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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 ) ) Public Utility Commission of Texas ) NSD File No. L-98-105 Petition for Expedited Waiver of ) 47 C.F.R. Section 52.19(c)(3)(ii) for) Area Code Relief ) ORDER Adopted: October 23, 1998 Released: October 23, 1998 By the Deputy Chief, Common Carrier Bureau: I. INTRODUCTION 1. On July 23, 1998, the Public Utility Commission of Texas (Texas Commission) filed a petition for expedited waiver of the Commission's rules which require ten-digit local dialing by all customers within and between area codes covered by an area code overlay. The Texas Commission requested that the Commission waive the ten-digit dialing requirement of section 52.19(c)(3)(ii) for a period not to exceed six months from the date overlays are implemented in the Dallas and Houston areas. In the alternative, the Texas Commission seeks a waiver of the ten-digit dialing requirement only for those central office codes in an overlaid numbering plan area (NPA) which include telephone numbers assigned to customer-premises alarm systems. For the reasons discussed herein, the full relief requested in the Texas Commission's Petition is granted. Accordingly, the Texas Commission may eliminate the geographic division between the 214 and 972 area codes in Dallas, and the 713 and 281 area codes in Houston, thereby creating an overlay in both metropolitan areas, but delay implementing ten-digit dialing until six-months after the overlays are activated. II. BACKGROUND 2. Section 251(e)(1) of the Communications Act of 1934 ("the Act"), as amended by the Telecommunications Act of 1996 ("1996 Act") gives the Commission "exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States," and allows the Commission to delegate to state commissions or other entities "all or any portion of such jurisdiction." The Local Competition Second Report and Order acknowledged that "states are uniquely situated to determine what type of area code relief is best suited to local circumstances," and authorized states to continue the task of overseeing the introduction of new area codes. 3. Section 52.19 of the Commission's regulations delegates to the state commissions the authority to resolve matters involving the introduction of new area codes. Section 52.19(c)(3)(ii) provides, however, that "[n]o area code overlay may be implemented unless there exists, at the time of implementation, mandatory ten-digit dialing for every telephone call within and between all area codes in the geographic area covered by the overlay area code." 4. On July 9, 1998, the Texas Commission directed the Texas Code Administrator to implement NPA relief in the metropolitan Dallas and Houston areas. The NPA boundary currently separating the 214 and 972 NPAs in Dallas would be eliminated on December 5, 1998, creating a single area served by both NPAs. A new overlay NPA would also be added to the Dallas area, comprising the same area served by the 214 and 972 NPAs, in July 1999. In Houston, the boundary separating the 713 and 281 NPAs would be eliminated on January 16, 1999. Coincident with the elimination of the 713/281 boundary, a third new overlay NPA would be introduced to the Houston area, encompassing the 713 and 281 areas. The Petition seeks a temporary waiver of the ten-digit dialing requirement for the Dallas and Houston areas citing the short time frame in which to complete customer education efforts and necessary modifications to customer premises alarm equipment as the principal reasons for the request. 5. One party, Logix Communications Corporation (Logix), a competitive local exchange carrier (CLEC), filed comments in opposition to the Texas Commission's waiver request. Logix disputes the Texas Commission's contention that five months is an inadequate amount of time to complete consumer education efforts, noting that in the previous NPA splits of Dallas and Houston, the NPA relief took place approximately five months after the Texas Commission approved the split. Logix also argues that as early as April 1998, industry participants in the NPA relief planning effort for the Dallas and Houston areas informed the Texas Commission that alarm system modifications would be a central concern in implementing overlays in Texas. Thus, according to Logix, the Texas Commission has had adequate time to prepare the industry and the public for the modifications necessary to accommodate the change to ten-digit dialing. Logix also contends that the anti-competitive effects of the requested waiver are not overcome by the temporary nature of the waiver request. III. DISCUSSION 6. Under Section 1.3 of the Commission's rules, the Commission may exercise its discretion to waive a rule where there is "good cause" to do so. That discretion, however, "does not contemplate that an agency must or should tolerate evisceration of a rule by waivers." Rather, petitioners generally face a "high hurdle" to show that a waiver is justified. A waiver of the rules is appropriate if special circumstances warrant a deviation from the general rule and such deviation will serve the public interest. Examples of special circumstances the Commission may consider include hardship imposed by the rule's enforcement, equity, or more effective implementation of overall policy on an individual basis. Further, a decision to grant a waiver must be based on articulated, reasonable standards that are predictable, workable, and not susceptible to discriminatory application. 7. The Bureau denied two prior requests from state public utility commissions for a permanent waiver of the ten-digit dialing requirement in the case of the activation of an overlay NPA. The Bureau did, however, grant a temporary waiver of the ten-digit dialing requirement in both cases, citing three factors justifying the temporary delay: (1) insufficient time remained to adjust telecommunications networks for the change to ten-digit dialing; (2) insufficient time remained to educate customers to the change in dialing patterns; and (3) certain geographic conditions weighed in favor of the grant of a temporary delay. Although the geographic considerations that, in part, led to a grant of a temporary waiver of ten-digit dialing requirements in New York are not present in Texas, we find that special circumstances in the instant matter favor granting the Texas Commission's request for a six- month delay of ten-digit dialing in the Dallas and Houston areas following the implementation of NPA overlays in those cities. The additional time required properly to educate consumers to the change in dialing patterns, and the additional time required to reprogram alarm systems, warrant a temporary deviation from