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LL2 LL2L"",,2d"""i~'^09FSS999Sq+9+/SSSSSSSSSS99qqqSggnxggxx9In]nxgxgS]xgg]]?/?FS9SSISI/SS//I/xSSSS??/SInII?C/CZ9+ZF999+999999S9S/gSgSgSgSgSnnIgIgIgIgI9/9/9/9/nSxSxSxSxSxSxSxSxS]IgSxSxSxS]IxSgSgSgSgSnInInZnIxdgIgIgIgIxSxSxSxZxSxZxS9/9S999SSZZnI]/]<]9]5]/nSanSnSxSxSng?g?g?S?S?S?ZZ]<]/]FxSxSxSxSxSxSn]Z]?]?]?xS]9nSS?]9]Sd+SS8%8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuddddddddddddddddddddddddddddddddddddddddN\4  pG;9W!@(#,h@\  P6G;hP;H5!,),5\  P6G;,P\<{,W80,%BZW*f9 xr G;X\=5hC:,%rXh*f9 xr G;XX6jC:,<̃Xj9 xOG;X`2 X-  = X-w  Federal Communications Commission`(#cFCC 97123  X-______________________________________________________________________________ X01Í ÍX01Í Í` `  hhCqpp  X-#XP\  P6QynXP#vg #X\  P6G;ɒP#Before the Federal Communications Commission  yOa<Washington, D.C. 20554#Xj\  P6G;ynXP#у  X4-  X-#XP\  P6QynXP#In the Matter of hhCq)  X- ` `  hhCq)  X-Toll Free Service Access CodeshhCq)ppCC Docket No. 95155  X-` `  hhCq)pp  X -Petition to Modify 888 Number Allocationq)ppNSD File No. 9710  X -Plan filed by LCI International, Inc.q)   ) ` `  hhCq)  X| -Petition to Modify 888 Number Allocationq)ppNSD File No. 9715  Xe -Plan filed by UniDial, Inc.hhCq)pp  XN-` `  hhCq)   ) xxX   X7-Petition to Modify 888 Number Allocationq)ppNSD File No. 9716  X -Plan filed by Consolidated Communicationq)pp  X -Telecom Services Inc. hhCq)    X-  SECOND REPORT AND ORDER AND  X- FURTHER NOTICE OF PROPOSED RULEMAKING Đ\  XQ-Adopted: April 4, 1997 hhCqppReleased: April 11, 1997  X -Comment Date: May 22, 1997 hhC  X-Reply Date: June 23, 1997 hhC By the Commission:  X- =TABLE OF CONTENTS ` `  hhC  Xk!-   )Paragraph No.   X&$-X` hp x (#%'0*,.8135@8:1 ] Xg -ԍ #X\  P6G;ɒP#Id. at 2507.b  X -  14. ` ` On May 10, 1996, the Bureau directed DSMI to end the 800 number conservation plan and to modify the 888 number conservation plan, which is still effective.  X -Because the rules we are promulgating in this Second Report and Order and Further Notice of" 6>0*$$33 "  X-Proposed Rulemaking are essentially conservation measures themselves, we direct DSMI to end the 888 number conservation plan when the rules we promulgate today become effective. We delegate authority to the Bureau, however, to take action to establish, modify, or monitor toll free number conservation plans in the future if exigent circumstances make such action necessary.  Xv- 15. ` ` In February, 1996, Congress passed and the President signed into law the  X_-Telecommunications Act of 1996 (1996 Act).?_ ] X-ԍ #X\  P6G;ɒP#Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996 Act), to be codified at 47  {O -U.S.C.  151 et. seq. The 1996 Act erects a "procompetitive, deregulatory national framework designed to accelerate rapid private sector deployment of advanced telecommunications and information technologies and services to all Americans by  X -opening all telecommunications markets to competition."@ C ] X-ԍ #X\  P6G;ɒP#S. Conf. Rep. No. 104230, 104th Cong. 2d Sess. 1 (1996). Section 251(e)(1) of the Communications Act of 1934, as amended, provides that: XThe Commission shall create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis. The Commission shall have exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States. Nothing in this paragraph shall preclude the Commission from delegating to State commissions or  Xb-other entities all or any portion of such jurisdiction.iAb ] X-ԍ#X\  P6G;ɒP# 47 U.S.C.  251(e)(1).i(#  X4- III.DISCUSSION  X-  X- A.` ` EFFICIENT USE OF TOLL FREE NUMBERS  X- ` ` 1. In General  X-  ` `  a.  Background  X|- 16.` ` The NPRM tentatively concluded that Section 1 and Title II of the  Xe-Communications Act of 1934 ("Communications Act")Be ] X"-ԍ #X\  P6G;ɒP#47 U.S.C.  151, 201 et seq. require us to ensure that toll free numbers are assigned and used in an efficient, fair, and orderly manner, and that the rapid"N VB0*$$33"  X-depletion experienced with 800 numbers does not recur.C ] Xy-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13696. We sought comment on proposals to advance these goals. Concerned by reports of carriers assigning toll free numbers to subscribers without a request to do so, we questioned whether such assignments serve the  X-public interest.Dy ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13696.  X-` `  b.Comments  Xv-  X_- 17.` ` Commenters generally support the Commission's efforts to ensure that toll free  XH-numbers are assigned and used efficiently,EH* ] X# -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., 800 Users Coalition Comments at 3; NEXTLINK Comments at 1. and address the appropriate degree of regulation necessary to assure that toll free numbers are available for subscribers who need and want them. For example, SNET supports increased accountability by RespOrgs, but believes this  X -should not be accomplished through burdensome Commission mandates and control.F  ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# SNET Comments at 6; see also USTA Comments at 24; AirTouch Comments at 3; Allnet Comments at i; ACTA Comments at 79; U S West Comments at 12. PCIA maintains that additional regulation is unnecessary because an adequate implementation plan for new toll free service access codes should solve the problem of rapid and unanticipated  X -depletion.G T ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#PCIA Comments at 45; see also LCI Comments at 2. Some commenters assert that any procedures adopted to further the efficient use  X -of toll free numbers should be included in the Industry Guidelines rather than Commission rules, because the guidelines can be modified more quickly to changing marketplace  Xy-circumstances. Hy ] X/-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See AT&T Comments at 5; see also SNET Comments at 6; PageNet Comments at 45; USTA Reply  yO-Comments at 3.  Sprint recommends that, if only one IXC has been assigning toll free numbers to subscribers who did not request them, we should require that carrier to demonstrate why we should permit it to continue this practice, rather than imposing additional  X4-requirements on all carriers.I4~ ] Xc -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Sprint Comments at 2. Several carriers urge the Commission not to adopt rules that  X-will favor larger providers of 800 service.'J/ ] X"-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., NEXTLINK Comments at 1; Qwest Comments at 2; and NTCA Comments at 2 .#Xj\  P6G;ynXP##Xj\  P6G;ynXP#' "J0*$$33F"Ԍ X- c.` ` Discussion  X-  X-  18.` ` We conclude that  1 and Title II of the Communications Act require the Commission to ensure the efficient, fair, and orderly allocation of toll free numbers. The principles contained in  251(e)(1), which states that the Commission shall create or designate one or more impartial entities to administer telecommunications numbering and to make such  Xv-numbers available on an equitable basis, also support this position.oKv ] X-ԍ#X\  P6G;ɒP# See supra para. 15.o We intend to rely on the industry, whenever possible, to solve implementation and operation issues associated with managing this numbering resource. However, we believe that more accountability by RespOrgs and subscribers is necessary in light of the rapid and unanticipated depletion of 800  X -numbers in 1995. Neither the implementation plan for new toll free codes nor the Industry  X -Guidelines can assure such accountability. The Industry Guidelines do not address efficient allocation of toll free numbers. We conclude that Commission action, beyond the implementation plan for new toll free codes, is required.  X -  X -` ` 2. Warehousing  Xy- ` `  a.Background  XK- 19.` ` In the NPRM, we defined "warehousing" as RespOrgs' obtaining toll free numbers from the SMS database without having an identified subscriber for those reserved  X-numbers. The NPRM noted that the voluntary Industry Guidelines limit the quantity of toll  X-free numbers RespOrgs may reserve at any one time.Ly ] X0-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13701.đ Before the introduction of the Bureau's 800 conservation measures, however, the depletion of 800 numbers led to concern that RespOrgs were warehousing toll free numbers, rather than immediately assigning them to  X-subscribers.M* ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ā The NPRM noted that when RespOrgs hold more toll free numbers than they  X-need, the numbers cannot be distributed to RespOrgs with actual subscribers.N ] X6-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. at n.69. The NPRM  X-sought comment on our tentative conclusion that warehousing toll free numbers is an unreasonable practice under Title II of the Communications Act and is, therefore, contrary to  Xe-the public interest.Oe ] X#-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ā"e= O0*$$33"Ԍ X- Ù  20.` ` The NPRM also sought comment on two reporting requirements designed to  X-control warehousing. First, the NPRM sought comment on a requirement that RespOrgs certify: (1) that there is an identified subscriber agreeing to be billed for service associated with each toll free number a RespOrg requests from the database; and (2) that the RespOrg has assigned a number to an identified, billed subscriber before switching the number from  X-reserved or assigned to working status.P ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# For definitions of "reserved," "assigned," and "working" statuses, see supra note 11. Second, the NPRM sought comment on three proposals pertaining to affirmative requests for toll free service: (1) a requirement that each RespOrg or toll free service provider have an affirmative request from a subscriber before assigning a toll free number; (2) a requirement that records of affirmative requests be retained for two years; and (3) imposition of the affirmative request requirement through carrier tariffs  X -or Commission rules.Q y ] XD -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13701. We tentatively concluded that certification and affirmative request requirements serve the public interest by ensuring the fair and equitable distribution of scarce  X -numbering resources.R * ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ā The NPRM sought comment on the Commission's legal authority to  X -enforce such recordkeeping rules.S  ] Xa-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13696. Finally,  the NPRM sought comment on what enforcement  X -actions the Commission could take against a RespOrg warehousing numbers. The NPRM tentatively concluded that the Commission has the authority to penalize RespOrgs for violating the Commission's rules against warehousing. Suggested penalties included fines and  Xy-decertification as a RespOrg.Ty ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id. at 13701.  XK-` `  b.Warehousing as an Unreasonable Practice  X-` `   (1)hhCComments  X- 21.` ` Most commenters support the Commission's proposal to declare warehousing  X-an unreasonable practice.UA= ] X -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Bell Atlantic Comments at 6; Pacific Comments at 9; TRA Comments at 15; Allnet Comments at 89; CompTel Comments at 912 (warehousing is an unreasonable practice prohibited by Section 201 of the  yOw"-Communications Act); and AT&T Reply Comments at 5. See also ACRA Comments at 10 (unreasonable practice under Title II of the Communications Act).  MCI asserts that there is no proof that "warehousing" or"F U0*$$33"  X-"hoarding" of numbers has occurred.V ] Xy-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# MCI Comments at 8. LCI argues that the shortage of toll free numbers is a supplyside problem caused by legitimate demand for 800 numbers outstripping the supply before the  X-industry was prepared to implement 888.Wy ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#LCI Comments at 7; see also NIMA Comments at 6; PageNet Comments at 4. Vanity International maintains that warehousing  X-would not be a problem if all toll free SACs were implemented as soon as possible.yX* ] X-ԍ#X\  P6G;ɒP# Vanity International Reply Comments at 3.y Ameritech asserts that we should revise the definition of warehousing to allow RespOrgs to  X-reserve numbers without having a customer.Y ] X -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Ameritech Comments at 2728; see also MCI Comments at 23; Scherers Comments at 6. Comptel contends that, while it supports reasonable limits on the quantity of numbers a RespOrg may reserve, "warehousing" should  X_-not be defined by these limits.ZA_ ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#CompTel Comments at 1011 (suggesting that "`[w]arehousing' shall mean the reservation and/or assignment of a telephone number from a numbering resource database with knowledge or with reason to know that no identifiable subscriber has affirmatively requested such number from the entity prior to reservation and/or assignment").  X1-` `   (2)hhCDiscussion  X -  22.` ` Section 201(b) of the Communications Act provides that "[a]ll charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and any such charge, practice, classification, or  X -regulation that is unjust or unreasonable is hereby declared to be unlawful."[ ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#47 U.S.C.  201(b). In addition,  201(b) states that "all practices" shall be just and reasonable and "[t]he Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the  Xy-provisions of [the Communications] Act."\yyF ] Xp-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.; see also 47 U.S.C.  205(a) ("the Commission is authorized and empowered to determine and prescribe . . . what . . . practice is or will be just, fair, and reasonable . . . and to make an order that the carrier or carriers shall . . . conform to and observe the . . . practice so prescribed"). Again,  251(e) requires that the Commission ensure that numbers are made available on an equitable basis. We interpret these subsections to empower the Commission to ensure that toll free numbers, which are a scarce and valuable"K\0*$$33"  X-national public resource,] ] Xy-ԍ #X\  P6G;ɒP#See NANP Order, 11 FCC Rcd 2588 (adopted July 13, 1995). are allocated in an equitable and orderly manner that serves the public interest. We conclude that warehousing, which is the practice whereby RespOrgs, either directly or indirectly through an affiliate, reserve toll free numbers from the SMS database without having identified subscribers for whom they are reserving those numbers, is an unreasonable practice under  201(b) and also is inconsistent with our obligation under  251(e)(1) to ensure that numbers are made available on an equitable basis. Permitting warehousing hastens the depletion of a given SAC and is, thus, contrary to the public interest. We disagree with Ameritech and other commenters that contend that we should permit RespOrgs to reserve numbers without having an actual subscriber. We believe such a practice may result in an anticompetitive allocation of numbers by unreasonably preventing RespOrgs and carriers from meeting the needs of subscribers desiring toll free numbers. We agree with MCI that the extent of warehousing has not been quantified, but conclude that specific rules designed to prevent warehousing will advance our overall goals for toll free number  X -allocation. The certification requirement adopted belowo^ y ] X-ԍ#X\  P6G;ɒP# See infra para. 25.o is one method to help deter warehousing; we will continue to monitor the reservation of toll free numbers and take additional actions, if necessary, to discourage warehousing.  Xy-` `  c.Certification and Affirmative Request Requirements  XK-` `  (1)hhCComments  X- 23.` ` Many commenters oppose a requirement that RespOrgs certify that: (1) they have an identified subscriber agreeing to be billed for service associated with each toll free number reserved from the database; and (2) they have an identified, billed subscriber before switching a number from reserved or assigned to working status. Numerous commenters opposing such a RespOrg certification requirement assert that it imposes an administrative  X-burden without any commensurate benefits._* ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., AT&T Comments at 20; Sprint Comments at 17; NYNEX Comments at 3; see also OMB Comments at 2. Others state that the proposed certification  X-contains highly proprietary information.}` ] X -ԍ#X\  P6G;ɒP# See, e.g., Pacific Comments at 9.} Some subscribers to toll free services and several  X|-carriers support the certification on a quarterly basis.a|T ] X#-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., MCI Comments at 910; GTE Comments at 3; and Weather Channel Comments at 4, n.5. NYNEX argues that certification"| a0*$$33" should only be imposed as a punitive measure for RespOrgs that warehouse toll free  X-numbers.b ] Xb-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See NYNEX Comments at 3. NEXTLINK proposes, alternatively, that the RespOrg's act of reserving a number in the database serves as a certification that there is an identified customer agreeing to be billed for service associated with the toll free number. NEXTLINK argues that its proposal would further the Commission's objective without imposing unnecessary and costly  X-bureaucratic requirements on RespOrgs.cy ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See NEXTLINK Comments at 6. See also Pacific Reply Comments at 10.  X_- 24.` ` Most commenters support requiring an affirmative request from a subscriber for  XH-toll free service before a subscriber can be assigned a toll free number.NdAH* ] X# -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., AT&T Comments at 6; U S West Comments at 34; Scherers Comments at 45; Time Warner Comments at 2; Bass Pro Comments at 3 n.6; Service Merchandise Comments at 3; BellSouth Comments at 2, 4;  yO-SWBT Comments at 14; Unitel Comments at 1; ATC Comments at 2. But see OMB Comments at 12  yO-(questioning whether a simple service or billing agreement would meet the Commission's requirements). N Numerous commenters also support requiring RespOrgs and toll free service providers to retain records  X -of affirmative requests for toll free service.e 3 ] X-ԍ#X\  P6G;ɒP# See, e.g., BellSouth Comments at 23; Telemation Comments at 4, MFS Comments at 23.Ķ Some commenters support a two year retention  X -requirement,f ] X-ԍ #X\  P6G;ɒP#See, e.g., Telemation Comments at 4; BellSouth Comments at 23; CVS Comments at 1. while other commenters support retention for one year.g ] XI-ԍ #X\  P6G;ɒP#See, e.g., CompTel Comments at 6 n.7; LDDS Comments at 3. Several commenters, however, oppose a record retention requirement, alleging that it would impose an  X -undue and unnecessary burden on RespOrgs and service providers.h F ] X-ԍ#X\  P6G;ɒP# See, e.g., NEXTLINK Comments at 2 (noting that such a requirement would needlessly increase overhead expenses, to which small providers are especially sensitive). Commenters are divided about whether the affirmative request requirement should be included in carriers' tariffs or  X -adopted as part of the Commission's rules.|iy  ] X-ԍ #X\  P6G;ɒP#Compare TRA Comments at 5 (supporting inclusion in Commission rules because it would be less  yO -burdensome to carriers and would carry greater weight than inclusion in tariffs) with Telco Planning Comments at 2 (supporting inclusion in both Commission rules and tariffs).| On the other hand, several commenters oppose" i0*$$33 "  X-an affirmative request requirement.jA ] Xy-ԍ #X\  P6G;ɒP#Allnet Comments at 2 (affirmative request requirement would impose a huge administrative burden on  yOb-carriers to implement and on the Commission to monitor and police); see also CWI Comments at 23. See also MCI Comments at 23 (affirmative request requirement would unreasonably delay service installation and implementation). Sprint recommends that documentation, such as a signed sales contract or adequately documented notes in the customer files maintained by  X-the service provider, be acceptable authorization.ky ] XT-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Sprint Comments at 23. Sprint also supports imposing any affirmative request requirement on the toll free service provider rather than the RespOrg, if they are separate entities, because only the service provider  yO -would have subscriber information. Id.ď AirTouch maintains that an affirmative request requirement could compromise end users' proprietary information and supports,  X-instead, periodic audits or subscriber verification from randomly selected RespOrgs.<l ] Xg -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#AirTouch Comments at 9 n.21. But see SWBT Comments at 14 (supporting independent audits in conjunction with an affirmative request requirement); U S West Comments at 34 (same).<  Xv-` `   (2)hhCDiscussion  X_-  XH- 25.` ` We conclude that requiring RespOrgs to submit a written statement certifying that they have not warehoused toll free numbers would create an unnecessary administrative burden on RespOrgs. We find, however, that a "certification" requirement is still necessary and we adopt NEXTLINK's proposal as our rule. Thus, the act of reserving a toll free number from the database serves as a certification that there is an identified subscriber agreeing to be billed for service associated with the toll free number. RespOrgs will not be permitted to obtain numbers from the database and then offer them to a variety of potential toll fee subscribers. RespOrgs, however, will be able to reserve several numbers for a particular toll free subscriber so that each subscriber can choose the number that best fits its needs before a number is assigned. We conclude that it is an unreasonable practice and is inconsistent with our obligation under  251(e)(1) to ensure that numbers are made available on an equitable basis for RespOrgs to maintain a number in reserved status after a subscriber has indicated that it is not interested in obtaining that toll free number. So that all RespOrgs  X-are aware of our conclusions on this subject, we direct that the following language be included in the SMS tariff: X(1) [T]he Federal Communications Commission ("FCC") has concluded that warehousing, which the FCC defines as Responsible Organizations, either directly or indirectly through an affiliate, reserving toll free numbers from the SMS database without having an identified toll free subscriber for whom those numbers are being reserved, is an unreasonable practice under  201(b) of the"| l0*$$33" Communications Act and is inconsistent with our obligation under  251(e)(1) of the Communications Act to ensure that numbers are made available on an equitable basis; and (2) if a Responsible Organization does not have an identified toll free subscriber agreeing to be billed for service associated with each toll free number reserved from the database, or if a Responsible Organization does not have an identified, billed toll free subscriber before switching a number from reserved or assigned to working status, then there is a rebuttable presumption that the Responsible Organization is warehousing numbers. Responsible Organizations that warehouse numbers will be subject to penalties.   X -  26.` ` Because we are adopting the certification requirement, we conclude that an affirmative request requirement is unnecessary. We want to encourage innovative business practices and avoid unreasonable burdens upon RespOrgs and toll free subscribers. The certification and affirmative request requirements appear to be duplicative because they would  X -deter the same activity and require similar information, i.e., that there is an actual subscriber  X-for a particular toll free number under a RespOrg's control. Imposing both requirements is also unnecessary because of the direct accountability that is imposed on RespOrgs by our finding that warehousing is an unreasonable practice under  201(b) and is inconsistent with our obligation under  251(e) of the Communications Act to ensure that numbers are made available on an equitable basis; the possibility of a penalty for taking action that violates the Communications Act should further deter warehousing. We note that, although some commenters support a certification requirement while others support an affirmative request requirement, the certification requirement we are adopting should satisfy both groups. Again, the information necessary to satisfy each requirement is duplicative; the certification requirement will ensure that the information is available earlier rather than later in the process  X-(i.e. at the reservation stage rather than at the assigned stage). We note that, since it is possible for a number to be taken from "reserved" status and placed directly in "working" status, without ever being in "assigned" status, the certification requirement ensures that the information will be available for all numbers, while adoption of the affirmative request requirement alone may have allowed parties to avoid the affirmative request requirement by bypassing the assignment stage. Finally, by making the act of reserving a number serve as the necessary certification, and not requiring an additional written certification, we address the comments of parties concerned about administrative burdens being imposed on RespOrgs through either a certification requirement or an affirmative request requirement.  X -  ` `  e.Penalties for Warehousing  X"-` `   (1)hhCComments "#l0*$$33G""Ԍ X- 27.