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I.   25x31a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:><q*"xxxxWWxxxWWkkxxx&-#Xj\  P6G;[hXP#э Id. Z "~ 0*(("Ԍ X-   2.  Comments  X-  X-  a. Definition of Vanity Numbers  Y-  8. Various commenters suggest differing definitions for vanity numbers. Ameritech, for example, suggests six possible categories of vanity numbers: (1) numbers corresponding  Yw-to letters spelling a subscriber's product (e.g., "1800FLOWERS"); (2) numbers  Y`-corresponding to letters spelling a subscriber's name (e.g., "1800HOLIDAY"); (3) numbers  YI-that begin with "4" or "2" and end with a product or subscriber's name (e.g., "18004TRAVEL"); (4) numbers for which the last four digits spell a product or subscriber's name;  Y -(5) numbers that are easily remembered; and (6) numbers that have been heavily marketed.s  Y -#Xj\  P6G;[hXP#э Ameritech Comments at 30. See also AT&T Comments at 27 (numbers that are advertised, widely known and accepted by the public, and called by customers); Americas Carrier Telecommunications Association ("ACTA") Comments at 17 (numbers that can be translated into a word or name). s The 800 Users Coalition asserts that product information numbers or reservation numbers for hotels and airlines that generate large volumes of traffic, should also be included within the  Y -definition of vanity numbers.u 4 Y-#Xj\  P6G;[hXP#э 800 Users Coalition Comments at 14. u SWBT contends that a logical extension of the definition  Y -would include every emergency and hot line number.d  YU-#Xj\  P6G;[hXP#э SWBT Comments at 16.d LDDS Worldcom ("LDDS") asserts that the definition should be broadened beyond mnemonic terms to recognize that the digits  Y-themselves may be of value to the toll free subscriber.d Y-#Xj\  P6G;[hXP#э LDDS Comments at 13.d  Yc- 9. AT&T maintains that RespOrgs should determine which of their 800 numbers  YM-qualify as vanity numbers,dMG  YE-#Xj\  P6G;[hXP#э AT&T Comments at 27.d while LDDS asserts that toll free subscribers should define the  Y6-ultimate value of their numbers.d6  Y-#Xj\  P6G;[hXP#э LDDS Comments at 13.d AirTouch Paging ("AirTouch") declares that there is no  Y-fair means of determining what constitutes a vanity number   ,&  Yy"-#Xj\  P6G;[hXP#э AirTouch Comments at 14, n. 30. See also GTE Comments at 10, n. 16 (concerned that a significant amount of numbers may be taken out of circulation if the definition of vanity numbers is too amorphous).& while Personal Communications Industry Association ("PCIA") states that the Commission definition is",0*(( "  Y-overly broad and "precludes meaningful comment."g Yy-#Xj\  P6G;[hXP#э PCIA Comments at 1012.g As part of its proposed plan for 888 network implementation, the SNAC defines a process that allows RespOrgs to contact their current 800 subscribers to see which numbers those subscribers might want replicated in  Y-888.s_y Y-ԍ SNAC Comments at 1314. The SNAC is one of six industry committees included within the Ordering and Billing Forum ("OBF"). OBF "provides a forum for customers and providers in the communications industry to identify, discuss and resolve national issues which affect ordering, billing, provisioning and exchange of information about access service  Y -and related industry matters." Id. at 2. The SNAC is responsible for identifying, developing, and implementing the resolution of issues involving the support of the SMS  Y[ -database. Id.s The criteria used to determine which subscribers would be contacted is left to the discretion of each RespOrg. Once the subscriber base is identified, each RespOrg would be required to compile a computer tape containing requested numbers. The tapes would then be sent to DSMI who, after conducting certain verification procedures, would mark these numbers for the "unavailable" status. The polling process was scheduled for completion in  YH-midDecember.H  Y-#Xj\  P6G;[hXP#э Id. at 1314.#Xw5 P7XP#ъ    Y -  10.  Commenters addressing the question of how many existing 800 numbers would be classified as vanity numbers arrive at widely varied estimates of the potential pool. SNAC, for example, conducted a survey indicating that 24% of existing 800 numbers were identified as vanity numbers. SNAC's survey also indicated that that same percentage of  Y -subscribers would want to replicate their numbers in 888. Q  Y-#Xj\  P6G;[hXP#э SNAC Comments at 16, Appendix B. See also Sprint Comments at 18 (citing SNAC  Y-survey); NYNEX Comments at 7 (estimating the number at 25%). TLDP Communications, Inc. ("TLDP"), considering as vanity numbers only those that translate into names or words,  Y-estimates the quantity at between 10% and 20%, using a "brief mathematical analysis."  Y--#Xj\  P6G;[hXP#э TLDP Comments at 23. See also Telecompute Comments at 4 (no more than 25% of all seven digit numbers "spell" anything). The 800 Users Coalition used data collected from coalition members, holding approximately 14,000 800 numbers, and from the AT&T Toll Free Directory, containing 180,000 published  YL-800 numbers, to arrive at its 5% to 6% figure.vL Y#-#Xj\  P6G;[hXP#э 800 Users Coalition Comments at 1517.v The 800 Users Coalition also noted that high volume numbers face the same problems as vanity numbers and consequently should be  Y-afforded the same protections as vanity numbers._6 Y'-#Xj\  P6G;[hXP#э Id._ Ameritech contends that it is virtually"0*(( " impossible to estimate the scope of vanity numbers because the definition is so broad and  Y-subjective. Yb-#Xj\  P6G;[hXP#э Ameritech Comments at 30. See also LDDS Comments at 13 (impossible at this#Xj\  P6G;[hXP# time to estimate the quantity of vanity numbers); Bell Atlantic Comments at 7 (no way of knowing the quantity of vanity numbers currently in use because Bell Atlantic does not know how its customers are using their numbers).  Y-  11.   In a letter dated January 18, 1996, DSMI informed the bureau that RespOrgs had requested to have approximately 310,000 888 numbers protected, thus providing additional evidence of the large number of 800 numbers that would be classified as vanity  Yw-numbers. w4 Y\ -ԍ See Letter from Michael J. Wade, President, DSMI to Kathleen B. Levitz, Deputy Bureau Chief, Common Carrier Bureau, FCC, dated January 18, 1996.  Y`-       XI-   3.  Discussion  Y -  12.  Defining vanity numbers is a daunting undertaking. Some numbers are valued for their mnemonic equivalent, while other numbers are valued for, among other things, the  Y -fact that their digits are easily memorized. This Report and Order will address only those issues essential to assuring the 888 SAC can be opened to the general public on March 1, 1996. We propose, therefore, to assure interim protection for all equivalent 888 numbers designated by current 800 subscribers by setting those 888 numbers aside during the initial 888 reservation period. We find that the only numbers ineligible for such treatment are 888 numbers equivalent to personal or residential 800 numbers. We find that, in contrast to other 800 subscribers, personal subscribers have no commercial interest in their 800 numbers  YM-that competitors might seek to undermine.!M Y-ԍ We anticipate that 800 service providers will act promptly in resolving and/or correcting billing errors experienced by personal 800 users after the deployment of 888. The determination as to whether a subscriber is a residential or commercial subscriber shall be determined by the terms of the 800 tariff under which a subscriber is taking service. Consequently, only commercial users have any potential right of protection.  Y-  13.   Based on DSMI's January 18th letter,F"h  Y!-ԍ See supra n. 32. F we estimate that approximately 310,000 numbers will eligible to be set aside during the initial 888 reservation period. We note, however, that this estimate may grow in light of the actions taken below where we request that RespOrgs continue to identify their 800 subscribers that may wish to have their numbers replicated in 888. As discussed more fully below, we will defer, subject to one modification, to that polling process to identify those numbers that shall be set aside. "Q "0*((\"Ԍ Y-  14.  At this time we do not decide whether these numbers ultimately should be afforded any permanent special protection or right. We arrive at this conclusion because in light of our decision to have all 888 numbers corresponding to vanity numbers classified as unavailable, a decision about permanent protection is not essential to the opening of the 888 code. We note, however, that postponing the decision will minimize consumer confusion during the initial transition to the 888 service access code. That is, by affording special rights at this time, consumers may wrongly assume that all 800 and 888 numbers are  Y`-interchangeable.