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The path and name of the WordPerfect, Word97, and Acrobat files will be the same as the ASCII Text file except that they will end with the letters wp, doc, or pdf respectively, instead of the letters txt. ***************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Numbering Resource Optimization ) CC Docket No. 99-200 ) Connecticut Department of Public Utility Control ) RM No. 9258 Petition for Rulemaking to Amend the Commission's ) Rule Prohibiting Technology-Specific or ) Service-Specific Area Code Overlays ) ) Massachusetts Department of Telecommunications ) NSD File No. L-99-17 and Energy Petition for Waiver to Implement a ) Technology-Specific Overlay in the ) 508, 617, 781, and 978 Area Codes ) ) California Public Utilities Commission and the People ) NSD File No. L-99-36 of the State of California Petition for Waiver to ) Implement a Technology-Specific or Service-Specific ) Area Code ) NOTICE OF PROPOSED RULEMAKING Adopted: May 27, 1999 Released: June 2, 1999 Comment Date: July 30, 1999 Reply Comment Date: August 30, 1999 By the Commission: Commissioner Tristani issuing a statement. Table of Contents Paragraph Number I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . .1 II. EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . .7 III. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . 13 A. Background . . . . . . . . . . . . . . . . . . . . . 13 B. General Inquiries. . . . . . . . . . . . . . . . . . 31 IV. ADMINISTRATIVE MEASURES . . . . . . . . . . . . . . . . . 36 A. Introduction . . . . . . . . . . . . . . . . . . . . 36 B. Definitions of Categories of Number Usage. . . . . . 39 C. Verification of Need for Numbers . . . . . . . . . . 54 D. Reporting/Record-keeping Requirements. . . . . . . . 69 E. Audits . . . . . . . . . . . . . . . . . . . . . . . 83 F. Enforcement. . . . . . . . . . . . . . . . . . . . . 91 G. Reclamation of NXX Blocks. . . . . . . . . . . . . . 95 H. Cost Elements and Cost Recovery . . . . . . . . . .101 V. OTHER NUMBERING OPTIMIZATION SOLUTIONS . . . . . . . . . 105 A. Introduction . . . . . . . . . . . . . . . . . . . .105 B. Non-LNP-Based Solutions. . . . . . . . . . . . . . 111 1. Rate Center Consolidation . . . . . . . . . . .111 2. Mandatory Ten-Digit Dialing and Related Measures122 C. LNP-Based Solutions: Number Pooling . . . . . . . 130 1. Background. . . . . . . . . . . . . . . . . . 130 2. Pooling Roll-out. . . . . . . . . . . . . . . .143 3. Implementation Time Frame . . . . . . . . . . 155 4. Non-LNP-Capable Carriers. . . . . . . . . . . .159 D. Pooling Implementation Issues. . . . . . . . . . . .177 1. Technical Issues. . . . . . . . . . . . . . . 177 2. Administration. . . . . . . . . . . . . . . . .182 3. Cost Recovery . . . . . . . . . . . . . . . . .193 4. Transition Issues . . . . . . . . . . . . . . 211 E. Carrier Choice of Numbering Optimization Strategy. .215 VI. PRICING OPTIONS . . . . . . . . . . . . . . . . . . . . .225 VII. AREA CODE RELIEF . . . . . . . . . . . . . . . . . . . 241 A. Introduction . . . . . . . . . . . . . . . . . . . .241 B. Background . . . . . . . . . . . . . . . . . . . . .242 C. Discussion . . . . . . . . . . . . . . . . . . . . .246 VIII. PROCEDURAL MATTERS. . . . . . . . . . . . . . . . . . .262 A. Ex Parte Presentations . . . . . . . . . . . . . . 262 B. Initial Paperwork Reduction Act Analysis . . . . . 263 C. Initial Regulatory Flexibility Act Analysis. . . . .264 D. Comment Filing Procedures. . . . . . . . . . . . . .283 IX. ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . 289 Appendix A I. INTRODUCTION 1. In this Notice of Proposed Rulemaking (Notice), we examine a variety of measures intended to increase the efficiency with which telecommunications carriers use telephone numbering resources. The purpose of this effort is two-fold: to slow the rate of number exhaust in this country as evidenced by the ever-increasing rate at which new area codes are assigned; and to prolong the life of the North American Numbering Plan (NANP). 2. In 1947, AT&T adopted the current nationwide numbering scheme, under which the ten-digit telephone number serves not only as a network "address," but also conveys information to the network as to how phone calls should be routed and billed. A principal benefit of this system was that it permitted automated routing of long-distance phone calls, obviating the need for operators to assist in routing. Under the allocation system that developed to support this system, numbering resources are allocated to local telephone exchange carriers on the basis of physical geography, rather than on the basis of end-user demand for those numbers. That is, typically a large block of numbers is allocated to a carrier for use in a geographic area, even though there may not be end-users assigned to each individual number available in the area. This system worked smoothly so long as only one entity (the local exchange carrier) offered only one type of service (wireline telephony) to customers. 3. New services using the same numbering system, particularly cellular telephones, began to enter the telecommunications marketplace with increasing frequency beginning in the late 1980's. More recently, the Telecommunications Act of 1996 opened the market for competitive local wireline service, again giving rise to more players entering the market. In addition, many customers are obtaining additional telephone lines to support additional services such as Internet, data, and facsimile services. Because of the relatively recent explosion of market entry and customer demand for new services, as well as the allocation of telephone numbers to multiple service providers in large blocks on a geographic basis, we have witnessed an incredible increase in demand for numbering resources. 4. Although we are only just beginning to see the benefits of competition in the marketplace for local wireline telephone service, the coincident costs in the form of the rapid exhaust of area codes are already all too apparent. The effect on consumers having to undergo, in some cases, multiple area code changes in relatively short time frames is an unacceptable byproduct of burgeoning competition in the telecommunications marketplace. To illustrate the pace of area code exhaust, consider California, which, at the end of 1992, had 13 area codes in use. The California Public Utilities Commission projects that by the end of 2002, it will have 41 area codes. When the task of splitting the 323 area code from the 213 area code in the Los Angeles area was completed in April 1999, rather than lasting for ten or even five years, the new area code was immediately declared to be in jeopardy of exhausting its numbering resources. 5. The goal of this proceeding is to address the underlying drivers of area code exhaust so that consumers are spared the enormous costs and inconveniences associated with the rapid pace of implementation of new area codes. In addition, clearly, implementing new area codes is not a solution that can continue indefinitely. As of the end of 1998, it was estimated that nearly one-third of the total number of geographic area codes assignable to the United States had been put into service. By some projections, the NANP could exhaust within ten years. Because the estimated cost of expanding the NANP is enormous, and the time to effect such an expansion is estimated to be on the order of ten years, the need to extend the life of the current NANP through effective conservation and efficient utilization of numbering resources is apparent and immediate. 6. This Commission, with input from industry groups, advisory bodies, state public utility commissions and the public, has already begun to examine various numbering conservation and optimization methods. Continuing in these efforts, we issue this Notice to seek public comment on how best to create national standards for numbering resource optimization. In doing so, we seek to: (1) minimize the negative impact on consumers; (2) ensure sufficient access to numbering resources for all service providers that need them to enter into or to compete in telecommunications markets; (3) avoid, or at least delay, exhaust of the NANP and the need to expand the NANP; (4) impose the least societal cost possible, in a competitively neutral manner, while obtaining the highest benefit; (5) ensure that no class of carrier or consumer is unduly favored or disfavored by our optimization efforts; and (6) minimize the incentives for carriers to build and carry excessively large inventories of numbers. II. EXECUTIVE SUMMARY 7. In this Notice, we consider and seek comment on a variety of administrative and technical measures that would promote more efficient allocation and use of NANP resources. In Section III, we seek specific comment on the relative costs and benefits, both financial and societal, of implementing each measure. We also ask that commenters weigh the cost of extending the life of the current NANP through various numbering resource optimization strategies against the projected cost of expansion of the NANP. 8. In Section IV, we examine the existing mechanisms for the administration and allocation of numbering resources, which are governed by industry-developed guidelines. We find that the guidelines have not been effective in constraining the ability of carriers to obtain and carry excessively large inventories of numbering resources for which they have no immediate need. We seek comment on whether the guidelines should be modified or replaced, wholly or in part, by enforceable federal rules. Within the section, we outline proposals for a uniform set of numbering status definitions. We also seek comment on measures that would tie the allocation of new numbering resources to a showing of need by the carrier, increase carrier accountability for number utilization through enhanced data reporting and audit requirements, and speed the return of unused numbering resources. We specifically seek comment on the possibility of requiring carriers to meet number utilization thresholds before they can obtain additional numbering resources. These measures would not require implementation of new systems or technologies, and we believe that they could be implemented in a relatively short time period at minimal cost. 9. In Section V, we consider and seek comment on some specific numbering resource optimization solutions that could be implemented in addition to, or in combination with, stricter administrative standards for the administration and allocation of numbering resources. These methods include rate center consolidation, mandatory ten-digit dialing, and number pooling. We consider the likely costs and potential number optimization benefits of each of these solutions. We also seek comment on a host of issues related to the way in which number pooling might be implemented and administered, if we were to make carrier participation mandatory at some level. 10. In light of the potential costs of these numbering resource optimization solutions, we seek comment on whether the magnitude of the number exhaust problem justifies requiring carriers to participate in one or more of these solutions on a mandatory basis, either at the federal level or through delegation of authority to the states. In the alternative, we consider whether optimal use of numbering resources could be accomplished without the need for such mandates, provided that carriers achieved sufficiently high levels of efficiency in their usage of numbers. Under this approach, we would require carriers to meet specific number utilization thresholds, but would leave to each carrier the choice of what numbering optimization method or methods to use to achieve that threshold. 11. In Section VI, we consider whether establishing a pricing mechanism for numbering resources would improve the efficiency of number allocation and use. Although it is probably not feasible in the short-term to replace our existing numbering resource allocation mechanism with a market-based approach, we believe it is important to consider using market- based mechanisms to allocate numbers as a possible long-term alternative to regulatory mandates. We seek comment on whether moving to a market-based system of allocating numbering resources is feasible, and how the transition to such a system could be implemented. 12. In Section VII, we consider area code relief methodologies, including splits, overlays, and boundary realignments, as numbering optimization strategies. We recognize that our consideration of both short-term and long-term numbering resource optimization measures in this Notice does not eliminate the need for states to continue to implement area code relief in those area codes that are approaching depletion. We seek comment on what action the Commission can take to assist states in implementing area code relief in a manner that is consistent with the objectives of this proceeding. III. OVERVIEW A. Background 13. With the passage of the 1996 Act, Congress sought to establish "a pro-competitive, deregulatory national policy framework" for the United States telecommunications industry. Competition in telecommunications markets is dependent, in part, upon fair and impartial access by all telecommunications carriers to national numbering resources. Inefficiencies in the allocation and utilization of numbering resources threaten to slow or halt the growth of competition by preventing new entrants from getting into telecommunications markets, and by preventing carriers already providing services from expanding their offerings. Thus, we view our efforts with regard to numbering resource optimization as an integral part of the Commission's overall efforts to implement fully the goals of the 1996 Act. 14. Equally importantly, numbering resource optimization efforts are necessary to address the considerable burdens imposed on consumers by the inefficient administration of numbering resources. Consumers face additional costs, both tangible and intangible, when a new area code is implemented in their local area. We believe that consumers should not be subjected to these increased costs and inconveniences except when absolutely necessary. Thus, we proceed with the additional goal of lessening the negative impact of numbering resource optimization and administration on consumers. 15. As discussed in greater detail below, there are several factors that contribute to the current strain on numbering resources. These factors include: (1) the allocation of numbers in blocks of 10,000 (NXX codes); (2) multiple rate centers, and the demand by most carriers to have at least one NXX code per rate center; (3) the increased demand for numbering resources by new entrants and new technologies; and (4) the absence of regulatory, industry or economic control over requests for numbering resources. Each of the numbering resource optimization measures proposed in the Notice are intended to attack one or more of these numbering exhaust drivers. 16. Numbering Administration Authority. Section 251(e)(1) of the Communications Act grants the Commission plenary jurisdiction over numbering issues that pertain to the United States. Specifically, the Act directs the Commission to create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis. This section also gives the Commission the authority to delegate to state commissions or other entities all or any portion of its jurisdiction over numbering administration. The Commission, however, retains jurisdiction over all matters it does not specifically delegate. We believe that we have the authority to adopt the numbering optimization measures set forth in this Notice pursuant to the numbering administration authority granted to the Commission under section 251(e). 