` ` Commenters generally support the proposal that we should penalize RespOrgs  X-that warehouse toll free numbers.amy ] Xb-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Promoline Comments at 6; Qwest Comments at 56; NYNEX Comments at 3. But see Pacific Reply Comments at 6 (recommending that the Commission not enumerate penalties until the 800 audit is completed). a While some commenters argue that forfeiting RespOrg  X-status is too extreme a measure,n  ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See LDDS Comments at 11; Qwest Comments at 6. many favor decertification for "habitual offenders."o ] X= -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Ameritech Comments at 2728; TRA Comments at 15; Promoline Comments at 6. Many commenters contend that either loss of SMS access privileges or a decrease in the RespOrg's allowable "take rate" is reasonable because they both force RespOrgs to use the  X-warehoused numbers.pk ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., NYNEX Comments at 3; MFS Comments at 9; BellSouth Comments at 14. Nearly all commenters support a monetary fine and assert that the  Xv-Commission has the legal authority to impose monetary penalties.?qv ] XC-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., AT&T Comments at 22; Ameritech Comments at 2728; Allnet Comments at 89. Allnet asserts that the Commission has the authority to impose damages under 47 U.S.C.  208. ? Ameritech argues that the Commission could establish penalties, such as monetary fines and the temporary reduction of the quantity of numbers a RespOrg can reserve, for RespOrgs that violate the affirmative  X1-request rule.)r1 ] Xw-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Ameritech Comments at 34. Ameritech believes that the Commission may enforce these penalties  yO`-against all RespOrgs, including noncommon carriers. Id.) AT&T contends that the Commission has authority under the Communications  X -Act to issue cease and desist orders,s  ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# AT&T Comments at 21, citing 47 U.S.C.  312(b). to initiate inquiries on its own motion,t  ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id. , citing 47 U.S.C.  403. to penalize  X -violations of its rules,u p ] X$-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. , citing 47 U.S.C.  502. and to impose forfeitures.Iv ! ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id., citing 47 U.S.C.  503(b); 47 C.F.R.  1.80. See also Allnet Comments at 88 (supporting Commission's authority to impose forfeitures); Enterprise Comments at 5 (same).I BellSouth asserts that the Commission  X -can hold a common carrier accountable for its conduct in a formal complaint proceeding.w  ] X7"-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#BellSouth Comments at 34; see 47 U.S.C.  208. CWI states that all RespOrgs should be penalized for warehousing, not just those that are" Kw0*$$33] "  X-common carriers subject to Title II obligations.x ] Xy-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# CWI Comments at 1112. Allnet, however, maintains that because there is a question of the Commission's jurisdiction over noncommon carrier RespOrgs, the  X-Commission should allow only common carriers to be RespOrgs.yy ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Allnet Comments at 89. U S West maintains that fines combined with audits and a temporary loss of RespOrg status are effective deterrents because, to maximize profits, companies will continue to warehouse numbers when a fine is  X-small compared to the potential revenue gained from warehousing.z* ] Xh -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See U S West Comments at 18.  X_- 28. ` ` AT&T argues that the SMS administrator can and should be authorized to  XH-reclaim toll free numbers that remain in a particular status (e.g., reserved) for a period longer  X1-than the Industry Guidelines permit. AT&T further asserts that when the SMS Administrator finds that a significant percentage of a RespOrg's "reserved" numbers are being automatically recaptured after 45 days, it should issue a warning letter to the RespOrg. In the absence of an appropriate justification for the numbers being recaptured in 45 days, AT&T proposes that a RespOrg's reservation cap be reduced commensurate with the percentage of numbers that  X -had been reverting to the spare pool.{  ] XJ-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See AT&T Comments at 8.  Xy-` `  (2)hhCDiscussion  XK-  29.` ` We conclude that the Commission's exclusive jurisdiction over the portions of the North American Numbering Plan that pertain to the United States, found at  251(e)(1) of the Communications Act, as amended, authorizes the Commission to penalize RespOrgs that  X-warehouse toll free numbers. We may impose a forfeiture penalty under  503(b).p|y ] XC-ԍ #X\  P6G;ɒP#47 U.S.C.  503(b) ("[a]ny person who is determined by the Commission . . . to have . . . willfully or repeatedly failed to comply with any . . . rule, regulation, or order issued by the Commission under this Act . . . shall be liable to the United States for a forfeiture penalty"). p In addition, if a person violates a provision of the Communications Act or a rule or regulation issued by the Commission under authority of the Communications Act, the Commission can refer the matter to the Department of Justice to determine whether a fine, imprisonment, or" |0*$$33"  X-both are warranted under  501 or  502 of the Communications Act.} ] Xy-ԍ#X\  P6G;ɒP# See 47 U.S.C.  4 (i), 501 and 502. We also may limit any RespOrg's allocation of toll free numbers or possibly decertify it as a RespOrg under  X- 251(e)(1) or  4(i).O~y ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id. at  4(i) ("[t]he Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution of its functions").O In addition, RespOrgs that falsely indicate that they have identified subscribers for particular numbers may be liable for false statements under Title 18 of the  X-United States Code. ] XG -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# 18 U.S.C.  1001. We direct DSMI, and any successor toll free administrator, to monitor reserved numbers that are being automatically recaptured after 45 days and to submit regular reports to the Common Carrier Bureau, indicating which RespOrgs repeatedly reserve toll free  X_-numbers without having an identified subscriber.r_ ] X-ԍ#X\  P6G;ɒP# See infra at para. 50.r  X1-` ` 3. Ownership of Numbers  X -   X -` `  a.Background  X - 30.` ` The NPRM stated that the Commission has characterized telephone numbers as  X -a public resource that are not the property of the carriers. T ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13702 (citing NANP Order, 11 FCC Rcd 2588 (adopted July 13, 1995)). Further, the Commission has noted that "carriers do not `own' codes or numbers, but rather administer their distribution for  X-the efficient operation of the public switched telephone network."N ] XF-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. (citing The Need to Promote Competition and Efficient Use of Spectrum for Radio Common Carrier  yO/-Services, Memorandum Opinion and Order, 59 Rad. Reg. (P&F) 1275, 1284 (1986)).N The NPRM noted that Bellcore, the current administrator of the North American Numbering Plan ("NANP"), as well  Xb-as the current Industry Guidelines and assignment guidelines for 555 NXX codes, concur with  XK-this assessment.K~ ] Xz-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13702. The NPRM stated that some subscribers might consider toll free numbers to be their property, although tariffs and rules on file with state public service commissions"4/0*$$33f"  X-routinely state that subscribers do not own their telephone numbers. y ] Xy-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. at 1370203 (citing Burris v. South Central Telephone Company, 540 F. Supp. 905, 907 (S.D. Miss.  yOb-1982)). The NPRM also notes that certain carriers have drafted tariffs granting exclusive property interests in  yO*-blocks of telephone numbers to those carriers, but no court has yet ruled on the legality of those tariffs. Id.    X-` `  b.Comments  X- 31.` ` Most commenters agree that numbers are a public resource and are not the  X-property of carriers, RespOrgs, or subscribers.y  ] XG -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., Unitel Comments at 34; GTE Comments at 9; SNET Comments at 5; Allnet Comments at 9 yO0 -10 n.8 (since the Industry Guidelines specifically state there is no ownership interest in numbers, subscribers take toll free service under those terms). Pacific Reply Comments at 67. LCI asserts that, when 800 subscribers selected and invested in their numbers, they did so with an understanding that they did not have a vested interest in retaining that 800 number or in transferring it into another toll free  XH-code, e.g. 888.HJ ] XC-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#LCI Comments at 8. In contrast, Dial 800 maintains that the Commission's decision to make toll free numbers portable requires a "sound policy" decision granting some form of  X -ownership in toll free numbers.m  ] X-ԍ#X\  P6G;ɒP# Dial 800 Reply Comments at 6.m  X -` `  c. Discussion  X - 32.` ` We find that there is a "legitimate governmental interest or rational basis" for declaring that toll free numbers are a public resource and that we must ensure that telephone  X-numbers are allocated efficiently and fairly.v ] X-ԍ #X\  P6G;ɒP#Cf., Mark Olson Comments at 14.v Telephone numbers are essential to routing calls on the public switched network, and the Commission is empowered to ensure that the  Xb-public has access to telephone numbers.wyb] ] Xp-ԍ#X\  P6G;ɒP# Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996) to be codified at 47 U.S.C.  251(e)(1), ("[t]he Commission shall create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis").w We will not alter our prior holdings regarding ownership interests in telephone numbers.  X- ` ` 4. Hoarding and Brokering "0*$$33 "Ԍ X- ` `  a.Background  X-  33.` ` In the NPRM, we sought comment on whether we should permit toll free  X-subscribers to hoard numbers. The NPRM defined "hoarding" as a toll free subscriber  X-acquiring more numbers from a RespOrg than it intends to use immediately. ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# NPRM at 13701 n.72. Hoarding causes toll free numbers to remain inactive and unavailable for subscribers who need working  Xv-toll free numbers. In the NPRM, we noted that the Commission had received many  X_-complaints about hoarding._y ] X -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ā We also sought comment on what penalty, if any, should be  XH-imposed if a subscriber hoards toll free numbers.H* ] X# -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. at 13701.  X - ` `  b.Comments  X -  !34.` ` Hoarding. Several carriers state that monitoring customers is difficult and that they oppose rules prohibiting hoarding. These carriers contend that, if a subscriber pays its bill, the carrier has no right to question that subscriber's intent to use a toll free number.  X -These carriers also argue that they should not be penalized for subscribers' wrongdoings.  ] X3-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., MCI Comments at 910; AT&T Comments at 21 n.39.  X-Ameritech asserts that the proposed definition of hoarding is too broad and vague.i ] X-ԍ#X\  P6G;ɒP# Ameritech Comments at 28.i NIMA maintains that directresponse marketers rely on telemarketing service bureaus to have a large supply of available toll free numbers to respond quickly to the marketers' need for the numbers. NIMA states that service bureaus need to maintain an inventory of spare numbers to smooth shortrun imbalances between demand for new numbers and the supply of old numbers available for reassignment. What appears to be "warehousing" or "hoarding," NIMA  X-states, could be a bona fide attempt to meet the legitimate needs of toll free subscribers.= ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See NIMA Comments at 6.  X-  "35.` ` Conversely, several commenters support rules prohibiting hoarding. Ameritech states that it would not oppose a rule addressing hoarding concerns by prohibiting reservation or acquisition of numbers for the purpose of selling those numbers or by requiring retention" 0*$$33"  X-of a number failing to generate a minimum level of billable usage within 12 months. ] Xy-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id. at 2829. Ameritech, however, does not support declaring hoarding "unlawful."   X-SWBT warns that the actions NIMA argues may be bona fide business transactions could lead  X-to pervasive hoarding or warehousing by RespOrgs.ey ] X-ԍ#X\  P6G;ɒP# SWBT Comments at 78.e SWBT asserts that paging companies take thousands of numbers with no specific customers assigned to them, and should be  X-required to have bona fide customers before reserving a number.Y* ] X -ԍ#X\  P6G;ɒP# Id.Y Otherwise, RespOrgs have an incentive to set up "paging companies" of their own to act as a holding point for  Xv-numbers.v ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id.Ā   XH- #36.` ` Brokering. Subscribers of toll free services, such as the members of the 800  X1-Users Coalition, express concern over number brokering.1 ] Xn-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See 800 Users Coalition Comments at 19; LDDS Reply Comments at 67 (the Commission should prohibit brokering as a violation of the Communications Act). ACRA, defining brokering as certain entities obtaining the rights to toll free numbers and attempting to "sell" those numbers for a substantial fee, maintains that brokering often involves toll free numbers with a  X -mnemonic that would be valuable to a specific company targeted by number brokers.  ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#ACRA Comments at 9. Avis recommends that RespOrgs and third party agents deposit money into escrow accounts, whose costs they not be allowed to pass on to subscribers, and the escrow deposit would be forfeited if an entity engaged in the trafficking of toll free numbers. Avis further recommends that subscribers with a minimum amount of usage should be exempt from the escrow requirement  Xy-and that a neutral body (e.g., the FCC or NANPA) investigate and prosecute instances of toll  Xb-free number trafficking.eb ] X-ԍ#X\  P6G;ɒP# Avis Comments at 56.e Conversely, ATC states that a subscriber should not be fined or lose a reserved number when it assigns the number for a fee to another company, as long as the number of assignments for a fee is insignificant compared to the subscriber's business  X-operation.lg ] X5"-ԍ #X\  P6G;ɒP#See ATC Comments at 2.l One commenter adds that if the resale of 800 numbers was permissible, a "highly fluid secondary market" would emerge and the present shortage of 800 numbers"0*$$33F"  X-would not exist.y ] Xy-ԍ#X\  P6G;ɒP# See Mark Olson Comments at 2.y  X- $37.` ` Allnet states that the Commission should set an "economically efficient" price for toll free number reservations to assure that numbers are used efficiently. Allnet's proposal requires that if a toll free number fails to reach a preset monthly usage level within a specified time, the RespOrg would pay a higher monthly charge. Once the minutes of use  Xv-exceed the preset monthly usage level, the fee would be reduced.vy ] X -ԍ#X\  P6G;ɒP# Allnet Comments at 34. See also Bass Tickets Comments at 2; Nissan Rosenthal Comments at 1. Allnet argues that a higher fee for low volume 800 numbers is a more direct deterrent against brokering than is an  XH-escrow requirement.H* ] X# -ԍ#X\  P6G;ɒP# See infra paras. 5659 for a discussion of the escrow requirement.  X1-  X -` `  c.Discussion  X -%38.` ` Hoarding occurs when a toll free subscriber acquires more numbers from a RespOrg than it intends to use for the provision of toll free service. If a subscriber refuses to release numbers that are not in use, the pool of available numbers decreases. This will exacerbate toll free number depletion and necessitate the opening of an additional toll free relief code earlier than would be necessary otherwise. It is time consuming and costly for the industry to perform the necessary modifications to the network so that it can support calls using the new code. Hoarding can also result in some customers being unable to obtain toll free numbers, even though certain numbers are not being used. We conclude, therefore, that  X4- hoarding is contrary to the public interest. We further find that number brokering, which is the selling of numbers by private entities for a fee, is not in the public interest. Brokering provides motivation for hoarding and therefore results in quicker exhaustion of the current  X-SAC and interferes with the orderly allocation of numbering resources.[y ] X{-ԍ#X\  P6G;ɒP# For example, if the cost of having a toll free number in service is less than the expected revenue from the sale of the number, then the subscriber has an incentive to hoard numbers. Removing the ability to sell a toll free number eliminates this incentive to hoard.[ Simply prohibiting a subscriber from hoarding a number will not fully eliminate the effects of hoarding. For example, a subscriber could acquire a group of numbers it expected to sell at a later date. The subscriber could then nominally place the numbers in service through "dummy" affiliates or other entities that otherwise would not employ a toll free number.  Xe- &39. ` ` We disagree with arguments that the Commission has no right to question the"e 0*$$33" use of toll free numbers if subscribers are paying their bills. Such a conclusion disregards the Commission's responsibility to promote the orderly allocation of toll free numbers and, again, would lead to the premature depletion of the supply of toll free numbers, which are a scarce public resource. To make all RespOrgs aware of our conclusions on this subject, we direct that the following language be included in the SMS tariff and in the LECs' toll free database access tariffs: X(1) [T]he Federal Communications Commission ("FCC") has(# Xconcluded that hoarding, defined as the acquisition of more toll free numbers than one intends to use for the provision of toll free service, as well as the sale of a toll free number by a private entity for a fee, is contrary to the public interest in the conservation of the scarce toll free number resource and contrary to the FCC's responsibility to promote the orderly use and allocation of toll free numbers.(#  X - '40.` ` We conclude that imposing a onetime or monthly fee, as suggested by several commenters, would not sufficiently deter the hoarding of toll free numbers because some subscribers have the means to and will pay high fees if it is profitable to hoard and sell the numbers. A onetime fee, therefore, would not necessarily result in the orderly allocation of numbering resources, but could, as with number brokering, lead to premature exhaustion of the toll free SAC because, if the fee is below the market price of toll free numbers, parties with financial means may view the fee as approval of hoarding and thus may make substantial investments in toll free numbers which they believe they can sell out of inventory at a substantial profit. As a result, such a policy may hasten rather than slow number exhaustion. There is no way to determine if a subscriber is maintaining an inventory because it may soon have a need for the numbers, or if the subscriber is building a supply of numbers for possible sale, but in either scenario the numbers are unavailable for toll free subscribers that have an immediate need. We conclude that, to the extent that telemarketing service bureaus are performing legitimate services, and not merely buying and selling numbers, such activity would not be considered "hoarding," but that routing multiple toll free numbers to a single subscriber will create a rebuttable presumption of hoarding or brokering. Other factors that may be considered if a toll free subscriber is alleged to be hoarding or brokering numbers are the amount of calling of a particular number and the rate at which a particular subscriber changes toll free numbers.   X -   ` `  d.Penalties for Hoarding and Brokering  X"-` `  (1)hhCComments  X#- "#0*$$33G""Ԍ X- (41.` ` Avis contends that sanctions for hoarding should include fines, suspension of Commission and/or state authorizations for common carriers, and criminal referrals, if  X-appropriate. ] XK-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See Avis Comments at 25; see also Enterprise RentACar Comments at 5. The 800 Users Coalition proposes that those who report instances of number brokering obtain the number being brokered. This "whistleblower" proposal allegedly will provide subscribers with an incentive to report number brokering and will ensure that toll free  X-numbers are available for their most efficient use.|y ] X-ԍ #X\  P6G;ɒP#See 800 Users Coalition Comments at 6.|  Xv-  X_- ` `   (2)hhCDiscussion  X1- )42.` ` Toll free subscribers that hoard or broker numbers will be subject to penalties1* ] X -ԍ #X\  P6G;ɒP#See 47 U.S.C.  4(i), 501, 502, and 503.  X -similar to those we will impose for warehousing.o  ] X-ԍ#X\  P6G;ɒP# See supra para. 29.o The penalties may include, but are not  X -limited to, a forfeiture penalty under  503(b) of the Communications Act.  ] X@-ԍ#X\  P6G;ɒP# See 47 U.S.C. 251(e)(1) and  503(b). If a subscriber hoards numbers, that subscriber's service provider must terminate toll free service because hoarding is contrary to the public interest, leads to depletion of toll free numbers and number  X -brokering, and is contrary to the rules adopted in this Second Report and Order.  X-` ` 5. Lag Time Rules  Xb- ` `  a.Background  X4- *43.` ` In the NPRM, we noted that, under the Industry Guidelines, toll free numbers are categorized according to status and may remain in different statuses for varying amounts  X-of time.= ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13697. We tentatively concluded that the time permitted to elapse between withdrawal of a number from the SMS database and conversion of the number to working status leads to an  X-inefficient use of toll free numbers. ] Xw"-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ć The NPRM sought comment on two proposals to reduce the interval between reservation and conversion to working status: (1) reduce the time" 0*$$33"  X-a toll free number may remain in reserved status from 60 days to 45 or 30 days;A ] Xy-ԍ #X\  P6G;ɒP#Reserve status begins when a RespOrg takes a toll free number from the database for its customer.  yOb-Under industry guidelines, a toll free number may be held in reserve status for up to 60 days. See Industry  yO*-Guidelines at  2.4.3. As part of the 800 conservation plan, the time a RespOrg can hold a number in reserve was reduced to 45 days.  and (2) reduce the time a toll free number can be in the assigned, but not working, status from 12  X-months to 4 months. ] XT-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ā  X- +44.` ` The NPRM also sought comment on the "aging" process, the time between disconnection or cancellation of a toll free number and the point when it may be reassigned to  Xv-another subscriber. Av ] X -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id. at 1369798. Industry guidelines set the aging process at six months, with a provision that the period  yO-may be reduced to four months once the toll free resource is 95 percent exhausted. See Industry Guidelines at   yOZ-2.2.6. As part of the 800 conservation plan, the aging process was reduced to four months. See Wallman Letter II.  While noting the need to prevent excessive misdialing, unreasonable expense to the new subscriber and confusion for the caller, the Commission stated its belief that reducing the aging process would better balance the needs of toll free subscribers and callers with the need to recycle toll free numbers expediently, and would enhance efficient  X -allocation of this resource. ] XV-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id.Ā The NPRM sought comment on two proposals to reduce the aging process: (1) reduce the aging period between disconnect and spare status from 6 months to 4 months; and (2) reduce the period a number may remain in suspended status from  X -12 months to 4 months. < ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ā  X -` `  b.General Issues  Xy-` `   (1)hhCComments  XK- ,45.` ` Several commenters maintain that reduced lag times were appropriate under the  X4-800 conservation plan, but should not be part of ordinary toll free procedures.4 ] X!-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., NIMA Comments at 4; U S West Comments at 7; MFS Reply Comments at 3; LCI Comments  yO"-at 5. Pacific does not believe that lengthy lag times caused the 800 shortage, but rather numbers moving directly"f0*$$33)"  X-from reserved to working status, bypassing the assigned status. ] Xy-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Pacific Comments at 4. Some PCIA members state that market demand, rather than artificially imposed time intervals, should determine number  X-reassignment periods.y ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# PCIA Comments at 15 n.29. CWI asserts that the Industry Guidelines do not reflect the presentday value of toll free numbers and should be revised to accommodate RespOrgs' and  X-subscribers' needs.* ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# CWI Comments at 2. Asserting that RespOrgs can evade any lag time limits, SWBT recommends that the Commission implement the following requirements in lieu of adjusting lag times: (1) a number may be reserved only if actual subscriber negotiations are underway;  X_-(2) a number cannot be moved into working status unless a "sale" to a subscriber intending to use that number has been completed; and (3) disconnected numbers must be returned to the  X1-spare pool.1 ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# SWBT Comments at 57. Several commenters assert that any lag time rules should be incorporated in the  X -Industry Guidelines rather than in the Commission's rules, because such technical and  X -operational procedures have historically been left to industry bodies.  ] X@-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., AT&T Comments at 89; SNAC Comments at 12.  X -` `   (2)hhCDiscussion  X - -46.` ` We conclude that the extended periods for which toll free numbers remain out  X-of service are unnecessary and inefficient.  