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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of ) ) Administration of the ) North American Numbering Plan, ) CC Docket No. 92-237 Carrier Identification Codes (CICs) ) ORDER ON RECONSIDERATION, ORDER ON APPLICATION FOR REVIEW, AND SECOND FURTHER NOTICE OF PROPOSED RULEMAKING Adopted: October 20, 1997 Released: October 22, 1997 Comment Date: December 8, 1997 Reply Comment Date: January 12, 1998 By the Commission: TABLE OF CONTENTS Paragraph No. I. INTRODUCTION 1 II. BACKGROUND 2 III. ORDER ON RECONSIDERATION 7 A. Extension of Transition Beyond January 1, 1998 7 1. The Commission's Decision 7 2. Petitions for Reconsideration 8 3. Comments and Reply Comments 10 4. Discussion 20 B. Grandfathering of Three-Digit CICs 38 1. Petitions for Reconsideration 38 2. Comments and Reply Comments 42 3. Discussion 47 IV. ORDER ON APPLICATION FOR REVIEW 77 A. Position of Parties 77 B. Discussion 79 V. SECOND FURTHER NOTICE OF PROPOSED RULEMAKING 83 A. Background 83 B. Request for Comments 84 C. Procedural Matters 86 VI. CONCLUSION 91 VII. ORDERING CLAUSES 92 Appendix A: List of Parties Appendix B: Initial Regulatory Flexibility Analysis I. INTRODUCTION 1. Carrier identification codes (CICs) are numeric codes that enable local exchange carriers (LECs) providing interstate interexchange access services to identify the interstate interexchange carrier (IXC) that the originating caller wishes to use to transmit its interstate call. LECs use the CICs to route traffic to the proper IXC and to bill for the interstate access service provided. CICs facilitate competition by enabling callers to use the services of telecommunications service providers both by presubscription and by dialing a carrier access code, or CAC, which incorporates that carrier's unique Feature Group D CIC. Originally, CICs were unique three-digit codes (XXX) and CACs were five-digit codes incorporating the CIC (10XXX). This reconsideration order focuses upon the transition to four-digit CICs and seven-digit CACs, as discussed in the following paragraphs. II. BACKGROUND 2. On April 11, 1997, in the CICs Second Report and Order, the Commission approved an industry plan to expand Feature Group D CICs from three to four digits on the ground that it was a reasonable method of meeting future demand for CICs as the supply of three-digit codes was exhausted. The industry agreed that as the expansion from three to four-digit CICs occurred, and as carriers replaced their five-digit CACs with seven-digit CACs, a transition, or permissive dialing period, was needed. The industry, however, was unable to agree on the length of the transition. In its 1994 CICs NPRM, the Commission proposed a six-year period. In the CICs Second Report and Order, however, because of the rapidly depleting pool of available three-digit CICs, the Commission decided to end the transition on January 1, 1998. The Commission also denied requests to "grandfather" (i.e., to permit carriers to continue to use) previously assigned three-digit CICs that are in use at the end of the transition. The Commission's decisions were intended to advance the pro- competitive objectives of the Communications Act of 1934 (the Communications Act or the Act), as amended by the Telecommunications Act of 1996 (1996 Act). 3. On May 19, 1997, the Competitive Telecommunications Association (CompTel), Telecommunications Group, Inc. (Telco), and VarTec Telecom, Inc. (VarTec) filed petitions for reconsideration of the CICs Second Report and Order. Nine parties filed comments on the petitions for reconsideration, and six parties filed reply comments. VarTec simultaneously filed an emergency motion for stay of implementation of the CICs Second Report and Order. In an Order issued July 18, 1997, the Common Carrier Bureau (Bureau) denied the stay motion. On August 8, 1997, VarTec filed an Application for Review of the Bureau's decision. 4. In this Order on Reconsideration, we modify our decision in the CICs Second Report and Order regarding the length of the transition during which three and four-digit Feature Group D CICs co-exist, and create a "two-step" end to the transition. By January 1, 1998, the end of the first phase, all LECs that provide equal access must have completed switch changes to recognize four-digit CICs. The second phase, which ends on June 30, 1998, is intended to allow interexchange carriers (IXCs) time to prepare their networks for, and educate their customers about, the replacement of three-digit CICs by four-digit CICs. After that date, only four-digit CICs and seven-digit CACs will be recognized. We also affirm our decision in the CICs Second Report and Order not to grandfather the use of three- digit CICs and five-digit CACs that are in use during the transition. After June 30, 1998, all CICs will be four digits in length. Our decisions here are intended to advance the pro- competitive objectives of the Communications Act, as amended. 5. We also adopt an Order on Application for Review that addresses the Application for Review filed by VarTec. For the reasons stated below, we affirm the Bureau's decision and deny VarTec's application. 6. Finally, we adopt a Second Further Notice of Proposed Rulemaking (Second FNPRM) to examine issues related to the provision of equal access in areas where it is not currently offered. Some incumbent LECs in rural and isolated areas, whose end offices are equipped with stored program-controlled (SPC) switches do not provide equal access because they have never received a bona fide request to do so. In other instances, the LECs' end offices are not equipped with SPC switches and, therefore, the LECs are not required to convert to equal access according to a specific timetable. The Second FNPRM tentatively concludes that eventually all LEC end offices should be required to provide equal access. The Second FNPRM tentatively concludes that LECs with SPC switches that have not received a bona fide request for equal access should be required to upgrade their facilities to provide equal access and to accept four-digit CICs within three years of the effective date of an Order adopted in this proceeding. It further tentatively concludes that LECs whose end offices are equipped with non-SPC switches should be required to convert their switches to provide equal access and to accept four-digit CICs when they next replace their switching facilities. III. ORDER ON RECONSIDERATION A. Extension of Transition Beyond January 1, 1998 1. The CICs Second Report and Order 7. In reaching its decision in the CICs Second Report and Order that the transition from three to four-digit CICs must end on January 1, 1998, the Commission considered data available at that time and analyses of current trends. Based on this information, the Commission assumed that, because the conservation plan modifications adopted in the CICs Second Report and Order allow the assignment of two CICs to each qualified applicant (rather than the one CIC limit imposed by the Bureau in March 1995), 75 percent of the 1,066 holders of a single CIC would request and obtain a second CIC. The Commission also assumed that 100 percent of new CIC applicants would request two CICs, thereby increasing the monthly CIC consumption by new applicants by 16 CICs per month, for a total average monthly CIC consumption by new applicants of 32 codes. The Commission concluded that enough CICs would remain available for assignment during a transition ending on January 1, 1998, but not significantly beyond that date. 2. Petitions for Reconsideration 8. CompTel requests that the Commission reconsider its decision to end the transition on January 1, 1998, and instead extend it for two years, until January 1, 2000. According to CompTel, IXCs need the additional two years to educate consumers about the new dialing patterns, to reprogram equipment, and to coordinate conversion with incumbent LECs (particularly small, rural carriers) that have not upgraded their switches to recognize four-digit CICs and seven-digit CACs and whose upgrade status directly affects long distance carriers' ability to convert to four-digit CICs. CompTel, observing that the transition established by the CICs Second Report and Order lasts only nine months, argues that carriers have not been given prior notice of a date certain at which time the transition would end. CompTel is particularly concerned about long distance carriers whose customers use automatic dialers that must be individually and manually reprogrammed by technicians. CompTel asserts that much of the required reprogramming will not be completed by January 1, 1998, and states that, as a consequence, these customers will be unable to complete long distance calls. CompTel also argues that many newer long distance carriers have expended significant resources on three-digit CICs for dial-around purposes, and must now expend additional significant resources on CIC conversion at a time when the resources are needed to negotiate and implement interconnection agreements, as well as the Commission's new access charge and universal service policies. 9. Telco argues that the Commission should grandfather three-digit CICs and five-digit CACs. As an alternative, Telco requests that the Commission require switch manufacturers and local exchange carriers to upgrade their switches by January 1, 1998, but extend the permissive dialing period until January 1, 1999 to enable dial-around carriers to test switches and educate customers. Asserting that it has learned from certain independent LECs that not all switches will be upgraded to recognize five-digit CACs by the end of the year, Telco argues that it cannot begin educating customers about the dialing changes until the conversion of LEC switches is completed. Telco contends that the customer education process will take at least a year because many of Telco's customers are older individuals with lower calling volumes. Telco also argues that for the purpose of educating dial-around customers, it is irrelevant whether the industry has been on notice of the upcoming need for changes since 1994 and that the transition has been in place since April 1995 as relied upon by the Commission in determining the end to the transition. Finally, Telco challenges the assumptions used by the Commission in estimating how long the remaining four-digit CICs in the 5XXX and 6XXX pool will last. Telco argues that its assumptions, that only 50 percent of existing CIC holders with one CIC would request a second CIC and only 50 percent of new entrants would request two CICs, are as reasonable as those of the Commission and would yield an additional 350 CICs available for assignment. At an assignment rate of 24 CICs per month, rather than at the Commission's assumed assignment rate of 32 CICs per month, Telco argues that its proposal would add more than one year to the transition. Telco also questions the Commission's concern that a substantial number of CICs should remain available for unidentified new entrants into the telecommunications services market. 3. Comments and Reply Comments 10. The majority of parties that commented on this issue supports an extension of the transition beyond January 1, 1998. The suggested end to the transition varies, with dates ranging from June 30, 1998, to January 1, 2000. Commenters assert that an extension of the transition is warranted for several reasons. 11. Some parties assert that the Commission's decision to end the transition on January 1, 1998, "imposes an unnecessary burden on the interexchange market." In particular, parties argue that the burden would be great on IXCs that have programmed their five-digit CACs in numerous automatic dialers and that must manually reprogram them by sending technicians to customers' offices. Parties argue that customers using automatic dialers that have not been reprogrammed by January 1, 1998, would be unable, after that date, to complete long distance calls using the long distance carriers they had selected. They assert that this situation would lead to significant customer confusion and frustration and would harm the ability of these long distance carriers to compete with the incumbent LECs in the intraLATA toll services market. 12. Parties raise particular concern about states that do not yet require intraLATA toll presubscription. They argue that, in these states, all of a customer's 1+ intraLATA toll traffic would default to the incumbent LEC if the customer's long distance carrier were unable to use its CAC. According to these commenters, end users can only reach a competing carrier by dialing the carrier's CAC prior to dialing the called party's NPA/NXX- XXXX. For convenience, however, many consumers have programmed their long distance carrier's CAC into their PBX or dialer so that when the end user dials 1+, the PBX or dialer substitutes the CAC for the 1+ dialing. Thus, commenters suggest that although "it was intraLATA toll that precipitated the need for PBXs and dialers to be programmed with CACs, the PBX or the dialer uses the CAC for all of a consumer's toll traffic. If the CAC ceases to function, it will affect all of a consumer's long distance calls." According to commenters, the customer using the equipment will not be able to make any long distance calls (interLATA, intraLATA, interstate or intrastate) until the PBX or dialer is reprogrammed with the seven digit CAC. For this reason, MCI argues that the transition should be extended until the Regional Bell Operating Companies (RBOCs) are required to provide intraLATA toll dialing parity or at least until the demand for additional CICs requires the transition's end. WorldCom also contends that, because all LEC switches have not been converted, its efforts to reprogram dialers through a systematic national program have been hindered and it has not been possible to mount a national education campaign. 