Telephone Number Portability

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket No. 95-116; FCC 98-275]

Telephone Number Portability

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document addresses database issues, location portability,

500 and 900 number portability, and wireless issues, all of which were

raised in petitions for reconsideration of the First Report and Order

in this proceeding, and not addressed in the First Order on

Reconsideration. We address these because their resolution will foster

deployment of number portability and promote competition in the local

telecommunications marketplace.

EFFECTIVE DATE: January 11, 1999.

FOR FURTHER INFORMATION CONTACT: Jonathan Askin, Attorney, Common

Carrier Bureau, Policy and Program Planning Division, (202) 418-1580,

or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order

adopted October 15, 1998, and released October 20, 1998. The full text

of this

[[Page 68198]]

Order is available for inspection and copying during normal business

hours in the FCC Reference Center, 1919 M St., NW, Room 239,

Washington, DC. The complete text also may be obtained through the

World Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/

fcc98275.wp, or may be purchased from the Commission's copy contractor,

International Transcription Service, Inc., (202) 857-3800, 1231 20th

St., NW, Washington, DC 20036.

Regulatory Flexibility Certification

As required by the Regulatory Flexibility Act, the Order contains a

Final Regulatory Flexibility Analysis on Reconsideration which is set

forth in the Order on Reconsideration. A brief description of the

analysis follows. Pursuant to section 604 of the Regulatory Flexibility

Act, the Commission performed a comprehensive analysis of the Order

with regard to small entities. This analysis includes: (1) a succinct

statement of the need for, and objectives of, the Commission's

decisions in the Order; (2) a summary of the significant issues raised

by the public comments in response to the initial regulatory

flexibility analysis, a summary of the Commission's assessment of these

issues, and a statement of any changes made in the Order as a result of

the comments; (3) a description of and an estimate of the number of

small entities to which the Order will apply; (4) a description of the

projected reporting, recordkeeping and other compliance requirements of

the Order, including an estimate of the classes of small entities which

will be subject to the requirement and the type of professional skills

necessary for compliance with the requirement; (5) a description of the

steps the Commission has taken to minimize the significant economic

impact on small entities consistent with the stated objectives of

applicable statutes, including a statement of the factual, policy, and

legal reasons for selecting the alternative adopted in the Order and

why each one of the other significant alternatives to each of the

Commission's decisions which affect small entities was rejected.

Synopsis of Second Memorandum Opinion and Order

I. Introduction

On June 27, 1996, the Commission adopted the First Report and Order

and Further Notice of Proposed Rulemaking, 61 FR 38605, July 25, 1996

(First Report and Order) in this docket, which implemented the

provisions of section 251 of the Communications Act of 1934, as

amended, that relate to telephone number portability. Specifically,

section 251(b)(2) requires that all local exchange carriers (LECs)

provide, ``to the extent technically feasible, number portability in

accordance with requirements prescribed by the Commission.'' Section

251(e)(2) provides that ``the costs of establishing . . . number

portability shall be borne by all telecommunications carriers on a

competitively neutral basis as determined by the Commission.'' The Act

defines ``number portability'' as ``the ability of users of

telecommunications services to retain, at the same location, existing

telecommunications numbers without impairment of quality, reliability,

or convenience when switching from one telecommunications carrier to

another.'' In the First Report and Order, the Commission determined,

among other things, that the Commission has authority under section 251

to promulgate rules regarding long-term and currently available number

portability, as well as to establish cost recovery methods for each.

2. Twenty-two parties filed petitions for reconsideration or

clarification of the First Report and Order; 19 parties filed

oppositions or comments on the petitions; and 16 parties filed reply

comments. On March 6, 1997, the Commission adopted a First Memorandum

Opinion and Order on Reconsideration, 62 FR 18280, April 15, 1997

(First Order on Reconsideration) in this proceeding, addressing a

number of issues. In this Second Memorandum Opinion and Order on

Reconsideration, we address all remaining issues raised by the

petitioners, except issues relating to cost recovery for currently

available number portability, which will be addressed in a future

order. We also address American Mobile Telecommunications' (AMTA)

petition for reconsideration of the First Order on Reconsideration,

which raises similar issues to those raised by AMTA in its petition for

reconsideration of the First Report and Order.

II. Background

3. In the First Report and Order, the Commission required all LECs

to begin implementing a long-term service provider portability solution

that meets the Commission's performance criteria in the 100 largest

Metropolitan Statistical Areas (MSAs) no later than October 1, 1997,

and to complete deployment in those MSAs by December 31, 1998, in

accordance with a phased implementation schedule. In the First Order on

Reconsideration, the Commission modified this schedule, extending the

completion dates for the first two phases of the implementation

schedule and clarifying that, within the 100 largest MSAs, LECs need

only provide number portability in switches for which another carrier

has made a specific request for the provision of portability.

4. In the First Report and Order, the Commission also required all

cellular, broadband personal communications services (PCS) and covered

specialized mobile radio (SMR) providers to have the capability of

delivering calls from their networks to ported numbers anywhere in the

country by December 31, 1998, and to offer service provider

portability, including the ability to support roaming, throughout their

networks by June 30, 1999. In the First Order on Reconsideration, the

Commission concluded that these commercial mobile radio service (CMRS)

providers need only deploy local number portability by the June 30,

1999, deadline in switches in the 100 largest MSAs for which they

receive a request at least nine months prior to the deadline. On

September 1, 1998, the Wireless Telecommunications Bureau extended the

deadline for implementation of number portability by CMRS providers to

March 31, 2000.

5. In the First Report and Order, the Commission concluded, inter

alia, that a system of regional number portability databases, managed

by independent local number portability administrator(s) (LNPA(s))

would serve the public interest. The Commission directed the North

American Numbering Council (NANC), an advisory committee established

pursuant to the Federal Advisory Committee Act, to recommend as local

number portability administrators one or more independent, non-

governmental entities that are not aligned with any particular

telecommunications industry segment within seven months of the initial

meeting of the NANC. The Commission also directed the NANC to make

recommendations regarding, inter alia, the duties of local number

portability administrator(s), the location of regional databases, and

technical specifications for the regional databases. In the Second

Report and Order, 62 FR 48774, September 17, 1997, the Commission

adopted, with minor modifications, the NANC LNPA Working Group Report,

containing the recommendations of the NANC regarding the selection of

LNPAs, the duties of LNPAs, the locations of regional databases, and

technical specifications for the regional databases.

[[Page 68199]]

III. Reconsideration Issues

A. Database Issues

1. Treatment of Industry Efforts to Implement Regional Databases Prior

to Issuance of NANC's Recommendations

a. Discussion

6. The Commission has adopted the NANC LNPA Working Group Report,

which contains NANC's recommendations with respect to regional database

implementation, in a separate order. In particular, in that order, the

Commission adopted the NANC's recommendation that Lockheed Martin serve

as local number portability database administrator for the Northeast,

Mid-Atlantic, Midwest and Southwest regions, and that Perot Systems

serve as the local number portability database administrator for the

Southeast, Western and West Coast regions.