We further conclude that inordinately long lags between the withdrawal of a number from the SMS database and the conversion of that number to working status exacerbated the 800 number shortage. Reducing the time that toll free numbers may remain out of circulation, and the rules we are adopting today in this  X4-Second Report and Order, will lead to more efficient use and allocation of toll free numbers. We conclude that adopting these rules also will lead to more effective enforcement because  X-compliance with the Industry Guidelines is voluntary, while RespOrgs and subscribers who disregard our rules will be subject to penalties. Our recent experience with 800 numbers illustrates the need for Commission involvement in modifying the lag time intervals in effect,  X-although we prefer to leave operational procedures to industry forums where possible.w= ] X!-ԍ #X\  P6G;ɒP#See Appendix C for rules changes.w  X-` `  c.Reducing the Reserved and Assigned Intervals" 0*$$33o"Ԍ X-ԙ` `  (1)hhCComments  X- .47.` ` Several commenters generally support a reduction in the amount of time a toll free number may remain in reserved status to 30 days, primarily to prevent warehousing of  X-toll free numbers.y ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See Promoline Comments at 24; ACTA Comments at 10, 13; Bass Tickets Comments at 2; NEXTLINK Comments at 3. Several commenters also support reducing the interval to 30 days, but give no specific reasons.  yO-See ACRA Comments at 10; Telecompute Comments at 2; UniTel Comments at 1. Numerous other commenters support a reduction to 45 days.  ] X^ -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., BellSouth Comments at 6; Crestar Comments at 2; AirTouch Paging Comments at 17 n.37; PCIA Reply Comments at 1719; AT&T Comments at 7, 9 (45 days has been required under the Bureau interim  yO -800 allocation plan and this interval has not created any operational problems for AT&T). See also LDDS Comments at 4; TRA Comments at 67 (supporting an initial reduction to 45 days and a further reduction to 30 days, if a 45day interval leads to an increase in the quantity of toll free numbers without any offsetting implementation problems); NTS Comments at 1 (supporting a 45day interval with a onetime rereservation). Many  X-commenters, however, oppose any reduction in the reserved interval, ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., CWI Comments at 2; MCI Comments at 4; Scherers Comments at 8. stating that 60 days is needed to move a number to working status. According to these parties, factors that can lead  X_-to the need for more time include marketing plans,_S ] Xc-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Sprint Comments at 56 n.3. dedication of toll free circuits,_ ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., LCI Comments at 56. LEC  XH-provisioning delays,H ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Id.Ć construction delays,Hf ] X_-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Ameritech Comments at 1011.ę staffing needs for particular business  X1-applications,1 ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Sprint Comments at 56. and the bundling of multiple services into one order.1 ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# U S West Comments at 8. MFS states that reducing the interval to 45 or 30 days could result in subscribers' losing their reserved numbers because of technical or regulatory variables that can delay installation of service. MFS maintains that a reduced reserved interval may impact small service providers more than large ones, because the larger service providers will have greater resources to adjust to a  X -tighter time frame. y ] X#-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# MFS Comments at 45." !*0*$$33 "Ԍ X-ԙ /48.` ` Numerous commenters support reducing the time a toll free number may  X-remain in the assigned, but not working, status from 12 months to four months. ] Xb-ԍ #X\  P6G;ɒP#See, e.g., BellSouth Comments at 6; Time Warner Comments at 3; Telecompute Comments at 2. Unitel supports a reduction to four months, provided there is an opportunity to seek a reasonable  X-extension if unusual circumstances arise.yy ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# UniTel Comments at 12. Unusual circumstances include equipment delays, facilities shortages, and the  yO-inability of carriers to provide service. Id.; see also AT&T Comments at 9 (supporting reduction because, except in rare situations, subscribers are ready to convert numbers to working status within four months).  Other commenters, however, oppose any reduction in the assigned interval. SNAC, for example, asserts that the 12month time frame  X-addresses the needs of subscribers whose numbers are embedded in their business plans yet  Xv-are not required for usage until some later date (e.g., the number dedicated to the 1996  X_-Olympics)._ ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# SNAC Comments at 910; see also Scherers Comments at 8; NYNEX Comments at 2. Assigning numbers well in advance of their actual usage also gives subscribers  XH-additional time beyond the reservation period to develop marketing plans,Hk ] Xd-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# SNAC Comments at 910; Ameritech Comments at 1012. build facilities,H ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Bell Atlantic Comments at 3. and resolve possible construction delays or other problems with their telecommunications  X -systems. ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Ameritech Comments at 1012. SNAC contends that reducing the assigned interval would not yield a large return of numbers to the SMS database because, prior to the 800 conservation plan, less than one X -tenth of one percent of working 800 numbers were in assigned status. ~ ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# SNAC Comments at 910 n.16. Some commenters contend that any reduction in lag times should be addressed by the industry rather than the  X -Commission. / ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Ameritech Comments at 1012 . Several commenters support a compromise approach, suggesting that the  X -assigned interval be reduced to 9 months,  ] X8-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Sprint Comments at 6; see also Service Merchandise Comments at 4 (supporting reduction to 6 to 9 months). 6 months, Y ] X!-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., PCIA Comments at 1516; Bell Atlantic Comments at 3. 60 days,  ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Promoline Comments at 24 (supporting 60day assigned interval combined with 30 day reservation interval). or 30 days. A ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# ACTA Comments at 11 (supporting 30 day assigned interval with the option to renew for an additional 30day period for "good cause"). " "0*$$33"Ԍ X-ԙ` `   (2)hhCDiscussion  X-  049.` ` The current 60day reservation period and the current 12month assigned period  X-yield a maximum 14month interval between a number's   removal from the SMS database and  X-the time that number may accept calls. We conclude that it is in the public interest to have toll free numbers available for those subscribers ready to put those numbers into service. Moreover, while the industry operated under the 800 conservation plans, little, if any, harm  X_-arose from shortening the intervals set in the Industry Guidelines. For these reasons, we reject the arguments opposing a reduction in the lag time between reservation and working  X1-status.  ;y1 ] X-ԍ #X\  P6G;ɒP#See AT&T Comments at 7, 9; BellSouth Comments at 6. (AT&T and BellSouth noted that a 45 day reservation period has been in effect under the 800 conservation plan, and that interval has not caused an undue hardship upon RespOrgs.);  X - 150.` ` We conclude that a reduction of the reservation period from 60 days to 45 days is appropriate; the 800 conservation plan demonstrated that a 15day reduction in the reservation interval will not impose a significant hardship upon new toll free subscribers. We further conclude that there shall be no extension of the reservation period after expiration of the initial interval. This policy will prevent RespOrgs from keeping numbers in reserved status indefinitely and from holding the most desirable toll free numbers, and will give other potential subscribers access to those numbers.  XK- 251.` ` We also conclude that the interval in which a number may be assigned, but not working, shall be reduced from 12 months to 6 months. When combined with the 45day reservation period, the total interval between a number's removal from the SMS database and its activation will be reduced from 14 months to 7 1/2 months, which should lead to more efficient use and orderly allocation of toll free numbers. In most cases, a sixmonth assignment interval will accommodate new toll free subscribers' business plans because the risk of misdialed calls will be minimal. A maximum sixmonth assignment period, combined with the 45day reservation period and the time period for which the number "aged" after termination of its prior subscriber's service, should be a sufficient time period to protect the new toll free subscriber from misdialed calls once the subscriber is ready to activate the number. However, we acknowledge contentions that special circumstances may require"e#0*$$33" dedication of a toll free number more than 7 1/2 months before its actual usage, as in the case  X-of the number dedicated to the 1996 Olympics ] Xb-#Xj\  P6G;ynXP#э#X\  P6G;ɒP#See SNAC Comments at 910; Scherers Comments at 8; NYNEX Comments at 2. or numbers used for other onetime events such as political campaigns or charity functions. Such numbers belong in the "unavailable"  X-status,Ay ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See Industry Guidelines at  2.4.9 ("[t]he 800 Number is not available for assignment due to an unusual condition. Requests to make a specific 800 number unavailable must be submitted in writing to the NASC with the appropriate documentation of the reason for the request. The NASC is the only entity that can assign or remove this status to [sic] a number"). and not the assigned status. Numbers that will be used for an ongoing purpose, such as a business, should not be placed in unavailable status. We require RespOrgs requesting unavailable status to submit written requests to DSMI. This requirement will hold those  Xv-parties more accountable and will decrease abuses of the current lag time process.wv ] X -ԍ #X\  P6G;ɒP#See Appendix C for rules changes.w If DSMI is uncertain whether a number should be placed in unavailable status, we expect it to seek guidance from the Common Carrier Bureau.  X -` `  d. Reducing the Aging Process  X -` `   (1)hhCComments  X - 352.` ` A few commenters support reducing the interval between disconnect and spare  X -status.A 3 ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., AT&T Comments at 10 (supporting reduction to four months); PCIA Reply Comments at 1719 (same); Bass Tickets Comments at 2 (supporting a reduction to at least 4 months, perhaps to 2 months, because market forces should protect toll free subscribers); ACTA Comments at 11 (supporting reduction to 30 days as a way to deter warehousing). AT&T states that it did not experience complaints regarding excessive misdialing, unreasonable expense to new toll free subscribers, or confusion for toll free callers during the  Xy-fourmonth interval effective during the 800 conservation period.dy< ] Xf-ԍ#X\  P6G;ɒP# AT&T Comments at 10.d BellSouth and U S West, however, assert that the temporary fourmonth interval led to misdirected calls,  XK-customer dissatisfaction, and excessive requests for new number assignments.K ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See BellSouth Comments at 67; U S West Comments at 78. Other commenters oppose a reduction to four months because of the potential inconvenience and expense an insufficient aging interval can impose on the previous toll free subscriber, the new"$0*$$33)"  X-subscriber, and the calling public. ] Xy-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Ameritech Comments at 1112; SNAC Comments at 1011; MCI Comments at 5. Pacific states that a shorter aging period may prompt  X-increased warehousing, as RespOrgs attempt to ensure a supply of properly aged numbers.y ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Pacific Comments at 45. Several commenters support increasing the time between disconnection of a number and  X-placement of the number in spare status from the current six months to 12 months.A* ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Pacific Comments at 45 (supporting a sixmonth interval if there is no referral number on the toll free number and an increase to 12 months if there is a referral number); BellSouth Comments at 67 (supporting six months with the option to extend to a maximum of 12 months if the previous subscriber has requested call referral); AirTouch Comments at 1617 (supporting an increase to 12 months).  X- 453. ` ` In addition, a few commenters support reducing the current 12month  Xv-suspended interval.<v3 ] XZ-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., Crestar Comments at 2 (supporting reduction to four months); ACTA Comments at 11 (supporting reduction to 30 days); PCIA Comments at 1516 (supporting reduction to 6 months).< The majority of commenters oppose a reduction because of adverse  X_-impacts on seasonal subscribers that do not need a toll free number yearround._ ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., SNAC Comments at 11; NIMA Comments at 4; LDDS WorldCom Comments at 5. MCI contends that suspended service is often due to nonpayment or billing disputes, which often  X1-take longer than four months to resolve.1] ] X?-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# MCI Comments at 56. Most of those numbers are either reactivated or returned to spare in less than 12  yO(-months. Id. In addition, U S West asserts that a reduction in the suspended interval will not yield significant savings in toll free numbers since only a small fraction of all toll free numbers are in suspended status, and seasonal subscribers hold  X -most of those numbers.  ] Xs-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#U S West Comments at 89; see also SNAC Comments at 11. U S West supports an appropriate pricing structure and the ability  X -to tag seasonal numbers uniquely for potential subscribers.  ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# U S West Comments at 89. AT&T suggests limiting the quantity of numbers a RespOrg may hold in suspended status to reduce the likelihood that  X -RespOrgs will keep numbers in that status for inappropriate reasons. 8 ] X!-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#AT&T Comments at 1011.  Xy-` `   (2)hhCDiscussion"y%0*$$33"Ԍ X-ԙ   554.` ` We conclude that changing certain elements of the aging process will result in more efficient use of toll free numbers. First, we conclude that reducing the current six X-month disconnect interval to four months will not significantly inconvenience callers, subscribers, or RespOrgs. A reasonable interval between disconnection of one subscriber's service and assignment of the number to a new subscriber is necessary, and a fourmonth disconnect interval was effective during the 800 conservation plan. The experience of AT&T, one of the largest RespOrgs, indicates that a permanent reduction to that level will not cause the inconvenience some commenters predict. In fact, the reduction will reduce the quantity of numbers not in working status but still unavailable for assignment. Because of the anti X1-warehousing measures adopted today,w1 ] X -ԍ #X\  P6G;ɒP#See supra paras. 22 and 25.w we disagree with Pacific's contention that reducing  X -the disconnect interval may result in increased warehousing of toll free numbers. y ] XD -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See Pacific Comments at 45. We also conclude that a RespOrg may not retrieve a number from disconnect status and return it directly to working status when the fourmonth disconnect interval expires. Upon expiration, all numbers in disconnect status must go into the spare category. This should ensure that  X -numbers are placed in the disconnect category only when 800 service has been disconnected.  X- 655.` ` Second, we conclude that the 12month suspended interval should be reduced to eight months, and that only numbers involved in billing disputes shall be eligible for such status. The record indicates that the majority of numbers currently in suspended status are  XK-assigned to seasonal subscribers.K* ] X&-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Ameritech Comments at 1112; SNAC Comments at 1011; MCI Comments at 5. While the quantity of numbers in suspended status is  X4-relatively small,4 ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See U S West Comments at 89; SNAC Comments at 11. efficient allocation requires that numbers either be used by their subscribers or available for use by other potential subscribers. Seasonal numbers, therefore, may no longer be placed in suspended status. This should prevent RespOrgs from using the suspended and other nonworking statuses to keep toll free numbers in their control and  X-unavailable for reservation by the general public.w ] X-ԍ #X\  P6G;ɒP#See Appendix C for rules changes.w  X-` ` 6. Escrow Requirement  Xe-` `  a.Background "e&= 0*$$33"Ԍ  X- 756.` ` RespOrgs currently pay a monthly charge of 70 cents for each toll free number drawn from the SMS database. Similarly, a subscriber pays a service charge to the toll free  X-service provider for each toll free number assigned to that subscriber. In the NPRM, we sought comment on the feasibility of requiring a onetime deposit into an escrow account for each toll free number held in reserved status. Commenters were asked to address the effect of such a requirement on market participants' incentives to warehouse or hoard toll free numbers. We asked, if deposits were required, who should make the deposit, how large the deposit should be to encourage efficient use of numbers, and generally how an escrow account requirement should work. We also sought comment on the effect a deposit requirement would have on smaller RespOrgs, and whether RespOrgs should pass this charge on to the toll  X -free subscriber.m ] X| -ԍ #X\  P6G;ɒP#NPRM at 1369697.m  X -` `  b.Comments  X - 857.` ` Most commenters oppose the requirement of a deposit into an escrow account for every toll free number reserved, arguing that the requirement would unnecessarily burden  Xy-the industry.Ayy ] X-ԍ#X\  P6G;ɒP# See, e.g., MCI Comments at 2; Sprint Comments at 45; 800 Users Coalition Comments at 4; U S West Comments at 4; LDDS Comments at 5 (an escrow deposit requirement would harm smaller RespOrgs); MCI Reply Comments at 23 (vigorous enforcement of rules for abusers is more effective in preventing warehousing or hoarding of numbers); MFS Reply Comments at 23. Again, Allnet states that the Commission should seek a means of setting an "economically efficient" price for reserving 800/888 numbers, and that a deposit requirement is not the most efficient means of sending this price signal. Allnet argues that deposits are inefficient because the "cost of a deposit" is only the time value of money. Thus, Allnet states, the deposit has to be high enough so that the time value of losing the use of that  X-money is equal to the economic price of holding the number.k ] X9-ԍ#X\  P6G;ɒP# Allnet Comments at 3.k Similarly, Sprint argues that, if the deposit required is too low, it will not discourage effectively the unnecessary reservation of toll free numbers, but if the deposit is too high, it could financially burden RespOrgs and  X-discourage customers from subscribing to toll free service.k3 ] X -ԍ #X\  P6G;ɒP#Sprint Comments at 4.k  X- 958. ` ` Some commenters support the proposal but argue that the requirement should"' 0*$$333"  X-not apply to small RespOrgs. ] Xy-ԍ#X\  P6G;ɒP# See, e.g., Ameritech Comments at 67; Qwest Comments at 34; see also Qwest Reply Comments at 3. Avis recommends that RespOrgs, service providers, and thirdparty agents be required to make escrow deposits, and not be allowed to pass these costs to subscribers. Avis states that an entity should forfeit its escrow deposit if that entity traffics in toll free numbers, while subscribers who have exhibited a minimum amount of usage  X-should be exempted from the escrow requirement.y ] X-ԍ #X\  P6G;ɒP#Avis Comments at 25; see also Enterprise Comments at 5; Bass Tickets Comments at 2.  Xv-` `  c. Discussion  X_-  XH- :59.` ` We decline to impose an escrow deposit requirement. Such a requirement may reduce the incentive of RespOrgs, service providers, or subscribers to warehouse numbers, but we are persuaded that the same outcome can be achieved through other measures, such as the  X -certification requirement adopted above.p * ] X-ԍ #X\  P6G;ɒP#See supra para. 25. p We also conclude that our finding that warehousing is an unreasonable practice under the Communications Act and is subject to Commission sanctions will discourage warehousing. Further, the costs associated with managing escrow deposits for the millions of available toll free numbers appear to be burdensome. We will reconsider our decision on an escrow deposit requirement if the  X-protections we institute in this Second Report and Order do not effectively discourage warehousing.  Xb-   XK-` ` 7. Use of PINs   X-` `  a.Background  X- ;60.` ` In the NPRM, the Commission noted that Personal Identification Number (PIN) technology permits more intensive use of toll free numbers because the number of customers able to use a single toll free number increases exponentially with the number of  X-digits in the PIN.A ] X6-ԍ#X\  P6G;ɒP# NPRM at 13698. The number of customers potentially able to use a single toll free number when each  yO -customer is assigned a PIN is approximately equal to 10N, where N is equal to the number of digits in the PIN. For example, a PIN with 6 digits could offer as many as one million customers access to inbound toll service from a single toll free number. We note that such intensive use would, in most cases, not be feasible. The Commission, however, observed that PINs require tollfree callers to dial additional numbers and that numbers using PINs are not portable. The Commission "( 0*$$333"  X-concluded that a PIN "requirement" was not justified,Y ] Xy-ԍ #X\  P6G;ɒP#Id.Y but sought comment on how to encourage the use of PINs for services, such as personal toll free services or paging services, which are more likely to use the toll free numbers assigned to them with PINs.  X-` `  b.Comments  Xv- <61.` ` Many commenters recognize PINs' value in slowing toll free number  X_-consumption, but argue that the Commission should not mandate PIN usage.Y _y ] X -ԍ #X\  P6G;ɒP#See, e.g., Sprint Reply Comments at 13. See also MCI Comments at 67 and AT&T Comments at 112. As carriers that offer PINs for personal toll free service, MCI and AT&T argue that carriers should determine  yO: -when PIN usage is appropriate, and support a policy of encouraging rather than mandating PIN usage. See also SNET Comments at 9 (the Commission should reward use of PINs by eliminating requirements that may be attached to numbers that do not utilize PINs).Y LCI and CWI discuss the limitations of PIN technology, arguing that it is not compatible with services like call forwarding and faxtofax communications because such services do not allow the entry  X -of additional digits.} J ] X-ԍ #X\  P6G;ɒP#CWI Comments at 3; LCI Comments at 67.} Other commenters note that number portability is not possible with  X -PIN usage$  ] X-ԍ #X\  P6G;ɒP#See Qwest Comments at 45; OPASTCO Comments at 1011. See also SNET Comments at 9 (the benefits of improved toll free number utilization outweigh the potential number portability limitations). $ and that the requirement of dialing additional digits lowers the value of toll free  X -numbers using PINs.w t ] X-ԍ #X\  P6G;ɒP#See NEXTLINK Comments at 3.w Some toll free service subscribers state that the likelihood of misdialed calls is directly related to the number of digits dialed and that, when a toll free  X -number handles many calls, the use of PINs is unworkable. % ] X-ԍ #X\  P6G;ɒP#Avis Comments at 910; Service Merchandise Comments at 4. PCIA states that a policy encouraging the use of PINs unreasonably presumes that lower volume uses of toll free  X-service have an inherently lesser value. ] X-ԍ #X\  P6G;ɒP#PCIA Comments at 3, 810; see also PageNet Comments at 1112. U S West does not support any artificial encouragement of PIN usage, but, rather, favors letting the market drive the appropriate  Xb-behavior.jb ] X"-ԍ#X\  P6G;ɒP# U S West Comments at 911.j "K)80*$$33"Ԍ X- =62.` ` Vanity International favors required shareduse on all 800 numbers for personal  X-voice mail, homes, cellular phones, and pagers.s ] Xb-ԍ #X\  P6G;ɒP#Vanity International Comments at 4.s The 800 Users Coalition supports a PIN technology requirement for services characterized by companies that obtain large pools of  X-numbers which are used for low calling volume services.y ] X-ԍ #X\  P6G;ɒP#800 Users Coalition Comments at 78; see also TRA Comments at 89. See also NYCHA Reply comments at 5 (require PINs for users with high volume of numbers assigned to them).  X-` `  c.Discussion  X_- >63.` ` Based on the record before us, we conclude that we will not require the use of PINs. We find that incentives already exist for using PIN technology. For example, a service provider using a fourdigit PIN would achieve fifty percent coverage or 5000 customers per toll free number and would pay only one 70 cent service charge a month for SMS database fees. If this service provider assigned an individual toll free number to each of its 5000 customers it would pay $3,500 a month in SMS database fees. Thus, by using only one 800 number and a fourdigit PIN, the service provider saves $3,499.30 a month. Also, requiring PIN usage would thwart the objective of increasing the portability of toll free numbers. Consequently, we conclude that the benefits of requiring PIN usage noted by some commenters are outweighed by the disadvantages of such a requirement.  Xb- ` ` 8. Partitioning  X4-` `  a.Background  X-  ?64. ` ` Partitioning is defined as assigning specific toll free SACs to subscribers of  X-particular types of services dependent upon access to toll free dialing numbers (e.g., 800 for business entities, 888 for personal and paging subscribers, 877 for data and fax subscribers).  X-In the NPRM, we sought comment on whether we should "partition" toll free service, leaving business entities and the majority of vanity number holders in the 800 SAC, while assigning subsequent toll free codes, like 888, to personal and paging subscribers and subscribers of  X|-other services that may develop.| ] X -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13704. Ē We noted that any partitioning plan must be consistent with the Communications Act and may not be unreasonably discriminatory toward any"e*0*$$33"  X-particular class of carrier.y ] Xy-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. (citing Ameritech Order, 10 FCC Rcd 4596, for the premise that Ameritech's overlay plan to provide area code relief by restricting cellular and paging carriers to a particular area code was found to be unreasonably discriminatory by the Commission).  X-  X-` `  b.Comments    X-     @65.` ` Several commenters support a "SAC by service" approach, whereby 800 numbers would be reserved for business applications and new toll free codes would be  Xv-reserved for personal and paging services, as well as data and fax functions.v  ] X0 -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See 800 Users Coalition Comments at 813; Telco Planning Comments at 4; CMA Comments at 12; ARINC Comments at 24.  The 800 Users  X_-Coalition proposes that existing "nonconforming assignments" (i.e., nonbusiness applications) in 800 would be grandfathered, but would eventually migrate to the new SACs by attrition. The 800 Users Coalition states that such an approach would eliminate caller confusion and prevent brokering and other noncompetitive uses of equivalent toll free numbers. The 800 Users Coalition also believes partitioning would: further the goals of the NANP to facilitate entry into the communications marketplace; facilitate easy access for consumers to the public  X -switched network; and not give an undue advantage to any particular industry segment.  ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#800 Users Coalition Comments at 813. Other commenters give qualified support to partitioning of toll free services. TLDP advocates economic incentives to encourage partitioning, such as requiring 800 service providers to increase their monthly SMS fee from 70 cents to $2 or $3 and exempting new toll free codes  Xy-from such a charge.y3 ] X]-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# TLDP Comments at 34.     XM- A66.` ` Numerous other commenters oppose partitioning toll free service, arguing that  X6-it could require a massive transfer of subscribers from 800 to 888,6 ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See NYNEX Comments at 9; Bell Atlantic Comments at 9; Scherers Comments at 17. and that it would be  X-unreasonably discriminatory to force parties to change their numbers. ] Xe -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See PCIA Comments at 1213; Pacific Comments at 14; Bell Atlantic Comments at 9; UniTel Comments at 4. Bell Atlantic asserts that partitioning would violate the Commission's ruling on geographic area codes in the"+0*$$33 "  X-Ameritech Order. ] Xy-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Bell Atlantic Comments at 9 (citing Ameritech Order, 10 FCC Rcd 4596 (1995)). See also PageNet Reply Comments at 11. AirTouch contends that the Commission underestimates the importance of 800 numbers to paging users and states that, if forced to transfer to 888, current 800  X-paging subscribers would suffer great disruptions of service.  PCIA asserts that partitioning is unreasonable because there is no technical reason to require paging subscribers to accept toll free services under different terms and conditions than other toll free service subscribers.  X-PCIA also contends that partitioning would substantially limit toll free number portability.A ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# PCIA Comments at 1213.   Xv-   X_-` `  c.Discussion  X1- B67. ` ` As some commenters note, there would be some advantage to partitioning. For example, a "SAC by service" approach could eliminate some caller confusion because SACs  X -would be associated with particular types of services.u  ] X-ԍ#X\  P6G;ɒP# 800 Users Coalition Comments at 913.u The approach also could lessen  X -incentives for number brokering,Y  ] X@-ԍ #X\  P6G;ɒP#Id.Y and could minimize the right of first refusal issue.m T ] X-ԍ #X\  P6G;ɒP#Telco Planning Comments at 4.m While these arguments have some merit, we conclude that partitioning would not serve the public interest for several reasons. First, we find that partitioning would be unreasonably discriminatory because 800 numbers would, at least initially, enjoy greater recognition than would numbers in new toll free SACs. We disagree, therefore, with the 800 Users Coalition assertion that partitioning would not unduly benefit any particular market segment. "Non Xb-conforming" entities (e.g., nonbusiness applications such as paging and fax services) permitted to grandfather their numbers in 800 would have an advantage over competitors that would have to use a new SAC. Second, partitioning would require multiple 8XX codes to be opened immediately, which is not possible because the necessary software is still being developed. Third, it would be inefficient and costly to assign SACs by service when it is unclear that there would be sufficient service demand to consume most, if not all, of the numbers in a particular code. It is also unclear who would pay for development of multiple SACs if there were little demand for numbers within a particular code and, therefore, insufficient revenue to justify opening a new code. Fourth, some codes currently reserved for toll free service may be used for another purpose if the relative demands for INPAs change, which could not occur if toll free service was partitioned by SAC. "|, 0*$$33"Ԍ X-ԙ B.` ` MISDIALED CALLSq  X-` ` 1. Background  X- C68.` ` In the NPRM, we recognized that many toll free numbers, such as those used  X-by telemarketing firms, receive a high volume of calls each day. ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# NPRM at 13704. We also acknowledged that, soon after the introduction of a new toll free code, there is a strong likelihood that a subscriber with a sevendigit number in one toll free code corresponding to a high volume  XH-sevendigit number in another toll free code might receive many misdialed calls.Hy ] Xr -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id. We sought comment on whether there should be some protection for the new toll free subscriber that obtains a number corresponding to a high volumenumber in another code. We sought  X -comment on how such a number should be identified in the SMS database. * ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Id.Ā The NPRM  X -also sought comment on requiring carriers to provide a transitional gateway intercept during the transition to 888. Under such a system, a consumer calling, for example, either "1800THECARD" or "1888THECARD" would first reach an intercept message that would help  X -the consumer clarify which entity he wanted to reach before the call was completed.  ] X3-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 1369899.  Xy- ` ` 2. Comments   XK-  D69.` ` BellSouth contends that no special measures should be developed for high volume numbers because misdialed numbers are not unique to toll free calls, and maintains  X-that these matters are best addressed on a casebycase basis. ] XZ-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#BellSouth Comments at 20; see also Unitel Comments at 4; MCI Comments at 18; Pacific Comments at 15. MCI asserts that it would be  X-difficult to determine in advance which NXXs would be in high demand. ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#MCI Comments at 12; see also AT&T Comments at 14 (stating there is no practical way to identify high demand NXXs). Sprint maintains  X-that multiple standards will complicate the reservation process.~ ] X#-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Sprint Comments at 910. Many commenters note that providing protection for a toll free subscriber that obtains a new number corresponding to a"-/0*$$33" high volume number in another code would necessitate modifications in the SMS database to  X-identify these high volume numbers.  ] Xb-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., Pacific Comments at 15; U S West Comments at 25; MCI Comments at 18; Bell Atlantic Comments at 10; Ameritech Comments at 34.  Pacific maintains that toll free subscribers' traffic patterns are proprietary to RespOrgs and have great competitive value, and that an  X-unscrupulous RespOrg could use the information to identify target markets.A ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Pacific Comments at 15; see also Ameritech Comments at 34. Other commenters suggest that, since the scope of misdialed toll free numbers is unknown, a  X-separate forum such as the Industry Numbering Committee ] X0 -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# PageNet Comments at 15. See also LCI Comments at 9. or the SNACg ] X -ԍ#X\  P6G;ɒP#U S West Comments at 26.g should study the problem further.  XH- E70.` ` Several commenters support special treatment for 888 numbers corresponding to high volume 800 numbers. GSA offers two proposals to ameliorate the problem of misdialed numbers: (1) require that the 888 equivalent of high volume 800 numbers not be assigned until the public is accustomed to multiple toll free codes; and (2) prevent new highvolume users from being assigned 888 numbers so that the 800 number equivalent does not  X -receive misdialed calls. T ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# GSA Comments at 4. See also U S West Reply Comments at 56; BellSouth Comments at 1516; Coalition Comments at 20.  Ameritech contends that the Commission should direct the industry, through the SNAC, to identify NXXs that would be subject to special treatment, and proposes a rule that numbers in those NXXs cannot be reserved without a specific subscriber request  X-and cannot be reserved through computergenerated reservation programs. ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Ameritech Comments at 1617. MFS supports requiring placement of certain highdemand 888 numbers in a special availability pool, which  Xb-would be released for general availability on a completely random basis.Gb~ ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# MFS Comments at 8; see also Telco Planning Comments at 3 (supporting a twotier reservation process: one tier for high volume and vanity numbers and another tier for "regular" toll free numbers).G Both Telco  XK-Planning and AirTouch offer solutions to the misdialing problem.K ] X!-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#AirTouch Comments at 19; Telco Planning Comments at 6. AirTouch suggests a"K.0*$$33g"  X-requirement that each RespOrg report to the Commission "its top 10% usage numbers" ] Xy-ԍ#X\  P6G;ɒP# AirTouch, however, fails to define the category of "top 10% usage numbers." and delay the assignment of these numbers for six months so that the public will become familiar  X-with the new SAC.y ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP#AirTouch Comments at 19. Telco Planning proposes establishment of two intervals for disconnected numbers: (1) one year for highvolume numbers; and (2) 90 days for numbers  X-that would naturally result in a low volume of misdialed numbers (e.g., certain personal toll  X-free numbers). * ] Xh -#Xj\  P6G;ynXP#э #X\  P6G;ɒP#Telco Planning Comments at 2. According to Telco Planning, this measure would permit the low volume numbers to be assigned earlier, and reassigning the low volume numbers before the high X_-volume numbers would "naturally result in very low misdials if reactivated [sooner]."Y _ ] X -ԍ #X\  P6G;ɒP#Id.Y  X1- F71.` ` Most commenters addressing the proposed transitional gateway intercept oppose  X -such a requirement.   ] XW-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., TRA Comments at 20; Ameritech Comments at 3233; Pacific Comments at 13; British Airways Reply Comments at 6; Bass Pro Comments at 7. Reasons cited in opposition include cost,   ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See, e.g., MCI Comments at 16; UniTel Comments at 4; ACRA Comments at 89. annoyance to the toll free  X -caller,  ] Xj-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See Pacific Comments at 13; Ameritech Comments at 3233; Bell Atlantic Comments at 9. caller confusion, and lack of the necessary technology. g ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., 800 Users Coalition Comments at 2324; Bass Pro Comments at 7; Weather Channel Comments at 78; Pacific Comments at 13; TRA Comments at 20. The 800 Users Coalition  X -advocates a voluntary transitional gateway intercept.  ] X}-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# 800 Users Coalition Comments at 2324. See also NYCHA Reply Comments at 12. DMA supports a transitional intercept, but not as a substitute for a permanent policy protecting 800 vanity number subscribers  X -against similar 888 numbers that confuse consumers.  ] X -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# DMA Comments at 14 n.5.  X- ` ` 3. Discussion   Xb- #XP\  P6QynXP#  G72. ` ` The record in this proceeding has persuaded us not to adopt any special "b/B0*$$33" measures to protect new 888 number holders who obtain a number corresponding to a highvolume number in the 800 code. We conclude that public education and awareness campaigns will address consumer confusion that could lead to misdialed 800 and 888 toll free calls. Moreover, many equivalent highvolume numbers in 888 have been marked "unavailable" as part of the vanity number setaside program to "minimize consumer  X-confusion during the initial transition to the 888 service code."u ] X-ԍ #X\  P6G;ɒP#See Bureau Order at 2498.u We anticipate that these measures will minimize the costs of misdialed calls received by some subscribers. In addition, many personal 888 numbers assigned a PIN cannot receive misdialed calls intended for the 800 subscribers because these personal toll free numbers will be protected by the use of a PIN.  X - H73. ` ` We find that the solution offered by AirTouch to require RespOrgs to report their top 10% usage numbers and delay the assignment of those numbers when a new SAC is introduced and the solution offered by Telco Planning to establish two intervals for disconnected numbers are creative responses to the problem. However, they are administratively burdensome and difficult to implement. We agree with Pacific that a  X-competing RespOrg could use the information suggested by AirTouch (i.e., identifying the mostused numbers) to target subscribers. Also, Telco Planning's proposal hinges on the SMS database's ability to identify all high volume numbers, yet no commenter has suggested whether or how the SMS database would need to be modified to identify these numbers. We conclude that a better approach, as suggested by PageNet and U S West, is for the industry to determine whether to study the scope of the misdialed toll free number problem, and to inform the Commission of the results of any study.  X- I74. ` ` We disagree with BellSouth's claim that no special measures are needed because misdialed calls are not unique to toll free numbers. In the case of toll free numbers, the subscriber receiving the misdialed calls must either bear the cost of those calls or track them so that it may receive credit from its toll free service provider. Since misdialed calls are inevitable, we expect carriers to resolve billing disputes related to misdialed toll free calls promptly.  X7- J75.` ` We conclude that it is not now practical to require transitional gateway intercepts. We are concerned that many networks lack the technology needed to support  X -transitional gateway intercepts. y ] X3"-ԍ#X\  P6G;ɒP# See, e.g., MCI Comments at 16; NYNEX Comments at 9. We do not have an adequate cost analysis, and thus cannot conclude that the proposal is in the public interest. Further, transitional gateway intercepts"0*0*$$33"  X-might increase postdial delay, call setup times, and access times.v ] Xy-ԍ #X\  P6G;ɒP#See Ameritech Comments at 3233.v  X-  X- D.` ` PERMANENT CAP ON RESERVATIONS  X-` ` 1. Background  Xv- K76.` ` To deter warehousing, existing Industry Guidelines have established a cap on the quantity of numbers that a RespOrg may have in reserved status at any point. That cap is  XH-15 percent of a RespOrg's working numbers or 1000 numbers, whichever is greater.~Hy ] Xr -ԍ #X\  P6G;ɒP#Industry Guidelines at  2.2.5.~ We sought comment on whether a permanent cap on reserved numbers of three percent or some  X -other number lower than 15 percent should be imposed to reduce warehousing. * ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# NPRM at 13701.  X - ` ` 2. Comments  X -  L77.` ` Commenters generally support maintaining a cap on the quantity of numbers that a RespOrg is allowed to reserve. Many support retention of the cap set forth in the  X-Industry Guidelines. ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See, e.g., CWI Comments at 12; Ameritech Comments at 278; SNAC Comments #Xj\  P6G;ynXP#at 16. Other commenters suggest caps between three and 15 percent. ] X-ԍ#X\  P6G;ɒP#AT&T Comments at 8 (eight percent); Scherers Comments at 14 (eight percent); LDDS Comments at 12 (10 percent); and Unitel Comments at 3 (three percent). NYNEX asserts that the practice of basing the cap on a percentage of working numbers is flawed because as working numbers increase, the cap rises but the quantity of available toll free numbers falls. NYNEX suggests that the industry, with the Commission's help, should develop a formula that considers a RespOrg's market share and growth potential as well as  X-the diminishing supply of toll free numbers. ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NYNEX Comments at 23. MFS does not support a cap as low as three percent because a cap this low could limit new RespOrgs' abilities to maintain steady growth  X-rates. ] XV"-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#See MFS Comments at 9. CTA asserts that any cap imposed on the industry should not be usage based.jg ] X$-ԍ #X\  P6G;ɒP#CTA Reply Comments at 56.j "10*$$33" NEXTLINK argues that the cap should be an absolute number imposed equally upon all RespOrgs because a cap based on a percentage of working numbers constrains small  X-RespOrgs. ] XK-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See NEXTLINK Comments at 5. USTA argues that a permanent cap on reserved numbers is contrary to the spirit of business in a competitive environment and that any restrictions should be limited to those  X-imperative for the orderly conduct of business.y ] X-#Xj\  P6G;ynXP#э#X\  P6G;ɒP# See USTA Comments at 9. Sprint argues that the Commission should  X-codify the Industry Guidelines. For example, Sprint argues that rather than specifying that a RespOrg may reserve 1000 numbers, the rule should state that a RespOrg may reserve  X_-numbers in accordance with section 2.2.5 of the Industry Guidelines. Sprint argues that this  XH-would give the industry flexibility to revise the rules to meet changing circumstances.H* ] X# -#Xj\  P6G;ynXP#э#X\  P6G;ɒP# Sprint Comments at 10.  X -      ` ` 3. Discussion   X -  M78.` ` We conclude that, without any market mechanism to discourage warehousing, a cap on a RespOrg's ability to reserve numbers is necessary. A cap assures all RespOrgs that other RespOrgs cannot stockpile large quantities of numbers through the reservation process  X -and so discourages "runsonthebank." The record indicates that it is necessary to reduce the  X-current cap, which is based on the percentage of numbers in "working" status. The industry had set a cap of 15 percent when only numbers in the 800 code were available for toll free service. The addition of numbers in the 888 code essentially doubles the quantity of numbers available for toll free service and, eventually, working toll free numbers. We, therefore, adopt a cap of 7.5 percent of a RespOrg's working numbers to reflect this increased supply of toll free numbers. We agree that a cap based on a percentage of working numbers places RespOrgs without a large quantity of numbers in "working" status at a disadvantage. The  X-Industry Guidelines acknowledge this disadvantage by setting a minimum cap of 1000 numbers. Several commenters assert that a minimum cap of 1000 numbers constrains small RespOrgs because small RespOrgs sometimes experience large spurts of growth. We conclude that doubling the minimum number of toll free numbers that RespOrgs may hold in  X-"reserved" status (i.e. 2000 numbers) will allow newer RespOrgs to grow without being  X|-constrained by a percentagebased cap, but will not increase warehousing.AX| ] X!-ԍ#X\  P6G;ɒP# Increasing the minimum number to 2000 numbers will decrease the number of RespOrgs affected by the decrease in the percentagebased cap. For example, with a cap equal to 15 percent of working numbers or 1000 numbers, whichever is greater, a RespOrg with 13,333 working numbers could have up to 2000 numbers in reserved status. The reduction of the percentage cap from 15 to 7.5 reduces the quantity of numbers this"#0*$$#" RespOrg is allowed to have in reserved status from 2000 to 1000 and, therefore, results in a more binding constraint on this RespOrg. An increase to 2000 as the minimum number of numbers that a RespOrg can have in reserved status eases this constraint.  We further"|20*$$33" conclude that these changes will rebalance the interests of new and established RespOrgs, but will not change the impact on the pool of spare toll free numbers.  X- N79.` ` We agree with NYNEX that a cap based on a percentage of working numbers does not necessarily constrain a RespOrg's ability to reserve numbers. However, we do not intend to impose a cap that restricts a RespOrg's ability to reserve numbers to meet its subscribers' needs. We conclude that the new cap should prevent RespOrgs from reserving an unreasonably high quantity of numbers, and will therefore curtail warehousing and prevent premature depletion of numbers, but is flexible enough to allow all RespOrgs to provide service to their subscribers. For these reasons, we reject a cap expressed solely as a number.  X - O80. ` ` We also agree with NYNEX that a percentagebased cap alone is troublesome  X -because the cap rises as the quantity of numbers available for reservation falls. In response to NYNEX's observation, we limit the total number of numbers that a RespOrg may have in reserved status at any one time. We conclude that no RespOrg may increase the quantity of numbers it holds in reserved status if that quantity is greater than three percent of the numbers available in the spare pool as of the preceding Sunday at 12:01 a.m. ET. Thus, RespOrgs may reserve either 2000 numbers or 7.5 percent of a RespOrg's working numbers, whichever is greater. In no event, however, may a RespOrg reserve more than three percent of the number of numbers available in the spare pool as of the previous Sunday at 12:01 a.m. ET. This measure will balance the draw among all RespOrgs when the pool is low, and will conserve numbers while reducing the likelihood of the necessity for "emergency" action by the Common Carrier Bureau.  X- E.` ` DATA LINK PERFORMANCE  X- ` ` 1. Background   X|- P81. ` ` The Commission understands that there is a limit to the number of transactions that the data links between the SMS database and the SCP can accommodate in any fixed  XN-period.C N ] X -ԍ #X\  P6G;ɒP#A data message containing routing information is sent from the SMS database to each SCP when a toll free number is changed from assigned to working status. Once all SCPs have the proper routing information, the toll free number subscriber can receive calls. Similar data messages are sent from the SMS database to the SCPs over these same data links when there is a change in toll free number information, such as when a subscriber disconnects the number or changes its toll free service provider.C We also recognize that the number of data messages these links are expected to"N30*$$33^" carry after the introduction of a new code may exceed the data links' maximum capacity. We remain concerned that these factors might affect the performance of the SMS database system, particularly its ability to send errorfree data messages with accurate routing information to the SCPs. Without this accuracy, the quality of all toll free service could be affected. We sought comment on whether we should require the SCP owners to increase the data links' capacity to accommodate the increased volume of traffic anticipated when the 888 code was first opened for reservations, or whether the expected increase in volume would be only  X_-temporary (i.e., triggered by unmet demand for toll free dialing numbers and the introduction of the new code).  X - Q82. ` ` We also asked commenters to identify actions the Commission might take to ensure no degradation in the performance of the SMS database when there is a high volume of activity. Specifically, we proposed allowing number reservation 45 days before network activation of the next toll free code. The reserved numbers could not be changed to working status, however, before the activation date. Finally, we sought comment on the proposal to limit the quantity of numbers that can change from reserved to assigned to working status in  X-one day.d  ] X -ԍ #X\  P6G;ɒP#NPRM at 13699.d  Xb- ` ` 2. Comments   X4- R83. ` `  Many SCP owners oppose requiring expansion of the data links between the  X-SMS database and the SCPs.!y ] XG-ԍ#X\  P6G;ɒP# See, e.g., GTE Comments at 78; NYNEX Comments at 4; SWBT Comments at 1112; BellSouth Comments at 89; U S West Comments at 1315. Unitel asserts that the issue of data links is being addressed in  X-the SNAC forum and should be resolved by consensus among the interested parties.f" ] X-ԍ#X\  P6G;ɒP# Unitel Comments at 20.f Avis supports the Commission's effort to ensure that there is no degradation in the performance of  X-the SMS database during times of high activity.# ] X,-ԍ #X\  P6G;ɒP#Avis Comments at 8; see also Sprint Comments at 1213. MCI asserts that if the Commission is concerned that the volume may exceed the "technological capabilities of Bellcore and some of  X-the LECs, "the Commission should direct SCP owners to upgrade their data links.f$T ] X!-ԍ#X\  P6G;ɒP# MCI Comments at 1213.f  X|- ` ` 3. Discussion "|4 $0*$$332"Ԍ X-ԙ S84. ` ` We remain concerned about potential degradation in SMS database performance when there is a high volume of activity on the data links. We do not, however, require carriers to increase the capacity of the data links to handle more data messages. We agree that the pace of network enhancements should be driven by actual industry needs, and are confident that the SCP owners will increase the capacity of their data links if expansion is warranted. Further, we recognize, as Unitel has suggested, that the SNAC is addressing the "issue of data links," and we anticipate that SNAC will notify the Commission if it determines that there may be degradation in the performance of the SMS database because of the increase in toll free traffic. We also decline to limit the quantity of numbers that can change from reserved to assigned to working status in any one day. The record did not support this proposal, and we rely on the statements of several commenters who asserted that the existing  X -capacity of the system can handle the normal daily operations of the SMS database.t% ] X| -ԍ#X\  P6G;ɒP# U S West at 1315; BellSouth at 89.t Further, the Bureau has already determined that early reservation should be permitted and that  X -early reservation will reduce the burden imposed on the SMS database.k& y ] X-ԍ #X\  P6G;ɒP#Bureau Order at 2504.k We also note that, since deployment of the 888 SAC, we have received no reports of problems in downloading  X -information from the SMS to the SCP.  Xb-F.` ` PUBLIC AWARENESS AND INDUSTRY PARTICIPATION  XK-  X4- ` ` 1. Background   X- T85.` ` In the NPRM, we sought comment on whether, in addition to the educational efforts already underway, there should be efforts to heighten public awareness of the  X-introduction of new toll free codes.j'* ] X-ԍ #X\  P6G;ɒP#NPRM at 13705.j Both the Commission and the telecommunications industry have sponsored education initiatives to inform the public of the new toll free 888 numbers. For example, between June 1995 and April 1996, the Bureau had public biweekly meetings with the industry to discuss preparation of the network to support the 888 toll free code. In the first meeting, the industry reported its plans to launch independent public relations campaigns, including hiring public relations firms to conduct multimedia campaigns, training sales staff, conducting press interviews and issuing press releases about the new toll  X7-free 888 SAC. The NPRM sought comment on who should conduct and pay for further"75'0*$$33"  X-public awareness efforts, and what other forms future educational efforts should take.Z( ] Xy-ԍ #X\  P6G;ɒP#Id. Z  X- ` ` 2. Comments   X- U86.` ` Several commenters suggest that the Commission should require all carriers to  X-have an educational plan for the 888 SAC and future toll free codes.t)yy ] X-ԍ#X\  P6G;ɒP# See, e.g., 800 Coalition Comments at 25; ARINC Comments at 6; MCI Comments at 22 (MCI has planned its own education campaign but would not oppose a limited industry educational effort to share the costs; it proposes that all carriers contribute to funding educational activities).t Specifically, the 800 Users Coalition, supported by NYCHA, urges the Commission to require all carriers to: (1) share in the costs of educating the public; (2) collectively conduct a multimedia campaign that covers more than the top 35 geographic markets; and (3) invest, at minimum, the same resources in terms of media, scale, scope and effort that local exchange companies historically  X -use to introduce new area codes or other changes in local numbering plans.*  ] X-ԍ#X\  P6G;ɒP# 800 Coalition Comments at 25; NYCHA Reply Comments at 13. They claim that carriers are best positioned to educate the general public regarding changes in  X -telecommunications services.d+ k ] X-ԍ #X\  P6G;ɒP#ARINC Comments at 6.d Other commenters urge the Commission to issue consumer bulletins and advisories because the Commission's consumer advisories attract more attention  X -than press releases from carriers.,  ] X-ԍ#X\  P6G;ɒP# See, e.g., NIMA Comments at 9; Bell Atlantic Comments at 11; Sprint Comments at 26; Ameritech Comments at 39. Some commenters support the Commission's establishing special educational efforts for 800 number subscribers to address concerns regarding vanity  X-numbers.- ] X-ԍ #X\  P6G;ɒP#See Wise Comments at 9; DMA Comments at 17. Several commenters oppose the Commission's mandating educational efforts and  Xy-anticipate that competition in the toll free market will compel such efforts..yF ] Xp-ԍ#X\  P6G;ɒP# See, e.g., Pacific Comments at 6; NIMA Comments at 9; SNET Comments at 15; Sprint Comments at 26; Ameritech Comments at 39. Sprint argues that education campaigns are business decisions; individual toll free providers should  XK-determine their form and financing.l/K ] X"-ԍ #X\  P6G;ɒP#Sprint Comments at 26.l "46p/0*$$33"Ԍ X- ` ` 3. Discussion  X-  X- V87.` ` We agree with those commenters asserting that competition in the toll free market will precipitate public education. AT&T began its educational efforts in September  X-1995.0 ] X-ԍ#X\  P6G;ɒP# See AT&T Launched National Education Program to Introduce New 888 TollFree Prefix, August 16, 1995, AT&T News Release. MCI has also developed a public awareness program. We would expect these educational efforts to cause other toll free service providers to adopt educational programs. Subscribers may seek out those carriers they associate with 888 (and future toll free codes) whether through multimedia campaigns, print advertisements or billing inserts. The low quantity of 800 numbers in the SMS database may also propel carriers to educate the public on 888 numbers because 888 numbers will be the only toll free numbers carriers will be able to offer their subscribers. We decline to require all carriers jointly to fund educational efforts; we agree with Sprint that such efforts are business decisions properly left to the discretion of the carrier. While we would fully support the joint effort MCI suggests, we find that it would be inappropriate for the Commission to mandate such efforts. In response to commenters asking the Commission to issue additional educational information regarding 888, we plan to  X -continue our efforts to educate the public on numbering plan changes as a general matterq1 A ] X-ԍ #X\  P6G;ɒP#In the fall of 1995, the Bureau began working with an Industry Outreach Committee to address issues posed by the introduction of interchangeable area codes, of which 888 is one. This group consisted of Bureau staff, carriers, switch manufacturers, private branch exchange ("PBX") manufacturers, state public utility commissions and the North American Numbering Plan Administrator ("NANPA"). The purpose of this group was to develop educational material on new area codes specially targeted for PBX owners, carriers and international countries.q through press releases, consumer alerts, and consumer fact sheets. Such information is also  Xy-available on our World Wide Web site.2y ] X-ԍ#X\  P6G;ɒP# Our home page address is: http://www.fcc.gov. A page dedicated to toll free service is accessible through the Common Carrier Bureau's home page. We encourage others to make information on toll free numbers available on their home pages as well.  X4-  G.` ` CIRCUIT BREAKER MODELS  X- ` `  1. Background   X- W88.` ` The stock and future exchanges use circuit breakers to restrict program trading in volatile markets by limiting access to computerized trading systems, thus halting trading over short periods of time. The Securities Exchange Commission ("SEC") and the Commodities Futures Trading Commission ("CFTC") adopted the circuit breaker rules in 1988"7S 20*$$33"  X-to allow volatile markets to cool off.t3y ] Xy-ԍ #X\  P6G;ɒP#See Securities Exchange Act Release Nos. 26386 (December 1988), 53 FR 52904; and 26198 (October  yOb-19,1988), 53 FR 41637. See also SEC, CFTC Approve Coordinated Trading Halts in Volatile Markets, 20 Sec Reg. & L. Rep. (BNA) No. 41, at 1580 (Oct. 21, 1988).t In the NPRM, the Commission sought comment on the adoption of a similar circuit breaker model as a means of promoting the effective use of  X-toll free numbers.c4  ] X-ԍ#X\  P6G;ɒP# NPRM at n.95.c While we understood that we could not apply the exact algorithm used in the stock market to the administration of toll free numbers, we tentatively concluded that a  X-circuit breaker rule for toll free numbers would serve the public interest.o5 ] X -ԍ #X\  P6G;ɒP#Id. at 13705.o We noted that circuit breaker rules would anticipate the problems posed by a rapid depletion of toll free numbers. We sought comment on whether other conservation proposals presented in the  X_-NPRM,6_k ] X{-ԍ #X\  P6G;ɒP#See, e.g., the Commission's proposal to reduce the amount of time a number can remain in any status  yOd-but working. NPRM at 1369798. if adopted, would make circuit breaker rules unnecessary. Finally, we sought comment on certain implementation issues, such as whether RespOrgs would comply with circuit breaker rules, what costs RespOrgs or DSMI would incur in developing any circuit breaker model adopted, and whether the SMS database administrator could enforce a circuit  X -breaker model.l7 ] X-ԍ #X\  P6G;ɒP#Id. at 1370506.l  X - X89.` ` The NPRM presented two circuit breaker models for comment.Z8 ] X-ԍ#X\  P6G;ɒP# Id.Z In the first model, a circuit breaker would be "triggered" after the percentage of toll free numbers in the spare pool declined to a specific level. Once the circuit breaker was in effect, the industry might be required to begin planning the implementation of the next toll free code and the Commission would evaluate whether it should limit the amount of toll free numbers each  Xb-RespOrg could reserve over a set period.`9ybF ] XY-ԍ #X\  P6G;ɒP# Id. See also id. at 13699700 ("we propose that the Commission identify a trigger that would alert the industry that the current toll free code is sufficiently near completion to require that the next toll free code be prepared for deployment.")` The second model, in contrast, would apply  XK-circuit breaker rules to the daytoday operation of the SMS database. RespOrgs would be"K890*$$33"  X-limited in the amount of numbers they could reserve from the spare pool in one day.g: ] Xy-ԍ#X\  P6G;ɒP# Id. at 1370506.g If a RespOrg exceeded that cap, this would trip the circuit breaker and the RespOrg's daily allocation would be set by a prescribed formula. This type of circuit breaker would prevent a large amount of toll free numbers from being removed from the database over a short time regardless of how many numbers remained in the database.  Xv-` ` 2 .  Comments  XH- Y90.` ` Several commenters questioned the need for a circuit breaker model in  X1-general.;1y ] X[ -ԍ #X\  P6G;ɒP#See, e.g., PCIA Comments at note 12; BellSouth Comments at 19; PageNet Comments at 15. NYNEX states that the proposed models are cumbersome to administer and  X -expensive to implement.<A * ] X-ԍ #X\  P6G;ɒP#NYNEX Comments at 10. See also Pacific Comments at 17 (it is difficult to prescribe remedies until the Commission has reached a conclusion based on its SMS database audit); SWBT Comments at 20 (the circuit breaker model would reward RespOrgs that grab numbers for customers who will not use them and is "bad public policy"). Other RBOCs contend that a circuit breaker model is not  X -necessary if other measures proposed in the NPRM are adopted.= 3 ] X-ԍ #X\  P6G;ɒP#See, e.g., Bell Atlantic Comments at 11; BellSouth Comments at 19. PageNet opposes  X -adoption of a circuit breaker model because it would create an "artificial restriction."g> ] X-ԍ #X\  P6G;ɒP#PageNet Comments at 15.g Instead, it urges the Commission to concentrate on assuring that the industry implements the  X -system upgrades required to make numbers available on a timely basis.Y? ] X-ԍ#X\  P6G;ɒP# Id.Y CompTel admits that, in the future, some rationing of toll free numbers may continue to be necessary to prevent depletion before a new code can be opened. Therefore, it does not oppose a "reasonable" circuit breaker rule applied during the implementation period before the  Xb-introduction of a new toll free code.@bF ] XY-ԍ #X\  P6G;ɒP#CompTel Comments at 18. See also CVS Comments at 5; NTC Comments at 1; NEXTLINK Comments at 7; MCI Comments at 17; Unitel Comments at 5. NEXTLINK claims that recent experience with the sudden acceleration of 800 number consumption demonstrated that an "equitable and predictable" mechanism is necessary to prevent abusive reservation practices and premature"49@0*$$33f"  X-depletion of numbers.jA ] Xy-ԍ#X\  P6G;ɒP# NEXTLINK Comments at 67. j NEXTLINK also suggests that a numerical cap may be lowered once  X-the first circuit breaker model's "trigger" for exhaust of the present code has been reached.YBy ] X-ԍ #X\  P6G;ɒP#Id.Y  X- Z91.` ` Regarding the second, daytoday, circuit breaker model proposed in the  X-NPRM, NEXTLINK suggests that the Commission adopt an absolute numerical cap applicable to all RespOrgs, and not a cap based on a percentage of the RespOrg's working numbers, because percentagebased caps unfairly penalize small RespOrgs. NTS also supports the second circuit breaker model to prevent stockpiling of toll free numbers, asserting that, without a circuit breaker, one or two RespOrgs will reserve over 80% of the available toll free  X1-numbers.C1* ] X -ԍ #X\  P6G;ɒP#NTS Comments at 1. In December 1994, over 90% of the "800555XXXX" numbers were reserved in less than ten minutes by a RespOrg with an MGI interface. Scherers proposes to limit the amount of numbers any RespOrg can reserve  X -during a fifteen minute period.nD  ] Xn-ԍ #X\  P6G;ɒP#Scherers Comments at 10.n Scherers argues that the allocation can be based upon current volume of numbers under any RespOrgs's control. Scherers states that its proposal will not prevent any company from conducting business and will allow the smallest RespOrgs  X -equal access to "attractive vanity numbers."YE T ] X-ԍ #X\  P6G;ɒP#Id.Y  X - [92. ` ` CompTel, like MCI, opposes a circuit breaker addressing daytoday operations because there is no evidence that the rate of consumption of numbers has caused problems  Xy-before the depletion of 800 numbers.mFy ] X/-ԍ#X\  P6G;ɒP# CompTel Comments at 17.m It also argues that the proposal would penalize carriers experiencing growth by freezing their consumption at a rate below their current  XK-needs.YGK ] X-ԍ#X\  P6G;ɒP# Id.Y Finally, CompTel argues that, if the model is applied to daytoday operations,  X4-RespOrgs that reserve numbers in bulk amounts can manipulate the model easily.fH4g ] XL!-ԍ #X\  P6G;ɒP#Id. at 19.f CompTel suggests that we assign a "neutral administrator" to study the circuit breaker concept and to":H0*$$33e"  X-report its findings to the Commission.YI ] Xy-ԍ #X\  P6G;ɒP#Id.Y CVS supports limiting the rate of number  X-reservation per unit of time.bJy ] X-ԍ#X\  P6G;ɒP# CVS Comments at 5.b  X-` ` 3.   Discussion   X-  X- \93.` ` The Commission is committed to ensuring that toll free numbers are available  Xv-and efficiently used. We decline, however, to adopt a daytoday circuit breaker model.bKyv* ] XQ -ԍ#X\  P6G;ɒP# We will consider the first model, which would trigger an implementation plan for the next toll free code, in a later order when we address other implementation issues regarding the 877 SAC and beyond. We will incorporate the comments on the first model into that order. b The daytoday model appears to be flawed, could only be implemented after further study,  XH-and appears unnecessary because of the other actions taken in this Second Report and Order  X1-and the Bureau Order to promote the efficient use of toll free numbers. This Second Report  X -and Order shortens several of the lag time periods, imposes a certification requirement on RespOrgs, and revises the maximum amount of numbers that RespOrgs may reserve at one time. The Commission may revisit the issue of a daytoday circuit breaker if these actions have little effect on promoting the orderly allocation of toll free numbers. Finally, by keeping "vanity numbers" in the unavailable status for the time being, we hope to avert certain RespOrgs from attempting to "stockpile" numbers.  Xy- H. Petitions to Modify 888 Number Allocation Plan  XK- ]94. ` ` The Commission has received three petitions requesting modification of the 888 number allocation plan. The petitions were filed by LCI International, Inc. (LCI), Consolidated Communications Telecom Services, Inc. (CCTS) and UniDial, Inc. (UniDial)  X-(collectively, Petitioners). Petitioners state that, because of the low supply of 800 numbers,lLk ] X"-ԍ#X\  P6G;ɒP# See n. 31 supra.l they are unable to obtain enough toll free numbers to meet their customers' needs. Because  X-the rules we are promulgating in this Order are essentially conservation measures themselves, we have directed DSMI to end the 888 number conservation plan when the rules we  X-promulgate today become effective.pM ] Xw"-ԍ #X\  P6G;ɒP#See para. 14, supra.p RespOrgs will not be restricted to their previous allocations of 888 numbers. Therefore, the petitions are dismissed as moot."; M0*$$33Q"Ԍ X-ԙ  X- IV.FURTHER NOTICE OF PROPOSED RULEMAKING  X-  X-  ` ` 1. Background   X- ^95. ` ` In the NPRM, we sought comment on the appropriate party to administer the toll free database. We noted that DSMI is currently the primary administrator of the toll free  X_-database,RNy_ ] X-ԍ#X\  P6G;ɒP# See NPRM at 13705. In response to industry concerns, Bellcore established DSMI for the purpose of administering the SMS/800, and subcontracted functions requiring access to proprietary customer information to a neutral third party, Lockheed IMS.R and stated that the RBOCs had announced plans to sell Bellcore, which is the  XH-parent company of DSMI.OH  ] X -ԍ#X\  P6G;ɒP# Id. See also para. 8, supra. We sought comment on whether DSMI should continue to administer the toll free database or whether another neutral entity, such as the North American  X -Numbering Plan Administrator, should be the administrator.YP  ] X-ԍ #X\  P6G;ɒP#Id.Y We asked parties to comment on whether the administrative database functions currently performed by DSMI and Lockheed should be performed by independent third parties not affiliated with Bellcore, the RBOCs, or  X -current owners of the regional databases.YQ k ] X-ԍ #X\  P6G;ɒP#Id.Y  X - _96. ` ` In the 800 Proceeding Order, the Commission stated that the SMS was administered by the NASC, which was administered by Bellcore. It noted, however, that the RBOCs and Bellcore had agreed to transfer responsibility for the daytoday operations to a  Xb-neutral third party.fRb ] X/-ԍ #X\  P6G;ɒP#Order at 1425. f The Commission rejected parties' arguments that SMS access did not have to be treated as a common carrier service and tariffed under Title II because the transfer of the daytoday operations of the SMS to a neutral third party would safeguard against discrimination by the SMS administrator. The Commission stated that it was not clear that transferring the operations to a neutral third party would reduce concerns about possible discrimination in the provision of the monopoly service of providing SMS access. According to the Commission, it reached its conclusions in light of the importance of ensuring that SMS access be provided at reasonable rates and on nondiscriminatory terms, and because of the  X-"untried nature" of the proposed alternative mechanisms for achieving these goals (i.e. transferring SMS administration to a neutral third party). The Commission concluded that,"< R0*$$33Q" under the BOC plans for providing SMS access to RespOrgs, such SMS access is a Title II common carrier service and should be offered pursuant to tariff, which would ensure that  X-SMS access would be provided on a nondiscriminatory basis and at reasonable rates.iS ] XK-ԍ #X\  P6G;ɒP#Order at 14261427.i  X- `97. ` ` The Commission further concluded that, based on how SMS access would be provided, the BOCs should file the tariff. The Commission noted that the BOCs, through Bellcore, had developed the SMS and would provide the SMS software, software maintenance and enhancement services, and billing and collection services. Bellcore initially would administer the SMS on a daytoday basis. The Commission noted that, when the BOCs subcontracted NASC responsibilities to an independent third party, that third party would receive a set fee for the administrative services it would perform, which would be largely ministerial in nature. The BOCs and Bellcore would retain general control over the  X -operation.TA y ] X-ԍ #X\  P6G;ɒP#Order at 1427, citing letter from Anthony M. Alessi, Director Federal Regulatory, Ameritech, to Donna Searcy, Secretary, FCC, January 28, 1993; letter from Marie Breslin, Director, FCC Relations, Bell Atlantic, to Donna Searcy, Secretary, FCC, March 13, 1992, and 800 Data Base Access Service Implementation Plan, March 2, 1992, at 3234.  The Commission directed that, since there is only one SMS, there should be one tariff for SMS access; the BOCs should file a single joint tariff, or one BOC should file a  X -tariff in which the others concurred.ZU  ] X-ԍ #X\  P6G;ɒP# Id.Z    X- a98. ` ` Since the record in this docket closed, new legislation was enacted regarding, in particular, numbering administration. As noted, 251(e)(1) of the Communications Act of 1934, as amended by the 1996 Act, requires the Commission to create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis. Section 251(e)(1) also gives the Commission exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States, but states that the Commission is not precluded from delegating to State  X-commissions or other entities all or any portion of the Commission's jurisdiction.iV3 ] X-ԍ#X\  P6G;ɒP# 47 U.S.C.  251(e)(1).i  X- b99. ` ` In Implementation of the Local Competition Provisions of the  X-Telecommunications Act of 1996, FCC 96333, CC Docket No. 9698 (August 8, 1996)  X-(Local Competition Second Report and Order), the Commission concluded that actions taken  X~-in Administration of the North American Numbering Plan, CC Docket No. 92237, Report"~= V0*$$33"  X-and Order, 11 FCC Rcd 2588 (1995) (NANP Order), satisfy the  251(e)(1) requirement that the Commission create or designate one or more impartial entities to administer  X-telecommunications numbering and to make such numbers available on an equitable basis.W ] XK-ԍ#X\  P6G;ɒP# Local Competition Second Report and Order at paras. 264266.  X-In the NANP Order, the Commission directed that functions associated with NANP administration be transferred to a new administrator of the NANP, unaligned with any  X-particular segment of the telecommunications industry.pXy ] X-ԍ #X\  P6G;ɒP#NANP Order at 2613. p The Commission also stated its intention to undertake the necessary procedural steps to create the North American Numbering  X_-Council (NANC).iY_* ] X: -ԍ #X\  P6G;ɒP#NANP Order at 2608.i It directed the NANC to recommend a NANP administrator that is an independent, nongovernment entity not closely associated with any particular industry  X1-segment.bZ1 ] X-ԍ#X\  P6G;ɒP# Id. at 2609.b  X - c100. ` ` Section 251(b) of the Communications Act of 1934, as amended, imposes an obligation on all local exchange carriers to provide, to the extent technically feasible, number  X -portability in accordance with the requirements prescribed by the Commission. In Telephone  X -Number Portability, FCC286, CC Docket No. 95116 (July 2, 1996) (Number Portability  X -Order), the Commission promulgated rules and regulations implementing this directive. We concluded that a system of regional databases that are managed by one or more independent administrators would serve the public interest. We directed the North American Numbering Council (NANC) to provide initial oversight of this regional database system, to determine the number and location of the regional databases, and to select one or more administrators responsible for deploying the number portability database system.  X-` ` 2. Discussion   X- d101. ` ` Although we will consider the comments we already have received on this  X-issue, and will incorporate them with the comments we receive in response to this Further  X-Notice, we find it necessary to seek further comment on the administration of the toll free database so that we can determine what entity should administer the toll free database,  X|-particularly in light of passage of the 1996 Act. In this Further Notice of Proposed  Xe-Rulemaking, we seek comment on how the creation or designation of one or more impartial entities to administer telecommunications numbering and to make numbers available on an equitable basis affects the Commission's choice of an administrator for the toll free database. "7>Z0*$$33" We seek comment on what entity would be an appropriate toll free database administrator, given that the Act opens all telecommunications markets to competition, and the current administrator is owned by Bellcore, which is presently owned by the RBOCs, a discrete industry segment. We tentatively conclude that, given DSMI's current ties to the RBOCS, DSMI's continuation as the toll free database administrator, at least until finalization of the sale of Bellcore, would violate  251(e) of the Act. We seek comment on this tentative  Xv-conclusion, and seek comment on how the agreement for the sale of Bellcoreo[v ] X-ԍ #X\  P6G;ɒP#See para. 8, supra.o affects resolution of the question of who should administer the toll free database.  