17. The Commission has promulgated rules to implement section 251(e)(1). These rules provide, in part, that if the Commission delegates to the states or to other entities any portion of its authority over telecommunications numbering, those states or entities must perform their delegated functions in a manner consistent with certain guidelines, which require that numbering administration: (1) facilitate entry into the telecommunications marketplace by making telecommunications numbering resources available on an efficient, timely basis to telecommunications carriers; (2) not unduly favor or disfavor any particular industry segment or group of telecommunications consumers; and (3) not unduly favor one telecommunications technology over another. These guidelines are intended to ensure the fair and timely availability of numbering resources to all telecommunications carriers. 18. The Commission also directed the North American Numbering Council (NANC), a federal advisory committee created to advise the Commission on numbering matters, to recommend to the Commission an independent, non-government entity to serve as the North American Numbering Plan Administrator (NANPA). Previously, the incumbent local exchange carrier (LEC) within each geographic area, until recently, had performed central office code assignment and area code relief functions, and Bell Communications Research (Bellcore) performed other numbering administration functions. In October 1997, the Commission affirmed the selection of Lockheed Martin IMS as the new NANPA, noting that it would perform the numbering administration functions previously performed by Bellcore, as well as area code relief planning and CO code administration. 19. Area Code Relief. The Commission has delegated to state commissions the authority to direct the form of area code relief, to perform the functions associated with initiating and planning area code relief, and to adopt final area code relief plans, subject to Commission and industry guidelines for numbering administration. 20. The assignment of new area codes has been the primary relief measure employed in geographic areas experiencing numbering resource shortages brought on by the rapid growth in demand for central office codes or NXX codes. NXX codes are in such demand because of the manner in which numbering resources are allocated; that is, entire NXX codes containing 10,000 telephone numbers apiece are typically allocated to service providers for each rate center within a Numbering Plan Area (NPA) in which the provider seeks to offer service. Thus, for example, if a new entrant seeks to provide service throughout a hypothetical NPA containing 50 rate centers, it would require 50 NXX codes (one per rate center), or 500,000 individual telephone numbers. With a maximum of 792 NXX codes in an NPA available for allocation, the assignment of one NXX per rate center to as few as 16 service providers in the hypothetical NPA could literally exhaust the NPA upon activation, although few individual telephone numbers may actually be in use. This practice has contributed to a recent increase in the number of existing area codes going into jeopardy, although many individual telephone numbers may remain unassigned or unused. 21. Preliminary estimates indicate that a relatively low percentage of individual telephone numbers are actually assigned to customers throughout the NANP. The NANPA estimates that the "fill rate," or actual assignment to subscribers of telephone numbers allocated to carriers, is between 5.7% and 52.6%, depending on the industry segment. Despite the relatively low utilization rate of individual telephone numbers, existing area codes are entering jeopardy and new area codes are being activated throughout North America at an alarming rate. The pace of area code exhaust has accelerated exponentially in the past few years. For example, in 1984, the entire NANP had 125 area codes, and by December 1994, 134 area codes had been assigned, an increase of only nine area codes in 10 years. In marked contrast, in 1996 alone, 22 area codes were added to the NANP, and in 1997, 43 area codes were added. In 1998, 26 area codes were added to the NANP, bringing to 248 the total number of geographic codes assigned, with 207 of those codes serving portions of the United States. Currently, 13 new area codes are expected to be activated in 1999, with 22 area code relief plans pending state public utility commission approval, many of which will likely lead to new area codes being added in 1999. With only 680 usable area codes in the NANP, it is foreseeable that the NANP could exhaust in the relatively near term. The compelling need for immediate and comprehensive action to make more efficient use of numbering resources is clear. 22. Concerns regarding the financial and societal costs of area code relief are well- founded. The introduction of a new area code carries with it a significant number of costs and burdens that are sometimes difficult to quantify. Consumers, who are especially reluctant to undergo certain forms of area code relief, are affected by an increase in cost and inconvenience. For example, approximately one-half of customers in an area code to be split will be assigned a new area code. Some tangible costs that consumers may experience in this instance include time and effort associated with notifying others of the change in area code, increased confusion and difficulty in completing calls to parties whose area codes have changed, monetary costs associated with reprinting stationery with the new area code, and time and effort associated with reprogramming telephone automatic dialing systems, and other equipment, to incorporate the new area code. Intangible costs to consumers may include the loss of a community's geographic identity and many other costs which are difficult to quantify. 23. Similarly, businesses also bear significant costs when they, or their customers, are subject to area code relief. Tangible costs may include those associated with reprogramming or replacing telecommunications equipment such as private branch exchanges (PBXs), updating customer databases that contain phone number fields, and reprinting advertising and stationery. Certain industries are uniquely harmed by the transition to a new area code; alarm systems, for example, generally must be individually reprogrammed or even replaced to accommodate changes in dialing patterns. The telecommunications industry, in particular, incurs additional operational costs related to equipment and technology upgrades necessary to provide service. Intangible costs to businesses associated with a change in area code may include a loss of goodwill when customers have difficulties reaching the intended business. 24. State public utility commissions face an enormous burden in determining when, and in what form, to implement area code relief. In the initial stages, state utility commissions must expend resources to convene public meetings and to plan for area code relief. They must also work with the NANPA and the industry to effect the chosen area code relief plan, and bear the costs of notifying the public. Furthermore, state commissions inevitably bear the brunt of consumer dissatisfaction with whatever method of area code relief is chosen. 25. These limitations in the current area code relief paradigm underscore the need for more efficient and longer-term solutions to the numbering crisis. They also establish the need for a shift in focus to other relief methods that effect optimization, and not merely the addition, of numbering resources. Because of the overwhelming costs associated with the implementation of new area codes, we believe that this Commission should take definite and immediate steps to ensure that telecommunications numbering resources are administered more efficiently. 26. Numbering Resource Optimization Efforts. The Commission, state public utility commissions, and the telecommunications industry have taken steps to optimize the use of numbering resources through various administrative and regulatory efforts. Many of these undertakings will be examined at length in this Notice, toward the goal of creating a uniform national strategy for numbering resource optimization. 27. One such effort is the development by the industry of the CO Code Guidelines, which were designed to provide a framework for allocation of numbering resources within the geographic area codes of the NANP. Another, mandated by the Commission in its rules and addressed in the CO code guidelines, is the collection of data from service providers through the Central Office Code Utilization Survey (COCUS). The COCUS solicits data on actual and projected CO code utilization for each NPA in the NANP, which the NANPA uses in order to project NPA exhaust in connection with area code relief planning and implementation. A third effort is the development by the NANC of a set of interim audit procedures for the NANPA to use in determining whether selected service providers are in compliance with the CO Code guidelines. 28. Additionally, the industry in January 1999 finalized guidelines for the administration of thousands-block pooling, which uses the capabilities of Location Routing Number (LRN) Local Number Portability (LNP) to allocate telephone numbers to service providers in blocks of 1,000 numbers, rather than in entire NXX blocks containing 10,000 numbers each. Two states have initiated thousands-block pooling trials in an effort to optimize their numbering resources, and several other states have conducted extensive studies on the impacts of thousands-block number pooling in some or all NPAs within the state. 29. 1998 NANC Numbering Resource Optimization Report (NANC Report). Pursuant to a request from the Common Carrier Bureau, the NANC in October 1998 provided a detailed report evaluating a number of measures that may be used to optimize the use of telecommunications numbering resources. The first category, "Measures that Affect Local Calling," includes rate center consolidation, extended local calling, and inconsistent rate centers (IRCs). These measures seek to reduce the demand for central office codes by either reducing the number of rating areas within an NPA, or eliminating the need for carriers to obtain numbering resources within each rate center in an NPA in order to provide service throughout the NPA. The second category, "Measures that are LRN-Based," includes measures that are dependent on the existence of local number portability: individual telephone number (ITN) pooling, thousands- block number pooling, unassigned number porting, and location portability. The final category, "Measures that do not Require Local Number Portability," is a collection of administrative and technological methods related to the management of numbering resources, and includes NXX code sharing, code sharing using route indexing, mandatory ten-digit dialing, industry assignment guidelines, overlays, reducing the demand for telephone numbers, and geographic splits. 30. The Bureau placed the NANC Report on public notice shortly after its receipt. The Public Notice specifically solicited comments on 6 of the 14 measures discussed in the report: extended local calling areas, mandatory ten-digit dialing, industry assignment guidelines, thousands-block pooling, individual telephone number pooling, and unassigned number porting. The Bureau received comments from 48 parties. B. General Inquiries 31. Costs and benefits comparison. In addition to general information on the viability and desirability of the numbering resource optimization measures examined herein, we seek specific comment on the relative costs and benefits, both financial and societal, of implementing each measure. It would be particularly helpful for commenters to weigh the cost of extending the life of the current NANP through the various proposed numbering optimization strategies against the projected cost of expansion of the NANP, based on the assumption that continuing current number allocation and use practices will lead to the premature exhaust of the NANP. 32. Although the time frame for NANP exhaust cannot be determined with precision, the NANPA developed two models that predict the NANP will be exhausted in the 2006 to 2012 time frame. The NANC established an industry working group to review the NANPA's exhaust projections. While the NANPA's projections are not universally supported by industry experts, there is general agreement that the expected life of the NANP is limited. We seek comments on the design and assumptions contained in the NANPA's NANP Exhaust Model, and any alternative projections of NANP exhaust that we should consider. 33. In addressing when action needs to be taken to address NANP exhaust, it is critical to establish a benchmark estimate of how long it would take to develop and implement an expanded NANP. For example, if it is estimated that the process will take ten years, then it is imperative that the process begin immediately and that we adopt conservation measures sooner rather than later. If it is estimated to take only two years, there is less urgency to begin work immediately, and more time can be devoted to evaluating alternative options that can extend the life of the existing NANP. Industry numbering experts and the NANPA are already exploring options for NANP expansion. Based on their work, we believe that ten years may be a conservative time frame for rolling out a new NANP. We seek comment on this estimate and request that commenters provide alternative projections. Commenters should provide a detailed analysis of any projections provided. 34. We also seek comment on what costs will be incurred in expanding the NANP. We note that available estimates for the total cost of expanding the NANP vary greatly; preliminary estimates of the total costs (telecommunications industry and societal combined) discussed at the February 1999 NANC meeting established a range of $50 to $150 billion. These estimated costs are substantial, and would, we believe, significantly outweigh the cost of implementing all or most of the numbering resource optimization solutions proposed in this Notice. Moreover, we believe that extending the life of the NANP by as little as ten years could yield substantial benefits. We seek comment on whether these preliminary estimates are within a reasonable range or whether the actual costs can be expected to be materially higher or lower. Commenters providing estimates should separate their cost estimates into telecommunications industry costs and societal costs. 