#` Y-#Xj\  P6G;[hXP#э See NYNEX Comments at 78; United States Telephone Association ("USTA") Comments at 46; U S West Comments at 1824. Such a result may seriously undermine the public awareness and education  YI-efforts now underway to inform consumers of the new 888 toll free code.)$Ib Y\ -#Xj\  P6G;[hXP#э In the NPRM, the Commission noted that both the Commission and the telecommunications industry have begun educational initiatives in an effort to assure that the  Y.-public is fully informed of toll free 888. NPRM at para. 49. The NPRM sought comment on whether further efforts are necessary to improve public awareness of the introduction of  Y-888. Id. This issue will be addressed in a subsequent Order.) Deferring the decision on special rights will permit the Commission to consider fully the consequences of a final decision on the fair, equitable, and orderly allocation of toll free numbers, as well as the economic ramifications of that decision to the current 800 subscribers seeking replication in 888. We anticipate that the Commission will resolve the vanity number issue and will identify what set of numbers, if any, is to receive permanent protection, as well as the scope of that protection, within the year.  X-  B.RESERVATION OF TOLL FREE NUMBERS   Yz-  Xc- 1.  Reservation Process  X5-X (#%'0*,.8135@8:v* YQ -#Xj\  P6G;[hXP#э Id.Y Several commenters assert that use of an MGI is critical for efficient processing of the large volume of transactions large RespOrgs must process, and RespOrgs choosing to use an MGI should not be penalized for  Y1-efficiency and responsiveness to customers' needs.?1 Y-#Xj\  P6G;[hXP#э See MCI Comments at 11; Sprint Comments at 89, n. 6 and 7; U S West Comments at 1112; SWBT Comments at 810; Bell Atlantic Comments at 45.  In addition, some commenters contend  Y -that MGI is a tariffed service,@ u Y@-ԍ The use of an MGI is included in the SMS tariff. See The Bell Operating Companies' Tariff F.C.C. No. 1,  3. available to any RespOrg that decides, based on an assessment of relative costs and benefits, to install such a capacity. To penalize RespOrgs  Y -electing to make that business investment would be unfair.A   Y-#Xj\  P6G;[hXP#э See Sprint Comments at 89, n. 6 and 7; MCI Comments at 11; AT&T Comments at 12, n. 22. Sprint maintains that MGI requires a nonrecurring activation charge of $308,910 and a nonrecurring initial installation charge of $212,015. Sprint Comments at 89, n. 6 and 7 (citing BOCs' Tariff No. 1,  4.2(E)). Sprint asserts that strict  Y -enforcement of rules against hoarding and bartering  , as well as limiting the amount of time a number may be held in reserved status, would more effectively promote the efficient use of  Y -toll free numbers than imposing limits on the use of MGI.B { Y-ԍ Sprint Comments at 89, n. 6 and 7. But see Eastern Tel Reply Comments at 45 (asserting that checks such as an affirmative request requirement do not directly address the competitive drawbacks of MGI).  Y-    Xy-   (4)" " Mandatory Dispute Resolution  Yb-  YK- 20.  The majority of commenters addressing this issue oppose any form of dispute"K B0*((9"  Y-resolution.C Yy-#Xj\  P6G;[hXP#э See, e.g., CompTel Comments at 4; Ameritech Comments at 1516; LDDS Comments at 7. Some commenters maintain that, as long as a first come, first served  Y-reservation policy is retained, there is no need for dispute resolution.Db Y-#Xj\  P6G;[hXP#э See MCI Comments at 11; AT&T Comments at 13; Sprint Comments at 8, n. 5. Sprint asserts that it is unclear how an arbitrator would determine who should receive a number in dispute,  Y-assuming each party has an equally legitimate use for the number.kE Y -#Xj\  P6G;[hXP#э Sprint Comments at 8, n. 5.k Competitive Telecommunications Association ("CompTel") contends that it is unclear what incentive  Y-multiple entities would have to resolve a dispute over a number.fF Y -#Xj\  P6G;[hXP#э CompTel Comments at 4.f Other reasons cited in  Yv-opposition to mandatory dispute resolution include the administrative burden,fGvu Y-#Xj\  P6G;[hXP#э Pacific Comments at 6.f cost,fHv&  YM-#Xj\  P6G;[hXP#э CompTel Comments at 4.f delay,Iv  Y-#Xj\  P6G;[hXP#э Id. at 4. See also Ameritech Comments at 1516; AirTouch Comments at 18.  Y_-and the possibility of profiteering.lJ_  Y-#Xj\  P6G;[hXP#э Ameritech Comments at 1516.l Unitel, on the other hand, supports mandatory dispute resolution if discrepancies in equal access to the SMS database cannot be eliminated, to  Y1-protect the interests of smaller RespOrgs.eK19 Y-#Xj\  P6G;[hXP#э Unitel Comments at 2.e Time Warner Communications Holdings, Inc. ("Time Warner") supports requiring proof of an affirmative request for the number as part of  Y -any dispute resolution process.jL  Y-#Xj\  P6G;[hXP#э Time Warner Comments at 5.j  X -   (5)" " Lottery  Y - 21.  Numerous commenters also oppose a lottery system because it would not be  Y-necessary under a first come, first served reservation policy,dM Y"-#Xj\  P6G;[hXP#э AT&T Comments at 13.d would impose tremendous  Yz-administrative burdens,fNzL Yw%-#Xj\  P6G;[hXP#э Pacific Comments at 6.f and would exacerbate the delay in reserving toll free numbers.lOz Y('-#Xj\  P6G;[hXP#э Ameritech Comments at 1516.l "z O0*((w" Some commenters also maintain that a lottery would invite abuse, as various entities may submit claims for numbers simply to exact payment from legitimate participants for  Y-withdrawing their claims.P YK-#Xj\  P6G;[hXP#э Id. See also CompTel Comments at 5. Several commenters, however, support a lottery in certain circumstances. Telecommunications Resellers Association ("TRA"), for example, asserts  Y-that a lottery is the most equitable process for allocating scarce resources,Qy Y-#Xj\  P6G;[hXP#э TRA Comments at 12. See also LCI, International ("LCI") Comments at 8. TRA suggests that the Commission could impose certain minimal criteria to assure that numbers are not wasted on "parties unable to offer the public the greatest benefits with those  Y -numbers." TRA Comments at 12. while AirTouch considers a lottery a viable option for allocating numbers that should only be used for "single  Yv-number requests by one or more parties."%Rv Y -#Xj\  P6G;[hXP#э AirTouch Comments at 18. AirTouch believes, however, that the first come, first served reservation process is "the most equitable and efficient means to reserved toll free  Y-numbers." Id.% AirTouch also supports a lottery for highly desirable numbers, such as those with repeating digits or digit patterns, to prevent RespOrgs from reserving such numbers in blocks. AirTouch notes, however, that such a process would put additional burdens on the database administrator and may not, therefore, be  Y -feasible.S h  Y3-#Xj\  P6G;[hXP#э Id. See also Telemation Comments at 56 (supporting a lottery for high demand toll free numbers, such as vanity numbers and popular access codes, such as "555"). Time Warner advocates a lottery in the event dispute resolution does not work,jT   Y-#Xj\  P6G;[hXP#э Time Warner Comments at 5.j while Service Merchandise Company, Inc. ("Service Merchandise") supports a lottery if an  Y -incumbent subscriber fails to exercise its right of first refusal.rU  YP-#Xj\  P6G;[hXP#э Service Merchandise Comments at 5.r  X -   X -  c." " Discussion  X-    (1)" " Reservation Guidelines  Yb- 22.  We conclude that the current first come, first served reservation policy as  YL-adopted in the Industry Guidelines should apply to 888 numbers subject to the conservation  Y5-plan set forth in this Report and Order. Thus, for those numbers made available as of the date that early reservation begins, RespOrgs may reserve the 888 numbers on a first come, first served basis. First come, first served remains the most equitable, easily administered, and least expensive means of allocating toll free numbers. Further, we conclude that the use of MGI is an individual business decision made on the part of each RespOrg. We are not convinced that MGI alone is the major source of reservation abuses; rather, the use of certain"dU0*((" computer programs to complete mass transactions is of greater concern. We recognize that amending the permanent cap on reservations may respond to some of the concerns of commenters asserting that a first come, first served reservation policy combined with the use of MGI puts smaller RespOrgs at a competitive disadvantage. We anticipate that the Commission will address the permanent cap issue shortly. In the interim, the conservation plans discussed below should provide the necessary protection for smaller RespOrgs so that they are not placed at a competitive disadvantage.  YH- 23.  Because we have decided to retain a first come, first served reservation policy for toll free numbers, and because such a system precludes more than one RespOrg from reserving the same number from the SMS database, both mandatory dispute resolution and a lottery system become unnecessary. Because we rely upon the reservation procedures set  Y -forth in the Industry Guidelines with respect to the first come, first served reservation policy , there is no need for additional Bureau action on this issue and consequently, we do not  Y -codify the guidelines at this time.  Y -  X- 2.  Initial Reservation of 888  Xc-  a." " Background  Y5-24.   In the NPRM, the Commission sought comment on whether it should adopt rules that would assure there would be no immediate depletion of the new toll free code once  Y-888 became operational.@V Y-ԍ NPRM at para. 24.@ The Commission was also concerned that the performance of the network facilities providing access to the SMS database, the data links connecting the SMS and the regional SCPs and the SMS database itself still function at the normal operational level and not be affected by the increased RespOrg activity when the 888 code is first released for reservation. For this reason, the Commission asked commenters to suggest a plan for gradually permitting RespOrgs to reserve numbers in the new toll free code for their subscribers. The Commission asked commenters to discuss the advantages and disadvantages  Yg-of such a plan, how it should be implemented, and what role the Commission should play.8Wgy Y-ԍ Id.8  X9-   b." " Comments   Y - 25.   As part of its comments, SNAC filed a plan setting procedures to govern early reservation of 888 number that took into account the current unsatisfied demand for toll free  Y-numbers.X* Y%-ԍ The SNAC plan is the product of an industrywide effort by SNAC members. See  Y&-generally SNAC Comments. The SNAC recommends that this plan serve as a model for the procedures that"X0*(( "  Y-would govern opening additional SACs, beginning with 888.oY Yy-ԍ Id. at 13. Each toll free SAC will provide 7.9 million numbers.o Specifically, the SNAC plan proposes: (1) a process to identify those 800 numbers assigned to subscribers that wish to obtain the equivalent number in the 888 code; (2) the opening of the 888 code for number reservation as part of an effort to meet unsatisfied demand for toll free dialing numbers arising during the 800 number conservation plan; and (3) ways to protect the SMS database hardware and operation from reaching its processing capacity which, in turn, will affect the overall performance of the SMS database and the data links connected between it and the regional SCPs. The SNAC plan sets a start and completion date for each of its steps. Each step is designed to move the industry closer to handling 888 traffic on the public switched  Y1-telephone network on March 1, 1996.2Z1y Y[ -ԍ Id.2 Crucial elements of the SNAC plan include stepbystep introduction of the new toll free SAC and early 888 number reservation while 800 numbers remain available. SNAC states that without a stepbystep approach, 888 numbers would first be released for reservations on March 1, 1996. This could impact the SMS data processing because the sudden increase in RespOrg activity, both in reserving numbers and in transferring new numbers to working status, could cause the SMS to send the necessary data messages to all regional SCPs.  Yy- 26.   First, the SNAC reached consensus on a method that would identify those 800 numbers assigned to subscribers that wish to replicate their number in the 888 code and on a  YL-procedure to set aside those numbers in the SMS database.:[L* Y'-ԍ Id. at 14. : Second, the SNAC agreed to direct RespOrgs to contact their 800 subscribers to designate those numbers that subscribers may want to replicate in the 888 SAC. Third, once these "vanity numbers" are identified, SNAC maintains that DSMI should mark these them "unavailable" in the SMS database. Finally, once designated as unavailable, these numbers would not be released for reservation  Y-at the same time that the rest of the 888 code is available for reservation.2\ Ye-ԍ Id.2  Y- 27.   SNAC also maintains that, in order to open the 888 code and not have the anticipated increased RespOrg activity overburden the SMS database infrastructure, there  Y~-must be some temporary and limited changes to the August 800 number allocation plan.]~ Y"-ԍ See Letter from Kathleen M.H. Wallman, Chief, Common Carrier Bureau to Michael Wade, President, DSMI, dated August 17, 1995 ("Wallman Letter III") for a description of the August allocation plan. SNAC suggests that as a partial response to current unmet demand for toll free numbers, the current allocation of 29,000 800 numbers per week should be doubled for one week prior to"P ]0*((k"  Y-the first week when 888 reservations^ Yy-ԍ The SNAC determined that the early reservation process should begin six weeks prior to March 1, 1996, so its plan would have began during the week of January 1421, 1996 as week one. This date was based on both the earliest possible date the SMS/800 database could handle 888 reservations and the time needed for the RBOCs to file tariffs that would  Y-govern access to the 888 database. See SNAC Comments at 1415.  are accepted. Under this proposal, RespOrgs could reserve twice as many 800 numbers for subscribers still awaiting numbers as they are  Y-permitted to reserve under the August 800 conservation plan.F_ Y -ԍ See Wallman Letter III.F SNAC maintains that its proposal would also allow RespOrgs to put these newly reserved 800 numbers in service before the March 1, 1996 deployment of 888. Then, in the remaining weeks preceding  Y-March 1,t` Y -ԍ Weeks 2 through 6 would be those between January 21 to February 25, 1996. t SNAC urges that the weekly allocation of 29,000 toll free numbers be tripled to 87,000 numbers per week. SNAC proposes that this allocation would be met by taking 29,000 numbers from the pool of 800 numbers and the remaining 58,000 numbers from the new 888 resource. The SNAC affirms that the capability in the SMS database to distinguish between 800 reservation and 888 reservation will allow the Commission to maintain its 800  Y -conservation measures while gradually introducing the 888 numbers.Ca   YJ-ԍ SNAC Comments at 15.C  Y - 28.   The SNAC asserts that its plan hinges on the Commission's willingness to accept early reservation of 888 numbers. Without early reservation, it argues, the SMS/800 database would suffer significant stress that could be potentially disastrous to both 800 and  Y -888 services nationwide.b 0  Y-ԍ Id. Many commenters support the SNAC plan. See, e.g., BellSouth Comments at 9; Ameritech Comments at 19; Sprint Comments 12; LCI Comments at 7; Pacific Comments at 67; LDDS Comments at 7. Pacific hopes the SNAC plan will avert any potential problems posed by the introduction of the 888 access code and urges the Commission to allow the industry to administer the transition to the new code. Pacific Comments at 6. For example, SNAC states that the provision of emergency toll  Y-free service (e.g., service for natural disasters) might become impossible because of system backlog, and any repairs or maintenance of the computers that are the SMS hardware and  Yc-require access to the SMS database system could be significantly delayed.=cc Y"-ԍ SNAC Comments at 15.=  Y5- 29.  Commenters generally support a reservation period for 888 numbers that begins"56c0*(("  Y-several weeks before 888 toll free service is introduced.d Yy-ԍ Id. See also, AT&T Comments at 13; SWBT Comments at 10; U S West Comments at 12; Bell Atlantic Comments at 5; ACTA Comments at 4; Pacific Reply Comments at 3; AirTouch Reply Comments at 29; LDDS Reply Comments at 5. Ameritech asserts that the reservation process for 888 numbers should begin "sufficiently in advance of the date 888 access is implemented" so that each RespOrg has enough time to reserve the numbers it needs prior to implementation of 888 access. It also contends that the Commission should  Y-limit the number of reservations that each RespOrg can make in a single day.BeK Y -ԍ Ameritech Comments at 18.B BellSouth agrees and adds that without a plan permitting early reservation, substantial demand for 888  Yv-numbers could impair the downloading function between the SMS database and the SCPs.Afv Y# -ԍ BellSouth Comments at 9.A AT&T suggests that the opportunity for early reservation be extended only to new 888  YH-requests and 800 subscribers exercising a right of first refusal.CgH Y-ԍ AT&T Comments at 14.C AT&T would not, however, ask the Commission to continue this policy once the new SAC numbers became available for calling from the general public, and would instead rely on a first come, first served reservation policy for toll free numbers. AT&T argues that the first come, first served process is "firmly grounded" in existing procedures, and is easy to implement and  Y -inexpensive to administer.2h ^  Y-ԍ Id.2 Further, AT&T asserts that new number requests should be  Y -given "activation priority" over "vanity number replication requests."2i   Y~-ԍ Id.2 Cable and Wireless,  Y -Inc. ("CWI") reaffirms that early reservation should be allowed if replication is permitted.;j  Y-ԍ CWI Comments at 8.;  Yy- 30.   