meet customer demand, that carrier can apply for relief via the 
safety valve. In addition, the state commissions note that no carriers 
have complained that the utilization thresholds are technically or 
otherwise infeasible, and that no customers have complained about being 
unable to obtain service because a carrier did not have enough numbers. 
Therefore, we reject CTIA's contention that forbearance is in the 
public interest, or will promote or enhance competitive market 
conditions among providers of telecommunications services.

III. Ordering Clause

    13. Pursuant to sections 10 and 251(e) of the Communications Act of 
1934, as amended, 47 U.S.C. 160 and 251(e), that the Cellular 
Telecommunications and Internet Association's Petition for Forbearance 
From Further Increases in the Numbering Utilization Threshold, filed on 
June 28, 2002, is denied.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-24941 Filed 10-1-03; 8:45 am]
BILLING CODE 6712-01-P