35. Adoption of rules. Many of the proposals set forth in this Notice build upon procedures and practices currently governed by voluntary industry guidelines, which lack enforceability. We are mindful of the deregulatory intent of the 1996 Act, and do not seek to impose any unnecessary regulation. Under the current system for allocation of numbering resources, however, it is difficult for the industry to police itself effectively, given that each carrier has an incentive to obtain as many numbers as possible, especially in places where area codes are rapidly reaching exhaust. In such light, we seek specific comment on which of the measures we discuss in the Notice should be adopted as FCC rules. Alternatively, should we direct the NANC to ensure that certain of these measures are incorporated into existing industry guidelines? Further, we seek comment on the suggested interplay between FCC rules and industry guidelines on numbering optimization. For example, should we set forth general federal requirements for numbering resource optimization, and leave the detailed implementation of these requirements to industry bodies? IV. ADMINISTRATIVE MEASURES A. Introduction 36. As noted above, one of the major drivers of number exhaust is the lack of discipline in the process by which numbering resources are administered and allocated. Currently, the procedures for the allocation of numbering resources within the geographic area codes of the NANP are set forth in the CO Code Guidelines, which were developed and are maintained by the Industry Numbering Committee (INC). Among other things, these guidelines set forth criteria for the allocation of NXX codes, the responsibilities of the Central Office Code Administrator, applicants and code holders, as well as NXX code reclamation requirements and certain code conservation measures. The INC updates the guidelines as needed or at the direction of the NANC. The guidelines were originally developed at the direction of the FCC and FCC rules require the NANPA to perform its numbering administration functions in accordance with the guidelines. 37. As is identified in greater detail below, the current guidelines do not impose adequate constraints on a carrier's ability to obtain and stockpile numbers for which it has no immediate need. To address these shortcomings, in this section, we set forth a number of administrative proposals intended to inject a greater degree of discipline into the process of allocating and administering numbering resources. Generally speaking, these proposals would place an increased responsibility on carriers to provide information about their utilization of the numbering resources that have already been allocated to them. Because the measures proposed in this section do not require implementation of new systems or technologies, we believe that they would impose minimal costs on the industry (and therefore, indirectly, on the consumer), and could likely be put into place in a relatively short time period. Further, because these measures do not rely on the LNP platform, as do certain of the measures discussed in Section V, they may be applicable immediately to all service providers that use numbering resources, regardless of whether the provider has yet deployed (or, for that matter, will ever deploy) number portability. We further believe that implementing these measures will increase the efficiency with which carriers use numbers, by tying allocation of new numbering resources to need, increasing carrier accountability for numbering utilization, and speeding the return of unused codes. We seek comment on the costs and benefits of implementing each of the measures discussed in Section IV. 38. We recognize that the industry, through the NANC, has been working to develop recommendations with respect to a number of the proposals outlined below, in particular in the areas of standardized number status definitions, enhanced utilization and forecast data reporting, and audits and enforcement. In many cases, we have drawn upon the substantial work efforts of industry bodies in developing our own proposals. With respect to several of the measures addressed in this section, we expect to receive recommendations from the NANC before the close of the comment cycle in this proceeding, and we invite commenters to address the NANC proposals and recommendations in their comments in response to this Notice. We specifically request the NANC to make recommendations regarding which, if any, of the measures discussed in Section IV should be adopted as FCC rules. We request that the NANC provide these recommendations concurrently with the deadline for receipt of reply comments on this Notice. B. Definitions of Categories of Number Usage 39. As a preliminary matter, we tentatively conclude that a uniform set of definitions for the status of numbers should be established for purposes of implementing the proposals set forth in this Notice. We believe that uniform definitions are essential to effective communications between carriers, the NANPA, and regulatory entities -- a common understanding of definitions helps to ensure that all participants in the number administration process are using a common "language." As such, uniform definitions will improve our ability to collect accurate data on number utilization and demand, which in turn will improve our ability to forecast number exhaust, and will assist in enforcing the CO Code Guidelines. 40. We note that the industry already has devoted a substantial degree of effort to establishing a uniform set of number status definitions. Most of the definitions set forth in this section are drawn directly from industry proposals. As a general matter, we seek comment on whether these uniform number status definitions should be codified as part of the FCC's rules, as are certain definitions that relate to the status of toll free numbers. In the alternative, we seek comment on whether uniform number status definitions should be incorporated into the CO Code Guidelines and the Thousand Block Pooling Guidelines, as intended by the INC. We further seek comment on whether all of the proposed definitions are necessary and useful, as well as on whether we should adopt any additional number status definitions, such as definitions related to telephone numbers allocated to resellers by facilities-based carriers. We seek comment on the following set of proposed number status definitions. 41. An administrative number is one which is not or should not be assigned to a customer, because it is in one of the following categories: employee/official number; Location Routing Number (LRN); test number; Temporary Local Directory Number (TLDN); or Wireless E911 ESRD/ESRK. The referenced subcategories are as follows: - An employee/official number is a number assigned by a service provider for its own internal business purposes. We seek comment on the types of internal business purposes for which carriers use employee/official numbers. We further seek comment on whether this definition should be tightened, either by specifying appropriate uses for employee/official numbers, or by identifying uses that are not appropriate. - A Location Routing Number (LRN) is the ten-digit (NPA-NXX-XXXX) number assigned to a switch or point of interconnection (POI) used for routing in a permanent local number portability environment. - A test number is a number assigned for inter- and intra-network testing purposes. We seek comment on the types of purposes for which carriers use test numbers. We also seek comment on whether this definition should be tightened, either by specifying appropriate testing uses for numbers, or by identifying uses that are not appropriately termed "testing." - A Temporary Local Directory Number (TLDN) is a number dynamically assigned on a per-call basis by the serving wireless service provider to a roaming subscriber for the purpose of incoming call setup. - A wireless E911 emergency services routing digits/key (ESRD/ESRK) number is a ten-digit number used to route an E911 call to the appropriate Public Service Answering Point (PSAP) when that call is originating from wireless equipment. If a NANP telephone number is used as an ESRD or ESRK, this number cannot be assigned to a customer. 42. An aging number is a number in the aging process. Aging is the process of making a disconnected telephone number unavailable for re-assignment to another subscriber for a specified period of time. An aging interval includes any announcement treatment period, as well as the blank telephone number intercept period. A number is disconnected when it is no longer used to route calls to equipment owned or leased by the disconnecting subscriber of record. We seek comment on the standard aging intervals currently used by carriers, as well as on whether we should set limits on the amount of time a number may remain in "aging" status, e.g., 90 to 120 days. 43. An assigned number is a number that is: (a) working in the PSTN under an agreement (e.g., tariff, contract) at the request of a specific customer for that customer's use, or (b) not yet working but has a customer service order pending. We seek comment also on whether this definition should be further refined by limiting the time during which a customer service order may be considered to be "pending," e.g., 3 to 5 days. 44. A dealer numbering pool is a set of numbers allocated by a service provider to a retail dealer for use in the sale and establishment of service on behalf of that service provider. We seek comment regarding how carriers currently classify these numbers for the purpose of determining available inventories. We seek comment on how dealer numbering pools should be treated, and what, if any, limitations should be imposed in connection with assigning numbers to dealer numbering pools. 45. A ported-out number is an assigned number that is ported from the code holder/block holder to another service provider. With respect to ported-out numbers, we seek comment on how the porting carrier and the ported-to carrier should treat these numbers for reporting purposes. Should both of these carriers treat the number as unavailable for assignment? Should the ported-to carrier be entitled to treat the ported-out number as an assigned number for purposes of calculating its utilization level? 46. Reserved number: The industry has been working to craft a definition of reserved telephone number. To date, the industry has crafted a proposed set of characteristics for a reserved number, which include: (1) A reserved number is a non-working number. (2) A reserved number has been set aside by a service provider at the request of a specific end-user customer for that customer's future use. (3) The reserved status of a telephone number is reflected in the telephone number administration system of the service provider in whose inventory the numbers are being reserved. (4) The name of the party requesting the reservation is in the service provider's administration system. (5) The end user is aware of the reservation of numbers. (6) A reserved number has some restrictions with respect to timeframe and quantity. (7) Numbers reserved by a service provider on behalf of a customer may be ported where number portability is available and where any portion of the associated working numbers have been or will be ported from that service provider. 47. In addition, the industry has set forth the following broad guidelines with respect to reserved numbers: (1) Service providers must ensure number reservations are not used for the purposes of hoarding. (2) All classes of customers must be treated equally under the application of reserved number guidelines. (3) Reserved number guidelines must apply equally to all service providers making telephone number reservations on behalf of their end-user customers. (4) Reserved number guidelines must apply equally to service providers making use of telephone numbers for their end user customers from another service provider's inventory (e.g., resellers, Type 1 interconnection for Commercial Mobile Radio Service (CMRS) carriers). (5) The reserved number intervals begin for all customers regardless of any previous reservations, on the effective date of this process. (6) The original interval limitation established for given customers shall continue uninterrupted if or when the customer changes service providers. 48. We are quite concerned about how reserved numbers are categorized, and whether they should be categorized as "unavailable for assignment." We believe that an appropriately narrow definition must be adopted for both "reserved number" and "reserved code" to prevent potential abuse, e.g., a carrier's use of reserved status as a means to amass and retain excessive inventories of numbers for which it has no immediate need. In this light, we seek comment on the NANC's working set of characteristics set forth above, and whether an appropriately narrow definition and/or set of reserved number guidelines can be fashioned from them. In the alternative, we seek comment on MCI WorldCom's proposal that a "reserved number" be defined as a number set aside by a service provider under the provisions of a legally enforceable written agreement at the request of a specific customer for future use. 49. Moreover, we seek comment on whether time limits should be imposed on the amount of time a code may be held in reserved status. For example, our toll free assignment rules specify that a number may be held in reserved status for only 45 days. We seek comment on whether 45 days is an appropriate period of time for a number to be held in reserved status. In the alternative, we seek comment on whether carriers should be required to pay a fee for numbers held in reserved status. We note that it is the practice of some carriers to require such a fee from parties for whom they are reserving numbers, in order to ensure that the request for reservations is bona fide. We seek comment on whether the same type of assurance, via fee, should be required from reserving carriers themselves. 50. A number in soft dial tone is a number temporarily assigned to line equipment and facilities which permits restricted dialing (e.g., operator, 911, service provider business office). We seek comment concerning the purposes for which carriers use soft dial tone, and whether these numbers are best categorized as a subset of administrative numbers. 51. Telephone numbers available for assignment are numbers within existing codes (NXX) or blocks (NXX-X) that are available for assignment to subscriber access lines or their equivalents within a switching entity/point of interconnection (POI), and are not categorized as assigned, administrative, aging, or reserved. 52. Telephone numbers unavailable for assignment are numbers that are characterized as administrative, aging, assigned, or reserved. We seek comment on whether this number status definition promotes our numbering optimization objectives, or whether it should be narrowed, possibly by excluding reserved numbers. 53. In the CO Code Guidelines, working telephone numbers are defined as the quantity of telephone numbers within existing NXX codes that are assigned to working subscriber access lines or their equivalents, e.g., direct inward dialing trunks, paging numbers, special services, temporary local directory numbers (TLDNs), etc., within a switching entity or POI. This definition seems to overlap with the definition of an assigned number set forth above. Also, the definition of a working telephone number contradicts the definition of an assigned number because the working telephone number definition considers TLDNs to be working numbers, but the definition of an assigned number does not. For these reasons, we seek comment on whether the definition of working telephone number should include TLDN and whether the definition of working telephone number should be included in a comprehensive set of telephone number status definitions. C. Verification of Need for Numbers 54. Current central office code assignment procedures. Under the current CO Code Guidelines, NXX codes are assigned to entities for use at a switching entity or POI that they own or control. The NANPA must assign NXX codes pursuant to the assignment criteria on a first- come, first-served basis. 