Some commenters think the Commission should leave the current 800  Yc-conservation plan in place,Fkcq Y -ԍ See Wallman Letter III.F or adopt a modified conservation plan, for a period beginning  YL-March 1, 1996.lL" Y#-ԍ See, e.g., GTE Comments at 4; Allnet Comments at 6; CWI comments at 10. CWI contends that the Commission should continue to limit number reservation during the initial period after March 1, 1996 to prevent overloading the SMS database system and accelerated exhaustion of 888 numbers. CWI maintains that two weeks is an adequate time to extend a "controlled reservation" plan so that pent up demand for toll"l0*(('"  Y-free numbers is met.Bm Yy-ԍ CWI Comments at 10.B GTE asserts that an allocation process should be kept in place for at least six months after the March 1, 1996 ready date, after which the process can be modified  Y-subject to past activity and future projections.Any Y-ԍ GTE Comments at 4.A  Y- 31.  Other commenters maintain that 888 numbers should be released in phases after March 1, 1996. SWBT argues that if the guidelines were to ensure that toll free numbers would be assigned only to bona fide customers, the threat of a spike in numbers drawn from the database would be eliminated. But, absent effective rules, SWBT maintains that the Commission should release for reservation "a three or six month supply of 888 numbers in  Y2-NXX blocks of 10,000 numbers."@o2* Y -ԍ SWBT Comments at 1011.@ SWBT further suggests that the Commission then closely monitor the consumption of numbers to determine if they are being "used in an  Y -orderly manner."2p  Y-ԍ Id.2 Only then, SWBT suggests, should the Commission authorize release of  Y -the next set of NXXs to the spare pool.q  Y*-ԍ Id. U S West also supports the Commission monitor the reservation process to make the necessary changes after March 1, 1996 (US West Comments at 12.) U S West agrees that phased introduction of new  Y -toll free numbers is needed to allow orderly process and implementation of new codes.Gr &  Y-ԍ U S West Comments at 12.G CVS asserts that one hundred 888 NXX codes should be released incrementally and  Y -sequentially each day until all NXXs are generally available.qs  Y0-ԍ For example, the first 100 NXXs to be released would be 200 through 299.q CVS continues by saying that general oversight of implementation should not be undertaken by the Commission, but  Yz-by the North American Numbering Council ("NANC").mtz  Y-ԍ CVS Comments at 3. See also Bell Atlantic Comments at 5.m  YL- 32.  Only one commenter does not support releasing 888 numbers in phases. TRA asserts that all numbers should be available for reservation on the first date the public can place toll free calls using the new code. A gradual introduction of numbers could create a temporary, artificial shortage, fostering the rationing of numbers. TRA further claims that a plan under which numbers are gradually made available could be discriminatory and harmful  Y-to competition and industry growth.?u9 Y&-ԍ TRA Comments at 1213.? "u0*(("Ԍ Y-ԙ  33.  In an ex parte presentation, Vanity International expressed concern with the SNAC plan. It contends that the practices followed by some RespOrgs to collect requests from existing 800 subscribers who seek to reserve the 888 number corresponding to their  Y-assigned 800 number discriminate against smaller businesses.ev Y5-ԍ Ex Parte Comments of Vanity International at 1. e Vanity International argues that some RespOrgs have asked only large businesses whether they are interested in replicating their existing 800 numbers in the new 888 SAC. Vanity International argues that if the SNAC deadline of January 24, 1996 for submitting "protection requests" is honored, many 800 subscribers will forfeit any right to protect their equivalent 888 numbers. Vanity International asserts that such a result would be contrary to the Commission's stated goal of  Y2-making the allocation of toll free numbers a fair and equitable process.8w2y Y\ -ԍ Id. at 3.8 In addition, Vanity International maintains that it is the right of the existing 800 subscribers to determine whether they would like to have those numbers protected, at least in the short term, in the 888 SAC. Vanity International states that by failing to inform all existing 800 subscribers of their right to seek protection, or by failing to inform them of the consequences of inaction,  Y -the RespOrgs have essentially preempted the rights of those uninformed subscribers.:x * Y-ԍ Id. at 56.: Vanity International asks the Commission to extend the date by which 800 subscribers must submit protection requests and to require RespOrgs to poll all their subscribers about whether  Yz-they wish to replicate their assigned 800 numbers in the 888 code.8yz Y-ԍ Id. at 6.8  XL-   c." " Discussion   X-    1)" " Modification to the Current 800 Conservation Plan   Y- !34.   Faced with the accelerating depletion of 800 numbers, the industry asked the Bureau in June 1995 to take extraordinary measures to ensure that 800 numbers would remain available until the time that the public could place toll free calls using numbers drawn from the 888 SAC. The Bureau determined that rather than allowing all 800 numbers to be assigned before 888 numbers could also be available to the public, the public interest would be served by developing a plan that would conserve 800 numbers until 888 numbers could be introduced. On June 13, 1995, the Bureau instructed DSMI to limit the amount of numbers any RespOrg may reserve in one week and also shortened the aging process for toll free  Y9-numbers.Oz9 Yv%-ԍ See Letter from Kathleen M.H. Wallman, Chief, Common Carrier Bureau to Michael Wade, President, DSMI, dated June 13, 1995 ("Wallman Letter I"). The "aging process" is defined as the period of time between disconnection or cancellation of a toll free number and"H'y0*((e'"  Y-the point at which the number may be assigned to another subscriber. Industry Guidelines set the aging process at six months, with a provision that the period may be reduced to four  Yb-months once the toll free resource is 95% exhausted. See Industry Guidelines at  2.2.6. Effective June 14, 1995, the conservation measures imposed by the Bureau reduced the aging  Y4-process to four months. See Wallman Letter I.O That plan has been refined twice since its introduction. {9 Y-ԍ See Letter from Kathleen M.H. Wallman, Chief, Common Carrier Bureau to Michael  Y-Wade, President, DSMI, dated June 21, 1995 ("Wallman Letter II" ). See also Wallman Letter III.  Each time the plan"9 {0*((L" was modified by changing the allocation distribution among RespOrgs to better meet the needs of the industry while balancing the need to keep 800 numbers available until March 1996. Many commenters in this proceeding support continuation of the 800 conservation  Y-plan imposed by the Bureau, at least for a few months after March 1, 1996._|  Y -ԍ See, e.g., U S West Comments at 12. _ For reasons set forth below, we agree and find that continuation of the current conservation plan for a limited period will serve the public interest.  Y_- "35.   When the conservation plan was first introduced, industry projections anticipated all 800 numbers would be assigned as early as July 1995, a date well in advance of the projected date for 888 deployment. Because of the Bureau's conservation plan,  Y -however, DSMI now projects that 800 numbers will be available through June 1996.} Q  Y-ԍ See 800 Number Resource Utilization, presentation by DSMI, January 10, 1996. Because it now appears that unassigned 800 numbers will be available several months after toll free calling using 888 numbers begins, we conclude that a temporary increase of the  Y -weekly allocation will serve the public interest .~   Y-ԍ This includes the four month aging process, the 45 day limit on reservations, and certifications to DSMI. All other conservation measures set forth in Wallman Letters I, II, and III remain unchanged. First, increasing the weekly allocation should help meet unsatisfied consumer demand for 800 toll free numbers. Second, because the 888 code is expected to be operational nationally in March, there is a reduced need to conserve the remaining spare 800 numbers. For these reasons, we find it appropriate to increase the total weekly allocation of 800 numbers, now set at 29,000, to 73,000 numbers  YL-for a limited period, i.e., for three weeks beginning at 12:01 A.M. Eastern Standard Time, January 28, 1996 and ending at 11:59 P.M. Eastern Standard Time, February 17, 1996. On February 18, 1996, the weekly allocation shall return to 29,000 numbers to ensure that 800 numbers continue to be available in the event that toll free calls to 888 numbers are not possible in some local service areas. We intend to end the 800 number conservation plan once we are convinced that 888 calls can be placed nationwide.  X- "~0*(("Ԍ Y-#36.   For the reasons set forth above and in Wallman Letter III,E Yy-ԍ See supra n. 93.E we find that the public interest will best be served if approximately 73,000 numbers are allocated among new  Y-and established RespOrgsHy Y-ԍ The August conservation plan groups RespOrgs into two categories: "New RespOrgs," those RespOrgs that came into existence subsequent to December 1, 1993; and "Established  Y-RespOrgs," those RespOrgs that existed prior to December 1, 1993. See Wallman Letter III.H using the criteria of the August conservation plan set forth in that  Y-letter.H Yi -ԍ The August conservation plan set forth in Wallman Letter III responded to numerous requests from the RespOrgs suggesting that allocation based solely on a RespOrg's embedded base of 800 numbers as the second conservation plan prescribed, placed too much weight on historical market share and did not adequately acknowledge growth trends in the industry. The August plan, which looked at both the market share of each RespOrg at a specific point in time and the growth that RespOrg experienced in 1994, better reflects the dynamic nature of the toll free market, while still furthering our goal of conserving 800 numbers until 888 is deployed. Thus, each RespOrg's allocation will be increased by a factor of 2.5.   Yy-ԍ This factor was determined by calculating the increase of 73,000 as compared to  Yb-29,000 (i.e., 73,000  29,000). Therefore,  Y-to calculate its new allocation, each RespOrg should multiply its current allocation by 2.5.  Y-Canada's weekly amount will also increase proportionally from 1,500 numbers to 3,775 numbers. We deem it essential to set aside 800 numbers for Canada in the interest of international comity. The minimum amount of numbers any RespOrg may receive each week in which the plan remains in effect will be 100 numbers. The Network Services Division will send to DSMI by facsimile a list of each RespOrg's new weekly maximum allocation.  X - 2)  Initial Reservation of 888  Y - $37.   The SNAC's proposed plan assigns to each RespOrg the responsibility to identify those numbers that its 800 service subscribers wish to replicate in the 888 SAC. While we are encouraged by the efforts that the RespOrgs have already undertaken to identify this "protected" set of numbers, we are concerned by the comments of Vanity International, who asserts that some RespOrgs may be discriminating against smaller business subscribers by not asking them if they wish to replicate their 800 numbers in the 888 SAC. Each RespOrg has a direct relationship with those for whom the RespOrg maintains 800 database records and is consequently in the best position to obtain this information. It is, moreover, in the RespOrgs' best interest to contact their commercial 800 subscribers to determine whether those subscribers value their numbers enough to wish to replicate them in the 888 code. Such contacts may not only generate new business, but also may protect RespOrgs from liability to their 800 subscribers whom they did not contact. Therefore, we"0*((" are adopting this portion of the SNAC plan, modified, however, by allowing additional time for RespOrgs to contact those commercial 800 subscribers they have not already polled. We encourage RespOrgs to honor all replication requests submitted to them by their commercial 800 subscribers. Under the modified SNAC plan we now adopt, all RespOrgs will have the ability to continue to poll their 800 commercial subscribers for one week to identify those commercial subscribers with an interest in obtaining the 888 numbers with the identical last seven digits as their assigned 800 numbers.  YH- %38.   Once the RespOrgs have identified this "protected" set of numbers, they are responsible for sending the list of these numbers to DSMI no later than 11:59 P.M. Eastern Standard Time, February 1, 1996. Each list should identify requests from commercial subscribers who were either contacted by the RespOrg or who have contacted their RespOrg  Y -independently of the RespOrg's polling efforts. DSMI will then have one week to process  Y -the information in each RespOrg's list and place these 888 numbers in"unavailable" statusq  YO-ԍ These numbers should be held under the NASC RespOrg ID used previously.q by 11:59 P.M. Eastern Standard Time, February 8, 1996. This will allow DSMI sufficient time before it accepts reservation for 888 numbers to assign the equivalent 888 numbers to the "unavailable" status in the SMS. Once DSMI has concluded this process and has also  Yz-marked all numbers in the "888555 NXX" "unavailable,"Izy Y-ԍ See infra para. 57.I early reservation of 888  Yc-numbers can begin at 12:01 A.M. Eastern Standard Time, February 10, 1996. We agree with the commenting parties that identifying these numbers and permitting early reservation is essential to avoiding the risk that the database, and the links between the database and the regional SCPs, will be unable to accommodate not only the demand for 888 numbers, but also the continuing needs of subscribers with 800 numbers. Finally, we agree with AT&T that a "first come, first served" reservation policy will best serve the public because it is simple, efficient, and less expensive to administer than any other reservation scheme. We  Y-subject the first come, first served policy only to the conservation plan discussed below. * Y-ԍ We note, however, that carriers are still expected to comply with the Industry  Y-Guidelines that have not been modified by any of the Bureau's actions. For example, until the Commission rules otherwise, the cap on the quantity of toll free numbers that a carrier can reserve at any one time remains 15% of its total quantity of its total quantity of working  YA -numbers, or 1000 numbers, whichever is greater. See Industry Guidelines at  2.2.5.   X- 3)  Initial Conservation of 888  Yf- &39.   For the same reasons we have directed DSMI to permit reservation of 888 numbers in advance of the first date the network will support calls to each number, we conclude that the public interest would be served by adopting an 888 conservation plan. We intend this 888 conservation plan to achieve two goals: (1) to prevent the SMS from potential "system overload" created by increased RespOrg activity; and (2) to discourage a"  0*((" rush to reserve 888 numbers like the one that occurred when RespOrgs were first permitted  Y-to reserve the 800555 pool of numbers in 1994.w Yb-ԍ That is, when 800555 numbers became available for reservation a single RespOrg  YK-reserved 90% of the numbers within the first ten minutes of availability. See SNET  Y4-Expedited Petition for Preliminary Injunction and Stay, Report and Order, DA 952141 (adopted October 6, 1995).w We find that we must set the weekly allocation of numbers at a level that balances the needs of the RespOrgs, the technical limitations of the SMS, and the capacity of the data links between the SMS and the regional SCPs. A weekly allocation of 120,000 888 numbers appears to strike the appropriate balance. We expect this generous allocation of 888 numbers, in addition to the 800 numbers in the weeks preceding March 1, 1996, will offer RespOrgs a reasonable opportunity to meet  Y_-their subscriber needs._4 YD -ԍ In June 1995, 113,000 800 numbers were reserved from the SMS database in one week. The industry labelled this high activity as reaction to the imminent exhaust of 800 numbers.  Y1- '40.   For the reasons set forth in Wallman Letter III,E1 Y-ԍ See supra n. 93.E we will set each RespOrg's share of the weekly allocation of 120,000 888 numbers on the same basis as its 800 allocation is calculated. Thus, to calculate each RespOrg's share of the weekly allocation  Y -plan, each should multiply their August allocation by a factor of 4.0. h  Y-ԍ This factor was calculated by developing the ratio between 120,000 and 29,000 (i.e., 120,000  29,000). Six thousand 888 numbers will available for distribution to Canadian RespOrgs. Each RespOrg will be permitted to receive a minimum of 200 888 numbers per week. The Network Services Division will send DSMI a letter setting forth each RespOrg's maximum weekly allocation  Y-for 888 numbers. We will monitor number reservation and SMS database performance, and will reevaluate the continued need for this conservation plan after the March 1, 1996 deploymnet of the 888 code. We urge all RespOrgs to be sensitive to how their increased activity could affect SMS performance. The Bureau will modify this 888 conservation plan if toll free service experiences any decrease in service quality, whether in the processing of subscriber records or on the data links between the SMS and the regional SCPs. The Bureau will also carefully monitor and investigate any complaints from RespOrgs, SCP owners, or consumers.  X- C.TARIFFS  X- 1.  Background  Yf- (41.  In the NPRM, the Commission sought comment on tariffing issues related to"f 0*((l" the introduction of 888. The Commission anticipated that the majority of tariffing issues would be related to LECs' database access tariffs. Specifically, the Commission tentatively concluded that 888 service and subsequent toll free codes would be functionally equivalent to 800 services and should be treated accordingly. The Commission, therefore, sought comment on its tentative conclusion that existing Part 69 provisions for 800 service would also cover 888 service and the LECs would not need to obtain a waiver of Part 69 to open  Yv-888 toll free service.@v Y-ԍ NPRM at para. 56.@ Comment was also sought on any interim arrangements that a LEC might offer to its toll free database access customers during the period in which preparations for opening the 888 code for general use neared completion. Further, the Commission sought comment on the conclusion that any revisions to existing database access tariffs should  Y -be filed on not less than 45 days' notice.8 y YD -ԍ Id.8  X - 2.  Filing Procedures  X -  a." " Background   Y- )42.  For purposes of addressing the tariffing issues raised in the NPRM, we must  Yz-consider the Commission's action in the 800 Rate Structure Order.z* YU-ԍ Provision of Access for 800 Service, Second Report and Order, 8 FCC Rcd 907  Y>-(1993) ("800 Database Rate Structure Order"), recon., CC Docket No. 8610, FCC No. 95487 (adopted December 4, 1995). In that Order, the Commission determined that LECs must price basic 800 database services on a perquery basis and that LECs subject to price cap regulation must treat basic 800 database service as a  Y5-"restructured service."_5 Y-ԍ The Commission defines a "restructured service" as the rearrangement of an existing service. Carriers can restructure a service by changing an existing method of charging for or provisioning the service, or by changing a term or condition in, adding language to, or adding, consolidating, or eliminating rate elements appearing in the existing service's tariff. When a service has been restructured, the previous version of that service no longer exists.  Y -Policy and Rules Concerning Rates for Dominant Carriers, Second Report and Order, 5 FCC  Y !-Rcd 6786, 68246825 (1990) ("LEC Price Cap Order"). The Commission found that a perquery charge for 800 database service was appropriate because database queries are a distinct part of the set up of an 800  Y-call and a perquery charge best reflects the costs of providing access to the 800 database.; Y$-ԍ Id. at 6788.; The Commission determined that 800 database service should be classified as a restructured"0*(("  Y-service rather than a "new service" Yy-ԍ The LEC Price Cap Order states that "as long as the preexisting service is still offered, and the range of alternatives available to consumers is increased, we will classify the service as new." 5 FCC Rcd at 6824. because basic 800 database service replaced the NXX  Y-systemHK Y-ԍ Prior to the implementation of the SMS database, carriers routed 800 traffic using the "NXX system" and did not allow subscribers to toll free service to switch carriers without  Y-changing their toll free number. NPRM at para. 4, n. 8. A toll free number such as "800NXXXXXX" consists of three parts: (1) a three digit numbering plan area ("NPA") or area code ("800"); (2) a three digit central office code ("NXX"); and (3) a four digit line number  Yr -("XXXX"). Id. at para. 3, n. 5. The NXX system assigned blocks of 10,000 numbers to a  Y[ -particular interexchange carrier ("IXC") based on the NXX code in the dialed number. Id. at para. 4, n. 8. and did not add to the range of options already available to customers.c[  Y-ԍ 800 Database Rate Structure Order, 8 FCC Rcd at 911.c  X-   b." " Comments  Y- *43.  The commenters unanimously support the Commission's tentative conclusion that 888 toll free service is functionally equivalent to 800 toll free service and that Part 69  Y`-waivers are not required.`  Y-ԍ See, e.g., Ameritech Comments at 43; Pacific Comments at 18; NYNEX Comments at 11; SNET Comments at 1516; NYNEX Reply Comments at 6. Bell Atlantic states that because 888 is not a new service, it will not be filing an incremental cost study or any new rate elements. The tariff, Bell Atlantic notes, will offer 888 access under the same terms, conditions, and rates as existing  Y -toll free access service.O  Yr-ԍ Bell Atlantic Comments at 1112.O Most LECs, however, argue that the Commission must act promptly so that tariffs are filed on not less than 45 days' notice. SWBT notes that the LECs' 800 tariffs were filed 32 months ago, and the Commission has yet to complete its  Y -investigation of their lawfulness.= W Y-ԍ SWBT Comments at 21.= SNET argues that it is premature to determine that 888 costs be treated in accordance with procedures established for 800 service because the  Y -Commission has not yet concluded its investigation of the LECs initial 800 database tariffs.@  Ya#-ԍ SNET Comments at 1516.@  "L0*((*"Ԍ X-ԙ  c." " Discussion  Y- +44.  We conclude that toll free service using 888 numbers is functionally equivalent to toll free service using 800 numbers and does not require LECs to obtain waivers of Part 69 of the Commission's rules to offer toll free service using the 888 code. The addition of 888 as a toll free SAC simply increases the universe of numbers available for toll free  Yw-service; it does not add to the range of options already available to customers (i.e., is not a  Y`-"new" service).V` Y-ԍ LEC Price Cap Order, 5 FCC Rcd at 6824.V Therefore, we do not require LECs to obtain waivers of Part 69 to file 888 database access tariffs.  Y - ,45.  LECs will be required to make the necessary revisions to their current 800 database tariffs to reflect that a code other than the 800 SAC will be used for toll free service. We order the LECs to file the tariffs expanding toll free service using the applicable tariff filing provisions. These tariffs must be filed no later than February 1, 1996 with an effective date of March 1, 1996. Carriers that are unable to meet the required notice period will be permitted to request special permission under Section 61.151 of the Commission's  Y-rulesy Y-ԍ 47 C.F.R.  61.151. This section prescribes the procedures to be followed by a carrier applying for a waiver of Part 61. to file on shorter notice only if they can document the reason for their inability to  Y{-meet the prescribed notice period.{ Y?-ԍ We note that several LECs have already filed revisions for implementing the 888 code on 45 days' notice, effective March 1, 1996. Any revisions to these filings will also require special permission.  XM- 3.  Exogenous Costs  X-  a." " Background   Y- -46.  In the 800 Rate Structure Order, the Commission concluded that it was appropriate to allow the LECs to treat as exogenous the costs incurred specifically for the  Y-implementation and operation of 800 database services.T_ Y !-ԍ This decision was reached under Section 61.44(c)(5) of the rules, 47 C.F.R.  61.44(c)(5), pursuant to which the Commission may grant exogenous cost treatment for "other extraordinary exogenous cost changes as the Commission shall permit or require." In their tariffs, LECs were required to make a detailed showing of the costs incurred specifically for the implementation of basic 800 database service and were also required to  Y%-justify the reasonableness of those costs. 800 Database Rate Structure Order, 8 FCC Rcd at 911.T The Commission, however, did not extend exogenous cost treatment to those costs that were not reasonable and that were not"0*((" specifically incurred for the implementation and operation of the 800 database system, such as core SS7 costs. The Commission anticipated that exogenous treatment would be accorded to those costs associated with: Service Control Points ("SCPs"), the Service Management System ("SMS"), and the links between SCPs and the SMS, as well as between Signal Transfer Points ("STPs") and SCPs, to the extent such costs were directly attributable to 800  Y-database service.2 Y-ԍ Id.2 The Commission reached this decision because of, what the Commission called, "highly unusual circumstances" that stemmed from our finding that provision of 800 service through a database should be mandated because making 800 numbers portable served  YH-the public interest.2Hy Yr -ԍ Id.2 Specifically, the Commission determined that it had effectively required the implementation of 800 database service and dictated the terms, conditions, and schedule for implementing it. Under these circumstances, the Commission concluded that reasonable costs specific to implementation of basic 800 database service were outside the  Y -carrier's control and were, therefore, treated as exogenous under price cap regulation.2 * Y-ԍ Id.2  Y - .47.   In the LEC Price Cap Order,Y  YJ-ԍ LEC Price Cap Order, 5 FCC Rcd 6786.Y we decided that, in most circumstances, "extraordinary" costs would not be treated as exogenous because such treatment would  Y-reduce a carrier's need to be efficient and innovative.2 Y-ԍ Id.2 In the Price Cap Performance  Yz-Review for Local Exchange Carriers,z=  Yh-ԍ Price Cap Performance Review for Local Exchange Carriers, First Report and Order,  YQ-10 FCC Rcd 8961, 9094 (1995). we reaffirmed this conclusion and found that the ability to cope with unforeseen events is at least in part a function of a carrier's managerial decisions, and that permitting exogenous treatment for such unforeseen events removes the  Y5-incentive to operate more efficiently.25  Y-ԍ Id.2 The Commission, therefore, concluded that  Y-extraordinary costs would continue to be treated endogenously in most cases.8  YW"-ԍ Id.8 The Commission, however, did not foreclose the possibility that costs associated with the provision of services required by the Commission, such as occurred when the Commission required that toll free numbers be made portable through the use of an 800 database, may be"90*(("  Y-treated as exogenous in the future.J Yy-ԍ Id. at 9094, n. 575. J  X-   b." " Comments  Y- /48.  The LECs generally argue that the costs of implementing 888 should be treated as exogenous because it is consistent with the treatment given the costs associated with  Yw-implementation of the 800 database.Ywy Y -ԍ See, e.g., BellSouth Comments at 19.Y NYNEX states that to the extent that existing price cap rules are revised as part of ongoing proceedings, the Commission should ensure that  YI-there remains some mechanism for recovery of these costs under price caps.EI* Y$ -ԍ NYNEX Reply Comments at 67.E NYNEX argues that incremental exogenous costs should be allowed for implementing 888. It asserts that implementation of 888 has not been a trivial exercise. Further, NYNEX asserts that growth in toll free numbers in working status has far exceeded the growth in the number of  Y -toll free calls and, thus, the number of queries to the toll free database.`  Yy-ԍ See, e.g, NYNEX Comments at 11.` BellSouth agrees that 888 is functionally equivalent to 800 and thus, the costs of implementing 888 should be treated as exogenous to the extent certain 800 database costs receive such treatment. BellSouth states that it will develop rates by identifying and annualizing these exogenous costs. BellSouth asserts that it will determine how much its proposed toll free database access rates will increase by forecasting the number of toll free database queries applicable to the study period and then computing the ratio of exogenous costs over forecasted database queries or exogenous costs per forecasted database query. Using this ratio and increasing it by an appropriate overhead loading, BellSouth plans to produce a basic toll free service rate  Y-increment that will then be added to the existing toll free query rate.K Y[-ԍ BellSouth Comments at 1920.K U S West, using its projected costs of implementing 888 and extrapolating based on U S West's percentage of the total access lines and switches in the entire LEC industry, estimates that the LEC industry as  Y-a whole has spent between $170 to $250 million to implement 888.F=  Y -ԍ U S West Reply Comments at 8.F Pacific argues that tandem upgrades and SSP costs as well as all other costs associated with the mandated deployment of toll free service should be considered exogenous costs because the Commission has determined that certain costs incurred by the LECs caused by administrative, legislative, or judicial requirements beyond their control should result in an  Yf-adjustment to their price caps.|f  Y'-ԍ Pacific Reply Comments at 9 (citing LEC Price Cap Order, 5 FCC Rcd at 6807). | "f 0*(("Ԍ X-ԙ   c." " Discussion  Y- 049.  We conclude that the costs associated with the implementation of 888 should  Y-not be treated as exogenous costs. The 800 Rate Structure Order found that 800 database services were restructured services. Exogenous cost treatment for those costs specific to 800 database services was granted because of what the Commission termed "highly unusual circumstances." Specifically, the Commission mandated that toll free service providers make use of a toll free database so that toll free numbers would be made portable. The Commission, therefore, allowed LECs to increase their query rates so that the costs of establishing the 800 toll free database were included as a component in query rates. In the case of 888, network upgrades have been required as a result of the rapid increase in the demand and use of toll free services and are thus attributable to the need for increased network capacity caused by increased usage. While the exhaustion of the supply of 800  Y -numbers may be a special event, the Price Cap Order indicates that this alone does not justify exogenous cost treatment. Allowing an additional increase to these perquery charges, as suggested by BellSouth, would thus, in essence, constitute return to rate of return regulation, which price cap regulation has supplanted for many of the larger carriers. We do, however, note that those carriers currently regulated under rate of return regulation will be allowed to recover their costs incurred as a result of the introduction of 888 as a toll free SAC.  Y5- 150.   The LECs' principle argument for exogenous cost treatment is that implementation of 888 has been costly and that these costs are beyond their control because the Commission mandated the deployment of toll free service. The Commission has, however, concluded that costs beyond a carrier's control will generally not be treated as exogenous. As discussed above, the addition of the 888 SAC to the universe of toll free numbers is the result of the rapid growth in the demand for toll free numbers and is not directly attributable to the Commission's directive that carriers restructure toll free services  Y-by making toll free numbers portable. Y-ԍ Price Cap Performance Review for Local Exchange Carriers, 10 FCC Rcd at 9094, n. 575.  Yg- 251.   Noting that the average number of queries per toll free number has decreased, the LECs appear to argue that because RespOrgs and other carriers reserve the majority of toll free numbers and, thus, control to whom toll free numbers are assigned, the decrease in average number of queries per number is beyond LEC control. The Commission has stated that the burden to justify exogenous cost treatment lies with the carrier being regulated under price caps. Even if the LECs could establish that the decrease in query rates is beyond their control, which they fail to do, the fact that this lay beyond their control would not, by itself, justify exogenous cost treatment. As we have noted, the Commission has found that permitting exogenous cost treatment for unforeseen events removes the carriers' incentive to operate more efficiently and that the ability to cope with such events is at least in part a function of carriers' managerial decisions. The Commission, therefore, concluded that we"#b0*(($"  Y-should continue to treat costs that are beyond carriers' control endogenously in most cases.9 Yy-ԍ Id. 9  Y- 352.   The LECs have failed to show why we should depart from this general rule and treat the addition of the 888 SAC to the universe of toll free numbers as an "extraordinary" event for which they should be allowed to treat its costs as exogenous. We, therefore, conclude that costs associated with the implementation of 888 will not be treated as exogenous for carriers regulated by price caps.  XI- 4.  Interim Arrangements  X -  a." " Comments  Y - 453.  Ameritech and NYNEX assert that they plan initially to route all 888 traffic through access tandems using an advanced intelligent network ("AIN") design. Ameritech and NYNEX are currently upgrading their network to have AIN capabilities at the access tandems and plan to add this capacity at their end offices once their access tandems are equipped with this capacity. When a toll free call is routed through an access tandem, however, the IXC is charged for using both the access tandem and the end office. The use of access tandems to process interstate toll free dialing calls would, therefore, increase an IXC's access charges. Ameritech and NYNEX argue that they should be allowed the flexibility to charge endoffice rates to IXCs that currently have access from endoffices connected directly to the SCP for 800 service. Ameritech and NYNEX propose that they issue credits to these IXCs equal to the additional charge they incur for routing all 888 calls through an access tandem because these IXCs would have chosen to, and could have, routed these calls from the LECs' end offices directly to the SCP if this option were made available by the LECs. NYNEX argues that the issuing of credits is necessary to reduce the economic  Y-impact that such network upgrades might have on its toll free serviceprovider customers.dy Y-ԍ NYNEX Comments at 7 and 11; Ameritech Comments at 44.d Scherers states that its tariffs are not dependent upon a dedicated toll free code and will be the same for 888 as 800 and that LECs should be asked to retain the same rates for toll free  Yg-service, regardless of the number assigned.]g* YB -ԍ Scherers Comments at 21; TRA Comments at 22. ]  X9-   b." " Discussion  Y - 554.   We agree that the issuing of credits for tandem charges so that the cost of toll free access equals what the IXC would be charged if direct routing from the end office were available for 888 is reasonable because it reduces the economic effect the LECs' network upgrades will impose on their 888 access customers. As noted by the commenters, access from an end office directly connected to the 888 SCP is considered to be more efficient for"!0*(("" those customers already receiving access to the 800 SCPs directly from that end office than access through the tandem. The LECs' plans to offer credits to their access customers forced to route 888 traffic through the LECs' access tandems gives these LECs the incentive to make direct access from the end office available as quickly as possible. We consider these arrangements to be temporary and will subject these interim arrangements to periodic review. We also require that these LECs offer their credit plan to any access customer that obtains access from the end office connected directly to the SCP for 800 toll free service if that customer must use the LECs' interim access tandem arrangement for 888 service because the LECs have not completed their network upgrades.  X - D.DIRECTORY ASSISTANCE  X - 1.  Background  Y - 655.  In 1989, the Commission concluded that 800 Directory Assistance ("DA")  Y -should be open to competition.  Y!-ԍ See Provision of Acces for 800 Service, 4 FCC Rcd 2824 (1989) ("800 Order"),  Y -recon., 6 FCC Rcd 5421 (1991) ("800 Reconsideration Order"), further recon., 8 FCC Rcd 1038 (1993). On May 8, 1995, SNET filed a petition for declaratory ruling asking the Commission to require AT&T to enter into reciprocal compensation  Yz-arrangements with other carriers that wish to offer 800 DA. In the NPRM, the Commission determined that, while SNET's petition is related to this proceeding, it would defer  YL-consideration of the petition.QLK YH-ԍ See NPRM at para. 46, n. 90.Q The NPRM sought comment on a proposal to combine 800 DA, 888 DA, and subsequent toll free DA codes into an interchangeable toll free DA service. With such an interchangebale toll free DA service, callers would be able to dial either "18005551212" or "18885551212" and obtain DA for all toll free numbers. Specifically, commenters were asked to address the economic reasonableness and technical feasibility of combining the provision of toll free DA. Commenters were also asked to address a proposal to not assign "8885551212," until toll free DA issues, such as SNET's  Y-petition, had been resolved.F YX-ԍ NPRM at para. 48.F  X}- 2.  Comments  YO- 756.  Commenters addressing this issue generally support the Commission's proposal to open toll free DA to competition and agree that "8885551212" should be used for toll  Y"-free DA." Y&-ԍ See, e.g., Pacific Comments at 15; BellSouth Comments at 21; Telco Planning, Inc. ("Telco Planning") Comments at 6. There was also wide support for withholding the assignment of "8885551212""" G 0*((-"  Y-until all issues related to toll free DA have been resolved.m Yy-ԍ See, e.g., SNET Comments at 1214; NYNEX Comments at 10.m Airtouch notes that there is strong support for opening toll free DA service to competition, but that the suggestions on how this should be implemented lack the detail necessary for the Commission to make an informed decision on how to proceed. AirTouch, therefore, suggests that the Commission refrain from promulgating rules affecting the market structure for toll free DA until a more  Y-concrete plan can be developed.Gy Y-ԍ AirTouch Reply Comments at 12.G BellSouth suggests that additional study is required to identify any technological constraints that might prevent the implementation of a combined  Y_-offering of toll free DA envisioned by the Commission.B_* Y: -ԍ BellSouth Comments at 21.B AirTouch argues that AT&T's  YH-management of the 800 DA service should be eliminated,AH Y-ԍ AirTouch Comments at 18.A while Allnet argues that "888 Y1-5551212" should be auctioned to someone other than AT&T.?1 Yn-ԍ Allnet Comments at 10.?  X - 3.  Discussion  Y - 857.   Many commenters assert that the comments addressing how competition in the market for toll free DA should be implemented lack the detail necessary for the Commission to make an informed decision on this matter at this time. We agree. Moreover, it is not essential that we resolve this issue now in order to enable toll free service using 888 numbers  Yz-to become available. Consequently, this Report and Order refrains from addressing the steps the Commission could take to foster a competitive market for toll free DA service. The  YL-Commission will address this issue in a subsequent decision. We also agree with the commenters who recommend that "8885551212" be set aside until issues related to a competitive toll free DA are resolved. We note, however, that more than one number in the 888 SAC could be used for toll free DA in a competitive market; "555" NXXs are generally associated with DA and information services. Therefore, we order DSMI to place all "888555XXXX" numbers in unavailable status so no RespOrg can reserve these numbers until  Y-the Commission has reached a decision on the issues raised in the NPRM related to the development of a competitive toll free DA service.  X}- IV.CONCLUSION  Yf-  YO- 958.   This Report and Order addresses only those issues essential to the scheduled March 1, 1996 deployment of the 888 SAC. First, we provide interim protection for all equivalent 888 numbers designated by current commercial 800 subscribers by setting those numbers aside during the initial 888 reservation period. At this time, we do not decide" != 0*((;" whether these numbers ultimately should be afforded any permanent special right or protection. Second, we conclude that the current first come, first served reservation policy  Y-should apply to 888 numbers, subject to the limitations set forth in this Report and Order. Third, we conclude that the current 800 number conservation plan, subject to the  Y-modifications set forth in this Report and Order, should be continued for a limited period of time. Fourth, we determine that reservations for 888 numbers, other than those numbers designated for interim protection by existing 800 subscribers, shall begin at 12:01 A.M. Eastern Standard Time, February 10, 1996. Fifth, we adopt an 888 conservation plan to both prevent an SMS database overload and discourage a "gold rush" approach to 888 number reservations. Finally, we conclude that, for tariffing purposes, 888 service should be treated like 800 service and that the associated investment and expenses of carriers regulated by price caps should not be given exogenous cost treatment. Additional issues addressed by  Y -the NPRM in this docket will be resolved in a subsequent decision. 9 'P= " "0*((@ "  9 'P=   X- V.ORDERING CLAUSES  Y- :59.   Accordingly, IT IS ORDERED that, pursuant to authority contained in Sections 1, 4, 5, and 201205 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154, 155, and 201205, Section 0.201(d) of the Commission's rules, 47 C.F.R.  0.201(d),  Y`-this Report and Order is hereby ADOPTED.  Y2- ;60.   IT IS FURTHER ORDERED that, pursuant to 5 U.S.C.  554(d) and 47  Y -C.F.R.  1.103(a), this Report and Order shall take effect upon adoption."  Y -ԍ Preventing shutdown of the toll free reservation process and ensuring that toll free  Y~ -numbers remain available to the public constitute good cause for making this Report and  Yg -Order effective upon adoption." X " (#%'0*,.8135@8: