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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the FCC 96-333 Federal Communications Commission Washington, D.C. 20554 ) In the Matters of ) ) Implementation of the Local Competition) Provisions of the Telecommunications Act) CC Docket No. 96-98 of 1996 ) ) Interconnection Between Local Exchange) Carriers and Commercial Mobile Radio ) CC Docket No. 95-185 Service Providers ) ) Area Code Relief Plan for Dallas and ) Houston, Ordered by the Public Utility)NSD File No. 96-8 Commission of Texas ) ) Administration of the North American ) CC Docket No. 92-237 Numbering Plan ) ) Proposed 708 Relief Plan and 630 ) Numbering Plan Area Code by Ameritech-)IAD File No. 94-102 Illinois ) ) SECOND REPORT AND ORDER AND MEMORANDUM OPINION AND ORDER Adopted: August 8, 1996 Released: August 8, 1996 By the Commission: Table of Contents Section: Paragraph: I. INTRODUCTION AND OVERVIEW . . . . . . . . . . . . . . . . . . . . . .1 A. Actions to Implement Section 251(b)(3). . . . . . . . . . . . . . . 4 1. Dialing Parity. . . . . . . . . . . . . . . . . . . . . 4 2. Nondiscriminatory Access. . . . . . . . . . . . . . . . . . . 12 B. Actions to Implement Section 251(c)(5) . . . . . . . . . . . . 16 C. Actions Taken to Implement Section 251(e) . . . . . . . . . . 18 II. DIALING PARITY REQUIREMENTS. . . . . . . . . . . . . . . . . . . 22 A. In General . . . . . . . . . . . . . . . . . . . . . . . . . 22 1. The Need for Minimum Nationwide Dialing Parity Standards . . 23 a. Background and Comments. . . . . . . . . . . . . . . . . . . 23 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 25 2. Scope of the Dialing Parity Requirements . . . . . . . . . . 26 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 26 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 27 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 29 B. Implementation of the Toll Dialing Parity Requirements . . . 31 1. Presubscription Method of Achieving Toll Dialing Parity. . . 31 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 31 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 33 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 34 2. Categories of Domestic, Long Distance Traffic Subject to Presubscription . . . . . . . . . . . . . . . . . . . . . . . . 35 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 35 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 36 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 37 3. Separate Presubscription for International Calls . . . . . . 43 a. Background and Comments. . . . . . . . . . . . . . . . . . . 43 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 45 4. Full 2-PIC Presubscription Method . . . . . . . . . . . . . 46 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 46 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 48 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 49 5. Deployment of Presubscription Software in Each End Office. . 51 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 51 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 52 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 54 C. Implementation Schedule for Toll Dialing Parity. . . . . . . 55 1. Background and Comments. . . . . . . . . . . . . . . . . . . 55 2. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 59 D. Implementation of the Local Dialing Parity Requirements. . . 64 1. In General . . . . . . . . . . . . . . . . . . . . . . 64 a. Background. . . . . . . . . . . . . . . . . . . . 64 b. Comments. . . . . . . . . . . . . . . . . . . . . 65 c. Discussion . . . . . . . . . . . . . . . . . . . 67 2. Local Dialing Parity Methodologies . . . . . . . . . . . . . 69 a. Background and Comments . . . . . . . . . . . . . . . . 69 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 71 3. Non-Uniform Local Calling Areas. . . . . . . . . . . . . . . 72 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 72 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 73 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 75 E. Consumer Notification and Carrier Selection Procedures . . . 76 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 76 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 77 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 80 F. Cost Recovery. . . . . . . . . . . . . . . . . . . . . . . . 82 a. Background . . . . . . . . . . . . . . . . . . . . . . . . . 82 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 83 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 92 G. Unreasonable Dialing Delays. . . . . . . . . . . . . . . . . 96 III. NONDISCRIMINATORY ACCESS PROVISIONS. . . . . . . . . . . . . . . . 97 A. Definition of the Term "Nondiscriminatory Access". . . . . . 97 1. Background . . . . . . . . . . . . . . . . . . . . . . . . . 97 2. Comments . . . . . . . . . . . . . . . . . . . . . . . . . . 98 3. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 101 B. Nondiscriminatory Access to Telephone Numbers. . . . . . . 106 1. Definition . . . . . . . . . . . . . . . . . . . . . . . . 106 2. Commission Action to Enforce Access to Telephone Numbers . 107 C. Nondiscriminatory Access to Operator Services. . . . . . . 108 1. Definition of "Operator Services". . . . . . . . . . . . . 108 a. Background and Comments. . . . . . . . . . . . . . . . . . 108 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 110 2. Definition of "Nondiscriminatory Access to Operator Services" 112 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 112 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 113 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 114 3. Commission Action to Ensure Nondiscriminatory Access to Operator Services. . . . . . . . . . . . . . . . . . . . . . . . 119 a. Background and Comments. . . . . . . . . . . . . . . . . . 119 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 121 4. "Branding" Requirements for Operator Services. . . . . . . 123 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 123 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 126 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 128 D. Nondiscriminatory Access to Directory Assistance and Directory Listings 130 1. Definition of "Nondiscriminatory Access to Directory Assistance and Directory Listings". . . . . . . . . . . . . . . . . . . . . 130 a. Background . . . . . . . . . . . . . . . . . . . . . . . . .130 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 131 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 133 2. Commission Action to Implement Nondiscriminatory Access to Directory Assistance and Directory Listings. . . . . . . . . . . 138 a. Background and Comments. . . . . . . . . . . . . . . . . . 138 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 141 3. Branding of Directory Assistance . . . . . . . . . . . . . 146 a. Background and Comments. . . . . . . . . . . . . . . . . . 146 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 148 4. Alternative Dialing Arrangements for Directory Assistance. 149 a. Background and Comments . . . . . . . . . . . . . . . . . 149 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 151 E. Unreasonable Dialing Delay . . . . . . . . . . . . . . . . 152 1. Definition and Appropriate Measurement Methods . . . . . . 152 a. Background and Comments. . . . . . . . . . . . . . . . . . 152 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 156 2. Specific Technical Standard for Dialing Delay. . . . . . . 163 a. Background and Comments. . . . . . . . . . . . . . . . . . 163 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 164 IV. NETWORK DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . 165 A. Scope of Public Notice . . . . . . . . . . . . . . . . . . 166 1. Definition of "Information Necessary for Transmission and Routing" 166 a. Background and Comments. . . . . . . . . . . . . . . . . . 166 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 171 2. Definition of "Services" . . . . . . . . . . . . . . . . . 175 a. Background and Comments. . . . . . . . . . . . . . . . . . 175 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 176 3. Definition of "Interoperability" . . . . . . . . . . . . . 177 a. Background and Comments . . . . . . . . . . . . . . . . . 177 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 178 4. Changes that Trigger the Public Notice Requirement . . . . 179 a. Background and Comments. . . . . . . . . . . . . . . . . . 179 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 182 5. Types of Information to be Disclosed . . . . . . . . . . . 183 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 183 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 184 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 188 B. How Public Notice Should be Provided . . . . . . . . . . . 192 1. Dissemination of Public Notice Through Industry Fora and Publications . . . . . . . . . . . . . . . . . . . . . . . . 192 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 192 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 193 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 198 2. When Should Public Notice of Changes Be Provided?. . . . . 203 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 203 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 206 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 214 C. Relationship with other Public Notice Requirements and Practices. 237 1. Relationship of Sections 273(c)(1) and 273(c)(4) with Section 251(c)(5). . . . . . . . . . . . . . . . . . . . . . . . 237 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 237 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 238 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 240 2. Relationship of Sections 251(a) and 251(c)(5) with Section 256. 241 a. Background . . . . . . . . . . . . . . . . . . . . . . . . 241 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 242 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 244 D. Enforcement and Safeguards . . . . . . . . . . . . . . . . 245 1. Enforcement Mechanisms . . . . . . . . . . . . . . . . . . 245 a. Background and Comments. . . . . . . . . . . . . . . . . . 245 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 247 2. Protection of Proprietary Information, Network and National Security. . . . . . . . . . . . . . . . . . . . . . 249 a. Background and Comments. . . . . . . . . . . . . . . . . . .249 b. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .254 V. NUMBERING ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . .261 A. Designation of an Impartial Number Administrator . . . . . .262 1. Background . . . . . . . . . . . . . . . . . . . . . . . . .262 2. Comments . . . . . . . . . . . . . . . . . . . . . . . . . .263 3. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .264 B. Delegation of Numbering Administration Functions . . . . . .267 1. Delegation of Matters Related to Implementation of New Area.268 a. Background . . . . . . . . . . . . . . . . . . . . . . . . .268 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . .269 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .271 2. Area Code Implementation Guidelines. . . . . . . . . . . . .273 a. Background . . . . . . . . . . . . . . . . . . . . . . . . .273 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . .275 c. Discussion. . . . . . . . . . . . . . . . . . . . . . . . .281 3. Texas Public Utility Commission's Area Code Relief Order for Dallas and Houston. . . . . . . . . . . . . . . . . . . . . . . . . . . .294 a. Background . . . . . . . . . . . . . . . . . . . . . . . . .294 b. Petition and Comments. . . . . . . . . . . . . . . . . . . .295 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .304 4. Delegation of Additional Numbering Administration Functions.309 a. Background . . . . . . . . . . . . . . . . . . . . . . . . .309 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . .311 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .315 5. Delegation of Existing Numbering Administration Functions Prior to Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . .323 a. Background . . . . . . . . . . . . . . . . . . . . . . . . .323 b. Comments . . . . . . . . . . . . . . . . . . . . . . . . . .324 c. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .328 C. Cost Recovery for Numbering Administration . . . . . . . . .336 1. Background . . . . . . . . . . . . . . . . . . . . . . . . .336 2. Comments . . . . . . . . . . . . . . . . . . . . . . . . . .337 3. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .342 D. Section 271 Competitive Checklist Requirement that the BOCs Provide Non-Discriminatory Access to Numbers for Entry into In-region InterLATA Services . . . . . . . . . . . . . . . . . . . . . . . .344 1. Background . . . . . . . . . . . . . . . . . . . . . . . . .344 2. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .345 VI. FINAL REGULATORY FLEXIBILITY ANALYSIS. . . . . . . . . . . . . . . .346 A. Need for and Purpose of this Action. . . . . . . . . . . . .347 B. Summary of Issues Raised by the Public Comments in Response to the Initial Regulatory Flexibility Analysis . . . . . . . . . . . . .349 C. Description and Estimate of the Small Entities Subject to the Rules361 D. Summary of Projected Reporting, Recordkeeping and Other Compliance Requirements. . . . . . . . . . . . . . . . . . . . . .378 E. Report to Congress . . . . . . . . . . . . . . . . . . . . .398 VII. ORDERING CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . .399 List of Parties. . . . . . . . . . . . . . . . . . . . . . . . . Appendix A Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix B I. INTRODUCTION AND OVERVIEW 1. In February, 1996, Congress passed and the President signed into law, the Telecommunications Act of 1996 (1996 Act). The 1996 Act erects a "procompetitive, de- regulatory national framework designed to accelerate rapid private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition." Section 101 of the 1996 Act adds new section 251 to the Communications Act of 1934. Congress intended that the provisions of this new section would help competition grow in the market for exchange and exchange access and related telecommunications services. It directed the Commission to adopt rules that would implement the requirements of this section no later than August 8, 1996. We note, however, that, under section 251(f), certain rural or small local exchange carriers (LECs) are exempt or may seek relief from the rules we adopt herein. 2. We began this rulemaking proceeding on April 19, 1996. The First Report and Order, which addressed issues that were raised in this docket, decided that the Commission should establish national rules implementing section 251. The First Report and Order interprets and implements, inter alia, section 251(a), (b)(1), (b)(4), (b)(5), (c)(1), (c)(2), (c)(3), (c)(4), and (c)(6). That order promulgates rules to open the local exchange and exchange access markets to competition by eliminating legal and technical barriers to such competition. This Second Report and Order and Memorandum Opinion and Order (Order) promulgates rules to implement the parts of section 251 that relate to the elimination of certain operational barriers to competition. Specifically, this Order addresses local exchange carriers' obligations to provide their competitors with dialing parity and nondiscriminatory access to certain services and functionalities; incumbent local exchange carriers' duty to make network information disclosures; and numbering administration. In this Order we also deny the Petition for Expedited Declaratory Ruling on the area code relief plan for Dallas and Houston that the Texas Public Utility Commission (Texas Commission) filed with this Commission on May 9, 1996. We also address petitions for clarification or reconsideration in the Ameritech and NANP proceedings. 