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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 Coon Valley Telephone Company ) Jordan-Soldier Valley Cooperative Telephone) Company ) Jefferson Telephone Company ) NSD File Nos. 98-95; ) 98-96; 98-94 Petitions for Waiver of the ) Four-Digit Carrier Identification Code (CIC)) Implementation Schedule ) ORDER Adopted: July 13, 1998 Released: July 14, 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, or 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 approved an industry plan to expand Feature Group D CICs from three to four digits on the ground that it was a reasonable method of meeting future demand for CICs 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. The industry, however, was unable to agree on the length of the transition. In its 1994 CICs NPRM, the Commission proposed a six-year period. In the CICs Second Report and Order, however, because of the rapidly depleting pool of available three-digit CICs, the Commission decided to end the transition on January 1, 1998. The Commission also denied requests to "grandfather" (i.e., to permit carriers to continue to use) previously assigned three-digit CICs that are in use at the end of the transition. The Commission's decisions were intended to advance the pro- competitive objectives of the Communications Act of 1934 (the Communications Act or the Act), as amended by the Telecommunications Act of 1996 (1996 Act). 3. On October 22, 1997, in the CICs Order on Reconsideration, the Commission modified the decision in the CICs Second Report and Order regarding the length of the transition during which three and four-digit Feature Group D CICs co-exist, and created a "two-step" end to the transition to four-digit CICs. Under the CICs Order on Reconsideration, all LECs that provide equal access must have completed switch changes to recognize four-digit CICs by January 1, 1998, the end of the first phase. The second phase, which ends on June 30, 1998, is intended to allow interexchange carriers time to prepare their networks for, and educate their customers about, the replacement of three-digit CICs by four- digit CICs. After June 30, 1998, only four-digit CICs and seven-digit CACs will be recognized. The Commission also affirmed its decision in the CICs Second Report and Order not to grandfather the use of three-digit CICs and five-digit CACs that are in use during the transition. 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. Two small LECs have filed petitions for extension of previously granted waivers of the CICs Second Report and Order and CICs Order on Reconsideration's January 1, 1998 LEC conversion deadline. Coon Valley Telephone Company (Coon Valley) requests an extension until October 30, 1998 and Jordan-Soldier Valley Cooperative Telephone Company (Jordan-Soldier) seeks an extension until August 31, 1998. Another small LEC, Jefferson Telephone Company (Jefferson), that became an equal access provider after the release of the CICs Order on Reconsideration, also has filed a petition requesting an extension until August 31, 1998. 5. In this Order, we conclude that, for the reasons discussed below, the requests of Coon Valley, Jordan-Soldier and Jefferson should be granted, by extending for them the switch conversion deadline for four-digit CIC capability for the time periods requested. We advise the parties, however, that we will not entertain further requests for extension of time in which to meet their obligation to provide four-digit CIC capability, absent a timely and compelling demonstration of extraordinary circumstances. II. DISCUSSION 6. The Commission may waive any provision of its rules, in whole or in part, if good cause is shown. 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, we stated the factors we 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. We have weighed these same factors in evaluating each petition before us. A. Coon Valley Telephone Company and Jordan-Soldier Valley Cooperative Telephone Company 7. Coon Valley and Jordan-Soldier are two of eleven Iowa LECs on whose behalf GVNW filed a petition for waiver of the four-digit CIC conversion deadline in December 1997. GVNW asserted that each of the LECs participates in centralized equal access service provided by Iowa Network Services (INS); that the INS centralized equal access function provides presubscription and equal access capabilities through a centralized switching system rather than through provisioning in each end office switch; and that the eleven Iowa LECs invested in digital switching technology before switch manufacturers made equipment with four-digit CIC capability. GVNW further asserted that because the LECs had been providing new services through the INS switch, they had not been required to invest in upgrades to their individual end offices. GVNW asserted that, through the INS, the eleven Iowa LECs were able to provide equal access earlier than other rural LECs, and although they cannot provide dial-around capabilities to carriers with four-digit CICs, they are able to provide them with equal access presubscription. 