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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** I Before the Federal Communications Commission Washington, D.C. 20554 In the Matters of ) ) Administration of the ) CC Docket No. 92-237 North American Numbering Plan ) ) Toll Free Service Access Codes ) CC Docket No. 95-155 ) THIRD REPORT AND ORDER and THIRD REPORT AND ORDER Adopted: October 9, 1997 Released: October 9, 1997 By the Commission: TABLE OF CONTENTS Paragraph No. I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 II. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 A. Procedural History . . . . . . . . . . . . . . . . . . . . .2 B. The North American Numbering Council . . . . . . . . . . . .9 C. Summary of Tasks Given to the NANC . . . . . . . . . . . . 14 III. NANP Administrator . . . . . . . . . . . . . . . . . . . . . . . . 16 A. Background . . . . . . . . . . . . . . . . . . . . . . . . 16 B. NANC Recommendation for NANPA and Billing and Collection Agent 17 1. Process Followed by NANC in Selecting and Recommending new NANPA and Billing and Collection Agent . . . . 17 a. Requirements Document. . . . . . . . . . . 17 b. Description of Evaluation Process . . . . 18 (1) NANPA . . . . . . . . . . . . . . 22 (2) Billing and Collection Agent . . . 32 c. Positions of the Parties . . . . . . . . . 36 (1) Comments on NANPA . . . . . . . . 36 (2) Comments on NANPA Billing and Collection Agent 56 d. Discussion . . . . . . . . . . . . . . . . 59 (1) NANPA . . . . . . . . . . . . . . 59 (2) Billing and Collection Agent . . . 68 2. Neutrality . . . . . . . . . . . . . . . . . . . . 69 a. Description of Neutrality Definition . . . 69 b. Discussion . . . . . . . . . . . . . . . . 70 (1) NANP Administrator . . . . . . . . 70 (2) Billing and Collection Agent . . . 82 C. Process for Governance . . . . . . . . . . . . . . . . . . 92 1. Description of Recommended Rules . . . . . 92 2. Discussion . . . . . . . . . . . . . . . . 95 IV. TOLL FREE NUMBER ADMINISTRATION. . . . . . . . . . . . . . . . . . 99 A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . 99 B. Positions of the Parties . . . . . . . . . . . . . . . . . . .101 C. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . .109 V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . .110 VI. PROCEDURAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . .111 A. Final Regulatory Flexibility Analysis . . . . . . . . . .111 VII. ORDERING CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . .127 APPENDICES Appendix A: Final Rules Appendix B: Members of NANC Appendix C: NANC Recommendation II. INTRODUCTION 1. In a Report and Order released on July 13, 1995, the Federal Communications Commission (Commission) established the North American Numbering Council (NANC) pursuant to the Federal Advisory Committee Act (FACA). The NANP Order directed the NANC to recommend to the Commission and to other member countries of the North American Numbering Plan (NANP) a neutral entity to serve as NANP Administrator (NANPA) and a mechanism for recovering the costs of NANP administration in the United States. The membership of NANC, which includes thirty-two voting members and four special non-voting members, was selected to represent all segments of the telecommunications industry with interests in numbering administration. The Commission's charge that the NANC recommend an impartial NANP administrator is consistent with Congress' directive in section 251(e)(1) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, that the Commission designate an impartial numbering administrator to make telecommunications numbering available on an equitable basis. In this order, we affirm the NANC's selection of Lockheed Martin IMS (Lockheed) as the NANPA and of the National Exchange Carriers Association (NECA) as the NANPA Billing and Collection Agent (B&C Agent), subject to the conditions outlined below and to the rules proposed by NANC to govern the activities of the NANPA and the B&C Agent. We also, in CC Docket No. 95-155, conclude that toll free numbering administration, as currently structured, violates section 251(e)(1) of the Communications Act, as amended, and direct the NANC to recommend what entity should administer the toll free database. II. BACKGROUND A. Procedural History 2. The North American Numbering Plan (NANP) is the basic numbering scheme permitting interoperable telecommunications service within the United States, Canada, Bermuda, and most of the Caribbean. The NANP began when, in the early 1940s, American Telephone and Telegraph (AT&T) began to develop a numbering plan to ensure that the expansion of toll (or "long distance") dialing would be guided by "principles in harmony with the ultimate incorporation of all networks into an integrated network of nation-wide scope." Under the plan, the United States and Canada were divided into eighty-three "zones," each of them identified by three digits. Within each zone, a central office was represented by another three-digit code. The original "zones" are now referred to as Numbering Plan Areas (NPAs), and the three digits representing those areas are referred to either as NPA codes or area codes. The three digits representing central offices are called central office (CO) codes or NXX codes. 3. AT&T administered the NANP for over forty years. In 1984, at divestiture, the Plan of Reorganization established Bell Communications Research (Bellcore) as the NANP Administrator (NANPA). Bellcore currently administers the NANP for all member countries. Although its primary function is to assign numbers, pursuant to industry guidelines, to parties requesting them, it also maintains numbering databases, initiates number conservation and reclamation efforts, advises industry and regulatory agencies on numbering issues and serves as a subject matter expert on numbering issues (including providing consultation to the Commission and representing the United States in various international numbering committees). Bellcore administers most numbering resources in the United States. Additionally, within the United States, eleven regional CO code administrators handle CO code assignments. The dominant local exchange carrier (LEC) in a particular region serves as the CO code administrator. Currently, Bellcore Client Companies fund the operation of Bellcore as the NANPA. 4. As more new entrants entered the telecommunications market, particularly wireless entrants in direct competition with the wireline industry, the wireline industry's continued administration of the NANP became unacceptable. In 1994 we issued a Notice of Proposed Rulemaking examining what entities might perform the policy-making, dispute resolution and applications processing functions associated with NANP administration. In the resulting NANP Order, we stated that adequate numbering resources are essential to provide consumers efficient access to new telecommunications services and technologies, and to support growth of an economy dependent upon those services and technologies. We stated: The NANP erects a framework for assigning the telephone numbers upon which those services depend and for permitting international calls between the member countries to be completed without the need to dial international access codes and international country codes. The advantages of widespread access to such a seamless network are considerable. These numbers are a public resource, and are not the property of the carriers. [Footnote omitted]. Access to numbering resources is critical to entities desiring to participate in the telecommunications industry. Numbers are the means by which businesses and consumers gain access to, and reap the benefits of, the public switched telephone network. These benefits cannot be fully realized, however, unless numbering resources of the NANP are administered in a fair and efficient manner that makes them available to all parties desiring to provide telecommunications services. To maximize these benefits required continued international coordination of number administration among member countries of the NANP. 5. The NANP Order resolved several issues related to the future administration of the NANP. In it, we stated the broad policy objectives that should and could be achieved through judicious administration of the NANP. They are as follows: þ Administration of the plan must seek to facilitate entry into the communications marketplace by making numbering resources available on an efficient, timely basis to communications services providers. þ Administration of the NANP should not unduly favor or disadvantage any particular industry segment or group of consumers. þ Administration of the NANP should not unduly favor one technology over another. The NANP should be largely technology neutral. þ Administration of the NANP and the dialing plan should give consumers easy access to the public switched telephone network. þ Administration of the NANP should ensure that the interests of all NANP member countries are addressed fairly and efficiently, and foster continued integration of the NANP across NANP member countries. þ United States numbering policy should be developed in a manner that fosters international numbering consistency and interoperability. 6. We concluded that an effective structure for number administration in the United States would be one in which an industry policy board or oversight committee would develop policy and, at least initially, would resolve disputes. The NANPA would maintain administrative number databases and process applications for numbers, while reporting to the oversight committee instead of directly to regulatory bodies. The committee would report to the Commission and other NANP member country regulatory bodies, which would resolve disputes the board could not and set broad numbering objectives and policy. We concluded that this model would serve the public interest by permitting fair and efficient administration of numbering resources, fostering an integrated approach to numbering administration across NANP member countries, and enabling the Commission and regulatory bodies of other nations to ensure that domestic numbering administration is effective, while leveraging the expertise and innovation of the industry. In the NANP Order, we committed to creating the North American Numbering Council (NANC) as the oversight committee. One of the tasks we directed the NANC to undertake was to recommend to the Commission an independent, non-government entity that is not closely associated with any particular industry segment to serve as the new NANPA. 7. In February 1996, Congress passed the Telecommunications Act of 1996 (1996 Act) amending the Communications Act of 1934 (the Act). Section 251(e)(1) of the Act 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. Section 251(e)(1) further states that the Commission shall have exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States, but that nothing in section 251(e)(1) shall preclude the Commission from delegating to State commissions or other entities all or any portion of such jurisdiction. 8. In implementing the 1996 Act, we released the Local Competition Second Report and Order on August 8, 1996. In that order, we concluded that the actions taken in the NANP Order satisfied the section 251(e)(1) requirement that we create or designate an impartial numbering administrator. We noted that we had required that there be a new, impartial number administrator and established the model for how that administrator would be chosen. We had thus taken "action necessary to establish regulations" leading to the designation of an impartial number administrator as required by section 251(e)(1). B. The North American Numbering Council 9. In the NANP Order, we agreed that this Commission must actively oversee administration of limited numbering resources, and agreed with parties expressing concerns regarding the industry's ability to administer number resources fairly and in a competitively neutral manner. We concluded that we can monitor the administrator through participation in and direction of an advisory board (i.e. the NANC). We stated that we believed that the NANPA could function most effectively by reporting to a single entity with broad representation from industry, consumers, state regulators and other NANP member countries. 10. Noting that the United States is not the only country relying upon the NANP for its numbering needs or having policy concerns affecting the NANP's future administration, we encouraged other member countries to support the model for numbering administration that we adopted. We recognized that each NANP member is a sovereign country with responsibility for ensuring the efficient development of its telephone network, and observed that commenters from those countries had indicated support for an industry-led NANP administration. We stated our belief that the approach we adopted in the NANP Order would benefit not only the United States but all NANP members, because the NANC would provide a forum in which telecommunications service providers from all NANP countries can raise concerns affecting common numbering resources. 11. In the NANP Order, we concluded that the numbering administration model we had adopted called for the creation of the NANC, which would provide recommendations to the Commission on numbering issues and be the initial site for resolution of disputes relating to administration of the NANP. We stated that, although industry fora had achieved success in resolving numbering issues, industry mechanisms for resolving issues may not always lead to timely resolution or may not afford all parties reasonable access to dispute resolution mechanisms. We noted that the strength of industry fora to resolve issues is the wealth of technical and operational expertise they bring to bear on complex numbering issues. We stated, however, that as competition in telecommunications grows and new competitors join incumbents in industry fora, it would become more difficult for those fora, operating by consensus, to resolve numbering issues. Further, we concluded that the Commission needs consensus advice from industry on numbering issues to enable it to make timely, informed decisions on numbering policy issues. 12. We concluded that the NANC would be subject to the Federal Advisory Committee Act because it is an advisory committee established to obtain advice or recommendations for a federal agency. Creation of the NANC was determined to be essential and in the public interest because of the importance of numbers to providers of telecommunications services, and the need for neutral administration of numbers to ensure their availability. We stated that NANC meetings would be open to the public, that detailed meeting minutes would be prepared, and that a designated federal official would be present at all meetings. We further noted that an advisory committee established under FACA must have a balanced membership in terms of the points of view represented. Thus, we stated that council membership would be drawn from all segments of the industry, including local exchange carriers (LECs), interexchange carriers (IXCs), wireless providers, and competitive access providers. The membership also would include other interested parties from the United States and other NANP member countries, including the National Association of Regulatory Utility Commissions (NARUC), telecommunications users, and other consumer groups. 