the Commission's rules requiring ten-digit dialing in areas served by two or more overlaid NPAs. 8. Inadequate Time Remains for Consumer Education, Reprogramming Alarm Equipment. We agree with the Texas Commission that more time is required to complete consumer education regarding the change in dialing patterns and to reprogram customer- premises alarm equipment so as to accommodate the ten-digit dialing requirement in Dallas and Houston. The Texas Commission states that it did not finalize the NPA relief plans for the Dallas and Houston metropolitan areas until June 24, 1998, and did not issue an order until July 10, 1998, directing implementation of these relief plans. As such, with the first overlay scheduled for December 5, 1998, only a five-month period exists in which to prepare customers for the change in local dialing patterns and to reprogram alarm equipment. The Texas Commission states that it delayed adoption of the plan in order to ascertain that it was necessary and that no other alternatives existed. While we would prefer that state commissions not wait until NPA exhaust reaches a critical stage before making the decision as to the form in which they will activate new NPAs, we cannot, in this instance, conclude that the Texas Commission acted unreasonably. Only two years ago, the Texas Commission undertook an NPA relief plan which, while projected to last more than five years, found several NPAs in jeopardy within one year. It is understandable that the Texas Commission would authorize implementation of a new NPA relief plan only after it was satisfied that one was necessary. 9. We decline to second guess the Texas Commission's assessment that more time is needed to educate consumers to a change in dialing patterns. Moreover, we are not persuaded by Logix's arguments to the contrary, which rely on the facts behind the previous area code relief of Dallas and Houston, in which area code splits were made shortly after mandates ordering such relief. As the Texas Commission notes, however, although these splits were implemented within six months, as splits, rather than overlays, they included a permissive dialing period during which customers could dial either seven digits or ten digits to complete calls within the geographic area covered by the splits. As a practical matter, this permissive dialing period allowed for a longer period of consumer education. We conclude that granting the instant waiver request will serve to provide a similar amount of time until a mandatory dialing change occurs under the proposed NPA relief plan as in the previous NPA splits. 10. Similarly, we agree that more time is needed to allow the alarm industry to reprogram equipment to account for the change in dialing patterns in the Dallas and Houston areas. Although the alarm industry has already begun to make system modifications in the affected NPAs, the Texas Commission has determined that alarm providers in the Dallas and Houston areas need additional time to convert each alarm unit to ten-digit dialing, because most automated alarm systems must be individually reprogrammed or replaced to support the new dialing requirement. This view is supported by the North Texas Alarm Association, which contends that the alarm industry requires until July 1999 to complete reprogramming to allow ten-digit dialing in tens of thousands of alarm panels. Moreover, we note that in the prior NPA splits in Dallas and Houston, the alarm industry was given an additional eighteen months beyond the end of the permissive dialing period to complete system modifications. 11. Potential Anticompetitive Effects of a Waiver. We find that the requested relief a delay of ten-digit dialing for six months from the date of NPA overlay implementation strikes an acceptable balance between assuring a smooth transition to the new dialing pattern and the potential anti-competitive impacts of allowing seven-digit dialing within an area covered by two or more overlaid NPAs. Although we share Logix's concern that CLECs in Dallas and Houston without NXXs in the "old" NPAs could be competitively disadvantaged during the waiver period, we conclude that this potential problem is mitigated by the existence of several NXX codes in the existing NPAs which remain available for use by the industry. Moreover, in Dallas, where a new NPA is not slated for introduction until July 1999, telecommunications carriers which obtain NXX codes during the waiver period will not be put at a disadvantage by an unfamiliar NPA. 12. Another factor weighing in favor of our grant of the Texas Commission's petition is that in both Dallas and Houston, local number portability (LNP) has been available for several months. Logix correctly notes that the mere existence of LNP in a given area does not assure competitively neutral access to telephone numbers in an overlay plan with seven-digit dialing. The Bureau has determined, however, that long-term number portability does reduce some of the anticompetitive effects of overlays by allowing an incumbent LEC's customers to retain their phone numbers when switching to a CLEC. IV. CONCLUSION 13. We find that the Texas Commission has met the requirements of section 1.3 of our rules and the waiver standard articulated in WAIT Radio and Northeast Cellular. As stated above, it has shown the special circumstances which warrant a deviation from the Commission's rules. Furthermore, the relief proposed, a six-month waiver, serves the public interest by providing sufficient time for customer education and time to reprogram alarm equipment, while the relatively short period of time keeps anticompetitive impacts to a minimum. We also note that on two prior occasions, the Bureau waived the ten-digit dialing requirement in areas facing circumstances similar to those of Texas. We thus grant the Texas Commission's petition in its entirety and waive the requirement of ten-digit dialing in the Dallas and Houston areas for a period of time not to exceed six months from the date of overlay implementation in those areas. Specifically, the six-month waiver period in Dallas will begin when the boundary separating the 214 and 972 NPAs is eliminated, and the waiver period in Houston will begin when the boundary separating the 713 and 281 NPAs is eliminated. V. ORDERING CLAUSE 14. IT IS THEREFORE ORDERED, pursuant to sections 1.3 and 52.19 of the Commission's rules, 47 C.F.R.  1.3 and 52.19, and by authority delegated in sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R.  0.91 and 0.291, that the Texas Commission's Petition for Expedited Temporary Waiver of 47 C.F.R. Section 52.19 is GRANTED as described herein. FEDERAL COMMUNICATIONS COMMISSION Yog R. Varma Deputy Chief, Common Carrier Bureau