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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Petition of Southwestern Bell Telephone Company ) Under Section 69.4(g)(1)(ii) ) CCB/CPD 97-64 of the Commission's Rules ) for Establishment of New Service Rate Elements ) ) Southwestern Bell Tariff F.C.C. No. 73 ) for provision of Long-Term Number Portability ) Transmittal No. 2680 Database Related Services ) ) Petition of Pacific Bell ) Under Section 69.4(g)(1)(ii) ) CCB/CPD 97-65 of the Commission's Rules ) for Establishment of New Service Rate Elements ) ) Pacific Bell Tariff F.C.C. No. 128 ) for Provision of Long-Term Number Portability ) Transmittal No. 1962 Database Related Services ) Memorandum Opinion and Order Adopted: Dec. 30, 1997 Released: Dec. 30, 1997 By the Deputy Chief, Competitive Pricing Division: I. Introduction 1. In this Memorandum Opinion & Order we grant the petitions of Southwestern Bell and Pacific Bell seeking under section 69.4(g)(1)(ii) of the Commission's rules to establish new service rate elements for provision of prearranged and default number portability query services to wireline and wireless telecommunications carriers. We also suspend for one day and set for investigation Southwestern Bell Transmittal No. 2680 and Pacific Bell Transmittal No. 1962, offering such long-term number portability query services. II. Background 2. Section 251(b)(2) of the Communications Act of 1934, as amended, requires all local exchange carriers "to provide, to the extent technically feasible, number portability in accordance with requirements prescribed by the Commission." Section 251(e)(2) states that "[t]he cost of establishing telecommunications numbering administration arrangements and number portability shall be borne by all telecommunications carriers on a competitively neutral basis as determined by the Commission. Pursuant to section 251(b)(2) and criteria the Commission established in its Report and Order & Further Notice of Proposed Rulemaking (Order & FNPRM) to implement this statutory mandate, carriers now intend to provide long-term number portability through a location routing number (LRN) architecture. Under an LRN architecture, each switch is assigned a unique ten-digit LRN, the first six digits of which identify the location of that switch. Each customer's telephone number is paired with the LRN for the switch that currently serves that telephone number, and the number and the corresponding LRN are stored in one of seven databases, each of which serves an area that corresponds to one of the original Regional Bell Operating Company service territories. Neutral third parties, called local number portability administrators, will administer these regional databases. 3. When a customer changes from one LEC to another, the carrier that wins the customer will "port" the customer's number from the former carrier by electronically transmitting (uploading) the new LRN to the administrator of the relevant regional database. This will pair the customer's original telephone number with the LRN for the switch of the new carrier, allowing the customer to retain the original telephone number. The regional database administrator will then electronically transmit (download) LRN updates to local service management systems operated by carriers or third-parties. This information will then be distributed to service control points (SCPs) that the carriers use to store and process data for providing number portability. 4. For a carrier to route an interswitch telephone call to a location where number portability is available, the carrier must determine the LRN for the switch that serves the terminating telephone number of the call. Carriers will accomplish this by querying an SCP to find the LRN of the terminating telephone number. Rather than perform its own querying, an N-1 carrier may arrange for other carriers or third parties to provide querying and other portability services for them. In the Second Report and Order, the Commission approved the industry's "N minus one" (N-1) querying protocol. Under this protocol, the N-1 carrier will be responsible for the query, "where 'N' is the entity terminating the call to the end user, or a network provider contracted by the entity to provide tandem access." Thus, the N-1 carrier for a local call will usually be the calling customer's LEC; the N-1 carrier for an interexchange call will usually be the calling customer's interexchange carrier. 5. The Commission also determined that if an N-1 carrier arranges with another entity to perform queries on the carrier's behalf that other entity may charge the N-1 carrier in accordance with requirements to be established in the pending long-term number portability cost recovery proceeding. The Commission also noted that when an N-1 carrier fails to ensure that a call is queried, the call might be routed by default to the LEC that originally served the telephone number. If the number has been ported, the LEC that originally served the customer incurs costs in redirecting the call. This could happen, for example, if there is a technical failure in the N-1 carrier's ability to query, or if the N-1 carrier fails to ensure that its calls are queried, either through its own query capability or through an arrangement with another carrier or third-party. The Commission determined in the Second Report and Order that if a LEC performs queries on default-routed calls the LEC may charge the N-1 carrier in accordance with requirements to be established in a pending Commission proceeding aimed at implementing section 251(e)(2)'s competitive neutrality requirement with respect to the costs of long-term number portability. The Commission has not yet issued its order on the costs of long-term number portability. 6. The Competitive Pricing Division issued a Memorandum Opinion and Order October 30, 1997, granting under section 69.4(g)(1)(i) of the Commission's rules petitions by Ameritech and Bell Atlantic to establish new service rate elements to provide prearranged and default query services. Section 69.4(g)(1)(i) of the Commission's rules states that "[l]ocal exchange carriers subject to price cap regulation may establish one or more switched access rate elements for a new service upon approval of a petition demonstrating that [t]he establishment of the new rate element or elements would be in the public interest." In granting the petitions, the Division found that the rate elements were in the public interest because "the Commission has already determined that carriers may assess charges for performing query services on the behalf of N-1 carriers," and because "[a]llowing charges will facilitate implementation of number portability on an industry-wide basis by providing a mechanism for LECs to recover the costs associated with prearranged and default queries." The Memorandum Opinion and Order also found, however, that the Ameritech and Bell Atlantic transmittals