55. An "initial" code is the first NXX code assigned to the carrier at a new switching entity, POI or unique rate center, and the administrator is to assign initial codes to the extent required to terminate traffic. To obtain an initial code, the applicant must certify that a need exists due to routing, billing, regulatory or tariff requirements. Although applicants may be required to provide the administrator with technical support for initial code requests, the guidelines specify that utilization criteria or projection will not be used to justify an initial NXX code assignment. The applicant for an initial code must be licensed or certified to operate in the area for which the code is requested, and must demonstrate this to the NANPA. 56. A "growth" code is an additional NXX code requested for an established switching entity, POI or rate center when the telephone numbers available for assignment in previously assigned NXX codes will not meet expected demand. To obtain a growth code, an applicant must certify that existing codes associated with that switch, POI or rate center will exhaust within 12 months, and must prepare a Months-to-Exhaust Worksheet. Applicants are required to complete the Months-to-Exhaust Worksheet, and to maintain it in their files for audit purposes; recent revisions to the CO Code Guidelines also require carriers to submit the Months-to-Exhaust Worksheet to the NANPA when applying for growth codes. In jeopardy NPAs, code holders must certify that existing NXX codes will exhaust within six months. 57. Applicant demonstration of readiness or need. As shown above, the current CO Code Guidelines do not require applicants to demonstrate their readiness to utilize initial codes, or their need to obtain growth codes. The absence of such controls may lead some carriers to obtain numbers that they are unable to use in the near term. This behavior is especially likely in NPAs that are approaching jeopardy, as carriers may be concerned that if they do not obtain an excess supply of numbers, they may not be able to maintain an adequate inventory once jeopardy has been declared. In this section, we propose certain verification measures designed to prevent carriers from obtaining numbering resources that they do not need in the near term. 58. Initial codes. With respect to an applicant's ability to obtain an initial code, we seek comment on what type of showing would be appropriate. It is not our intent to circumscribe any carrier's ability to obtain initial codes in order to initiate provision of service or to expand its service "footprint," but we wish to determine whether requesting additional information from applicants for initial codes could prevent actual or potential abuses of the process. In particular, we are concerned that under the current guidelines, certain new entrants may obtain numbering resources well in advance of when they will actually be able to provide service, which results in a highly inefficient distribution of numbering resources. To prevent this type of situation, we seek comment on whether applicants should be required to make a particular showing regarding the equipment they intend to use to provide service, the state of readiness of their network or switches, or their progress with their business plan, prior to obtaining initial codes, or whether any other type of showing should be required. 59. We are also concerned about instances in which carriers have obtained initial codes for use in areas in which they are not licensed or certificated. We seek comment on whether applicants should be required to submit evidence of their license/certificate with their applications for initial codes, or conversely, whether we should place an obligation on the NANPA to check the status of an applicant's license or certification with the relevant state commission prior to issuing the requested initial code. To the extent that commenting parties support the latter proposal, they should comment on whether placing this obligation on the NANPA will slow down the time in which the NANPA processes initial code applications, and if so, by how much. We seek comment generally on the most efficient, least burdensome way to ensure that applicants do not obtain NXX codes in areas where they are not licensed or certificated. For example, would a general certification by a carrier that it intends to implement service within a specific timeframe adequately assure that carriers only obtain initial codes in areas where they are licensed or certificated? 60. Growth codes. With respect to carriers' ability to obtain growth codes, we tentatively conclude that applicants should be required to provide data that supports their need to obtain additional numbering resources, as a means of preventing the building and carrying of excessive inventories. While verification of need will not eliminate an applicant's incentive to hoard, it will reduce the applicant's ability to hoard numbering resources without being detected, by providing a mechanism for oversight of applications. We further tentatively conclude that the NANPA may not allocate additional numbering resources to an applicant, unless the applicant has made a satisfactory demonstration of need. We seek comment on these tentative conclusions. 61. Method of verification of need. As outlined above, applicants are currently required to complete a Months-to-Exhaust Worksheet prior to applying for growth codes, and under recent revisions to the CO Code Guidelines, to provide the worksheet to the NANPA. We seek comment on whether requiring applicants to submit the Months-to-Exhaust Worksheet along with an application for a growth code would be an adequate demonstration of need for additional numbering resources. We further seek comment on whether NANPA should be required to evaluate the Months-to-Exhaust projection prior to allocating the requested code. We are concerned, however, about using the Months-to-Exhaust Worksheet as a proxy for need, because the Months-to-Exhaust analysis is forward-looking, and cannot be verified until after the carrier has already obtained the requested NXX code. Further, the Months-to-Exhaust forecast is largely subjective and dependent on good faith projections by each carrier. We seek comment on whether there are modifications to the current Months-to-Exhaust forecast that might alleviate these concerns. 62. As an alternative, we seek comment on whether applicants should be precluded from requesting growth codes from the NANPA until they have achieved a specified level of numbering utilization (or "fill rate") in the area in question. Several commenters support use of number utilization thresholds as a means of verifying an applicant's need for numbers. We believe that a utilization threshold may be superior to a Months-to-Exhaust forecast because it is an objective measurement that may be verified before the applicant obtains numbering resources. Moreover, a utilization threshold standard reflects the applicant's actual historical experience in efficiently utilizing numbering resources, rather than marketing projections. 63. Setting a utilization rate. We seek comment generally on whether a percentage utilization threshold should be adopted, and if so, on the appropriate level for that threshold. We further seek comment on whether we should set a uniform nationwide utilization threshold or, in the alternative, establish a range within which state commissions may set the utilization rate. We also seek comment on whether it is possible to set a uniform utilization level that applies to all types of service providers, or whether there may be a need to set different utilization levels for different types of services or service providers. In addition, we seek comment on whether utilization levels, if adopted, should gradually be increased over time, in order to provide carriers time to adjust to the new requirements, and to improve their utilization performance over time. We further seek comment on whether the utilization threshold standard should apply nationwide, or only in areas that are experiencing the most difficulties with number exhaust, e.g., the largest 100 metropolitan statistical areas (MSAs) and in area codes where a jeopardy condition has been declared. Alternatively, we seek comment on whether the smaller MSAs should have a lower utilization rate than the largest 100 MSAs. We seek comment on the costs and benefits of establishing a utilization threshold for these areas. 64. Calculating utilization levels. We also seek comment on how utilization thresholds should be calculated. We propose that a carrier's utilization rate in a given geographic area (NPA or rate center) should be calculated by dividing the quantity of "telephone numbers unavailable for assignment" (the numerator) by the total quantity of telephone numbers in all NXXs assigned to the carrier within the appropriate geographic area (the denominator), and multiplying the result by 100. We are concerned, however, that certain number status categories, including reserved numbers, numbers allocated to resellers, and numbers in dealer numbering pools, may be used by carriers to stockpile numbers. That is, carriers may assign NXX codes or portions thereof to these categories, and then count these codes or numbers as being utilized, even when they are not being used to provide any type of service. We are particularly concerned that the incentive to assign numbers to these categories for such strategic purposes may increase if we move to a number allocation regime based on utilization thresholds, as proposed. Accordingly, we seek comment on whether these categories of numbers should be excluded from the "numerator," or whether there are other ways to prevent the types of abuses about which we are concerned. 65. In most cases, newly acquired and activated NXX codes will have lower utilization rates than older, more "mature" NXXs. Accordingly, we seek comment on whether applicants should have the option of excluding from their utilization rate calculation all NXXs obtained in the period immediately preceding the carrier's request for additional numbering resources (i.e., all newly acquired NXXs). We seek comment on whether "newly acquired" NXXs should be defined as those assigned to the applicant by the NANPA during the 90 days prior to the new application, or whether 120 days is a more appropriate period for exclusion. We propose that carriers wishing to take advantage of such an exclusion must exclude the newly acquired NXXs from both the numerator and the denominator of their utilization rate calculation. Thus, to the extent that a carrier had begun to assign numbers from a newly acquired NXX, the numbers assigned may not be included in the numerator, if the entire NXX were not included in the denominator of the equation. We seek comment on this proposal. Wireless carriers have expressed concern that, because of the existence of seasonal fluctuations in demand for their services, the establishment of a utilization threshold will penalize them for not being able to utilize their NXXs immediately. Therefore, we seek comment on whether the exclusion of newly acquired NXXs from the utilization rate calculation will accommodate these carriers' unique situation. 66. We further seek comment on whether utilization levels should be calculated on an NPA-wide or a rate center-wide basis. That is, should all of the NXX code resources that an applicant has been assigned in a particular NPA be included in the calculation of its utilization rate for the purposes of obtaining another NXX code in that NPA, or should the calculation be limited to only the NXX codes that have been assigned in the rate center in which the applicant wants an additional code? In particular, we seek comment on: a) which method more closely tracks how carriers actually use numbering resources; b) which method is least likely to result in strategic number acquisition behavior (or "gaming") by carriers; c) which method is least likely to result in carriers being unable to obtain numbering resources necessary to meet customer demand (for example, to expand service "footprint"); d) which method is least likely to have an anticompetitive effect on certain segments of industry; and e) which method would be less burdensome from a regulatory standpoint. 67. In the event that we decide that utilization should be calculated on an NPA-wide basis, we seek comment on how regional variances in number utilization patterns should be taken into account. For example, some NPAs contain both suburban/rural and urban areas. In such "mixed" NPAs, carriers may have high utilization rates in rate center(s) located in a densely- populated areas of the NPA, and lower utilization rates in the more rural or suburban rate center(s) in the NPA. As a consequence, a carrier may be unable to meet an NPA-wide utilization rate, even when it is running into numbering shortages in particular rate centers in more densely- populated areas. Additionally, we seek comment on whether and how "mixed" NPAs should be identified, as well as on whether different utilization levels should be set for mixed NPAs. In the alternative, should applicants be entitled to obtain additional growth codes in a particular rate center within a "mixed" NPA by demonstrating an extraordinary level of utilization within that rate center, e.g., 85%? 68. Impact on small carriers and new entrants. We further seek comment on whether, in implementing a numbering utilization threshold, we should distinguish between carriers that have a small presence in a given NPA, or other appropriate geographic area, because they are either new market entrants or small carriers, and those that have a larger presence. Imposing the same utilization requirements on carriers with a small market presence as on those with a much larger presence may discourage market entry and competition, as well as diminish a smaller or newer carrier's ability to react to market demands. We seek comment on whether, from a competitive standpoint, different utilization thresholds should apply to carriers with a small market presence, and if so, what should be considered to be a small market presence. For example, should we apply a graduated utilization threshold scheme to carriers, based on the number of NXX codes they have in a given NPA (e.g., 50% or lower utilization rate for carriers with up to five NXXs in the NPA, 60% for carriers with up to ten NXXs, etc.)? We emphasize that the different treatment afforded to small carriers would apply only to those carriers with few numbering resources. D. Reporting/Record-keeping Requirements 69. It is necessary for the NANPA to collect information on the utilization of numbering resources and projected future demand for numbering resources in order to allocate numbering resources efficiently and to forecast NPA exhaust dates reliably. As we discuss in more detail in this section, we believe that it is necessary to strengthen the current system for forecast and utilization data collection, both to enhance the accuracy with which the NANPA may predict patterns of number usage and of NPA and NANP exhaust, and also to serve as a check on the ability of unscrupulous carriers to hoard numbers or otherwise abuse the number allocation and administration system. 