X1- e102. ` ` We conclude that  251(e)(1) requires, at the very least, that all numbering administration functions be examined to determine if numbering administration is facilitating competition for telecommunications services. We disagree with assertions, made in comments received before passage of the 1996 Act, that there is no need to consider the issue of who  X -should administer the toll free database because the issue was decided in the 800  X -Proceeding.\ y ] X-ԍ#X\  P6G;ɒP# NYNEX Comments at 10. See also SWBT Comments at 1920; U S West Comments at 2728; Ameritech Comments at 3739, n. 28. Given the evolution of telecommunications markets and toll free service, as well as the mandates of  251(e)(1), we conclude that the issue of who should administer the  X-toll free database is an important and relevant one.  Xb- f103. ` ` We seek comment on what further action the 1996 Act requires that the Commission take to ensure that there is an impartial number administrator for toll free  X4-administration.]4 ] X-ԍ #X\  P6G;ɒP#In the Local Competition Second Report and Order, the Commission responded to arguments that the  yO-NANP Order did not meet the requirements of  251(e)(1) because it did not address toll free number  yO-administration. The Commission noted that the NANP Order directed the NANC to provide recommendations on the question of what number resources, beyond those currently administered by the NANP administrator, the NANP Administrator should administer. The Commission stated that its purpose in directing the NANC to address this question was to develop a record on the issue of whether the new administrator should assume additional responsibilities beyond those of the current NANP administrator to facilitate competition in telecommunications services. According to the Commission, by asking the question and seeking recommendations from the NANC, it set into motion a process designed to foster competition in all  yO -telecommunications services, including toll free service, through numbering administration. See Local  yO -Competition Second Report and Order at para. 266. We seek comment on what role, if any, the NANC should have in determining what entity should assume the responsibility of toll free database administration. We seek comment on whether the toll free database administrator should be the same entity that ultimately is chosen as the NANP administrator or the number portability administrator,"?s]0*$$33" or whether another administrator should be chosen strictly for the toll free database.  X- g104. ` ` We seek comment on what effect the selection of a new administrator for the  X-toll free database would have on the Commission's 800 Proceeding Order in which the Commission concluded that, under the RBOC plans for providing SMS access, such SMS access is a Title II common carrier service and must be provided under tariff. Specifically, we seek comment on whether access to the database should still be provided pursuant to tariff if there is ultimately a new administrator of the database and if so, what party or entity should  XH-file the tariff.   X - h105. ` ` We seek comment on how, if a new toll free number administrator is chosen, that administrator will obtain access to the information currently found in the toll free database and how that administrator will obtain access to the necessary software, equipment, and other items essential to administration of the toll free database. We seek comment on how the transition to a new administrator could be accomplished without disruption in toll free service. We seek comment on the Commission's authority to impose a requirement the RBOCs and Bellcore license to any third party administrator the software that is required to continue operation of the SMS and the NASC, and seek comment on how the Commission should use such authority.   X4- i106. ` ` We seek comment on several other issues. Specifically, we seek comment on whether, as proposed by ACTA: (1) DSMI, as the SMS administrator, should report to the Commission; (2) any services that DSMI subcontracts must be subcontracted to an entity neutral and apart from the industry; (3) the selection of an administrator should be by competitive bidding; (4) costs for toll free number administration should be reimbursed through fees to the industry; and (5) the new administrator should be responsible for network  X-planning of future toll free codes.d^ ] X#-ԍ#X\  P6G;ɒP# ACTA Comments at 20.d  We seek comment on, if DSMI is to report to the Commission, what information it should include in reports. Regarding ACTA's proposal for cost recovery, we seek comment on what specific costs should be reimbursed through fees to "the industry," and what specific members of the industry should be required to bear the costs of toll free number administration. We seek comment on whether the Commission should direct DSMI to withhold access to, and treat as proprietary, competitively sensitive information, such as information on vanity numbers and RespOrg replication lists, as proposed  X -by Sprint.i_ y ] X5"-ԍ#X\  P6G;ɒP# Sprint Comments at 2224.i  X- "@*_0*$$33"Ԍ X-VI.` ` PROCEDURAL MATTERS  X-  X- A.` ` Ex Parte  X- j107.` ` The Further Notice of Proposed Rulemaking is a nonrestricted notice and  X-comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed as provided in the Commission's rules.  X_-See generally 47 C.F.R. 1.1202, 1.1203, and 1.1206(a).   X - B.` ` FINAL REGULATORY FLEXIBILITY ANALYSIS, INITIAL REGULATORY FLEXIBILITY ANALYSIS, AND INITIAL PAPERWORK  X -REDUCTION ACT OF 1995 ANALYSIS   X - k108. ` ` The Final Regulatory Flexibility Analysis, the Initial Regulatory Flexibility Analysis for the Further Notice of Proposed Rulemaking, and the Initial Paperwork Reduction Act of 1995 Analysis for the Further Notice of Proposed Rulemaking are contained in Appendix A.  XK- VIII.` ` ORDERING CLAUSES  X- l109. ` ` Accordingly, pursuant to  1, 4(i), 201205, 218, and 251 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 201205, 218, and 251, IT IS ORDERED that the SECOND REPORT AND ORDER is hereby ADOPTED.  X- m110. ` ` IT IS FURTHER ORDERED, pursuant to  1, 4(i), 201205, 218, and 251 of the Communications Act, as amended, 47 U.S.C.  151, 154(i), 201205, 218, and 251, that the FURTHER NOTICE OF PROPOSED RULEMAKING is hereby ADOPTED.  Xe- n111. ` ` IT IS FURTHER ORDERED that all policies, rules, and requirements set forth  XN-herein are effective 30 days after publication of this order in the Federal Register, except for collections of information subject to approval by the Office of Management and Budget  X -("OMB"), which are effective 70 days following publication in the Federal Register. " A_0*$$33"Ԍ X-  o112. ` ` IT IS FURTHER ORDERED that the Common Carrier Bureau is delegated authority to establish, modify, and monitor conservation plans for toll free numbers if exigent circumstances make such action necessary.  ` `  hhCFEDERAL COMMUNICATIONS COMMISSION ` `  hhCWilliam F. Caton ` `  hhCActing Secretary "1B_0*$$33"  X- dAppendix A  X-  p113. ` ` As required by the Regulatory Flexibility Act (RFA),E` ] XK-ԍ See 5 U.S.C.  603.E an Initial Regulatory  X-Flexibility Analysis (IRFA) was incorporated in Toll Free Service Access Codes, CC Docket  X-No. 95155, Notice of Proposed Rulemaking (NPRM) in this proceeding. The Commission  X-sought written public comments on the proposals in the NPRM, including the IRFA.ay ] X-#Xj\  P6G;ynXP#э #X\  P6G;ɒP#NPRM at 13707. The  Xv-Commission's Final Regulatory Flexibility Analysis (FRFA) in this Second Report and Order  X_-conforms to the RFA, as amended.by_* ] X: -ԍ #X\  P6G;ɒP#See 5 U.S.C.  604. The Regulatory Flexibility Act, 5 U.S.C.  601 et. seq., has been amended by the Contract With America Advancement Act of 1996, Pub.L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the "Small Business Regulatory Enforcement Fairness Act of 1996" (SBREFA).  X1- Need for and Objectives of the Proposed Rules:  X -  X - q114. ` ` The Commission, in compliance with Sections 1 and 251(e)(1), and Title II of the Communications Act of 1934, as amended by the Telecommunications Act of 1996,  X -promulgates rules in this Second Report and Order to ensure the efficient, fair, and orderly  X -allocation of toll free numbers. This Second Report and Order addresses comments filed in  X -response to the NPRM concerning the allocation of toll free numbers. The rules promulgated in this order are in the public interest and are necessary to ensure the fair, equitable, and orderly allocation of the toll free number resource.  Xb-  Summary of Significant Issues Raised by the Public Comments in Response to the IRFA:  X-  X- r115. ` ` In the NPRM, the Commission included an IRFA of the expected impact on  X-small entities of the proposals suggested in the NPRM.gck ] X -ԍ#X\  P6G;ɒP# NPRM, Appendix A.g The Commission noted that the  X-proposals set forth in the NPRM may have a significant economic impact on a substantial number of small entities, because toll free numbers are essential to many businesses both in terms of marketing and advertising products. Further, the Commission noted that toll free numbers may also have an intrinsic value to many businesses. The Commission sought"C c0*$$333"  X-written public comments on the IRFA.dd ] Xy-ԍ #X\  P6G;ɒP#NPRM at 13707.d Although no comments were submitted in direct response to the IRFA, the Commission has addressed the issues raised in the general  X-comments that pertain to small entities,{ey ] X-ԍ#X\  P6G;ɒP# See, e.g., MFS Comments at 45.{ and has considered the significant economic impact on a substantial number of small entities.  X- Description and Estimate of the Number of Small Entities to which the Rules Will  Xv-Apply:  XH- s116. ` ` For the purposes of this Order, the RFA defines a "small business" to be the same as a "small business concern" under the Small Business Act, 15 U.S.C.  632, unless the  X -Commission has developed one or more definitions that are appropriate to its activities.f * ] X-ԍ #X\  P6G;ɒP#See 5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 5 U.S.C. 632). Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional  X -criteria established by the Small Business Administration (SBA).g  ] X)-ԍ#X\  P6G;ɒP# 15 U.S.C.  632. See, e.g., Brown Transport Truckload, Inc. v. Southern Wipers, Inc., 176 B.R. 82 (N.D.Ga. 1994). SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small  X-entities when they have fewer than 1,500 employees.gh ] X]-ԍ#X\  P6G;ɒP# 13 C.F.R. 121.201.g We first discuss generally the total number of small telephone companies falling within both of those SIC categories. Then, we discuss the number of small businesses within the two subcategories, and attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.  X- t117. ` ` 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 FRFA. Nevertheless, as mentioned above, we include small incumbent LECs in our FRFA. Accordingly, our use of the terms "small entities" and "small businesses" does not encompass "small incumbent LECs." We use the term "small incumbent LECs" to refer to any"D h0*$$33p"  X-incumbent LECs that arguably might be defined by SBA as "small business concerns."|i ] Xy-ԍ #X\  P6G;ɒP#See 13 C.F.R. 121.210 (SIC 4813).|   X-` ` 1. Responsible Organizations  X- u118. ` ` We adopt several rules today that apply to all Responsible Organizations (RespOrgs), which may be small business entities. Any entity that meets certain eligibility criteria may serve as a RespOrg. Neither the Commission nor the SBA has developed a definition of small entities that would apply specifically to RespOrgs. The most reliable source of information regarding the number of RespOrgs appears to be data collected by Database Service Management, Inc. ("DSMI"), the organization that administers the toll free allotment database. According to a May 8, 1996, report obtained from DSMI, 168 companies  X -reported that they were RespOrgs.j y ] X--ԍ #X\  P6G;ɒP#DSMI, SMS/800 Overview, SMS/800 Statistics (May 8, 1996). Although it seems certain that some of these RespOrgs 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 RespOrgs that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 168 small entity RespOrgs that may be affected by decisions in this order.  Xy-` ` 2. Toll Free Subscribers  Xb-  XK- v119. ` ` We also adopt some rules that apply to all toll free subscribers, which also may be small business entities. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to toll free subscribers. The most reliable source of information regarding the number of 800 subscribers of which we are aware appears to be the  X-data we collect on the 800 numbers in use.k* ] X-ԍ #X\  P6G;ɒP#Federal Communications Commission, Common Carrier Bureau, Industry Analysis Division, FCC  yO-Releases, Study on Telephone Trends, Tbl. 20 (May 16, 1996). According to our most recent data, at the end of 1995, the number of 800 numbers in use was 6,987,063. Similarly, the most reliable source of information regarding the number of 888 subscribers appears to be the data we  X-collect on the 888 numbers in use. l ] X-ԍ#X\  P6G;ɒP# Federal Communications Commission, Common Carrier Bureau, Industry Analysis Division, Long  yO -Distance Carrier Code Assignments, p. 80, Tbl. 10B (October 18, 1996).  According to our most recent data, at the end of August 1996, a total of 2,014,059 888 numbers were assigned. Although it seems certain that some of these subscribers either are not independently owned and operated businesses, or do not have more than 1,500 employees, we are unable at this time to estimate with greater precision"eE l0*$$33" the number of toll free subscribers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 6,987,063 small entity 800 subscribers and fewer than 2,014,059 888 subscribers that may be affected by the decisions  X-and rules adopted in this Second Report and Order.  X-` ` 3. Telephone Companies (SIC 4813)  X_- w120. ` ` 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  X -telephone services, as defined therein, for at least one year./m ] X| -ԍ#X\  P6G;ɒP# United States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {Oe -Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) (1992 Census)./ 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  X-entities or small incumbent LECs because they are not "independently owned and operated."inC ] X-ԍ#X\  P6G;ɒP# 15 U.S.C.  632(a)(1).i 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  X4-service firms or small incumbent LECs that may be affected by this Second Report and Order.  X- x121. ` ` 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  X-operation for at least one year at the end of 1992.o ] Xf-ԍ #X\  P6G;ɒP#1992 Census, supra, at Firm Size1-123. According to SBA's definition, a small business telephone company other than a radiotelephone company is one employing fewer  X-than 1,500 persons.p ] X -ԍ #X\  P6G;ɒP#13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. All but 26 of the 2,321 nonradiotelephone 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 nonradiotelephone companies that might qualify as small entities or small incumbent LECs. "NFVp0*$$33" 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  X-decisions and rules adopted in this Second Report and Order.  X_- y122. ` ` 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  X -provision of local exchange services.sqy ] X7-ԍ #X\  P6G;ɒP#Federal Communications Commission, CCB, Industry Analysis Division, Telecommunications Industry  yO -Revenue: TRS Fund Worksheet Data, Tbl. 1 (Average Total Telecommunications Revenue Reported by Class of  yO-Carrier) (Dec.1996) (TRS Worksheet). s 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  XK-this Second Report and Order.  X- z123. ` ` 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  X-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  X|-interexchange services.Yr|  ] X6-ԍ #X\  P6G;ɒP#Id.Y 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  X -Second Report and Order." Gr0*$$33="Ԍ X-ٙ {124. ` ` 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  X-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  X_-provision of competitive access services.Ys_ ] X-ԍ #X\  P6G;ɒP#Id.Y 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  X -adopted in this Second Report and Order.  X - |125. ` ` 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  XK-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  X-operator services.Yty ] XG-ԍ #X\  P6G;ɒP#Id.Y 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  X-decisions and rules adopted in this Second Report and Order.  X|- }126. ` ` 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  X -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"H*t0*$$33"  X-services.Yu ] Xy-ԍ#X\  P6G;ɒP# Id.Y 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  X-in this Second Report and Order.  X_- ~127. ` ` Wireless (Radiotelephone) Carriers. SBA has developed a definition of small entities for radiotelephone (wireless) companies. The Census Bureau reports that there were  X1-1,176 such companies in operation for at least one year at the end of 1992./v1y ] yO[ -#X\  P6G;ɒP#э United States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {O# -Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) (1992 Census)./ According to SBA's definition, a small business radiotelephone company is one employing fewer than  X -1,500 persons.w  ] X-ԍ#X\  P6G;ɒP# 13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. 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  XK-companies that may be affected by the decisions and rules adopted in this Second Report and  X4-Order.   X- 128. ` ` 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  X-TRS Worksheet. According to our most recent data, 792 companies reported that they were  X|-engaged in the provision of cellular services.x| ] X!-ԍ #X\  P6G;ɒP#TRS Worksheet at Tbl. 1 (Number of Carriers Reporting by Type of Carrier and Type of Revenue). 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"NI5x0*$$33" carriers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 792 small entity cellular service carriers that may be  X-affected by the decisions and rules adopted in this Second Report and Order.  X- 129. ` ` 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  X1-connection with the TRS Worksheet. According to our most recent data, 138 companies  X -reported that they were engaged in the provision of mobile services.Yy ] X -ԍ #X\  P6G;ɒP#Id.Y 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  X -affected by the decisions and rules adopted in this Second Report and Order.  Xy- 130. ` ` 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  X-calendar years.zyy ] XG-ԍ #X\  P6G;ɒP#See Amendment of Parts 20 and 24 of the Commission's rules Broadband PCS Competitive Bidding  yO0-and the Commercial Mobile Radio Service Spectrum Cap, Report and Order, FCC 96278, WT Docket No. 96 yO-59, paras. 5760 (released June 24, 1996) 61 FR 33859 (July 1, 1996); see also 47 CFR  24.720(b). 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  X-revenues of not more than $15 million for the preceding three calendar years.f{ ] yOZ-#X\  P6G;ɒP#э Id. at para. 60.f These regulations defining "small entity" in the context of broadband PCS auctions have been approved by the SBA. No small businesses within the SBAapproved 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  X|-won approximately 40% of the 1,479 licenses for Blocks D, E, and F.||J ] yOw"-#X\  P6G;ɒP#э FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (released January 14, 1997). However, licenses for blocks C through F have not been awarded fully, therefore there are few, if any, small"eJ|0*$$33" 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.  X- 131. ` ` SMR Licensees. Pursuant to 47 C.F.R.  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  X1-SMR has been approved by the SBA.}1 ] X -ԍ #X\  P6G;ɒP#See Amendment of Parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896901 MHz and the 935940 MHz Bands Allotted to the  yO[ -Specialized Mobile Radio Pool, PR Docket No. 89583, Second Order on Reconsideration and Seventh Report  yO# -and Order, 11 FCC Rcd 2639, 2693702 (1995); Amendment of Part 90 of the Commission's Rules to Facilitate  yO -Future Development of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93144, First Report and Order, Eighth Report and Order, and Second Further Notice of Proposed Rulemaking, 11 FCC Rcd 1463 (1995). The rules adopted in this Second Report and Order 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 FRFA, that all of the extended implementation authorizations may be held by small entities, which may be affected by the  X-decisions and rules adopted in this Second Report and Order.   Xb- 132. ` ` 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  X-SMR licensees affected by the rule adopted in this Second Report and Order 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  X7-the decisions in this Second Report and Order. " Ka}0*$$33>"Ԍ X- 133. ` ` 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  X-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  Xv-services.Y~v ] X-ԍ #X\  P6G;ɒP#Id.Y 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  X -resellers that may be affected by the decisions and rules adopted in this Second Report and  X -Order.  X -` ` 4. Cable System Operators (SIC 4841)  X - 134. ` ` SBA has developed a definition of small entities for cable and other pay television services, which includes all such companies generating less than $11 million in  Xy-revenue annually.nyy ] yO-#X\  P6G;ɒP#э 13 CFR  121.201, SIC 4841.n This definition includes cable systems operators, closed circuit television services, direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems and subscription television services. According to the Census Bureau, there were 1,788 such cable and other pay television services, and 1,423 had less than $11 million  X-in revenue.-  ] X-ԍ #X\  P6G;ɒP#1992 Economic Census, Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 (U.S. Bureau of the Census data under contract to the Office of Advocacy of the U.S. Small Business Administration).-  X- 135. ` ` The Commission has developed its own definition of a small cable system operator for the purposes of rate regulation. Under the Commission's rules, a "small cable  X-company," is one serving fewer than 400,000 subscribers nationwide.A ] X-ԍ#X\  P6G;ɒP# 47 C.F.R.  76.901(e). The Commission developed this definition based on its determination that a  yO-small cable system operator is one with annual revenues of $100 million or less. Implementation of Sections of  yO -the 1992 Cable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995), 60 FR 10534 (February 27, 1995).  Based on our most recent information, we estimate that there were 1,439 cable operators that qualified as small"L 0*$$33R"  X-cable system operators at the end of 1995. ] Xy-ԍ#X\  P6G;ɒP# Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Since then, some of those companies may have grown to serve over 400,000 subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. Consequently, we estimate that there are fewer than 1,439 small entity cable system operators that may be affected by the  X-decisions and rules adopted in this Second Report and Order.  Xv- 136. ` ` The Communications Act also contains a definition of a small cable system operator, which is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with  X1-any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000."i1y ] yO[ -#X\  P6G;ɒP#э 47 U.S.C.  543(m)(2).i The Commission has determined that there are 61,700,000 subscribers in the United States. Therefore, we found that an operator serving fewer than 617,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all  X -of its affiliates, do not exceed $250 million in the aggregate.g  ] yO-#X\  P6G;ɒP#э 47 CFR  76.1403(b).g Based on available data, we  X -find that the number of cable operators serving 617,000 subscribers or less totals 1,450.  ] yO-#X\  P6G;ɒP#э Paul Kagan Associates, Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). We do not request nor do we collect information concerning whether cable system operators  X-are affiliated with entities whose gross annual revenues exceed $250,000,000,}X) ] yOj-#X\  P6G;ɒP#э We do receive such information of an casebycase basis only if a cable operator appeals a local franchise authority's finding that the operator does not qualify as a small cable operator pursuant to section 76.1403(b) of  yO-the Commission's rules. See 47 CFR  76.1403(d). } and thus are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act. It should be further noted that recent industry estimates project that there will be a total of 65,000,000 subscribers, and we have based our fee revenue estimates on that figure.  X-  X-137. ` ` To the extent that any statement contained in this FRFA is perceived as creating ambiguity with respect to our rules or statements made in preceding sections of this  X-Second Report and Order, the rules and statements set forth in those preceding sections shall be controlling.  X-  X- Description of Projected Reporting, Recordkeeping and Other Compliance  X|-Requirements: "|MI 0*$$332"Ԍ X-ԙ 138. ` ` In this Second Report and Order, we adopt a new certification requirement to prevent warehousing of toll free numbers. We conclude that warehousing, which we define as the practice by which RespOrgs, either directly or indirectly through an affiliate, reserve toll free numbers from the SMS database without having an identified subscriber for whom those numbers are being reserved, is an unreasonable practice under Section 201(b) of the Communications Act and is inconsistent with our obligation under  251(e) of the Communications Act to ensure that numbers are made available on an equitable basis, and that we are authorized to penalize RespOrgs found to be violating our antiwarehousing rules. Under the new certification requirement, the act of reserving a toll free number from the database serves as certification that there is an identified subscriber agreeing to be billed for service associated with the toll free number. We believe that this certification requirement will not unduly burden RespOrgs, including small business entities, because the act of reserving the number constitutes the necessary certification; no other written statement is required. We anticipate that no new skills are necessary to comply with this requirement, and that no additional staff or other resources should be necessary to comply with this requirement.  Xy- Significant Alternatives and Steps Taken by Agency to Minimize Significant Economic  Xb-Impact on a Substantial Number of Small Entities Consistent with Stated Objectives:  X4- a.` ` Warehousing  X- 139. ` ` As stated, we conclude that warehousing is an unreasonable practice under Section 201(b) of the Communications Act and is inconsistent with our obligation under  251(e) of the Communications Act to ensure that numbers are made available on an equitable basis, and that we are authorized to penalize RespOrgs found to be violating our antiwarehousing rules. This conclusion is in the public interest, and will not have an adverse impact on RespOrgs, including small business entities, because all RespOrgs are subject to our warehousing rules and will be subject to penalties for violating them. Small RespOrgs will be  Xe-affected in the same manner as nonsmall business entities. ` `  X7- 140. ` ` We considered requiring RespOrgs to submit a written certification that they have an identified subscriber agreeing to be billed for service associated with each toll free number requested from the database and that they have an identified, billed subscriber before switching a number from reserved or assigned to working status. Commenters asserted that this requirement would impose an administrative burden without commensurate benefits. We concluded that such a requirement would create an unnecessary administrative burden on RespOrgs, including small business entities. Further, we considered requiring each RespOrg or toll free service provider to have an affirmative request from a subscriber prior to assigning a toll free number. Some commenters suggested that RespOrgs and toll free service providers"#N0*$$33G""  X-be required to retain records of affirmative requests for toll free service. ] Xy-ԍ #X\  P6G;ɒP#See, e.g., BellSouth Comments at 23; Telemation International ("Telemation") Comments at 4; MFS Comments at 23. Other commenters opposed the record retention requirement, stating that it would impose an undue and  X-unnecessary burden on RespOrgs and service providers.A ] X-ԍ#X\  P6G;ɒP# See, e.g., NEXTLINK Comments at 2 (noting that such a requirement would increase overhead expenses, to which small providers are especially sensitive). We rejected the affirmative request and record retention alternatives as unnecessary, noting that the Commission wants to  X-encourage innovative business practices and avoid unreasonable burdens. Further, a recordkeeping requirement would impose an undue burden on small businesses that may not have the personnel or the resources to fulfill the requirement.  XH- b.` ` Hoarding   X - 141. ` ` In this Second Report and Order, we conclude that hoarding, which we define as an event that occurs when a toll free subscriber acquires more numbers from a RespOrg than it intends to use immediately, is also an activity that is contrary to the public interest. We further conclude that the private sale of numbers involved in number brokering is contrary to the public interest. Toll free subscribers found to be hoarding and brokering numbers will be penalized. This conclusion is in the public interest, and will not unreasonably harm toll free subscribers, including small business entities, because all toll free subscribers are subject to our rules against hoarding and brokering of numbers, and will be subject to penalties for violating them. Small toll free subscribers will be affected in the same manner as nonsmall business entities.  X- 142. ` ` We considered, and commenters suggested, imposing a onetime and/or monthly fee for reservations of toll free numbers in order to assure that numbers are used efficiently, but concluded that it would not sufficiently deter the hoarding of toll free numbers. Further, such a requirement could place an undue financial burden on small business entities (either RespOrgs or subscribers) that may not have the financial resources to comply with such a fee requirement.  X|- c.` ` Lag Time Rules   XN- 143. ` ` In this Second Report and Order, we conclude that the authorized reservation period (the period within which a RespOrg holds a number in "reserved" status for a subscriber) for a toll free number should be reduced from 60 days to 45 days. We also conclude that the interval in which a number may be assigned (i.e. the RespOrg has specific" O0*$$33=" subscriber routing information entered in the toll free database, but the number is pending activation in the SCPs), but not working, shall be reduced from 12 months to 6 months. If special circumstances require dedication of a toll free number far in advance of its actual usage, as was the case with the number dedicated to the 1996 Olympics, such numbers belong in the "unavailable" status, and not the assigned status. We require RespOrgs requesting unavailable status to submit written requests to DSMI. Although MFS raised a concern that shortening the reserved interval could adversely affect small service providers because the  X_-larger service providers will have greater resources to adjust to a tighter time frame,d_ ] X-ԍ #X\  P6G;ɒP#MFS Comments at 45.d we do not believe these requirements will adversely affect RespOrgs or toll free subscribers, including small business entities. Experience gained while the industry operated under the 800 conservation plans showed that little, if any, harm arose from shortening the intervals set  X -in the Industry Guidelines.  X - 144. ` ` In this Second Report and Order, we also conclude that certain elements of the aging process must be changed to achieve a more efficient use of toll free numbers. First, we conclude that the 6month disconnect interval (the time within which a number has been disconnected but an exchange intercept recording is being provided to inform callers of that status) can be reduced to 4 months. We also conclude that a RespOrg should not be allowed to retrieve a number from disconnect status and return that number directly to working status at the expiration of the 4month disconnect interval; the numbers in disconnect status must go directly into the spare category upon expiration of the 4month disconnect interval. Second, we conclude that the 12month suspended interval (the time within which a number is temporarily disconnected and is scheduled to be reactivated) should be reduced to 8 months, and that only numbers involved in billing disputes will be eligible for such status. We do not believe that compliance with these requirements will be unduly burdensome for RespOrgs, including small business entities; no additional financial, technical, or staffing resources should be necessary for a RespOrg to comply with these requirements. Further, compliance with these requirements is essential to make toll free numbers available for reservation by all RespOrgs, including small business entities, for the general public. We have concluded that these reductions will not cause significant inconvenience to callers, subscribers, or RespOrgs, including small business entities. A fourmonth disconnect interval was effective during the 800 conservation plan. The experience of AT&T, which stated that it did not experience complaints regarding excessive misdialing, unreasonable expense to new toll free subscribers, or confusion to toll free callers, indicates that a permanent reduction to that level will not  X-cause the inconvenience some commenters predict.dy ] X#-ԍ#X\  P6G;ɒP# AT&T Comments at 10.d "P*0*$$33"Ԍ X-  d.` ` Escrow Requirement   X- 145. ` ` We considered imposing an escrow deposit requirement for each toll free number held in reserved status. Commenters noted that such a requirement could place a financial burden on RespOrgs, particularly smaller RespOrgs, and could discourage some  X-customers from subscribing to toll free service. ] X-ԍ #X\  P6G;ɒP#See, e.g., LDDS Comments at 5 (an escrow deposit requirement would increase the cost of toll free services with no corresponding benefits and would inevitably harm smaller RespOrgs). Small RespOrgs could be placed at a disadvantage by the financial burden of an escrow deposit requirement. Further, small business entities which may benefit from obtaining a toll free number may be discouraged from doing so because of the financial burden of an escrow deposit. We also concluded that the costs associated with managing escrow deposits for all of the available toll free numbers appear to be burdensome. For these reasons, we will not impose an escrow requirement at this time.  X - e.` ` Partitioning   X - 146. ` ` We considered and sought comment on "partitioning" toll free service, leaving business entities and the majority of vanity number holders in the 800 SAC, while assigning subsequent toll free codes to personal and paging subscribers and subscribers of other services  Xb-built upon the use of toll free dialing service that may develop in the future.gbA ] XT-ԍ#X\  P6G;ɒP# NPRM at para. 46.g We concluded that such an approach would most likely be unreasonably discriminatory because 800 service has existed for many years and 800 numbers would, at least initially, have greater recognition and acceptance than would numbers in relief toll free SACs. Further, if nonbusiness applications such as paging and fax services were allowed to "grandfather" their numbers in 800, they would have a decided advantage over entities in the same line of business required to use a new SAC. The entities that would have been placed at a disadvantage by such an approach would probably have included small business entities. New business entities are often small, and the new entities would have been required to use the new SAC.  X|- f.` ` Permanent Cap on Reservations   XN- 147. ` ` In this Second Report and Order, we conclude that, to discourage warehousing, a cap imposed on a RespOrg's ability to reserve numbers is necessary. We find it necessary to reduce the current cap, which is based on the percentage of numbers in the "working" status. Because the addition of numbers in the 888 code essentially doubles the quantity of numbers available for toll free service and, eventually, working toll free numbers, we reduce"Q0*$$33" the cap from 15% of a RespOrg's numbers in working status to 7.5%. Acknowledging that this could place at a disadvantage RespOrgs that do not have a large quantity of numbers in "working" status, which may include small business entities, we conclude that doubling the minimum number of toll free numbers that RespOrgs are currently allowed to hold in  X-"reserved" status under the Industry Guidelines will allow newer RespOrgs to grow without being constrained by a percentagebased cap. Again, there is a possibility that new RespOrgs will be small business entities, and that these small entities could be placed at a disadvantage because of the percentagebased cap. Therefore, we increased the minimum number of numbers a RespOrg can have in reserved status from 1000 to 2000 numbers, to ensure that new RespOrgs, which may include small business entities, are not placed at a disadvantage.  X - Report to Congress :  X - 148. ` ` The Commission shall include a copy of this Final Regulatory Flexibility  X -Analysis, along with this Second Report and Order, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A). A  X-copy of this FRFA will also be published in the Federal Register.  )  Xb- C.` ` INITIAL REGULATORY FLEXIBILITY ANALYSIS:  X4- 149. ` ` As required by  603 of the Regulatory Flexibility Act (RFA),X4 ] yO-#X\  P6G;ɒP#э See 5 U.S.C.  603. The Regulatory Flexibility Act, see 5 U.S.C.  601 et. seq., has been amended by the Contract With America Advancement Act of 1996, Pub.L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the "Small Business Regulatory Enforcement Fairness Act of 1996" (SBREFA). the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected  X-significant economic impact on small entities by the policies or rules proposed in this Further  X-Notice of Proposed Rulemaking (Further Notice). Written public comments are requested in the IRFA. These comments must be filed in accordance with the same filing procedures as other comments in this proceeding, but they must have a separate and distinct heading  X-designating them as responses to the IRFA. The Secretary shall send a copy of this Further  X-Notice, including the IRFA set out below, to the Chief Counsel for Advocacy of the Small Business Administration (SBA) in accordance with the RFA, 5 U.S.C.  603(a).  XN- Need for and Objectives of the Proposed Rule: The Further Notice responds to concerns regarding what entity is the appropriate administrator of the toll free database. In the original  X -Notice of Proposed Rulemaking in CC Docket No. 95155, In the Matter of Toll Free Service  X -Access Codes, we sought comment on whether the current administrator, Database Service Management, Inc. (DSMI), should continue to administer the toll free database. DSMI is a subsidiary of Bellcore, which is currently owned by the Regional Bell Operating Companies"R0*$$33"  X-(RBOCs).^y ] Xy-ԍ#X\  P6G;ɒP# On November 21, 1996, Science Applications International Corporation (SAIC) announced that it has agreed to purchase Bellcore. The transaction is expected to be finalized in late 1997, and is dependent upon Bellcore's owners obtaining the required regulatory approvals.^ After comments were received on the NPRM , Congress passed the Telecommunications Act of 1996 (1996 Act), amending the Telecommunications Act of 1934. Section 251(e)(1) of the Telecommunications Act, as amended, charges the Commission with creating or designating one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis. Given DSMI's ties to  X-the RBOCs, the Further Notice tentatively concludes that DSMI's continuation as the toll free database administrator would violate  251(e)(1) of the Telecommunications Act and seeks further comment on what entity should administer the toll free database. The objective of this proposal is to ensure that toll free numbers are allocated on a fair, equitable, and orderly basis.  X - Legal Basis:` ` The proposed action is authorized under  1, 4(i), 201205, 218, and 251(e)(1) of the Communications Act, as amended, 47 U.S.C.  151, 154(i), 201205, 218 and 251(e)(1).  X - Description and Estimate of the Number of Small Entities To Which the Proposed Rule  X-Will Apply: The proposals set forth in the Further Notice may have a significant impact on a substantial number of small entities. Neutral administration of the toll free database is of concern to all toll free subscribers and Responsible Organizations (RespOrgs), which include small business entities.  X- 150. ` ` For the purposes of this Order, the RFA defines a "small business" to be the same as a "small business concern" under the Small Business Act, 15 U.S.C.  632, unless the  X-Commission has developed one or more definitions that are appropriate to its activities.  ] X-ԍ #X\  P6G;ɒP#See 5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 5 U.S.C. 632). Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional  X-criteria established by the Small Business Administration (SBA). ] X-ԍ #X\  P6G;ɒP#15 U.S.C.  632. See, e.g., Brown Transport Truckload, Inc. v. Southern Wipers, Inc., 176 B.R. 82 (N.D.Ga. 1994). SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small"|S0*$$33"  X-entities when they have fewer than 1,500 employees.g ] Xy-ԍ #X\  P6G;ɒP#13 C.F.R. 121.201.g We first discuss generally the total number of small telephone companies falling within both of those SIC categories. Then, we discuss the number of small businesses within the two subcategories, and attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.  Xv- 151. ` ` 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 FRFA. Nevertheless, as mentioned above, we include small incumbent LECs in our FRFA. Accordingly, our use of the terms "small entities" and "small businesses" does not encompass "small incumbent LECs." We use the term "small incumbent LECs" to refer to any  X -incumbent LECs that arguably might be defined by SBA as "small business concerns."| y ] X--ԍ #X\  P6G;ɒP#See 13 C.F.R. 121.210 (SIC 4813).|   X -` ` 1. Responsible Organizations   X -   X - 152. ` ` The proposals and tentative conclusions in the Further Notice apply to and would affect all RespOrgs, which may be small business entities. Any entity that meets certain eligibility criteria may serve as a RespOrg. Neither the Commission nor the SBA has developed a definition of small entities that would apply specifically to RespOrgs. The most reliable source of information regarding the number of RespOrgs appears to be data collected by DSMI, the organization that administers the toll free allotment database. According to a May 8, 1996, report obtained from DSMI, 168 companies reported that they were  X-RespOrgs.* ] X-ԍ #X\  P6G;ɒP#DSMI, SMS/800 Overview, SMS/800 Statistics (May 8, 1996). Although it seems certain that some of these RespOrgs 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 RespOrgs that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 168  X-small entity RespOrgs that may be affected by any decision on the Further Notice.  X|-` ` 2. Toll Free Subscribers  XN- 153. ` ` The proposals and tentative conclusions in the Further Notice also apply to and would affect all toll free subscribers, which also may be small business entities. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to toll free subscribers. The most reliable source of information regarding the number of 800" T0*$$33[" subscribers of which we are aware appears to be the data we collect on the 800 numbers in  X-use. ] Xb-ԍ#X\  P6G;ɒP# Federal Communications Commission, Common Carrier Bureau, Industry Analysis Division, FCC  yOK-Releases, Study on Telephone Trends, Tbl. 20 (May 16, 1996). According to our most recent data, at the end of 1995, the number of 800 numbers in use was 6,987,063. Similarly, the most reliable source of information regarding the number  X-of 888 subscribers appears to be the data we collect on the 888 numbers in use. A ] X-ԍ#X\  P6G;ɒP# Federal Communications Commission, Common Carrier Bureau, Industry Analysis Division, Long  yO-Distance Carrier Code Assignments, p. 80, Tbl. 10B (October 18, 1996).  According to our most recent data, at the end of August 1996, a total of 2,014,059 888 numbers were assigned. Although it seems certain that some of these subscribers either are not independently owned and operated businesses, or do not have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 6,987,063 small entity 800 subscribers and fewer than 2,014,059 888 subscribers that may be affected by the decisions and rules adopted as a result  X -of the Further Notice.  X -` ` 3. Telephone Companies (SIC 4813)  X - 154. ` ` Total Number of Telephone Companies Affected. The decisions and rules  X-adopted as a result of the Further Notice 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  XK-providing telephone services, as defined therein, for at least one year./K ] X-ԍ #X\  P6G;ɒP#United States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {O-Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) (1992 Census)./ 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  X-operated."i5 ] X -ԍ #X\  P6G;ɒP#15 U.S.C.  632(a)(1).i 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 rules"|U 0*$$33"  X-adopted as a result of the Further Notice.  X- 155. ` ` 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  X-operation for at least one year at the end of 1992. ]  X-ԍ #X\  P6G;ɒP#1992 Census, supra, at Firm Size1-123. According to SBA's definition, a small business telephone company other than a radiotelephone company is one employing fewer  X_-than 1,500 persons._b ] Xr -ԍ #X\  P6G;ɒP#13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. All but 26 of the 2,321 nonradiotelephone 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 nonradiotelephone 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  X-decisions and rules adopted as a result of the Further Notice.  Xb- 156. ` ` 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  X-provision of local exchange services.sy ] X-ԍ#X\  P6G;ɒP# Federal Communications Commission, CCB, Industry Analysis Division, Telecommunications Industry  yOn-Revenue: TRS Fund Worksheet Data, Tbl. 1 (Average Total Telecommunications Revenue Reported by Class of  yO6-Carrier) (Dec.1996) (TRS Worksheet). s 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 as  XN-a result of the Further Notice."NVT0*$$33"Ԍ X-ԙ 157. ` ` 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  X-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  X_-interexchange services.Y_ ] X-ԍ #X\  P6G;ɒP#Id.Y 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 as a result  X -of the Further Notice.   X - 158. ` ` 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  XK-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  X-provision of competitive access services.Yy ] XG-ԍ #X\  P6G;ɒP#Id.Y 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  X-adopted as a result of the Further Notice.  X|- 159. ` ` 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  X -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"W*0*$$33"  X-operator services.Y ] Xy-ԍ#X\  P6G;ɒP# Id.Y 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  X-decisions and rules adopted as a result of the Further Notice.  X_- 160. ` ` 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  X -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  X -services.Y y ] X-ԍ #X\  P6G;ɒP#Id.Y 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  XK-as a result of the Further Notice.  X- 161. ` ` Wireless (Radiotelephone) Carriers. SBA has developed a definition of small entities for radiotelephone (wireless) companies. The Census Bureau reports that there were  X-1,176 such companies in operation for at least one year at the end of 1992./* ] X-ԍ#X\  P6G;ɒP# United States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {O-Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) (1992 Census)./ According to SBA's definition, a small business radiotelephone company is one employing fewer than  X-1,500 persons. ] X-ԍ #X\  P6G;ɒP#13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. 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"NXV0*$$33" 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  X-companies that may be affected by the decisions and rules adopted as a result of the Further  X-Notice.   X- 162. ` ` 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  X -TRS Worksheet. According to our most recent data, 792 companies reported that they were  X -engaged in the provision of cellular services. ] X| -ԍ#X\  P6G;ɒP# TRS Worksheet at Tbl. 1 (Number of Carriers Reporting by Type of Carrier and Type of Revenue). 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 that there are fewer than 792 small entity cellular service carriers that may be  X-affected by the decisions and rules adopted as a result of the Further Notice.  Xb- 163. ` ` 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  X-connection with the TRS Worksheet. According to our most recent data, 138 companies  X-reported that they were engaged in the provision of mobile services.Yy ] X-ԍ #X\  P6G;ɒP#Id.Y 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  Xe-affected by the decisions and rules adopted as a result of the Further Notice.  X7- 164. ` ` 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"Y*0*$$33"  X-calendar years.X ] yOy-#X\  P6G;ɒP#э See Amendment of Parts 20 and 24 of the Commission's rules Broadband PCS Competitive Bidding  yOA-and the Commercial Mobile Radio Service Spectrum Cap, Report and Order, FCC 96278, WT Docket No. 96 yO -59, paras. 5760 (released June 24, 1996) 61 FR 33859 (July 1, 1996); see also 47 CFR  24.720(b). 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  X-revenues of not more than $15 million for the preceding three calendar years.f ] yOk-#X\  P6G;ɒP#э Id. at para. 60.f These regulations defining "small entity" in the context of broadband PCS auctions have been approved by the SBA. No small businesses within the SBAapproved 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  X_-won approximately 40% of the 1,479 licenses for Blocks D, E, and F._x ] yO -#X\  P6G;ɒP#э FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (released January 14, 1997). 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.  X - 165. ` ` SMR Licensees. Pursuant to 47 C.F.R.  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  Xb-SMR has been approved by the SBA.b ] X-ԍ#X\  P6G;ɒP# See Amendment of Parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896901 MHz and the 935940 MHz Bands Allotted to the  yO-Specialized Mobile Radio Pool, PR Docket No. 89583, Second Order on Reconsideration and Seventh Report  yO-and Order, 11 FCC Rcd 2639, 2693702 (1995); Amendment of Part 90 of the Commission's Rules to Facilitate  yO\-Future Development of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93144, First Report and Order, Eighth Report and Order, and Second Further Notice of Proposed Rulemaking, 11 FCC Rcd 1463 (1995). The rules adopted as a result of the Further Notice 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 FRFA, that all of the extended implementation authorizations may be held by small entities, which may be affected by the  X-decisions and rules adopted as a result of the Further Notice."Z 0*$$33q"Ԍ X-ٙ 166. ` ` 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  X-SMR licensees affected by any rule adopted as a result of the Further Notice 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  X -the decisions adopted as a result of the Further Notice.  X - 167. ` ` 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  XK-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  X-services.Y ] X-ԍ#X\  P6G;ɒP# Id.Y 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  X-resellers that may be affected by the decisions and rules adopted as a result of the Further  X-Notice.  