that established rates for those query services raised substantial questions of lawfulness, and so suspended them for one day and set them for investigation. III. Southwestern Bell and Pacific Bell Rate Element Petitions and Tariffs 7. Southwestern Bell Telephone Company and Pacific Bell filed petitions December 12, 1997, to establish under section 69.4(g)(1)(ii) of the Commission's rules new service rate elements related to the provision of long-term number portability query services. Specifically, the petitions seek to implement four rate elements: (1) a Prearranged End Office Service Provider Number Portability (SPNP) Query rate element, (2) a Prearranged Tandem SPNP Query rate element, (3) a Default End Office SPNP Query rate element, and (4) a Default Tandem SPNP Query rate element. The rate elements would allow Southwestern Bell and Pacific Bell to charge wireless and wireline N-1 telecommunications carriers for querying traffic that the N-1 carriers terminate to Southwestern Bell's and Pacific Bell's tandem and end offices by arrangement or default. 8. We grant the petitions under section 69.4(g)(1)(ii) of the Commission's rules, which allows "[l]ocal exchange carriers subject to price cap regulation [to] establish one or more switched access rate elements for a new service upon approval of a petition demonstrating that [a]nother local exchange carrier has previously obtained permission to establish one or more rate elements identical to those proposed in the petition to offer the identical service." As Southwestern Bell and Pacific Bell point out, the Competitive Pricing Division, Common Carrier Bureau, has granted Ameritech permission to establish identical rate elements. 9. We disagree with AT&T that granting these petitions is premature because the Commission has not yet issued its orders on long-term number portability cost recovery. As we noted when we granted Ameritech's petition, "the Commission has already determined that carriers may assess charges for performing query services on the behalf of N-1 carriers," and "[a]llowing charges will facilitate implementation of number portability on an industry-wide basis by providing a mechanism for LECs to recover the costs associated with prearranged and default queries." The grant of these petitions, however, will be subject to the Commission's determinations in CC Docket No. 95-116 regarding the mechanisms by which incumbent LECs should be permitted to recover their number portability costs, the jurisdictional nature of number portability costs, and the extent to which incumbent LECs may establish query charges of the types proposed by Southwestern Bell and Pacific Bell. Consequently, we will grant the petitions under section 69.4(g)(1)(ii) of the Commission's rules, but will require Southwestern Bell and Pacific Bell to conform their rates, rate structures, regulations, and services offered under these rate elements to any determinations made by the Commission in CC Docket No. 95-116. 10. Southwestern Bell and Pacific Bell filed transmittals on December 24, 1997, with a scheduled effective date of December 31, 1997, to establish tariffed rates under these new rate elements. Southwestern Bell filed Transmittal No. 2680 to modify its Tariff F.C.C. No. 73 with respect to the provision of long-term number portability query services and Pacific Bell filed Transmittal No. 1962 to modify its Tariff F.C.C. No. 128 with respect to the provision of long-term number portability query services. The Commission is currently considering the appropriate policies, regulations, and rules regarding cost recovery of long-term number portability costs in CC Docket No. 95-116. This includes consideration of mechanisms by which incumbent LECs should be permitted to recover their long-term number portability costs, the kinds of costs carriers may recover, and the extent to which they may establish query charges. Southwestern Bell Transmittal No. 2680 and Pacific Bell Transmittal No. 1962 raise issues that the Commission is currently considering in the long-term number portability cost recovery proceeding. 11. We conclude that the proposed tariff revisions raise substantial questions of lawfulness warranting suspension and investigation. Southwestern Bell and Pacific Bell have not provided sufficient cost justification and other support to permit a full assessment of the reasonableness of the proposed charges and rate structures, particularly in light of the ongoing proceeding in CC Docket No. 95-116. For example, Southwestern Bell and Pacific Bell have not provided a sufficiently detailed explanation of the content and calculation of their proposed rates in relation to their costs, or how their proposed recovery of number portability query costs will be divided between state and federal jurisdictions. We will, therefore, suspend the transmittals for one day and include them in the investigation we have already initiated regarding the similar transmittals of Ameritech and Bell Atlantic. We will also impose an accounting order with respect to the services offered under the Southwestern Bell and Pacific Bell transmittals during the course of the investigation. V. ORDERING CLAUSES 12. Accordingly, IT IS ORDERED that, pursuant to sections 4(i) and 201-205 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 201-205, the petitions of Southwestern Bell and Pacific Bell seeking under section 69.4(g)(1)(ii) of the Commission's rules to establish new service rate elements that would allow them to charge rates for the provision of long- term number portability query services on behalf of other carriers ARE GRANTED subject to the conditions above. 13. IT IS FURTHER ORDERED that, pursuant to section 204(a) of the Communications Act of 1934, as amended, 47 U.S.C.  204(a), and section 0.291 of the Commission's Rules, 47 C.F.R.  0.291, Southwestern Bell's Transmittal No. 2680 and Pacific Bell's Transmittal No. 1962 ARE SUSPENDED for one day and set for investigation. 14. IT IS FURTHER ORDERED that Southwestern Bell and Pacific Bell SHALL FILE a supplement within 5 business days after release of this Memorandum Opinion and Order advancing the effective date of the revisions to December 30, 1997, and then suspending the revisions for one day to December 31, 1997. For these purposes, we waive sections 61.58 and 61.59 of the Commission's Rules, 47 C.F.R.  61.58 and 61.59. Southwestern Bell and Pacific Bell should cite the "DA" number of this Order as its authority for these filings. 15. IT IS FURTHER ORDERED that, pursuant to section 204(a) of the Communications Act of 1934, as amended, 47 U.S.C.  204(a), and section 0.291 of the Commission's Rules, 47 C.F.R.  0.291, Southwestern Bell and Pacific Bell SHALL KEEP ACCURATE ACCOUNT of all amounts that are associated with the rates that are subject to this investigation. FEDERAL COMMUNICATIONS COMMISSION Patrick Donovan Deputy Chief, Competitive Pricing Division Common Carrier Bureau