Agenda Date: November 8, 2000 Item Number: Docket: UT-991627 – Telephone Number Conservation Company Name: Telecommunications General Staff: David Dittemore, Telecommunications Engineer Betty Erdahl, Policy Research Specialist Glenn Blackmon, Assistant Director-Telecommunications Recommendation 1. Issue an order directing the telecommunications industry to implement a number pooling trial in the Seattle consolidated metropolitan area by June 17, 2001 and in the remaining areas of western Washington by October 1, 2001. 2. Direct Staff to solicit comments and reply comments on cost allocation and cost recovery issues associated with number pooling. Background The historical telephone numbering system is not well-suited to an industry structure in which multiple companies are offering local exchange service in any given area. The current system distributes a full prefix of 10,000 numbers to each separate company, which is far more numbers than most entrants can reasonably expect to use in the near term. The result is that Washington, like most of the country, is running out of prefixes even though there are plenty of unused numbers in most prefixes. The Federal Communications Commission in March committed to establish a national program to begin distributing telephone numbers in blocks of 1,000 – which is known as "thousands-block number pooling." However, the FCC has not yet decided when it will begin. In the meantime, the FCC in July granted the WUTC authority to implement a number pooling trial. The WUTC has already directed the telecommunications industry to develop a number pooling implementation plan. The Washington Exchange Carrier Association, on behalf of the industry, submitted its Generic Pooling Plan for Washington on September 26, 2000. The WUTC completed a second necessary step to number pooling on October 31, 2000, when it designated Telcordia Technologies, Inc. as the state's interim number pooling administrator. The administrator serves as a neutral third party to operate number pools in each qualifying rate center. Staff recommends that the WUTC direct the industry to implement number pooling, starting with the area codes in western Washington. Number pooling will greatly reduce the number of stranded numbers that exist today with 10,000-number block allocations. Number pooling probably will not eliminate the need to introduce the 564 "overlay" area code next year, but it should help avoid the premature exhaustion of that code, which the state has experienced with 360 and 425. Unresolved Issues Staff is aware of several issues that need to be resolved for number pooling to move forward. The telecommunications industry, has worked with Staff in attempting to resolve these issues, but the diversity of interests within the industry and the limitations of the FCC's delegation of authority have made it difficult to reach resolution. 1. Cost allocation and cost recovery – The industry will incur both shared and carrier-specific costs. Under the terms of the FCC's delegation of authority, the WUTC must address the issues of how shared costs are to be allocated among the telecommunications companies and how those companies are to recover their costs. There is no industry consensus on this issue, and Staff recommends that the WUTC provide opportunity for written reply and reply comments as part of this number conservation proceeding. The comments could include recommendations on how carrier-specific costs might be measured, verified, and recovered, though this element of cost recovery may not be the same for all companies. 2. Order of implementation for area codes and metropolitan areas - The FCC order calls for implementation of pooling on a Metropolitan Statistical Area (MSA) by MSA basis. In its petition, the WUTC tentatively identified its initial MSA as the Seattle consolidated metropolitan statistical area (consisting of King, Pierce, Kitsap, Island, Snohomish, and Thurston counties). This would include all or parts of the 206, 425, 253, and 360 area codes. All references in this memo to an "entire" area code or MSA are intended to refer to the rate centers within the area where local number portability has been implemented. However, the industry believes, and Staff concurs, that a better approach would be to implement pooling for the entire 360 area code even though it is ot within any single MSA. The 360 area code is the one closest to exhaustion and is currently being rationed to seven new prefixes per month. Staff sees two possibilities at this point: a. The WUTC could require that the initial pooling area be all four area codes in the Seattle CMSA. After that successful implementation, the Washington State portion of the Portland MSA would be implemented, followed by the remainder of western Washington. This approach is consistent with the WUTC's delegated authority. b. The industry could voluntarily agree to implement number pooling in the entire 360 area code, followed by the 206, 425, and 253 area code. The WUTC cannot order this approach, because it is inconsistent with its delegated authority. Consideration of these options is complicated by their relationship with the scheduled implementation of the 564 overlay area code in October 2001. Staff believes that, regardless of the order in which pooling is implemented, it should be in place in all four western Washington area codes before the overlay is implemented. Staff also believes that prompt implementation of pooling in 360 might enable a delay in the overlay date. Were this to occur, the industry would then have more time to implement pooling in the other area codes. At least some of the telephone companies disagree with this view. They are concerned that number pooling not be used as a basis to deny or delay necessary area code relief through an overlay. Staff agrees that the number pooling cannot be used in this way, but that should not stop the WUTC from delaying area code relief should conservation efforts make such a delay feasible. In the absence of any industry consensus in favor of option (b), Staff recommends that the WUTC adopt option (a). 3. Implementation deadline – The industry number pooling plan calls for implementation in the first area 221 days after number pooling is ordered, i.e., June 17, 2001, with one additional area code each subsequent calendar quarter. This schedule would result in the fourth area code being implemented in June 2002. This schedule does not result in implementation of number pooling before the overlay area code is scheduled to be implemented in October 2001. In submitting the plan, the industry did not explain the rationale for limiting number pooling implementation to one area code per quarter. Staff believes that, if necessary to achieve the October 2001 objective, the time intervals in the number pooling plan could be shortened. In particular, the plan allows for 45 days before the first implementation meeting, at which the administrator would explain forms and forecast methods and milestones would be established, and it allows 60 days after that before companies have to submit forecasts and lists of blocks to be donated. In general, Staff believes that much of the work set out in the timeline could occur concurrently for multiple areas. Staff recommends that the WUTC direct the industry to implement number pooling by June 17, 2001 in the initial area (which would be the 360 area code if the industry volunteers to exceed the FCC requirement and would be the Seattle CMSA otherwise). The WUTC should direct the industry to implement number pooling in the remaining areas of western Washington by October 20, 2001. 4. Software version for number pooling. The industry's pooling plan schedule is predicated on the availability of local number portability Software Release 3.0 in this region by February 2001. Without the software release, the industry believes that number pooling cannot be accomplished on the schedule in its plan. Release 3.0 is currently being tested in the Northeast Region. The contractor, NeuStar, missed the original target for release of the software in the Northeast. The target date was later in other regions, and NeuStar has not yet determined whether the Northeast delay will cause the schedule to slip in other regions. Staff recommends that the WUTC order the industry to implement number pooling without reference to the software version to be used. Staff agrees that it would be desirable to use the Release 3.0 software, but other states have required number pooling with the earlier software. If it becomes apparent that Release 3.0 will not be ready by the time it is critical for the Washington pooling trial, the WUTC should review the schedule at that time. Conclusion Staff recommends that the Commission order implementation of a number pooling trial using the Generic Pooling Plan for Washington as modified to achieve implementation in all four western Washington area codes by October 1, 2001.