13. Several parties challenge the Commission's determination in the CICs Second Report and Order that the industry has been given adequate notice about the need to upgrade systems to recognize four-digit CICs. Other parties assert that notice is largely irrelevant to dial-around interexchange service providers. US WEST agrees with the Commission that the industry has been on notice since May 1994 about the need to begin the CIC conversion process, and that the transition has been ongoing since April 1995, the day after which the last three-digit Feature Group D CIC was assigned, and the day on which Bellcore began to assign four-digit CICs exclusively. In addition, US WEST argues that the April 1996 Public Notice "clearly indicated that the transition schedule might be advanced." US WEST argues that a transition ending on January 1, 1998, is sufficiently long and states that customers in the US WEST region typically receive from six to nine months notice and education regarding numbering plan area changes. 14. CWI argues that it needs a longer transition not just to complete reprogramming all of its automatic dialers but also to notify its customers who have installed their own customer premises equipment (CPE) that they need to convert to four-digit CICs. CWI states that because customers maintain their own CPE, it "is unclear on exactly how these customers are to be notified" and CWI "can only assume that the Commission intends to conduct a public campaign to notify consumers or will require notification by the LECs." Telco asserts that call intercept messages, like those used to introduce new area codes, must be developed to inform dial-around customers that they need to dial additional digits. Telco asserts that the process for developing and implementing such call intercepts has not yet begun and will require industry consensus. MCI supports Telco's suggestion that the Commission require intercept messages, but argues that such messages are unlikely to remove the anti-competitive effect of premature termination of the permissive dialing period. 15. Finally, CWI argues that some companies, like CWI, have their own switches that may not be capable of accepting four-digit CICs. CWI asserts that it is in the process of developing software that will enable its switches to recognize four-digit CICs but will need additional time to engage in testing, troubleshooting, and verifying the use of four-digit codes with other carriers. 16. The majority of commenters supports a "two-step" transition process to avoid a "flash-cut" conversion. Under such a transition, LECs would first be required to convert their end office switches to accept four-digit CICs, and then to coordinate with IXCs for an additional period of time during which the IXCs would also educate customers regarding necessary dialing changes. Parties contend that they cannot begin to make changes necessary to accommodate four-digit CICs (e.g., reprogramming of PBXs or automatic dialers) until the transition to four-digit CICs is complete at the LEC switch level and, thus, their ability to prepare for conversion is dependent on how quickly incumbent LECs convert their switches. Parties express concern that in areas with many smaller and independent LECs and in other areas where switches have not been upgraded, CAC dialing will be "rendered impossible" by the end of the transition on January 1, 1998, significantly hampering the business of long distance resellers. Moreover, parties contend that once LEC switch conversion has taken place, dial-around inter-exchange service providers need time, after the LEC conversion deadline, for customer education and end-office field testing. 17. US WEST, rejecting arguments about LECs' inability to meet the current conversion date, claims that there is no documented evidence to support the alleged lack of LEC conversion. US WEST asserts specifically that it had completed necessary changes throughout its network before the first four-digit CIC was assigned and that it can now accommodate all of the 522 four-digit CICs assigned as of May 1997. US WEST states, however, that to the extent the Commission finds that the requisite conversion of incumbent LEC switches is incomplete, US WEST could support Sprint's suggestion that there be a "'moderate extension of the transition period,'" with incumbent LEC conversion required by January 1, 1998, and a transition ending no later than June 30, 1998. US WEST disputes, however, that a lengthier extension of the transition is necessary, rejecting the argument that the lack of intraLATA toll presubscription and 1+ dialing capability with respect to intraLATA toll calls is anticompetitive. US WEST and Sprint urge the Commission to limit the duration of any extension to the transition. They argue that the transition causes competitive imbalances because some carriers' customers are able to reach their networks using a five-digit CAC while other carriers' customers must dial seven digits. TRA disagrees, responding that the "anticompetitive dangers here do not approach the compelling dimensions asserted by US WEST," and arguing that the CICs Second Report and Order, by ending the transition on January 1, 1998, has "inadvertently set the stage for the 'flash-cut conversion' which the Commission has held would be 'contrary to the public interest.'" 18. Parties advocating a lengthened, two-step transition process reject suggestions that, as an alternative to extending the transition, the Commission could entertain waivers of the conversion requirements by LECs with switches that are not upgraded to recognize four- digit CICs, and IXCs served by the switches of such LECs. AT&T, while not objecting to an extended transition, supports the waiver approach for LECs that allege that they cannot meet the January 1, 1998 conversion date. AT&T is the only long distance carrier that disagrees that complete conversion of LEC switches should be a prerequisite to ending the transition. Telco argues that requiring LECs to obtain waivers of the switch conversion deadline would lead to sporadic implementation of four-digit CICs, to the detriment of new entrants. TRA cautions that any waivers granted would have severe consequences for long distance calling and should be scrutinized carefully. Sprint notes that no such waivers have been requested. 19. AT&T requests that the Commission clarify the CICs Second Report and Order's modification of the conservation plan limiting to two the number of CICs an entity may be assigned. AT&T asks that the Commission state that it will discontinue the conservation plan once the transition ends. 4. Discussion 20. Two-Step Transition. After reviewing the comments and additional record information described below, we conclude that we should modify our decision in the CICs Second Report and Order to end the period for completing the conversion from three-digit Feature Group D CICs to four-digit Feature Group D CICs on January 1, 1998. First, we determine that LEC end office switches must be upgraded to accept four-digit CICs by January 1, 1998. Second, we determine that the transition during which use of both three- digit CICs and five-digit CACs may continue will end on June 30, 1998, rather than on January 1, 1998. The result will be a "two-step" transition, in which LECs will complete switch changes to recognize four-digit CICs in the first phase, and IXCs will prepare their networks and educate their customers during the second phase. We note that, if certain LEC switches are unable to recognize four-digit CICs and seven-digit CACs now, the callers subscribing to the services of the approximately 549 four-digit CIC holders may be denied access to services of those CIC holders until January 1, 1998. The number of such CIC holders will only increase during the period ending on January 1, 1998. We find that perpetuating this inability to access services any longer than necessary would be contrary to the pro-competitive goals of the 1996 Act. Notwithstanding the above modifications, we affirm that the transition should end as soon as practicable because, as we stated in the CICs Second Report and Order, "[w]e are confident that . . . the use of only four-digit CICs will serve the pro-competitive goals of the Act, as well as the specific objectives of Sections 251(e) and 251(b)(3)." Moreover, as explained below, we must ensure that the supply of available four-digit Feature Group D CICs is sufficient to last for the duration of the transition. 21. Prior to issuing the CICs Second Report and Order, Commission staff made inquiries to learn when the hardware and software necessary to upgrade equipment to accept four-digit CICs had been made available by PBX manufacturers to PBX owners. Commission staff made similar inquiries with respect to when network switch manufacturers had made such hardware and software available to carriers. Relying on information received from two network switch manufacturers cumulatively representing approximately 91 percent of the total United States market for local network switches as measured by sales, the Commission stated that it appeared that the hardware and software necessary for local network switches to process four-digit CICs had been on the market for at least two to three years and, in some cases, for much longer. Although Lucent Technologies did not disclose how many of its local network switch customers had purchased the new products, NorTel, representing 45 percent of the local network switch market, stated that all of its customers requiring equal access software had four-digit CIC capability. 22. Nonetheless, because of the concern raised in the reconsideration record about the status of LEC end office switch conversion, Commission staff made further inquiries about the status of LEC conversion efforts. Commission staff requested and received information from the following associations with LEC members: the Organization for the Promotion and Advancement of Small Telephone Companies (OPASTCO); the National Telephone Cooperative Association (NTCA); the United States Telephone Association (USTA); the National Rural Telephone Association (NRTA); GVNW Inc./Management (GVNW); and the National Exchange Carriers Association (NECA). Specifically, Commission staff asked each association for information on what percentage of its LEC members required to provide equal access had end office switches capable of recognizing four-digit CICs and seven-digit CACs as of July 1, 1997. 23. The information the Commission received reveals that most equal access central offices either are currently capable of recognizing four-digit CICs, or will be upgraded to do so by the end of 1997. Based on data collected from the Local Exchange Routing Guide, USTA states that approximately 83 percent of central offices in the United States are required to provide equal access (i.e., 24,000 central offices out of a total of 28,500 are required to provide equal access). USTA states that it expects its LEC members required to provide equal access to have four-digit CIC capability installed by January 1, 1998, and that it further understands that software upgrades are all that is necessary to enable equal access end offices to recognize four-digit CICs. NTCA reports that of the 304 member LECs responding to an inquiry sent to all 496 members, six respondents required to offer equal access will not be able to support four-digit CICs and seven-digit CACs by the end of 1997. NTCA reports that many LECs responding to the inquiry that do not offer equal access nonetheless either have the capability now to provide equal access using four- digit CICs and seven-digit CACs, or will have it by the end of 1997. GVNW received information from 89 of approximately 150 clients (60 percent). Central offices of 79 percent of those respondents provide equal access and, of those, approximately 95 percent have switches capable of recognizing four-digit CICs and seven-digit CACs. Regarding the relationship between equal access software and four-digit CIC capability, NECA states: "It is our understanding that most of the switch vendors started adding four-digit CIC capability to their switch software in the 1995 timeframe . . . . [c]ompanies who had equal access software installed after the availability of four-digit CIC capability should be able to comply with the FCC's recent order with minimum of expense." Both OPASTCO and NECA provide information regarding the equal access conversion status of their members: OPASTCO states that 335 of its 485 members report that they provide equal access; and NECA data indicates that 86 percent of the central offices of its LEC members currently offer equal access. 24. Although our further inquiries on the status of LEC end office switch conversion reveal that most LECs already have converted their switches to accept four-digit CICs or will do so by January 1, 1998, we acknowledge that some LECs report that they will not convert their switches by that deadline. Based on the information the Commission received, however, the number of carriers in this situation appears to be small. We expect that all LECs that currently provide equal access are now striving, and will continue to strive, to achieve compliance with the four-digit CIC requirement by January 1, 1998. If we receive a complaint of LEC noncompliance, infeasibility of compliance with that deadline will not relieve a defendant LEC of liability under section 208 of the Commission's rules. A LEC that determines that it will not meet the January 1, 1998 conversion deadline must seek relief from the Commission prior to that date. 25. On balance, we find that the public interest, and the procompetitive policies underlying the Act, as amended, are best served by moving to use of only four-digit CICs as soon as possible. Therefore, we affirm our decision that LECs that currently provide equal access must upgrade their end office switches to recognize four-digit CICs by January 1, 1998. To accommodate the concerns raised by IXCs and others, however, we extend the transition for them by six months, from January 1, 1998, to June 30, 1998. Introducing a second stage and thereby creating a two-step transition process will give IXCs the time they need to coordinate the conversion with LECs, and to prepare their networks and educate their customers about necessary dialing changes. The record indicates that IXCs, to prepare their networks for complete conversion to four-digit CICs, may need to engage in, for example, reprogramming automatic dialers and PBXs, troubleshooting, testing, and verifying the use of four-digit CICs with other carriers. As discussed below, our decision not to extend the transition more than six months is based on our concern that there be enough four-digit CICs to meet the demand for CIC assignments during the transition, and that the anticompetitive effects of dialing disparity are minimized. 26. In general, individual carriers are responsible for educating their customers about changes necessitated by the transition to four-digit CICs and they should be free to decide how best to do so. Although industry may agree on additional industry-wide consumer education efforts that should be undertaken to smooth the transition from three to four-digit CICs for consumers, pursuant to our exclusive jurisdiction over those portions of the NANP that pertain to the United States and to our general rulemaking authority, we conclude that, at a minimum, LECs must offer a standard intercept message beginning on or before June 30, 1998, explaining that a dialing pattern change has occurred and instructing the caller to contact its IXC for further information. In developing an intercept message, LECs must consult with IXCs and reach agreement on the content of the message and on the period of time during which the message will be provided. We leave to resolution by the parties decisions about who should have the ultimate responsibility for determining the content of the intercept message and the period of time during which the message must be offered. The Commission will resolve any disputes arising from parties' inability to reach agreement on such matters. Finally, we conclude that the determination of how best to cover the costs of providing the intercept message should be left to individual LECs, including whether their access customers should be charged a reasonable fee to cover those costs. 27. CIC Consumption. We remain concerned that there be enough four-digit CICs in the 5XXX and 6XXX range available to meet the demand for CIC assignments during the transition. In the CICs Second Report and Order, we estimated that the remaining unassigned CICs in this range "should be sufficient to meet carrier demand until January 1, 1998, but perhaps not significantly beyond that date." Based on current CIC consumption, with adjustments made to reflect conservation plan modifications, we conclude that the remaining unassigned CICs in the 5XXX and 6XXX range should be sufficient to meet carrier demand until June 30, 1998, but continue to believe that the CIC supply would be jeopardized by an extension significantly beyond that date. We must ensure that there are enough assignable CICs during the transition to meet industry demand because without CICs it would be extremely difficult for new entrants to compete in the telecommunications services market. Therefore, we find that a forecast of Feature Group D CIC consumption must be based on reasonably liberal assumptions of possible consumption. 28. Our decision here to extend the transition only until June 30, 1998, recognizes our continuing expectation that, even under our conservation plan, monthly CIC consumption will continue to increase "as new carriers enter the telecommunications services market . . ." While the number of Feature Group D CICs assigned in May 1997 was only 18, the number of assignments in June 1997 increased to 27, and in July 1997 to 29. The number of assignments in August 1997 decreased only slightly to 21, but in September 1997 increased significantly to 30, just slightly below our estimate in the CICs Second Report and Order of 32. These figures demonstrate that CIC consumption continues to increase and offer additional support that our analysis of demand for CICs is reasonable, and compels a transition that is as brief as reasonably possible. As noted above, we expect that 75 percent of the 989 current CIC holders who are eligible to receive a second CIC as a result of the change in the ongoing conservation plan, will request a second CIC. For these reasons, we cannot responsibly extend the transition to as late as January 1, 2000, as some parties request, or even, as requested by MCI, until the RBOCs must provide intraLATA toll dialing parity, which, in some situations, could be as late as February 8, 1999. 29. In the past, entities that requested Feature Group D CICs without acquiring Feature Group D trunk access were denied a CIC. Since the CICs Second Report and Order was released, however, the Industry Numbering Committee (INC) accepted for industry consideration a proposed change to the CIC Assignment Guidelines to eliminate the requirement that an applicant for a Feature Group D CIC must use that CIC for its own Feature Group D trunk access if the applicant will be using the Feature Group D access already provided to an underlying transport provider. This change may be implemented as early as November 1997. Thus, our estimates of CIC consumption must assume that this change in assignment eligibility will occur prior to the transition's end. If this change is implemented, entities previously denied CIC assignments will become eligible to receive up to two CICs. Between May 19, 1997 (the effective date of the CICs Second Report and Order) and June 30, 1997, six of nine Feature Group D CIC requests were rejected because the requesting parties had not acquired Feature Group D trunk access; after the change is implemented, each of those six previously ineligible entities will become eligible to receive two Feature Group D CICs. Thus, it appears likely that this change in the CIC Assignment Guidelines will increase CIC consumption. 30. For all these reasons, we disagree with the parties that argue that available CICs could meet industry needs during a transition extending significantly beyond January 1, 1998. MCI and TRA, in challenging the Commission's estimates regarding CIC consumption, have underestimated the significance of CICs to a competitive telecommunications environment. Both parties fail to consider the significant number of second Feature Group D CICs that single CIC holders may request, and the number of CIC assignments that may be demanded by new entrants into the telecommunications services market. In addition, we disagree with Telco that the assumptions used in making our estimates in the CICs Second Report and Order were too liberal. To facilitate competition in the telecommunications services market, both by incumbents and by new market entrants, it is imperative that we not underestimate CIC consumption. For the same reason, we disagree with Telco that we have overestimated the number of CICs that should be available to meet demand of unidentified new entrants during the transition. 31. Notice of End of Transition. Some parties argue that the Commission has given industry inadequate notice of the end of the transition from three to four-digit CICs and that the statements we made in the CICs Second Report and Order about the industry's awareness of the end of the transition were flawed. We disagree and affirm our previous conclusion that the industry has received ample notice about the need to make changes necessary to accommodate four-digit CICs and seven-digit CACs, including the need to educate consumers about the upcoming changes. We emphasize here that our decision to implement a two-step transition to four-digit CICs, and to extend the transition slightly, is based on the concern expressed in the reconsideration record about the status of LEC switch conversion and its effect on the ability of IXCs to prepare their networks and educate their customers. 32. Telco argues that the Commission was unreasonable in expecting the industry to have invested money in upgrading systems "to implement what was at that point merely a proposal by the Commission," and interprets the CICs Second Report and Order as mandating that "the transition should begin retroactively from the date the CICs NPRM was released rather than the date the final rules were adopted." Telco argues that "the transition period must begin with adoption of final rules, not the notice of proposed rules." We find that Telco's argument is based on an inaccurate characterization of the Commission's statements about notice in the CICs Second Report and Order. 33. In the CICs Second Report and Order, responding to Telco's contention that the transition to four-digit CICs had not commenced because the Commission had not adopted a specific transition period on the record in any final decision, we stated that Telco had not explained why the Commission must establish the beginning of the transition for CIC expansion, when the industry had already developed and begun to implement the transition plan. We noted that, in the CICs NPRM, the Commission had stated that the industry had planned for the change from three to four-digit CICs to occur during the first half of 1995. We also tentatively concluded that the industry's plan to expand three-digit Feature Group D CICs to four digits was reasonable and that the transition from three to four-digit CICs should last six years. 34. In the CICs Second Report and Order, we observed that the last available three- digit CIC was assigned on March 31, 1995. Accordingly, on April 1, 1995, the transition began. Thus, the date on which the transition commenced depended solely upon when the last available three-digit CIC was assigned, not upon any date or event set by the Commission. In the CICs Second Report and Order, we did not state that the transition from three to four-digit CICs had begun on the date the Commission issued the CICs NPRM. Moreover, on reconsideration, we find that it cannot be reasonably inferred from the CICs Second Report and Order, or from any other statements issued by the Commission, that the Commission has attempted to "effectively start[] the transition period with the issuance of the NPRM rather than the issuance of the final rules adopting a transition period." Therefore, we find Telco's arguments without merit. 35. Modified CIC Conservation Plan. Finally, we respond to AT&T's request that we clarify that, concurrently with the end of the transition, we will discontinue the modified conservation plan limiting to two the number of CICs an entity may be assigned and reinstate the CIC Assignment Guidelines limit of six CICs per entity. AT&T contends that this clarification would be consistent with "clear implications" of statements in the CICs Second Report and Order that a shorter transition will allow the Commission to end the conservation plan sooner and that the modified conservation plan is necessary as long as the transition is in place. In support of simultaneously ending the conservation plan's limit and the transition, AT&T argues that there will be no CIC shortage at that time and carriers will need additional codes to deploy new services, such as those requiring special routing and processing. 36. In the CICs Second Report and Order, we recognized the disadvantages imposed on competing providers by the conservation plan, prior to its modification. For that reason, we modified the plan to allow an entity to receive two CICs even if neither CIC would be used to offer intraLATA services. We acknowledge that, even with the modifications, the conservation plan is only a temporary measure. It is necessary, as noted in the CICs Second Report and Order, only "as long as the transition continues . . .[to avoid] a flash-cut conversion to four-digit codes." Nonetheless, before we can determine how many CICs an entity should be allowed to obtain (whether to allow six per entity as stated in the CIC Assignment Guidelines or some other number), the Commission must resolve issues related to CIC use and assignment. The maximum number of CICs assigned to an entity is one of many issues that is raised in a Further Notice of Proposed Rulemaking and Order released in this docket on October 9, 1997. Because in the CICs Second Report and Order we did not intend to end the conservation plan and transition simultaneously, we decline to grant the clarification AT&T has requested. 37. In sum, we conclude that extending the transition by six months, from January 1, 1998, to June 30, 1998, will allow sufficient time after LEC switch conversion for carriers to educate customers about the change in CICs and CAC dialing. The length of this extension is sufficiently brief to minimize the anticompetitive effects of dialing disparity, to allow us to end the conservation plan as soon as possible, and to ensure that there are enough Feature Group D CICs in the 5XXX and 6XXX range for assignment during the remainder of the transition. B. Grandfathering of Three-Digit CICs 1. Petitions for Reconsideration 38. VarTec asks that the Commission reconsider and vacate the mandate in the CICs Second Report and Order that five-digit CACs be eliminated and instead implement VarTec's grandfathering plan. VarTec argues that the Commission's decision to eliminate five-digit CACs will cause customer confusion and result in a diminution of business for smaller dial-around long distance telephone services, that will force them to compete to become primary interexchange carriers and "expos[e] [carriers such as] VarTec to the large IXCs' predatory marketing techniques." In addition, VarTec repeats arguments made in its emergency motion for stay of the CICs Second Report and Order that the decision to eliminate five-digit CACs: (1) is arbitrary and capricious in violation of the Administrative Procedure Act (APA); (2) takes VarTec's private property without just compensation in violation of the Fifth Amendment; (3) violates VarTec's commercial free speech rights under the First Amendment; and (4) violates the Communications Act and the Regulatory Flexibility Act by creating a market entry barrier for small businesses. 39. VarTec contends that its grandfathering plan "endorses the notion of 'first come, first serve' which the Commission has repeatedly held to be reasonable under the Act." Under VarTec's plan, all three-digit CICs starting with a "1" could no longer be used as of January 1, 1998 (the end of the transition under the CICs Second Report and Order) to avoid CAC dialing conflicts. VarTec asserts that this plan would require the reassignment only of three-digit CICs with "1" as the first digit, but that only 70 such CICs have been assigned. VarTec contends the Commission's adoption of VarTec's grandfathering plan would, in the long run, make 900 more CACs available for use than under the current expansion plan. VarTec claims that software and switch reprogramming that currently allow switches to read both three and four-digit CICs beginning with a "5" or a "6" (such as 10636 --one of VarTec's CACs-- and 1016XXX) will permit the implementation of VarTec's plan. 40. In support of grandfathering, VarTec argues that, despite the Commission's concern that grandfathering would interfere with four-digit CICs beginning with "5" or "6," these CICs co-exist today with three-digit CICs beginning with "5" and "6" (such as VarTec's CICs "595" and 696"), and that they can continue to co-exist in the future. In support of the adoption of its grandfathering plan, VarTec also cites the Commission's findings in the CICs Second Report and Order, that the existence of CACs of varying lengths during the transition did not violate section 201(b) (prohibiting unreasonable practices) or section 202(a) (prohibiting unreasonable discrimination) and that the transition is indeed reasonable and necessary to avoid a flashcut conversion. 41. Supporting VarTec's grandfathering proposal, Telco argues that alternatives to complete CIC expansion are necessary. According to Telco, VarTec's grandfathering plan would expand the pool of available CICs to include all four-digit CICs and all but 100 three- digit CICs. Moreover, Telco argues that the plan arguably would impose no additional requirements on switch manufacturers and operators. 2. Comments and Reply Comments 42. Parties supporting grandfathering argue that elimination of five-digit CACs would "threaten the competitive viability of dial-around carriers." Grandfathering, they assert, would prevent such carriers from suffering significant losses that they would otherwise be unable to recover and that would put them at a disadvantage even with respect to new carriers relying only on seven-digit CACs. For example, CGI and CommuniGroup, small interexchange carriers with customers that for the most part obtain access to their services through five-digit CACs, argue that the Commission should vacate its decision to eliminate five-digit CACs, relying on all of the reasons stated in VarTec's petition. 43. Parties opposing grandfathering three-digit CICs and five-digit CACs object to the discrimination that would assertedly result from perpetuating dialing disparity. Sprint, for example, claims that "any proposal which permanently institutionalizes such disparity must be rejected as being contrary to the public interest." Sprint also asserts that VarTec does not provide adequate support for its claim that, in a seven-digit CAC environment, VarTec would be unable to compete for 1+ traffic and to re-educate its customers about the longer CACs. In addition, Sprint, asserting that "it is well established that NANP codes are a public resource, and that use of such codes do [sic] not confer ownership," urges that we reject VarTec's Fifth Amendment claim. AT&T asserts that complete conversion across-the-board would "put all carriers at parity by not requiring disparate dialing patterns." 44. In response to arguments that co-existence of five and seven-digit CACs would harm competition, VarTec states that, to the contrary, co-existence would increase competition by eliminating the possibility that the customers of five-digit CAC holders will revert to using their primary IXC because of confusion over the CAC change. In response to US WEST's assertion that VarTec should have been aware of the need to expand to four- digit CICs, VarTec argues that because not all LEC switches are technically capable of handling four-digit CICs (an assertion VarTec argues the record supports), and because use of four-digit CICs was not mandatory and was subject to a Commission-proposed six-year transition, it has continued to promote its three-digit CICs. VarTec rejects Sprint's opposition to its Fifth Amendment taking argument. VarTec contends that Sprint's reliance on statements in Commission Orders and industry guidelines that NANP codes are a public resource are insufficient, and that Sprint provides no statutory authority to support the assertion. VarTec argues that "CACs are analogous to western water rights which belong to no one, but may be acquired by reason of investment of time and money in application of the resource's productive use." 45. US WEST argues that grandfathering five-digit CACs would "preclude an orderly transition to the use of five-digit CICs, if such a transition ultimately becomes necessary" instead of leading to an increase in the number of CICs in the long run as VarTec contends. US WEST suggests that, if expansion to five-digit CICs becomes necessary, the expansion could be accomplished by "opening up the third digit '1' to utilize the numbers 2 through 9" which would "provide far more CICs than grandfathering the existing three-digit CICs, which would preclude the use of the third digit for expansion purposes." US WEST contends that expansion from four to five-digit CICs is "far more reasonable and nondiscriminatory" than grandfathering three-digit CICs as a means of making more CICs available in the long run. 46. Both Telco and VarTec, in their reply comments, outline possible ways of allowing further CIC expansion, if necessary. In response to US WEST's concern that grandfathering three-digit CICs will preclude an orderly transition to five-digit CICs, Telco suggests a "sequential grandfathering" scheme: for present purposes, the Commission can order carriers to assign four-digit CICs in the "1" sequence only after the other sequences -2XXX, 3XXX, etc.- have been used. Once those codes have been assigned, the Commission can reevaluate, based on competitive circumstances and CIC code demand at that time, whether a transition to five-digit CICs is necessary and whether three- and four-digit CIC assignments should be grandfathered. If four-digit CICs are exhausted at such unprecedented rates that the dial-around market is still developing when four-digit codes are used up, the Commission would still have the option of grandfathering four-digit CICs, using the unassigned "1" sequence to properly route CACs, thus allowing a smooth transition to five- digit CICs. Telco argues that sequential grandfathering "eliminates the need for customer re-education, maintains the service status quo for customers, and stabilizes expectations for new entrants regarding the risks and investment for entry." According to Telco, the number of CICs available with grandfathering would be "virtually the same" as under the Commission's current scheme, with only 100 fewer CICs made available with grandfathering. VarTec disputes US WEST's assertion that VarTec's grandfathering plan would preclude future expansion to five-digit CICs, arguing that the plan, which would increase the number of available CACs from 970 to 10,900, would make unlikely the need to expand to five-digit CICs; VarTec further contends that, even if such an expansion did become necessary, its grandfathering plan could be modified to accommodate the change and make available an additional 100,000 CICs. 3. Discussion 47. We affirm our decision in the CICs Second Report and Order to deny requests that we grandfather three-digit CICs and five-digit CACs in use when the transition ends. For the reasons described below, we affirm our conclusion in the CICs Second Report and Order that grandfathering would make it impossible to assign four-digit Feature Group D CICs outside the 5XXX and 6XXX range, a result we find to be contrary to the public interest. We also find that, even if this impossibility did not exist, grandfathering could lead to significant anticompetitive results that would be counter to the public interest. We reject VarTec's arguments that the CICs Second Report and Order: (1) incorrectly fails to grandfather five-digit CACs; (2) is arbitrary and capricious in violation of the APA; (3) violates the Fifth Amendment by taking VarTec's property; (4) violates the First Amendment by restricting VarTec's commercial speech rights; and (5) violates section 257 of the Communications Act, as amended, and the Regulatory Flexibility Act by imposing barriers to market entry for small businesses. 48. VarTec's Grandfathering Plan. VarTec erroneously contends that grandfathering would work because three-digit CICs beginning with "5" and "6" can continue to co-exist with four-digit CICs beginning with "5" and "6" in the future as they do today. We acknowledge that three-digit CICs beginning with "5" and "6" are currently in use, and that four-digit CICs beginning with the same numbers also are in use, with no conflicts. This situation can continue as long as we do not allow four-digit CICs beginning with a digit other than five or six to be assigned. As emphasized throughout the CICs Second Report and Order, and this Order on Reconsideration, however, continuing CIC demand will compel us to permit the use of four-digit CICs outside the 5XXX and 6XXX range. During the transition, we must continue to ban the use of such codes because if four-digit CICs outside the 5XXX and 6XXX range are assigned while three-digit CICs are still in use, a code conflict would cause the misrouting of calls made using the four-digit CICs and associated seven-digit CACs. Therefore, if we grandfathered three-digit CICs under the existing expansion plan, assignment of those additional four-digit CICs would not be possible, which would not only hamper new entrants' ability to compete but also waste a scarce numbering resource. As discussed below, the alternatives proposed by VarTec in its plan would make an orderly transition to five-digit CICs difficult, at best. 49. Even, assuming arguendo, it were technically feasible for the Commission to grandfather three-digit CICs and five-digit CACs in use when the transition ends, and still make available for assignment four-digit Feature Group D CICs outside the 5XXX and 6XXX range, we would still decline to do so. We agree with parties arguing that a competitive disparity would result if customers of some carriers could access their services by dialing five-digit CACs, while customers of other carriers would be forced to dial seven- digit codes. Indeed, this disparity was a significant factor in our decision in the CICs Second Report and Order to end the transition on January 1, 1998, and remains a significant reason for our decision on reconsideration to extend the transition only for a short period. Customers who wish to use more than one dial-around service may be confused by the presence of CACs of varying lengths. Moreover, under VarTec's plan, entities assigned three-digit CICs beginning with a "1" would need to relinquish those codes. VarTec fails to explain adequately how the harm to those carriers is justified under its grandfathering plan. In addition, we note that the industry already has incurred great expense to accommodate the current expansion plan's permissive dialing period (which allows concurrent use of both three and four-digit CICs). 50. In response to concerns that its grandfathering plan would not allow an orderly transition to five-digit CICs, VarTec proposed a "simple adaptation" of its grandfathering plan. Under VarTec's modified proposal, all three digit CICs starting with "1" would be removed from use so that a switch would not confuse 101XX with 101XXXX. VarTec further claims that if subsequent expansion becomes necessary, three digit CICs starting with the number "2" could be removed from use, so that use of the number "2" would signal that a five digit CIC is about to be dialed (i.e., 102XXXXX). VarTec fails to provide evidence on the record that this suggested modification to its grandfathering plan would achieve an orderly transition. Similarly, the record is insufficient to support Telco's assertion that its suggested "sequential grandfathering" modification (which appears to be the same as VarTec's modified plan) will permit an orderly transition to five-digit CICs. To the contrary, the proposals suggested by VarTec and Telco will result in the reassignment of three-digit CICs beginning with "1" as the first digit (of which there are at least 70) and will perpetuate dialing disparity between the holders of three-digit and four-digit CICs. In addition, neither party offers any evidence regarding the software and hardware modifications that would be needed to allow switching equipment to accommodate, simultaneously, the three-digit CIC/five-digit CAC format, the four-digit CIC/seven-digit CAC format, and the five-digit CIC/seven-digit CAC format, nor did either party present evidence regarding the costs of such modifications. 51. VarTec's argument that grandfathering five-digit CACs would be consistent with the notion of "first-come, first served," as sanctioned by the Commission in other contexts is misplaced. VarTec cites the N11 First Report and Order and FNPRM, in which the Commission stated that when a LEC assigns N11 codes, "it must do so in a reasonable, non-discriminatory manner, such as on a first-come, first-served basis," and to the Commission's pole attachment rules in the Interconnection First Report and Order, in which the Commission found that parties with preexisting attachments may benefit incidentally from newly modified facilities without bearing the costs of the modifications. The reasoning underlying these decisions does not and should not apply to a CIC expansion plan for the benefit of the entire industry. Regarding N11 codes, although the Commission stated that first-come, first-served would be a reasonable, nondiscriminatory manner for assigning N11 codes for local use, the Commission acknowledged that "widely distributed industry numbering documents consistently and unambiguously state that an N11 code assignment is not a permanent assignment and is subject to termination on short notice." In the pole attachment context, the first-come, first-serve principle is not applicable at all. In that context the Commission requires nondiscriminatory treatment of attaching parties by utilities, while recognizing that in some instances there may be incidental beneficiaries when modifications to the attachments on a pole are made. 52. In the CICs Second Report and Order, the Commission concluded that the existence of CACs of varying lengths during the transition did not violate section 201(b)'s prohibition against unreasonable practices or section 202(a)'s prohibition against unreasonable discrimination. In its petition, VarTec interpreted the CICs Second Report and Order to mean that the Commission had found that "the disparity between dialing a five- digit CAC and a seven-digit CAC is not unreasonable under the Act, and that converting all five-digit CACs to seven digits 'would be contrary to the public interest.'" We reject VarTec's interpretation. In the CICs Second Report and Order we did not state that converting all five-digit CACs to seven-digit CACs would be contrary to the public interest. Rather, after discussing the ways in which a flash-cut conversion would be detrimental to various entities, we stated that "a flash-cut conversion to four-digit CICs . . . would be contrary to the public interest." In other words, the Commission expressed concern not about the propriety of moving from five to seven-digit CACs, but about the potentially significant disruption that could result from a "flash-cut" conversion to seven-digit CACs. For this reason, we instituted a transition process for the phase-in of four-digit CICs. Our determination that the resulting variation in CAC lengths during the transition do not violate Sections 202(a) and 201(b) was limited to the transition period. 53. Arbitrary and Capricious Arguments. VarTec also asserts erroneously that its grandfathering proposal would make more CICs and CACs available in the long run, that the CICs Second Report and Order fails to accomplish the Commission's objectives in the CICs NPRM of ensuring that an adequate number of CICs is available, and that, as a result, our decision is arbitrary and capricious, in violation of the APA. To the contrary, we find that VarTec's plan would result in the same number of assignable Feature Group D CICs as the current expansion plan, but with significantly greater disruption and cost to industry and the public. 54. As a preliminary matter, VarTec does not define "long run" in its petition. We assume that by "long run" VarTec means until all five-digit CICs are assigned. Under VarTec's plan, a caller using a five-digit CAC could not complete his call when a five-digit CIC/seven-digit CAC format is introduced. With five-digit CICs and seven-digit CACs, the switching equipment must be programmed to receive the five-digit CIC, preceded by the digits "10." After that programming change occurs, the same switching equipment will be unable to process the three-digit CICs also preceded by the digits "10." If a five-digit CAC using a three-digit CIC is dialed, the switching equipment will assume that the call has been abandoned, and disconnect the call because the switch did not receive the final two digits of the seven-digit CAC. Because at the time of introduction of five-digit CICs, three-digit CICs must cease to be used, we reject VarTec's argument that its grandfathering plan will make more CICs available in the "long run." The industry plan and VarTec's plan would make the same number of CICs available. 55. In addition, because with VarTec's plan three-digit CIC holders would need to replace their three-digit CICs and five-digit CACs with five-digit CICs and seven-digit CACs immediately upon assignment of the first five-digit CIC with no transition possible, we agree with US WEST that grandfathering would "preclude an orderly transition to the use of five- digit CICs, if such a transition ultimately becomes necessary." Under the current plan which calls for all CICs to have the same number of digits, callers will not need to change dialing patterns even after five-digit CICs are introduced, because CACs could continue to be seven digits long. For a carrier assigned a four-digit CIC, end users could continue to dial the exact same seven-digit CACs because the third digit of a seven-digit CAC would become the first digit of a carrier's new five-digit CIC. For example, the four-digit CIC "0698" (a four-digit CIC converted from the three-digit CIC "698"), would become the five-digit CIC "10698," but the CAC would remain the same before and after the conversion to five-digit CICs: "1010698." 56. Fifth Amendment Arguments. In support of its argument that the Commission has violated the Fifth Amendment in deciding to eliminate five-digit CACs, VarTec argues that the Commission has "taken," without just compensation, VarTec's property interests in its: (1) goodwill; (2) service marks; and (3) entitlement to engage in its trade and business using CACs. The Bureau rejected these arguments when it denied VarTec's emergency motion for stay of implementation of the CICs Second Report and Order. We too reject these arguments. Although the focus of the CICs Stay Order was to address whether VarTec had shown that it would be irreparably harmed absent a stay of the CICs Second Report and Order, the reasoning upon which the Bureau based its decision to deny the stay is applicable here. 57. First, we find that VarTec has not demonstrated that the CICs Second Report and Order caused a loss of its goodwill. All three-digit CICs that currently are the suffixes of five-digit CACs will not be eliminated. Instead, they will become, by the addition of a preceding "0," four-digit CICs, that are the suffixes of seven-digit CACs. Thus, any seven-digit CAC that might easily be confused with a five-digit CAC (i.e., 10636 and 1010636) would both correspond to the same carrier, in this example, VarTec. For this reason, we find that customer confusion between VarTec and a competitor, and the tarnishing of VarTec's reputation, is unlikely. Moreover, VarTec may act to preserve its customer base, by, for example, educating its customers about the need to, and how to, dial the expanded CAC format. 58. Second, we find that VarTec's service mark argument fails. While we agree with VarTec that trademarks and service marks are property rights, we find that because CICs and CACs are telephone numbers and, therefore, a public resource, there can be no private ownership of them. We specifically reject VarTec's assertion that there is a lack of legal authority to support the propositions that NANP codes are a public resource, and that use of such codes does not confer ownership. 59. The 1996 Act amendments to the Communications Act confer upon the Commission "exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States," and direct the Commission to ensure that numbers are available on an equitable basis. On several occasions, including occasions preceding the enactment of the 1996 Act, the Commission has determined that "[telephone] numbers are a public resource, and are not the property of the carriers." Other public switched network routing information, such as CACs, also are part of that public resource, and do not become the property of carriers or their customers. In the recent N11 First Report and Order and FNPRM, for example, we noted that N11 codes are essential public resources that serve important national and state goals. Moreover, in the CICs Stay Order, where the Bureau rejected VarTec's request for a stay of the transition from three-digit to four-digit CICs, the Bureau stated that: carriers do not 'own' codes or numbers . . . rather, they use them for the efficient operation of the public switched telephone network. Telephone numbers, including CICs and CACS, are a national public resource. Thus, VarTec's arguments premised on ownership of its CICs and CACs, including the Fifth Amendment argument, are unfounded. We note that Bellcore, as current administrator of the NANP, has also characterized numbers as a public resource and has specifically rejected the concept that the assignment of a number implies ownership by either the assignor or assignee. The CIC Assignment Guidelines expressly state that "[a]ssignment of a CIC to an entity in no way implies or infers ownership of the public resource by the entity." VarTec cites no case law to support its position that ownership of CACs is similar to that of western water rights (with acquisition resulting "by reason of investment of time and money in application of the resource to productive use") and we, therefore, find that argument unpersuasive. 60. VarTec's reliance on American Express Travel Related Services Co. v. Accuweather, Inc. to support the proposition that it has service mark rights in its CACs is equally misplaced. According to VarTec, the court there "recogniz[ed] service mark rights in a particular telephone number promoted in the sale of the telephone number's owner's services." The court, in American Express, however, did not base its decision on the ownership of numbers as a protected property interest. Instead, the court's holding was based on the parties' contract and principles of contract law. We do not interpret American Express to hold that numbers, even those extensively advertised by a carrier, are necessarily owned by the entities assigned them, and therefore eligible for service mark or other protection. Further, we note that, in the promotional materials attached to its petition, VarTec does not appear to claim service mark interests in any of its CICs or CACs. Rather, VarTec's materials only place service mark notifications adjacent to phrases that clearly identify its services, such as "10 Talk" and "Choice Communications." Moreover, VarTec has not provided any documentary evidence, for example, a customer survey, to support VarTec's claim that its customers identify VarTec by its CAC. That type of evidence is commonly used to establish ownership and use of a name sufficient for trademark or service mark protection. 61. Third, we disagree with VarTec's assertion that the Commission's Second Report and Order interferes with VarTec's entitlement to engage in its trade and business using CACs. After full conversion to four-digit CICs and seven-digit CACs, VarTec can still conduct its business, but it will be required to do so on an equal footing with other carriers. We find this result to be in the public interest. As noted above, VarTec may take various actions to preserve its relationship with its customers, such as educating its customers about the need to, and how to, dial the expanded CAC format. Such actions should enable VarTec to continue its dial-around business without disruption or loss of business. 62. Even if we assume, for purposes of argument, that VarTec could have acquired an interest in its CACs, warranting Fifth Amendment protection, VarTec still has failed to demonstrate a takings under applicable Supreme Court decisions. Under those decisions, the determination of whether a Fifth Amendment violation has occurred requires a balancing of competing interests and depends largely on the particular circumstances of the case. In examining those facts, the Court has considered several factors, including the character of the governmental action and its economic impact on the claimant. In looking at the nature of the governmental action, the Court has recognized that "[a] 'taking' may more readily be found when the interference with property can be characterized as a physical invasion by government . . . than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good." Moreover, a taking is more likely to be found if the government has acquired for its own use a resource to permit or facilitate public functions. The extent to which a governmental action has interfered with distinct investment-backed expectations is particularly relevant in examining the economic impact of the regulation on the claimant. 63. In the present case, the governmental action cannot be characterized as a physical invasion of VarTec's property. Instead, it is more appropriately described as an adjustment to the benefits and burdens of economic life to promote the public good. Although the adjustment to expand all three-digit CIC holders' CICs to four digits may cause some inconvenience or burden to those CIC holders in the short-term, the adjustment is necessary to allow all carriers to compete on an equal basis. Moreover, the government will not acquire VarTec's CAC for its own use. Indeed, the Commission has not taken VarTec's CAC at all. To the contrary, the CICs Second Report and Order simply furthers implementation of industry's CIC expansion plan by establishing an end to the transition from three to four-digit CICs. As part of that plan, all three-digit CICs, including VarTec's, will be expanded to four-digit CICs, and five-digit CACs will be expanded to seven-digit CACs. 64. We also reject VarTec's argument that the CICs Second Report and Order interferes with its reasonable investment-backed expectation in its CACs. VarTec's claim that it spent significant resources promoting its five-digit CACs because "until the institution of this proceeding VarTec had no reason to suspect that the Commission would attempt to take away VarTec's CACs" is unfounded. As noted above, the Commission, in the CICs Second Report and Order, did not "take away" VarTec's, or any other three-digit CIC holder's, CICs or CACs. Reassignment of three-digit CICs is not a part of the expansion plan. Instead, to ensure an orderly transition to four-digit CICs and the nondiscriminatory treatment of all CIC holders, a "0" will precede CIC holders' current three-digit CICs to form four-digit CICs and current five-digit CACs will become the suffixes of seven-digit CACs. For example, one of VarTec's three-digit CICs, "636," will now become the four-digit CIC, "0636." 65. We also find that VarTec's claims that it had no knowledge of the plan to expand from three to four-digit CICs prior to the institution of this proceeding are not credible. The industry began working on the expansion of three to four-digit CICs in 1987. Moreover, it published the plan for expansion from three to four-digit CICs, and corresponding five to seven-digit CACs, in April 1991, prior not only to the Commission's issuance of the CICs NPRM, but also to the National Association of Regulatory Utility Commissioners' Petition for Notice of Inquiry in September 1991. The plan to expand to four-digit CICS was generally available within the industry and we believe that members of the industry were aware of it well before the release of the CICs NPRM. For these same reasons, we also are not persuaded by VarTec's claim that the CICs Second Report and Order interferes with VarTec's reasonable investor-backed expectations. A governmental action readjusting rights and burdens is not unlawful solely because it "upsets otherwise settled expectations" even if new duties or liabilities are imposed. 66. VarTec also has not demonstrated that the Commission's action in the CICs Second Report and Order causes it economic harm of the magnitude necessary to establish a Fifth Amendment takings under Commission precedent. To establish a takings claim under the Fifth Amendment, for example, common carriers challenging rates prescribed by the Commission must show that the rates paid by ratepayers would "jeopardize the financial integrity of the companies, either by leaving them insufficient operating capital or by impeding their ability to raise future capital." The claimants also must demonstrate that the government-prescribed rates fail to compensate investors for the risks associated with their investments. Aside from bald assertions of financial harm, VarTec does not make a showing of harm necessary to support a takings claim under the Fifth Amendment. 67. The cases relied on by VarTec are inapposite. For example, VarTec cites the Lucas case for the proposition that the Commission has effected a per se taking of its property. In Lucas, the court concluded that a government regulation prohibiting the construction of any permanent habitable structures on the plaintiff's land effected a total destruction of the value of the plaintiff's property. The effect of the Commission s decision here, in contrast, is simply to add a "0" to VarTec s current three-digit CIC ("636" becomes "0636") and the digits "10" to VarTec's CAC ("10636" becomes "1010636"). The Commission has not confiscated VarTec's alleged property or destroyed its value. Moreover, the Commission has provided a reasonable transition within which VarTec may educate its customers. As discussed above, the Commission also is requiring LECs to offer an intercept message that will inform callers of the change in dialing patterns and that will assist VarTec in educating its customers about the changes in CAC dialing. Thus, the facts and reasoning of the Lucas case do not apply in the present context. Other cases cited by VarTec are similarly distinguishable. 68. In sum, to determine whether government action is confiscatory, and therefore may violate the Fifth Amendment, the Court has looked at the financial impact of that action. The end result of the CICs Second Report and Order is that all CIC holders must convert to four-digit CICs and, accordingly, must compete on an equal footing. We conclude that this end result falls far short of a Fifth Amendment takings. Thus, we reject VarTec's arguments on this point. 69. First Amendment Arguments. VarTec argues that its CACs are service marks that constitute commercial speech warranting protection under the First Amendment. VarTec claims that the service marks in question, its CACs, are entitled to First Amendment protection because they serve "as indications of the origin of VarTec's services (the function of a service mark)" and "communicate useful information to consumers regarding the manner in which VarTec's services can be utilized." VarTec asserts that the Commission's decision in the CICs Second Report and Order fails the Supreme Court's test that commercial speech restrictions must pass, because there is no "reasonable fit" between the governmental action and the government's interest. We conclude that we need not apply the Central Hudson test for three reasons. First, with respect to its CICs and CACs, VarTec does not provide, nor exercise discretion over, the content of the information contained in its particular CICs and CACs. These CICs and CACs were assigned to VarTec by a third party. The inherent technical nature and purpose of CICs and CACs requires that the content of CICs and CACs be fixed when assigned and remain fixed thereafter while the particular CICs and CACs are in use. VarTec thus did not create the original content of the CICs and CACs it uses, and any unilateral alteration by VarTec of their content would make them unusable for the purpose intended. This absence of original content creation and editing control means that the use of the CICs and CACs by VarTec does not constitute speech subject to First Amendment protection. Second, VarTec has not demonstrated that its customers identify VarTec by its CICs and CACs in the manner necessary to establish service mark or trademark interests in its CICs and CACs. Therefore, no commercial interest exists that arguably might warrant First Amendment protection. Finally, VarTec has not cited any legal authority for the proposition that telephone numbers such as CICs and CACs constitute speech, commercial or otherwise. For the foregoing reasons we conclude that there is no commercial speech with respect to VarTec's use of its CICs and CACs; hence, there can be no First Amendment violation. 70. Even assuming, arguendo, that VarTec's CACs constituted commercial speech, the Commission's decision is a permissible restriction under the test set forth in Central Hudson. Under Central Hudson, if the commercial speech is not misleading or related to unlawful activity, a restriction on that speech is lawful and does not violate the First Amendment if: (1) the government has a substantial interest to be achieved by the restriction; and (2) the limitation on the expression is designed carefully to achieve the government's goal. Compliance with the second element of the Central Hudson test may be measured by two criteria. First, the restriction may not provide only ineffective or remote support for the government's purpose. Instead, it must directly advance the governmental interest. Second, a "reasonable fit" must be present between the government's ends and the means chosen to accomplish those ends. The "fit" need not be perfect; it simply must be reasonable and "in proportion to the interest served." 71. Applying the Central Hudson test, we reject VarTec's argument that the CICs Second Report and Order violates the First Amendment. Although the information VarTec seeks to protect is not misleading or otherwise related to unlawful activity, the governmental interest in any restriction on that speech is substantial and the CICs Second Report and Order directly advances that interest. CICs are the essential means by which LECs provide interexchange access services. Without an adequate supply of CICs, competition in the telecommunications market will be thwarted because new entrants will be unable to gain access to LECs' networks. Thus, the government has a substantial interest in ensuring that a sufficient supply of CICs is available for the continued growth of the telecommunications market. Industry has long recognized the need for an adequate supply of CICs and began to plan for the expansion to four-digit CICs prior to the Commission's decision in the CICs Second Report and Order. 72. The CICs Second Report and Order directly advances the government's interest in maintaining an adequate supply of CICs. That order continues the implementation of the expansion plan developed by industry in 1991, instituted because industry recognized that expansion from three-digit CICs to four-digit CICs was necessary to ensure an adequate supply of CICs. Thus, the Commission's decision in the CICs Second Report and Order, continuing the implementation of industry's expansion plan, is "carefully calculated" to avoid market disruption or burdening speech as it ensures that all market participants receive equitable treatment as the market expands. 73. We reject VarTec's contention that its grandfathering plan "better achieves" the government's interest than a nondiscriminatory expansion to four-digit CICs. As discussed above, we find that VarTec's grandfathering plan would not result in a greater number of available CICs than the current industry expansion plan. To the contrary, if the Commission grandfathered three-digit CICs under the existing expansion plan, assignment of four-digit CICs outside the 5XXX and 6XXX range would not be possible. Furthermore, VarTec admits that its plan would require a complete change in the CICs, and consequently in the CACs, of the holders of 70 CICs and a random reassignment of a CIC to those entities. VarTec fails to justify the discriminatory treatment its plan would inflict upon those CIC holders. The industry plan, on the other hand, treats all CIC holders equally. Finally, and most importantly, we find that VarTec's grandfathering plan would create long term, significant discrimination in dialing patterns. Whereas the current plan to expand all three-digit CICs to four digits requires the customers of all carriers to dial a seven-digit CAC to reach their service provider, under VarTec's plan, the customers of carriers with three- digit CICs could reach their service providers by dialing only five digits. This aspect of VarTec's grandfathering plan would create a significant competitive imbalance at odds with the underlying procompetitive policies of the Communications Act. 74. The other cases cited by VarTec in support of its claim that the CICs Second Report and Order violates its First Amendment rights are clearly distinguishable from the instant case. Each of the cited cases involved a ban on particular forms of commercial speech. A ban is not involved here. Rather, the CICs Second Report and Order reasonably alters the manner in which VarTec and its customers will communicate in order to enter into a transaction at the same point of purchase as before, by requiring the dialing of a seven-digit CAC, rather than the dialing of a five-digit one. VarTec is therefore not prohibited from transacting business or otherwise communicating with its customers; the intrusion on its commercial speech rights, if any, is minimal. 75. In sum, we conclude that an important governmental interest is served by the Commission's determination, consistent with industry's plan, that all three-digit CICs should be expanded to four digits, to ensure an adequate supply of CICs and vigorous competition in the telecommunications market. The CICs Second Report and Order directly advances that interest by implementing the expansion plan in, what the Commission believes, is the most reasonable and nondiscriminatory way. The means chosen by industry and affirmed by the Commission in the CICs Second Report and Order, an across-the-board conversion from three to four-digit CICs, is a "reasonable fit" with the objective of ensuring that the pool of available CICs is sufficient to meet the demand for CICs and to accommodate new entrants. Thus, we find that the First Amendment is not violated by any alleged restriction to VarTec's "commercial speech." 76. Section 257 and Regulatory Flexibility Arguments. VarTec's argument that the CICs Second Report and Order violates section 257 of the Communications Act, as amended, and the Regulatory Flexibility Act is unfounded. We stated in the CICs Second Report and Order that the transition to the use of only four digit CICs will "[s]erve the goal of section 257 . . . by reducing barriers to entry of new small carriers and perhaps other small entities." The directive to eliminate "barriers to entry" does not mean that we must give preference to small carriers. In the CICs Second Report and Order, we were careful to treat all carriers the same, whether large, small, incumbent provider, or new market entrant. When the conversion to four-digit CICs is completed, more CICs will be available to new market entrants, many of whom will be smaller carriers. Thus, contrary to VarTec's claims, we conclude that the actions taken in the CICs Second Report and Order and today eliminate market entry barriers and advance the procompetitive purposes of the Act. IV. ORDER ON APPLICATION FOR REVIEW A. Position of Parties 1. VarTec Application 77. In its application for review of a Common Carrier Bureau decision denying its request for a stay of the CICs Second Report and Order, VarTec argues that the Bureau erred in determining that VarTec would not suffer irreparable harm absent a stay. VarTec argues that, contrary to the Bureau's determination, VarTec demonstrated that certain harm would occur. VarTec claims that, because of its billing and collection arrangements with LECs, VarTec is unable to identify its customers in order to communicate directly with them about change in CAC dialing, and must instead rely on mass marketing techniques. This arrangement, according to VarTec, makes it impossible for the company properly to educate its customers about the important change in dialing. VarTec asserts that the inability to alert each of its customers about the change in dialing, compounded by the fact that the LECs are not required to provide intercept messages after January 1, 1998, will cause VarTec to lose a significant portion of these customers. In addition, VarTec argues that: (1) the Bureau erred in its application of legal precedent to determine that VarTec will be able to recover economic loss alleged as a result of the CICs Second Report and Order and that VarTec does not "own" its CACs; (2) the Bureau failed to address VarTec's claim of irreparable harm that would result from First Amendment violations; and (3) the CICs Stay Order violates the APA as being arbitrary and capricious, an abuse of discretion pursuant to delegated authority, contrary to the Fifth and First Amendments, and unwarranted by the record. 2. US WEST Opposition 78. In its opposition to VarTec's application for review, US WEST claims that the Bureau was correct in denying VarTec's motion for stay. US WEST asserts that granting VarTec's motion would cause others substantial harm by way of competitive disparity. US WEST also claims that VarTec raised no new matters in its motion. US WEST also disputes VarTec's claimed inability to educate its customers properly. US WEST asserts that the industry had been aware for some time prior to issuance of the CICs Second Report and Order that education about expanded CICs and CACs would be necessary, and that VarTec, therefore, should have been taking steps to educate its customers. US WEST also suggests ways in which VarTec effectively can use mass marketing techniques to alert customers to the dialing changes resulting from the expansion from three to four-digit CICs and from five to seven-digit CACs (including inserting a conspicuous message in its mailings to customers and using other types of mass market communications vehicles such as radio and television). In response to VarTec's argument that its problems are particularly acute because LECs are not required to provide intercept messages, US WEST asserts that it currently provides an intercept message when an access code is misdialed or is not active in its region, a practice which it plans to continue after the transition. US WEST also contends that such a message will likely be provided by most LECs, alleviating any harm that VarTec might otherwise suffer. B. Discussion 79. For the reasons discussed below, we find that the Bureau did not err in denying VarTec's motion for stay of implementation of the CICS Second Report and Order. In its application for review, VarTec relies heavily on the absence of a requirement that LECs provide intercept messages after the transition to demonstrate that, contrary to the Bureau's finding, VarTec would be harmed absent a stay. VarTec, in its motion for stay, did not rely on the need for an intercept message to make its showing of irreparable harm. Commission procedural rules regarding applications for review require that the application rely on questions of fact or law upon which the designated authority has been afforded an opportunity pass. VarTec's application fails to comply with this requirement. This failure alone would warrant denial of the application. Because the intercept message issue was raised in petitions for reconsideration, which we are addressing concurrently with VarTec's application for review, we will, nonetheless, consider VarTec's application for review, and, specifically, the issue of intercept messages. 80. In the Order on Reconsideration, we conclude that LECs must offer an intercept message, explaining that a dialing pattern change has occurred, and instructing the caller to contact its IXC for further information. In addition, US WEST's opposition makes it apparent that local exchange carriers are aware of the importance of intercept messages to a smooth transition to four-digit CICs and seven-digit CACs. We find that the Commission's requirement that LECs provide intercept messages will significantly reduce any harm that VarTec may arguably suffer as a result of CIC expansion. 81. We agree with the Bureau, notwithstanding the intercept issue, that VarTec's claim of irreparable harm must fail because the economic harm VarTec claims it will suffer is speculative. As the Bureau stated, "VarTec may take actions to preserve its customers, such as educating them about the need to, and how to, dial the expanded CAC format." While we acknowledge that VarTec's mass mailings may not reach all of VarTec's customers because billing and collection from those customers is handled by LECs, we agree with US WEST that VarTec can still adequately educate its customers, for example, by inserting a conspicuous message in its mass mailings. Existing dial-around customers that VarTec may be unable to contact directly, and who, according to VarTec, may ignore mass mailings even if they receive them, will be more likely to notice mass mailings if they include a conspicuous message. Inclusion in mass mailings of a conspicuous message about the change in VarTec's CAC will increase the likelihood that VarTec's existing customers will be alerted to this important change. We also note that VarTec still may be able to contact some of its customers directly, by matching the phone numbers of its customers with their addresses (provided by the LECs). In this way, VarTec will be able to provide direct mailings to its customers to inform them of the change in reaching VarTec through its CACs. 82. We disagree with VarTec that the Bureau erred in rejecting VarTec's Fifth Amendment and First Amendment claims. VarTec presented both of these issues in its Petition for Reconsideration and we rejected both arguments. Thus, for the reasons stated in the Order on Reconsideration, we also reject VarTec's arguments here. V. SECOND FURTHER NOTICE OF PROPOSED RULEMAKING A. Background 83. In the Independent Telephone Company Equal Access Report and Order, the Commission recognized differences between independent telephone companies other than GTE on the one hand, and GTE and the Bell Operating Companies (BOCs) on the other, primarily in the types of switching equipment they used, the markets they served, and the financial resources available to most non-GTE independent telephone companies. This led the Commission to set an equal access implementation schedule for non-GTE independent telephone companies that differed from those set for the BOCs in the Modified Final Judgment and for GTE in the Consent Decree. For non-GTE independent telephone company end offices equipped with SPC switches, the Commission required that equal access implementation must occur within three years of a reasonable request for equal access, with the possibility of a waiver, if the company seeking the waiver could demonstrate that upgrading its switch was infeasible, except at costs that clearly outweigh potential benefits to users of telecommunications services. For companies not receiving a request for equal access, the Commission required that implementation occur as soon as practicable, according to a schedule and a degree of implementation that reflected the capital constraints of the operating company and the market and other business conditions of the area served by the end office. The Commission did not impose a conversion schedule on end offices equipped with electromechanical switches, regardless of the existence of a request, and required only that for these end offices, conversion should occur as soon as practicable. B. Request for Comments 84. Our inquiries regarding the status of LEC conversion to accept four-digit CICs reveal that some independent incumbent LECs in rural and isolated areas do not provide equal access. Some of those LECs' end offices are equipped with SPC switches, but the LECs have never received a bona fide request to provide equal access. In other instances, the LECs' end offices are not equipped with SPC switches and, therefore, the LECs are not required to convert to equal access according to a specific timetable, even if a LEC received a reasonable request for equal access. Thus, a requirement that all LEC end office switches be upgraded to accept four-digit CICs by January 1, 1998, may have the unintended effect of requiring those LECs that have never received a bona fide request for equal access or that are not subject to a specific timetable for providing equal access nonetheless to upgrade their end offices to offer equal access by January 1, 1998. Such a requirement would modify the Commission's equal access implementation schedule for non-GTE independent telephone companies, set by the 1985 Independent Telephone Company Equal Access Report and Order. More than twelve years have passed since the adoption of the Independent Telephone Company Equal Access Report and Order. We therefore tentatively conclude that all LEC end offices, including those LECs whose end offices are equipped with SPC switches, but have not received a bona fide request for equal access and those LECs whose end offices are equipped with non-SPC switches, should nevertheless be required to provide equal access. This requirement also would apply to LECs who may have received a waiver of the Commission's equal access rules, to the extent those waivers remain in place. We tentatively conclude that LECs with SPC switches that have not received a bona fide request for equal access should be required to upgrade their facilities to provide equal access and to accept four-digit CICs within three years of the effective date of an Order adopted in this proceeding. We further tentatively conclude that LECs whose end offices are equipped with non-SPC switches should be required to provide equal access and to convert their switches to accept four-digit CICs when they next replace their switching facilities. We seek comment on these tentative conclusions. 85. We tentatively conclude that requiring LECs whose end offices are equipped with SPC switches to upgrade their facilities to enable them to offer equal access, even if they have not received a request for equal access, and LECs whose end offices are equipped with non-SPC switches to convert their facilities to provide equal access, is not inconsistent with the Commission's general goal, expressed in the Independent Telephone Company Equal Access Report and Order, that equal access occur as soon as practicable, regardless of whether a request has been made for equal access, and regardless of the type of switch with which an end office is equipped. Moreover, the Commission stated, in the Independent Telephone Company Equal Access Report and Order, that where generic software is available, the telephone company should endeavor to make the necessary conversions in less than three years. We note that the responses to our inquiries indicate that the four-digit CIC software generally is included in equal access software packages developed since 1995. Commenters that oppose our tentative conclusion should discuss why a twelve year period of time in which to convert to provide equal access has been insufficient and should propose specific alternatives to the Commission's proposal. C. Procedural Matters 1. Ex Parte Presentations 86. This is a permit-but-disclose notice-and-comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided that they are disclosed as provided in the Commission's rules. See generally 47 C.F.R.  1.1202, 1.1203, 1.1206. Written submissions, however, will be limited as discussed below. 2. Regulatory Flexibility Act 87. See Appendix B, infra for the Initial Regulatory Flexibility Analysis. 3. Comment Filing Procedures 88. General Requirements. Pursuant to applicable procedures set forth in sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on or before December 8, 1997, and reply comments on or before January 12, 1998. To file formally in this proceeding, you must file an original and six copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original and 11 copies. Comments and reply comments should be sent to Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 222, Washington, D.C. 20554, with a copy to Carmell Weathers of the Common Carrier Bureau, 2000 M Street, N.W., Room 221, Washington, D.C. 20554. Parties should also file one copy of any documents filed in this docket with the Commission's copy contractor, International Transcription Services, Inc., 1231 20th Street, N.W., Washington, D.C. 20036. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., room 239, Washington, D.C. 20554. 89. Other requirements. Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also comply with Section 1.49 and all other applicable sections of the Commissions rules. We also direct all interested parties to include the name of the filing party and the date of the filing on each page of their comments and reply comments. Comments and reply comments also must clearly identify the specific portion of this FNPRM to which a particular comment or set of comments is responsive. If a portion of a party's comments does not fall under a particular topic listed in the outline of this FNPRM, such comments must be included in a clearly labelled section at the beginning or end of the filing. 90. Parties are also asked to submit comments and reply comments on diskette. Such diskette submissions would be in addition to and not a substitute for the formal filing requirements addressed above. Parties submitting diskettes should submit them to Carmell Weathers, Network Services Division, 2000 M Street, N.W., Room 235, Washington, D.C. 20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The diskette should be submitted in "read only" mode. The diskette should be clearly labelled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter. VI. CONCLUSION 91. Our proceedings on CICs, and other numbering proceedings, emphasize that numbering resources must meet not only the needs of incumbents, but also those of new entrants in the telecommunications services market. Our decision on reconsideration to modify the transition in a limited manner, and to extend the permissive dialing period by only six months, is intended to ensure that, as soon as practicable, new market entrants have access to numbering resources on the same basis as incumbents. In the Order on Reconsideration, we have sought to: allow additional time for carriers to educate customers about the need to dial the extra digits of longer CACs; ensure that the dialing disparity between five and seven-digit CACs does not continue for a lengthy period; and end the transition before the assignment of all available four-digit CICs in the 5XXX and 6XXX range. Similarly, our Order on Application for Review is intended to ensure the orderly transition from three to four-digit CICs and to ensure the nondiscriminatory treatment of all CIC holders. Finally, our Second FNPRM, tentatively concluding that all LECs, when they next upgrade their switches, should make the upgrades necessary to provide equal access and to accept four-digit CICs, seeks to promote an efficient nationwide communications service. VII. ORDERING CLAUSES 92. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 201-205, and 251(e)(1) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 201-205, and 251(e)(1), that the Petition for Reconsideration of VarTec Telecom, Inc., is DENIED. 93. IT IS FURTHER ORDERED, that the Petitions for Reconsideration of the Competitive Telecommunications Association and Telecommunications Group, Inc., ARE GRANTED to the extent stated herein, and, in all other respects, ARE DENIED. 94. IT IS FURTHER ORDERED, that the Order on Reconsideration and the requirements contained herein WILL BECOME EFFECTIVE 30 days after publication of a summary in the Federal Register. The collection of information contained within is contingent upon approval by the Office of Management and Budget. 95. IT IS FURTHER ORDERED, pursuant to Sections 4(i) and 5(c) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 155(c), that the Application for Review filed by VarTec Telecom, Inc. is DENIED. 96. IT IS FURTHER ORDERED, pursuant to Sections 1, 4(i) and (j), 201-205, 218 and 251(e)(1) of the Communications Act as amended, 47 U.S.C. Sections 151, 154(i), 154(j), 201-205, 218 and 251(e)(1), that the Second Further Notice of Proposed Rulemaking is hereby ADOPTED. 97. IT IS FURTHER ORDERED that the Commission's Office of Managing Director SHALL SEND a copy of the Second Further Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary APPENDIX A: LIST OF PARTIES 1. Petitions for Reconsideration of CICs Second Report and Order a. Parties Filing Petitions for Reconsideration The Competitive Telecommunications Association (CompTel) Telecommunications Group, Inc. (Telco) VarTec Telecom, Inc. (VarTec) b. Parties Filing Comments AT&T Corp. (AT&T) Cable and Wireless, Inc. (CWI) CGI and CommuniGroup Long Distance International (LDI) MCI Telecommunications Corporation (MCI) Sprint Communications Company, L.P. (Sprint) Telecommunications Resellers Association (TRA) US WEST, Inc. (US WEST) WorldCom, Inc. (WorldCom) c. Parties Filing Reply Comments CompTel Sprint Telco TRA VarTec US WEST 2. Petition for Application for Review of CICs Second Report and Order a. Party Filing Petition for Application for Review VarTec Telecom, Inc. b. Party Filing Opposition US WEST APPENDIX B: INITIAL REGULATORY FLEXIBILITY ANALYSIS 1. As required by the Regulatory Flexibility Act (RFA) the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected economic impact on small entities by the policies and proposals in this Second Further Notice of Proposed Rulemaking (Second FNPRM) in the Administration of the North American Numbering Plan, Carrier Identification Codes (CICs). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for the submission of comments in this proceeding. A copy of this Second FNPRM, including the IRFA, shall be sent to the Chief Counsel for Advocacy of the Small Business Administration. See 5 U.S.C.  603(a). In addition, this Second FNPRM and IRFA will be published in the Federal Register. See id. A. Need for and Objectives of Proposed Rule 2. Inquiries by Commission staff regarding the status of LEC conversion to accept four-digit CICs reveal that some independent incumbent LECs in rural and isolated areas do not provide equal access. Some of those LECs' end offices are equipped with stored program-controlled (SPC) switches, but the LECs have never received a bona fide request to provide equal access. In other instances, the LECs' end offices are not equipped with SPC switches and, therefore, the LECs are not required to convert to equal access according to a specific timetable, even if a LEC received a reasonable request for equal access. The Commission recognizes, therefore, that a requirement that all LEC end office switches be upgraded to accept four-digit CICs by January 1, 1998, may have the unintended effect of requiring those LECs that have never received a bona fide request for equal access or that are not subject to a specific timetable for providing equal access nonetheless to upgrade their end offices to offer equal access by January 1, 1998. The Commission notes that such a requirement would modify the Commission's equal access implementation schedule for non-GTE independent telephone companies, set by the 1985 Independent Telephone Company Equal Access Report and Order. Noting that more than twelve years have passed since the adoption of the Independent Telephone Company Equal Access Report and Order, the Commission, in the Second FNPRM, tentatively concludes all LEC end offices, including those LECs whose end offices are equipped with SPC switches, but have not received a bona fide request for equal access and those LECs whose end offices are equipped with non-SPC switches, should nevertheless be required to provide equal access. This requirement also would apply to LECs who may have received a waiver of the Commission's equal access rules, to the extent those waivers remain in place. The Commission tentatively concludes that LECs with SPC switches that have not received a bona fide request for equal access should be required to upgrade their facilities to provide equal access and to accept four-digit CICs within three years of the effective date of an Order adopted in this proceeding. The Second FNPRM further tentatively concludes that LECs whose end offices are equipped with non-SPC switches should be required to provide equal access and to convert their switches to accept four-digit CICs when they next replace their switching facilities. 3. The Commission also tentatively concludes that requiring LECs whose end offices are equipped with SPC switches to upgrade their facilities to enable them to offer equal access, even if they have not received a request for equal access, and LECs whose end offices are equipped with non-SPC switches to convert their facilities to provide equal access, is not inconsistent with the Commission's general goal, expressed in the Independent Telephone Company Equal Access Report and Order, that equal access occur as soon as practicable, regardless of whether a request has been made for equal access, and regardless of the type of switch with which an end office is equipped. Moreover, the Commission stated, in the Independent Telephone Company Equal Access Report and Order, that where generic software is available, the telephone company should endeavor to make the necessary conversions in less than three years. See Second FNPRM at para. 85. The Commission notes that the responses to its inquiries indicate that the four-digit CIC software generally is included in equal access software packages developed since 1995. The Commission states that commenters that oppose the tentative conclusion should discuss why a twelve year period of time in which to convert to provide equal access has been insufficient and should propose specific alternatives to the Commission's proposal. See Second FNPRM at paras. 84-86. B. Legal Basis 4. Authority for actions proposed in this Second FNPRM may be found in: Sections 1, 4(i) and (j), 201-205, 218 and 251(e)(1) of the Communications Act of 1934 as amended, 47 U.S.C. Sections 151, 154(i), 154(j), 201-205, 218 and 251(e)(1). C. Description and Estimate of the Number of Small Entities To Which the Proposed Rule Will Apply 5. The RFA generally defines "small entity" as having the same meaning as the terms "small business," "small organization," and "small governmental jurisdiction" and the same meaning as the term "small business concern" under the Small Business Act unless the Commission has developed one or more definitions that are appropriate for its activities. Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the Small Business Administration (SBA). The SBA has defined companies listed under Standard Industrial Classification (SIC) categories 4812 (radiotelephone communications) and 4813 (telephone communications, except radiotelephone) to be small entities when they have 1500 or fewer employees. These standards also apply in determining whether an entity is a small business for purposes of the RFA. 6. Because the small incumbent LECs that would be subject to this proposal are either dominant in their field of operations or are not independently owned and operated, consistent with our prior practice, they are excluded from the definition of "small entity" and "small business concerns." Accordingly, our use of the terms "small entities" and "small businesses" does not encompass small incumbent LECs. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will consider small incumbent LECs within this analysis and use the term "small incumbent LECs" to refer to any incumbent LECs that arguably might be defined by SBA as "small business concerns." 7. The proposal made by the Commission in this Second FNPRM will apply to local exchange carriers. We seek comment on whether other entities should be included in our final regulatory flexibility analysis. 8. Local Exchange Carriers. Neither the Commission nor SBA has developed a definition of small entity specifically applicable to providers of local exchange services. The closest applicable definition is that under SBA rules for telephone communications, except radiotelephone, SIC 4813, which defines a small entity as one with 1500 or fewer employees. The most reliable source of information regarding the number of LECs nationwide of which we are aware appears to be the data that we collect annually in connection with the Telecommunications Relay Service (TRS). According to our most recent data, 1,347 companies reported that they were engaged in the provision of local exchange service. Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1500 employees, we are unable at this time to estimate with any more certainty the number of LECs that would qualify as small business concerns. Consequently, we estimate that there are fewer than 1,347 small incumbent LECs that may be affected by the proposal in this Second FNPRM. D. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements 9. The proposal in the Second FNPRM, if adopted, would require that LECs with SPC switches that have not received a bona fide request for equal access should upgrade their facilities to provide equal access and to accept four-digit CICs within three years of the effective date of an Order adopted in this proceeding. The proposal also would require that LECs whose end offices are equipped with non-SPC switches should provide equal access and to convert their switches to accept four-digit CICs when they next replace their switching facilities. See Second FNPRM at paras. 84-85. E. Steps Taken to Minimize Economic Impact on Small Entities and Significant Alternatives Considered 10. In the Second FNPRM, the Commission seeks to gather relevant information from all interested parties, including small business entities, about the effect of requiring equal access conversion, even by those LECs that have not received a request for it, or whose end offices are not equipped with SPC switches. We ask that commenters opposed to our tentative conclusion suggest alternatives. See Second FNPRM at paras. 84-85. 11. In addition, here, we tentatively conclude that the proposals in the Second FNPRM would impose minimum burdens on small entities, especially given that: (1) the Commission, in the Independent Telephone Company Equal Access Report and Order, adopted over twelve years ago expressed a general desire that equal access occur as soon as practicable, regardless of whether a request has been made for equal access, and regardless of the type of switch with which an end office is equipped, and stated that where generic software is available, the telephone company should endeavor to make the necessary conversions in less than three years; and (2) the responses to inquiries by Commission staff also indicate that the four-digit CIC software generally is included in equal access software packages developed since 1995. We seek comment here on this tentative conclusion. F. Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rule 12. None.