3. Dialing parity, nondiscriminatory access, network disclosure, and numbering administration issues are critical issues for the development of local competition. As stated in the First Report and Order, incumbent local exchange carriers have little incentive to provide access to potential competitors to their networks. In other words, potential competitors in the local and long distance markets face numerous operational barriers to entry notwithstanding their legal right to enter such markets. The dialing parity, nondiscriminatory access, and network disclosure requirements should remove those barriers to entry. The rules we adopt herein will benefit consumers by making some of the strongest aspects of local exchange carrier incumbency -- the local dialing, telephone numbers, operator services, directory assistance, and directory listing -- available to all competitors on an equal basis. A. Actions to Implement Section 251(b)(3) 1. Dialing Parity 4. Section 251(b)(3) of the 1996 Act directs each local exchange carrier (LEC) to provide dialing parity to competing providers of telephone exchange and telephone toll service. This requirement means that customers of these competitors should not have to dial extra digits to have their calls routed over that LEC's network. To implement this statutory requirement, we adopt broad guidelines and minimum federal standards that build upon the experiences and accomplishments of state commissions. Although the 1996 Act requires a LEC to provide dialing parity only to providers of telephone exchange and toll services, section 251(b)(3) does not limit the type of traffic or service for which dialing parity must be afforded to those providers. We conclude, therefore, that section 251(b)(3) requires LECs to provide dialing parity to providers of telephone exchange or toll service with respect to all telecommunications services that require dialing to route a call and encompasses international, interstate, intrastate, local and toll services. 5. With respect to toll service, we further find that section 251(b)(3) requires, at a minimum, that customers be entitled to choose different presubscribed, or preselected, carriers for both their intraLATA and interLATA toll calls. In states, like Alaska and Hawaii, that have no LATAs, customers must be able to choose different presubscribed carriers for both their intrastate and interstate toll calls. Based on this finding, we adopt a rule requiring all LECs to implement intraLATA and interLATA toll dialing parity, using the "full 2-PIC" presubscription method. The toll dialing parity requirement we adopt is defined by LATA boundaries given that the Bell Operating Companies' (BOCs') operations are likely to be shaped by LATA boundary restrictions for a period of unforeseeable duration. Given that implementation of the 1996 Act over time may diminish the significance of LATA boundaries, however, we permit states to redefine the toll dialing parity requirement based on state, rather than LATA, boundaries where a state deems such a requirement to be pro- competitive and otherwise in the public interest. 6. In order to facilitate the orderly implementation of toll dialing parity, we require each LEC, including a BOC, to submit a plan to the state regulatory commission for each state in which it provides telephone exchange service setting forth the LEC's plan for implementing toll dialing parity, including the methods it proposes to enable customers to select alternative providers. In the event that a state elects not to evaluate such a plan sufficiently in advance of the date on which a LEC is required to implement toll dialing parity, we require the LEC to file its plan with the Commission. The Commission will act upon such a plan within 90 days of the date on which it is filed with the Commission. 7. Under the toll dialing parity implementation schedule we adopt, we require each LEC, including a BOC, to implement toll dialing parity no later than February 8, 1999. In addition, we require a LEC, including a BOC, to provide toll dialing parity throughout a state coincident with its provision of in-region, interLATA or in-region, interstate toll services in that state. LECs, other than BOCs, that are either already offering or plan to begin to provide in-region, interLATA or in-region, interstate toll services before August 8, 1997, must implement toll dialing parity by August 8, 1997. We note that smaller LECs, for which this implementation schedule may be unduly burdensome, may petition their state commission for a suspension or modification of the application of this requirement. 8. Those states desiring to impose more stringent presubscription methodologies, e.g., multi-PIC or smart-PIC, will retain the flexibility to impose such additional requirements. We also announce our intention to issue a Further Notice of Proposed Rulemaking addressing the technical feasibility and nationwide availability of a separate presubscription choice for international calling based on the use of multi-PIC or smart-PIC technologies. 9. Pursuant to the local dialing parity requirements of section 251(b)(3), we require a LEC to permit telephone exchange service customers, within a defined local calling area, to dial the same number of digits to make a local telephone call, notwithstanding the identity of the customer's or the called party's local telephone service provider. We decline at this time to prescribe additional guidelines to address the methods that LECs may use to accomplish local dialing parity given our finding that local dialing parity will be achieved upon implementation of the number portability and interconnection requirements of section 251, as well as the provisions requiring nondiscriminatory access to telephone numbers found in section 251(b)(3). 10. We also decline to adopt federal consumer education programs or procedures that would inform consumers of the existence of competitive telecommunications providers. Instead, we leave decisions regarding consumer education and carrier selection procedures to the states. We conclude that, in order to ensure that dialing parity is implemented in a pro- competitive manner, national rules are needed for the recovery of dialing parity implementation costs. 11. Section 271 of the 1996 Act requires BOCs to provide intraLATA toll dialing parity throughout a state coincident with the exercise of their authority to offer interLATA services originating within the state. BOC entry into the interLATA market is conditioned upon their offering "nondiscriminatory access to such services or information as are necessary to allow the requesting carrier to implement local dialing parity in accordance with the requirements of Section 251(b)(3)." 2. Nondiscriminatory Access 12. Section 251(b)(3) also requires all LECs to permit competing providers of telephone exchange service and toll service "nondiscriminatory access to telephone numbers, operator services, directory assistance and directory listings." We conclude that "nondiscriminatory access," as used in section 251(b)(3), encompasses both: (1) nondiscrimination between and among carriers in rates, terms and conditions of access; and (2) the ability of competing providers to obtain access that is at least equal in quality to that of the providing LEC. This definition of "nondiscriminatory access" in section 251(b)(3) recognizes the more general application of that section to all LECs, whereas section 251(c) places more specific duties upon incumbent LECs in terms of nondiscriminatory access. We conclude that the term "nondiscriminatory access to telephone numbers" requires all LECs to permit competing providers access to telephone numbers that is identical to the access the LEC provides to itself. 13. We conclude that the term "operator services," for purposes of section 251(b)(3), means any automatic or live assistance to a consumer to arrange for billing or completion, or both, of a telephone call. Such a definition includes busy line verification, emergency assistance, operator-assisted directory assistance, and any other such services used to arrange for the billing and/or completion of telephone calls. We further conclude that any customer of a telephone service provider that provides operator services should be able to obtain these services by dialing "0" or "0-plus the desired telephone number." If a dispute arises regarding a competitor's access to operator services, the burden will be upon the providing LEC to demonstrate, with specificity, that it has permitted nondiscriminatory access and that any disparity is not caused by network elements within its control. To the extent that operator services use any information services and adjuncts that are not "telecommunications services," of which resale is required under 251(b)(1), LECs are required to make available such services to competing providers in their entirety as a requirement of nondiscriminatory access under 251(b)(3). Finally, we find that the refusal of a LEC providing nondiscriminatory access to comply with reasonable requests of competing providers to "brand" resold operator services as those of the reseller, or to remove its brand, creates a presumption that the LEC is unlawfully restricting access to operator services. 14. We conclude that the requirement in section 251(b)(3) of nondiscriminatory access to directory assistance means that LECs that provide directory assistance must permit access to this service to competing providers that is at least equal in quality to the access that the LEC provides to itself. We impose obligations upon all LECs to satisfy the requirement of nondiscriminatory access to directory listings. If a LEC provides directory assistance, that LEC must permit competing providers to have access to its directory assistance, so that any customer of a competing provider can access any listed number on a nondiscriminatory basis, notwithstanding the identity of the customer's local service provider. Further, we require LECs to share directory listings with competing service providers, in "readily accessible" tape or electronic formats, upon request, and in a timely manner. To the extent that all or part of directory assistance services are not "telecommunications services," of which resale is required under 251(b)(1), LECs must make available such services in their entirety as part of their obligation to permit nondiscriminatory access to competing providers. This requirement thus extends to any information services and adjuncts used to provide directory assistance. Finally, as with the branding of resold operator services, we find that the refusal of a LEC providing nondiscriminatory access to directory assistance to "brand" resold directory assistance services as those of the reseller, or to remove its brand, creates a presumption that the LEC is unlawfully restricting access to directory assistance. 15. We also conclude that section 251(b)(3)'s requirement of nondiscriminatory access and its prohibition of unreasonable dialing delays applies to both the provision of local and toll dialing parity. We conclude that the dialing delay experienced by customers of a competing provider should not be greater than that experienced by customers of a LEC providing dialing parity or nondiscriminatory access, for identical calls or call types. Finally, we conclude that the statutory obligation to avoid unreasonable dialing delays places a duty on LECs that provide dialing parity, or nondiscriminatory access to operator services or directory assistance, to process all calls from competing providers on the same terms as calls from its own customers. B. Actions to Implement Section 251(c)(5) 16. In addition to the duties imposed by section 251(b)(3) on all LECs, new section 251(c)(5) imposes upon incumbent LECs the duty to "provide reasonable public notice of changes in the information necessary for the transmission and routing of services using that local exchange carrier's facilities or networks, as well as of any other changes that would affect the interoperability of those facilities or networks." We adopt broad guidelines to implement section 251(c)(5). We also specify how public notice must be made whenever an upcoming change may affect the way in which a competing service provider transmits, routes, or otherwise provides its services. 17. We conclude that "information necessary for transmission and routing" in section 251(c)(5) means any information in the incumbent LEC's possession that affects a competing service provider's performance or ability to provide either information or telecommunications services. We define "interoperability" as the ability of two or more facilities, or networks, to be connected, to exchange information, and to use the information that has been exchanged. C. Actions Taken to Implement Section 251(e) 18. New section 251(e)(1) restates the Commission's authority over matters relating to the administration of numbering resources by giving the Commission "exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States." This section also requires 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." Finally, section 251(e)(2) provides that the cost of establishing telecommunications numbering administration arrangements "shall be borne by all telecommunications carriers on a competitively neutral basis as determined by the Commission." In this Order, we address whether further action is required to create or designate an impartial entity to administer telecommunications numbering. We clarify the states' role in number administration, and provide direction to states wishing to use area code overlay plans. We also clarify how cost recovery for numbering administration will occur. We deny the petition for expedited declaratory ruling filed by the Texas Commission based on our finding that the Texas Commission's wireless-only area code overlay plan violates the guidelines set forth in our Ameritech Order. We authorize Bellcore and the incumbent LECs to perform number administration functions as they did prior to the enactment of the 1996 Act until such functions are transferred to the new North American Numbering Plan Administrator. 19. We conclude that we have taken appropriate action to designate an impartial number administrator pursuant to section 251(e)(1). We further conclude that the Commission should retain its authority to set policy with respect to all facets of numbering administration to ensure the creation of a nationwide, uniform system of numbering that is essential to the efficient delivery of interstate and international telecommunications services and to the development of a competitive telecommunications services market. While we retain this policy-making authority, we authorize the states to resolve matters involving implementation of new area codes subject to the guidelines set forth in this Order. 20. In this Order, we also prohibit the use of service-specific or technology-specific area code overlay plans. States may employ all-services overlays only if they also mandate 10-digit dialing for all local calls within the area affected by the area code change and ensure the availability of at least one central office code in the existing area code to every entity authorized to provide local exchange service in that area, including CMRS providers. 21. To fulfill the mandate of section 251(e)(2), we require that (1) only "telecommunications carriers," as defined in Section 3(44) of the 1996 Act, shall contribute to the costs of numbering administration; and (2) that such contributions shall be based on each contributor's gross revenues from its provision of telecommunications services reduced by all payments for telecommunications services and facilities that have been paid to other telecommunications carriers. II. DIALING PARITY REQUIREMENTS A. In General 22. With dialing parity a telephone customer can preselect any provider of telephone exchange service or telephone toll service without having to dial extra digits to route a call to that carrier's network. Until now, in most states, telephone customers wishing to have their intraLATA toll calls carried by a carrier other than their current provider of telephone exchange service had to dial a five- or seven-digit prefix or access code before dialing the called party's telephone number. Presubscription to a carrier other than a customer's telephone exchange service provider has not been an option for interstate, intraLATA toll calls or in most states for intrastate, intraLATA toll calls. In states where intrastate, intraLATA toll dialing parity is available, a customer may presubscribe to a carrier other than his or her provider of telephone exchange service and have all of that customer's intrastate, intraLATA toll calls carried by that selected carrier simply by dialing "1" plus the area code and telephone number of the called party. The section 251(b)(3) dialing parity obligation will foster vigorous local exchange and long distance competition by ensuring that each customer has the freedom and flexibility to choose among different carriers for different services without the burden of dialing access codes. 1. The Need for Minimum Nationwide Dialing Parity Standards a. Background and Comments 23. Section 251(b)(3) imposes on all LECs the "duty to provide dialing parity to competing providers of telephone exchange service and telephone toll service." In the NPRM, we sought comment on whether the Commission should adopt nationwide dialing parity standards and, if so, what those standards should be. 24. A majority of commenters urge the Commission to adopt uniform nationwide dialing parity guidelines, but commenters differ on how detailed such federal rules should be. For example, the Telecommunications Resellers Association maintains that specific national standards are needed to ensure that competing providers are able to utilize common network designs in multiple markets and to prevent incumbent LECs from "gaming" or "manipulating the processes" of the states. Ameritech urges the Commission to adopt "broad rules that afford sufficient flexibility to accommodate local conditions." Other commenters, such as Bell Atlantic, opposing the adoption of federal dialing parity standards, assert that the proponents of such standards have failed to demonstrate how they or consumers have been harmed by "locally tailored implementation" of dialing parity in the intraLATA toll markets. Without such a demonstration, argues Bell Atlantic, the Commission should not interfere with states' activities. Cincinnati Bell Telephone Company (CBT) likewise opposes federal standards, maintaining that so long as a state regulatory commission adopts a toll dialing parity arrangement that "offers consumers a choice from at least two carriers, one of which is the local exchange carrier, the requirements of the 1996 Act have been met." b. Discussion 25. We conclude that the purpose of the statutory dialing parity requirements -- to facilitate the introduction of competition in the local and toll markets -- is best served by the adoption of broad guidelines and minimum federal standards that build upon the states' experiences. We conclude that such minimum nationwide standards will facilitate competition to the extent that new entrants seeking to offer regional or national services will not be subjected to an array of differing state standards and timetables. We note that our conclusion to adopt nationwide dialing parity standards is consistent with our conclusion in the First Report and Order that nationwide standards to implement other section 251 provisions are necessary to facilitate competition by serving as a backdrop against which interconnection negotiations and arbitration can occur. We are persuaded that, contrary to the views of Bell Atlantic, the failure to adopt minimum federal standards would harm both new entrants and consumers by delaying the introduction of competition and imposing additional costs on competitors, including small entities, particularly when different network configurations are required in each market. We conclude that uniform standards -- in some cases minimum, uniform standards -- will speed competitive entry by more promptly opening the local and toll markets to competition. 2. Scope of the Dialing Parity Requirements a. Background 26. Under section 251(b)(3) a LEC must provide dialing parity only to competing providers of telephone exchange service and telephone toll service. The scope of the obligation to provide dialing parity, however, is not limited to a particular type of traffic or service. Section 251(b)(3) makes no distinction among international, interstate and intrastate traffic for purposes of the dialing parity provisions. The statutory definition of "dialing parity" also contains no such distinctions and, instead, speaks generally in terms of the provision of "telecommunications services" by "a person that is not an affiliate of a local exchange carrier." Based on the absence of any such distinctions in defining the scope of the dialing parity requirements, the NPRM tentatively concluded that section 251(b)(3) creates a duty to provide dialing parity to competing providers of telephone exchange service and telephone toll service with respect to all telecommunications services that require dialing to route a call, and encompasses international as well as interstate and intrastate, local and toll services. b. Comments 27. Numerous parties express support for the Commission's tentative conclusion. Several parties qualify their support for this conclusion, however, by asserting that the duty to provide dialing parity to competing providers of telephone toll service applies to international calls only to the extent that it entitles a customer to route automatically, without the use of an access code, all of the customer's international calls to his or her presubscribed interLATA long distance carrier. These parties maintain that section 251(b)(3) does not require LECs to provide customers a separate presubscription choice for international calling. 28. A broad range of parties also support the tentative conclusion that section 251(b)(3) imposes a duty on the LEC to provide both local and toll dialing parity. Two parties reject this tentative conclusion, arguing that the dialing parity requirements apply only to local calling and do not extend to toll services. Specifically, Lincoln Telephone and the Pennsylvania Commission contend that Congress addressed toll dialing parity only in section 271(e)(2) of the 1996 Act as it relates to the conditions under which a BOC may enter the in- region, interLATA toll business and question the Commission's authority to implement toll dialing parity requirements. U S WEST similarly argues that section 251(b)(3) imposes only a duty to provide local dialing parity and suggests that the only affirmative obligation to provide toll dialing parity is contained in the equal access provisions of section 251(g) of the 1996 Act, which, U S WEST states, applies only to the BOCs and GTE. Lincoln Telephone makes the additional argument that competitive providers wishing to enter the intraLATA toll market should be required to "share responsibility for serving the entire LATA, rather than simply selecting the lowest cost customers from the most profitable exchanges without regard to that practice's effect on other customers." The imposition of such a requirement, according to Lincoln Telephone, would "reflect a commitment to affordable universal service." c. Discussion 29. We adopt our tentative conclusion that section 251(b)(3) creates a duty to provide dialing parity to competing providers of telephone exchange service and telephone toll service with respect to all telecommunications services that require dialing to route a call, and encompasses international as well as interstate and intrastate, local and toll services. We note that section 251(b)(3) does not limit the types of traffic or services for which dialing parity must be provided to competing providers of telephone exchange and telephone toll service. The reference to these types of providers clearly shows that dialing parity must be provided for exchange service and toll service. Nothing in the statutory language limits the scope of the dialing parity obligation to exchange and toll services or distinguishes among the various types of telecommunications services in imposing the dialing parity obligations. This conclusion is further supported by the statutory definition of dialing parity insofar as it refers to the provision of "telecommunications services" generally without distinction among various types of telecommunications services. In addition, we are not persuaded that section 251(g) relieves certain LECs of the duty to provide toll dialing parity. That section contains no reference or cross reference to dialing parity or to section 251(b)(3). Section 251(g) preserves the equal access obligations already imposed on the BOCs and GTE, but does not exempt them or other LECs from the toll dialing parity requirements. Finally, we note that CMRS providers are not required to provide dialing parity or nondiscriminatory access under section 251(b)(3) because the Commission has not determined that CMRS providers are LECs and section 332(c) of the Communications Act of 1934 provides that a "person engaged in the provision of commercial mobile services . . . shall not be required to provide equal access to common carriers for the provision of toll services." 30. Finally, concerning Lincoln Telephone's proposal to require competitive providers of intraLATA toll service to serve an entire LATA, rather than merely certain low cost customers within a LATA, we note that Lincoln Telephone, in essence, is asking us to condition a carrier's receipt of dialing parity upon that carrier's assuming the obligation of an "eligible" telecommunications carrier. We find neither the language of section 251(b)(3) nor its legislative history supports the conclusion that Congress intended to condition a carrier's right to receive the benefits of dialing parity upon its assuming the obligations of an eligible telecommunications carrier. The issue of encouraging carriers to provide universal service throughout a service territory is beyond the scope of this proceeding. Also, for the Commission to make LATA-wide or state-wide service a precondition of entry into that LATA or state would be to erect a major legal barrier to entry, particularly for smaller telecommunications services providers, that is contrary to the basic thrust of the 1996 Act. B. Implementation of the Toll Dialing Parity Requirements 1. Presubscription Method of Achieving Toll Dialing Parity a. Background 31. The statutory definition of dialing parity provides that the customer must have the ability to choose "from among 2 or more telecommunications services providers (including such local exchange carrier)." The definition also provides that customers must be able to exercise this choice by being able "to route automatically without the use of access codes, their telecommunications to the telecommunications services provider of the customer's designation." Thus, LECs are precluded from relying on access codes as a means of providing dialing parity to competitive service providers. The 1996 Act, however, does not specify what methods should be used to implement dialing parity. The NPRM tentatively concluded that presubscription represents the most feasible method of achieving dialing parity in long distance markets consistent with the statutory definition of dialing parity and sought comment as to this tentative conclusion. In this context, the NPRM defined "presubscription" as the process by which a customer preselects a carrier to which all of a particular category or categories of calls on the customer's line will be routed automatically. 32. As stated in the NPRM, presubscription to a carrier other than the customer's local exchange carrier has not been available for interstate, intraLATA toll calls nor has it been available in most states for intrastate, intraLATA toll calls. Instead, LECs automatically carry these calls rather than routing them to a presubscribed carrier of the customer's choice. If the state from which the customer is calling has authorized competition, but has not ordered presubscription in the intraLATA toll market, a customer wishing to route an intraLATA toll call to an alternative carrier typically must dial the carrier access code of the alternative carrier. b. Comments 33. Nearly all parties concur in the Commission's tentative conclusion that presubscription represents the most feasible method of achieving toll dialing parity consistent with the statutory definition of dialing parity. PacTel and Lincoln Telephone suggest that presubscription is not required to achieve toll dialing parity so long as customers can reach competing toll carriers through the use of carrier access codes. Finally, BellSouth argues that the toll dialing parity requirement is satisfied by "removing the intraLATA default to the incumbent LEC, thus assuring that no additional digits need to be dialed in order to reach carriers competing with the incumbent LEC for intraLATA toll service." BellSouth further argues that the Commission should confirm that such arrangements are consistent with the statutory dialing parity requirements. c. Discussion 34. We adopt our tentative conclusion that the dialing parity requirement for toll calling can best be achieved through presubscription because that method would enable customers to route a particular category of traffic to a preselected carrier without having to dial access codes. We note that the use of access codes to route calls among competing providers of telephone toll service is precluded under the statutory definition of dialing parity. Accordingly, we disagree with those parties who contend that toll dialing parity can be achieved through the use of access codes in a manner that is consistent with the statutory definition of dialing parity. We also cannot conclude that the toll dialing parity requirement is satisfied by removing the intraLATA default, as BellSouth maintains. Removing the intraLATA default would not satisfy the toll dialing parity requirement unless the LEC also uses the full 2-PIC presubscription methodology discussed below. 2. Categories of Domestic, Long Distance Traffic Subject to Presubscription a. Background 35. In the NPRM, the Commission sought comment as to the categories of long distance traffic (e.g., intrastate, interstate, and international traffic) for which a customer should be entitled to choose presubscribed carriers. The NPRM also sought comment on specific alternative methods for implementing local and toll dialing parity, including various forms of presubscription, in the interstate and intrastate long distance and international markets, that are consistent with the statutory requirements set forth in the 1996 Act. b. Comments 36. Most parties appear to agree that customers should be entitled to presubscribe to two separate carriers for their toll calling. There is a lack of consensus in the record, however, regarding how the Commission should define the presubscription requirement. USTA, for example, argues that "[a]ll telecommunications carriers, including LECs, should be permitted to define the scope of local service and toll service in response to market forces." USTA further argues that the "relevant distinction, for the long term, will be between intrastate and interstate toll traffic." Sprint, on the other hand, argues in favor of maintaining a presubscription requirement based on LATA boundaries and recommends that customers continue to be allowed to choose separate intraLATA and interLATA toll carriers. Sprint urges us to maintain the LATA distinction, asserting that "competition over the past 12 years has developed around the LATA concept, and presubscription has for the most part already occurred along these lines." c. Discussion 37. With respect to toll service, we conclude that section 251(b)(3) requires, at a minimum, that customers be entitled to choose presubscribed carriers for their intraLATA and interLATA toll calls. Because of the variations that exist among LATA boundaries and toll traffic within, and among, the various states, we have also concluded that each state should have the opportunity to determine whether customers should be able to presubscribe to carriers for intrastate toll service and for interstate toll service in lieu of the intraLATA and interLATA toll presubscription dichotomy that we have established as a minimum nationwide standard at this time. Although toll dialing parity typically has been based on LATA boundaries in multi-LATA states where it has been implemented, we do not impose a requirement that toll dialing parity be based only on LATA boundaries given our expectation that implementation of the 1996 Act eventually will diminish the significance of LATA boundaries. We are aware that BOCs remain subject to certain LATA boundary restrictions for at least the near-term and that some BOCs may find it technically infeasible, or otherwise undesirable, to implement toll dialing parity based on state boundaries. We thus conclude that states should be able to take the relevance of those factors into account, where applicable, and have the flexibility to require that toll dialing parity implementation be based on state boundaries where they determine that implementing toll dialing parity on the basis of state boundaries would be pro-competitive and otherwise in the public interest. In Alaska and Hawaii, states with no LATAs, toll dialing parity will continue to be based on state boundaries. 38. We also direct each LEC to submit to the state regulatory commission for each state in which it provides telephone exchange service the LEC's plan for implementing toll dialing parity. That plan must contain detailed implementation information, including the proposed date for dialing parity implementation for that exchange that the LEC operates in each state, and the method it proposes for enabling customers to select alternative providers of telephone toll service. For a LEC, other than a BOC, the plan also must identify the LATA with which the LEC proposes to associate. 39. We find that the states are best able to evaluate implementation plans in a way that will avoid service disruptions for subscribers and promote competition in the intrastate toll market. A LEC must first obtain state approval of its implementation plan before it implements toll dialing parity. If the LEC determines that a state commission elects not to evaluate the LEC's toll dialing parity implementation plan for that state sufficiently in advance of the date on which a LEC is required to implement toll dialing parity pursuant to the Commission's rules, we direct the LEC to file its plan with the Commission. The Commission will release a public notice of any such LEC filings, in order to give interested parties an opportunity to comment. The LEC's plan will be deemed approved on the fifteenth day following release of the Commission's public notice unless, no later than the fourteenth day following the release of the Commission's public notice, either: (1) the Common Carrier Bureau notifies the LEC that its plan will not be deemed approved on the fifteenth day; or (2) an opposition to the plan is filed with the Commission and served on the LEC that filed the plan. The opposition must state specific reasons why the plan does not serve the public interest. 40. If one or more oppositions are filed, the LEC that filed the plan will have seven additional days (i.e., until no later than the twenty-first day following the release of the Commission's public notice) within which to file a reply to the opposition(s) and serve it on all parties that filed oppositions. The response shall: (a) include information responsive to the allegations and concerns identified by the opposing party; and (b) identify possible revisions to the plan that will address the opposing party's concerns. In the case of such contested toll dialing parity plans, the Common Carrier Bureau will act on the plan within ninety days of the date on which the Commission released its public notice. In the event the Bureau fails to act within 90 days, the plan will not go into effect pending Bureau action. If the plan is not contested but did not go into effect on the fifteenth day after the Commission released its public notice, and the Common Carrier Bureau fails to act on the plan within ninety days of the date on which the Commission released its public notice, the plan will be deemed approved without further Commission action on the ninety-first day after the date on which the Commission released its public notice of the plan's filing. 41. A LEC's plan may not accomplish toll dialing parity by automatically assigning toll customers to itself, to a customer's currently presubscribed interLATA or interstate toll carrier, or to any other carrier except when, in a state that already has implemented intrastate, intraLATA toll dialing parity, the subscriber has selected the same intraLATA and interLATA presubscribed carrier. Finally, when LATA boundaries encompass parts of two adjacent states, we permit the LEC to implement in each state the procedures that that state approved for implementing toll dialing parity within its borders. If a state commission elects not to evaluate the LEC's intrastate toll dialing parity plan, we direct the LEC to file both its intrastate toll dialing plan and its interstate toll dialing plan with the Commission. The plans will be acted on in accordance with the procedures outlined above. 42. We note that the minimum intraLATA/interLATA toll presubscription requirement that we adopt in this Order is necessarily an interim measure. Specifically, we expect that the development of the "multi-PIC" or "smart-PIC" presubscription methodology will enable customers to presubscribe to multiple carriers for various categories of long-distance calling. Thus, in time, we anticipate that service markets, and the presubscription requirement in particular, will be defined by technological, economic and marketing considerations and that LATA or state boundary distinctions will diminish for purposes of the toll dialing parity requirements. As the record before us provides an inadequate basis for adopting more specific requirements now, we intend to monitor developments in this area and issue a Further Notice of Proposed Rulemaking to address these long range considerations so that end users will be able to preselect alternative providers for operator services, directory assistance, international and other services. 3. Separate Presubscription for International Calls a. Background and Comments 43. The NPRM sought comment on whether customers should be entitled to choose a presubscribed carrier for international calls and on what Commission action, if any, is necessary to implement dialing parity for such calls. 44. Most parties maintain that the 1996 Act does not require, and the Commission should not mandate, a separate presubscription choice for international calling. Several parties take the position that the toll dialing parity requirement applies to international calling only to the extent that it entitles a customer to route automatically without the use of an access code the customer's international calls to the customer's presubscribed interLATA carrier. A number of parties contend that the technology required to support a separate presubscription choice for international calling, the so-called multi-PIC or smart-PIC methodology, is not currently available. USTA suggests that the cost of providing a separate presubscription choice for international calling should be weighed against the amount of customer demand for such an option, and the harm to consumers that may result from a potentially greater number of unauthorized carrier changes. AT&T, Ameritech, Sprint and the Indiana Commission urge the Commission to revisit the issue of a separate presubscription choice for international calling only after it is demonstrated to be technically and economically feasible. b. Discussion 45. While we believe that a separate presubscription choice for international calling is consistent with the intent of the 1996 Act because it could foster additional carrier competition, we recognize that technical limitations preclude our imposing such a nationwide requirement at this time. To the extent that such a capability becomes technically feasible and is ordered in a particular state, we find that the deployment of a separate presubscription choice for international calling is consistent with the 1996 Act. We will address in a further notice at a future date the issue of how soon a separate presubscription choice for international calling will be technically feasible on a nationwide basis. 4. Full 2-PIC Presubscription Method a. Background 46. In the NPRM, the Commission sought comment as to whether the Commission should adopt a nationwide presubscription methodology for implementing the toll dialing parity requirements. The NPRM also noted that states have adopted a variety of intraLATA toll dialing parity requirements and implementation methodologies. 47. Among the presubscription methodologies that states have examined are the "modified 2-PIC," the "full 2-PIC," and the "multi-PIC" or "smart-PIC" methods. The modified 2-PIC method generally allows a customer to presubscribe to a telecommunications carrier for all interLATA toll calls and to presubscribe to either the customer's presubscribed interLATA carrier or the customer's local exchange carrier for all intraLATA toll calls. The full 2-PIC method generally allows customers to presubscribe to a telecommunications carrier for all interLATA toll calls and to presubscribe to another telecommunications carrier (including, but not limited to, the customer's local exchange carrier) for all intraLATA toll calls. The multi-PIC or smart-PIC methods, as known today, would allow customers to presubscribe to multiple carriers, each one of which would be selected to transport a specified component of toll traffic. b. Comments 48. Nearly all parties favor adoption of the full 2-PIC method. Few parties favor deploying the modified 2-PIC method. Likewise, few commenters favor immediate deployment of the multi-PIC method. Several parties suggest that the multi-PIC or smart- PIC methodology and technology may warrant consideration in the future, but is currently unavailable. Others maintain that the Commission should conclude that the 2-PIC approach is consistent with the 1996 Act based on the theory that the 1996 Act does not require more than a two-PIC capability to achieve toll dialing parity. c. Discussion 49. We adopt in this Order the full 2-PIC method as the minimum presubscription standard. Under our rules and pursuant to section 251(d)(3), however, state commissions may impose more stringent presubscription requirements, such as multi-PIC or smart-PIC. 50. We adopt the full 2-PIC method as the minimum presubscription standard at this time for several reasons. We conclude that, as compared with the modified 2-PIC method, the full 2-PIC method will maximize choice for consumers and open the long-distance telecommunications markets to a greater number of competitive services providers, including smaller providers, and thus is more consistent with the congressional objectives underlying enactment of section 251(b)(3). Second, this method clearly is preferred by the majority of state regulators and telecommunications service providers. Third, as compared with the multi-PIC method, the technology for the full 2-PIC method is widely available and well defined. By contrast, there is no evidence in the record to support a finding that the technical and economic feasibility of the multi-PIC method has been demonstrated on a nationwide basis. We conclude that this national standard should speed competitive entry into the intraLATA and intrastate toll markets while providing states that are considering a more stringent presubscription method, i.e., multi-PIC or smart-PIC, flexibility to impose such additional requirements. Until the Commission considers the issue of multi-PIC or smart-PIC methods in a further notice, we believe that the states are best situated to evaluate the technical feasibility and economic impact of such methods on LECs, including smaller LECs, in their jurisdictions. 5. Deployment of Presubscription Software in Each End Office a. Background 51. With end office equal access, presubscription software is installed at each end office switch within the LEC's service areas. Toll calls are then directly routed at each end office switch to the presubscribed provider of telephone toll service. With centralized equal access, presubscription software is installed at a central tandem switch location. With the latter, toll calls are routed from an end office to a tandem switch for presubscription information. Providers of telephone toll service may connect at the tandem to receive this traffic rather than at each individual end office that is associated with the tandem. b. Comments 52. MCI raises the issue of whether presubscription software should be deployed in each end office or at a single tandem location and proposes that the Commission require end office equal access rather than centralized equal access. Specifically, MCI argues that end office equal access represents a superior form of access to the extent that it enhances redundancy and reduces post dial delays. Centralized equal access should not be permitted, MCI maintains, insofar as that approach requires that all end offices receive the equal access features from the tandem and any interruption in service from the tandem can affect a larger number of subscribers on the system. In addition, because calls are routed from the end office to the tandem and back, MCI contends that centralized equal access would result in significant post-dial delay. MCI does suggest, however, that in areas that "would not otherwise convert to interLATA or intraLATA equal access, centralized equal access provides consumers at least a limited form of carrier choice." 53. Two commenters who are centralized equal access providers oppose MCI's position. Specifically, Iowa Network Services and MIEAC counter that centralized equal access is not inferior to end office equal access and repeatedly has been found to serve the public interest by the Commission and numerous state regulatory commissions. MIEAC takes issue with MCI's argument that centralized equal access is inferior to end office equal access, noting that recent technological advances, and the use of SS7 trunk signaling, in particular, have improved call set up times and reduced post dial delay. Iowa Network Services calls the argument that centralized equal access provides less network redundancy a "red herring" and notes its recent installation of a redundant fiber ring facility to connect its participating exchanges, which will allow instant rerouting of traffic in the case of a facilities equipment failure. Iowa Network Services also operates a "diversity access tandem" that provides switch redundancy should its primary tandem fail. MIEAC argues that centralized equal access networks fully comply with the toll dialing parity requirement of section 251(b)(3) insofar as these networks support 2-PIC presubscription. Finally, MIEAC and Iowa Network Services contend that centralized equal access represents an appropriate method of providing equal access in rural areas where it otherwise would not be technically or economically feasible. c. Discussion 54. The issue of presubscription software deployment was not raised in the NPRM and, as a result, few commenters address it. We conclude that the record is not sufficient for us to require LECs, pursuant to section 251(b)(3), to provide end office equal access rather than centralized equal access to competing providers of telephone toll service. No specific information is provided, let alone consensus reached in this record, on such threshold issues as the technical and economic feasibility of placing the software in one location over another. We note that while MCI and Iowa Network Services disagree generally on the benefits of deployment locations, neither addresses such important implementation issues as whether different switching equipment owned by various companies might provide obstacles to deployment, or the relevant costs associated with one deployment scheme over another. Iowa Network Services, we further note, does not address how its proposal would comport with the Commission's generally prescribed requirement under which most LECs are required to implement equal access at end offices. Based on the reasons stated above, and based on our concern regarding the harm that could come to small telecommunications services providers if we adopt MCI's proposal, we decline to adopt at this time a requirement prescribing the location for deployment of presubscription software under section 251(b)(3). C. Implementation Schedule for Toll Dialing Parity 1. Background and Comments i. Timetable for BOCs 55. Section 271(e)(2)(A) requires a BOC to provide intraLATA toll dialing parity throughout a state "coincident with" its exercise of authority to provide in-region, interLATA services in that state. Section 271(e)(2)(B) precludes most states from imposing intraLATA toll dialing parity requirements on a BOC before the earlier of the date on which a BOC is authorized to provide in-region, interLATA services in a state or three years from the date of enactment of the 1996 Act. The NPRM sought comment on what implementation schedule should be adopted for all LECs. 56. The BOCs generally argue that section 271(e)(2) establishes the relevant implementation schedule for all BOCs and, thereby, obviates the need for a nationwide implementation schedule for BOCs. For example, Ameritech argues that, except in single- LATA states and where a state has previously ordered intraLATA presubscription, section 271(e)(2) requires a BOC to implement intraLATA toll dialing parity "coincident with its exercise of in-region, interLATA authority" or three years after enactment of the 1996 Act. Other parties urge the Commission to require BOCs to implement toll dialing parity in advance of these dates on the theory that only the states, and not the Commission, are constrained by the limitations in section 271(e)(2)(B). Frontier suggests that the Commission mandate that dialing parity be made available immediately for interstate, intraLATA toll calls. AT&T asserts that "except as provided in Section 271(e)(2)(B), the Commission should require all Tier 1 LECs to implement dialing parity, utilizing the Full 2- PIC method, by January 1, 1997." NYNEX maintains that the Commission should recognize and give effect to state orders granting deferrals or waivers of the toll dialing parity requirements. ii. Timetable for all other LECs 57. For all other LECs, other than BOCs, the 1996 Act provides no timetable for implementing toll dialing parity. The NPRM sought comment on what implementation schedule should be adopted for all LECs. 58. USTA argues that there is no need for a uniform implementation schedule and suggests that the Commission permit states to adopt their own timetables. PacTel similarly opposes our adoption of an implementation schedule and advocates that all LECs be permitted to design their own schedules based on "local conditions and state requirements." In contrast, MCI urges the Commission to adopt an implementation schedule based on the concern that incumbent LECs, if permitted to design their own timetables, would delay implementation because they lack incentive to implement dialing parity quickly. TCC proposes that non-BOC incumbent LECs should be required to provide toll dialing parity by no later than January 1, 1997. NECA argues that a LEC's obligation to provide dialing parity should be triggered only upon the receipt of a bona fide request from a competitive toll provider. Finally, MFS suggests that incumbent LECs be required to implement intraLATA toll dialing parity within a year of the effective date of the rules, or by the date previously ordered by a state commission. MFS also asks the Commission to adopt rules specifying that in any geographic area where a BOC is not required to provide intraLATA presubscription pursuant to section 271(e)(2)(A), no other LEC in that geographic area will be required to provide toll dialing parity until the BOC is required to provide it. 2. Discussion 59. As discussed above, we require all LECs to provide intraLATA and interLATA toll dialing parity no later than February 8, 1999. In addition, we require a LEC, including a BOC, to provide toll dialing parity throughout a state based on LATA boundaries coincident with its provision of in-region, interLATA or in-region, interstate toll services in that state. As discussed below, for non-BOC LECs that currently are providing, or within a year of release of this Order begin to provide, in-region, interLATA or in-region, interstate toll service, we provide a grace period during which those LECs will be able to provide such toll service before having to provide toll dialing parity to their customers. Moreover, non-BOC LECs that implement intraLATA and interLATA toll dialing parity may choose whichever LATA within their state that they deem to be most appropriate to define the area within which they will offer intraLATA toll dialing parity. State commissions in ruling upon such a choice of LATA association shall determine whether the proposed LATA association is pro- competitive and otherwise in the public interest. We note, however, as discussed above, that states may redefine the toll dialing parity requirement based on state, rather than LATA, boundaries where a state deems such a requirement to be pro-competitive and otherwise in the public interest. 60. We decline to adopt the recommendations of parties that urge us to require BOCs to provide toll dialing parity in a state before the earlier of the date on which those BOCs receive authority to provide in-region, interLATA services in that state or February 8, 1999. Subject to the requirements of the 1996 Act, we do, however, authorize states to determine whether a more accelerated implementation schedule should be utilized for LECs operating within their jurisdictions. Where a state issued an order by December 19, 1995 requiring a BOC to implement toll dialing parity in advance of the implementation deadlines we establish, we do not intend to extend the toll dialing parity implementation deadline for the BOC beyond the implementation deadline established by that state. In addition, where a state issued an order prior to the release of this Order requiring a LEC, other than a BOC, to implement toll dialing parity in advance of the implementation deadlines we establish, we do not intend to extend the toll dialing parity implementation deadline for the LEC beyond the implementation deadline established by that state. 61. We further conclude that LECs, other than BOCs, that begin providing in-region, interLATA or in-region, interstate toll services before August 8, 1997, including LECs that currently offer such services, are not required to implement toll dialing parity until August 8, 1997. We do not mandate compliance with the toll dialing parity requirement by these LECs "coincident with" their provision of in-region, interLATA or in-region, interstate toll services because it would place certain carriers in violation of this order upon its release and would impose an unreasonably short timetable on others. To the extent that a LEC is unable to comply with the August 8, 1997 deadline, that LEC is required to notify the Commission's Common Carrier Bureau by May 8, 1997. The notification must state, in detail, the justification for the LEC's inability to comply by August 8, 1997 and set forth the date by which it will be able to implement toll dialing parity. Finally, we have considered the arguments of LECs that seek to make their toll dialing parity obligation contingent upon the receipt of a bona fide request and conclude that special implementation schedules for smaller LECs are unnecessary because these LECs may petition their state commission, pursuant to section 251(f)(2), for a suspension or modification of the application of the dialing parity requirements. 62. In summary, we establish the following toll dialing parity implementation schedule and filing deadlines for all LECs: (a) Each LEC, including a BOC, must implement intraLATA and interLATA toll dialing parity based on LATA boundaries no later than February 8, 1999. If the state commission elects not to evaluate a LEC's toll dialing parity implementation plan, the LEC must file that plan with the Commission not later than 180 days before February 8, 1999. (b) Except as provided in subparagraph (c) below, a LEC, including a BOC, that begins to provide in-region, interLATA toll services or in-region, interstate toll services in a state before February 8, 1999, must implement intraLATA and interLATA toll dialing parity based on LATA boundaries coincident with its provision of in-region, interLATA or in-region, interstate toll services. If the state commission elects not to evaluate its toll dialing parity implementation plan, the LEC must file such plan with the Commission not later than 180 days before the date on which it begins to provide in-region, interLATA toll services. (c) A LEC, other than a BOC, that begins to provide in-region, interLATA or in- region, interstate toll services in a state before August 8, 1997, must implement intraLATA and interLATA toll dialing parity based on LATA boundaries by August 8, 1997. If the LEC is unable to comply with this August 8, 1997, implementation deadline, the LEC must notify the Commission's Common Carrier Bureau by May 8, 1997. At that time it must state its justification for noncompliance by August 8, 1997, and set forth the date by which it will be able to implement toll dialing parity. If the state commission elects not to evaluate the LEC's toll dialing parity implementation plan, the LEC must file such plan with the Commission not later than 90 days after publication of this Order in the Federal Register. 63. We further conclude that the 1996 Act does not authorize the Commission to give effect to a state order that purports to grant a BOC a deferral, waiver or suspension of the BOC's obligation to implement dialing parity. We note that section 251(f)(2) provides procedures for suspending or modifying application of the dialing parity requirements only for certain LECs, i.e., those "with fewer than 2 percent of the Nation's subscriber lines installed in the aggregate nationwide." Given that section 251 contains no comparable procedures for larger LECs, we are persuaded that Congress intended the dialing parity requirements that we adopt pursuant to section 251(b)(3) to apply, without exception, to all LECs with 2 percent or more of the Nation's subscriber lines. D. Implementation of the Local Dialing Parity Requirements 1. In General a. Background 64. The NPRM tentatively concluded that, pursuant to section 251(b)(3), a LEC is required to permit telephone exchange service customers within a defined local calling area to dial the same number of digits to make a local telephone call, notwithstanding the identity of a customer's or the called party's local telephone service provider. The NPRM sought comment on this tentative conclusion. b. Comments 65. Nearly all parties concur with the Commission's proposed interpretation of the local dialing parity requirements of section 251(b)(3). Ameritech contends, however, that the 1996 Act requires only that local calls between competing LECs be dialed without the use of an access code. Ameritech states that, while the Senate version of the dialing parity provision would have required LECs to provide customers with the ability "to dial the same number of digits" when using any carrier providing telephone exchange and exchange access service in the same area, Congress narrowed the dialing parity obligation in the final legislation to require only that calls between competing LECs be dialed without the use of an access code. In response to Ameritech's proposed interpretation of the local dialing parity requirements, the Ohio Consumers' Counsel asserts that it does "not believe that consumers would see any real functional difference between having to dial extra digits and having to dial an access code" and, thus, urges that customers not be required to dial access codes or extra digits when using a competing provider's services. 66. Ameritech also asks the Commission to clarify that "the dialing parity obligation applies only to competing carriers that provide both telephone exchange service and telephone toll service (i.e., competing LECs)." Finally, USTA urges the Commission to clarify that section 251(b)(3) does not include an obligation to provide dialing parity to CMRS providers. USTA contends that the provision of dialing parity to CMRS providers by LECs would complicate implementation of "sender pays" arrangements that have been adopted in certain states if dialing parity were interpreted to preclude the use of extra digits and/or recorded announcements associated with a "sender pays" arrangement. USTA expresses concern that customers may receive bills for calling CMRS customers without advance notice that they are going to be billed for such calls. c. Discussion 67. We adopt our tentative conclusion that, pursuant to section 251(b)(3), a LEC is required to permit telephone exchange service customers within a defined local calling area to dial the same number of digits to make a local telephone call, notwithstanding the identity of a customer's or the called party's local telephone service provider. As we stated in the NPRM, we believe that this interpretation of the dialing parity requirement as applied to the provision of telephone exchange service would best facilitate the introduction of competition in local markets by ensuring that customers of competitive service providers are not required to dial additional access codes or personal identification numbers in order to make local telephone calls. We disagree with Ameritech's view that Congress intended only to preclude the use of access codes and did not intend to preclude the dialing of extra digits. The fact that Congress ultimately adopted a dialing parity definition that precludes "the use of any access code" does not constrain the Commission from precluding the dialing of extra digits, including access codes. Given that the statute does not define the term "access code," we conclude that our interpretation of the local dialing parity requirement will avoid potential disputes concerning what is and what is not an "access code." We are also persuaded by the argument advanced by the Ohio Consumers' Counsel that consumers would not perceive a functional difference between having to dial extra digits and having to dial an access code when using a competing provider's services. 68. We conclude that Ameritech's additional argument that the dialing parity obligation applies only to competing carriers that provide both telephone exchange service and telephone toll service, represents an impermissibly narrow reading of the statute. We find that the phrase "providers of telephone exchange service and telephone toll service" imposes an obligation on LECs to provide dialing parity to providers of solely telephone exchange service, to providers of solely telephone toll service, or to providers of both telephone toll and exchange service. We believe that this interpretation is consistent with both the language of the statute and Congress' intent to encourage the entry of new competitors in both the local and toll markets. We reject USTA's argument that the section 251(b)(3) dialing parity requirements do not include an obligation to provide dialing parity to CMRS providers. To the extent that a CMRS provider offers telephone exchange service, such a provider is entitled to receive the benefits of local dialing parity. Regarding USTA's argument that applying section 251(b)(3) in a way that benefits CMRS providers could complicate implementation of sender pays arrangements in some states, we conclude that the record before us is insufficient to determine whether, or under what circumstances, sender pays arrangements, including those requiring the dialing of extra digits or recorded announcements, are consistent with the 1996 Act. Although we do not intend to preclude the states from lawfully enforcing legitimate consumer protection policies that do not have an anticompetitive impact, we cannot conclude on this record that the arrangements USTA describes would be permissible. Finally, given our expectation that local dialing parity will be achieved through LECs' compliance with other section 251 requirements, we do not adopt a timetable for implementing the local dialing parity requirements. 2. Local Dialing Parity Methodologies a. Background and Comments 69. In the NPRM, we stated our expectation that the local dialing parity obligations would not be achieved through presubscription. Rather, we anticipated that a customer's ability to select a telephone exchange service provider and make local telephone calls without dialing extra digits will be accomplished through the unbundling, number portability and interconnection requirements of section 251. The NPRM sought information and comment as to how the local dialing parity requirement should be implemented. 70. The parties generally agree that local dialing parity will be accomplished through implementation of the unbundling, number portability and interconnection requirements of section 251. Parties add to this list the 1996 Act's equal access requirements. A few parties contend that local dialing parity is assured once competing providers of telephone exchange service are permitted nondiscriminatory access to telephone numbers. b. Discussion 71. We anticipate that local dialing parity will be achieved upon implementation of the number portability and interconnection requirements of section 251. We also concur with the view that the ability of competing local exchange service providers to receive telephone numbers on a nondiscriminatory basis is critical to the achievement of local dialing parity. We believe that the interconnection requirements that section 251(c)(2) imposes on incumbent local exchange carriers will reduce the likelihood that customers of a competing LEC will have to dial an access code to reach a customer of the incumbent LEC insofar as the two networks are connected. Number portability will ensure that customers switching local service providers will not need to dial additional digits to make local telephone calls. Likewise, allowing every telecommunications carrier authorized to provide local telephone service, exchange access, or paging service in an area code to have at least one NXX in an existing area code also reduces the potential local dialing disparity that may result if competing LECs can only give customers numbers from a new area code. We therefore decline to prescribe now any additional guidelines addressing the methods that LECs may use to accomplish local dialing parity. We also conclude that, contrary to the views expressed by some parties, the provision of nondiscriminatory access to telephone numbers, by itself, does not fulfill the local dialing parity mandate of section 251(b)(3). Given that acquisition of a central office code by a LEC would not necessarily ensure that the LEC's customers would be relieved of an obligation to dial extra digits, access codes or some other special dialing protocol, the provision of nondiscriminatory access to telephone numbers does not by itself ensure local dialing parity. Rather, we find that under section 251(b)(3) each LEC must ensure that its customers within a defined local calling area be able to dial the same number of digits to make a local telephone call notwithstanding the identity of the calling party's or called party's local telephone service provider. 3. Non-Uniform Local Calling Areas a. Background 72. The NPRM tentatively concluded that, pursuant to section 251(b)(3), a LEC is required to permit telephone exchange service customers within a defined local calling area to dial the same number of digits to make a local telephone call, notwithstanding the identity of a customer's or the called party's local telephone service provider. The NPRM did not address the potential dialing parity implications of non-uniform local calling areas nor did it address the potential impact of our proposed interpretation of the local dialing parity obligation on local calling area boundaries. b. Comments 73. A number of parties express concern about the potential interrelationship between our proposed interpretation of the local dialing parity requirements and local calling area boundaries. For example, WinStar cautions the Commission that by requiring that customers "within a defined local calling area" be able to dial the same number of digits to make a local telephone call, certain parties may interpret this to require that a competing provider of local exchange service must define its local calling area to match the local calling area of the incumbent LEC. GSA/DOD maintains that dialing is not truly at parity if different carriers have different definitions of the geographic areas in which calls can be made with seven-digit dialing. To address the potential dialing parity issue that may arise when a new entrant's "network coverage" is more limited than the incumbent LEC's, GSA/DOD recommends that the Commission adopt rules that ensure that local calling areas are consistently defined for LEC wholesale and retail services. 74. GTE contends that "[s]o long as new entrants have the technical ability to deploy equipment necessary to offer the same seven-digit dialing as the incumbent LEC, dialing parity should be deemed to exist even if one or more of the new entrants ultimately chooses to provide ten-digit dialing." To illustrate its point that all local calls cannot be dialed using the same number of digits, NYNEX notes that in the New York City Metro LATA local calls span three different area codes, with seven-digit dialing within an area code and ten-digit dialing between area codes. Finally, the Florida Commission expresses concern regarding the potential customer confusion that may result if customers in local calling areas are required to dial ten rather than the currently dialed seven digits to make local "Extended Calling Service" calls. c. Discussion 75. A telephone call requiring seven-digit dialing is not necessarily a local call and a telephone call requiring ten-digit dialing is not necessarily a toll call. Disparity in local dialing plans, by itself, does not contravene our interpretation of the local dialing parity requirements unless such plans are anti-competitive in effect. By requiring that all customers "within a defined local calling area" be able to dial the same number of digits to make a local telephone call, we do not intend to require a competing provider of local exchange service to define its local calling area to match the local calling area of an incumbent LEC. We further do not intend to require a competing provider of telephone exchange service that voluntarily chooses to provide ten-digit as opposed to seven-digit dialing in a local calling area to modify its dialing plan in this instance in order to conform to the dialing plan of another LEC. No other commenter addressed GSA's proposal that the Commission adopt rules that ensure that local calling areas are consistently defined for LEC wholesale and retail services. Therefore, we conclude that the record is insufficient to permit us to take such action at this time. E. Consumer Notification and Carrier Selection Procedures a. Background 76. Section 251(b)(3) does not specifically require that procedures be established to permit consumers to choose among competitive telecommunications providers (e.g., through balloting). The NPRM sought comment as to whether the Commission should require LECs to notify consumers about carrier selection procedures or impose any additional consumer education requirements. We also sought comment on an alternative proposal that would make competitive telecommunications providers responsible for notifying customers about carrier choices and selection procedures through their own marketing efforts. b. Comments 77. Several parties contend that the responsibility for consumer education should be borne, at least in part, by the incumbent LECs and claim that incumbent LECs are uniquely situated to assist in this function. Conversely, others maintain that responsibility for the notification and education of consumers should be imposed on the carriers seeking those customers' business, as part of those carriers' marketing efforts. GSA/DOD favors letting carriers "fight it out among themselves," noting that carriers themselves will have every incentive to make sure that prospective customers are aware of their choices. PacTel suggests that states are in the best position to assess the informational needs of their citizens. Several commenters express concern that any customer notification requirement must recognize that the details of any such notification plan should reflect local circumstances, including local carrier selection options, rates and dialing plans. Ameritech maintains that a "carrier-neutral customer notification of the toll dialing parity selection processes is in the public interest and should be a part of the implementation of any toll dialing parity plan." 78. While several commenters urge the Commission to adopt rules for balloting, the majority of parties urge us to reject this option. Parties that oppose balloting argue that such decisions should be left to the individual states and claim that balloting is confusing to customers, costly, and forces consumers to make selections before they might otherwise choose to do so. Commenters also argue that competition for customers will ensure that carriers notify customers as to how their services can be obtained. In stating its opposition to a balloting requirement, MFS observes that: the long-distance market today differs markedly from the situation in the mid- 1980's, when non-dominant carriers were virtually unknown to most consumers and balloting was mandated as a way of educating consumers to their ability to choose a carrier. No such education is needed today, because most consumers are well aware of their long-distance choices, and the carriers have readily available means of contacting those who are not. 79. Commenters also raised a number of issues related to consumer notification and carrier selection methods. For example, PacTel asserts that "the default carrier for both existing and new customers who do not actively choose an intraLATA toll provider should be the dial-tone provider." Sprint agrees that "existing customers who are currently obtaining intraLATA toll service from the dial tone provider, and do not indicate a desire to change carriers, should remain with that intraLATA toll provider." Sprint rejects PacTel's proposal, however, "to default new customers who do not choose an intraLATA toll provider to the dial tone provider." Concerning whether customers should be assessed a "PIC change charge" when they select an alternative provider of telephone toll or telephone exchange service, parties propose allowing customers a "grace period" during which they could switch carriers without charge. The Ohio Consumers' Counsel supports a cap on the cost of initiating both local and toll service with a new carrier, noting that a "customer's old carrier should not be able to impose an `exit fee' upon the customer who switches." Finally, GVNW urges that the Commission's rules, complaint procedures and penalties for "slamming" be applied to any carrier selection procedures that the Commission adopts with respect to local exchange service providers. c. Discussion 80. We agree with those commenters who observe that competitive providers of telephone exchange and telephone toll service have an incentive to make consumers aware of the choices available, and we perceive no need to prescribe detailed consumer notification or carrier selection procedures at this time. We do believe, however, that states may adopt such procedures. The states are best positioned to determine the consumer education and carrier selection procedures that best meet the needs of consumers and telecommunications services providers in their states. Thus, states may adopt consumer education and carrier selection procedures that will enable consumers to select alternative carriers for their local and toll services. We further agree that a customer notification requirement should take into consideration local circumstances. The states may adopt balloting, consumer education and notification requirements for services originating within their states, that are not anti- competitive in effect. States also may adopt measures to prevent abuse of the customer notification and carrier selection processes. All such procedures, however, must be consistent with the guidelines set forth above with respect to the requisite categories of toll traffic for which consumers must be entitled to presubscribe and the toll presubscription method that we require carriers to implement. We note that the consumer notification requirements already imposed by states' intrastate, intraLATA toll dialing parity orders have required LECs to inform customers either once or twice of their opportunity to choose an alternative carrier. We anticipate that any subsequently imposed consumer notification requirements would be no more be burdensome, and, in particular, would not require more than two notifications to consumers of their opportunity to choose alternative carriers to transport their intraLATA toll calls. 81. We conclude that "dial-tone providers" should not be permitted automatically to assign to themselves new customers who do not affirmatively choose a toll provider. New customers of a telephone exchange service provider who fail affirmatively to select a provider of telephone toll service, after being given a reasonable opportunity to do so, should not be assigned automatically to the customer's dial-tone provider or the customer's preselected interLATA toll or interstate toll carrier. Rather, we find that consistent with current practices in the interLATA toll market, such nonselecting customers should dial a carrier access code to route their intraLATA toll or intrastate toll calls to the carrier of their choice until they make a permanent, affirmative selection. This action eliminates the possibility that a LEC could designate itself automatically as a new customer's intraLATA or intrastate toll carrier without notifying the customer of the existence of alternative carrier choices. Finally, notwithstanding our decision to entrust the issues of consumer notification and carrier selection to the states, we emphasize that all telecommunications carriers remain subject to the requirements of section 258 as well as any verification or "anti-slamming" procedures that the Commission may adopt to prevent unauthorized changes in a customer's selection of a provider of telephone exchange or telephone toll service. F. Cost Recovery a. Background 82. In the NPRM, the Commission noted that the 1996 Act does not specify how LECs will recover the costs associated with providing dialing parity to competing providers. The Commission therefore sought comment on: (1) what, if any, standard should be used for arbitration to determine the dialing parity implementation costs that LECs should be permitted to recover; and (2) how those costs should be recovered. b. Comments 83. At the outset, we note that there does not appear to be a consensus among commenters as to either of the two cost recovery issues raised in the NPRM. The parties are generally divided into two positions: (1) interexchange carriers and competitive carriers prefer a Commission standard under which carriers could recover from competing providers only the specific incremental costs of providing intraLATA toll dialing parity; and (2) incumbent LECs and several states prefer that no national standards be developed, and that cost recovery issues be left either to the states or to intercarrier negotiations. 84. AT&T suggests that carriers only be entitled to recover incremental costs directly associated with the implementation of dialing parity, and states that the Commission should "explicitly exclude (a) recovery of costs intended to reimburse an incumbent carrier for revenues it expects to lose as a result of implementing dialing parity . . . as well as (b) costs associated with network upgrades that are not necessary to implement dialing parity." AT&T further suggests that the Commission mandate an "Equal Access Recovery Charge" on all providers of toll service based on minutes of use subject to dialing parity, and that this charge be tariffed separately from any access charges, approved by the state commission, and amortized over a period not to exceed eight years. 85. MCI appears to agree with AT&T's proposal, stating that "incremental costs incurred to implement dialing parity should be recovered from all carriers that carry intraLATA toll on a presubscribed basis in accordance with cost causative principles." MCI also suggests that dialing parity costs be recovered on a minutes-of-use basis, as an addition to the local switching rate element, which would be separately identified in a tariff, and that Commission rules for cost recovery be "presumptively correct" (i.e., states can depart from such rules if they can show their mechanism is more effective). Several parties urge the Commission to draw upon its cost recovery paradigms for interLATA equal access, and apply the same basic principles to the intraLATA toll market. 86. Many other competitive providers also advocate various forms of incremental cost recovery, on a per-minutes of use basis, to be assessed against all providers of presubscribed intraLATA toll services; such costs could include, for example, hardware costs, software costs, and consumer education costs. GSA/DOD asks the Commission to "view LEC claims for large cost compensation with considerable skepticism," and suggests that the Commission "distribute any verifiable incremental costs associated with achieving dialing parity as a percentage surcharge on the bills of all carriers, including the incumbent LECs." 87. Taking the opposite view, BOC commenters, together with GTE and USTA, argue that there is essentially no need for the Commission to adopt cost recovery measures for dialing parity, and that cost recovery issues are best left for the states to address. Several state public utility commissions also argue that, given the state-specific nature of intraLATA cost recovery issues, and the omission of a specific cost-recovery standard from Congress in section 251(b)(3), the individual states are in the best position to address these issues. In support of these arguments, some state commenters have provided the Commission with detailed descriptions of their current mechanisms for recovering intraLATA presubscription costs. 88. Ameritech argues that dialing parity costs "should be recovered under normal regulatory principles from the cost-causer," and Bell Atlantic argues that "only carriers who will benefit from intraLATA presubscription should pay the costs. Unless interexchange carriers bear the full costs of implementing intraLATA presubscription, exchange carrier customers who do not switch intraLATA toll carriers and do not benefit from presubscription would ultimately be required to pay for it." On the other extreme, the Telecommunications Resellers Association states that incumbent LECs should "shoulder the full financial burden of remedying this competitive imbalance [in the intraLATA toll market]." 89. The reply comments reveal substantial disagreement among carriers from the two opposing positions. Interexchange carriers and competitive carriers reject the suggestion that they shoulder the full cost burden for intraLATA dialing parity, and urge that, at a minimum, costs be spread among all service providers that enjoy dialing parity. AT&T states that "the proposal by Ameritech and Bell Atlantic to recover implementation costs exclusively from their competitors underscores the need for explicit national rules. . . . [n]othing could be more. . .harmful to competition, than allowing incumbent LECs to charge a fee for new entrants for the "privilege" of competing with them." GSA/DOD also urges the Commission to "reject" the proposals of Bell Atlantic and SBC. MFS correctly notes that there was "little consensus" on this issue, and states "it is entirely inappropriate in a competitive environment that an individual carrier's costs be recovered from its competitors." The Ohio Consumer's Counsel states that Ameritech's "cost-causer" proposal "ignores the fact that the benefits of dialing parity are network-wide." 90. Incumbent LECs maintain that the Commission should not set national cost recovery standards, and that this matter remains the prerogative of the states. GTE "strongly opposes" AT&T's suggestions, and PacTel states that "LECs cost recovery should not be limited by noncompensatory incremental methodologies or unreasonably long amortization requirements." SBC asserts that the proposals of MCI and AT&T are "examples of regulatory micro-management, are inconsistent with Congressional intent, and would also. . .place the major burden of dialing parity cost recovery squarely on the backs of incumbent LECs." 91. GCI states that "costs should be recovered in a competitively neutral manner because all LECs, not just incumbent LECs, must meet this obligation." Western Alliance contends that "costs incurred to achieve dialing parity should be included in the investment recoverable through explicit universal [service] supports." Finally, NECA argues that there is no need for the Commission to prescribe specific cost recovery mechanisms. c. Discussion 92. We conclude that, in order to ensure that dialing parity is implemented in a pro- competitive manner, national rules are needed for the recovery of dialing parity costs. We further conclude that these costs should be recovered in the same manner as the costs of interim number portability, as mandated in our recent Number Portability Order. Our authority to promulgate national cost recovery rules derives from section 251(d) of the 1996 Act and section 4(i) of the 1934 Act. In section 251(d), Congress directed the Commission to take the necessary steps to implement section 251. Section 4(i) of the 1934 Act authorizes us to take any action we consider "necessary and proper" to further the public interest in the regulation of telecommunications. Because we determine that dialing parity is crucial to the development of local exchange competition, we conclude that we should establish pricing principles for the recovery of dialing parity costs. Accordingly, we reject the arguments of incumbent LECs and others who oppose national standards for cost recovery of the network upgrades required to achieve dialing parity. 93. Many of the network upgrades necessary to achieve dialing parity, such as switch software upgrades, are similar to those required for number portability. Moreover, with both dialing parity and number portability, customer inconvenience represents the barrier to effective competition Congress intends to eliminate, whether that inconvenience results from the dialing of extra digits in the case of dialing parity, or notification of family, friends and business contacts when a customer is forced to change his or her number. For these reasons, we determine that our recent Number Portability Order provides guidance regarding which costs incumbent LECs should be able to recover in implementing dialing parity, as well as how such costs should be recovered. The rules adopted in the Number Portability Order apply only to currently-available number portability mechanisms. We sought further comment on cost recovery for long-term number portability, because long-term number portability will involve a different kind of system than currently available solutions. We tentatively concluded that under section 251(e)(2), the same cost recovery principles should apply to long-term number portability. In the case of dialing parity, there is a similar distinction between currently-available solutions (i.e., full 2-PIC presubscription), and long- term solutions (i.e., multi-PIC or smart-PIC methodologies). Like number portability, we may need to revisit the issue of an appropriate cost recovery standard once other presubscription technologies become available on a nationwide basis. 94. In the Number Portability Order, we concluded that costs for number portability should be recovered on a competitively-neutral basis. We also concluded that any recovery mechanism should: (1) not give one service provider an appreciable, incremental cost advantage over another service provider, when competing for a specific subscriber; and (2) not have a disparate effect on the ability of competing service providers to earn a normal return. We therefore reject the arguments of those commenters that assert that only new entrants should bear the costs of implementing dialing parity, because such an approach would not be competitively neutral. We also concluded in the Number Portability Order that LECs could only recover the incremental costs of implementing number portability. Because we determine that number portability and dialing parity share significant technical similarities and overcome similar barriers to competition, we conclude that we should impose the same cost standard for dialing parity costs that we have adopted for number portability costs. We therefore agree with AT&T that LECs may not recover from other carriers under a dialing parity cost recovery mechanism any network upgrade costs not related to the provision of dialing parity. 95. In our Number Portability Order, we concluded that the costs of long-term number portability that could be recovered through a competitively-neutral mechanism included installation of number portability-specific switch software, implementation of SS7 and IN or AIN capability, and the construction of number portability databases. We determined that states could use several allocators, including gross telecommunications revenues, number of lines, and number of active telephone numbers, to spread number portability costs across all telecommunications carriers. Applying the same cost recovery principles to dialing parity, we conclude that LECs may recover the incremental costs of dialing parity-specific switch software, any necessary hardware and signalling system upgrades, and consumer education costs that are strictly necessary to implement dialing parity. These costs must be recovered from all providers of telephone exchange service and telephone toll service in the area served by a LEC, including that LEC, using a competitively- neutral allocator established by the state. Although, under section 251(e)(2), number portability costs must be recovered from all telecommunications carriers, section 251(b)(3) only requires that dialing parity be provided to providers of telephone exchange service and telephone toll service. Therefore, we conclude that a competitively-neutral recovery mechanism for dialing parity should only allocate costs to this more limited class. States may use any of the allocators described in the Number Portability Order, or any other allocator that meets the criteria we have established. States should apply the principles we adopt today, and the other guidelines for recovering costs of currently available number portability measures, in establishing more specific cost recovery requirements for dialing parity. G. Unreasonable Dialing Delays 96. For a discussion of the section 251(b)(3) prohibition on unreasonable dialing delays, as that section applies to the provision of local and toll dialing parity, see section III(E) below. III. NONDISCRIMINATORY ACCESS PROVISIONS A. Definition of the Term "Nondiscriminatory Access" 1. Background 97. Section 251(b)(3) requires all LECs to permit "nondiscriminatory access" to telephone numbers, operator services, directory assistance, and directory listings to competing providers of telephone exchange service, and to competing providers of telephone toll service. In the NPRM, we tentatively concluded that "nondiscriminatory access" requires each LEC to permit the same degree of access that the LEC itself receives for the services specified in section 251(b)(3). The Commission also asked for specific comment on whether the nondiscriminatory access provisions of section 251(b)(3) also impose a duty on LECs to resell operator and directory assistance services to competing providers. 2. Comments 98. A number of commenters concur that, as proposed in the NPRM, "nondiscriminatory access" should require each LEC to permit the same access to these services that the LEC itself receives. Bell Atlantic argues, however, that access need not be strictly equal, but must "simply be of a type that will permit the other carrier to provide comparable services with no difference in quality perceptible to callers." Bell Atlantic cites the Modification of Final Judgment (MFJ) for the proposition that "equal access" does not require "strict technical equality of services and facilities," but rather it requires that consumers should perceive no qualitative differences. Sprint objects to Bell Atlantic's use of "customer perception" as the nondiscriminatory access standard, arguing that this standard would allow the incumbent LEC to "discriminate against its competitors in ways not visible to the end user." 99. Ameritech requests a clarification that a LEC's duty under section 251(b)(3) is owed only to "providers of telephone exchange and telephone toll service." Ameritech also argues that because Congress did not expressly impose a strict equality standard in section 251(b)(3), as it did in section 251(c)(2)(C) for incumbent LECs, "the only logical interpretation is that LECs are required to provide access . . . that is nondiscriminatory among carriers." The Ohio Consumer's Counsel responds that "Ameritech is claiming that giving all other carriers an equal level of degraded access, i.e., inferior to that provided to itself, is 'non-discriminatory.' Surely Congress contemplated nothing of the sort, as is recognized even by other incumbent LECs." 100. As for resale, a number of commenters agree that LECs should make operator and directory assistance services available for resale to competing providers under section 251(b)(3), in order to further nondiscriminatory access to such services. On the other hand, several commenters contend that this provision does not imply any resale requirements. AT&T argues that resale is not required under section 251(b)(3), because "to the extent that a local exchange carrier provides transmission with, or as part of, its operator services, the service must be made available for resale under sections 251(b)(1) and 251(c)(4) of the Act." Bell Atlantic takes a similar approach, arguing that, to the extent that a LEC provides operator and directory assistance services that are "telecommunication services," the service must be made available for resale by LECs under section 251(b)(1), and, if the services are telecommunication services offered to retail customers, incumbent LECs must offer them for resale at wholesale prices under section 251(c)(4). 3. Discussion 101. We conclude that the term "nondiscriminatory access" means that a LEC that provides telephone numbers, operator services, directory assistance, and/or directory listings ("providing LEC") must permit competing providers to have access to those services that is at least equal in quality to the access that the LEC provides to itself. We conclude that "nondiscriminatory access," as used in section 251(b)(3), encompasses both: (1) nondiscrimination between and among carriers in rates, terms and conditions of access; and (2) the ability of competing providers to obtain access that is at least equal in quality to that of the providing LEC. LECs owe the duty to permit nondiscriminatory access to competing providers of telephone exchange service and to providers of telephone toll service, as the plain language of the statute requires. Such competing providers may include, for example, other LECs, small business entities entering the market as resellers, or CMRS providers. 102. Section 251(b)(3) requires that each LEC, to the extent that it provides telephone numbers, operator services, directory assistance, and/or directory listings for its customers, must permit competing providers nondiscriminatory access to these services. Any standard that would allow a LEC to permit access that is inferior to the quality of access enjoyed by that LEC itself is not consistent with Congress' goal to establish a pro-competitive policy framework. 103. We are not persuaded by Bell Atlantic's statement that the standard for nondiscriminatory access should focus only upon "customer perceptions" of service quality. Such a standard overlooks the potential for a providing LEC to subject its competitors to discriminatory treatment in ways that are not visible to the customer, such as the imposition of disparate conditions between similarly-situated carriers on the pricing and ordering of services covered by Section 251(b)(3). While invisible to the customer, such conditions can severely diminish a competitor's ability to provide exchange and/or toll service on the same terms as the LEC permitting the access. 104. The MTS and WATS Order (III) does not preclude us from requiring LECs to permit access that is at least equal in quality to the access the LEC itself receives. In the MTS and WATS Order (III), the Commission simply held that neither "absolute technical equality" nor an "overly quantitative and microscopic" definition of equal access was desirable. We find that the nondiscrimination standard established in this Order is consistent with those previous decisions. We do not set forth in this Order an overly technical definition of nondiscriminatory access. 105. We conclude that, to the extent all or part of any operator or directory assistance services, and features that are adjunct to such services, are not "telecommunications services" within the meaning of section 3(44) of the Communications Act of 1934, LECs that provide such services must nonetheless make the services and features available under section 251(b)(3). We recognize that resale of operator services and directory assistance is a primary vehicle through which competing providers, especially new entrants and small business entities, can make operator services or directory assistance available to their customers and that providing LECs are a primary source from which competing providers can obtain these services. Operator and directory assistance services, or the portions of such services, that are "telecommunications services" are already subject to resale requirements under: (1) section 251(c)(4)(A), which requires incumbent LECs "to offer for resale at wholesale rates any telecommunications service that the carrier provides at retail to subscribers who are not telecommunications carriers"; and (2) section 251(b)(1), which imposes a duty on all LECs not to prohibit the resale of their telecommunications services, nor to impose unreasonable or discriminatory conditions on the resale of such services. Operator and directory assistance services, however, generally use various adjunct information features, e.g., rating tables or customer information databases. We recognize that without access to such information features, competing providers cannot make full use of such services. Thus, to ensure that competing providers can obtain nondiscriminatory access to operator services and directory assistance, we require LECs to make such services available to competing providers in their entirety. B. Nondiscriminatory Access to Telephone Numbers 1. Definition 106. Currently, the largest LEC in each area code serves as the Central Office (CO) code administrator for that area. In the NPRM, this Commission proposed that the term "nondiscriminatory access to telephone numbers" means that all LECs providing telephone numbers must permit access to telephone numbers to competing providers in the same manner that the LECs themselves receive such access. The few commenters who addressed this issue support the extension of our general definition of nondiscriminatory access to cover access to telephone numbers. We conclude, consistent with the general definition of nondiscriminatory access in para. 101, supra, that the term "nondiscriminatory access to telephone numbers" requires a LEC providing telephone numbers to permit competing providers access to these numbers that is identical to the access that the LEC provides to itself. In addition, as discussed in paras. 261-345, infra, the delegation of the administration of numbering resources to a neutral administrator will further the statutory objective that all competing providers receive nondiscriminatory access to telephone numbers. 2. Commission Action to Enforce Access to Telephone Numbers 107. In the NPRM, we sought comment on what, if any, Commission action is necessary or desirable to implement the requirement under section 251(b)(3) that LECs permit nondiscriminatory access to telephone numbers. Many commenters state that no additional Commission actions, beyond those already required by section 251(e), are necessary. We conclude that issues regarding access to telephone numbers will be addressed by our implementation of section 251(e) herein. C. Nondiscriminatory Access to Operator Services 1. Definition of "Operator Services" a. Background and Comments 108. The 1996 Act does not define the term "operator services." In the NPRM, the Commission proposed to use the definition of "operator services" in the Telephone Operator Consumer Services Improvement Act (TOCSIA) of 1990. Section 226 (a)(7), which was added to the 1934 Act by TOCSIA, defines operator services as: "any automatic or live assistance to a consumer to arrange for billing or completion, or both, of a telephone call through a method other than: (1) automatic completion with billing to the telephone from which the call originated; or (2) completion through an access code by the consumer, with billing of an account previously established with the telecommunications service provider by the consumer." 109. Bell Atlantic, BellSouth and MCI agree with the proposed definition of "operator services." AT&T, however, expresses concern that this definition should not be used by incumbent LECs to claim that they are then not obligated to make operator services, including transmission of information, available for resale at wholesale rates, pursuant to section 251(c)(4). AT&T thus suggests that the Commission adopt the definition as proposed in the NPRM, but explicitly state that the definition is applicable only in the context of section 251(b)(3). AT&T asserts that the traditional functions of "emergency interrupt," "busy line verification," and "operator assisted directory assistance" are within the meaning of "operator services" in this context. b. Discussion 110. TOCSIA defines operator services to be "any automatic or live assistance to a consumer to arrange for billing or completion, or both, of a telephone call through a method other than: (1) automatic completion with billing to the telephone from which the call originated; or (2) completion through an access code by the consumer, with billing of an account previously established with the telecommunications service provider by the consumer." Based on support in the record and the desirability of having a definition consistent with that in the preexisting statute, we conclude that we should adopt the definition of operator services as used in TOCSIA for purposes of section 251(b)(3), with modifications. For purposes of section 251(b)(3), we do not exempt (1) and (2), above, from the definition of operator services. Accordingly, the term operator services, for purposes of section 251(b)(3), means "any automatic or live assistance to a consumer to arrange for billing or completion, or both, of a telephone call." Although commenters did not focus on this issue, nor suggest that the exemptions be deleted from the TOCSIA definition of "operator services," we conclude that we should adopt a modified definition of operator services for the purpose of implementing section 251(b)(3). When enacted, the TOCSIA definition was intended to address services from an aggregator location, rather than addressing the types of operator services in general that would be essential to competition in telecommunications markets. Operator services are becoming increasingly automated, and thus excluding access to automatic call completion from the obligations imposed by section 251(b)(3) could deny competitors access to a service that is essential to competition in the local exchange market. We conclude that, for the same reason, "completion by an access code by the consumer," a common means of completing calls made from payphones, should also be included in the definition of operator services for section 251(b)(3). 111. Adopting a national definition of "operator services" based on the TOCSIA definition, as modified above, will allow for consistency and ease of compliance with the statute, specifically with respect to services to which all LECs must permit nondiscriminatory access. We further conclude that we should state explicitly that busy line verification, emergency interrupt, and operator-assisted directory assistance are forms of "operator services," because they assist customers in arranging for the billing or completion (or both) of a telephone call. Thus, if a LEC provides these functions, the LEC must offer them on a nondiscriminatory basis to all providers of telephone exchange and/or toll service. To avoid confusion with the TOCSIA definition at section 226, we state here that this definition only applies for purposes of section 251. Finally, unlike the definition of operator services in TOCSIA, we point out that our definition of "operator services" under section 251(b)(3) is applicable to both interstate and intrastate operator services. 2. Definition of "Nondiscriminatory Access to Operator Services" a. Background 112. In the NPRM, we proposed that the phrase "nondiscriminatory access to operator services" should be interpreted to mean that a telephone service customer, regardless of the identity of his or her local telephone service provider, must be able to connect to a local operator by dialing "0," or "0 plus" the desired telephone number. b. Comments 113. Several commenters agree with the Commission's interpretation of this phrase as proposed in the NPRM. PacTel, however, requests that we clarify that the "0" or "0 plus" requirement does not mean "that a customer must be able to access every LEC's operator services or directory assistance using the same dialing scheme, but rather only the services of the carrier selected to provide local service." AT&T requests that operator service connection methods continue to include dialing "00" in order to access the pre-selected long distance carrier operator. CBT asks that we find that the nondiscriminatory access requirements only apply when a competing local service provider is using either a LEC's local exchange services on a resale basis or when the competing provider is using a LEC's unbundled switch ports. GCI states that, in Alaska,