8. Based on communications with INS, the eleven Iowa LECs, including Coon Valley and Jordan-Soldier, believed that they could become four-digit CIC compliant through INS, without upgrading or replacing their own switches. They learned in November 1977, however, that if they did not have SS7 capability, they might not be able to upgrade to provide four-digit CICs capability. GVNW asserted that, upon learning of these problems, the eleven Iowa LECs had taken immediate action to become four-digit CIC compliant as quickly as technically feasible in order to meet the June 30, 1998 end of the permissive dialing period. GVNW asserted that, in the interim, only the relatively small number of dial-around calls using four-digit CICs will be affected. 9. Coon Valley decided to pursue software generic upgrades to become four-digit CIC compliant and requested an extension of the switch conversion deadline until June 30, 1998. Coon Valley intended to expedite its plans to upgrade its software (from 14.1 generic to 21 generic, costing approximately $235,000), originally scheduled for the third quarter of 1998. At the time of its original petition for waiver, Jordan-Soldier was pursuing interconnection agreements with other carriers that would act as host switches for various features and functions, to include the four-digit CIC capability, had initiated an interconnection agreement with a neighboring LEC, and anticipated interconnection by the end of the permissive dialing period on June 30, 1998. The Division found that both LECs had demonstrated the special circumstances meriting a grant of the requested relief and granted waivers on December 24, 1997. 10. In its request for extension, Coon Valley states that since its original request for waiver, it has concluded that it would be more beneficial to replace its switch entirely, rather than to upgrade it, and has selected a vendor to replace the current switch. Replacement of the switch, rather than an upgrade, would save it an estimated $40,000. The current implementation schedule calls for completion of the switch installation on October 29, 1998. Coon Valley states that it is making a concerted effort to comply with all of the Commission's requirements. It also states that the grant of the extension request will have a minimal impact on its customers, will allow the company greater flexibility to meet the current and future regulatory requirements, and will serve the best interest of the public. 11. Jordan-Soldier states that although it anticipated at the time of its original petition that the interconnection arrangement it planned would be operational by June 30, 1998, it then determined that, notwithstanding the interconnection agreement, either a switch replacement or an upgrade to its generic software was an operational necessity because the translations fields in its current software generic cannot accommodate a four-digit CIC and seven-digit CAC. Moreover, Jordan-Soldier states that it has been acquired by another company since the filing of its original waiver. Although the new company management has taken action to acquire a used switch, Jordan-Soldier states that it has not been able to secure a team to install the switch. Jordan-Soldier also states that preliminary discussions with one of the two vendors that it is working with indicate that the switch could be installed and operational by August 31, 1998. It, therefore, seeks an extension of its prior waiver to that date. Jordan-Soldier states that it is making a concerted effort to comply with all of the Commission's requirements. It also states that the grant of the extension request will have a minimal impact on its customers and will serve the best interest of the public. 12. We find that the request for extension of waiver filed by Coon Valley and Jordan-Soldier demonstrate the special circumstances meriting a grant of the extension. Both have diligently worked to replace their switches by the June 30, 1998, deadline. As stated in our Third CICs Waiver Order, we note that Coon Valley and Jordan-Solider use a centralized equal access service provided by INS. Both learned in early November 1997, that they would not be able to use the INS centralized switching system to become four-digit CIC compliant, since they did not have SS7 capability. Coon Valley pursued software generic upgrades to become four-digit CIC compliant and Jordan-Soldier pursued interconnection agreements with other carriers that would act as host switches for various functions, including the four-digit CIC capability. Upon further review, Coon Valley determined that switch replacement would be more beneficial, saving it approximately $40,000. Similarly, Jordan- Soldier concluded that, notwithstanding the interconnection agreement, either a switch replacement or an upgrade to the generic software was an operational necessity because of the need for an expansion in the translation fields to accommodate four-digit CICs and seven- digit CACs. Although the additional delay in Coon Valley's and Jordan-Soldier's ability to meet the requirements of the CICs Second Report and Order and the CICs Order on Reconsideration stem from their decision to replace, rather than upgrade, their switching equipment, we find that both are diligently working to bring their networks into compliance with the four-digit CIC capability requirement in the most efficient way possible. 