X|-` ` 4. Cable System Operators (SIC 4841)  XN- 168. ` ` SBA has developed a definition of small entities for cable and other pay television services, which includes all such companies generating less than $11 million in  X -revenue annually.n y ] yOJ!-#X\  P6G;ɒP#э 13 CFR  121.201, SIC 4841.n This definition includes cable systems operators, closed circuit television services, direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems and subscription television services. According to the Census Bureau, there were 1,788 such cable and other pay television services, and 1,423 had less than $11 million"[ 0*$$33"  X-in revenue.- ] Xy-ԍ #X\  P6G;ɒP#1992 Economic Census, Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 (U.S. Bureau of the Census data under contract to the Office of Advocacy of the U.S. Small Business Administration).-  X- 169. ` ` The Commission has developed its own definition of a small cable system operator for the purposes of rate regulation. Under the Commission's rules, a "small cable  X-company," is one serving fewer than 400,000 subscribers nationwide.AA ] X-ԍ#X\  P6G;ɒP# 47 C.F.R.  76.901(e). The Commission developed this definition based on its determination that a  yO -small cable system operator is one with annual revenues of $100 million or less. Implementation of Sections of  yOG -the 1992 Cable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995), 60 FR 10534 (February 27, 1995).  Based on our most recent information, we estimate that there were 1,439 cable operators that qualified as small  Xx-cable system operators at the end of 1995.xJ ] Xs-ԍ#X\  P6G;ɒP# Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Since then, some of those companies may have grown to serve over 400,000 subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. Consequently, we estimate that there are fewer than 1,439 small entity cable system operators that may be affected by the  X -decisions and rules proposed in this Further Notice.  X - 170. ` ` The Communications Act also contains a definition of a small cable system operator, which is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with  X-any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000."i ] yO>-#X\  P6G;ɒP#э 47 U.S.C.  543(m)(2).i The Commission has determined that there are 61,700,000 subscribers in the United States. Therefore, we found that an operator serving fewer than 617,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all  X6-of its affiliates, do not exceed $250 million in the aggregate.g6 ] yOr-#X\  P6G;ɒP#э 47 CFR  76.1403(b).g Based on available data, we  X-find that the number of cable operators serving 617,000 subscribers or less totals 1,450. ] yO -#X\  P6G;ɒP#э Paul Kagan Associates, Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). We do not request nor do we collect information concerning whether cable system operators"\ 0*$$33 "  X-are affiliated with entities whose gross annual revenues exceed $250,000,000,}X ] yOy-#X\  P6G;ɒP#э We do receive such information of an casebycase basis only if a cable operator appeals a local franchise authority's finding that the operator does not qualify as a small cable operator pursuant to section 76.1403(b) of  yO -the Commission's rules. See 47 CFR  76.1403(d). } and thus are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act. It should be further noted that recent industry estimates project that there will be a total of 65,000,000 subscribers, and we have based our fee revenue estimates on that figure.  X-  Xv- Description of Projected Reporting, RecordKeeping, and Other Compliance  X_-Requirements: We seek comment on ACTA's proposal that would require DSMI, while it  XH-continues as the SMS database administrator, to report to the Commission. We also seek comment on a proposal to recover costs for toll free database administration through fees to the industry. We also seek comment on what, if any, affects the selection of a new toll free database administrator would have on small businesses. In particular, we seek comment on whether small entities anticipate having to hire additional professional staff or meet any other obligations as a result of the selection of a new administrator.  X -  X - Significant Alternatives To Proposed Rule Which Minimize Significant Economic  X-Impact on Small Entities and Accomplish Stated Objectives:  Xb-171.` ` In the Further Notice, we seek comment on how the  251(e)(1) directive that the Commission create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis affects the Commission's choice of administrator for the toll free database. We seek comment on what entity would be an appropriate neutral toll free database administrator, given that the Act opens all telecommunications markets to competition, and the current administrator is a subsidiary of Bellcore, which is presently owned by the RBOCs, a discrete industry segment. We tentatively conclude that, given DSMI's current ties to the RBOCs, DSMI's continuation  X-as the toll free database administrator, at least until finalization of the sale of Bellcore, would violate  251(e)(1) of the Telecommunications Act, as amended. We seek comment on this  X|-tentative conclusion, and seek comment on how the proposed sale of Bellcorez| ] X-ԍ #X\  P6G;ɒP#See para. 8 and n. 391, supra.z affects parties views on the question on the question of who should administer the toll free database.  X7- 172. ` ` Among other questions, we seek comment on how, if a new toll free number administrator is chosen, the administrator will obtain access to the information currently found  X -in the toll free database and how that administrator will obtain access to the necessary" ]0*$$33=" software, equipment, and other items essential to administration of the toll free database. In this IRFA, we specifically seek comment on how a transition to a new toll free database administrator would impact RespOrgs and toll free subscribers that are small business entities, and how that transition could be structured to minimize disruption in toll free service, which would benefit all toll free subscribers, including small business entities.  Xv- 173. ` ` In the Further Notice, we also seek comment on several issues raised in the  X_-comments to the original NPRM. Specifically, we seek comment on whether, as proposed by ACTA: (1) while DSMI continues as the SMS manager, it should report to the Commission; (2) any services that DSMI subcontracts must be subcontracted to an entity neutral and apart from the industry; (3) the selection of an administrator should be by competitive bidding; (4) costs should be reimbursed through fees to the industry; and (5) the new administrator should be responsible for network planning of future toll free codes. We seek comment on, if DSMI is to report to the Commission, what information it should include in its reports. Regarding ACTA's proposals for cost recovery, we seek comment on what specific costs should be reimbursed through fees to "the industry," and what specific members of the industry should be required to bear the costs of toll free number administration. In this IRFA, we specifically seek comment on how ACTA's proposed requirements would impact small business entities.  XK-  X4-Federal Rules That Overlap, Duplicate, or Conflict with These Rules: None.  X- D.` ` Initial Paperwork Reduction Act of 1995 Analysis for Further Notice of  X-Proposed Rulemaking  X-  X- 174. ` ` This Further Notice of Proposed Rulemaking ("Further Notice") contains either a proposed or modified information collection. As part of its continuing effort to reduce paperwork burdens, we invite the general public and the Office of Management and Budget ("OMB") to take this opportunity to comment on the information collections contained in this  XN-Further Notice, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 10413.  X7-Public and agency comments are due at the same time as other comments on this Further  X -Notice; OMB comments are due 60 days from the date of publication of this Further Notice in  X -the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information  X"-on the respondents, including the use of automated collection techniques or other forms of information technology."#^0*$$33G""Ԍ X-ԙ E.` ` Notice and Comment Provisions  X- 175. ` ` Pursuant to applicable procedures set forth in  1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415 and 1.419, interested parties may file comments on  X-the Further Notice of Proposed Rulemaking on or before May 22, 1997, and reply comments are due on or before June 23 "T , 1997. To file formally in this proceeding, you must file and original and four copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file and original plus nine copies. You should send comments and reply comments to the Office of the Secretary, Federal Communications Commission, Washington, D.C. 20554. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center (Room 239) of the Federal Communications Commission, 1919 M Street, N.W. 20554.  X - 176. ` ` Paperwork Reduction Act. Written comments by the public on the proposed and/or modified information collections are due May 22, 1997. Written comments must be submitted by the Office of Management and Budget ("OMB") on the proposed and /or  Xy-modified information collections on or before 60 days after publication in the Federal  Xb-Register. In addition to filing comments with the Secretary, a copy of any comments on the  XK-information collections contained in the Further Notice of Proposed Rulemaking should be submitted to Dorothy Conway, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, D.C. 2054, or via the Internet to dconway@fcc.gov and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W., Washington, D.C. 20503 or via the Internet to fain_t@al.eop.gov.  X- "_0*$$33"  X-d Appendix B ă  X-I List of Commenters  X-  ă 1.800.BALLOON 1800FLOWERS 800 Users Coalition ("Coalition") Aeronautical Radio, Inc. ("ARINC") AirTouch Paging ("AirTouch") Allnet Communication Services, Inc. ("Allnet") Ameritech American Car Rental Association ("ACRA") American Petroleum Institute ("API") American Telegram Corporation ("ATC") Americas Carrier Telecommunications Association ("ACTA") AT&T Corporation ("AT&T") AVIS Rent A Car System, Inc. ("Avis") Bass Pro Shops ("Bass Pro") Bass Tickets, Inc. ("Bass Tickets") Bell Atlantic Telephone Companies ("Bell Atlantic") BellSouth Telecommunications, Inc. ("BellSouth") Cable & Wireless, Inc. ("CWI") Charter Medical Corporation ("Charter Medical") Communications Managers Association ("CMA") Communications Venture Services, Inc. ("CVS") Competitive Telecommunications Association ("CompTel") Crestar Bank ("Crestar") DeFabio, Joel ("Joel DeFabio") Del Webb Corporation ("Del Webb") Direct Marketing Association ("DMA") Enterprise RentACar, Inc. ("Enterprise") General Services Administration ("GSA") GTE Service Corporation ("GTE") INVESCO Funds Group, Inc. ("IFG") LCI, International ("LCI") LDDS WorldCom ("LDDS") MCI Telecommunications Corporation ("MCI") MFS Communications Company, Inc. ("MFS") National Telephone Cooperative Association ("NTCA") NEXTLINK, Inc. ("NEXTLINK")"#`0*$$33G""ԌNetwork Telephone Services, Inc. ("NTS") NIMA, International ("NIMA") Nissan Rosenthal ("Nissan") NYNEX Telephone Companies ("NYNEX") Office of Management and Budget ("OMB") Olson, Mark D. ("Mark Olson") Organization for the Protection and Advancement of Small Telephone Companies ("OPASTCO") Pacific Bell and Nevada Bell ("Pacific") Page, Joseph Edward ("Joseph Page") Paging Network, Inc. ("PageNet") Personal Communications Industry Association ("PCIA") Promoline, Inc. ("Promoline") Puerto Rico Telephone Company ("PRTC") Qwest Communications Corporation ("Qwest") Scherers Communications Group, Inc. ("Scherers") Service Management System/800 Number Administration Committee of the Ordering and Billing Forum ("SNAC") Service Merchandise Company, Inc. ("Service Merchandise") Southern New England Telephone Company ("SNET") Southwestern Bell Telephone Company ("SWBT") Sprint Corporation ("Sprint") Telecommunications Resellers Association ("TRA") Telecompute Corporation ("Telecompute") Telemation International, Inc. ("Telemation") Telephone Express Telco Planning, Inc. ("Telco Planning") Time Warner Communications Holdings, Inc. ("Time Warner") TLDP Communications, Inc. ("TLDP") Vanity International World Savings and Loan Association ("World Savings") Weather Channel, Inc. ("Weather Channel") Wise Telecommunications ("Wise") United States Telephone Association ("USTA") Unitel Communications, Inc. ("Unitel") U S West Communications, Inc. ("U S West") "#a0*$$33G""Ԍ "_b0*$$33'"  X- n5 List of Reply Commenters  X- 1800FLOWERS American Automobile Association ("AAA") AirTouch Paging and Arch Communications Group ("AirTouch") Ameritech AT&T Corporation ("AT&T") Austin, John ("John Austin") Bass Pro Shops ("Bass Pro") BellSouth Telecommunications, Inc. ("BellSouth") British Airways Plc ("British Airways") Cable & Wireless, Inc. ("CWI") Communications Venture Services, Inc. ("CVS") Competitive Telecommunications Association ("CompTel") Dial 800, L.P. ("Dial 800") Eastern Tel Long Distance Service, Inc. ("Eastern Tel") Enterprise RentACar, Inc. ("Enterprise") General Communication, Inc. ("GCI") General Services Administration ("GSA") GTE Service Corporation ("GTE") Interactive CallBrand ("CallBrand") LDDS WorldCom ("LDDS") MCI Telecommunications Corporation ("MCI") MFS Communications Company ("MFS") National Telephone Cooperative Association (NTCA") New York Clearing House Association ("New York Clearing House") NYNEX Telephone Companies ("NYNEX") Pacific Bell and Nevada Bell ("Pacific") Paging Network, Inc. ("PageNet") Personal Communications Industry Association ("PCIA") Promoline, Inc. ("Promoline") Qwest Communications Corporation ("Qwest") Scherers Communications Group, Inc. ("Scherers") Southwestern Bell Telephone Company ("SWBT") Sprint Corporation ("Sprint") Telecommunications Resellers Association ("TRA") TLDP Communications, Inc. ("TLDP") United States Telephone Association ("USTA") U S West Communications, Inc. ("U S West")"#c0*$$33G""ԌVanity International  X-Weather Channel, Inc. ("Weather Channel")   X-   "d0*$$33"  X- d Appendix C  X- X(#  X-c Final Rules  X-  PART 52 NUMBERING  Xv-1.The authority citation for Part 52 continues to read as follows: AUTHORITY: Sections 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, 20105, 20709, 218, 2257, 2512, 271 and 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C.  153, 154, 20105, 20709, 218, 2257, 271 and 332 unless otherwise noted.  X -2.The table of contents for Part 52 is amended to read as follows:  X - Subpart A Scope and Authority  Xy- 52.1` ` Basis and purpose.  Xb-  52.3` ` General.  XK- 52.5` ` Definitions.  X- Subpart B Administration  X-  52.7` ` Definitions.  X- 52.9` ` General requirements.  X- 52.11` ` North American Numbering Council.  X- 52.13` ` North American Numbering Plan Administrator.  X- 52.15` ` Central office code administration.  X|- 52.17` ` Costs of number administration.  Xe- 52.19` ` Area code relief.  X7- Subpart C Number Portability  X - 52.21` ` Definitions.  X- 52.23` ` Deployment of longterm database methods for number portability by ` ` LECs.  X - 52.25` ` Database architecture and administration.  X!- 52.27` ` Deployment of transitional measures for number portability.  X"- 52.29` ` Deployment of longterm database methods for number portability by ` ` CMRS providers."#e0*$$33G""Ԍ X- 52.32 52.99 [Reserved] Subpart D Toll Free Numbers  X- 52.101` ` General Definitions.  X- 52.103` ` Lag Times.  Xv- 52.105` ` Warehousing.  X_- 52.107` ` Certification.  XH- 52.109` ` Hoarding.  X1- 52.111` ` Permanent Cap on Number Reservations.  X -  X -3.Subpart D is added to Part 52 to read as follows:  X -% Subpart D Toll Free Numbers ă  X-  52.101` ` General Definitions. As used in this Part:  X4- (a) Number Administration and Service Center ("NASC") . The entity that provides user support for the Service Management System database and administers the Service Management System database on a daytoday basis.  X-   X- (b) Responsible Organization ("RespOrg") . The entity chosen by a toll free subscriber to manage and administer the appropriate records in the toll free Service Management System for the toll free subscriber.  X-   X|-(c) Service Control Points. The regional databases in the toll free network.  Xe-   XN-(d) Service Management System Database ("SMS Database") . The administrative database system for toll free numbers. The Service Management System is a computer system that enables Responsible Organizations to enter and amend the data about toll free numbers within their control. The Service Management System shares this information with the Service Control Points. The entire system is the SMS database.  X -(e) Toll Free Subscriber. The entity that requests a Responsible Organization to reserve a toll free number from the SMS database.  X#-(f) Toll Free Number. A telephone number for which the toll charges for completed"#f0*$$33G"" calls are paid by the toll free subscriber. The toll free subscriber's specific geographic location has no bearing on what toll free number it can obtain from the SMS database.  X-  X- 52.103` ` Lag Times.  X-(a) Definitions. As used in this section, the following definitions apply:  X_-` ` (1) Assigned Status. A toll free number record that has specific subscriber routing information entered by the Responsible Organization in the Service Management System database and is pending activation in the Service Control Points.  X -` ` (2) Disconnect Status. The toll free number has been discontinued and an exchange carrier intercept recording is being provided.  X -` ` (3) Lag Time. The interval between a toll free number's reservation in the Service Management System database and its conversion to working status, as well as the period of time between disconnection or cancellation of a toll free number and the point at which that toll free number may be reassigned to another toll free subscriber.  Xb-   XK-` ` (4) Reserved Status. The toll free number has been reserved from the Service Management System database by a Responsible Organization for a toll free subscriber.  X-` ` (5) Seasonal Numbers. Toll free numbers held by toll free subscribers who do not have a yearround need for a toll free number.  X-` ` (6) Spare Status. The toll free number is available for assignment by a Responsible Organization.  X|-` ` (7) Suspend Status. The toll free service has been temporarily disconnected and is scheduled to be reactivated.  X7-` ` (8) Unavailable Status. The toll free number is not available for assignment due to an unusual condition.  X-` ` (9) Working Status. The toll free number is loaded in the Service Control Points and is being utilized to complete toll free service calls.   X!-(b) Reserved Status. Toll free numbers may remain in reserved status for up to 45 days. There shall be no extension of the reservation period after expiration of the initial 45day interval."#g0*$$33G""Ԍ  X-(c) Assigned Status. Toll free numbers may remain in assigned status until changed to working status or for a maximum of 6 months, whichever occurs first. Toll free numbers that, because of special circumstances, require that they be designated for a particular subscriber far in advance of their actual usage shall not be placed in assigned status, but instead shall be placed in unavailable status.  X_-(d) Disconnect Status. Toll free numbers may remain in disconnect status for up to 4 months. No requests for extension of the 4month disconnect interval shall be granted. All toll free numbers in disconnect status must go directly into the spare category upon expiration of the 4month disconnect interval. Responsible Organizations shall not retrieve a toll free number from disconnect status and return that number directly to working status at the expiration of the 4month disconnect interval.  X -(e) Suspend Status. Toll free numbers may remain in suspend status until changed to working status or for a maximum of 8 months, whichever occurs first. Only numbers involved in billing disputes shall be eligible for suspend status.  Xb-(f) Unavailable Status.  ` ` (1) Written requests to make a specific toll free number unavailable must be submitted to DSMI by the Responsible Organization managing the records of the toll free number. The request shall include the appropriate documentation of the reason for the request. DSMI is the only entity that can assign this status to or remove this status from a number. Responsible Organizations that have a toll free subscriber with special circumstances requiring that a toll free number be designated for that particular subscriber far in advance of its actual usage may request that DSMI place such a number in unavailable status. ` ` (2) Seasonal numbers shall be placed in unavailable status. The Responsible Organization for a toll free subscriber who does not have a year round need for a toll free number shall follow the procedures outlined in  52.103 (f)(1) of these rules if it wants DSMI to place a particular toll free number in unavailable status.  X-  52.105` ` Warehousing. (a) As used in this section, warehousing is the practice whereby Responsible Organizations, either directly or indirectly through an affiliate, reserve toll free numbers from the Service Management System database without having an actual toll free subscriber for"#h0*$$33G"" whom those numbers are being reserved.  X-(b) Responsible Organizations shall not warehouse toll free numbers.  There shall be a rebuttable presumption that a Responsible Organization is warehousing toll free numbers if: ` ` (1) the Responsible Organization does not have an identified toll free subscriber agreeing to be billed for service associated with each toll free number reserved from the Service Management System database; or ` ` (2) the Responsible Organization does not have an identified toll free subscriber agreeing to be billed for service associated with a toll free number before switching that toll free number from reserved or assigned to working status. (c) Responsible Organizations shall not maintain a toll free number in reserved status if there is not a prospective toll free subscriber requesting that toll free number. (d) A Responsible Organization's act of reserving a number from the Service Management System database shall serve as that Responsible Organization's certification that there is an identified toll free subscriber agreeing to be billed for service associated with the toll free number.  X-(e ) Tariff Provision. The following provision shall be included in the Service Management System tariff and in the local exchange carriers' toll free database access tariffs: ` ` [T]he Federal Communications Commission ("FCC") has concluded that warehousing, which the FCC defines as Responsible Organizations, either directly or indirectly through an affiliate, reserving toll free numbers from the SMS database without having an identified toll free subscriber for whom those numbers are being reserved, is an unreasonable practice under  201(b) of the Communications Act and is inconsistent with the Commission's obligation under  251(e) of the Communications Act to ensure that numbers are made available on an equitable basis; and (2) if a Responsible Organization does not have an identified toll free subscriber agreeing to be billed for service associated with each toll free number reserved from the database, or if a Responsible Organization does not have an identified, billed toll free subscriber before switching a number from reserved or assigned to working status, then there is a rebuttable presumption that the Responsible Organization is warehousing numbers. Responsible Organizations that warehouse numbers will be subject to penalties.  "#i0*$$33G""Ԍ X- Ù 52.107` ` Hoarding.  X- (a) As used in this section, hoarding is the acquisition by a toll free subscriber from a Responsible Organization of more toll free numbers than the toll free subscriber intends to use for the provision of toll free service. The definition of hoarding also includes number brokering, which is the selling of a toll free number by a private entity for a fee. ` ` (1) Toll free subscribers shall not hoard toll free numbers. ` ` (2) No person or entity shall acquire a toll free number for the purpose of selling the toll free number to another entity or to a person for a fee. ` ` (3) Routing multiple toll free numbers to a single toll free subscriber will create a rebuttable presumption that the toll free subscriber is hoarding or brokering toll free numbers.  X-(b ) Tariff Provision. The following provision shall be included in the Service Management System tariff and in the local exchange carriers' toll free database access tariffs: ` ` (1) [T]he Federal Communications Commission ("FCC") has XX` ` concluded that hoarding, defined as the acquisition of more toll free numbers than one intends to use for the provision of toll free service, as well as the sale of a toll free number by a private entity for a fee, is contrary to the public interest in the conservation of the scarce toll free number resource and contrary to the FCC's responsibility to promote the orderly use and allocation of toll free numbers.(#`  X-  X-52.111` ` Permanent Cap on Number Reservations.  Xe-  (a) A Responsible Organization may have in reserve status, at any one time, either 2000 toll free numbers or 7.5 percent of that Responsible Organization's numbers in working status, whichever is greater. (b) A Responsible Organization shall never reserve more than 3 percent of the quantity of toll free numbers in spare status as of the previous Sunday at 12:01 a.m. Eastern Time. (c) The Common Carrier Bureau shall modify the quantity of numbers a Responsible Organization may have in reserve status or the percentage of numbers in the spare poll that a Responsible Organization may reserve when exigent circumstances make such action"#j0*$$33G"" necessary. The Common Carrier Bureau shall establish, modify, and monitor toll free number conservation plans when exigent circumstances necessitate such action.