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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 ) ) NSD File No. 98-10 Administration of the ) North American Numbering Plan ) MEMORANDUM OPINION AND ORDER Adopted: February 11, 1998 Released: February 11, 1998 By the Chief, Common Carrier Bureau: I. INTRODUCTION 1. This Memorandum Opinion and Order addresses a petition for waiver filed by the National Exchange Carrier Association, Inc. (NECA) seeking a waiver of certain provisions of the Commission's NANP Order III that relate to NECA's role as the North American Numbering Plan Administrator's (NANPA) billing and collections agent (B&C Agent). NECA requests a 90-day waiver of the Commission's mandate that its appointment as the B&C Agent become effective coincident with NECA's incorporation of the B&C Agent subsidiary. NECA also requests that the requirement that it hold four meetings per year in Washington D.C. be waived in favor of one meeting per year in Washington, D.C., and three conference-call meetings. In this Order, we grant a 90-day waiver of the requirement that it create a separate subsidiary corporation prior to assuming its role as the B&C Agent. We will act on NECA's second waiver request in a subsequent order. II. BACKGROUND 2. Section 251(e)(1) of the Telecommunications Act of 1996, 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. In the NANP Order III, the Commission determined that it could effectively monitor the number administrator, the NANPA, through participation in, and direction of, an advisory board, the North American Numbering Council (NANC). 3. On May 15, 1997, the Commission received the NANC's recommended selections for both the NANPA and the B&C Agent. In the NANP Order III, the Commission accepted the NANC's recommendation that, subject to certain neutrality requirements, Lockheed Martin IMS (Lockheed) serve as the NANPA, and NECA as the B&C Agent. The NANP Order III designated that, if NECA defaulted on its obligations, was unwilling or unable to comply with the neutrality cure, or did not perform the B&C Agent functions in a satisfactory manner, Lockheed would serve as the alternate. 4. To address the NANC's concerns that NECA, as structured, was not neutral, the NANP Order III required NECA to create a separate subsidiary corporation to be designated the NANPA B&C Agent. The Commission determined that NECA's appointment as the B&C Agent would be effective coincident with NECA's incorporation of the B&C Agent subsidiary. The NANP Order III directed that the subsidiary's board be composed of fourteen members from telecommunications industry, regulatory, and consumer groups, mirroring the representational composition of the NANC. The NANP Order III also specified that the board must meet at least quarterly in Washington, D.C., and that the B&C Agent must submit to annual audits. 5. In a meeting that the NANC held on December 16, 1997, NECA presented arguments to the full NANC that it should be compensated for the requirements imposed by the NANP Order III, which, it argued, were beyond the scope of those outlined in the Requirements Document. On December 19, 1997, members of a NANC Steering Group conducted a conference call and concluded that because NECA knew for months about the "neutrality cure," the NANC should reject NECA's request for a price increase and replace NECA with Lockheed as the NANPA B&C Agent. On January 7, 1998, Mr. Hasselwander wrote to the Chief, Common Carrier Bureau (Bureau), and recommended that NECA be removed as the B&C Agent. The letter stated that the NANC concluded that NECA was unwilling and unable to fulfill its proposal to act as the NANPA B&C agent as bid. 6. On January 9, 1998, NECA responded to the NANC's January 7th letter to the Bureau stating that it did not believe the NANC gave full consideration to all of the facts but, rather, reacted against the notification that some additional costs were imposed by the NANP Order III. NECA stated that it had proposed other "neutrality cures" that met the terms stated in the Requirements Document, which would have resulted in no additional costs to their original proposal. NECA further noted that it stated in Comments filed in response to a Public Notice setting forth the NANC's recommendation, that creation of a new corporate entity would add costs and urged using a non-corporate independent board. In the January 9th letter, NECA recommended that the Commission consider certain options to address some of the NANC's concerns. 7. NECA appeared at the NANC meeting of January 20, 1998, to argue for reconsideration of the NANC's vote that it be removed as the B&C Agent. It was the NANC's view that NECA presented no information which would alter the NANC's recommendation. On January 22, 1998, members of NECA met with Commission staff and outlined a proposal to keep additional costs to a minimum and to assure that NECA would seek to establish a productive working relationship with the NANC. On February 10, 1998, the Chief, Common Carrier Bureau, wrote to the NANC informing it that the separate subsidiary formed by NECA would continue to be the NANPA B&C Agent. III. DISCUSSION 8. Section 1.3 of the Commission's rules permits grant of a waiver of any provision of its rules or orders for good cause shown. In supporting its case for a waiver, an applicant must demonstrate that there are special circumstances that warrant a deviation from the rule and must show how such deviation will serve the public interest. 9. The events described in the foregoing paragraphs delayed implementation of the steps necessary to establish and make operational the separate subsidiary required by the NANP Order III. Given the importance of the duties the NANPA performs, a 90-day waiver of incorporation of the separate subsidiary corporation serves the public interest by preventing the delay from impeding timely funding of the NANPA. We believe that NECA has met its burden of showing good cause with respect to this limited waiver of the neutrality requirements of the NANP Order III. Grant of this waiver will permit NECA to function as the B&C Agent prior to incorporation of the separate subsidiary corporation. Thus, billing and collections to fund the NANPA can begin while NECA finalizes the creation of the separate subsidiary corporation. 10. NECA has represented that the first meeting of the Board of Directors of the B&C Agent will occur shortly, and that a waiver of only 90 days is necessary. Furthermore, NECA has stated that it will make progress reports to the NANC, the NANPA, and the Commission and will transfer responsibility for billing and collection functions undertaken prior to incorporation to the B&C Agent at its initial board meeting. This waiver is contingent upon NECA's filing monthly written reports to the Commission and to the NANC stating the status of incorporation of the separate subsidiary, and detailing the billing and collections functions being performed by NECA during the waiver period. 11. We hereby grant NECA's request for a 90-day waiver of requirements that it form a separate subsidiary corporation so that it may function as the B&C Agent prior to the incorporation of the separate subsidiary. We condition this waiver to require NECA to provide monthly status reports, described above, to the NANC and the Commission. IV. ORDERING CLAUSE 12. Accordingly, pursuant to Section 1.3 and the authority contained in sections contained in Sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R.  1.3, 0.91 and 0.291, IT IS ORDERED that the petition for waiver filed January 27, 1998, by NECA IS GRANTED IN PART, to the extent described in this order. FEDERAL COMMUNICATIONS COMMISSION A. Richard Metzger, Jr. Chief, Common Carrier Bureau