13. Second, we conclude that Coon Valley and Jordan-Soldier have demonstrated that the products needed to accomplish the upgrade of their network are not readily available from switch manufacturers and that this fact has significantly affected their ability to meet the June 30, 1998, deadline. In its current petition for extension of its waiver beyond June 30, 1998, Coon Valley states that because of Mitel's schedule, installation of its new switch cannot be completed until October 28, 1998. Noting that the completion date does not include time for testing, Coon Valley requests that a waiver extension be granted until October 31, 1998. Jordan-Soldier states that although it has arranged for acquisition of a switch, it has been unable to secure an installation team of technicians to physically connect and test the components before turning the switch over to the company. One of the two vendors with whom it is engaged in discussions indicates that the switch could be installed and operational by August 31, 1998, and Jordan-Soldier states that it is working diligently with the vendors to meet that date. 14. Third, we find that the impact of an extension of the conversion deadline on the IXCs and customers served by Coon Valley and Jordan-Soldier does not outweigh the burden on them that would be imposed by a denial of their requests for further extension. We recognize that IXCs operating in the areas served by Coon Valley and Jordan-Soldier have not had an opportunity to prepare their networks and to educate their customers, as anticipated by the two-step transition created in the CICs Order on Reconsideration. We find, however, that the technical and economic burden on Coon Valley and Jordan-Soldier that would be imposed by a denial of the extensions outweighs the burden to the IXCs and their customers. Coon Valley serves only approximately 454 access lines and Jordan-Soldier serves approximately 337 access lines. We note that because Coon Valley's network will not accept four-digit CICs until October 31, 1998, and Jordan-Soldier's network will not accept four-digit CICs until August 31, 1998, CAC calling will not be available to IXCs and their customers from June 30, 1998, until October 31, 1998 and August 31, 1998, respectively. Nonetheless, the effect on seven-digit CAC dialing for these small numbers of access lines is not outweighed by the burden that would be imposed on Coon Valley and Jordan-Soldier by requiring them to install the more costly generic software upgrade. 15. We cannot ignore, however, the difficulties that the IXCs served by Coon Valley and Jordan-Soldier will experience in educating their customers about the forthcoming changes in dialing patterns, and the inability of these IXCs' customers to reach them through CAC dialing until Coon Valley and Jordan-Soldier have converted to accept four-digit CICs on October 31, 1998, and August 31, 1998, respectively. We, therefore, condition our grant of the requests to extend the switch conversion deadline. As of June 30, 1998, IXCs have converted from three-digit CICs to four-digit CICs and from five-digit CACs to seven-digit CACs. Thus, IXCs assigned four-digit CICs will expect their customers to be able to reach them by dialing seven-digit CACs. Their customers will have the same expectation. Coon Valley and Jordan-Soldier will not be able to meet those expectations. Therefore, we require that, no later than July 20, 1998, in its intercept message, Coon Valley indicate that callers will not be able to reach their long distance carriers through access code dialing until November 1, 1998. Similarly, Jordan-Soldier's intercept message must, beginning no later than July 20, 1998, indicate that callers will not be able to reach their long distance carriers through access code dialing until September 1, 1998. This intercept message should help minimize disruption to the IXCs served by Coon Valley and Jordan-Soldier and to those IXCs' customers trying to reach Coon Valley and Jordan-Soldier by CAC dialing between June 30, 1998, and the expiration of their waiver extensions on October 31, 1998 and August 31, 1998. We also require that Coon Valley and Jordan-Soldier provide the same notification in bill inserts to customers. 16. In addition, because we grant Coon Valley and Jordan-Soldier extensions beyond the end of the permissive dialing period, we impose an additional requirement on them to assist the Division in monitoring their diligence in converting to four-digit CICs by October 31, 1998, and August 31, 1998, the expiration of their waiver extensions. Specifically, Coon Valley must file reports with the Division on September 1 and October 1, 1998, detailing the progress it has made towards becoming four-digit CIC compliant. The reports should contain information concerning, but not limited to, the status of steps taken to ensure software upgrades and/or switch replacements to convert to four-digit CICs. We believe such a reporting condition is necessary to ensure that Coon Valley complies with the Commission's four-digit CIC conversion requirement in a manner consistent with the public interest and to avoid further requests for waiver of the conversion deadline. Coon Valley also must file a report with the Division on November 9, 1998, confirming that its switch has been installed and that it began providing four-digit CIC capability by October 31, 1998. The report should contain information including, but not limited to, an affidavit from an engineer confirming installation of the new switch and its compliance with our requirement that the switch recognize four-digit CICs. 17. Similarly, Jordan-Soldier must file a report with the Division on August 1, 1998, detailing the progress it has made towards becoming four-digit CIC compliant. The report should contain information concerning, but not limited to, the status of steps taken to ensure software upgrades and/or switch replacements to convert to four-digit CICs. We believe such a reporting condition is necessary to ensure that Jordan-Soldier complies with the Commission's four-digit CIC conversion requirement in a manner consistent with the public interest and to avoid further requests for waiver of the conversion deadline. Jordan-Soldier also must file a report with the Division on September 8, 1998, confirming that its switch has been installed and that it began providing four-digit CIC capability by August 31, 1998. The report should contain information including, but not limited to, an affidavit from an engineer confirming installation of the new switch and its compliance with our requirement that the switch recognize four-digit CICs. We believe that the reporting conditions we impose on Coon Valley and Jordan-Soldier are necessary to ensure that they comply with the Commission's four-digit CIC conversion requirement in a manner consistent with the public interest. We again advise the parties that we will not entertain further requests for extension of time, absent a timely and compelling showing of extraordinary circumstances. B. Jefferson Telephone Company 18. In October 1997, Jefferson, a rural LECs serving South Dakota, filed a petition requesting an extension of the switch conversion deadline until June 30, 1998. Jefferson asserted that it did not provide Feature Group D equal access, because it had never received a request for equal access. Jefferson stated that even if it were to receive a request for equal access, the market it serves is small and the company would be allowed three years after a bona fide request to begin providing equal access. Because the CICs Order on Reconsideration requires January 1, 1998 switch conversion to accommodate four-digit CICs only by those LECs providing equal access, however, and Jefferson was not providing equal access, the Division dismissed its petition as moot. 19. In its current petition, Jefferson states that it wishes to clarify that at the time of the original petition, it was in the last stages of implementing equal access and completed that process by December 31, 1997. It further states that it is now, however, in a position where it will not be four-digit CIC capable by June 30, 1998, because it requires, at a minimum, an upgrade to the switch to the latest generic software level. Jefferson has been unable to complete that process as a result of a combination of factors, including the sale of the company, a miscommunication between the company and Nortel as to who would be responsible for the work, and the departure from the company of the employee responsible for database conversions and translations. Jefferson states that it has reached a commitment from Nortel to complete the conversion by August 26, 1998, and requests an extension of the requirement to process four-digit CICs until August 31, 1998. Jefferson states that it is making a concerted effort to comply with all of the Commission's requirements. It also expresses concern that, without the waiver, complaints may be filed against it since it will not be four-digit CIC compliant by June 30, 1998 and states that the grant of the extension request will have a minimal impact on its customers, and will serve the best interest of the public. 20. On balance, we find that the request for extension of waiver filed by Jefferson demonstrates the special circumstances meriting a grant of the extension. Although Jefferson filed a request for waiver of the January 1, 1998 deadline, it stated in that waiver request that it did not provide equal access. For this reason, Jefferson's petition was dismissed as moot. Jefferson now clarifies that "it was in the last stages of implementing equal access," and completed that process by December 31, 1997. Although we question Jefferson's delay in seeking a waiver of the January 1, 1998, four-digit CIC conversion deadline for all LECs providing equal access, Jefferson notes that it is actively pursuing a remedy to meet the requirements of the CICs Second Report and Order and CICs Order on Reconsideration. We advise Jefferson that we will carefully scrutinize any future request for extension and its diligence in pursuing relief in a timely fashion. 21. Second, we conclude that Jefferson has demonstrated that the products needed to accomplish the upgrade of its network are not readily available from switch manufacturers and that this fact has significantly affected its ability to meet the June 30, 1998, deadline. In its current petition for waiver until August 31, 1998, Jefferson states that because of Nortel's schedule, the conversion of numbers into the database has not been completed. Jefferson represents that it has reached a commitment from Nortel to complete the conversion on August 26, 1998. To accommodate some testing to ensure four-digit CIC capability, Jefferson requests an extension of time until August 31, 1998. 22. Third, we find that the impact of an extension of the conversion deadline on the IXCs and customers served by Jefferson does not outweigh the burden on it that would be imposed by a denial of its request for extension. We recognize that IXCs operating in the areas served by Jefferson have not had an opportunity to prepare their networks and to educate their customers, as anticipated by the two-step transition created in the CICs Order on Reconsideration. We find, however, that the technical and economic burden on Jefferson that would be imposed by a denial of the extension outweighs the burden to the IXCs and their customers. Jefferson serves approximately 550 access lines, 4 payphones and no hotel-motel lines. We note that because Jefferson's network will not accept four-digit CICs until August 31, 1998, CAC calling will not be available to IXCs and their customers from June 30, 1998, until August 31, 1998. We believe, however, that the effect on seven-digit CAC dialing for this small number of access lines is not outweighed by the burden that would be imposed on Jefferson by requiring them to attempt to accelerate the conversion schedule agreed upon with Nortel. 23. We cannot ignore, however, the difficulties that the IXCs served by Jefferson will experience in educating their customers about the forthcoming changes in dialing patterns, and the inability of these IXCs' customers to reach them through CAC dialing until Jefferson has converted to accept four-digit CICs on August 31, 1998. We, therefore, condition our grant of the request to extend the switch conversion deadline. As of June 30, 1998, IXCs have converted from three-digit CICs to four-digit CICs and from five-digit CACs to seven-digits CACs. Thus, IXCs assigned four-digit CICs will expect their customers to be able to reach them by dialing seven-digit CICs. Their customers will have the same expectation. Jefferson will not be able to meet those expectations. Therefore, we require that, no later than July 20, 1998, in its intercept message, Jefferson indicate that callers will not be able to reach their long distance carriers through access code dialing until September 1, 1998. This intercept message should help minimize disruption to the IXCs served by Jefferson to those IXCs' customers trying to reach Jefferson by CAC dialing between June 30, 1998, and the expiration of its waiver extension on August 31, 1998. We also require that Jefferson provide the same notification in bill inserts to customers. 24. In addition, because we grant Jefferson an extension beyond the end of the permissive dialing period, we impose an additional requirement on it to assist the Division in monitoring its diligence in converting to four-digit CICs by August 31, 1998, the expiration of its waiver extension. Specifically, Jefferson must file a report with the Division on August 1, 1998, detailing the progress it has made towards becoming four-digit CIC compliant. The report should contain information concerning, but not limited to, the status of steps taken to ensure software upgrades and/or switch replacements to convert to four-digit CICs. We believe such a reporting condition is necessary to ensure that Jefferson complies with the Commission's four-digit CIC conversion requirement in a manner consistent with the public interest and to avoid further requests for waiver of the conversion deadline. Jefferson also must file a report with the Division, on September 8, 1998, confirming that its switch has been upgraded and that it began providing four-digit CIC capability by August 31, 1998. The report should contain information including, but not limited to, an affidavit from an engineer confirming installation of the new generic software upgrade and its compliance with our requirement that the switch recognize four-digit CICs. We believe that the reporting condition we impose on Jefferson is necessary to ensure that it complies with the Commission's four-digit CIC conversion requirement in a manner consistent with the public interest. We again advise Jefferson that we will not entertain further requests for extension of time, absent a timely and compelling showing of extraordinary circumstances. IV. ORDERING CLAUSES 25. 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 of Coon Valley Telephone Company for Extension of Time Granted in Prior Waiver is GRANTED by extending for it the switch conversion deadline for four-digit CIC capability until October 31, 1998, subject to the conditions stated herein. 26. 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 of Jordan-Soldier Valley Cooperative Telephone Company for Extension of Time Granted in Prior Waiver is GRANTED by extending for it the switch conversion deadline for four-digit CIC capability until August 31, 1998, subject to the conditions stated herein. 27. 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 of Jefferson Telephone Company for Extension of Time Granted in Prior Waiver is GRANTED by extending for it the switch conversion deadline for four-digit CIC capability until August 31, 1998, subject to the conditions stated herein. FEDERAL COMMUNICATIONS COMMISSION Geraldine A. Matise Chief, Network Services Division Common Carrier Bureau