13. The NANC had its first meeting on October 1, 1996 and continues to meet on a regular basis. The NANC established several working groups, including: (1) a steering group; (2) a NANPA group; and (3) a local number portability administration (LNPA) group. Participation in the working groups is open to all interested parties. All working groups report directly to the NANC. The NANPA working group has task forces to address issues pertaining to cost recovery for NANPA, NANPA transition planning, and CO code administration transition planning. The LNPA group has task forces to address issues pertaining to LNPA architecture planning and LNPA technical and operational requirements. C. Summary of Tasks Given to the NANC 14. In the NANP Order, we outlined several specific tasks for the NANC, whose mission, as a federal advisory body, is to provide the Commission with advice and recommendations reached through consensus to foster efficient and impartial number administration as telecommunications competition emerges. One of its first tasks was to recommend to the Commission an independent, non-governmental entity that is not closely associated with any particular industry segment to serve as the new NANPA. We also asked the NANC to provide recommendations on: (1) the transition plan for CO code administration to be transferred from the LECs to the new NANPA; (2) the measures that should be taken to conserve numbering resources; (3) the number resources, beyond those currently administered by the NANPA, that the new NANPA should administer; and (4) whether the NANC should continue as a federal advisory committee after 2 years. We also directed the NANC to perform a host of tasks to implement local number portability. 15. We stated that the NANC should also serve as a forum for initial dispute resolution. We asked the NANC to develop recommendations defining how NANPA costs should be recovered, including the specific mechanisms for collecting these funds and disbursing them to the administrator. Regarding the issue of number conservation, we requested NANC to investigate ways to ensure efficient number use. We also sought the NANC's recommendation on additional numbering resources for which the NANPA should be responsible. III. NANP Administrator A. Background 16. On May 15, 1997, the Commission received the NANC's recommendation related to the selection of the NANPA and the B&C Agent. To complete the tasks the Commission had set for it pertaining to the selection of the NANPA, NANC formed the NANPA Working Group (Working Group), and in its recommendation describes the process by which this Working Group developed a Requirements Document and an evaluation process to assess candidates for the new NANPA and the B&C Agent. The Working Group reported directly to the NANC, and its membership was open to all interested parties. B. NANC Recommendations for NANPA and Billing and Collection Agent 1. Process Followed by NANC in Selecting and Recommending new NANPA and Billing and Collection Agent a. The Requirements Document 17. In its recommendation, NANC explained that it received proposals in response to a "Requirements Document" that set forth the qualities and attributes of the NANPA and the B&C Agent and the functions that each would be expected to perform. As set out in section 1.9.2 of the Requirements Document, the criteria for evaluating the proposals were: (1) compliance with the Requirements Document; (2) experience; (3) completeness of the proposal; (4) communications effectiveness; and (5) innovation. The Requirements Document provided that the new NANPA would serve for an initial period of five years. The Requirements Document specifically stated that respondents should quote a firm, fixed price for performing the NANPA and B&C functions. b. Description of Evaluation Process. 18. In its recommendation, NANC included information describing the process followed by the NANPA Working Group and its Evaluation Team in preparing the Working Group's report for the NANC. Potential respondents to the Requirements Document were allowed to submit written questions to clarify their understanding of the Requirements Document, and received written responses to their questions from the NANPA Working Group. On March 26, 1997, the NANPA Working Group met with the potential respondents to review any additional questions. Participants included Bellcore, the Center for Communications Management Information (CCMI), Lockheed, Mitretek Systems (Mitretek) and NECA. Proposals were submitted by those entities on April 3, 1997. The NANC Working Group Evaluation Team, which had been approved by the NANC, held a meeting April 7-11, 1997. Each team member reviewed each of the proposals to determine if the proposal complied with the schedule for assuming NANPA responsibilities ordered by the Commission. No proposals were eliminated for non-compliance. The team members then assessed the proposals, using a "compliance matrix" to determine whether the respondents met the criteria outlined in the Requirements Document. When compliance was confirmed, the team members evaluated the detailed information of each proposal. For each response evaluated, team members completed an evaluation table, and assigned a numerical score for each evaluation criteria. A candidate's total score was obtained by multiplying the evaluation grade by the respective weighting factor for that particular requirement. The Evaluation Team noted that the quantitative analysis was intended to aid the evaluation process but was not the only assessment tool used. Pricing information was taken into account, and was given a weighting of 50 percent, while all other evaluation information combined also had a weighting of 50 percent. Finally, the Evaluation Team compiled a list of questions for respondents that had not been eliminated. 19. The Evaluation Team distributed specific questions seeking clarification or additional information on functional and pricing issues pertaining to the individual proposals to respondents on April 17, 1997. Respondents submitted their answers to those questions on April 24, 1997. The Evaluation Team held another meeting on April 30-May 1, 1997, in which it developed additional questions for each of the respondents in preparation for meetings with the respondents individually on May 2, 1997. On May 2, respondents gave presentations to the Evaluation Team and had the opportunity to answer the questions developed by the Evaluation Team. The Evaluation Team held a final four-day meeting from May 5 to May 8, 1997. Members reevaluated the respondents based on the presentations and on the written answers to the Evaluation Team's questions. The Evaluation Team broke into subgroups and listed the strengths and weaknesses of the candidates for the new NANPA, identifying the major attributes of each candidate. First, second, and third choices for the new NANPA were identified, and a final evaluation was conducted to identify the top two choices. A similar process was followed to identify the top candidates for the B&C Agent. The Evaluation Team developed a report to the NANC that presented the Team's recommendations for the new NANPA and the B&C Agent. In its report, the Evaluation Team identified two respondents, Mitretek and Lockheed, as the preferred choices for the new NANPA and NECA as the primary choice for the B&C Agent. Although the team could not achieve consensus on a single respondent for the NANPA, a majority preferred Mitretek. 20. On May 14, 1997, the full NANC held a closed meeting to review the Evaluation Team's report and to determine the NANC's recommendations to the Commission for the NANPA and the B&C Agent. On May 15, 1997, the NANC recommended Lockheed as the preferred choice to serve as the new NANPA and Mitretek as the alternate. Although NANC did not reach consensus on a preferred respondent for the new NANPA, a majority (13 members) voted for Lockheed while 11 members voted for Mitretek. The NANC also recommended that the new NANPA comply with specific requirements concerning pricing and intellectual property rights, which were included in the proposed rules that NANC also recommended to the Commission. Those requirements are as follows: (1) The new NANPA shall perform the numbering administration functions currently performed by Bellcore, and the CO code administration functions currently performed by the eleven CO code administrators, at the price agreed to at the time of its selection. The new NANPA may request from NANC, with approval by the FCC, an adjustment in this price if the actual number of CO Code assignments made per year, the number of NPAs requiring relief per year or the number of NPA relief meetings per NPA exceeds 120% of the NANPA's stated assumptions for the above tasks at the time of its selection. (2) The new NANPA must make available any and all intellectual property and associated hardware resulting from its activities as numbering administrator including, but not limited to, systems and the data contained therein, software, interface specifications and supporting documentation and make such property available to whomever NANC directs free of charge. The new NANPA must specify any intellectual property it proposes to exclude from the foregoing based on the existence of such property prior to its selection as NANPA. 21. Subject to the condition that the Commission order NECA to create an independent board of directors exclusively for the B&C Agent, the NANC recommended that NECA be the B&C Agent. (1) NANPA 22. The NANC determined that the proposals of both Lockheed and Mitretek were fully compliant with the NANC Requirements Document. Specifically, both organizations demonstrated compliance with the neutrality criteria set forth in section 1.2 of the Requirements Document. According to the NANC, both candidates displayed understanding and appreciation of the numerous complexities associated with administering the NANP. In the NANC's view, both also differentiated themselves from the other respondents by offering "innovative ideas and forward-looking state-of-the-art administration systems and tools that the NANC considered essential for effective administration in accordance with the Requirements Document." 23. NANC stated that the advantages of the Lockheed proposal are: (1) its cost, which is half of that of the Mitretek proposal; (2) its reflection of Lockheed s experience with numbering issues relative to local number portability and the 800/888 Help Desk; and (3) its potential to achieve synergy from the future consolidation of numbering administration systems and processes (e.g., number pooling). Some NANC members expressed concerns, however, regarding Lockheed's ability to perform the NPA relief and CO code administration functions effectively because of its proposed staff size. Because Lockheed at the time of its response to the NANC performed 800/888 Help Desk functions, and performs local number portability administration center (LNP NPAC) functions for the industry, the NANC also expressed concern regarding a lack of vendor diversity in numbering administration generally. 24. Lockheed's original proposal stated that, as the NANPA, it would centralize all national number relief and administration tasks at a single office on the east coast. The NANC noted that Lockheed has labor and capital resources to manage fluctuations in workload or funding. Regarding the organizational structure, the NANC stated that Lockheed's centralized NPA relief planning and CO code administration could simplify new entrant and national carrier access to the NANPA and lead to consistency in assignment procedures. The NANC was concerned, however, that Lockheed s centralization in Tarrytown, NY could hamper Lockheed's ability to obtain personnel to perform NPA relief and CO code functions, and could lead to a lack of local expertise in specific geographic regions. 25. In NANC's view, Lockheed demonstrated an understanding of the workload of NANPA, had experience in operating the 800/888 Help Desk, and had experience with contentious industry LNP meetings. The NANC also favored Lockheed's proposed use of automated on-line access systems for entry, validation, tracking, and management for all application processing and Lockheed's proposed forecasting model to assist the industry in Central Office Code Utilization Surveys (COCUS) and NPA relief timing. The NANC noted that the Lockheed proposal contained a state-of-the-art computer system with advanced security and disaster recovery to assure reliability in its database management. Further, NANC stated that Lockheed displayed database management experience and expressed a willingness to identify to the NANC any abuses in assignment processes. 26. Regarding price, NANC noted that Lockheed s overall proposed price for the five-year term as NANPA was half of Mitretek s. NANC stated that Lockheed had indicated its willingness to consider distributing personnel performing NPA relief planning and CO code administration across three existing Lockheed locations (East coast, West coast and Mid-west locations) without any increase to its price. On the transfer of intellectual property, the NANC reported that, at the May 14, 1997 NANC meeting, Lockheed committed to providing intellectual property rights for certain systems, software, and support documentation specifically developed to support NANPA functions. 27. The NANC found the strengths of Mitretek's proposal to be: (1) Mitretek's detailed analysis and understanding of the requirements the NANPA must meet; (2) the numbering expertise of the staff recently acquired by Mitretek; (3) Mitretek's willingness to make available all intellectual property rights to any successor; and (4) Mitretek's participation in recent INC and NANPA Working Group activities. The NANC raised concerns regarding Mitretek's higher price, which reflected Mitretek's larger staff in comparison to other respondents' proposals, and about Mitretek's lack of corporate experience related to number administration. 28. Mitretek proposed to distribute its CO code administration and NPA relief planning staff in five locations across the country, with at least one NANPA presence in each time zone. NANC noted that Mitretek would be performing only NANP administration and no other numbering administration, so Mitretek's selection as NANPA would assure another supplier of numbering administration services, enhancing vendor diversity and a competitive market for such services in the future. In reviewing Mitretek's proposed organizational structure, NANC stated that Mitretek's proposed decentralized structure for CO code administration and NPA relief planning would enhance Mitretek s ability to attract experienced personnel and to acquire understanding of local numbering needs and issues. The NANC stated, however, that decentralization could undermine consistency in applying industry numbering guidelines among the different central office code administration centers. The NANC reported that it did not reach consensus that a decentralized organizational structure is necessary to perform NPA relief planning and CO code administration functions. 29. In the NANC's view, Mitretek s proposed staffing would assure meeting of the industry's demands for CO code administration and NPA relief planning. The NANC noted that Mitretek had already hired industry numbering experts to help prepare the Mitretek proposal. The NANC stated, however, that Mitretek's staffing could be excessive, and thus could impose unnecessary costs on the industry. The NANC expressed concern that the total cost of the Mitretek proposal is $22.5 million higher than Lockheed's over the five-year term as NANPA. The NANC also stated that Mitretek's proposal may have been influenced by industry experience in California and that that experience may have led Mitretek to overestimate the required resources. The NANC further noted that Mitretek proposed a mechanized CO code administration tool, a forward- looking forecasting tool, a future on-line access capability for CO code application and a proposed procedure for resolving code conflict problems. Mitretek had also proposed the use of state-of-the-art computer and communications systems and software, and had established a Mitretek NANPA internet site. Finally, NANC observed that Mitretek's attendance at recent INC meetings had given it awareness of current numbering issues, and had demonstrated a willingness to work with the industry and make changes based on industry preferences and concerns. 30. Regarding intellectual property rights, the NANC stated that Mitretek would make available to the NANC all systems and software upon the former's termination as NANPA. Mitretek enumerated two ways it could allow this transfer, at Mitretek's option: (1) by transferring all systems, software, documents and data to the NANC or another NANC- designated organization; or (2) by issuing a no-cost, non-exclusive license for the systems, software, documents and data. Mitretek stated that the transfer would involve no cost to the NANC, or to any other designated organization that might serve as the future NANPA. 31. NANC eliminated Bellcore and CCMI from consideration for the NANPA. NANC considered Bellcore s description of systems, models, and options that might be applicable to current and future needs less innovative than those presented in other proposals. In addition, the NANC expressed concern that Bellcore's proposal for NANPA, Inc. to use personnel from Bellcore s Numbering Strategies Organization for consulting and technical support would create potential for undue influence by one particular industry segment. Finally, the NANC stated that Bellcore s proposal to centralize CO code administration but distribute NPA relief planning would minimize synergies that might otherwise be obtained. There was general agreement among NANC members that the CCMI proposal was not as strong as other proposals. (2) Billing and Collection Agent 32. The B&C Agent's primary function will be to calculate, assess, bill, and collect payments for numbering administration functions and distribute funds to NANPA on a monthly basis. In its recommendation, the NANC stated that, subject to a specific condition designed to assure neutrality, it recommends that NECA be the B&C Agent for three major reasons. First, the NANC stated, NECA has cost recovery expertise. NECA is the current administrator of the Telecommunications Relay Services (TRS) fund, and the recommended cost recovery mechanism mirrors the TRS model, which requires that every carrier providing interstate telecommunications services shall contribute to the TRS fund on the basis of its relative share of gross interstate revenues. NANC concluded this experience makes NECA qualified to manage NANPA cost recovery. Second, NECA has experience in telephone industry billing and a long relationship with U.S. telecommunications carriers, again gained through its experience with the TRS fund. Third, NECA's proposed price was one-third less than that of another finalist with equal staffing levels. 33. NANC's recommended cure to assure the B&C Agent's neutrality is that the Commission order NECA to create an independent board of directors exclusively for the B&C Agent. The NANC recommends that the B&C Agent Board have broad-based representation from telecommunications service providers that use the NANP, and that the Board have at least one non-United States representative. The NANC found NECA's proposal to place the NANPA B&C Agent responsibilities under the Universal Service Administrative Company (USAC) to be insufficient to address parties' concerns about NECA's neutrality. The NANC notes that, in its May 2, 1997 presentation, NECA stated that it would be responsive to a specific request by the Commission for a separate B&C Agent Board. Consistent with CC Docket No. 96-45 and CC Docket No. 97-21, the NANC recommends that the B&C Agent Board: (1) be neutral and impartial; (2) not advocate specific positions to the Commission in proceedings unrelated to numbering administration; (3) not be aligned with a particular industry segment; and (4) not have a direct financial interest in support mechanisms established by the Commission. 34. In spite of its support of NECA, the NANC had several concerns related to NECA's selection. Those concerns were: (1) NECA's lack of international experience; (2) NECA's unwillingness to handle shortfalls in collections; (3) a lack of diversity resulting from one organization collecting funds for various purposes, including Universal Service, TRS, and NANPA; and (4) NECA's failure to include non-routine reports, testimony and litigation in its firm price quote. 35. NANC recommended Lockheed as the alternate B&C Agent, noting that Lockheed did not bid to perform B&C functions as a separate function, but instead made its performance of those functions dependent upon its selection as the NANPA. The NANC recommended Lockheed as the alternate because Lockheed: (1) has the resources to handle shortfalls in collections; (2) has expertise in billing and collections; (3) has international experience and experience handling foreign currencies; and (4) is completely neutral. The NANC stated that Lockheed was not the first choice for the NANPA B&C Agent primarily because of its higher cost to perform the B&C functions with equivalent staffing. Also, NANC noted that Lockheed's experience in billing and collection services is not specific to the telecommunications industry, and that Lockheed, unlike NECA, does not have established relationships with U.S. telecommunications carriers. c. Positions of the Parties (1) Comments on NANPA 36. To commenters that support Lockheed, Lockheed's chief advantages over Mitretek are as follows: (1) Lockheed's price was half as much as Mitretek's; (2) Lockheed possesses numbering experience associated with local number portability and administration of the SMS/800 Help Desk; (3) Lockheed has the potential to achieve synergy from future consolidation of numbering administration systems associated with Lockheed's number portability involvement; and (4) Lockheed's centralized approach to CO code administration could achieve cost savings and overhead efficiencies. MCI opposes paying more for NANPA than is necessary, and notes that it alone would pay approximately $1.5 million more if Mitretek were selected. 37. For those that prefer Mitretek, Lockheed's chief disadvantages are: (1) its proposed staffing levels; (2) its centralization; (3) its initial unwillingness to transfer intellectual property upon termination of its tenure as NANPA; (4) the lack of vendor diversity; and (5) its estimation of costs. These commenters include: AirTouch; the California Public Utilities Commission (CaPUC); CTIA; PCIA; and SBC. The NANC's lack of consensus on a recommendation for NANPA concerns some commenters, who argue that the Commission is not bound by the recommendation and must make an independent decision. 38. Staffing Levels. Some commenters assert that Lockheed's proposal is deficient and will result in unacceptable delays in completion of code assignments, NPA relief, and other numbering administration tasks. AirTouch states that Lockheed assumes an average of 10,000 central office code opening requests per year, between 30-40 NPAs requiring relief, and an average of 12 meetings per NPA relief, yet only proposes a staff of eleven persons. The CaPUC notes that the Evaluation Team stated that Lockheed's proposal appeared to rely on mechanized systems and processes instead of personnel, and that Lockheed may lack the staff necessary to address numbering issues requiring human intervention and judgment. CTIA notes that the NANPA will implement "jeopardy" and conservation procedures for NPAs that need relief, will handle area code relief that is already underway, and will process a growing number of CO code applications. CTIA argues that Mitretek's proposal will assure that the industry's numbering administration demands will be met. Similarly, Omnipoint notes that the NANPA's role is likely to grow more challenging as the problems of number exhaust increase and more new entrants come into the market, and expresses concern that Lockheed's proposed staff is inadequate to respond effectively to the workload. SBC asserts that Lockheed has not secured an experienced industry team to perform complex NANPA functions. 39. Mitretek states that the differences in the proposed staff levels between Mitretek and Lockheed result from significant differences in the assumed number of NPAs requiring relief and the assumed workload associated with critical functions required of the CO code administrator. According to Mitretek, the differences in the number of NPA relief activities assumed by the respondents are evidence of the potential ambiguity in and misunderstanding of the stated requirements. In Mitretek's view, the Central Office Code Utilization Study (COCUS) forecast and history are better indicators of future activity than the Requirements Document, and the recent COCUS forecasts and history indicate an unexpected level of NPA relief planning activity greater than that indicated in the Requirements Document. Mitretek adds that technology and market factors will continue to increase the number of NPAs in relief planning and a decrease during the five year NANPA term is unlikely. 40. Mitretek also alleges that the differences in the proposed staff levels between Mitretek and Lockheed result from significant differences in the staff time each assumed would be required to perform key CO code administration and NPA relief planning functions. Mitretek projected that two hours of staff time would be required per CO code assignment, while Lockheed projected that one hour of staff time would be sufficient. Mitretek projected that approximately four staff per NPA in relief planning per year would be needed, while Lockheed assumed that one staff member could handle seven NPAs in relief planning per year. 41. Neutrality. On September 4, 1997, Mitretek filed an ex parte letter regarding Lockheed's compliance with the neutrality requirements for the NANPA. Mitretek states that Lockheed Martin IMS is a wholly-owned subsidiary, and hence an affiliate as defined in the Communications Act, of the Lockheed Martin Corporation. Mitretek further states that the Lockheed Martin Corporation and its affiliates currently offer and have received licenses to provide telecommunications services. Specifically, Mitretek alleges that the relationships between the Lockheed Martin Corporation, Lockheed Martin IMS, and the affiliates known as Lockheed Martin Telecommunications, Lockheed Martin Intersputnik, Loral Space and Communications, and Globalstar violate, or in the future could violate, the neutrality requirements. Mitretek states that, given the importance of the neutrality of the NANPA, it is appropriate for the Commission to determine whether or not Lockheed Martin Corporation and its affiliates are telecommunications services providers. 42. Lockheed responded to the Mitretek ex parte letter on September 11, 1997. Lockheed states that it is in compliance with the NANC's neutrality criteria and will continue to comply with those requirements during its term as the NANPA. Lockheed asserts that the NANC's neutrality criteria confirm the Commission's view that the NANPA must not represent, or be unduly influenced by, any segment of the industry that will use NANP numbering resources. Lockheed notes that the NANC neutrality criteria provide that the NANPA may not be an affiliate of any telecommunications service provider as defined in the Communications Act of 1934, as amended by the Telecommunications Act of 1996. In other words, the NANPA may not be an affiliate of an entity that provides telecommunications "for a fee directly to the public," and therefore requires allocations of NANPA-distributed numbering resources. Lockheed states that the business relationships described in Mitretek's letter are with entities that will not use numbering resources and are not classifiable as telecommunications service providers under the Act. Lockheed specifically states that Globalstar, Astrolink, and Loral SKYNET meet the requirements of competitive neutrality. 43. According to Lockheed, Loral SKYNET does not and will not use NANP resources and does not provide "telecommunications services" as defined in the Act. Lockheed argues that, therefore, Loral SKYNET cannot be classified as a "telecommunications service provider" under the Act or the neutrality criteria. In order to be so classified, Lockheed asserts, Loral SKYNET must: (1) provide services to the public, or to such classes of users as may be equivalent to public availability; and (2) provide its services to the public directly, rather than through intermediate customers. Lockheed states that the first requirement is not met where, as in the case of Loral SKYNET, a provider offers service only to a restricted class of non-end user customers. In Lockheed's view, Loral SKYNET'S highly restricted scope of service is subject to the analysis applied in the 1996 cable landing licensing decision in the AT&T Submarine Systems, Inc. Applications Proceeding. Lockheed states that, in that proceeding, the Commission's International Bureau reasoned that, in deciding whether a service is effectively available directly to the public, and therefore is a telecommunications service under the Act, "the type, nature, and scope of users for whom the service is intended and whether it is available to a significant restricted class of users" must be determined. Lockheed contends that the International Bureau determined that AT&T-SSI's service would not be effectively available directly to the public because AT&T-SSI proposed to make available "bulk capacity in its system to a significantly restricted class of users, including common carrier cable consortia, common carriers, and large businesses." 44. Lockheed further claims that services that are offered to a broad base of public end users, such as dialtone and long distance services, are easily distinguished from services that are offered only to carriers and other intermediaries that stand between the provider of the service and the ultimate user. In order to offer a telecommunications service under the Act, an entity must itself offer service to the public, Lockheed argues, and Loral SKYNET does not offer any service of this kind. 45. Regarding Globalstar, Lockheed asserts that Globalstar will provide mobile service, data, facsimile, position location and other mobile satellite services through distributors for both domestic and international subscribers. Lockheed states that the Commission has specifically found that Globalstar will not provide telecommunications services and thus will not be classified as a telecommunications carrier. Therefore, Globalstar's services do not qualify as telecommunications services under the Act and Globalstar should not be deemed a telecommunications service provider for purposes of the neutrality requirements. Similarly, Lockheed states that Astrolink intends to provide advanced broadband communications services to businesses and consumers on a worldwide basis. In authorizing the construction, launch, and operation of Astrolink's nine GCO Fixed-Satellite Service (FSS) satellites, Lockheed states, the Commission concluded that Astrolink may operate on a non-common carrier basis as well. Therefore, Lockheed argues, Astrolink does not provide telecommunications services within the meaning of the Act and should not be considered a telecommunications service provider for purposes of the neutrality requirements. 46. Lockheed contends that Lockheed Martin Intersputnik (LMI), a joint venture between the Lockheed Martin Corporation and Intersputnik, plans to develop a commercial satellite services business using resources contributed by both the Lockheed Martin Corporation and Intersputnik. The initial business effort of the joint venture may involve the use of one Lockheed Martin Corporation satellite to be launched in late 1998 using a Belarus-filed orbital slot at 75E. The orbital slot does not provide coverage of the United States. According to Lockheed, the proposed services to be provided include broadcast, fixed telecommunications and VSAT services to customers in Eastern Europe, South Asia, Africa, and the Commonwealth of Independent States. LMI's proposed service offering does not implicate the competitive harms the neutrality criteria are to guard against, Lockheed argues. Any potential service of LMI will not be provided directly to end users, will not use NANP resources and can in no way affect Lockheed's neutrality. 47. On September 24, 1997, the NANC Chairman, by letter to the Acting Chief of the Common Carrier Bureau, stated that it is the opinion of all NANC members present at the NANC's September 23, 1997 meeting that neither Lockheed Martin nor any of its affiliates is a telecommunications service provider as defined in the Communications Act of 1934, as amended by the Telecommunications Act of 1996. The NANC members participating in that meeting unanimously concluded that Lockheed Martin fulfills the neutrality requirements to serve as the NANPA. 48. Centralization of NANPA Functions. The CaPUC argues that Lockheed's centralization in an east coast office could result in poor service to jurisdictions that are not in the Eastern standard time zone. Further, commenters assert that Lockheed may not be able to hire a sufficient number of personnel in the centralized location to perform NPA relief and CO code functions. California, it says, needs regional expertise because of the high demand for numbering resources, and an "outfit" on the other side of the country cannot properly respond to this demand and properly coordinate with the CaPUC. Also, the CaPUC contends that centralization could impair the ability of CaPUC staff and other western state commissions to participate in relief planning activities if they are held in New York, and could impair the ability of NANPA staff to attend relief meetings in exhausting NPAs around the country. 49. Transfer of Intellectual Property. Commenters express concern that Lockheed's unwillingness to surrender all intellectual property and resources developed for NANPA activities without charge could impede the transfer of numbering administration activities to a new NANPA. PCIA asserts that Lockheed's proposal to allow a new NANPA to use only certain software and systems could force the Commission to continue using Lockheed as the NANPA. PCIA also notes that, if a new NANPA were selected after five years, the industry would either have to pay additional costs to obtain all of Lockheed's systems or pay the new NANPA to redo work Lockheed had already completed. PCIA states that accounting for these costs raises the price of Lockheed's services. 50. Vendor Diversity. Some commenters argue that diversity of suppliers will promote a competitive market for number administration services. They note that Lockheed is presently responsible for local number portability (LNP) administration and operates the SMS/800 Help Desk. CTIA asserts that, because Lockheed already performs other numbering administration functions, it may be able to recreate a monopoly position over administration functions, a risk that is decreased with Mitretek. PCIA notes that one of the requirements in choosing LNP administrators was that they not have a direct material financial interest in the United States portion of the NANP, and number assignments pursuant to the plan. As the NANPA, PCIA states, Lockheed would have a strong and direct financial interest in the NANP and number assignments, which could prevent it from serving as a neutral LNP administrator. 51. Estimation of Costs/Pricing Issues. PCIA asserts that Lockheed has underestimated the costs involved in NANP administration, and that Lockheed may be expecting additional compensation for certain services, such as services provided during the transition to the new NANPA and the provision of information on how to obtain documents related to CO code administration. Some commenters assert that Lockheed's lower price was the only reason the NANC did not recommend Mitretek, and argue that a lower price is not a reason to select an inferior number administrator. AirTouch states that Lockheed's proposal in fact incorporated the highest cost per person, while Mitretek's cost per person was comparable to other respondents. The CaPUC notes that Lockheed's proposal did not include travel-related expenses, the costs Lockheed would expect for transferring some intellectual property rights, or additional costs for staffing that may be necessary. The CaPUC states that it is likely that the NANPA workload will increase by more than 120 percent, and that the total cost of the Lockheed proposal will increase. AirTouch contends that, because the cost recovery mechanism spreads the cost differential across the industry over five years, the cost differential will have a minimal impact on any given carrier. Omnipoint notes that the Evaluation Team stated that Lockheed perceived that it may further negotiate regarding pricing issues. In Omnipoint's view, the Commission should not rely on a NANPA that cannot provide firm cost figures upon which the industry can depend. 52. Mitretek contends that, in developing the Requirements Document, the NANC did not elect any pricing scheme other than firm, fixed pricing. Mitretek states that on two occasions it formally suggested that, if the NANC was interested in a lower price, it could consider a pricing basis other than a firm, fixed price. Mitretek stated its willingness to adjust the price, not only if it had underestimated the staff required, but also if it has overestimated the staff required. Mitretek alleges that the NANC departed from a firm, fixed pricing requirement and incorporated a price adjustment mechanism in response to the difference in proposed staff levels and perceived future need for additional staff. This changed the price and risk strategy considered and proposed by Mitretek. Also, Mitretek argues that, because the trigger for the price adjustment is the stated assumptions of the respondent, rather than the NANC-stated requirements, the change encourages and rewards understatement of the required staff and cost. 53. Other Concerns. WorldCom states that Lockheed must abide by safeguards to ensure that there is a smooth transition to, and effective management of, the new NANPA. These safeguards should include direction to Lockheed to provide documentation of all transactions and procedures, and to document practices as they are developed to resolve issues. Further, WorldCom asserts that any entity selected as NANPA must assent to investigation by a successor of all files regarding any facet of the business, and to craft a transition plan subject to NANC approval. WinStar, while supporting Lockheed, urges the Commission to build an appropriate "firewall" between Lockheed's dual functions as NPAC vendor and as NANPA. Without proper distance, WinStar argues, information gleaned from LNP applications could be used unfairly to keep a carrier with substantial porting activity from obtaining new NXX resources essential for growth. MCI and WinStar both agree that the Commission should implement Lockheed's selection as quickly as possible, because it is essential to the future of numbering administration and to the future of local telephone competition. 54. In reply comments, Lockheed responds to various concerns raised by commenters. It states that it fully commits to the NANC conditions regarding price adjustment and the transfer of intellectual property upon termination of its services as NANPA. Lockheed states that it will deliver high quality number administration services, including sufficient staffing and expertise, systems, and travel, at the quoted price. Thus, Lockheed asserts, even if it underestimated the costs of NANP administration, any adjustments will not affect the prices paid by the industry. Lockheed states that its work load and volume assumptions are firmly grounded in the Requirements Document and industry figures. Lockheed states that the NANC's proposed rule regarding transfer of intellectual property will eliminate unforeseen added costs, such as licenses and transfer costs, and will ensure that the incumbent NANPA enjoys no unfair advantage in future selection processes because of the costs faced by other bidders in developing new systems. 55. Lockheed asserts that its approach to numbering administration partly depends on streamlining the administration process through use of advanced technologies. This streamlining would increase staff productivity, which decreases the number of staff required to perform the functions. Lockheed adds that cost and technology economies will be realized through leveraging an existing Lockheed Communications Industry Services infrastructure. Further, Lockheed states that it will be able to attract qualified and experienced staff, and notes that, in developing the NPAC SMS system for local number portability, it has attracted the best subject matter experts in their fields. Lockheed states that for NANPA, it is hiring number administration experts from all segments of the industry, and is recruiting experts in CO code administration, NPA relief planning, and carrier identification code administration. It notes that, to facilitate the hiring of quality staff, it will assign its NANPA personnel to three existing Lockheed offices across the nation. (2) Comments on NANPA Billing and Collection Agent. 56. Several commenters agree that NECA should be selected as the B&C agent, provided that NECA creates an independent board as described in the recommendation. MCI notes that NECA has expertise in cost recovery and experience in telephone industry billing, and that NECA's price, which assumes the same staffing levels, is still lower than those of the other respondents. MCI states that the Commission should state that if NECA does not administer B&C activities impartially, aggrieved carriers may seek Commission redress, and that the Commission will act quickly by enforcing the rules recommended by NANC. 57. NTCA asserts that the proposed neutrality cure for NECA is unnecessary. In NTCA's view, NECA should have the discretion to create an advisory board or oversight council instead of a separate subsidiary. Creation of a separate board to oversee only the B&C functions will be costly and inefficient, and will not yield public benefits. NTCA argues that an advisory council such as the USAC can as easily cure neutrality concerns. Similarly, NECA itself suggests that it form a B&C oversight council to provide independent oversight exclusively for the NANPA B&C functions. The council would oversee NECA's operation, via its USAC subsidiary, of the NANPA B&C functions. NECA states that the council could consist of the USAC Board and others in the NANP community, and one or more international representatives. The NANPA B&C functions and financial management would be conducted separately and independently from NECA's or USAC's other administrative responsibilities. Creation of the council, instead of a separate corporate entity, would lower administrative costs while preserving neutrality. In response to WorldCom's arguments that NECA cannot be neutral because of its ties to the incumbent LECs, NECA states that its proposal assures neutral administration of the billing and collection functions. Further, NECA alleges that WorldCom fails to recognize NECA's successful administration of the Commission's interstate TRS fund and its recent selection as interim administrator of the Commission's new universal service funds. 58. WorldCom opposes the selection of NECA as the B&C agent, alleging that, even with the "cosmetic" modifications NECA proposes, NECA cannot operate in a competitively neutral fashion. The creation of an independent board will not change the historical incumbent LEC leanings of NECA, WorldCom argues. WorldCom states that NECA does have some experience in B&C activities in the NANP environment, but that it nullifies its eligibility by refusing to accommodate shortfalls in collections, a stated requirement for the B&C agent. Further, NECA does not have billing experience in a competitive and contentious environment. WorldCom urges the Commission to select Lockheed or another neutral entity as the B&C agent. WorldCom argues that an advisory board or oversight council, as suggested by some commenters, lacks the authority of an independent board of directors and would be unable to supervise NECA to guard against anticompetitive actions. WorldCom states that an independent board would have bias problems, but that an oversight council would be completely ineffective in keeping check on NECA's partiality. WorldCom contends that, if NECA is the B&C agent, at a minimum its activities must be supervised by a specific branch of the Commission. WorldCom asserts that rules should be codified to ensure that: (1) NECA is required to balance its board of directors completely with non-ILEC interests; (2) membership in NECA is open to all interested parties, including IXCs and CLECs; (3) the board has authority over the hiring of professional staff and other personnel; and (4) NECA is required to comply fully with the neutrality principles articulated by the NANC. Other parties, in their reply comments, also disagree with comments that an advisory board or oversight council is sufficient. AT&T argues that any cost savings NECA would realize by overseeing B&C functions through USAC, rather than through a separate B&C board, would be trivial. d. Discussion (1) NANPA 59. We accept NANC's recommendation of Lockheed as the new NANPA and codify NANC's proposed conditions regarding transfer of intellectual property and pricing adjustment. The record demonstrates that Lockheed offers substantial savings compared to Mitretek, and can bring efficiency and synergy advantages to number administration activities. We note that the record demonstrates that Lockheed has worked to address the concerns of parties opposing its selection as the NANPA. The conditions the NANC recommends, which we are imposing on Lockheed and all future NANPAs, persuasively address the concerns of those parties opposing Lockheed because of its proposed estimation of costs and it initial unwillingness to transfer intellectual property rights. Concerns regarding Lockheed's projected staffing levels are addressed by the record, as discussed below. 60. We are not persuaded that Lockheed, as compared to Mitretek, is "so wholly" understaffed as to be unable to discharge its NANPA functions. Such a conclusion would be inconsistent with the finding of the NANPA Evaluation Team, which reached consensus to recommend both Lockheed and Mitretek as "preferred choices for the new administrator." We agree with MCI that it is inconceivable that the Evaluation Team, characterized by the very parties opposing Lockheed on this point to be the "most informed and knowledgeable body" in the evaluation process, would have made such a recommendation if Lockheed were unable to fulfill its duties as NANPA because of inadequate staffing. 61. As MCI has noted in the record in this proceeding, personnel levels alone are not dispositive of service quality. Lockheed's commitment is not limited to providing a particular number of employees to perform specific NANPA functions, such as NPA relief planning, but rather to performing the specific service of NANP administration and to assign however many employees are needed to fulfill that commitment. To the extent that staffing concerns are actually concerns relating to Lockheed's ability to perform its NANPA functions in a timely, efficient manner we note that Lockheed's performance will be closely monitored by the NANC and the Commission. If Lockheed fails to fulfill its responsibilities, this will become quickly evident and be swiftly remedied. Under the NANC's proposed rule, which we are codifying as Section 52.12(d) of our rules, the NANC will monitor the performance of the NANPA and, at the direction of the Commission, implement any remedial action necessary to correct identified problems. As we have stated many times, numbers are the means by which businesses and consumers gain access to, and reap the benefits of, the public switched network. Sections 251(e) and 251(b) of the Telecommunications Act of 1996 are no less clear as to the importance of fair and efficient numbering administration, and require Commission diligence to ensure that numbers are made available on a nondiscriminatory basis. NANC itself, we further note, has put any future NANPA on notice that failure to meet its responsibilities in this area will mean removal; we conclude that Lockheed would be unwilling to risk losing commercially valuable opportunities through poor performance in this very critical and public arena. 62. We further note that Lockheed, in response to concerns that its proposed centralization of NANPA functions might hinder its ability to hire qualified staff, has already replied that it will assign its NANPA personnel to three existing Lockheed offices, located on the East Coast, West Coast, and in the Mid-West, to facilitate the hiring of the best staff available. In addition, Lockheed has affirmatively stated that it will anticipate and adjust proactively its staffing needs to provide the necessary service levels. We note that the new NANPA will assume its responsibilities gradually, which will provide Lockheed sufficient time to obtain the necessary staff to carry out its new functions. Finally, while many NANPA functions undoubtedly require human judgment, Lockheed's innovative approach to numbering administration relying in part on the effective use of advanced technologies should streamline some administration processes and reduce staffing needs in general. Current industry efforts, encouraged by the Commission and state public utility commissions to reduce the rate of depletion of number resources, may reduce work demands on NANPA as well. Also, in the Local Competition Second Report and Order, we stated that states may assume responsibility for initiating NPA relief planning. While we do not know at this point how many states will actually take on that function, those that do will reduce the workload of the NANPA. 63. Regarding the transfer of intellectual property, we are not persuaded that NANC's recommendation should be rejected because Lockheed is unwilling to surrender all intellectual property and resources developed for NANPA activities. Responding to the Evaluation Team's concern that Lockheed had not committed to freely transfer intellectual property it developed in its role as NANPA should another NANPA be selected, NANC imposed the condition that any NANPA must freely transfer intellectual property to the NANC or a successor NANPA selectee. Lockheed has clarified on the record that, while it considers its existing "telecommunications infrastructure," which is based on "off-the-shelf" technology, to be its own, it considers the "NANPA system," Lockheed's application for numbering administration that makes use of its "telecommunications infrastructure," to be proprietary to the NANPA and will transfer it to a new NANPA free of charge. We conclude, therefore, that Lockheed has addressed all concerns regarding the transfer of its intellectual property. 64. Responding to Mitretek's argument that NANC departed from its firm, fixed price requirement by crafting a condition regarding price adjustment, we find no procedural irregularity. NANC was free to develop its own evaluation procedures and to attach conditions to its recommendation so long as they applied to all respondents. The record demonstrates that Lockheed and Mitretek were treated equally in terms of their communications with NANC, the NANPA Working Group, and the Evaluation Team. Both had equal opportunities to make presentations to the NANC and to justify the contents of their respective proposals and forecasts. We agree with Mitretek that the NANC incorporated a price adjustment mechanism because of the difference in proposed staff levels and perceived future need for additional staff. Reasonably, in attempting to balance its concerns regarding Lockheed's minimal staff against its concerns regarding Mitretek's significantly higher price, NANC determined that the price adjustment condition was necessary. Mitretek is mistaken, however, in its assertion that NANC's price adjustment condition "changed the price and risk strategy considered and proposed by Mitretek" and "encourages and rewards understatement of the required staff and cost." In preparing its proposal, Lockheed had no more notice than Mitretek that the NANC would develop the price adjustment condition and thus had no incentive to underestimate its staff and cost projections. Further, the price adjustment condition applies to both the Lockheed and the Mitretek proposals, and does not unfairly benefit one respondent over another. Because the price adjustment condition will be codified in our rules, future applicants for the role of NANPA could have incentive to underestimate staff and cost projections in proposals. Again, however, the price adjustment rule, and any advantages resulting from that rule, would apply to all applicants equally, and all applicants would be on an "equal footing" when preparing proposals. 65. We also disagree with arguments that the NANC gave too much weight to the monetary difference between the Lockheed and Mitretek proposals. Costs are important, particularly to the carriers that will bear larger shares of the costs for numbering administration. Unquestionably the price difference between the two proposals is substantial. Although some commenters note that the unit price per staff member was fairly consistent between the two proposals, the fact remains that Mitretek's proposal would cost the industry over $22 million more than Lockheed's would, an obviously important factor to a majority of the NANC members. The NANC's consideration of the prices of the two proposals was reasonable, and we do not disturb its overall recommendation on the basis that it gave too much weight to the issue of price. 66. We recognize that vendor diversity for number administration services has advantages for the industry because it prevents the industry from being captive to a single, monopolistic provider for these services. We conclude, however, that there will continue to be adequate vendor diversity if Lockheed is the new NANPA as well as an administrator for local number portability (LNPA). The NANC recommended that Lockheed be the LNPA in only four out of seven regions. Therefore, even though Lockheed has been selected as a LNPA, there will be another provider of LNPA services. Further, Lockheed will no longer be the administrator for the SMS/800 Help Desk. On this basis, we conclude that there will be adequate vendor diversity for number administration services. PCIA also argues that, if Lockheed is selected as the NANPA, it would have a financial interest in the NANP and number assignments which could prevent it from serving as a neutral LNP administrator. We conclude that the financial interest Lockheed would have in the NANP by virtue of its role as NANPA is not of the sort contemplated by the NANC when it solicited proposals for the LNP administrator. 67. We find that the NANC process for selection of the new NANPA was open and fair, and included the opportunity for participation from all segments of the telecommunications industry. We will not reject the NANC's recommendation because of its failure to reach consensus on that recommendation for the new NANPA. Unlike most telecommunications fora and standards bodies, the federal advisory committee process does not require consensus. We note that the NANC recommended Mitretek as the alternate NANPA, and we accept this recommendation formally. If Lockheed defaults on its obligations as NANPA, or if the NANC determines that Lockheed does not perform those functions in a satisfactory fashion, Mitretek will have the opportunity to assume NANPA responsibilities for the remainder of the five-year term, if it still wishes to do so, without its undergoing another evaluation process. (2) Billing and Collection Agent 68. We also accept the NANC recommendation and select NECA as the NANPA B&C Agent, subject to the neutrality conditions outlined below. The record demonstrates that NECA has relevant experience in cost recovery and billing and collection in the telecommunications industry, and has offered to perform the services at a significantly lower price than Lockheed. Although it did express some reservations about NECA's selection, particularly because of NECA's willingness to handle shortfalls in collections, the NANC determined on balance that NECA's experience with cost recovery and its lower price made NECA the better candidate for the B&C Agent. We will not disturb that judgment. We will, however, formally name Lockheed as the alternate B&C agent. If NECA defaults on its obligations as the NANPA B&C Agent, is unable or unwilling to comply with the neutrality cure we impose below, or does not perform the NANP B&C Agent functions in a satisfactory fashion, Lockheed will have the opportunity to assume NANPA B&C responsibilities, if it still wishes to do so, without its undergoing another evaluation process. 2. Neutrality a. Description of Neutrality Definition 69. The Requirements Document defined "neutrality" as follows: 1) a respondent may not be an affiliate of any telecommunications service provider(s) as defined in the Telecommunications Act of 1996. "Affiliate" is a person who controls, is controlled by, or is under the direct or indirect common control with another person. A person shall be deemed to control another if such person possesses, directly or indirectly, (i) an equity interest by stock, partnership (general or limited) interest, joint venture participation, or member interest in the other person ten (10%) percent or more of the total outstanding equity interests in the other person, or (ii) the power to vote ten (10%) percent or more of the securities (by stock, partnership (general or limited) interest, joint venture participation, or member interest) having ordinary voting power for the election of directors, general partner, or management of such other person; or (iii) the power to direct or cause the direction of the management and policies of such other person, whether through the ownership of or right to vote voting rights attributable to the stock, partnership (general or limited) interest, joint venture participation, or member interest of such other person, by contract (including but not limited to stockholder agreement partnership (general or limited) agreement, joint venture agreement, or operating agreement), or otherwise; 2) a respondent and any affiliate thereof may not issue a majority of its debt to, nor it may derive a majority of its revenues from any telecommunications service provider. "Majority" shall mean greater than 50 percent, and "debt" shall mean stocks, bonds, securities, notes, loans, or any other instrument of indebtedness; and 3) notwithstanding the Neutrality Criteria set forth in 1) and 2) above, a respondent may be determined to be or not to be subject to undue influence by parties with a vested interest in the outcome of numbering administration activities. NANC may conduct an evaluation to determine whether a respondent meets the undue influence criterion. b. Discussion (1) NANP Administrator 70. Mitretek's September 4, 1997 letter raises questions concerning whether any affiliates of Lockheed Martin IMS are telecommunications service providers. The Act defines "telecommunications" and "telecommunications service" as follows: The term "telecommunications" means the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received. The term "telecommunications service" means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used. 71. We previously concluded that inclusion of the phrase "directly to the public" in the definition of telecommunications service limits the reach of that term to telecommunications services provided on a common carrier basis. Federal precedent holds that a carrier may be a common carrier if it holds itself out "to service indifferently all potential users." We have found, however, that such users are not limited to end users. Common carrier services include services offered to other carriers, such as exchange access service, which is offered on a common carrier basis and provided primarily to other carriers. Therefore, whether any affiliate of Lockheed Martin IMS is a telecommunications service provider does not depend on whether those affiliates provide services directly to end users. The question is, instead, whether they have been authorized to offer services indiscriminately to the public, and are, therefore, providing services on a common carrier basis. 72. Astrolink. It is clear that the Lockheed Martin Corporation's Astrolink system will be operating on a non-common carrier basis and will not provide telecommunications services within the meaning of the Act. In its application, the Lockheed Martin Corporation stated that it proposed to offer services on a non-common carrier basis. In granting its application, we authorized the Lockheed Martin Corporation to operate on a non-common carrier basis. 73. Globalstar. It also is clear that Globalstar will be operating on a non-common carrier basis and will not provide telecommunications services within the meaning of the Act. In its application, the Loral/Qualcomm Partnership (LQP) stated that it did not intend to hold itself out to provide mobile satellite services indifferently to the public. We authorized LQP to operate on a non-common carrier basis. 74. Loral SKYNET. Loral SKYNET offers at least some of its services on a common carrier basis. In October 1996, AT&T Corporation (AT&T) and Loral SpaceCom Corporation (Loral) filed an application for authority to assign AT&T's licenses for Telstars 302, 303, 401, 402R, 5, and 6, and associated earth stations and common carrier authorizations, to Loral. As discussed below, three of these are now operational. Loral proposed to maintain continuity in SKYNET's service offerings, which include satellite services provided on a common carrier basis. The International Bureau, acting on delegated authority, granted the assignment application. 75. Telstar 302 is no longer in operation. Telstar 303 was launched and began service under common carrier regulation in August 1985. Its ten-year license term expired on August 7, 1995, and since that time, it has been operating under special temporary authority. In September 1996, the International Bureau, acting on delegated authority, permitted the satellite to operate until December 31, 1997, or until the date of the transfer of traffic from Telstar 303 to its replacement satellite, whichever occurred sooner. Loral recently filed an application to modify the license for the Telstar 303 satellite to extend the license term until December 31, 1998, or, alternatively, for special temporary authority to continue to operate Telstar 303 from December 31, 1997 until a license modification is granted. Telstar 303 is nearing the end of its projected operational life. 76. Telstar 401, which may have offered some services on a common carrier basis, is no longer in operation, having experienced a catastrophic failure in early 1997. On May 23, 1997, the International Bureau, acting on delegated authority, authorized Loral to launch and operate Telstar 5 on a non-common carrier basis as an emergency replacement for Telstar 401. Telstar 5 is in operation on a non-common carrier basis. 77. The third operational SKYNET service satellite is Telstar 402R and a portion of its services appear to be offered on a common carrier basis. In 1990, AT&T was granted authority to sell up to 12 of the 48 C-band transponders and up to 12 of the 48 Ku-band transponders on its Telstar 401 and 402 satellites on a non-common carrier basis. AT&T also was granted authority to operate the remainder of the Telstar 402R capacity on a common carrier basis. AT&T was required to continue to adhere to all applicable Commission requirements with respect to its common carrier operations. When AT&T and Loral applied for consent for assignment of AT&T's licenses, Loral proposed to honor all of AT&T's existing contracts and other obligations with respect to its licensed facilities. The parties structured the acquisition to enable Loral to maintain uninterrupted service to AT&T's customers and to avoid disruption, inconvenience, and confusion to the AT&T customers. 78. We conclude that Lockheed Martin IMS is an affiliate of a "telecommunications service provider," and is in technical violation of a portion of the NANC's proposed neutrality criteria. Section 52.12 (a)(1) provides in part that the NANPA shall not be an affiliate of any telecommunications service provider as defined in the Communications Act, as amended. Lockheed, through its 16 percent ownership of Loral Space, is an affiliate of a telecommunications service provider, Loral SKYNET, which currently provides certain services on a common carrier basis through its operation of Telstar 303 and Telstar 402R. 79. We also find, however, that the violation of section 52.12(a)(1) is de minimis. The customers of these SKYNET services constitute a discrete, specific group of former AT&T customers. Moreover, it appears that, because the Telstar satellites are used, among other things, to provide video teleconferencing and broadcast video distribution, many customers of the Telstar 303 and Telstar 402R common carrier offerings do not use North American Numbering Plan resources and, therefore, the service offerings do not jeopardize the neutrality of Lockheed Martin IMS as the NANPA. 80. Further, section 52.12(a)(2) provides that neither the NANPA nor any of its affiliates may issue a majority (i.e. more than 50 percent) of its debt to, or derive a majority of its revenues from, any telecommunications service provider. Nothing in this record suggests that Loral Space owns more than 50 percent of the debt instruments issued by the Lockheed Martin Corporation. Further, it appears that the revenues that the Lockheed Martin Corporation received as a result of its affiliation with Loral Space represent only a small portion of the revenues of the Lockheed Martin Corporation. According to the Form 10-K that was filed with the Securities and Exchange Commission for the period from April 1 through December 31, 1996, Loral Space and Communications Ltd. acquired Skynet Satellite Services on March 14, 1997, at a price of $478 million. Lockheed Martin's equity interest in Loral is 16 percent, or approximately $76.5 million of Loral's investment. In 1996, Lockheed Martin reported total assets of $29.257 billion in its consolidated Balance Sheet. Therefore, its equity interest in Skynet represents approximately 0.26 percent (0.0026) of its total assets. 81. In addition, section 52.12 (a)(3) of our rules, provides that, even if the NANPA does not satisfy the neutrality criteria stated in sections 52.12 (a)(1) and (2), the Commission nonetheless may find that the NANPA is neutral and not subject to undue influence by parties with a vested interest in the outcome of numbering administration and activities. Our rule further provides for the NANC in the first instance to evaluate such cases and to submit its recommendation to the Commission. In the instant case, the NANC, whose membership includes a diverse group of industry experts, reviewed the ex parte filings of Mitretek and Lockheed and recommended that we find that Lockheed is neutral for purposes of assuming the functions of the NANPA. We agree that Lockheed will not be subject to undue influence by parties with a vested interest in the outcome of numbering administration, as a consequence of its current interest in Loral SKYNET. In sum, in view of the de minimis nature of the common carrier services currently offered by Loral SKYNET, the extremely small financial stake of the Lockheed Martin Corporation in Loral SKYNET relative to the Lockheed Martin Corporation's overall assets, and the conclusion of the NANC that Lockheed is neutral, we conclude that Lockheed may serve as the NANPA without compromising the purposes of the statute and the resulting neutrality criteria. To any extent that the Lockheed Martin Corporation or its affiliates in the future offer common carrier services that are more than de minimis in nature, we would reconsider the issue of Lockheed's neutrality under section 52.12 and consider taking action disqualifying Lockheed as the NANPA. (2) Billing and Collection Agent 82. We agree with NANC's conclusion that NECA, as currently structured, is not neutral. We further find merit in NANC's proposed cure that NECA create an independent board exclusively for the B&C Agent and that such board: (i) be neutral and impartial; (ii) not advocate specific positions to the Commission in non-administration-related proceedings; (iii) not be aligned or associated with any particular industry segment; and, (iv) not have a direct financial interest in the support mechanisms established by the Commission. NANC correctly observes that these criteria are consistent with those recommended by the Universal Service Joint Board to assure the neutrality of a permanent administrator of the new universal service support mechanisms. 83. We find NECA's proposal to create a NANPA Billing and Collection "Oversight Council" inadequate to address NANC's neutrality concerns. While NECA states that its Oversight Council would operate separately and independently from NECA or its proposed wholly-owned subsidiary, the USAC, NANC was clear in its directive that the B&C Agent for NANPA was to have its own independent board. NANC's statement that "[NECA's] suggestion of the USAC Board . . . as a cure for its neutrality is considered insufficient and inadequate for the concerns of all parties" underscores this point. The NANC obviously had serious reservations about whether USAC, created for purposes other than numbering administration, could adequately substitute for a board dedicated exclusively to overseeing NANPA billing and collection efforts. The record provides no basis upon which to reject the NANC's judgment. AT&T, for example, states in its reply comments that any cost savings realized by not requiring NECA to create a separate B&C board would be "trivial." 84. Accordingly, we direct that, as soon as possible, NECA create an independent, not-for-profit subsidiary corporation, similar to the USAC model, under the laws of Delaware to be designated the NANPA B&C Agent. We further direct NECA to submit to the Commission for approval proposed articles of incorporation, bylaws, and any documents necessary to incorporate the B&C Agent, by December 12, 1997, in order to ensure that prior to incorporation of the B&C Agent all requirements of this Order have been satisfied. The Commission will approve or modify the proposed documents through a Public Notice. Consistent with NANC's recommendation, we direct NECA to create the separate subsidiary corporation with a board of directors reflecting "broad based representation from the NANP community with at least one international representative." The board of directors and the NECA board of directors shall not have common members. Specifically, mirroring the representational composition of NANC, the board shall be composed of fourteen members: two representatives of domestic interexchange carriers; two representatives of domestic incumbent local exchange carriers; two representatives of the competitive local exchange carriers; two representatives of the wireless carriers; two representatives of non-domestic carriers; two representatives of consumer groups; and two representatives from state and international regulatory bodies. The board shall meet at least quarterly, and more frequently if the board members deem necessary. As discussed below, it shall have an audit of the subsidiary's activities as B&C Agent for the NANPA conducted annually, and shall provide the audit report to the NANC. The board shall also report to the NANC on its activities on at least an annual basis. 85. The establishment of this subsidiary corporation with its own independent board of directors will bring to numbering administration the expertise needed to ensure that billing and collection functions related to numbering resources are administered efficiently. This subsidiary corporation, through its parent company, NECA, will have access to the experience and resources necessary to implement support mechanisms quickly. We expect that this general expertise will enable the NANPA B&C Agent to assume its full responsibilities quickly. This in turn should assure that NANPA will begin to operate on schedule, despite the short implementation periods specified in the NANP Order. As stated above, if NECA should be unwilling or unable to perform as directed Lockheed should become the B&C Agent for NANPA. While it projected higher costs for the billing and collection function than NECA did, and does not have NECA's longstanding relationships with telecommunications carriers, Lockheed is considered neutral for purposes of assuming the duties of the B&C Agent. 86. We direct NECA to establish the B&C Agent as a separate subsidiary. This separate subsidiary will have separate directors, pursuant to the requirements set forth above, and will maintain separate books of account from those of NECA's other operations. We direct that the appointment of NECA as the B&C Agent will become effective coincident with NECA's incorporation of the B&C Agent subsidiary. We direct the B&C Agent subsidiary to develop any necessary database systems, to hire and train personnel, and to discuss with contributors the assessment of NANPA cost recovery requirements. In its role as the B&C Agent, this NECA subsidiary may engage only in activities directly related to billing and collection to recover costs for NANP administration. Meetings of the B&C Agent subsidiary's board of directors shall be open to the public and shall be held in Washington, D.C., because this city is easily accessible and may be particularly convenient for the parties that have offices or representatives in the Washington, D.C. area. We conclude that board members shall be entitled to reimbursement for expenses directly incurred as a result of their participation on the B&C Agent subsidiary board. 87. Intercorporate Transactions. We anticipate that the B&C Agent subsidiary may engage in transactions with NECA. We expect that NECA and the B&C Agent subsidiary will engage in such transactions whenever doing so would minimize the latter's expenses. We direct NECA to provide such services, including lending start-up funds, upon the request of the B&C Agent subsidiary, on reasonable terms. Start-up funds for the B&C Agent subsidiary may not come from the TRS fund or from TRS administrative expense accounts. All transactions that occur between NECA and the B&C Agent subsidiary must be conducted on an arm's length basis. For transactions between NECA and the B&C Agent subsidiary, NECA must comply with the Commission's affiliate transaction rules. We also direct NECA to revise its cost allocation manual (CAM) to reflect the formation of the B&C Agent subsidiary. 88. Accounting and Auditing Requirements. The B&C Agent subsidiary will maintain books of account in accordance with generally accepted accounting principles (GAAP) that are separate from NECA's books of account. We direct that an audit be performed of the B&C Agent subsidiary's books on an annual basis by an independent auditor. The audit period should conform to the time period on which the subsidiary keeps its books. We direct the NANC to make a recommendation to the Commission regarding the nature and scope of such an audit, and request that the NANC make a recommendation consistent with our Accounting Safeguards Order, where we established specific audit procedures applicable to separate subsidiaries of the BOCs under section 272(d) of the Act. Because we conclude that oversight of the billing and collection functions is necessary to ensure the integrity of those functions, we apply to the B&C Agent subsidiary audit requirements similar to those contained in section 53.209 et seq. of our rules. Before selecting the independent auditor, the B&C Agent subsidiary shall submit to the NANC the former's proposed preliminary audit requirements, including the proposed scope of the audit and the extent of the compliance and substantive testing. The NANC shall review the preliminary audit requirements to determine whether they are adequate to meet the audit objectives. We direct the NANC to submit the preliminary audit requirements to the Bureau, along with any recommended modifications that it deems necessary. After the audit requirements have been approved by the Bureau, the B&C Agent subsidiary shall engage an independent auditor to conduct an agreed-upon procedures audit following the procedures approved by the Bureau. In making its selection, the B&C Agent subsidiary shall not engage an independent auditor that has been involved in designing the accounting or reporting systems under review in the audit. In addition, the B&C Agent subsidiary shall require the independent auditor selected to develop a proposed audit program based on the final audit requirements as approved by the Bureau, and to submit such audit program to the Bureau staff, which will determine whether any modifications are necessary to conform the proposed audit program to the final audit program approved by the Bureau. This procedure must occur every year. 89. Because the audit program is an agreed-upon procedures audit that will be conducted to assure that the B&C Agent serves the public interest, the B&C Agent subsidiary must require the independent auditor it selects to inform the Bureau, during the course of that audit, of any revisions the auditor makes to the final audit program or scope of the audit. The B&C Agent subsidiary must also require the independent auditor to notify the Bureau of any meetings with the B&C Agent or NECA in which audit findings are discussed, so that the Bureau can ensure that the audit program is conducted in accordance with Commission rules. In addition, the B&C Agent subsidiary must require the independent auditor selected to submit to the Bureau any accounting or rule interpretations that the B&C Agent subsidiary or the auditor makes to complete the audit. By receiving the above information, the Bureau can ensure that the auditor examines areas the Bureau has determined require review and that the Commission's rules are being followed. 90. The B&C Agent subsidiary must require the independent auditor selected, within 60 days after the end of the audit period, but prior to discussing the audit findings with the B&C Agent or with NECA, to submit a draft of the audit report to the Bureau. We conclude that early submission of the audit report to the Bureau allow the Bureau to assess the validity of the report's findings and the adequacy of the work product. If the Bureau staff, upon reviewing the draft audit report, determines that additional audit work is necessary, the independent auditor may request additional time to perform that work. The B&C Agent subsidiary must require the independent auditor selected to submit the final audit to the B&C Agent subsidiary for its response to the audit findings. Within 30 days after receiving the audit report, the B&C Agent subsidiary shall respond to the audit findings and send a copy of its response to the Bureau. The B&C Agent subsidiary also must submit to the Bureau any reply that the independent auditor makes to the B&C Agent subsidiary's response. 91. Nondisclosure of Information. The Commission will have full access to all data received by the B&C Agent subsidiary. Requests for protection from Commission disclosure can be made under section 0.459 of the Commission's rules at the time that the subject data are submitted to the B&C Agent. As required by our rules, such requests for nondisclosure must state reasons for withholding the materials from disclosure (e.g., competitive harm) and the facts supporting that statement. We will require the B&C Agent to keep confidential all data obtained telecommunications service providers, not to use such data except for purposes of billing and collection to recover costs for NANP administration, and not to disclose such data in company- specific form unless directed to do so by the Commission. C. Process for Governance of NANPA and the B&C Agent 1. Description of Recommended Rules 92. The NANC also has recommended our adoption of rules, developed by the NANPA Working Group, to govern how the new NANPA and the B&C Agent conduct their respective operations. The NANC's proposed rules would require the NANPA and the B&C Agent to conduct their operations subject to oversight from the Commission, with recommendations from the NANC. Generally, the rules prescribe: (1) neutrality standards governing both the NANPA and the B&C Agent; (2) the lengths of the terms of administration of both the NANPA and the B&C Agent; (3) how the NANPA and the B&C Agent are to respond to changes to industry regulations, Commission rules, or other guidelines or directives; (4) the performance review process for the NANPA and the B&C Agent; (5) the termination of the tenure of the NANPA and the B&C Agent if either fails to comply with the neutrality requirements or materially defaults in the performance of its obligations; (6) dispute resolution processes; (7) enterprise services that the NANPA may offer; (8) duties of the NANPA; and (9) duties of the B&C Agent. The NANC's proposed rules defined conditions under which the NANPA may seek an adjustment to its price schedule and the scope of the NANPA's obligation to transfer intellectual property rights to a successor NANPA that we have already discussed. 93. The NANC recommends that NANPA attempt to resolve disputes relating to number administration using a binder of decisional principles, which the NANC refers to as "NANC guidelines." Initially, it says, the binder will contain: (1) regulatory guidance and orders specifically relating to numbering (e.g., orders and directives of the FCC, state regulators and non-United States governmental bodies); and (2) numbering-related guidelines and related explanatory material that have been formally adopted by standards bodies (e.g., Committee T1, TIA committees) or the equivalent of such bodies (international organizations such as the ITU, Inmarsat or Intelsat), or that reflect the consensus of numbering-related forums and industry committees (e.g., Network Interconnection and Interoperability Forum which formerly included the ICCF, Industry Numbering Committee, Canadian Numbering Committee, etc.). 94. NANC further recommends that the FCC establish processes under which a NANC recommendation will have the authority of an FCC decision, if the Commission does not affirmatively suspend, modify or reject the recommendation within a fixed time period following the release of a public notice announcing that NANC recommendation. 2. Discussion 95. There was very little comment on the NANC's proposed rules. We adopt the rules as proposed by the NANC, with some modifications. The rules set broad guidelines within which the NANPA and the B&C agent must operate to meet the objectives of fair and efficient numbering administration. Because they constitute a minimal set of requirements, the rules should give the industry flexibility to perform number administration so that the industry's needs for numbering resources are met. The NANPA and, to the extent applicable, the B&C Agent, shall follow Commission rules and regulations and the guidelines developed by the INC and other industry groups pertaining to administration and assignment of numbering resources. If there is a dispute regarding the application of a particular guideline, or if the industry groups developing the guidelines cannot reach consensus regarding what guidelines apply in a given context, the Commission will address the dispute, either initially or after receiving a recommendation from the NANC, and will if necessary codify formal regulations. Parties with disputes or questions regarding industry guidelines, or proposed changes to industry guidelines, are encouraged to seek assistance from the NANC first. We reject arguments that NANC "adds an additional layer to decision-making on numbering issues" and therefore should be removed from the arena of resolving numbering disputes. As amply demonstrated by its record thus far, the NANC, proceeding at a rapid pace to resolve technically complex issues that affect the competitiveness of the entire telecommunications industry, has greatly facilitated the Commission's work in numbering. As we have stated many times before, we have carefully balanced the membership of NANC so that it represents the numbering interests of service providers, users, and regulators throughout the countries served by the NANP. The NANC membership, working together to achieve consensus on issues for which time is of the essence, has expedited what would otherwise likely be a much longer process if the Commission were to rely on traditional rulemaking exclusively. For these reasons, we find that NANC operates in the public interest and should continue in operation. 96. We agree with the NANC's recommendation that the NANPA attempt to resolve disputes using the binder of decisional principles. We also agree that the administrator should apply its expertise to interpreting and applying existing decisional principles, but that it should not make policy or create the equivalent of new guidelines, and should not exceed a three- month time period for completing resolution of disputes before it. If the NANPA requires additional time for resolution, it should inform the NANC how much additional time it requires and the reasons why three months is not sufficient. NANC concludes, and we concur, that most disputes will arise because a party disagrees with an administrator's decision, action, or non-action and it will ask the administrator to review the decision. 97. We further agree with the NANC's recommendation that we codify an instruction to the NANC to adopt and use dispute resolution procedures that, for each dispute before the NANC, provide all interested parties: (1) notice of the matters at issue; (2) a reasonable opportunity to make oral and written presentations; (3) a reasoned recommended resolution; and (4) a written report summarizing the recommendations and the underlying reasons. To provide solutions to numbering disputes when time is critical, we further agree to streamline our administrative processes of review and accordingly order that, under authority delegated by the Commission to address number administration, the Common Carrier Bureau, using NANC's initial report, written submissions made to the NANC, and the NANC's final recommendation as a written record, review any NANC recommendation. In addition, we order that, if NANC's recommendation is uncontested by the disputants, it will be deemed affirmed 14 days after the Common Carrier Bureau releases a public notice announcing the NANC's recommendation, unless the Common Carrier Bureau affirmatively suspends, modifies or rejects the recommendation during that time period. The NANC is directed to provide notice of its decision within five days of issuance by filing its recommendation with the Common Carrier Bureau. The NANC should include, at a minimum, the full text of its recommendation, including its decision and opinion. We further order that the NANPA shall not implement a NANC dispute resolution recommendation until passage of the 14-day time period, unless the Common Carrier Bureau affirmatively directs otherwise. Should a disputant wish to contest the NANC's recommendation, it may do so by filing a petition with the Common Carrier Bureau within 14 days after NANC's submission of its recommendation to the Common Carrier Bureau. Filing of such petition will automatically suspend the 14-day regulatory review time period discussed above. 98. MCI noted that the Commission's public notice seeking comment on the NANC recommendations, in its description of the NANC condition regarding price adjustment, contained slightly different language than did NANC's proposed rule. MCI states that the textual difference may raise confusion and undermine the effectiveness of the fixed price guarantee. We are, however, adopting the proposed rule as submitted in the NANC Recommendation. IV. TOLL FREE NUMBER ADMINISTRATION A. Background 99. The group within Bellcore that administers the NANP does not administer the toll free number database. The latter is administered separately by Database Service Management, Inc., (DSMI) under the Service Management System (SMS) Tariff. DSMI is a subsidiary of Bellcore, which is currently owned by the RBOCs. In 1995, in the Toll Free NPRM, we sought comment on whether DSMI should continue to administer the toll free databases or whether another entity, such as the NANP administrator or another neutral party, should administer the toll free databases. The Commission asked parties to comment on whether independent third parties not affiliated with Bellcore or the RBOCs should perform the administrative database functions instead of DSMI and Lockheed, who currently perform those functions. 100. Passage of the Telecommunications Act of 1996, and its specific mandate of equitable numbering administration, required the Commission to solicit further comment to ensure that it had a complete record on the issue of what entity should administer the toll free database. We issued a Further Notice of Proposed Rulemaking (FNPRM) that requested additional comment on the issue of what entity should administer the toll free database. We sought this additional comment on what entity should administer the toll free database, in light of section 251(e)(1), because the 1996 Act opens all telecommunications markets to competition. As noted earlier, Bellcore, which owns the current toll free database administrator, has been owned by the RBOCs which we stated, as a matter of first impression, would appear to be a discrete industry segment. The Commission tentatively concluded that, given DSMI's current ties to the RBOCs, DSMI's continuation as the toll free database administrator would violate section 251(e)(1) of the Act. Also noting that the RBOCs have entered into an agreement to sell Bellcore, the Commission sought comment on the effect of the agreement upon who should administer the database. Although we sought comment on other issues relating to administration of the toll free database, in this order, we focus only on the specific question of what entity should administer the database. We will address the remaining issues in a subsequent order in CC Docket No. 95- 155. B. Positions of the Parties 101. In the first set of comments on the issue of toll free database administration, filed before passage of the 1996 Act and the agreement for the sale of Bellcore, some commenters expressed support for DSMI's continuation as the toll free database administrator. Others stated that toll free number administration should be assumed by a neutral entity unaffiliated with any industry segment. Some supported having the NANC consider the issue of what entity should administer the toll free database, while others stated that the entity selected as NANPA should assume responsibility for toll free number administration. Some of the Bell Operating Companies argued that the real issue is whether the Commission's order in CC Docket No. 86-10 should be modified to remove the requirement that the Regional Bell Operating Companies manage the SMS/800 database. These RBOCs stated that DSMI is simply an agent of the RBOCs and that replacing DSMI will not remove the RBOCs from toll free database administration. 102. In their joint comments on the FNPRM, the RBOCs and Bellcore ("the RBOCs") assert that section 251(e)(1) does not require that DSMI or any of the database subcontractors be displaced. The RBOCs state that access to the SMS/800 system is provided pursuant to a nondiscriminatory tariff that allows RespOrgs to reserve toll free numbers on a first- come, first-served basis. According to the RBOCs, this ensures that toll free numbers are allocated in a nondiscriminatory and equitable manner, as required by section 251(e). The RBOCs assert that DSMI simply manages the toll free system, a "largely ministerial" task that does not involve allocating toll free numbers. Therefore, the RBOCs argue, no change in the current provision of the SMS/800 system is required. The RBOCs contend that no party has alleged specific acts of discrimination by the RBOCs or Bellcore in connection with the 800 database, and further state that the commenters in CC Docket No. 95-155 have not alleged that there has been partiality in the administration of SMS/800 access. The RBOCs argue that none of the database subcontractors actually reserve, allocate, or disseminate specific toll free numbers from the SMS/800 database. The RespOrgs themselves undertake that task, because by selecting a number from the pool of unreserved numbers, each RespOrg is able automatically to reserve a number for its customer. The subcontractors maintain the SMS/800 system, and keep track of which numbers have been reserved and which are available. They, however, are unable to dispense toll free numbers, and thus cannot favor one RespOrg over another. 103. The RBOCs state that even if DSMI or Bellcore performed some de minimis aspects of toll free number administration, Bellcore (including DSMI) has entered into an agreement to be purchased by Science Applications International Corporation, Inc. (SAIC), an entity unaffiliated with any segment of the industry. According to the RBOCs, the sale is expected to be final in the fall of 1997, before the Commission could select a vendor to replace DSMI. The RBOCs assert that the sale will make DSMI an "impartial entity." Rather than hastily discharging DSMI to achieve impartiality, the BOCs argue, the Commission can achieve the same results by awaiting the consummation of the sale. The RBOCs urge the Commission to postpone any decision relating to administration of the SMS/800 system until the sale is finalized. 104. AT&T states that any toll free administrator that is affiliated or in a contractual relationship with Bellcore would be exposed to conflicts of interest because of the competition between the RBOCs and the carriers that use SMS. AT&T agrees that, given its current ties to the RBOCs, DSMI's continuation as the toll free administrator, pending the sale of Bellcore, is inconsistent with section 251(e) of the Act. There are other considerations, however, that, in AT&T's view, militate against making any immediate changes. AT&T states that, once the RBOCs divest Bellcore, DSMI would qualify as a neutral third party and could continue as the toll free administrator. This fact, however, does not mean that others should not be permitted to do so, AT&T argues. AT&T asserts that the SMS/800 database administrator ultimately should be selected through a competitive bidding process similar to that used to select the NANPA and the LNPAs. According to AT&T, despite DSMI's present RBOC affiliation, other crucial number administration tasks facing the industry counsel against opening the SMS/800 database administration issue at this time. AT&T suggests that there is no imminent need to displace DSMI as the database administrator, as long as Bellcore is divested by the end of 1997. Nonetheless, AT&T asserts, the Commission should charge an industry committee, such as the NANC, with determining the procedures that in the long-term will be used to select a "follow-on" administrator. 105. AT&T states that the duties of the SMS/800 database administrator should not be united with the NANPA or the LNPAs, although a single vendor could assume each of those distinct administrative functions. According to AT&T, the SMS/800 database administrator should be distinct from other numbering administrators because the former administrator's duties require capabilities that administration of the other services does not, and toll free numbers are governed by administrative rules that do not apply to other services. Moreover, the SMS/800 database has been operational for years, while the number portability databases have yet to be implemented. 106. According to Sprint, any effort to ensure neutrality of the toll free database administrator should also focus on the entity providing direction to the administrator and making strategic decisions about matters such as enhancements to the toll free database. Sprint does not object to allowing DSMI to continue as the toll free database administrator, at least until a permanent number administrator is chosen. Sprint asserts, however, that to ensure neutrality in toll free administration, the current SMS Management Team (SMT), a group composed entirely of RBOC representatives, should be replaced with a Board of Directors with balanced industry representation to oversee the administrator's operations and to provide overall management of the toll free database. Sprint states that DSMI's performance has been satisfactory. Given the time, training, and expense associated with choosing an interim administrator, DSMI should not be replaced unless and until a new permanent administrator is chosen. 107. Sprint states that it does not object to referring the selection of a permanent toll free database administrator to the NANC. In Sprint's view, the administrator should have overall operational responsibility for the database, file the SMS tariff, prepare and file whatever toll free usage reports the Commission requires, and assess and collect the fees associated with use of the database. The administrator should not be responsible for network planning of future toll free codes, which is more appropriately handled by an industry forum such as the INC or the ICCF. 108. The BOCs oppose AT&T's proposal that the NANC develop procedures for selecting future SMS/800 database administrators. The BOCs state that selection of the toll free administrator is currently performed by the SMT, which has demonstrated that it can select a database overseer that will treat all sectors of the industry fairly. In the BOCs' view, the Commission should grant the SMT the discretion to select the database administrator. Since the SMT also administers the SMS/800 database access tariff, the BOCs argue, the Commission will be able to police against possible discrimination in administration of the database through its normal tariffing procedures. C. Discussion 109. We conclude that, as presently structured, toll free number database administration is inconsistent with section 251(e)(1) of the Communications Act, as amended. There is not an adequate record, however, upon which to determine what entity should administer the toll free database. Parties asserting that DSMI should no longer administer the toll free database do not suggest what entity should assume the functions. At least one commenter states that DSMI will be neutral after Bellcore is sold, but also asserts that a toll free database administrator should be chosen through a competitive bidding process. We direct the NANC to examine the issue of toll free number administration and make a recommendation to the Commission regarding what entity would be an appropriate administrator for the toll free database. The NANC is free to use a competitive bidding process, similar to those the NANC used in developing its recommendations for the NANPA and the LNPAs, if it determines that such a process is necessary in this context. We request that the NANC make a recommendation to the Commission within 120 days of the effective date of this Order. V. CONCLUSION 110. We conclude that the public interest will be served by our naming Lockheed as the NANPA and NECA as the B&C Agent. Neutral and impartial administration of the numbering resource is critical to the development of competition in the telecommunications market. The record in this proceeding demonstrates that Lockheed and NECA can meet the requirement of neutrality for the purposes of NANP administration and billing and collection for NANPA. Further, the record indicates that each can perform its respective functions effectively. We affirm the NANC's recommendation, subject to the conditions outlined above, and name Lockheed as the new NANPA and NECA as the NANPA B&C Agent. We conclude that, as presently structured, toll free number database administration is inconsistent with section 251(e)(1) of the Communications Act, as amended, and direct the NANC to recommend an entity to assume the duties of toll free number administration within 120 days of the effective date of this order. VI. PROCEDURAL MATTERS A. FINAL REGULATORY FLEXIBILITY ANALYSIS 111. As required by the Regulatory Flexibility Act (RFA), a Regulatory Flexibility Analysis (RFA) was incorporated in the Administration of the North American Numbering Plan Notice of Proposed Rulemaking (NPRM). There, we certified that the action undertaken would not have a significant economic impact on a substantial number of small entities. There were no comments filed in response to the certification. However, given the great increase in the number and variety of telecommunication service providers since 1994, thereby increasing generally, opportunities for small entities, we have determined to conduct a regulatory flexibility analysis at this time. Need for, and Objectives of, this Third Report and Order: 112. This Third Report and Order addresses the recommendations of the NANC for an impartial NANP Administrator (NANPA) and Billing and Collection Agent (B&C Agent), pursuant to the NANP Order, in which the Commission established the North American Numbering Council (NANC) pursuant to the Federal Advisory Committee Act, 5 U.S.C., App. 2 (FACA). The NANP Order directed the NANC, among other things, to recommend to the Commission and to other member countries of the North American Numbering Plan (NANP) a neutral entity to serve as NANP Administrator and an appropriate mechanism for recovering the costs of NANP administration in the United States. The Commission's charge that the NANC recommend an impartial NANP administrator is consistent with Congress' directive in section 251(e)(1) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, than an impartial numbering administrator be named to make telecommunications numbering available on an equitable basis. 113. This Third Report and Order establishes Lockheed Martin IMS as the NANPA and CO Code Administrator; selects NECA as the B&C Agent for NANP administration, and adopts the proposed NANPA rules to be codified at 47 C.F.R. section 52.7, et seq. 114. The rules constitute a minimal set of mandatory requirements and are designed to give the industry flexibility to perform number administration in a manner that ensures that the industry's needs for numbering resources are met. Additionally, the NANPA and, to the extent applicable, the B&C Agent, shall follow the guidelines developed by the INC and other industry groups pertaining to administration and assignment of numbering resources. If there is a dispute regarding the application of a particular guideline, or if the industry cannot reach consensus regarding what guidelines are appropriate or necessary in a given context, the Commission will address the dispute, either initially or after receiving a recommendation from the NANC, and will codify formal regulations if necessary. Parties with disputes or questions regarding industry guidelines, or proposed changes to industry guidelines, are encouraged to first seek assistance from the NANC. Analysis of Significant Issues Raised in Response to the Certification: 115. In the NANP NPRM, the Commission certified that the rules it proposed to adopt in this proceeding would not have a significant economic impact on a substantial number of small entities because "while the rules proposed in this proceeding would apply to telephone communications corporations of all sizes that are now assigned telephone numbers or that may in the future seek such assignments, the impact on small business entities served by these corporations and on small telecommunications companies is not likely to be significant." No comments were submitted in response to the certification. However, we have, on our own motion, reconsidered our certification in the NANP NPRM and decided to undertake a FRFA. Description and Estimate of the Number of Small Entities Affected by this Third Report and Order: 116. For the purposes of this Order, the RFA defines a "small business" to be the same as a "small business concern" under the Small Business Act, 15 U.S.C. section 632, unless the Commission has developed one or more definitions that are appropriate to its activities. Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the Small Business Administration (SBA). SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small entities when they have fewer than 1,500 employees. We first discuss generally the total number of small telephone companies falling within both of those SIC categories. Then, we discuss the number of small businesses within the two subcategories, and attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules. 117. Because the small incumbent LECs subject to these rules are either dominant in their field of operations or are not independently owned and operated, consistent with our prior practice, they are excluded from the definition of "small entity" and "small business concerns." Accordingly, our use of the terms "small entities and "small business" does not encompass small incumbent LECs. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will consider small incumbent LECs within the analysis and use the term "small incumbent LECs" to refer to any incumbent LECs that arguably might be defined by SBA as "small business concerns." Telephone Companies (SIC 4813) 118. Total Number of Telephone Companies Affected. Many of the decisions and rules adopted herein may not have a significant effect on a substantial number of the small telephone companies identified by SBA. The United States Bureau of the Census ("the Census Bureau") reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for at least one year. This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, PCS providers, covered SMR providers, and resellers. It seems certain that some of those 3,497 telephone service firms may not qualify as small entities or small incumbent LECs because they are not "independently owned and operated." For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It seems reasonable to conclude, therefore, that fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent LECs that may be affected by this Third Report and Order. 119. Wireline Carriers and Service Providers. SBA has developed a definition of small entities for telephone communications companies other than radiotelephone (wireless) companies. The Census Bureau reports that, there were 2,321 such telephone companies in operation for at least one year at the end of 1992. According to SBA's definition, a small business telephone company other than a radiotelephone company is one employing fewer than 1,500 persons. All but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 non- radiotelephone companies that might qualify as small entities or small incumbent LECs. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 2,295 small entity telephone communications companies other than radiotelephone companies that may be affected by the decisions and rules adopted in this Third Report and Order. 120. Wireless Service Providers. Neither the Commission nor SBA has developed a definition of small entity specifically applicable to providers of wireless services. The closest applicable definition is that under SBA rules for radiotelephone communications, SIC 4812, which defines a small entity as one with 1500 or fewer employees. The 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau of the Census, shows that only 12 radiotelephone firms out of a total of 1,176 such firms that operated during 1992 had 1,000 or more employees. 121. Local Exchange Carriers. Neither the Commission nor SBA has developed a definition of small providers of local exchange services (LECs). The closest applicable definition under SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of LECs nationwide of which we are aware appears to be the data that we collect annually in connection with the Telecommunications Relay Service (TRS). According to our most recent data, 1,347 companies reported that they were engaged in the provision of local exchange services. Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of LECs that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 1,347 small incumbent LECs that may be affected by the decisions and rules adopted in this Third Report and Order. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements: 122. Reporting. The reporting requirements established in the NANPA rules to be codified at 47 C.F.R.  52.7 are directed exclusively to the NANPA and the B&C Agent. These rules provide that the NANPA and the B&C Agent shall conduct their operations with oversight from the Commission, with recommendations from the NANC. Generally, the rules address: (1) neutrality of both the NANPA and the B&C Agent; (2) the terms of administration of both the NANPA and the B&C Agent; (3) the appropriate handling by the NANPA and the B&C Agent of changes to industry regulations, Commission rules, or other guidelines or directives; (4) the performance review process for the NANPA and the B&C Agent; (5) the termination of the tenure of the NANPA and the B&C Agent should either fail to comply with the neutrality requirements or materially default in the performance of its obligations; (6) dispute resolution; (7) enterprise services; (8) annual reporting requirements for the NANPA; (8) duties of the NANPA; and (9) duties of the B&C Agent. The NANC's proposed rules specifically include the conditions pertaining to price adjustment and the transfer of intellectual property rights to a successor NANPA. 123. Recordkeeping. The NANPA rules adopted herein require recordkeeping on the part of the NANPA and B&C Agent. The NANPA and B&C Agent recordkeeping requirements do not require additional reporting of data from the telephone service providers industry. The NANPA and the B&C Agent shall develop and implement an internal, documented performance monitoring system and shall provide such performance review on request of the Commission on at least an annual basis. The indirect effect of requiring periodic, annual and audit reports from the NANPA and the B&C Agent on small business entities creates a positive benefit as it ensures fairness and neutrality in the management of numbering resources. 124. Other Compliance Requirements. None. 125. Report to Congress: The Commission shall send a copy of this FRFA, along with this Third Report and Order, in a report to be sent to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C.  801(a)(1)(A). A copy of this FRFA will also be published in the Federal Register, see 5 U.S.C.  604(b), and will be sent to the Chief, Counsel for Advocacy of the Small Business Administration. VII. ORDERING CLAUSES 126. Accordingly, pursuant to sections 1, 4(i), and 251 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), and 251, IT IS ORDERED that this THIRD REPORT AND ORDER in CC Docket No. 92-237 is hereby ADOPTED. 127. IT IS FURTHER ORDERED that, pursuant to sections 1, 4(i), and 251 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), and 251, IT IS ORDERED that this THIRD REPORT AND ORDER in CC Docket No. 95-155 is hereby ADOPTED. 128. IT IS FURTHER ORDERED that the North American Numbering Council shall recommend to the Commission an entity to assume the duties of toll free number database administration by no later than 120 days after the effective date of this Third Report and Order in CC Docket No. 95-155. 129. IT IS FURTHER ORDERED that all policies, rules, and requirements set forth herein are effective 30 days after publication of this order in the Federal Register. 130. IT IS FURTHER ORDERED that, pursuant to section 5(c)(1) of the Communications Act of 1934, as amended, 47 U.S.C.  155(c)(1), authority is delegated to the Chief, Common Carrier Bureau, to conduct review of any recommendation of the North American Numbering Council on a dispute pertaining to numbering administration or the obtaining of numbers for the provision of telecommunications services. 131. IT IS FURTHER ORDERED that the Commission s Office of the Managing Director (OMD) SHALL SEND a copy of this Third Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary