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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** DA 98-1434 Before the Federal Communications Commission Washington, D.C. 20554 In the Matters of ) ) New York Department of Public Service ) Petition for Expedited Waiver of ) NSD File No. L-98-03 47 C.F.R. Section 52.19(c)(3)(ii) ) ORDER Adopted: July 20, 1998 Released: July 20, 1998 By the Deputy Chief, Common Carrier Bureau: I. INTRODUCTION 1. On January 9, 1998, the New York State Department of Public Service (New York Commission) requested an expedited waiver of the ten-digit dialing requirement of the Commission's rules governing area code relief. While we conclude that the New York Commission has not met its burden to justify a permanent waiver of the Commission's ten-digit dialing requirement, the Bureau does agree with the concern of the New York Commission that ten-digit dialing be implemented throughout the city of New York at the same time. Accordingly, the New York Commission may activate 646 as an all-services area code overlay in Manhattan, but delay, temporarily, implementing ten-digit dialing, until 347 is activated as an all-services area code overlay for 718 in Brooklyn, the Bronx, Queens, and Staten Island, but in any event no later than April 1, 1999. This temporary waiver should help to avoid the confusion and disruption occasioned by piecemeal introduction of ten-digit dialing in the city and should provide sufficient time for city-wide network modifications and public education. II. BACKGROUND 2. 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. However, section 52.19(c)(3)(ii) provides 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." 3. In an earlier order, the Bureau denied a petition to waive the ten-digit dialing requirement on the basis that a waiver, if granted, would create a "dialing disparity" in the area affected by the area code overlay. While denying a permanent waiver, the Bureau determined, nonetheless, that the Pennsylvania Commission temporarily could delay implementing ten-digit dialing in order to provide sufficient time for network modifications and customer education. 4. On December 10, 1997, the New York Commission directed Bell Atlantic to activate 646 as a new area code overlay for the existing 212 area code in Manhattan, effective April 1, 1998, but to delay introducing ten-digit dialing. It also ordered 347 to be activated as an area code overlay for the existing 718 area code in Brooklyn, the Bronx, Queens, and Staten Island, effective January 1, 1999. Following correspondence between the Network Services Division, the New York Commission, and Bell Atlantic, the New York Commission, on March 25, postponed the activation date of the 646 area code overlay for 212, pending a resolution of its waiver petition by the Commission. III. DISCUSSION 5. Pursuant to section 1.3 of the Commission's rules, the Commission may grant a waiver of a provision of its rules upon a showing of "good cause." 47 C.F.R.  1.3. As construed by the U.S. Court of Appeals for the District of Columbia Circuit, section 1.3 allows the Commission to grant a waiver if special circumstances warrant a deviation from the general rule and such a deviation will serve the public interest. The court noted, however, that the agency must explain why deviation better serves the public interest and articulate the nature of the special circumstances warranting a deviation from the general rule to prevent discriminatory application and to put future parties on notice as to its operation. Competition and Equitable Access to Numbering Resources 6. The purpose of mandatory ten-digit dialing is to ensure that competition is not deterred as a result of dialing disparity. Absent mandatory ten-digit dialing, local dialing disparity will occur because existing telephone users who remain in the old area code will be able to dial seven- digits to call others with numbers in the old area code, while new users, with the new overlay code, must dial ten-digits to reach a telephone user in the old code. 7. The New York Commission argues that the proposed overlay plan will not "impede competition" because competition already exists between the incumbent local exchange carrier (LEC) and competitive local exchange carriers (CLECs). It contends that the rapid demand for numbers in the new area code mitigates "any perceived anti-competitive effects of an overlay," and that ten-digit dialing would require all telephone users in New York City to dial ten digits within their area code without "improving competition." The New York Commission argues that the overlay plan "furthers competition" because the incumbent LEC does not have a competitive advantage over CLECs with respect to number assignments and that compliance with the mandatory ten-digit dialing requirement will not serve the public interest. We conclude that the presence of some competition, by itself, does not eliminate all concerns about dialing disparity and does not warrant a deviation from the Commission's ten-digit dialing requirements. 8. The New York Commission also argues that permanent local number portability and non-discriminatory enforcement of the central office code assignment guidelines ensure that CLECs have adequate access to numbering resources and ameliorate the potential anti- competitive effects of dialing disparities. We find that number portability does not eliminate the competitive inequality of dialing disparities caused by an area code overlay. We observe that the New York Commission's authority to resolve matters involving the introduction of new area codes pre-supposes compliance with regulations and industry guidelines pertaining to permanent local number portability and non-discriminatory central office code assignment. We conclude that state compliance with the existing federal requirements of long-term number portability and non-discriminatory central office code assignment does not constitute a special circumstance that justifies waiving the ten-digit dialing requirement. 9. The New York Commission argues also that number pooling places the incumbent LEC and CLECs in the same competitive position with respect to new number assignments by assuring that all carriers have equal access to available numbers in the existing area code "regardless of size and timing of market entry." It states that number pooling will provide an additional "pro-competitive safeguard," noting that implementation of number pooling will be required as soon as it is technically feasible, together with an education program to acquaint the public with the area code overlay and its operation. 