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P6Q&Pl7UC2X(XU4  pQX5PC2XEf_XP*f9 xQXX.W!0(Xh0\  P6QhP.I(!X,(\  P6Q,P"5^(1< XifQ ` Advanced Legal WordPerfect Learning  X4Њ#&a P&P#  #XP\  P6QXP#( X' x #XP\  P6QXP#Federal Communications Commission`(#dDA 99561 ă   yxdddy (  *` Before the x Federal Communications Commission  X'-Washington, D.C. 20554 ă  X4In the Matter of hhCq)  X4` `  hhCq)CC Docket No. 9935  Xv4LongTerm Telephone Number Portabilityq)  X_4Tariff Filings of  hhCq) ` `  hhCq)  X14U S WEST Communications, Inc.hhCq)Transmittal Nos. 965 and 975  X '   X ' ORDER DESIGNATING ISSUES FOR INVESTIGATION   X 4p Adopted: March 25, 1999 Released: March 25, 1999   X4\Direct Case Date: April 23, 1999  Xy4Oppositions/Comment Date:May 3, 1999  Xb4Rebuttal Date: May 17, 1999 By the Deputy Chief, Common Carrier Bureau:  X' J:I. INTRODUCTION ă  X41.` ` On February 9, 1999, the Common Carrier Bureau released the U S WEST  X4Suspension Order, Transmittal No. 965, which suspended U S WEST's number portability tariff filing for one day, imposed an accounting order, and initiated an investigation into  X4several issues raised by U S WEST's tariff filing.E\֌ yO'ԍLongTerm Number Portability Tariff Filing of U S WEST Communications, Inc., CC Docket No. 99 {O'35, Memorandum Opinion and Order, DA 99306 (Com. Car. Bur., rel. Feb. 9, 1999) (U S WEST Suspension  {O'Order, Transmittal No. 965).E The Bureau concluded that the tariff filed by U S WEST raised significant questions of lawfulness that warrant investigation. On March 9, 1999, U S WEST filed Transmittal No. 975, proposing to increase the longterm  XR4number portability rates previously filed in Transmittal No. 965.R֌ {O 'ԍSee  U S WEST Transmittal No. 975, filed Mar. 9, 1999; U S WEST Transmittal No. 965, filed Jan. 26, 1999. U S WEST filed Transmittal No. 975 with an effective date of March 24, 1999. On March 22, 1999, the  X$4Bureau released the U S WEST Suspension Order, Transmittal No. 975, which suspended U S WEST's second number portability tariff filing and made it subject to the investigation"F0*''ZZ"  X4initiated by the U S WEST Suspension Order, Transmittal No. 965.|^_ {Oy'ԍSee In the Matter of Local Telephone Number Portability Tariff Filings of U S WEST Communications,  {OC'Inc., Transmittal No. 975, Memorandum Opinion and Order, CC Docket No. 9935, DA 99560 (Com. Car. Bur.,  {O 'rel. Mar. 22, 1999) (U S WEST Suspension Order, Transmittal No. 975).| In this Order, the Bureau designates for investigation the issues discussed below.  X4  X'  @II. LEVEL OF COSTS AND CHARGES   X'\ A.Background  Xa42.` ` In the Third Report and Order, the Commission determined that incumbent local exchange carriers (LECs) may recover their carrierspecific costs directly related to  X54establishing and providing number portability through enduser and query service y& fs  charges.5_ {O 'ԍIn the Matter of LongTerm Number Portability, Third Report and Order, 13 FCC Rcd 11701, 11740,  {O'1177879, paras. 74, 147 (1998) (Third Report and Order).  The Commission limited the costs eligible for recovery through these new federal mechanisms to "costs carriers incur specifically in the provision of number portability services, such as for  X 4the querying of calls and the porting of telephone numbers from one carrier to another."m J_ {O'ԍThird Report and Order, 13 FCC Rcd at 11740, para. 72.m The Commission concluded that the costs carriers incur as an incidental consequence of number portability are not eligible for recovery as costs directly related to providing number  X 4portability, but are ordinary costs of doing business in the new competitive environment.: _ {O8'ԍId.: The ordinary price cap and rateofreturn cost recovery mechanisms provide incum@bent LECs with the opportunity to recover the costs of modernizing their networks in order to keep pace with technological and market developments, and to maintain high standards of service  XO4quality.M^On _ {On'ԍIn the Matter of LongTerm Number Portability Cost Classification Proceeding, Memorandum Opinion  {O8'and Order, CC Docket No. 95116, DA 982534 at 6, para. 6 (Com. Car. Bur., rel. Dec. 14, 1998) (Cost  {O'Classification Order).M  X!4 B.Petitions  X43.` ` AT&T states that U S WEST's proposed enduser and query rates are higher  X4than those proposed by other LECs. _ {O!$'ԍSee generally AT&T's Petition to Reject or Suspend U S WEST's Tariff, filed Feb. 2, 1999 at 3 (AT&T Petition). AT&T argues that U S WEST seeks to include a"0*%%ZZ" substantial amount of "administrative costs" and "business fees" in its query services costs  X4without providing an adequate explanation.D _ yOb'ԍAT&T Petition at 8.D AT&T states that the information contained in US WEST's transmittal is "patently insufficient" to allow the Commission or commenters to confirm that the expenses claimed are only incremental expenditures directly related to  X4number portability.: X_ {O'ԍId.:  Xv' C.Replies  XH4 4.` ` U S WEST maintains that it has adequately explained the administrative costs and business fees included in its number portability query charges and that all of the costs  X 4included are reasonable and clearly incremental to number portability.n  _ yO'ԍU S WEST Reply, filed Feb. 8, 1999 at 7 (U S WEST Reply). n  X ' D.Discussion   X 4 5.` ` As a preliminary matter, we note that U S WEST submitted extensive confidential cost material with its filing. This confidential material was not discussed or explained either in the public Description and Justification accompanying the filing or in any confidential narrative accompanying the confidential cost materials. We are unable to trace  Xb4the development of U S WEST's rates from this confidential cost material, and certain portions appear to be internally inconsistent. We require U S WEST to supply a narrative explanation of how costs were developed in the confidential filing already filed, as well as in any other confidential filings to be made as part of its direct case. This narrative will be  X4subject to the same confidentiality arrangements as the confidential filings. z_ {O1'ԍSee In the Matter of LongTerm Telephone Number Portability Tariff Filings, Order, CC Docket No. 95116, DA 99128, para. 8 (Com. Car. Bur., rel. Jan. 8, 1999).  X'  X4 6.` ` Our review of U S WEST's filing reveals that U S WEST deployed number  X4portability through the use of four pairs of service control points (SCPs) for number portability to enable its signal transfer points (STPs) to support number portability throughout  X4the U S WEST region. _ yO"'ԍU S WEST Transmittal No. 965, D&J, Section 3.2.3 "Service Control Points" at 1618. U S WEST also purchased a fifth SCP pair for use with Message  X|4Relay Service.@|d _ {O$'ԍId at 16.@ Although U S WEST argues that Message Relay Service supports query"| 0*%%ZZ"  X4routing associated with number portability, this service also supports other Custom Local Area Switching Services (CLASS). The costs of the fifth SCP, therefore, may not qualify as an eligible number portability cost. We direct U S WEST to explain why it believes this SCP pair is "for the provision of number portability" rather than for the provision of other services.  X47.` ` U S WEST states that it based its query charges on an estimate of the "forward looking incremental cost" of performing queries. This estimate was produced by means of a switching cost model that U S WEST maintains. Our preliminary review of this cost model suggests that the cost model result may include costs for which recovery already is provided through other recovery mechanisms. Moreover, it is not clear that this model accurately estimates the actual additional costs incurred for the provision of local number portability. The use of a model in a manner that does not attempt to calculate true incremental costs may  X 4be inconsistent with the Cost Classification Order's requirement that only incremental costs may be recovered through these federallyauthorized charges.  X 48.` ` Based upon a review of the tariff filings, we here designate for investigation whether U S WEST's use of its cost model to estimate its signalling costs of number portability results in the inclusion of some costs for which recovery already is provided through other recovery mechanisms and, therefore, produces an inaccurate estimate of actual number portability costs. We direct U S WEST to file, as part of its direct case, actual expenditures, including expenditures to date and planned actual expenditures within the recovery period, for the number portability costs that it estimated using its switching cost model. U S WEST must explain the basis of each calculation of actual expenditures.  X49.` ` Where U S WEST intends to continue to rely on the information produced by its cost model in support of its tariffs, we further direct the company to explain how the use of this cost model would produce more accurate estimates of the incremental costs generated by number portability than would be produced by an analysis of actual and planned expenditures. U S WEST also must demonstrate that the use of the model does not produce double recovery of costs already being recovered through other cost recovery mechanisms. This demonstration must include, at a minimum, a comparison of the model's calculation of average costs of number portabilitytype queries and the model's incremental costs of these queries. U S WEST also must demonstrate its total network switching and signalling costs with and without longterm number portability.  X4 10.` ` With regard to both costs derived from cost models and costs produced from an analysis of actual expenditures, we also direct U S WEST to identify costs for all land, buildings, administration, and maintenance expenses that are claimed as longterm number portability costs. The cost documentation provided with U S WEST's tariff shows that some endoffice and tandem switch costs appear related to reprogramming switches to perform 10digit translations. We require U S WEST to identify these costs and demonstrate that other"j$0*%%ZZ"" services will not benefit from such reprogramming. In the alternative, U S WEST should show how these costs were allocated, using either a cost model or actual expenditures, among the services that benefit from reprogramming.  X4 11.` ` We note that the number portability costs claimed in the longterm number portability tariff filings have varied greatly among carriers. U S WEST's Transmittal No. 965  Xv4proposes an enduser charge of $0.53 and query rates ranging from $0.00389 to $0.00466.v_ yO'ԍU S WEST Transmittal No. 965, Tariff F.C.C. No. 5, 2nd Rev. Page 1369.4, Section 13.4.3 at PQ and 4th Rev. Page 2018, Section 20.3.3. U S WEST's Transmittal No. 975 proposes an enduser charge of $0.54 and query rates ranging from $0.006422 to $0.007200. Our review of U S WEST's filings indicates that its reported costs are higher than those of other regional Bell Operating Companies (RBOCs). We also note that U S WEST still uses a large number of analog switches throughout its  X 4network. _ {O'ԍSee U S WEST Transmittal No. 965, Section 3.2.7 "Service Switching Points" at 2125. U S WEST also claims substantial costs for feature packages and software to enable its switches to provide the number portability functionality. We also note that U S WEST has claimed significant costs for "service delivery," which includes personnel training for negotiating, preparing, and correcting service orders for ported numbers, and for the hiring  X 4of additional personnel.x _ yO 'ԍU S WEST Transmittal No. 965, Section 3.2.9.1 "Service Delivery" at 33.x  Xy4 12.` ` U S WEST's tariff filings raise the issue of whether its costs of implementing number portability are substantially higher than those of other RBOCs because its network is less efficient. If so, its higher costs may be the result of a failure to have performed general network upgrades for which recovery has been provided through price cap or rateofreturn recovery mechanisms. Where a LEC has failed to upgrade its network and recover the costs of those network upgrades through price cap or rateofreturn recovery mechanisms, it may not be reasonable to allow recovery of higher number portability costs than the LEC would have recovered if the LEC had implemented number portability on an efficient, more modern network.  X4 13.` ` We also note that U S WEST's second number portability tariff, Transmittal No. 975, proposes rates that are higher than the rates U S WEST proposed in Transmittal No. 965. Transmittal No. 975 also raises the issue of whether U S WEST's number portability costs, both in general and in comparison to the number portability costs of other RBOCs, are unreasonable. We, therefore, designate for investigation whether the rates proposed in Transmittal No. 975 are reasonable. We direct U S WEST to explain the method used to determine the additional costs of establishing and providing number portability that were filed" B0*%%ZZ" in Transmittal No. 975, why these additional costs were not included in U S WEST's original tariff filing, and why these costs should be recovered through the enduser and query service  X2charges. ` `  ,  X2 14.` ` As noted above, based on our preliminary review, we find that U S WEST's enduser and query service charges are high relative to other RBOCs that have made longterm number portability tariff filings. The substantially higher charges proposed in U S WEST's tariff filings and U S WEST's inclusion of administrative and business costs in rates for its query services raise substantial issues of lawfulness that warrant an investigation. We designate for investigation whether U S WEST's enduser and query service charges are reasonable. As part of this issue, we designate for investigation whether the costs U S WEST claims for these services are eligible number portability costs. We further designate for investigation whether it is reasonable to allow U S WEST to recover higher number portability implementation costs than those incurred and recovered by LECs with more modern networks.  X215.` ` Finally, we note that U S WEST also increased its estimated "forward looking  Xy2incremental cost" of performing number portability queries by a factor of 1.89 to reflect its view that its network is actually much less efficient than "the most technically advanced and  XK2efficient telecommunications equipment."EK yO(ԍU S WEST Reply at 6.E This raises an issue discussed in detail in Section IV below.  X2 ^III. RECOVERY OF OSS COSTS  X2 A.Background  X216.` ` In the Third Report and Order, the Commission concluded that carrierspecific costs directly related to providing number portability are limited to costs carriers incur  X~2specifically in the provision of number portability services.s~X {O(ԍThird Report and Order, 13 FCC Rcd at 11740, para. 72.s In that light, the Commission recognized that modifications to Operations Support Systems (OSS) would provide a wide range of services and features that are unrelated to the provision of number portability and  X92that are recoverable in the LECs' rates for other services.F9 {O!(ԍId at para. 73.F The order makes clear that only the incremental portion of such modifications or upgrades that is directly related to number""|0*%%ZZ" portability functions is eligible for inclusion in the number portability cost recovery  X2mechanism.m {Ob(ԍThird Report and Order, 13 FCC Rcd at 11740, para. 73.m  X217.` ` In the Cost Classification Order, the Bureau, acting pursuant to authority  X2delegated to it by the Commission in the Third Report and Order, defined incremental OSS costs as the difference between the costs of the OSS upgrades without the number portability  Xz2functionality and the total cost of the upgrades with the number portability functionality.PzZ {O (ԍId at 11, para. 23.P  Xc2Only the difference in costs is an eligible number portability cost.Jc {O (ԍId at 12, para. 27.J The Cost Classification  XN2Order directed the incumbent LECs to distinguish costs that fall under the narrow definition of number portability with respect to OSS from costs incurred to adapt other systems to implement number portability, such as repair and maintenance, billing, or order processing  X 2systems.g ~ {O:(ԍCost Classification Order at 78, paras. 12, 14.g Moreover, even where an upgrade to OSS meets the twopart test set out in the  X 2Cost Classification Order,W\  yO(ԍEligible number portability costs are costs that: (1) would not have been incurred "but for" the  {O}(implementation of number portability; and (2) were incurred "for the provision of" number portability. See Cost  {OG(Classification Order at 6, para. 10. W the Bureau required incumbent LECs to make a special showing to establish the portion of any upgrade to OSS that should be attributed to number portability.  X 2Specifically, the Cost Classification Order directed incumbent LECs to show that all avoided costs and incremental revenues made possible by the upgrade will not cover the costs of the  X2upgrade.a4  {O(ԍCost Classification Order at 13, para. 29.a " 0*%%ZZ"Ԍ X2  B.Petitions  X218.` ` AT&T seeks to suspend and investigate U S WEST's tariff filing because the filing includes costs incurred to modify internal OSS systems for expenses that are not in  X2accordance with the Cost Classification Order.J yO(ԍAT&T Petition at 3.J Specifically, AT&T argues that U S WEST has included the costs of updating various systems that are not costs carriers incur specifically  Xx2in the provision of number portability service.AxX {O (ԍId at 45.A  XJ2 C.Replies  X32  X 2 19.` ` U S WEST maintains that the costs included in its tariff filing for OSS were  X 2not incidental costs.E  yO(ԍU S WEST Reply at 4.E U S WEST also maintains that it would not be able to port numbers to other local service providers without making modifications to certain ordering, tracking, and  X 2imaging systems.? z {O(ԍId at 4.?  ,  X 2 D.Discussion  X{220.` ` U S WEST's number portability tariff filing demonstrates that U S WEST has included a substantial portion of OSS costs as number portability costs. For example, USWEST claims a substantial amount of OSS costs in its tariff filing for modifications to  X62existing ordering, and maintenance and repair systems.6  yO(ԍU S WEST Transmittal No. 965, D&J, Section 3.2.8, "Operational Support Systems (OSS) Supporting LNP Functions" at 2531. Based on our review of the record and the tariff filings, we here designate for investigation the issue of whether U S WEST's number portability tariff includes costs U S WEST incurred to adapt other OSS systems to number portability, in addition to the incremental portion of OSS upgrades that are directly related to number portability. We also designate whether the OSS costs U S WEST claims in its number portability tariff are reasonable.  X221.` ` We direct U S WEST to file as part of its direct case an itemized list of OSS costs, arranged by functional area (for example, provisioning, maintenance, repair, billing, etc.). For each OSS modification or augmentation, U S WEST must provide: (1) the total cost; (2) the cost assigned to number portability; (3) the cost allocations among number"Pd 0*%%ZZ" portability services; (4) an explanation of how each OSS modification relates to performing queries; (5) an explanation of how each OSS modification relates to porting numbers between carriers; (6) an explanation of how each OSS modification relates to any other number portability function; (7) the basis for cost allocations between number portability and nonnumber portability services; and (8) the basis for cost allocations among number portability services. For functions other than provisioning of number portability, U S WEST should explain with specificity why it believes a particular OSS modification or upgrade qualifies as  X_2eligible under the Cost Classification Order.  X3222.` ` We further direct U S WEST to explain for each OSS modification the manner in which it alters the nature of the task or function previously performed, and why this alteration is necessary "for the provision of portability." In addition, some OSS costs appear to be related to revising OSS systems to perform 10digit translations. U S WEST should identify these costs and demonstrate that they will not benefit CLASS services, area code overlays, or other services. In the alternative, U S WEST should show how costs were allocated among services that benefit from the changes.  X{2 D  IV.   CALCULATION OF OVERHEADS x  XM2 A.Background  X223.` ` In the Third Report and Order, the Commission held that "carriers may identify as carrierspecific costs directly related to providing longterm number portability only those incremental overheads that they can demonstrate they incurred specifically in the provision of  X2longterm number portability."m  {OU(ԍThird Report and Order, 13 FCC Rcd at 11740, para. 74.m The Bureau interpreted the Commission's requirement in the  X2Cost Classification Order to require that only new overhead costs are eligible for recovery through the federal charge mechanisms and that no allocation of embedded overheads is  X2permitted.d!Z {O(ԍCost Classification Order at 1415, para. 33.d The Bureau required, therefore, that the incumbent LECs must demonstrate that any incremental overheads claimed are actually new costs incremental to and resulting from  Xk2the provision of number portability.M"k {O (ԍId at 1415, para. 33.M With regard to the use of overhead allocation factors in determining number portability costs, the Bureau also stated that the use of unbundled network element overhead factors may serve as a useful check on the reasonableness of the  X&2incumbent LECs' incremental overhead allocations.J#&~ {OU$(ԍId at 16, para. 37.J"& #0*%%ZZ "Ԍ X2ԙ B.Petitions  X2 24.` ` AT&T contends that U S WEST has adjusted its direct costs of performing  X2number portability queries by a factor that works as a general overhead additive.F$ yO4(ԍAT&T Petition at 67.F AT&T  X2alleges that this overhead additive is not included in the enduser surcharge calculation.?%X {O(ԍId at 7.? AT&T contends that U S WEST applies this factor to the direct perunit costs of default end  Xv2office, database, and default tandem queries to derive the actual rates charged.:&v {O (ԍId.: AT&T notes  X_2that U S WEST does not allege that the query rates are based on incremental costs.:'_| {O (ԍId.: As discussed generally in Section II above, AT&T further argues that U S WEST claims a substantial amount of unexplained administrative costs and business fees that may not be  X 2directly related to number portability.?(  {O(ԍId at 8.?  X 2 C.Replies  X 225.` ` U S WEST argues that it has not included general overhead loadings in its  X 2query charges as AT&T alleges.E)  yO(ԍU S WEST Reply at 6.E U S WEST contends that the 1.89 factor AT&T references in its petition is one of the Part 69 expense factors that U S WEST uses to support all of its  Xy2new services filings, minus the general overheads.<*y0  {OZ(ԍId. < U S WEST argues that the ratio converts forwardlooking costs that are directly related to providing longterm number portability to an actual cost basis. U S WEST also states that the costs of upgrading its analog and older  X42digital switches to provide query service are not reflected by forwardlooking cost studies.>+4  {O(ԍId. > " T +0*%%ZZF"Ԍ X2 D.Discussion  X226.` ` Our preliminary review of U S WEST's tariff filing shows that U S WEST has added significant amounts of "miscellaneous costs," "administrative," and "business fees" that appear to reflect the inclusion of some general overhead. For example, these costs include items such as marketing and advertising, franchise fees and licenses, depreciation, earnings,  Xv2vehicles, and gross receipts taxes.,v yO(ԍU S WEST Transmittal No. 965, D&J, Section 3.2.9.2 "Other Miscellaneous Costs" at 34 and Section 3.4 "LNP Query Costs" at 3538. U S WEST also added cost factors representing an average cost of building and use of space to support employees. We note that U S WEST claims that no general overhead costs were included in its number portability costs. We find, however, that the inclusion of these type of "miscellaneous" costs raises substantial issues of lawfulness that warrant investigation. We designate for investigation whether U S WEST's recovery of miscellaneous costs, administrative and business fees results in recovery of a portion of general overhead costs as U S WEST's number portability charges.  X 2 27.` ` We direct U S WEST to explain how it calculated the "miscellaneous incremental expenses" it included in its "network costs." We also direct U S WEST to file an explanation of how overhead cost factors related to such costs as building and space utilization were used in estimating "miscellaneous incremental overheads," "service delivery costs," "administrative," and "business fees" costs. We direct U S WEST to file actual expenditures made or planned for these functions.  X228.` ` We also designate for investigation whether U S WEST's use of a 1.89 factor to adjust its estimated "forward looking incremental" query cost constitutes use of a general overhead factor. We direct U S WEST to explain why use of this factor does not result in recovery of embedded costs rather than incremental costs of number portability.  X2=  LV. ALLOCATION OF NUMBER PORTABILITY  X20 COSTS AMONG NUMBER PORTABILITY SERVICES ă  Xe2 A.Background  X7229.` ` The Bureau provided specific, detailed guidance to the LECs in the Cost  X"2Classification Order as to the proper method of allocating eligible number portability costs between the enduser and query service charges. First, the Bureau determined the properL allocation of costs incurred for specific number portability services. The Bureau stated that incumbent LECs should allocate any portion of eligible number portability costs that is" ,0*%%ZZd"  X2incurred specifically to provide N1 query services to the N1 query services.a- {Oy(ԍCost Classification Order at 17, para. 40.a Where the incumbent LECs intend to establish several types of N1 query services, the Bureau directed that the LECs allocate the eligible number portability costs incurred specifically to provide  X2each type of query service to that particular service.J.Z {O(ԍId at 17, para. 40.J Similarly, the Bureau directed the incumbent LECs to allocate costs incurred only to provide number portability functions to  X2endusers to the enduser charge.J/ {O* (ԍId at 17, para. 40.J  X_230.` ` The Bureau also determined the proper allocation of any remaining eligible  XH2number portability costs.K0XH~ yOw(ԍRemaining eligible costs are those costs that are incurred by an incumbent LEC in general to establish and provide number portability service. These costs are not incurred specifically to provide a particular query service but are incurred to provide number portability as a whole.K Generally, the Bureau directed the incumbent LECs to allocate  X12these remaining costs on the basis of the capacity requirements for each type of service.a11 {O(ԍCost Classification Order at 17, para. 41.a For incumbent LECs that elect to provide several types of N1 query services, the Bureau directed that allocation of costs should be made to each service on the basis of the capacity  X 2requirements for the service.:2 0  {O(ԍId.:  X 2 B.Discussion  X231.` ` U S WEST appears to have allocated certain costs directly to one or another number portability service and to have allocated remaining costs according to capacity  Xb2utilization, as required by the Cost Classification Order.j3b  {O(ԍSee U S WEST Transmittal No. 965, Charts 2a and 2b.j At the same time, however, descriptions contained within U S WEST's confidential cost support suggest that some costs were actually allocated using U S WEST's switching cost model output. As a result, it is unclear how U S WEST's costs were actually allocated among number portability services.  X232.` ` To determine whether U S WEST has allocated number portability costs  X2consistent with the determinations made by the Bureau in the Cost Classification Order, we" T 30*%%ZZ" designate for investigation the issue of whether U S WEST's method of allocating number portability costs between the enduser and query service charges is reasonable.  X2 33.` ` We direct U S WEST to provide more complete explanations of its basis for allocating number portability costs among services and to explain more fully why its method is reasonable. In addition, we direct U S WEST to submit, as part of its direct case, an explanation of how the costs shown on the worksheet it submitted in its cost support,  X_2described in the Cost Classification Order,a4_ {O(ԍCost Classification Order at 20, para. 49.a correlate with costs shown elsewhere in its cost support. U S WEST must include sufficient data and calculations to show the assumptions used to allocate the costs of shared facilities, such as costs of the shared regional databases and links.  X 2 @ VI. JURISDICTIONAL SEPARATIONS ă  X 2 A.XBackground (#  X2!34.` ` In the Third Report and Order, the Commission found that section 251(e) authorizes the Commission to provide the distribution and recovery mechanism for all the  Xf2costs of providing longterm number portability.m5fZ {Oq(ԍThird Report and Order, 13 FCC Rcd at 11720, para. 29.m The Commission concluded that an exclusively federal recovery mechanism for longterm number portability will minimize the administrative and enforcement difficulties that might arise were jurisdiction over longterm  X!2number portability divided.:6! {O(ԍId.: The Commission noted that under the exclusively federal number portability cost recovery mechanism, incumbent LECs' number portability costs will  X2not be subject to jurisdictional separations.:7~ {O"(ԍId.:  X2 B.XDiscussion (#  X2"35.` ` Although the Commission established an exclusively federal recovery  X2mechanism for longterm number portability in the Third Report and Order, some LECs may have included, or may be including, some or all of these costs in their jurisdictional separations procedures. To the extent number portability costs have been assigned to the intrastate jurisdiction, those costs also may have been recovered through intrastate rates. Recovery in the federal jurisdiction may, thus, constitute double recovery. Similarly, to the"& 70*%%ZZ>" extent number portability costs are assigned to the intrastate jurisdiction prospectively, and LECs seek to recover those costs through intrastate rates, recovery in the federal jurisdiction would constitute double recovery.  X2#36.` ` We designate as an additional issue the question of what separations treatment and what intrastate ratemaking treatment may have been or may be accorded to U S WEST's number portability costs. We direct U S WEST to file an explanation of how prior years costs related to number portability implementation were treated with respect to jurisdictional separations. U S WEST should demonstrate that the number portability costs booked in past periods and included in the development of federal number portability charges have not been recovered already in the state jurisdiction. Alternatively, U S WEST should explain how state ratepayers will be made whole if the Commission allows federal recovery of costs previously assigned to the intrastate jurisdiction and included in the state ratemaking process. We also direct U S WEST to file an explanation of how costs related to LNP implementation will be treated prospectively with respect to jurisdictional separations. U S WEST should demonstrate that number portability costs included in the development of federal number portability charges will not be recovered prospectively in the state jurisdiction.  Xb2e. vVII. PROCEDURAL MATTERS Đx  X42 A.Filing Schedules  X2$37.` ` This investigation will be conducted as a notice and comment proceeding. We have designated this investigation CC Docket Nvo. 9935. The following company is the party designated to this investigation: U S WEST Communications, Inc.  X2%38.` ` This party shall file its direct case no later than April 23, 1999. The direct case must present the party's position with respect to the issues described in this Order. Pleadings responding to the direct case may be filed no later than May 3, 1999, and must be captioned "Oppositions to Direct Case" or "Comments on Direct Case." U S WEST may file a "Rebuttal" to oppositions or comments no later than May 17, 1999.  X 2&39.` ` An original and six copies of all pleadings shall be filed with the Secretary of the Commission. In addition, parties shall file two copies of any such pleadings with the Competitive Pricing Division, Common Carrier Bureau, 445 12th Street, S.W., 5th Floor, Washington, D.C. 20554. Parties shall also deliver one copy of such pleadings to the Commission's commercial copying firm, International Transcription Service, Inc., 1231 20th Street, N.W., Washington, D.C. 20036. Members of the general public who wish to express their views in an informal manner regarding the issues in this investigation may do so by submitting one copy of their comments to the Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W., Room 222, Washington, D.C. 20554. "h$70*%%ZZt"" Such comments should specify the docket number of this investigation. Parties are also encouraged to submit their pleadings electronically through the Electronic Tariff Filing System.  X2'40.` ` All relevant and timely pleadings will be considered by the Commission. In reaching a decision, the Commission may take into account information and ideas not contained in pleadings, provided that such information or a writing containing the nature and source of such information is placed in the public file, and provided that the fact of reliance on such information is noted in the order.  X < B.Ex Parte Requirements  X 2(41.` ` This tariff investigation is a "permit-but-disclose proceeding" and subject to "permit-but-disclose" requirements under section 1.1206(b) of the rules, 47 C.F.R.  X 21.1206(b), as revised. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must contain a summary of the substance of the presentation and not merely a listing of the subjects discussed. More than a one or two  X|2sentence description of the views and arguments presented is generally required.d8| {O(ԍSee 47 C.F.R. 1.1206 (b)(2), as revised. d Other rules pertaining to oral and written presentations are set forth in section 1.1206 (b), as well.  X72 t VIII. ORDERING CLAUSES   X 2x)42.` ` ACCORDINGLY, IT IS ORDERED that, pursuant to sections 4(i), 4(j), 201(b), 203(c), 204(a), 205, and 403 of the Communications Act, 47 U.S.C.  154(i), 154(j), 201(b), 203(c), 204(a), 205, and 403, and sections 0.91 and 0.291 of the Commission's rules,  X247 C.F.R.  0.91, 0.291, the issues set forth in this Order ARE DESIGNATED FOR  X2INVESTIGATION .  X2*43.` ` IT IS FURTHER ORDERED that U S WEST Communications, Inc. SHALL  Xh2BE a party to this proceeding. "QZ80*%%ZZ@"Ԍ X2 +44.` ` IT IS FURTHER ORDERED that U S WEST Communications, Inc. SHALL  X2INCLUDE , in its direct case, a response to each request for information that it is required to answer in this Order.  X2 ` `  ,hhhFEDERAL COMMUNICATIONS COMMISSION  X12` `  ,hhhYog R. Varma  xx  H(#(#` `  ,hhhDeputy Chief, Common Carrier Bureau S ( #&a Pu&P#