70. The need for better and more timely data on number usage and forecasted demand has grown much more acute as competition in the local exchange market has developed and the demand for numbers has rapidly increased. The current data reporting mechanisms were designed when the local exchange market was largely a monopoly; in that period, the industry and regulators had fewer concerns about how numbers were being utilized or whether carrier forecasts were indeed accurate. Today, however, as a result of the tremendous demand for numbers resulting from the recent opening of the local exchange market to competition, and the rapid growth of the wireless telecommunications industry, numbering resources are being allocated to carriers at an alarming rate. 71. Current data collection mechanism: COCUS. The current mechanism for forecast and utilization data collection is the Central Office Code Utilization Survey (COCUS). The NANPA administers the COCUS annually, which asks each carrier to provide information on the total number of NXX codes assigned to it in each NPA, as well as its forecasted demand for NXX codes over the next five years. Code holders must provide additional numbering utilization data in NPAs in which a jeopardy condition has been declared. The NANPA uses the COCUS data to monitor the use of NXX codes within each NPA and to forecast the date by which all NXX codes within each NPA will be assigned. 72. As currently configured, the COCUS has a number of shortcomings. First, because the COCUS was established through industry guidelines, carriers currently do not have a regulatory obligation to respond, which impedes the NANPA's ability to gather comprehensive and accurate number utilization and forecast information. Carrier response has not been sufficient to enable the NANPA to gather the information it requires. Second, COCUS relies, in large part, on carrier forecasts, but the current CO Code Guidelines do not provide any mechanism by which the NANPA can evaluate the reasonableness of these forecasts. Third, because the COCUS is conducted only once a year, any analyses based on COCUS information become quickly outdated. Finally, the forecast and utilization data collected through COCUS lacks sufficient specificity to enable the NANPA to determine how carriers are utilizing the numbers currently assigned to them. Unless addressed, this lack of detail will hamper numbering resource optimization efforts, because utilization data drives many of the number optimization measures proposed in this Notice, or otherwise being considered by the industry or state commissions. For example, the NANPA would need detailed utilization data to confirm that a carrier had met utilization rate requirements such as those proposed above. Moreover, accurate and detailed utilization data is necessary to maximize the benefits of number pooling, both to ensure that carriers fully utilize existing blocks of numbers before they request additional blocks, and to determine which blocks of numbers are eligible for contribution to the pool. We find that these shortcomings render the current COCUS increasingly unreliable as a tool for managing current and future numbering resources. 73. Mandatory data submission requirement. Consistent with the recommendation made by the NANC, and supported by a number of the parties that commented on the NANC report, we tentatively conclude that we should mandate that all users of numbering resources supply forecast and utilization data to the NANPA. We seek comment on this tentative conclusion. We further tentatively conclude that, as part of our obligation to develop a cogent national numbering resource policy that will ensure adequate numbering resources to all carriers, we must establish a more extensive, detailed and uniform reporting mechanism that will improve numbering utilization and forecasting on a nationwide basis. Several of the parties that commented on the NANC report support the adoption of a more detailed reporting mechanism that is operated at the federal level. In addition, we tentatively conclude that the NANPA should serve as the single point of collection for telephone number usage and forecast data. The data from this reporting system would, however, be available to states that want to perform their own analyses to address NPA issues such as jeopardy situations and area code relief. We seek comment on these tentative conclusions. 74. Specific data elements. We seek comment on the specific data items carriers should be required to track. We seek comment on whether all NXX codeholders should be required to report the status of all telephone numbers within the NXX blocks assigned to them, according to the number status definitions set forth earlier in this section. In the alternative, we seek comment on whether utilization data reporting on a more aggregated basis (e.g., reporting on "telephone numbers unavailable for assignment" or some more aggregated set of telephone number status categories) would provide sufficient data to track accurately number utilization. 75. We propose that any utilization reporting obligation that we adopt would be in addition to the demand forecasting requirement that the COCUS currently places on carriers. We seek comment on whether any modifications should be made to improve the quality and accuracy of carriers' demand forecasts, although we believe that consistent utilization tracking, and the attendant ability to audit forecasts after the fact, may significantly improve the quality of these forecasts. 76. Specificity of data. We also seek comment on the level of granularity this utilization and forecast data should be reported, e.g., at the NPA level, rate center level, or thousands-block level. We tentatively conclude that, in order to provide information that is meaningful for utilization tracking and forecasting purposes, telephone number status data should be reported at the rate center level, at a minimum. Additionally, we seek comment on whether we should also require the reporting of utilization data at the thousands-block level where thousands- block pooling has been, or is going to be, implemented. If we do require data to be reported at the thousands-block level, we seek comment as to whether we should exempt carriers that currently are not subject to LNP implementation obligations from having to report at this level of granularity, or whether there are benefits to be had from obtaining thousands-block level data from LNP-capable and non-LNP-capable carriers alike in an area that may move to thousands- block pooling. To the extent that commenters argue that more granular reporting requirements would impose greater costs and burdens on carriers, we ask that they provide specific cost estimates for comparison purposes, and explain in detail the burdens that would be imposed. In addition, we seek comment on whether we should limit utilization data collection to NPAs within the largest 100 MSAs and jeopardy NPAs, and whether we should consider less granular data- reporting requirements for areas outside the largest 100 MSAs or jeopardy NPAs. 77. Frequency of reporting. We tentatively conclude that carriers should report utilization and forecast data on a quarterly basis, rather than the current annual reporting cycle, because the pace of number exhaust is so great in many areas that annually collected information becomes so badly outdated that analyses based on it are useless. We note that the NANC is currently examining whether to establish quarterly, semi-annual and annual COCUS reporting cycles, based on NPA growth rate and service provider size. We seek comment on whether we should differentiate between carriers in high-growth rate NPAs and low-growth rate NPAs in terms of reporting frequency, and, if so, on how to distinguish high-growth NPAs from low- growth NPAs. In the alternative, would a mechanism modeled after the current practice of conducting a "Jeopardy COCUS," or additional round of forecast data collection when jeopardy is first declared in an area code, be sufficient to provide additional utilization and forecast data in high-growth NPAs? We further seek comment on whether there are other appropriate distinctions that should be drawn among carriers with respect to reporting frequency. 78. Confidentiality of data. Several parties that commented on the NANC report express concern about the preservation of confidentiality of the utilization data they will be required to provide. We seek comment on what, if any, special provisions should be established to protect the confidentiality of data disclosed to the NANPA, the FCC, and/or the state commissions. Under Exemption 4 of the Freedom of Information Act (FOIA), the FCC need not disclose "commercial or financial information . . . [that is] privileged or confidential." Based on the proposals set forth above in this section, we seek comment on what specific information that we may request from carriers would fall within this exemption. Some commenters have voiced particular concern about the ability of state commissions to protect the confidentiality of their submissions. Regarding proposals to enhance the COCUS, the NANC has recommended that states have access to aggregate utilization data and solely for a stated purpose. Also, the NANC determined that states may obtain carrier-specific data only in states where a legally enforceable confidentiality agreement is in place. We seek comment on the NANC's recommendations concerning use of confidential data by the state commissions. 79. Cost of data collection activity. To ensure that the data collection requirements are not overly burdensome, we seek comment on the cost of the proposed data collection activities to service providers. Specifically, we seek comment on the estimated fixed and incremental costs of that collection. We also seek comment on whether the fixed costs can be shared. In addition, we seek comment as to whether there are any economic, legal, or business reasons for excluding small carriers from reporting requirements, or otherwise scaling back their reporting obligations. Alternatively, we seek comment whether such an exclusion for small carriers would be necessary if the proposed additional utilization data were only collected from NPAs in the largest 100 MSAs and in jeopardy NPAs. 80. Alternative data collection options. Finally, we seek comment on several alternative data collection options the industry has proposed. The forecast and utilization reporting process in the current Thousand Block Pooling Guidelines is one such option. These guidelines require carriers operating in an NPA where pooling has been or is planned to be implemented to submit forecasts and utilization reports semiannually by thousands-block within a rate area. The pooling forecast is based on an 18-month projection. If a carrier identifies a significant change in its forecast, it is required to provide an updated forecast. We seek comment on whether the data collection provisions in these pooling guidelines should be applied more generally, i.e., outside of pooling areas, and to all carriers, rather than just carriers participating in pooling. 81. Another, similar proposal is the Line Number Utilization Survey (LINUS) data collection model designed by NANPA staff as a replacement for COCUS and presented for consideration to the NANC. LINUS would conduct a survey of forecast data quarterly at the rate center level. Utilization data would be collected at the thousands-block level by rate center, quarterly in the largest 100 MSAs, and semiannually in the remaining MSAs. Also, collection of utilization data collection would occur more often in NPAs that are nearing jeopardy. Participation in LINUS would be mandatory. We seek comment on whether LINUS would meet our data collection requirements, or whether modifications to LINUS are required in order to make it more responsive to our forecasting and tracking needs. 82. In addition, other industry parties have submitted proposals to NANC for a number utilization and forecasting mechanism to replace COCUS. AT&T's proposed model would, like COCUS, collect forecasting and utilization information annually, at the NPA level, but with the capacity for "real time" updates at other times. In addition, the forecast report in the AT&T model would be separated into components for forecasts of growth codes, initial codes for new entrants, and initial codes for new switching entities. US West also proposed a COCUS alternative that involves a two-stage process. The first stage, referred to as the "Top-down Analysis," relies on historical COCUS data and mathematical modeling to develop initial exhaust forecasts for each area code. After it has been determined that a particular NPA will exhaust within a selected period, the second stage of this proposal would be applied. The second stage involves a "Bottoms-up Analysis," which relies on user input similar to the existing COCUS system, but employs a mechanized data collection process. Although these proposals are presently under review by NANC, we seek comment regarding whether we should adopt any of their specific components. E. Audits 83. The only comprehensive method for verifying the validity and accuracy of utilization data submitted by users of numbering resources is through the use of audits. Audits can also be used to verify compliance with non-quantitative rules or guidelines, for example, to determine whether a carrier actually has subscribers for "assigned" numbers, or valid reservation requests. Audit requirements may also, independently, serve as a deterrent to carrier noncompliance or strategic behavior, such as hoarding of numbers. Because we believe that audits can serve as a valuable tool in our efforts to promote numbering resource optimization, we propose that the need verification measures proposed and the data collection program proposed earlier in this section be supplemented with a comprehensive audit program that verifies carrier compliance with federal rules and industry numbering guidelines. We seek comment on this proposal. 84. Types of audits. Three types of audits are commonly used: "for cause" audits, regularly scheduled audits, and random audits. As further detailed below, we seek comment on whether and, if so, how, all three types of audits should be employed as part of a comprehensive audit program to monitor carrier compliance with number allocation and administration rules and guidelines. We further seek comment on the comparative costs and benefits associated with performing each type of audit. 85. "For cause" audits are conducted if there is reason to believe that the information a carrier has provided, e.g., in connection with either reporting requirements or an application for additional resources, is inaccurate or misleading. Information providing a basis for initiating a for cause audit may be drawn from a variety of sources. Because for cause audits are triggered only when there is some cause to believe that a carrier may be in noncompliance, they are a highly cost-effective and necessary tool for monitoring number utilization and forecasting. For this reason, we tentatively conclude that we should include for cause audits within the comprehensive audit program proposed. We further seek comment on whether we should consider subsequent follow-up audits on carriers that in previous years had been subject to for cause audits for supplying inaccurate or misleading data or forecasts. 86. Regularly scheduled audits are repeated on a fixed schedule for a representative cross-section of carriers, and, in this context, would be applied to all entities that obtain numbering resources. Perhaps more so than other types of audits, regularly scheduled audits may encourage carriers to adopt better number utilization practices, because sooner or later, all carriers would be subject to a regularly scheduled audit. Given the large number of carriers that hold numbering resources, we tentatively conclude that regularly scheduled annual audits of all numbering resource holders would be too costly to be justified. Instead, we seek comment on whether conducting regularly scheduled audits every three years represents a reasonable compromise between effective auditing and cost containment. 87. Random audits provide a third means by which carrier utilization and forecast information can be reviewed for accuracy. Through such audits, the auditor reviews a specific carrier's information without triggering the expense and burden of regularly scheduled audit of all carriers. In addition, to better target problem areas, random audits could focus on those carriers that historically have had a high demand for numbers or new carriers that appear to be seeking a large quantity of numbers. For this reason, random audits may be used more frequently and flexibly than regularly scheduled audits. At the same time, allegations of unusual or inappropriate conduct are not necessary to trigger a random audit. We seek comment on whether we should adopt a random audit approach for use in situations where accurate reporting is paramount, such as in area codes where jeopardy has been declared, or whether there are other situations in which random audits would be appropriate. 88. Audit responsibility. We believe that numbering resource audits should be conducted by a neutral entity. One possibility is that the NANPA could conduct these audits. Because the industry guidelines envision that the NANPA itself, in its capacity as Central Office code administrator, will be subject to periodic audits for compliance with numbering administration guidelines and effective management of numbering resources, however, the NANPA may not be the best choice to audit code holders on similar issues. It is also possible that the FCC, state public utility commissions, or other neutral third parties could conduct numbering resource audits. We seek comment on how audit responsibility should be apportioned among these possible candidates. We further seek comment on whether we should direct the NANC to select an entity to audit carrier number utilization and forecast data using a competitive bidding process that is subject to our approval. 89. Audited information/procedures. We believe that the audit program should address all aspects of carrier compliance with our numbering resource rules and industry numbering guidelines, focusing in particular on utilization data reporting and forecasting. It will be easier to develop certain auditing procedures, including specific triggers related to for cause and random audits, after data reporting requirements have been finalized. We seek comment on the process by which specific auditing procedures should be established, as well as on the development of statistical and analytical approaches that will be required to evaluate the quality and validity of reported data. We ask parties to comment, in particular, on how we may structure an audit process that is flexible enough to focus on new problems or issues as they arise. 90. We note that the NANC and the INC have been working to develop a comprehensive audit process, and we direct the NANC to provide a progress report regarding this work effort to the Common Carrier Bureau on or before the deadline for initial comments in this proceeding. We also seek comment on the best method for soliciting the input of state public utility commissions, who have valuable insight into and experience with potential problem areas. While we believe that we should develop a national framework and procedures for numbering resource audits, so that there is some degree of uniformity across the country in the way that audits are conducted, we also recognize that state commissions should have a major role in the development of this framework and procedures. F. Enforcement 91. Many of the parties that commented on the NANC Report acknowledge a need both to strengthen the numbering allocation and assignment guidelines and to find an appropriate enforcement mechanism to ensure compliance on the part of all users of the numbering resource. We seek comment on what actions we should take to enhance the enforceability of the number utilization and optimization provisions contained in the guidelines. 92. We tentatively conclude that the NANPA, the FCC and the state commissions each have distinct roles to play in enforcing the provisions of the CO Code Guidelines, and other numbering utilization rules, and we seek comment on specifying more precisely what those roles are. We note that, while the FCC retains the authority to take any necessary enforcement action, in many instances, the NANPA would be the first entity to detect a carrier's violation of a rule or guideline, such as failing an audit. Because the NANPA might often be in the best position to take swift and effective enforcement action, commenters to the NANC Report suggest that the NANPA should be delegated additional enforcement authority. We tentatively conclude that the NANPA should be empowered to withhold NXX codes as a sanction for violation of the CO Code Guidelines, especially where the violation involves failure or refusal to supply accurate and complete utilization or forecast data. We seek comment on this tentative conclusion and the circumstances in which the NANPA should be empowered to withhold numbering resources. For example, should NANPA be authorized to restrict future requests for numbering resources, as a sanction for prior violations, where the carrier has no pending request for resources when the violation is detected, or would this type of situation be better addressed using alternative sanctions? We also seek comment on whether any additional enforcement authority should be delegated to the NANPA. 93. There are several situations in which enforcement actions are more appropriately taken by regulatory authorities than by the numbering administrator. For example, in some situations, the decision to take enforcement action involves a more subjective evaluation, or would otherwise call the NANPA's neutrality into question. In addition, regulatory authorities should provide a route of appeal from NANPA enforcement actions. We seek comment regarding the appropriate allocation of number administration enforcement responsibilities between the FCC and state regulators. Currently, most state commissions are not performing number administration functions. We seek comment regarding whether delegating additional enforcement authority to state commissions would place the states in the position of performing numbering administration tasks, and if so, whether this should be any cause for concern. 94. In other situations, such as where a violating carrier has no need for additional numbering resources, withholding these resources would have no effect as a sanction. We tentatively conclude that fines and forfeitures, and possibly, in extreme situations, revocation of certification and licenses should be available as possible sanctions for violation of the CO Code Guidelines, all of which could only be imposed by regulatory authorities. We seek comment on this tentative conclusion. In particular, if state revocation of a wireline carrier's certification or the Commission's revocation of a wireless carrier's license is an appropriate sanction for CO Code Guidelines violations, what standard should be used to trigger this specific sanction option? G. Reclamation of NXX Blocks 95. Reclamation and reuse of unused NXX blocks is a numbering optimization measure that may be one of the quickest and easiest measure to implement. As outlined below, the CO Code Guidelines contain provisions for NXX block reclamation. The NANC Report notes, however, that there has been "some hesitancy" on the part of the NANPA to enforce these reclamation provisions, and recommends a current review and modification of the NXX code reclamation procedure to address the current competitive status of the industry. In such light, we seek comment on several proposals to clarify and strengthen these reclamation provisions. 96. NXX Activation Rules. The CO Code Guidelines require an NXX assignee to activate the NXX code by placing it "in service" within six months of assignment. Currently, an NXX code is considered to be "in service" when the assignee has transmitted local routing information to the LERG. The carrier, however, does not have to assign and activate any number from the block to end-user customers in order to satisfy the activation requirement. Furthermore, an assignee may apply to the NANPA for an extension of up to an additional 90 days to place the NXX code in service. The CO Code Guidelines also allow an assignee to reserve an NXX code for up to eighteen months. In addition, an assignee of a reserved NXX code is eligible to receive a single six-month extension of the reservation if it is able to demonstrate that the proposed code use date was missed due to circumstances beyond its control. 97. NXX Reclamation Rules. The CO Code Guidelines require the assignee to return the NXX code to the NANPA if it has not been activated within six months of assignment, if the assignee no longer requires that NXX code for the purpose it was originally assigned, or if the service for which it was assigned is disconnected. Moreover, the CO Code Guidelines direct the NANPA to initiate reclamation action if the NXX code has not been activated within 18 months. The CO Code Guidelines direct the NANPA to refer to the INC for resolution certain instances where NXX codes have not been returned for reassignment by the assignee, as well as certain applications for extension of the NXX code activation date. 98. Modification of current CO Code Guidelines. In their comments on the NANC Report, several parties support the enforcement of the current reclamation rules by the NANPA, while others propose modifications to the guidelines. We tentatively conclude that the current activation and reclamation requirements and timeframes in the CO Code Guidelines should be modified in several ways to encourage more efficient use of NXX codes. First, we seek comment on whether the definition of placing an NXX code "in service" should be clarified to mean not just activation of the code through the transmission of local routing information to the LERG, but also that the carrier has begun to activate and assign to end users numbers within the NXX code. We tentatively conclude that this clarification will better ensure that NXX codes are not left idle for a lengthy period. We note that adopting such a definition, by itself, could lead to undesirable behavior on the part of carriers, as they might simply activate a few numbers in an otherwise unused NXX block in order to avoid reclamation of the block. Therefore, we seek comment regarding whether such a change in the definition of "in service" should be adopted only in connection with a sequential numbering requirement, or whether we should adopt other safeguards to prevent this type of strategic behavior. 99. We also seek comment on modifying the current reclamation provisions by requiring the NANPA to initiate NXX code reclamation within 60 days of expiration of the assignee's applicable activation deadline. We tentatively conclude that this modification will limit the length of time that an NXX code has been left idle and encourage better recycling of unused NXX codes. We further seek comment on whether there exist competitive pressures or other reasons that should discourage us from reducing the amount of time during which a carrier may reserve an NXX code from 18 months to three months, and, correspondingly, to reduce the period of potential extension of that reservation from six months to 30 days. We seek comment on whether we should consider any other modifications to the reclamation provisions to improve their enforceability, such as SBC's suggestion that we should maintain firm deadlines for activation by removing the discretion the NANPA presently has to determine the length of an extension. Finally, we seek comment on whether we should direct the INC to incorporate these proposed changes into the CO Code Guidelines, or whether we should adopt these proposals as FCC rules. 100. Delegating additional authority to the NANPA and the states. We seek comment on what, if any additional authority we should delegate to the NANPA to enforce the NXX block reclamation provisions. We tentatively conclude that we should delegate additional authority to state public utility commissions to order NXX block reclamation in accordance with the CO Code Guidelines, and any changes thereto adopted during the course of this proceeding. We believe that this grant of authority may increase the effectiveness of numbering conservation measures adopted by the states. We seek comment regarding whether we should direct the NANPA to refer questions or disputes about code activation, deadline extensions or reclamation directly to the state commissions for resolution, rather than to the INC. State commissions may be able to resolve such issues more quickly and decisively than an industry consensus process. We also seek comment regarding whether we should require state commissions to establish any particular type of dispute resolution or appeals processes in connection with issues regarding activation and reclamation of NXX codes. H. Cost Elements and Cost Recovery 101. In the Executive Summary accompanying the NANC Report, the NANC stated that "[c]ost/benefit analysis and determination of cost recovery mechanisms loom as high priorities before going forward with implementation of any of the future optimization methods presented in this, or future [NANC] reports." The NANC Report does not, however, address the costs of various optimization measures nor does it recommend a mechanism for recovery of costs associated with those optimization methods. 102. We seek comment on the specific cost elements of the proposed administrative measures, including a detailed breakdown of the types of costs involved in implementation of each particular administrative solution (for example, increasing staff to monitor number usage, software to complete administrative tasks, etc.), as well as the overall magnitude of the costs of the various administrative solutions. We also seek comment on whether the benefits of moving to a more efficient use of our numbering resources achieved through implementation of the proposed administrative measures outweigh the costs of implementation of those administrative measures. We ask that commenters support their conclusion with specific cost data, where available, or other evidence relevant to a cost/benefit analysis. 103. With respect to cost recovery, we tentatively conclude that the costs of the administrative solutions proposed above should be allocated and recovered through the existing NANPA fund formula. Our conclusion is based on the assessment that the proposed administrative solutions appear, in large part, to involve changes in the manner in which the NANPA oversees and manages numbering resources. For example, a requirement that the NANPA verify an applicant's need for additional numbers may require the NANPA to evaluate the applicant's months-to-exhaust projection or to evaluate carrier data proving that a particular utilization level has been met. Similarly, the costs of collecting utilization data, conducting service provider audits, initiating reclamation of NXXs and other administrative costs may, in many cases, be directed to the NANPA. Furthermore, the implementation of administrative solutions will benefit all telecommunications carriers by resulting in a more efficient use of numbering resources and by delaying the need for new area codes, as well as the exhaust of the NANP. We seek comment on this tentative conclusion. 104. In addition, because the administrative solutions we propose as possible ways of increasing the efficiency with which telecommunications carriers use numbering resources fall within the scope of numbering administration matters, we tentatively conclude that section 251(e)(2) requires that the costs of the administrative solutions be borne by all telecommunications carriers on a competitively neutral basis. We tentatively conclude that including the costs of the administrative solutions in the NANPA fund will result in the allocation and recovery of those costs from all telecommunications carriers on a competitively neutral basis and should not overburden any one carrier or class of carriers. We seek comment on these tentative conclusions. Commenters should address the Commission's interpretation that "on a competitively neutral basis" means that the costs borne by each carrier do not affect significantly any carrier's ability to compete with other carriers for customers in the marketplace and whether the proposed cost recovery mechanism is consistent with this interpretation. Parties that oppose our tentative conclusions should propose specific alternative methods for allocating and recovering the costs of administrative solutions to the numbering crisis on a competitively neutral basis. In addition, parties that argue that the Commission has authority to exclude a class or classes of carriers from the costs of the proposed administrative solutions should provide a detailed discussion of their position, including applicable statutory and regulatory authority. Commenters also should identify which class or classes of carriers should be excluded and why. V. OTHER NUMBERING OPTIMIZATION SOLUTIONS A. Introduction 105. In Section IV, we considered a variety of administrative measures aimed at ensuring that carriers obtain and use numbering resources efficiently. In this section, we consider and seek comment on additional numbering optimization methods that could be implemented in addition to, or in combination with, these administrative measures. 106. First, we consider rate center consolidation. Rate center consolidation involves creating larger geographic areas in which individual NXX codes can be used by consolidating or combining existing rate centers. Because many carriers, particularly competitive local exchange carriers, require NXX codes in most or all rate centers in an NPA to establish a competitive "footprint," establishing larger rate centers has significant potential to reduce the demand for NXX codes. Traditionally, rate center consolidation has been carried out at the state level. We seek comment on ways in which we may create incentives for state commissions and local exchange carriers to pursue this measure more aggressively. 107. Another potential numbering resource optimization method is mandatory ten-digit dialing for all telephone calls, whether they are local or toll calls. To date, we have implemented mandatory ten-digit dialing only in area code overlay situations. Expanding the use of ten-digit dialing could yield certain numbering optimization benefits, by making overlays less disruptive to implement, freeing up protected NXX codes and allowing use of "0" or "1" in the so-called "D" digit (the first number of the NXX code). At the same time, mandatory ten-digit dialing imposes certain burdens on consumers, who would no longer be able to rely on traditional seven-digit dialing for local calls. 108. We also consider number pooling as a numbering optimization method. Number pooling allows numbers to be allocated in smaller increments, so that multiple carriers can use numbering resources from a single NXX code. We seek comment on whether mandating some form of number pooling is necessary to achieve our numbering optimization objectives, and if so, how and to what extent pooling should be implemented. We also seek comment on the potential costs and benefits of three specific number pooling methods: (1) allocation of numbers in blocks of a thousand (thousands-block pooling), (2) individual telephone number pooling (ITN), and (3) unassigned number porting (UNP). Because one common element of all three pooling alternatives is that they require participating carriers to have LNP capability, we seek comment on whether non-LNP-capable carriers should be subject to pooling requirements or whether there are other non-LNP-based alternatives to pooling that could be employed by such carriers to achieve comparable results. 109. Regardless of whether or to what degree number pooling may be implemented on a mandatory basis, there are a variety of technical and administrative issues associated with pooling. We therefore address the issue of technical standards for pooling, appointment of an administrator, and possible rules or guidelines for both donation of numbers to and withdrawal of numbers from a number pool. We also consider possible mechanisms that would allow for recovery of shared costs and carrier-specific costs associated with implementing and administering number pooling. 110. Finally, as an alternative to mandating that carriers employ any particular numbering resource optimization method, we consider whether we can achieve our number utilization objectives without the need for such mandates by allowing carriers to choose the optimization solutions that best suit their particular circumstances. We seek comment on a regime that would require carriers to meet a number utilization threshold, as proposed in Section IV, but leave to each carrier the decision about how to achieve the requisite level of utilization, e.g., through participation in thousands-block number pooling, rate center consolidation, porting unassigned numbers from other carriers, or simply returning excess codes. B. Non-LNP-Based Solutions 1. Rate Center Consolidation 111. Rate centers are telephone company-designated geographic locations which are assigned vertical and horizontal coordinates within an area code. Historically, telephone numbers are assigned on an NXX code basis, and associated with a particular switch. For call rating purposes, each switch is associated with a particular rate center. For most carrier billing systems, the rate centers associated with the switches serving the calling and called parties are used to determine whether a call is local or toll and to compute the air mile distance for rating the toll call. Thus, most carrier billing systems rely on NPA-NXX code information for rating calls. 112. Because it is typically necessary for each facilities-based service provider to be assigned an NXX code for each rate center in which it provides service, the rate center structure places a great strain on numbering resources. Moreover, although wireless carriers offer larger calling areas and thus require fewer NXX codes for the wireless service, they often must request as many NXX codes as are required to permit wireless customers to be called by wireline customers on a local basis. 113. Rate center consolidation is the combining or aggregating of several existing rate centers into fewer rate centers. Rate center consolidation serves as a numbering optimization measure by enabling carriers to use fewer NXX codes to provide service throughout a region, thereby reducing the demand for NXX codes, improving number utilization, and prolonging the life of an area code. In areas where there are contiguous rate centers with identical calling areas and identical exchange rates, rate center consolidation may be fairly easy and painless to implement. Rate center consolidation will be most beneficial in areas where new entrants have NXX assignments, but service has not yet been activated. 114. Rate center consolidation may be an attractive numbering optimization measure because it enables carriers to maintain their existing call-routing and call-rating methods, is competitively neutral, does not require LRN LNP, and does not preclude the adoption of other numbering optimization methods. Further, rate center consolidation may be flexibly implemented, on a state, NPA or multiple rate center basis, and sometimes may be implemented within a short timeframe. Rate center consolidation may, however, have disruptive impacts on carriers and customers. For example, where local calling scopes must be modified in connection with rate center consolidation, carrier revenue may decrease, because a larger percentage of revenue may be derived from basic local service and a smaller percentage from toll service. Correspondingly, customers' local service rates may increase and they may experience other types of confusion or inconveniences when their calling areas change. Also, a complex consolidation scheme may involve expensive modifications to carriers' switches and operations support systems (OSS). Furthermore, rate center consolidation can cause a disruption in the routing of E911 calls because default routing of 911 calls is NXX driven. 115. The experiences of the state utility commissions that have implemented rate center consolidation or have studied its potential impact demonstrate that this measure brings varying levels of number conservation benefits and disruptive impact, depending on the effect on calling scopes and the complexity of the rate center geography. While some states are enthusiastic about implementing this measure, others contend that rate center consolidation may not be the best solution for their particular circumstances. 116. As do most of the parties that commented on the NANC Report, we consider rate center consolidation to be a vitally important long-term measure to optimize the utilization of numbering resources. We believe that rate center consolidation should be implemented to the greatest extent possible, and we seek comment on what actions this Commission should take to promote rate center consolidation. 117. We note that the Commission has previously encouraged states to consider rate center consolidation, among other measures, to decrease the frequency of the need for area code relief. We wish to clarify our position that states do not require any additional delegation of authority from the Commission to engage in rate center consolidation. Rather, because rate centers are inextricably linked with local call rating and routing issues, which fall within the traditional jurisdiction of state public utility commissions, we believe that state commissions have full authority to order rate center consolidation, and need obtain no further authorization from this Commission. We reiterate our support of state action to consolidate rate centers to improve numbering efficiencies. 118. We seek comment on how we may further encourage states to implement rate center consolidation where beneficial impacts could be achieved. For example, would delegating additional authority to state commissions to require codeholders to return vacant, unused codes that are no longer needed because of consolidation, as is proposed above in Section IV, help them to realize the full benefits of rate center consolidation? We also seek comment on whether and how the FCC or state commissions can create incentives to encourage incumbent local exchange carriers (ILECs) voluntarily to combine rate centers for the purpose of improving the efficiency of number utilization and slowing NPA exhaust rates. In addition, we seek comment on whether the introduction of intraLATA dialing parity, and the heightened competition that it may bring to the short-haul toll market, may lessen incumbent carrier resistance to rate center consolidation. In addition, because the advent of competition in the short-haul toll market may reduce ILEC revenue for these calls, we seek comment on whether ILEC migration to larger calling areas must, as anticipated by state commissions, necessarily result in higher rates being charged for basic service. 119. Although we believe that rate center consolidation will assist us in optimizing our numbering resources, we agree with MCI WorldCom that this measure will not, by itself, substantially reduce the demand for NPA relief until the industry addresses the underlying problem of associating call rating with NXX assignments. Therefore, we seek comment on whether there are ways to separate the call rating functions from the call routing functions, which would result in a reduced demand for NXX codes. We note that the Colorado Telephone Numbering Task Force recommends eliminating the link between call rating and NXX codes by investigating the possibility of using the Signaling System 7 (SS7) network, rather than the current reliance on associating NPA-NXXs with the specific vertical and horizontal (V&H) coordinates of a rate area to transmit the information required for the rating and routing of every call. Use of the SS7 network to transmit information for call rating would enable carriers to maintain their existing rate centers and to route calls according to their current network configuration. The adoption of this call rating method, however, will require that carriers complete a query for every call and modify their databases to include additional information, such as network addresses, LRNs, and/or V&H coordinates for the calling and called parties, on the SS7 call record. Furthermore, carriers may have to develop systems to inform consumers whether they are making a toll or local call through an audible or visual method. We believe that this proposal offers the possibility of greatly reducing the demand for additional NXX codes and thus merits further investigation. We seek comment on the Colorado Task Force's proposal. We also seek comment on whether the database modifications that carriers must make to accommodate LNP are similar to the modifications required to implement call rating using the SS7 network. 120. In addition, we seek comment on the relationship between rate center consolidation and other numbering optimization measures we may adopt, particularly number pooling. We seek comment on whether rate center consolidation should necessarily precede moving to pooling in an area, or whether it is possible to implement both measures simultaneously, and simply expand the pools as rate centers are consolidated. To the extent that commenters suggest that consolidating rate centers prior to number pooling would increase the effectiveness of pooling by creating fewer, larger pools within an NPA, we seek comment on how we might create incentives for state commissions to undertake rate center consolidation prior to implementing pooling in an area. For example, should we grant states the authority to implement pooling only after they have undertaken rate center consolidation in the area in question? In the alternative, would requiring carriers to meet specified number utilization thresholds provide them the incentive to consolidate rate centers voluntarily? 121. Finally, we seek comment on how to ensure that rate center consolidation does not adversely impact 911 systems, in particular the default routing of 911 calls. We further seek comment on what, if any, role the FCC should have in determining potential impacts on 911 systems, and implementing appropriate solutions to these problems. More specifically, are the issues that arise regarding 911 default routing sufficiently similar in each state that we should consider referring the matters to the NANC for a recommendation on a solution or set of solutions that could be used in all states undertaking rate center consolidation? We also seek comment on whether the FCC should take any actions to ensure that the concerns of the 911 community are addressed in the rate center consolidation process. 2. Mandatory Ten-Digit Dialing and Related Measures 122. Currently, the standard dialing pattern is seven-digit dialing within an NPA, and ten-digit dialing between NPAs. Our area code relief rules dictate, however, that where overlays are used, ten-digit dialing is required not only between the original NPA and the overlay NPA, but also within each NPA, to prevent anticompetitive impacts on new entrants that may have few or no numbers in the original NPA. There is often significant customer resistance to ten-digit dialing, which may explain why more state commissions have chosen to implement splits rather than overlays. In fact, to preserve seven-digit dialing for inter-NPA calls within a community of interest, many states have authorized the use of "protected codes." 123. Mandatory ten-digit dialing and reclamation of protected codes. Among the numbering optimization measures that do not require LNP, mandatory ten-digit dialing entails the dialing of ten digits for all calls, regardless of whether they are inter-NPA and intra-NPA and rated as local or toll. Mandatory ten-digit dialing works as a numbering optimization measure by freeing up more numbering resources for use, through the reclamation of protected codes, and potentially through permitting the use of either "0" or "1" as the first digit of an NXX code (the fourth, or "D" digit, of a ten-digit telephone number). Moreover, the adoption of ten-digit dialing on a nationwide basis might eliminate disincentives for states to adopt overlays. To date, we have observed the adoption of ten-digit dialing at the state and NPA levels in conjunction with the use of overlays for area code relief. Furthermore, ten-digit dialing and reclamation of protected codes may be implemented on a national, statewide, or NPA-wide basis. The NANC Report finds that the conversion to ten-digit dialing and the reclamation of protected codes could be implemented within 12 months. 124. Benefits. Ten-digit dialing would allow future area code relief projects, particularly overlays, to be less disruptive to consumers. In addition, Bell Atlantic Mobile states that mandatory ten-digit dialing may foster new and different uses for NPA overlays. Moreover, if ten-digit dialing were adopted as part of a national numbering optimization policy, customer confusion resulting from inconsistencies in dialing patterns from one area to another would be eliminated. PageNet also believes that ten-digit dialing would lower costs and reduce entry barriers, which, in turn, could result in lower prices and increased product and service innovation for all consumers. GTE further states that ten-digit dialing will prevent discrimination among service providers. 125. Disruptive effects. Ten-digit dialing, however, does present certain disruptive effects, particularly for consumers. Consumers often object to the inconvenience and confusion associated with having to remember and dial three extra digits. Also, some research raises a concern that the young, elderly and the memory impaired may be particularly affected by the change to ten-digit dialing, especially where 911 has not been implemented. Businesses may also incur costs associated with changing advertising and stationery, updating databases, and reprogramming customer premises equipment (CPE). Although the industry cost of implementing this measure will vary according to each geographic area and service provider, some carriers could experience substantial costs associated with modifications to switch translations and OSS, directory publishing, changes to announcement systems, and customer education. Implementation of ten-digit dialing will also require upgrades to the Public Safety Answering Point (PSAP) system. In light of these concerns, we seek further information on any other technical problems and costs associated with these measures. In particular, we seek comment on whether the ability to implement easily area code overlays could provide a disincentive to use existing resources more efficiently. 126. National policy. The majority of industry commenters support the conversion to mandatory ten-digit dialing as a numbering optimization measure, particularly in densely populated areas with NPAs that are projected to exhaust shortly. Some commenters, however, explicitly reject the adoption of this measure. The states also are divided in their embrace of this measure. For example, the Texas Commission supports an investigation into the costs and benefits of mandatory ten-digit dialing as a numbering optimization measure. Similarly, the Florida Commission states that mandatory ten-digit dialing would open the possibility for new types of area code overlays, including expanded overlays. The Ohio Commission argues that alternatives such as eight-digit uniform dialing and functional property codes have not been fully considered, and that these methods may be used to improve numbering utilization and postpone costly area code relief measures, while the New York Commission points out that ten-digit dialing is not required to reclaim protected NXX codes. We seek comment on whether we should adopt nationwide ten-digit dialing, or whether we should encourage states to implement ten-digit dialing as a priority. 127. D digit expansion. Expansion of the NANP so-called "D" digit (the fourth digit of a ten-digit telephone number) to include 0 and 1 could accompany the implementation of ten-digit dialing. Adoption of this measure would increase the quantity of NXXs available within an NPA by approximately 25%. The NANC Report states that D digit expansion must be done simultaneously by all participants in the NANP because otherwise calls can not be completed to exchanges where carriers continue to retain the D digit for internal use. We seek comment on whether D digit expansion may be implemented on a statewide or NPA-wide basis, rather than at a mandatory national level by all service providers. The NANC Report also states this modification is expected to be a multi-year process for carriers to implement, and therefore, expansion of the D digit would be implemented as the final phase of the measures associated with ten-digit dialing. 128. Disruptive effects of D digit expansion. D digit expansion, however, raises significant implementation concerns. The record reveals that implementation of this measure will require significant and costly technical modifications to switches, operations support systems, and customer premises equipment. Moreover, since service providers may be using these NXXs for intra-network use, they will need to develop an alternate technical solution. Furthermore, a call may not be completed if this measure is not implemented by all service providers in a timely manner. MCI WorldCom further asserts that adoption of this measure would preclude significant options for long-term expansion of the NANP. 129. National policy. We note that most commenters who addressed this issue oppose the expansion of the D digit because of implementation concerns. One commenter also recommends that the Commission preclude states from requiring the expansion of the D digit to preserve national flexibility to devise long-term alternatives for NANP expansion. Therefore, we seek further comment on the costs and benefits of expanding the D digit, and on whether we should mandate the adoption of this measure at the national level to ensure its effectiveness. We also seek comment on whether states should independently implement the expansion of the D digit as a numbering optimization measure at the present time. C. LNP-Based Solutions: Number Pooling 1. Background 130. Telephone number pooling addresses one of the causes of area code exhaust: the allocation of numbers in full central office code (NXX) blocks of 10,000. Historically, network routing mechanisms are based upon the understanding that geographic numbers are assigned on an NXX code basis and associated with a specific switch, and, correspondingly, that the network address to which the call must be routed is embedded in the first six digits (NPA-NXX) of the called number. Number pooling allows service providers in a given area to receive numbers in blocks smaller than 10,000 by breaking the association between the NPA-NXX and the service provider to whom the call is routed. Through number pooling, participating carriers can effectively share resources from NXX codes rather than receiving an entire NXX code at a time. 131. Once the association between the NPA-NXX code and the service provider is broken for purposes of call routing, an alternative to using the first six digits of the called number to route the call must be found. One alternative would be to perform seven-digit (NPA-NXX-X) or greater screening within each switch on calls to pooled numbers. The industry consensus view is that this method of call routing would be costly to implement, administratively burdensome and would result in an inefficient use of switch memory. The Location Routing Number (LRN) infrastructure supporting LNP provides a second, arguably more practical, alternative routing method. 132. Under the LRN method, a unique ten-digit number -- the "location routing number" or LRN -- is assigned to each central office switch to identify each switch in the network for call routing purposes. The LRN then serves as a network address. When an individual telephone number is ported, a record associating the ported number with the LRN of the appropriate service provider's switch is created and stored in the former carrier's LNP service control point (SCP) database, via downloads from the local Service Management System (SMS). Any service provider routing a call to the ported number would do so by querying the database to determine the LRN that corresponds to the dialed telephone number, and routing the call to the switch identified by that LRN. 133. The LRN database structure can also be used to route calls to customers who have been assigned telephone numbers from a pool, because, just like with ported numbers, the NPA- NXX of a pooled number no longer necessarily indicates the switch or service provider associated with the service. To facilitate call routing when LRN LNP is utilized for number pooling, the entire population of pooled numbers in the pooling area, and associated LRNs, must be stored in all of the LNP SCP databases that service providers use to store LRN information for numbers ported from their networks. Thus, number pooling can only be implemented where LRN LNP has been deployed. 134. The NANC Report proposed two different types of pooling: thousands-block pooling, in which carriers receive numbering resources in blocks of 1,000, and individual telephone number (ITN) pooling, in which carriers receive telephone numbers one at a time. In addition, the NANC proposed a numbering optimization method known as unassigned number porting (UNP). Although not technically a pooling method because carriers receive numbering resources from each other, rather than from a common pool overseen by a pooling administrator, the method is somewhat similar to ITN in that individual numbers are ported using the same network infrastructure (LNP) to route calls. 135. Initially, proposed pooling methodologies would be confined to a rate center, which denotes the smallest geographic area used to distinguish rate boundaries. That is, each rate center would contain a separate pool of numbering resources. In this manner, current wireline call rating mechanisms associating an NXX with a particular geographic area (i.e., rate center) can be maintained. Pooling, however, could be extended beyond the rate center if methods to eliminate the link between call rating and NXX codes using the SS7 network, as discussed in Section V.B.1., were implemented. 136. Thousands-block pooling. Thousands-block pooling involves the allocation of blocks of sequential telephone numbers within the same NXX code to different service providers, and possibly different switches, within the same rate center. All 10,000 numbers available in the NXX code are allocated within one rate center, but are allocated to multiple service providers in thousand-number blocks, instead to one particular service provider. Allocations are accomplished via a Pooling Administrator, who coordinates the allocation of numbers to a particular service provider with the Number Portability Administration Center (NPAC) SMS. 137. To implement thousands-block pooling, the industry has proposed employing the Intelligent Network/Advanced Intelligent Network (IN/AIN) system used for LNP. Use of this external database system for number pooling is described in detail as the NXX-X/LRN method in the INC Number Pooling Report. As noted above, to facilitate proper network routing in a thousands-block pooling environment, every service provider's existing LNP SCP database within the pooling area would store specific LRN routing information for thousand- number blocks within the same NXX. In addition, each service provider's LNP mechanisms would query their database for calls to pooled numbers allocated to other service providers. 138. With little exception, parties commenting on the LRN-based methods of numbering optimization strategies agree that a nationwide thousands-block pooling architecture could make more efficient use of NXX codes already allocated and those awaiting allocation. Given the potential benefits of a nationwide pooling architecture, we tentatively conclude that implementing thousands-block pooling in major markets is an important numbering resource optimization strategy that is essential to extending the life of the NANP. In this section of the Notice, we seek comment on how thousands-block pooling should be implemented. We believe that carriers should be required to participate in pooling in areas where the benefits of pooling outweigh the associated costs. We seek comment on how best to achieve this goal. 139. Individual telephone number pooling and unassigned number porting. Similarly, individual telephone number (ITN) pooling and unassigned number porting (UNP) involve the allocation of individual telephone numbers within the same NXX to different service providers, and possibly different switches, within the same rate center. As with thousands-block pooling, all 10,000 available numbers in an NXX code are allocated within one rate center, but individual telephone numbers may be allocated to different service providers. With ITN pooling, allocations would be accomplished via a Pooling Administrator, to coordinate the allocation of individual numbers to a particular service provider with the NPAC. With UNP, however, allocation of individual telephone numbers gener