10. Industry groups, at the direction of the NANC, are working to develop number conservation measures and more efficient means of allocating and using numbers, particularly number pooling. The New York Commission has not demonstrated how number pooling will ameliorate the dialing disparity that will occur between existing telephone users in the 212 and 718 area codes, who would continue to dial seven digits to call other telephone users in the 212 and 718 area codes, and new telephone users in the 646 and 347 area codes, who would have to dial ten digits to reach telephone users in 212 and 718. We conclude that a commitment to future implementation of number pooling does not provide a sufficient basis for waiving the ten- digit dialing requirement. We also do not find that a public education program provides a sufficient basis for granting a waiver. While an education program to acquaint the public with the area code overlay and its operation may be helpful, it will not ameliorate the competitive inequality of dialing disparity. As WinStar noted in its comments, a public outreach and education program is necessary for any form of area code relief. Such education efforts could be used just as effectively to explain the overlay with ten-digit dialing. 11. The New York Commission argues that the low number of rate centers in Manhattan allows all competitors to obtain central office codes in the old area code and in all rate centers in the old area code. The New York Commission points out that there are three rate centers in Manhattan and contends that the low number of rate centers allows all competitors to obtain central office codes in all rate centers. According to the New York Commission, the Bureau's concern that CLECs will receive most number assignments from the new area code, rather than from the existing area code, is unwarranted in Manhattan. 12. As of February 1998, 112 central office codes in the 212 area code were assigned to CLECs, and 625 to the incumbent Bell Atlantic. In the 718 area code, 94 central office codes were assigned to CLECs, and 498 to the incumbent Bell Atlantic. Clearly, Bell Atlantic has substantially more central office codes in both area codes than the CLECs. This factor, combined with customers' familiarity with 212 and 718, may cause telephone users to continue to prefer 212 and 718 over other area codes, even without granting the requested waiver. 13. We note that the Commission's competitive concerns regarding dialing disparities are not solely limited to potential competitive inequality between the incumbent LEC and CLECs currently competing in a market. We also must consider the effects of dialing disparities on future competitors, including wireless carriers, which might seek to enter the market to compete for customers in New York City. We conclude that the presence of CLECs with access to central office codes in the existing area code, and in most, if not all rate centers, by itself, is insufficient justification to waive the ten-digit dialing requirement. Impact on Existing Telephone Users 14. The New York Commission argues that enforcement of mandatory ten-digit dialing "will unduly inconvenience callers in the New York City area." Administration of numbers, however, whether by the Commission or through delegation of authority to state commissions, may not unduly favor or disfavor any particular group of telecommunications consumers. Were the Bureau to grant the waiver, telephone users in the overlay area codes will be compelled to dial ten-digits to talk to telephone users in the original area codes. Thus, between telephone users in the old and new area codes, including customers of wireless carriers, "there would exist a dialing disparity, which would increase customer confusion." As the Bureau already has observed, implementation of any new area code, whether through an overlay, a geographic split, or a rearrangement of existing area code boundaries, is initially confusing, not only to customers in the affected area, but also to those who call them from outside that area. Failure to implement ten- digit dialing will only increase the confusion and inconvenience that would ensue if only certain customers had to dial ten digits. Temporary Delay in Implementing Ten-Digit Dialing 15. The Bureau is, however, sympathetic to the detrimental effects of exhaust caused by the current lack of assignable central office codes in area code 212. It is clear that area code relief is required immediately in Manhattan. We observe also that carriers and operators of private systems require time to make technical modifications to their networks and that sufficient time must be allowed for public education. We note that boroughs of New York City comprise a single geographically-defined unit, with two existing wireline area codes, as well as the shared, wireless-only 917 area code. The New York Commission has stated that, in the event it did not receive a waiver, it preferred to implement ten-digit dialing on a city-wide basis after 646 and 347 both have been activated as overlays to the existing 212 and 718 area codes. 16. While we deny the petition for a permanent waiver, given the current scarcity of numbering resources in 212, the proposed implementation schedule for area code relief, and the fact that New York City comprises a single geographically-defined unit, we find that it would be less disruptive and confusing to businesses and residents to permit a temporary delay in implementing mandatory ten-digit dialing. Accordingly, we will allow the New York Commission to activate 646 as an all-services area code overlay in Manhattan, but to delay, temporarily, implementing ten-digit dialing until such time as 347 is activated as an all-services area code overlay for 718, but in no event later than April 1, 1999. This delayed implementation date should provide sufficient time for network modifications and public education before 347 is activated. IV. CONCLUSION 17. We find that the New York Commission has not shown good cause that would justify a permanent waiver of the Commission's ten-digit dialing requirement. Accordingly, the petition for a permanent waiver of the ten-digit dialing requirement is denied. However, as discussed above, on our own motion we grant the New York Commission a temporary waiver of the Commission's ten-digit dialing requirements . V. ORDERING CLAUSES 18. 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 Petition for Permanent Waiver is DENIED. 19. IT IS FURTHER ORDERED, on our own motion and 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 New York Commission may activate 646 as an all-services area code overlay in Manhattan, but delay, temporarily, implementing ten-digit dialing, until 347 is activated as an all-services area code overlay for 718 in Brooklyn, the Bronx, Queens, and Staten Island, but in any event no later than April 1, 1999. FEDERAL COMMUNICATIONS COMMISSION Lawrence E. Strickling Deputy Chief, Common Carrier Bureau