FCC Reduces Phone Number Porting Interval to One Business Day

On Wednesday, May 13, the Federal Communications Commission (FCC) approved an order reducing the time allowed for a telecommunications carrier or interconnected voice over Internet Protocol (VoIP) provider to transfer, or “port,” a telephone number to a competitor when a subscriber moves from one provider to another. The process, known as “number porting,” allows consumers to switch voice service providers while retaining their existing telephone number.

Under the new FCC rules all wireline, interconnected VoIP and intermodal ports (wireline to wireless) must be completed within one business day of the request, unless the new provider requests a longer period. This new interval is a substantial reduction from the previous four-day interval, and moves the wireline industry closer to the 2.5-hour interval used in the wireless industry. This new obligation will not take effect immediately, but will be subject to an implementation period which varies, depending upon the size of the service provider.

This shorter interval should assist competitive voice service providers with subscriber acquisition and retention efforts, given that subscribers will be able to port their numbers in a shorter period. In addition, reducing the interval will also eliminate the potential for incumbents to engage in unlawful retention marketing, or other anti-competitive behavior, while the port request is pending.

New shorter porting interval only applies to “simple” ports

The new one business-day porting interval will apply only to “simple” ports, not “complex” ports. Generally speaking, simple ports are those that involve an account for a single line, and that do not involve complex switch translations, or lines provided to the competitor under a resale or unbundled network element (UNE) arrangement. All other requests are considered complex ports, and will continue to be governed by the four-day interval.

Implementation period varies depending upon service provider’s size

To facilitate the establishment of a shorter porting interval, the FCC has ordered the North American Numbering Council (NANC) to develop new procedures and to make its recommendations within 90 days.

Upon issuance of the final NANC recommendations, service providers will have at least nine months to come into compliance with the new interval period. Further, the FCC has decided to provide “small carriers” (defined in the next paragraph) additional time to comply with the order. These service providers will have 15 months from the NANC recommendations to implement the new shorter porting interval. Thus, including the period allotted for the NANC recommendations, the new porting interval must be implemented within 12 months, or 18 months for so-called small carriers.

The FCC defined those carriers that are entitled to the longer implementation period, so-called small carriers, as those providers with fewer than 2 percent of the nation’s subscriber lines in the aggregate nationwide. This definition is likely to ensure that several large independent incumbent telecommunications companies, such as CenturyTel/Embarq or Frontier (following acquisition of Verizon lines in rural territories), will not be classified as small carriers subject to the longer implementation period. In addition to the phased-in implementation period, the FCC also will permit small carriers to seek a waiver of the rules, or petition a state commission for an exemption.

Costs of implementing systems necessary to complete port intervals may be recovered

The FCC’s order also affirms that service providers may recover their costs of implementing new systems necessary to meet this shorter porting interval. Specifically, the FCC affirmed that carriers may use the same cost recovery regime it employed when number porting was first adopted by the wireline industry in the 1990s. Under that regime, wireline carriers were permitted to recover the costs of implementing number portability by imposing tariff surcharges on their own end-user customers.

In the past, some incumbent telecommunications carriers have attempted to charge competitors for certain number porting costs. The FCC did not address that issue directly, but we encourage competitors to view their carrier billings closely to ensure that incumbent carriers do not attempt to recover implementation costs by charging competitors for completing a port.

Other porting issues remain unresolved

Several other number porting process issues have been pending before the FCC for several years. These issues, which often implicate the specific steps involved in the number porting process, are apparently going to be considered in a further notice of proposed rulemaking from the FCC. In addition to these issues, Verizon has recently proposed that the FCC adopt “porting” rules that would govern the process for the exchange of video subscribers from one provider to another. The FCC has apparently declined to address that proposal in this latest action.

Davis Wright Tremaine counsels competitive voice service providers on number porting and related competitive issues. Should you have any questions about the impact of this latest decision on your operations, please contact us.