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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of) ) Puerto Rico Telephone Company ) NSD File No. 98-66 Petition for Temporary Waiver of the ) Four-Digit Carrier Identification Code (CIC)) Implementation Schedule ) ) ) ORDER Adopted: June 15, 1998 Released: June 15, 1998 By the Chief, Network Services Division, Common Carrier Bureau: I. INTRODUCTION 1. Carrier identification codes (CICs) are numeric codes that enable local exchange carriers (LECs) providing interstate interexchange access services to identify the interstate interexchange carrier (IXC) that the originating caller wishes to use to transmit its interstate call. LECs use the CICs to route traffic to the proper IXC and to bill for the interstate access service provided. CICs facilitate competition by enabling callers to use the services of telecommunications service providers either by presubscription or by dialing a carrier access code (CAC) which incorporates that carrier's unique Feature Group D CIC. Originally, CICs were unique three-digit codes (XXX) and CACs were five-digit codes incorporating the CIC (10XXX). 2. On April 11, 1997, in the CICs Second Report and Order, the Commission and the industry agreed to expand Feature Group D CICs from three to four digits as the supply of three-digit codes was exhausted. The industry agreed that as the expansion from three to four-digit CICs occurred, and as carriers replaced their five-digit CACs with seven-digit CACs, a transition, or permissive dialing period, was needed. On October 22, 1997, in the CICs Order on Reconsideration, the Commission created a "two-step" transition. In the first phase, all LECs providing equal access were required to complete switch changes to recognize four-digit CICs by January 1, 1998; the purpose of the second phase, lasting from January 1, 1998, and ending on June 30, 1998, was to give IXCs time to coordinate the conversion process with LECs and to allow callers time to adjust to the new CAC dialing patterns. 3. In response to a Request for Expedited Declaratory Ruling from BellSouth Corporation requesting that the Common Carrier Bureau (Bureau) clarify the Commission's requirements regarding the blocking of three-digit CICs, the Bureau released a CICs Declaratory Ruling on May 1, 1998, in which it clarified that carriers may not begin blocking three-digit CICs earlier than July 1, 1998. On its own motion and pursuant to delegated authority, the Bureau, however, waived the July 1, 1998, deadline for the complete blocking of all three-digit CICs to allow a phase-out of three-digit CICs, with all blocking of three- digit CICs to be completed no later than September 1, 1998. Consequently, as of September 1, 1998, all switches must be upgraded to accept only four-digit CICs and telephone customers must use a seven-digit CAC, that incorporates a carrier's unique four-digit CIC, if they wish to "dial around" their presubscribed service provider to reach another provider of long distance toll service. 4. Puerto Rico Telephone Company (PRTC), the incumbent local exchange carrier in Puerto Rico serving 1,299,467 access lines, filed a petition for temporary waiver of the CICs Order on Reconsideration's requirement that the transition period from three to four- digit CICs end on June 30, 1998, and that it begin blocking three-digit CICs on July 1, 1998. The PRTC seeks to extend the transition period or permissive dialing period during which its customers can use either a five-digit CAC, incorporating a three-digit CIC, or a seven-digit CAC, incorporating a four-digit CIC, from July 1, 1998, to February 1, 1999. The PRTC asserts that the Telecommunications Regulatory Board of Puerto Rico (TRB) has ordered it to implement intraLATA dialing parity on February 1, 1999, and that the only way in which the PRTC can comply with both the Commission deadline and the TRB order in a manner that does not unnecessarily inconvenience consumers is to extend the Commission's June 30, 1998, deadline until February 1, 1999, the implementation date for toll dialing parity. Further, the PRTC contends that customers would be unnecessarily confused by "repeated changes in dialing procedures" if they implemented the change to the CAC dialing pattern on July 1, 1998, and later executed dialing changes associated with a February 1, 1999, local toll dialing parity implementation date. Consumer confusion, PRTC contends, would harm competition. Stating that it would be less burdensome to consumers to implement dialing pattern changes associated with the transition from three-digit to four-digit CICs and local toll dialing parity on the same date, the PRTC requests that we extend, for it, the transition from three-digit to four-digit CICs to coincide with the February 1, 1999, toll dialing parity implementation date. In this Order, for the reasons discussed below, we conclude that the PRTC's request should not be granted. II. DISCUSSION 5. An applicant for waiver must demonstrate that special circumstances warrant a deviation from the general rule and that such deviation will serve the public interest. In the First CICs Waiver Order, the Bureau's Network Services Division (Division) stated the factors it weighed in evaluating each petition for waiver: the LEC's diligence in upgrading its switches; the availability from manufacturers of products required to accomplish the upgrade; and the impact of an extension of the conversion deadline on the IXCs served by the LEC's switches and on customers' ability to reach IXCs through CAC dialing. The Division finds that the request for waiver filed by PRTC does not demonstrate the special circumstances meriting a grant of the waiver. 6. First, the PRTC reports that it has completed the first step of the two-step transition process from three-digit to four-digit CICs, by upgrading its end-office switches to accept four-digit CICs as of January 1, 1998. In addition, the PRTC states that it is "technically prepared" to end the transition period during which customers can dial either five-digit CACs, incorporating three-digit CICs, or seven-digit CACs, incorporating four-digit CICs, on June 30, 1998, as required by the CICs Order on Reconsideration. Based on these facts, we find that the first and second prongs of the criteria discussed above are not relevant considerations in this instance and we conclude that no operational reason exists for grant of a waiver to extend the end of the transition period, during which customers can dial both five- digit CACs and seven-digit CACs until February 1, 1999. 7. Second, we disagree with the PRTC's assertion that IXCs will benefit from the extension of the permissive dialing period until February 1, 1999. Indeed, we conclude that the impact of this waiver upon IXCs and their customers is likely to be adverse and significant. For example, an extension of the permissive dialing period would unduly burden IXCs offering service in PRTC's service territory by requiring them to prepare and distribute unique education materials to the customers served by the PRTC's 1.2 million access lines. To comply with the CICs Order on Reconsideration's requirement that IXCs education their customers about the dialing pattern change caused by the conversation from three-digit to four-digit CICs on July 1, 1998, IXCs operating throughout the United States, including Puerto Rico, would be required to develop two sets of educational materials -- one that informs customers located in the continental United States of the July 1, 1998, implementation date for seven-digit CAC dialing and a second set that informs the IXCs' customers in Puerto Rico of the February 1, 1999, implementation date for seven-digit CAC dialing for calls originating in Puerto Rico. 8. Third, we conclude that the PRTC has not offered any persuasive evidence to support its contention that its customers will be confused by learning about the July 1, 1998, CAC dialing pattern change caused by the conversion from three to four-digit CICs and, seven months later, learning about their ability to presubscribe to long distance carriers other than the PRTC resulting from implementation of intraLATA toll dialing parity on February 1, 1999. To the contrary, we believe the customer confusion is likely to increase should the requested waiver be granted, and that this confusion will deter customers from using CACs to make dial-around calls, to the detriment of toll competition both on and off of Puerto Rico. 9. Currently in Puerto Rico, telephone customers can presubscribe to an IXC for calls terminating off of Puerto Rico (inter-island calls), but cannot presubscribe to any IXC other than PRTC for long distance calls originating and terminating on Puerto Rico (intra-island calls). As a result, subscribers in Puerto Rico seeking to access the services of an IXC for calls to the United States and other points off of Puerto Rico either can dial direct using their presubscribed IXC, or can "dial around" their presubscribed IXC by dialing a five or seven- digit CAC (that incorporates the IXC's CIC), plus the area code and the seven-digit called telephone number. Subscribers that wish to use the services of an IXC other than PRTC for intra-island long distance calls also may "dial around" PRTC by dialing a five or seven-digit CAC (that incorporates the IXC's CIC), plus the seven-digit called telephone number. Without a waiver, the permissive dialing period will end on June 30, 1998, and the requirement to use seven-digit CACs will affect customers making intra-island or inter-island toll calls identically. When intra-island toll parity begins on February 1, 1999, and telephone customers can presubscribe to any IXC for intra-island calls, as well as inter-island calls, customers will continue to use a seven-digit CAC to make both types of dial around calls. 10. Should we grant the requested waiver, however, customers in Puerto Rico would face the following situation after July 1, 1998: (1) dial a seven-digit CAC to reach an IXC other than their pre-subscribed IXC to make an inter-island call (e.g., a call from Puerto Rico to the United States mainland); (2) dial either a five or seven-digit CAC to reach an IXC other than PRTC to make a call that originates and terminates in Puerto Rico, but only until January 31, 1999; and (3) on February 1, 1999, dial only a seven-digit CAC to reach any IXC other than their presubscribed IXC to make a call that originates and terminates in Puerto Rico. We conclude that this situation will result in unacceptable subscriber confusion. 11. We also disagree with PRTC's characterization of the implementation of toll dialing parity for intra-island long distance calls as a change in dialing patterns or methods that, if implemented seven months following the implementation of seven-digit CAC dialing, will needlessly confuse consumers. We conclude that implementation of toll dialing parity for intra-island toll calls is an expansion of the consumers' choice of IXCs and not a dialing pattern change. After February 1, 1999, consumers in Puerto Rico will be able to presubscribe to IXCs other than PRTC for intra-island toll calls, as well as for inter-island toll calls. Regardless of whether the presubscribed carrier is PRTC or another carrier, consumers nevertheless must use a seven-digit CAC if they wish to "dial around" that presubscribed carrier. Thus, we do not find, as PRTC suggests, that the implementation of seven-digit CAC dialing on July 1, 1998, followed by the implementation of intraLATA dialing parity on February 1, 1999, requires consumers to learn and unlearn new and different dialing methods. 12. Moreover, PRTC's situation is not unique; intrastate intraLATA toll dialing parity has not been implemented in most jurisdictions. Thus, IXCs operating in those jurisdictions will face virtually identical situations in having to educate their customers about the change in CAC dialing that takes effect on July 1, 1998, and in having to later educate customers about their ability to presubscribe to any carrier for intraLATA toll service. 13. The Division has previously granted waivers extending the switch conversion deadline for four-digit CIC capability beyond January 1, 1998, to small incumbent LECs serving approximately 10,000 or less access lines. In granting the waivers of the switch conversion deadline, the Division carefully balanced the impact of its decision upon LECs requesting waivers, IXCs, and customers. We note, however, that the PRTC serves more than 1.2 million access lines and, therefore, a far larger number of IXC customers would be affected by the grant of this waiver request than by previously granted waivers. We find that the number of customers served by PRTC weighs against the grant of the requested waiver particularly, where, as here, the impact on IXCs and their customers is likely to be significant. 14. In sum, we find that the PRTC has not demonstrated the special circumstances necessary for grant of a temporary waiver of the CICs Order on Reconsideration's requirement that the transition from three to four-digit CICs end on June 30, 1998. Accordingly, the PRTC must begin upgrading its networks to phase out the use of three-digit CICs and allow only the use of four-digit CICs on July 1, 1998. As required in the CICs Declaratory Order, the phase out of the three-digit CICs must be completed no later than September 1, 1998. III. ORDERING CLAUSES 15. IT IS ORDERED, pursuant to Section 1.3 of the Commission's rules, 47 C.F.R.  1.3, and authority delegated in Section 0.91 of the Commission's rules, 47 C.F.R.  0.91, and Section 0.291 of the Commission's rules, 47 C.F.R.  0.291, that the Petition for Temporary Waiver filed by the Puerto Rico Telephone Company, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Geraldine A. Matise Chief, Network Services Division Common Carrier Bureau