7. On February 20, 1998, the Chief of the Common Carrier Bureau

received a letter from the Chairman of the NANC informing him that the

Limited Liability Corporations (LLCs) for the Southeast, Western, and

West Coast regions reported to the NANC on local number portability

implementation. The LLCs for the Southeast, Western, and West Coast

regions reported that it was necessary to terminate their contracts

with Perot Systems, with whom they had experienced repeated performance

problems, and to enter into contracts with Lockheed Martin to serve as

the LNPA to expedite implementation of local number portability. The

NANC members supported unanimously the decision to change vendors as

``essential in successfully implementing [number portability] in these

regions.''

8. We adopt the NANC Perot Recommendation to replace Perot Systems

with Lockheed Martin as the LNPA in the Southeast, Western and West

Coast regions. The record indicates that the NPAC database and

associated facilities needed for long-term number portability in the

regions where Perot Systems was the database administrator were not

ready for intercompany testing as late as January 23, 1998, putting in

jeopardy the dates for which number portability was required to be made

commercially available in these regions. The record indicates that this

delay was specifically due to the failure of the designated LNPA, Perot

Systems, to provide a stable software and hardware platform. We find

that NANC Perot Recommendation supports timely implementation of local

number portability.

9. We find it unnecessary to authorize expressly or approve

automatically carriers' actions implementing regional database

solutions that were taken prior to the issuance of the NANC LNPA

Working Group Report or the Commission's order acting on the NANC LNPA

Working Group Report. We conclude that the concerns raised by BellSouth

and U S WEST in this area have become moot in light of subsequent

industry actions to implement local number portability. Carriers, both

on their own and through the regionally-based LLCs, have successfully

worked with the NANC to implement regional SMS database solutions.

2. Scope of the NANC's Responsibilities

a. Discussion

10. We find moot BellSouth's request that the NANC should address

only SMS database administration. The recommendations contained in the

NANC LNPA Working Group Report, adopted by the Commission in the Second

Report and Order, address technical specifications related to SMS

database administration only and do not address SMS/SCP pairs.

11. In addition, we find moot BellSouth's request that carriers,

and not the NANC, propose standards for interfaces between regional SMS

and downstream SCP databases. In the Second Report and Order, the

Commission adopted the NANC's recommended standards for interfaces

between regional SMS and downstream SCP databases. The carriers sharing

in the costs of developing, establishing and maintaining the regional

databases had ample opportunity, through the NANC, to participate in

the development of interface recommendations.

12. Finally, we find moot Pacific's request that we direct an

industry group other than the NANC to address operational and technical

issues that will arise as number portability is implemented. In the

Second Report and Order, the Commission found that the NANC represents

a broad cross-section of the industry, has developed substantial

expertise in number portability issues, and provides a valuable forum

in which carriers are able to consider, at the national level, possible

ways to resolve the issues that arise as number portability is deployed

within each number portability region. As a result, the Commission

charged the NANC with the task of addressing technical and operational

issues related to local number portability that may arise in the

future.

3. Effect of Implementation of Long-Term Number Portability on Interim

Number Portability Methods

a. Discussion

13. We clarify that all LECs must discontinue using transitional

number portability methods in areas where a long-term number

portability method has been implemented. In the First Report and Order,

the Commission concluded that the Act ``contemplates a dynamic, not

static, definition of technically feasible number portability

methods.'' Based on this finding, the Commission required LECs to offer

number portability, as soon as reasonably possible upon receipt of a

specific request, through remote call forwarding (RCF), direct inward

dialing (DID) and other comparable methods, because these are the only

methods that currently are technically feasible. Because transitional

number portability methods do not meet the performance criteria

established for long-term number portability, LECs may not continue to

utilize such measures once long-term solutions have been implemented.

This conclusion is consistent with the Commission's finding in the

First Report and Order that the Act ``clearly contemplates that

[currently available] methods should serve as only temporary measures

until long-term portability is implemented.''

14. We also wish to clarify that, under the rules adopted in the

First Report and Order, RCF and DID are not the exclusive methods of

providing number portability that LECs are obligated to provide today.

As the Commission stated in the First Report and Order, ``LECs are

required to offer number portability through RCF, DID, and other

comparable methods because they are the only methods that currently are

technically feasible.'' In specifically identifying RCF and DID as

technically feasible number portability methods, the Commission did not

imply that RCF and DID are the only methods through which LECs must

port numbers until a permanent number portability solution is

implemented. Clearly, the references to RCF and DID were illustrative

of the types of measures that LECs must provide on a transitional

basis. The Commission's rules require that LECs must provide, on a

transitional basis, any technically feasible method of number

portability comparable to RCF and DID.

15. In the two years since adoption of the First Report and Order,

a number of state commissions have ordered carriers to provide Route

Indexing--Portability Hub (RI-PH) and Directory Number Route Indexing

(DNRI), based on

[[Page 68200]]

findings of technical feasibility. To date, LECs in more than half the

states have either agreed or been ordered to provide RI-PH and DNRI as

technically feasible methods of providing number portability prior to

deployment of a database method. We therefore conclude, consistent with

the Commission's prior findings in this docket and with the rules and

policies established in the Commission's Local Competition Order, 61 FR

45476, August 29, 1996, that RCF, DID, DNRI and RI-PH are comparable

and technically feasible transitional methods of providing number

portability. We conclude that state commissions may determine that

additional methods are comparable and technically feasible, as well.

16. In adopting the requirements for transitional number

portability in the First Report and Order, the Commission relied on the

fact that no network modifications would be necessary in order to

provide number portability on a transitional basis, prior to

implementation of a long-term database solution. In particular, in

adopting section 52.27, the Commission concluded that it is not unduly

burdensome for LECs to provide number portability through RCF and DID

because these methods are offered as retail services in a number of

states today.

17. Since adoption of the First Report and Order, certain new

entrants have sought other transitional methods of number portability

that are better suited, in their view, to their particular business

needs. A number of carriers make available other transitional methods

of number portability, such as RI-PH and DNRI, only if requested by a

competing carrier. We conclude that it is not per se unreasonable for a

LEC to make available transitional number portability methods only upon

request, provided that the LEC does not deliberately use the request

process to delay competitive entry. We would expect a LEC to respond

expeditiously to a request for a particular method of transitional

number portability.

18. The First Report and Order did not address the issue of which

carrier has the right to select the particular transitional method of

number portability to be provided when there is more than one

technically feasible method. We amend the Commission's rules, on our

own motion, to clarify that a LEC is required to furnish the specific

method of currently available number portability that a competing

carrier requests, provided that provision of the requested method is

not unduly burdensome. We believe that the burden of fulfilling a

competing carrier's request for a specific method of providing number

portability will be minimal if the functionality described by a

requested currently available method already exists in the network. As

the Commission noted in the First Report and Order, the capability to

provide number portability through currently available methods, such as

RCF and DID, already exists in most networks, and no additional network

upgrades should be necessary in order to provide number portability in

this manner. We clarify this finding by adding that, to the extent no

network upgrades are necessary in order to provide number portability

through methods other than RCF or DID, a LEC must make such methods

available upon request as well.

19. Given that a number of states have ordered LECs to provide RI-

PH and DNRI, we presume that RI-PH and DNRI are not unduly burdensome

to provide. We conclude that the burden should be on the LEC providing

number portability to overcome this presumption. In particular,

consistent with the pro-competitive goals of the Act, we conclude that

the LEC shall bear the burden of demonstrating that a particular

requested transitional number portability method is unduly burdensome,

and therefore should not be provided to a requesting carrier. In

determining whether a specific method is unduly burdensome, relevant

factors are the extent of network upgrades needed to provide the

requested method, the cost of such upgrades, the business needs of the

requesting carrier, and the timetable for deployment of a long-term

number portability method in that particular geographic location.

4. Issues Related to Performance Criteria

a. Discussion

20. We reject Nextel's request that the Commission establish an

industry committee to develop a single, nationwide number portability

methodology. As a threshold matter, we disagree with Nextel's

underlying premise that number portability methodology decisions will

be made on a state-by-state basis. In the First Report and Order, the

Commission specifically concluded that regionally deployed databases

best serve the public interest. Because the harm that Nextel raised in

its petition (i.e., the deployment of a different number portability

plan in each state resulting in dramatically increased costs for multi-

state providers) has not occurred and is not likely to occur, we

conclude that it is unnecessary to grant Nextel's request.

21. In addition, we note that, to a great extent, the NANC already

has served the function that Nextel asserts is necessary. The NANC was

charged with developing recommendations regarding the implementation of

number portability, in large part, ``to ensure consistency and to

provide a national perspective on number portability issues, as well as

to reduce the costs of implementing a national number portability

plan.'' Further, the NANC includes representatives from each of the

constituencies that Nextel identifies: state and federal officials,

service providers, and equipment manufacturers. Moreover, we point out

that, to date, the industry and state/regional workshops have chosen

the Location Routing Number (LRN) methodology as the preferred method

of number portability, and carriers have proceeded to implement LRN. As

such, it would appear that states have chosen the same number

portability method, rather than several incompatible methods, as Nextel

feared.

22. We grant AirTouch's request for clarification that carriers may

arrange with other carriers to perform database dips and other routing

functions. Contrary to AirTouch's claims, we have not assumed, nor do

we require, that all carriers must satisfy their number portability

obligations by upgrading their networks to perform database dips. In

the Second Report and Order, the Commission concluded that, although

the carrier in the call routing process immediately preceding the

terminating carrier shall be responsible for ensuring that number

portability database dips are performed, that carrier can meet this

obligation by either querying the number portability database itself or

by arranging with another entity to perform database dips on its

behalf.

B. Location Portability

1. Discussion

23. We decline to adopt SBC's proposal that the Commission decide

now that we will not consider location portability until service

provider number portability is successfully deployed in the 100 largest

MSAs. The Commission concluded in the First Report and Order that the

requirement that all LECs provide local number portability (i.e.,

service provider portability) pursuant to section 251(b)(2) does not

include location portability because the Act's number portability

mandate is limited to situations when users remain ``at the same

location'' when switching from one telecommunications carrier to

another. Although we did not require LECs to

[[Page 68201]]

provide location portability when the First Report and Order was

issued, we nevertheless concluded that nothing in the Act would

preclude us from mandating location portability if, in the future, we

determine that location portability is in the public interest.

24. The Commission has no current plans to address location

portability at this time. We need not and do not address the issue of

whether it may be in the public interest to require the implementation

of location portability at some point in the future.

C. 500 and 900 Number Portability

25. In the First Report and Order, the Commission concluded there

was insufficient evidence in the record to determine whether it is

technically feasible for LECs to make their assigned 500 and 900

numbers portable. The Commission directed the Industry Numbering

Committee (INC) to examine this issue and to file a report of its

findings with the Commission within twelve months of the effective date

of the First Report and Order. The Commission stated that ``[u]pon

receipt of this report, we will take appropriate action under the * * *

Act.'' The INC released its report on July 2, 1997.

1. Provision of 500 and 900 Number Portability By Carriers Other Than

LECs

a. Discussion

26. The number portability requirements of section 251(b)(2) apply

only to LECs. Specifically, section 251(b)(2) imposes a duty on ``each

local exchange carrier * * * to provide, to the extent technically

feasible, number portability in accordance with requirements prescribed

by the Commission.'' Thus, we cannot rely on section 251 for authority

to require IXCs or other non-LECs to provide number portability for 500

and/or 900 number service. We therefore affirm the Commission's

conclusion in the First Report and Order that IXCs are not required

under section 251(b)(2) to make their assigned 500 and 900 numbers

portable to any other carrier offering 500 and 900 number service.

27. We, however, may possess independent authority under sections

1, 2 and 4(i) of the Act to require other carriers to provide number

portability for 500 and/or 900 number service to the extent that such

portability is in the public interest. Section 1 requires the

Commission to make available to all people of the United States ``a

rapid, efficient, Nation-wide, and world-wide wire and radio

communication service.'' Section 1 of the Act thus gives the Commission

jurisdiction to ensure that the portability of all telephone numbers

within the United States, including 500 and 900 numbers, is handled

efficiently and fairly. 500 and 900 number portability would promote

this mandate. 500 and 900 number portability also would promote the

efficient and uniform treatment of numbering that is essential to the

efficient delivery of interstate and international telecommunications.

Section 2 gives the Commission authority to regulate interstate common

carriers, including those that provide 500 and 900 number services.

Section 4(i) grants the Commission authority to ``perform any and all

acts, make such rules and regulations, and issue such orders, not

inconsistent with [the Act], as may be necessary in the execution of

its functions.'' The conclusion that we may possess independent

authority to require all carriers to provide number portability for

their assigned 500 and 900 numbers would be similar to the Commission's

decision in the First Report and Order to rely on its general

rulemaking authority to order number portability for CMRS providers,

and to reserve the Commission's authority to require service and

location portability, even though the Commission concluded that these

types of number portability are not specifically required by section

251(b)(2). This result would also be consistent with our exercise of

authority under sections 1, 2 and 4(i) to require the Bell Operating

Companies and GTE to provide number portability for 800 numbers even

prior to enactment of the 1996 Act.

28. As the Commission noted in the First Report and Order, most

users of 500 and 900 number services today have obtained their numbers

from IXCs. Thus, ``as a practical matter, portability for the vast

majority of 500 and 900 numbers can occur only if the IXC releases to

the new carrier management of the 500 or 900 number that is to be

ported.'' If only LECs were required to make their 500 and 900 numbers

portable, the vast majority of 500 and 900 numbers would not be

portable, and competing 500 and 900 service providers would face a

significant impediment in persuading customers to switch carriers.

Imposing portability obligations on all 500 and 900 service providers

would make it possible for all customers of 500 and 900 services to

switch providers without changing their numbers. This, in turn, would

promote competition in the 500 and 900 services markets.

29. We decline to rule at this time, however, on our authority to

require all carriers to offer 500 and 900 number portability. We will

first determine whether 500 and/or 900 number portability by all

carriers is technically feasible. In the event that it is determined

that 500 and 900 number portability by all carriers is technically

feasible, we will address our authority to impose the same number

portability requirements on all carriers that provide 500 and 900

services.

2. Implementation of 500 and 900 Number Portability

a. Discussion

We decline to determine at this time whether we have independent

rulemaking authority to require number portability for 500 and 900

numbers assigned to all carriers, if that would serve the public

interest. In its report, the INC expressly limited its analysis to the

technical feasibility of porting numbers assigned to LECs between LECs;

it did not address the technical feasibility of LEC-to-non-LEC, non-

LEC-to-LEC, or non-LEC-to-non-LEC portability for 500 or 900 numbers.

In order to evaluate whether the public interest would be served by

mandating 500 and 900 number portability for all carriers, we must

first determine whether number portability for the entire 500 and 900

number resource is technically feasible. We therefore conclude that we

should expand the scope of the inquiry that the Commission previously

delegated to the INC. We direct the NANC, which may refer the issues to

the INC, to examine the following questions:

1. Is it technically feasible for all 500 number service providers

to implement 500 number portability using existing network and

administrative database capabilities?

2. If the answer to Question #1 is ``No,'' is technology available

to develop the appropriate network and administrative database

capabilities to deploy 500 number portability in the future?

3. If the answer to Question #2 is ``Yes,'' how long would it take

to develop and deploy the necessary network infrastructure for 500

number portability, upon receipt of a regulatory directive?

4. Is it technically feasible for all 900 number service providers

to implement 900 number portability using existing network and

administrative database capabilities?

5. If the answer to Question #4 is ``No,'' is technology available

to develop the appropriate network and administrative database

capabilities to deploy 900 number portability in the future?

6. If the answer to Question #5 is ``Yes,'' how long would it take

to

[[Page 68202]]

develop and deploy the necessary network infrastructure for 900 number

portability, upon receipt of a regulatory directive?

31. The NANC is directed to file a report addressing the questions

referred to it in this Second Memorandum Opinion and Order on

Reconsideration within twelve months of the effective date of this

order. Upon receipt of the NANC's report, we will take appropriate

action.

32. We decline to rule at this time on SBC's request that we

consider economic feasibility, as well as technical feasibility, in

evaluating the provision of 500 and 900 number portability. As a

practical matter, we believe that it is premature to determine what

factors may be appropriate to consider with respect to the possible

implementation of portability for such numbers, if we ultimately

conclude we have jurisdiction to order portability of those numbers for

all carriers.

D. Wireless Issues

33. In the First Report and Order, the Commission concluded that

number portability must be provided by cellular, broadband PCS, and

covered SMR providers.

34. With respect to wireless carriers, the Commission concluded

that number portability will facilitate the entry of new service

providers, such as broadband PCS and covered SMR, into CMRS markets

currently dominated by cellular providers, and competition from these

new entrants will provide incentives for incumbent cellular providers

to lower prices and increase service choice and quality. The Commission

also noted that number portability will promote competition between

CMRS and wireline service providers as CMRS providers offer comparable

local exchange and fixed commercial radio services. The Commission

determined that it would not adopt a number portability schedule for

other categories of CMRS providers (including SMR operators that do not

fit the definition of ``covered SMR'') because these other providers

offer services that ``currently will have little competitive impact on

competition between providers of wireless telephony service or between

wireless and wireline carriers.''

1. Definition of ``Covered SMR''

b. Discussion

35. The term ``covered SMR'' was intended to include SMR licensees

that offer services that compete, or potentially compete, with services

offered by cellular and broadband PCS licensees. The Commission

concluded that because cellular, broadband PCS, and certain SMR

providers will compete directly with one another, and potentially will

compete in the future with wireline carriers, number portability was

sufficiently important to the development of competition that it should

be required for these carriers. Within the SMR service, however, it was

clear that some providers would be offering mass market, two-way, real-

time, interconnected voice services that compete with the offerings of

traditional cellular and broadband PCS providers, and others would not.

The definition of covered SMR is intended to distinguish between these

two groups of SMR providers.

36. We agree with the petitioners that the existing definition of

``covered SMR'' imperfectly accomplishes its intended purpose.

37. We note also that it may be infeasible, from a technical

standpoint, to require SMR providers whose systems lack an in-network

switching capability to provide number portability.

38. For the foregoing reasons, we adopt, with some modification,

the definition suggested by the petitioners:

``Covered CMRS systems offer real-time, two-way switched voice

service that are interconnected with the public switched network, and

utilize an in-network switching facility which enables the provider to

reuse frequencies and accomplish seamless hand-offs of subscriber

calls.''

With this change, number portability must be provided by ``covered

CMRS'' providers, which may hold licenses in cellular, PCS, SMR or any

other services.

39. We also clarify, in response to Nextel's petition, that the

definition of covered CMRS should be applied on a system-by-system

basis. That is, an entity may hold more than one CMRS license, but the

entity is required to provide number portability only with respect to

licenses that satisfy the definition of covered CMRS.

40. In addition, we reject AMTA's proposal that the covered SMR

definition apply only to systems serving 20,000 or more subscribers

nationwide. The approach we adopt above is a functional one, which is

based on whether the provider offers a certain type of service. We find

that determining whether an SMR system is required to provide number

portability based on how many subscribers it serves would be arbitrary,

and could discourage SMR providers from expanding their systems.

41. Further, we dismiss SBT's petition for reconsideration as

untimely. Public notice in this case was given on July 26, 1996, the

date on which the First Report and Order was published in the Federal

Register. Therefore, petitions to reconsider that decision were due on

or before August 26, 1996. Because the time period for filing petitions

for reconsideration is prescribed by statute, the Commission may not,

except in extraordinary cases, waive or extend the filing period. SBT

has not demonstrated that its late-filed petition fits into this narrow

exception; indeed, SBT has not even moved for leave to file its

petition. As such, we dismiss SBT's petition.

42. Finally, we dismiss AMTA's petition for reconsideration of the

First Order on Reconsideration as moot. By amending, in this Order, the

Commission's rules to ensure that only those CMRS carriers that compete

in the market for two-way, interconnected, real-time voice services are

subject to the Commission's number portability requirements, we grant

the relief that AMTA requests. Moreover, because we have clarified that

CMRS licensees providing primarily dispatch service with a non-cellular

type of system are exempt from the Commission's number portability

requirements, there is no need to extend the implementation period for

such licensees.

2. Geographic Scope of Number Portability for Wireless Carriers

a. Discussion

43. Requiring service provider portability in a wireless

environment, without imposing any geographic boundaries, could

theoretically result in de facto nationwide location portability, which

the Commission explicitly declined to adopt in the First Report and

Order. Conversely, limiting number portability in a wireless

environment to those carriers already serving the NPA of the ported

wireless number may thwart the pro-competitive goals of the Act. A

single geographic area may now have multiple NPAs due to area code

overlays. Typically, wireless carriers provide their customers with the

choice of NPAs when they have more than one switch in the geographic

market, but some new entrants may only have one or two switches with

all numbers coming out of the same NPA. Limiting number portability in

a wireless environment to those carriers already serving the NPA of the

ported wireless number may discourage customers from switching wireless

carriers if they cannot port their number to a different NPA even

though the number continues to be used in the same geographic

[[Page 68203]]

market. As noted, wireless carriers are not obligated to port numbers

until March 31, 2000. Furthermore, the NANC is currently examining the

myriad of complex issues surrounding wireless number portability.

Consequently, we defer a decision on this matter pending further

analysis by the NANC. We encourage AirTouch to participate in the

NANC's standards development process to ensure consideration of

AirTouch's concerns.

3. Preemption of State Number Portability Requirements for CMRS

Providers

a. Discussion

44. We reject the request for preemption of state number

portability requirements for CMRS carriers. While, under certain

circumstances, the Commission has authority to preempt state law, the

record is devoid of any evidence that such action is warranted at this

time. Pursuant to the Supremacy Clause of the U.S. Constitution,

Congress has the power to preempt state laws or regulations.

45. The petitioners have failed to identify any specific state

number portability requirements that apply to CMRS carriers that

conflict with federal number portability mandates or objectives. Nor is

there a basis in the current record for concluding that it will be

impossible for carriers to comply with federal and state CMRS number

portability requirements. Thus, we decline to consider the preemption

of state number portability requirements for CMRS carriers based on the

record before us.

46. In addition, despite the conclusory assertions of the

petitioners to the contrary, the record does not indicate that there

are, or will be, state number portability requirements applicable to

CMRS carriers that will conflict with the requirements of any other

state, such that CMRS carriers will be required to accommodate multiple

portability architectures and/or service requirements. Indeed, the

framework for implementing number portability is designed, in part, to

minimize such burdens. For example, in the First Report and Order, the

Commission directed one entity--the NANC--to develop recommendations

for technical and operational standards with respect to regional number

portability databases. Accordingly, we expect there will be a high

degree of national uniformity in this regard. Moreover, as discussed

above, the industry and state/regional workshops chose a single method

as the preferred method for number portability. In short, it is

unlikely that CMRS systems that span state lines will be required to

accommodate multiple portability architectures that differ

significantly from one another.

IV. Ordering Clauses

47. It is ordered that, pursuant to the authority contained in

sections 1, 4(i), 4(j), 201-205, 218, 251, and 332 of the

Communications Act as amended, 47 U.S.C. 151, 154(i), 154(j), 201-205,

218, 251 and 332, and 47 CFR 52 is amended.

48. It is further ordered that the Petitions for Reconsideration

and/or Clarification are granted to the extent indicated herein and

otherwise are denied.

49. It is further ordered that the policies, rules, and

requirements set forth herein are adopted, effective 30 days after

publication of a summary of this Second Reconsideration Order in the

Federal Register.

50. It is further ordered that the Petition for Reconsideration of

Small Business in Telecommunications is hereby dismissed.

51. It is further ordered that the Petition for Reconsideration

filed by the Ameritech Mobile Telecommunications Association, Inc. on

May 15, 1997, is dismissed as moot.

52. It is further ordered that the Commission's Office of Public

Affairs, Reference Operations Division, shall send a copy of this

Second Memorandum Opinion and Order on Reconsideration, including the

Second Supplemental Final Regulatory Flexibility Analysis, to the Chief

Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 52

Communications common carriers, Telecommunications, Telephone

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Final Rules

Part 52 of Title 47 of the Code of Federal Regulations (CFR) is

amended as follows:

PART 52--NUMBERING

1.The authority citation for Part 52 continues to read as follows:

Authority: Sec. 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 U.S.C.

151, 152, 154, 155 unless otherwise noted. Interpret or apply secs.

3, 4, 201-05, 207-09, 218, 225-7, 251-2, 271 and 332, 48 Stat. 1070,

as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 218, 225-7,

251-2, 271 and 332 unless otherwise noted.

2. Section 52.21 is amended by revising paragraphs (c) and (q) to

read as follows:

Sec. 52.21 Definitions.

* * * * *

(c) The term covered CMRS means broadband PCS, cellular, and 800/

900 MHz SMR licensees that hold geographic area licenses or are

incumbent SMR wide area licensees, and offer real-time, two-way

switched voice service, are interconnected with the public switched

network, and utilize an in-network switching facility that enables such

CMRS systems to reuse frequencies and accomplish seamless hand-offs of

subscriber calls.

* * * * *

(q) The term transitional number portability measure means a method

that allows one local exchange carrier to transfer telephone numbers

from its network to the network of another telecommunications carrier,

but does not comply with the performance criteria set forth in 52.3(a).

Transitional number portability measures are technically feasible

methods of providing number portability including Remote Call

Forwarding (RCF), Direct Inward Dialing (DID), Route Indexing--

Portability Hub (RI-PH), Directory Number Route Indexing (DNRI) and

other comparable methods.

3. Section 52.27 is revised to read as follows:

Sec. 52.27 Deployment of transitional measures for number portability.

(a) All LECs shall provide transitional number portability

measures, as defined in section 52.21(q) of this chapter, 47 CFR

52.21(q), as soon as reasonably possible upon receipt of a specific

request from another telecommunications carrier, until such time as the

LEC implements a long-term database method for number portability in

that area.

(b) A LEC must provide the particular transitional number

portability measure requested by a telecommunications carrier, except

as set forth in paragraph (c) of this section.

(c) A LEC that does not provide a requested transitional number

portability measure must demonstrate that provision of the requested

transitional number portability measure either is not technically

feasible or if technically feasible, is unduly burdensome.

(1) Previous successful provision of a particular transitional

number portability measure by any LEC constitutes substantial evidence

that the particular method is technically feasible.

[[Page 68204]]

(2) In determining whether provision of a transitional number

portability measure is unduly burdensome, relevant factors to consider

are the extent of network upgrades needed to provide that particular

method, the cost of such upgrades, the business needs of the requesting

carrier, and the timetable for deployment of a long-term number

portability method in that particular geographic location.

(d) LECs must discontinue using transitional number portability

measures in areas where a long-term number portability method has been

implemented.

4. Section 52.31 is amended by revising paragraphs (a), (b), and

(e) as follows:

Sec. 52.31 Deployment of long-term database methods for number

portability by CMRS providers.

(a) By March 31, 2000, all covered CMRS providers must provide a

long-term database method for number portability, including the ability

to support roaming, in compliance with the performance criteria set

forth in section 52.23(a) of this chapter, 47 CFR 52.23. A licensee may

have more than one CMRS system, but only the systems that satisfy the

definition of covered CMRS are required to provide number portability.

(b) By December 31, 1998, all covered CMRS providers must have the

capability to obtain routing information, either by querying the

appropriate database themselves or by making arrangements with other

carriers that are capable of performing database queries, so that they

can deliver calls from their networks to any party that has retained

its number after switching from one telecommunications carrier to

another.

* * * * *

(e) The Chief, Wireless Telecommunications Bureau, may establish

reporting requirements in order to monitor the progress of covered CMRS

providers implementing number portability, and may direct such carriers

to take any actions necessary to ensure compliance with this deployment

schedule.

Second Supplemental Final Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis (IRFA) was incorporated into the Notice

of Proposed Rulemaking in this docket (NPRM). The Commission sought

written public comment on the proposals in the Notice, including

comment on the IRFA. The comments received on the IRFA were discussed

in the First Report and Order's Final Regulatory Flexibility Analysis

(FRFA-First Report and Order), which was incorporated as Appendix C to

the First Report and Order in this docket. The FRFA-First Report and

Order conforms to the RFA. On reconsideration of the First Report and

Order, parties commented on the FRFA-First Report and Order. The

comments received on the FRFA-First Report and Order were discussed in

the Supplemental Final Regulatory Flexibility Analysis (Supplemental

FRFA) incorporated into the First Order on Reconsideration in this

docket. The Supplemental FRFA conforms to the RFA. This Second

Supplemental Final Regulatory Flexibility Analysis (Second Supplemental

FRFA) is incorporated as an appendix to the Second Order on

Reconsideration in this docket. This Second Supplemental FRFA also

conforms to the RFA.

A. Need for and Objectives of Second Order on Reconsideration

2. The need for and objectives of the requirements adopted in this

Second Order on Reconsideration are the same as those discussed in the

Final Regulatory Flexibility Analysis in the First Report and Order.

The Commission, in compliance with sections 251(b)(2) and 251(d)(1) of

the Communications Act of 1934, as amended by the Telecommunications

Act of 1996 (the Act), adopts requirements and procedures intended to

ensure the prompt implementation of telephone number portability with

the minimum regulatory and administrative burden on telecommunications

carriers. These requirements are necessary to implement the provision

in the Act requiring local exchange carriers (LECs) to offer number

portability, if technically feasible. In implementing the statute, the

Commission has the responsibility to adopt requirements that will

implement most quickly and effectively the national telecommunications

policy embodied in the Act and to promote the pro-competitive,

deregulatory markets envisioned by Congress. Congress has recognized

that number portability will lower barriers to entry and promote

competition in the local exchange marketplace.

B. Summary of Significant Issues Raised By Public Comments in Response

to the IRFA, FRFA-First Report and Order, and Supplemental FRFA

3. The comments received on the IRFA were discussed in the FRFA-

First Report and Order incorporated into the First Report and Order.

The comments received on the FRFA-First Report and Order were discussed

in the Supplemental FRFA incorporated into the First Order on

Reconsideration. No additional comments were sought or received for

purposes of this Second Supplemental FRFA.

C. Summary of the FRFA-First Report and Order

4. In the FRFA-First Report and Order, we concluded that incumbent

LECs do not qualify as small businesses because they are dominant in

their field of operation, and, accordingly, we did not address the

impact of the Commission's requirements on incumbent LECs. We noted

that the RFA generally defines the term ``small business'' as having

the same meaning as the term ``small business concern'' 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) satisfies any additional criteria established by the Small Business

Administration (SBA). According to the SBA's regulations, entities

engaged in the provision of telephone service may have a maximum of

1,500 employees in order to qualify as a small business concern. This

standard also applies in determining whether an entity is a small

business for purposes of the Regulatory Flexibility Act.

5. We did recognize that the Commission's requirements may have a

significant economic impact on a substantial number of small businesses

insofar as they apply to telecommunications carriers other than

incumbent LECs, including competitive LECs, as well as cellular,

broadband personal communications services (PCS), and covered

specialized mobile radio (SMR) providers. Based upon data contained in

the most recent census and a report by the Commission's Common Carrier

Bureau, we estimated that 2,100 carriers could be affected. We also

discussed the reporting requirements imposed by the First Report and

Order.

6. Finally, we discussed the steps we had taken to minimize the

impact on small entities, consistent with the Commission's stated

objectives. We concluded that our actions in the First Report and Order

would benefit small entities by facilitating their entry into the local

exchange market. We found that the record in this proceeding indicated

that the lack of number portability would deter entry by competitive

providers of local service because of the value customers place on

retaining their telephone numbers. These competitive providers, many of

which may be small entities, may find

[[Page 68205]]

it easier to enter the market as a result of number portability, which

will eliminate this barrier to entry. We noted that, in general, we

attempted to keep burdens on local exchange carriers to a minimum. For

example, we adopted a phased deployment schedule for implementation in

the 100 largest MSAs, and then elsewhere upon a carrier's request; we

conditioned the provision of currently available measures upon request

only; we did not require cellular, broadband PCS, and covered SMR

providers, which may be small businesses, to offer currently available

number portability measures; and we did not require paging and

messaging service providers, which may be small entities, to provide

any number portability.

D. Summary of the Supplemental FRFA

7. Implementation Schedule. In the First Report and Order, we

required local exchange carriers operating in the 100 largest MSAs to

offer long-term service provider portability, according to a phased

deployment schedule commencing on October 1, 1997, and concluding by

December 31, 1998, set forth in Appendix F of the First Report and

Order. In the First Order on Reconsideration, we extended the end dates

for Phase I of our deployment schedule by three months, and for Phase

II by 45 days. Thus, deployment will now take place in Phase I from

October 1, 1997, through March 31, 1998, and in Phase II from January

1, 1998, through May 15, 1998. We also clarified that LECs need only

provide number portability within the 100 largest MSAs in switches for

which another carrier has made a specific request for the provision of

portability. LECs must make available lists of their switches for which

deployment has and has not been requested. The parties involved in such

requests identifying preferred switches may need to use legal,

accounting, economic and/or engineering services.

8. In the First Order on Reconsideration, we reduced the burdens on

rural and smaller LECs by establishing a procedure whereby, within as

well as outside the 100 largest MSAs, portability need only be

implemented in the switches for which another carrier has made a

specific request for the provision of portability. If competition is

not imminent in the areas covered by rural/small LEC switches, then the

rural or smaller LEC should not receive requests from competing

carriers to implement portability, and thus need not expend its

resources until competition does develop. By that time, extensive non-

carrier-specific testing will likely have been done, and rural and

small LECs need not expend their resources on such testing. We noted

that the majority of parties representing small or rural LECs seeking

relief asked that we only impose implementation requirements where

competing carriers have shown interest in portability. Moreover, our

extension of Phases I and II of our deployment schedule may permit

smaller LECs to reduce their testing costs by allowing time for larger

LECs to test and resolve the problems of this new technology.

9. In the First Order on Reconsideration, we rejected several

alternatives put forth by parties that might impose greater burdens on

small entities and small incumbent LECs. We rejected requests to

accelerate the deployment schedule for areas both within and outside

the 100 largest MSAs. We also rejected the procedures proposed by some

parties that would require LECs to file waiver requests for their

specific switches if they believe there is no competitive interest in

those switches, instead of requiring LECs to identify in which switches

of other LECs they wish portability capabilities. The suggested waiver

procedures would burden the LEC from whom portability is requested with

preparing and filing the petition for waiver. In addition, a competing

carrier that opposes the waiver petition would be burdened with

challenging the waiver. In contrast, under the procedure we establish,

the only reporting burden on requesting carriers is to identify and

request their preferred switches. Carriers from which portability is

being requested, which may be small incumbent LECs, only incur a

reporting burden if they wish to lessen their burdens further by

requesting more time in which to deploy portability. Finally, we

clarified that CMRS providers, like wireline providers, need only

provide portability in requested switches, both within and outside the

100 largest MSAs.

E. Description and Estimates of the Number of Small Entities Affected

by This Second Order on Reconsideration

10. Consistent with our prior practice, we shall continue to

exclude small incumbent LECs from the definition of a small entity for

the purpose of this Second Supplemental FRFA. Accordingly, our use of

the terms ``small entities'' and ``small businesses'' does not

encompass ``small incumbent LECs.'' Nevertheless, we include small

incumbent LECs in our Second Supplemental FRFA. We use the term ``small

incumbent LECs'' to refer to any incumbent LECs that arguably might be

defined by SBA as ``small business concerns.''

11. Total Number of Telephone Companies Affected. Many of the

decisions and rules adopted herein may have a significant effect on a

substantial number of the small telephone companies identified by SBA.

The United States Bureau of the Census (``the Census Bureau'') reports

that, at the end of 1992, there were 3,497 firms engaged in providing

telephone services, as defined therein, for at least one year. This

number contains a variety of different categories of carriers,

including local exchange carriers, interexchange carriers, competitive

access providers, cellular carriers, mobile service carriers, operator

service providers, pay telephone operators, PCS providers, covered SMR

providers, and resellers. It seems certain that some of those 3,497

telephone service firms may not qualify as small entities or small

incumbent LECs because they are not ``independently owned and

operated.'' For example, a PCS provider that is affiliated with an

interexchange carrier having more than 1,500 employees would not meet

the definition of a small business. It seems reasonable to conclude,

therefore, that fewer than 3,497 telephone service firms are small

entity telephone service firms or small incumbent LECs that may be

affected by this Order on Reconsideration.

12. Wireline Carriers and Service Providers. SBA has developed a

definition of small entities for telephone communications companies

other than radiotelephone (wireless) companies. The Census Bureau

reports that, there were 2,321 such telephone companies in operation

for at least one year at the end of 1992. According to SBA's

definition, a small business telephone company other than a

radiotelephone company is one employing fewer than 1,500 persons. All

but 26 of the 2,321 non-radiotelephone companies listed by the Census

Bureau were reported to have fewer than 1,000 employees. Thus, even if

all 26 of those companies had more than 1,500 employees, there would

still be 2,295 non-radiotelephone companies that might qualify as small

entities or small incumbent LECs. Although it seems certain that some

of these carriers are not independently owned and operated, we are

unable at this time to estimate with greater precision the number of

wireline carriers and service providers that would qualify as small

business concerns under SBA's definition. Consequently, we estimate

that there are fewer than 2,295 small entity telephone communications

companies other than radiotelephone companies that may be affected by

the decisions and rules

[[Page 68206]]

adopted in this Order on Reconsideration.

13. Local Exchange Carriers. Neither the Commission nor SBA has

developed a definition of small providers of local exchange services

(LECs). The closest applicable definition under SBA rules is for

telephone communications companies other than radiotelephone (wireless)

companies. 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) Worksheet. According to our most recent data, 1,347

companies reported that they were engaged in the provision of local

exchange services. Although it seems certain that some of these

carriers are not independently owned and operated, or have more than

1,500 employees, we are unable at this time to estimate with greater

precision the number of LECs that would qualify as small business

concerns under SBA's definition. Consequently, we estimate that there

are fewer than 1,347 small incumbent LECs that may be affected by the

decisions and rules adopted in this Order on Reconsideration.

14. Interexchange Carriers. Neither the Commission nor SBA has

developed a definition of small entities specifically applicable to

providers of interexchange services (IXCs). The closest applicable

definition under SBA rules is for telephone communications companies

other than radiotelephone (wireless) companies. The most reliable

source of information regarding the number of IXCs nationwide of which

we are aware appears to be the data that we collect annually in

connection with the TRS Worksheet. According to our most recent data,

130 companies reported that they were engaged in the provision of

interexchange services. Although it seems certain that some of these

carriers are not independently owned and operated, or have more than

1,500 employees, we are unable at this time to estimate with greater

precision the number of IXCs that would qualify as small business

concerns under SBA's definition. Consequently, we estimate that there

are fewer than 130 small entity IXCs that may be affected by the

decisions and rules adopted in this Order on Reconsideration.

15. Competitive Access Providers. Neither the Commission nor SBA

has developed a definition of small entities specifically applicable to

providers of competitive access services (CAPs). The closest applicable

definition under SBA rules is for telephone communications companies

other than radiotelephone (wireless) companies. The most reliable

source of information regarding the number of CAPs nationwide of which

we are aware appears to be the data that we collect annually in

connection with the TRS Worksheet. According to our most recent data,

57 companies reported that they were engaged in the provision of

competitive access services. Although it seems certain that some of

these carriers are not independently owned and operated, or have more

than 1,500 employees, we are unable at this time to estimate with

greater precision the number of CAPs that would qualify as small

business concerns under SBA's definition. Consequently, we estimate

that there are fewer than 57 small entity CAPs that may be affected by

the decisions and rules adopted in this Order on Reconsideration.

16. Operator Service Providers. Neither the Commission nor SBA has

developed a definition of small entities specifically applicable to

providers of operator services. The closest applicable definition under

SBA rules is for telephone communications companies other than

radiotelephone (wireless) companies. The most reliable source of

information regarding the number of operator service providers

nationwide of which we are aware appears to be the data that we collect

annually in connection with the TRS Worksheet. According to our most

recent data, 25 companies reported that they were engaged in the

provision of operator services. Although it seems certain that some of

these companies are not independently owned and operated, or have more

than 1,500 employees, we are unable at this time to estimate with

greater precision the number of operator service providers that would

qualify as small business concerns under SBA's definition.

Consequently, we estimate that there are fewer than 25 small entity

operator service providers that may be affected by the decisions and

rules adopted in this Order on Reconsideration.

17. Pay Telephone Operators. Neither the Commission nor SBA has

developed a definition of small entities specifically applicable to pay

telephone operators. The closest applicable definition under SBA rules

is for telephone communications companies other than radiotelephone

(wireless) companies. The most reliable source of information regarding

the number of pay telephone operators nationwide of which we are aware

appears to be the data that we collect annually in connection with the

TRS Worksheet. According to our most recent data, 271 companies

reported that they were engaged in the provision of pay telephone

services. Although it seems certain that some of these carriers are not

independently owned and operated, or have more than 1,500 employees, we

are unable at this time to estimate with greater precision the number

of pay telephone operators that would qualify as small business

concerns under SBA's definition. Consequently, we estimate that there

are fewer than 271 small entity pay telephone operators that may be

affected by the decisions and rules adopted in this Order on

Reconsideration.

18. Wireless (Radiotelephone) Carriers. SBA has developed a

definition of small entities for radiotelephone (wireless) companies.

The Census Bureau reports that there were 1,176 such companies in

operation for at least one year at the end of 1992. According to SBA's

definition, a small business radiotelephone company is one employing

fewer than 1,500 persons. The Census Bureau also reported that 1,164 of

those radiotelephone companies had fewer than 1,000 employees. Thus,

even if all of the remaining 12 companies had more than 1,500

employees, there would still be 1,164 radiotelephone companies that

might qualify as small entities if they are independently owned are

operated. Although it seems certain that some of these carriers are not

independently owned and operated, we are unable at this time to

estimate with greater precision the number of radiotelephone carriers

and service providers that would qualify as small business concerns

under SBA's definition. Consequently, we estimate that there are fewer

than 1,164 small entity radiotelephone companies that may be affected

by the decisions and rules adopted in this Order on Reconsideration.

19. Cellular Service Carriers. Neither the Commission nor SBA has

developed a definition of small entities specifically applicable to

providers of cellular services. The closest applicable definition under

SBA rules is for radiotelephone (wireless) companies. The most reliable

source of information regarding the number of cellular service carriers

nationwide of which we are aware appears to be the data that we collect

annually in connection with the TRS Worksheet. According to our most

recent data, 792 companies reported that they were engaged in the

provision of cellular services. Although it seems certain that some of

these carriers are not independently owned and operated, or have more

than 1,500 employees, we are unable at this time to estimate with

greater precision the number of cellular service carriers that would

qualify as small business concerns under SBA's definition.

Consequently, we estimate

[[Page 68207]]

that there are fewer than 792 small entity cellular service carriers

that may be affected by the decisions and rules adopted in this Order

on Reconsideration.

20. Mobile Service Carriers. Neither the Commission nor SBA has

developed a definition of small entities specifically applicable to

mobile service carriers, such as paging companies. The closest

applicable definition under SBA rules is for radiotelephone (wireless)

companies. The most reliable source of information regarding the number

of mobile service carriers nationwide of which we are aware appears to

be the data that we collect annually in connection with the TRS

Worksheet. According to our most recent data, 138 companies reported

that they were engaged in the provision of mobile services. Although it

seems certain that some of these carriers are not independently owned

and operated, or have more than 1,500 employees, we are unable at this

time to estimate with greater precision the number of mobile service

carriers that would qualify under SBA's definition. Consequently, we

estimate that there are fewer than 138 small entity mobile service

carriers that may be affected by the decisions and rules adopted in

this Order on Reconsideration.

21. Broadband Personal Communications Service (PCS). The broadband

PCS spectrum is divided into six frequency blocks designated A through

F and the Commission has held auctions for each block. The Commission

defined ``small entity'' for Blocks C and F as an entity that has

average gross revenues of less than $40 million in the three previous

calendar years. For Block F, an additional classification for ``very

small businesses'' was added and is defined as an entity that, together

with their affiliates, has average gross revenues of not more than $15

million for the preceding three calendar years. These regulations

defining ``small entity'' in the context of broadband PCS auctions have

been approved by the SBA. No small businesses within the SBA-approved

definition bid successfully for licenses in Blocks A and B. There were

90 winning bidders that qualified as small entities in the Block C

auctions. A total of 93 small and very small business bidders won

approximately 40% of the 1,479 licenses for Blocks D, E, and F.

However, licenses for blocks C through F have not been awarded fully,

therefore there are few, if any, small businesses currently providing

PCS services. Based on this information, we conclude that the number of

small broadband PCS licensees will include the 90 winning C Block

bidders and the 93 qualifying bidders in the D, E, and F blocks, for a

total of 183 small PCS providers as defined by the SBA and the

Commission's auction rules.

22. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission

has defined ``small entity'' in auctions for geographic area 800 MHz

and 900 MHz SMR licenses as a firm that had average annual gross

revenues of less than $15 million in the three previous calendar years.

This definition of a ``small entity'' in the context of 800 MHz and 900

MHz SMR has been approved by the SBA. The rules adopted in this Order

on Reconsideration. may apply to SMR providers in the 800 MHz and 900

MHz bands that either hold geographic area licenses or have obtained

extended implementation authorizations. We do not know how many firms

provide 800 MHz or 900 MHz geographic area SMR service pursuant to

extended implementation authorizations, nor how many of these providers

have annual revenues of less than $15 million. We assume, for purposes

of this Supplemental FRFA, that all of the extended implementation

authorizations may be held by small entities, which may be affected by

the decisions and rules adopted in this Order on Reconsideration.

23. The Commission recently held auctions for geographic area

licenses in the 900 MHz SMR band. There were 60 winning bidders who

qualified as small entities in the 900 MHz auction. Based on this

information, we conclude that the number of geographic area SMR

licensees affected by the rule adopted in this Order on Reconsideration

includes these 60 small entities. No auctions have been held for 800

MHz geographic area SMR licenses. Therefore, no small entities

currently hold these licenses. A total of 525 licenses will be awarded

for the upper 200 channels in the 800 MHz geographic area SMR auction.

However, the Commission has not yet determined how many licenses will

be awarded for the lower 230 channels in the 800 MHz geographic area

SMR auction. There is no basis, moreover, on which to estimate how many

small entities will win these licenses. Given that nearly all

radiotelephone companies have fewer than 1,000 employees and that no

reliable estimate of the number of prospective 800 MHz licensees can be

made, we assume, for purposes of this FRFA, that all of the licenses

may be awarded to small entities who, thus, may be affected by the

decisions in this Order on Reconsideration.

24. Resellers. Neither the Commission nor SBA has developed a

definition of small entities specifically applicable to resellers. The

closest applicable definition under SBA rules is for all telephone

communications companies. The most reliable source of information

regarding the number of resellers nationwide of which we are aware

appears to be the data that we collect annually in connection with the

TRS Worksheet. According to our most recent data, 260 companies

reported that they were engaged in the resale of telephone services.

Although it seems certain that some of these carriers are not

independently owned and operated, or have more than 1,500 employees, we

are unable at this time to estimate with greater precision the number

of resellers that would qualify as small business concerns under SBA's

definition. Consequently, we estimate that there are fewer than 260

small entity resellers that may be affected by the decisions and rules

adopted in this Second Order on Reconsideration.

F. Description of Projected Reporting, Recordkeeping and Other

Compliance Requirements

25. There are no significant reporting, recordkeeping or other

compliance requirements imposed on small entities by this Second Order

on Reconsideration on other entities.

G. Steps Taken to Minimize Significant Economic Impact on Small

Entities and Significant Alternatives Considered

26. The Commission's actions in this Second Order on

Reconsideration will benefit small entities by facilitating their entry

into the local exchange market. The record in this proceeding indicates

that the lack of number portability would deter entry by competitive

providers of local service because of the value customers place on

retaining their telephone numbers. These competitive providers, many of

which may be small entities, may find it easier to enter the market as

a result of number portability which will eliminate this barrier to

entry.

27. In general in this docket, we have attempted to keep burdens on

local exchange carriers to a minimum. The regulatory burdens we have

imposed are necessary to ensure that the public receives the benefit of

the expeditious provision of service provider number portability in

accordance with the statutory requirements. We believe that the Second

Order on Reconsideration furthers our commitment to minimizing

regulatory burdens on small entities. Based on the record before us, we

do not find that any of the recommendations we adopt in the Second

Order on Reconsideration will have a

[[Page 68208]]

disproportionate impact on small entities.

28. Report to Congress: The Commission will send a copy of the

Second Order on Reconsideration, including the Second Supplemental

FRFA, in a report to be sent to Congress pursuant to the Small Business

Regulatory Fairness Act of 1996. A copy of the Second Order on

Reconsideration and this Second Supplemental FRFA (or summary thereof)

will also be published in the Federal Register and will be sent to the

Chief Counsel for Advocacy of the Small Business Administration.

[FR Doc. 98-32808 Filed 12-9-98; 8:45 am]

BILLING CODE 6712-01-P