Remedies for Area Code Proliferation Face the Test

State utilities regulators, moving to slow the pace of area code changes, do not know how effective their crucial telephone number conservation program will be or how long existing area codes will hold out.

Thanks to a recent Federal Communications Commission decision, the state Public Utilities Commission now has the power to more tightly ration phone numbers and force phone companies to return unused numbers.

But the key to slowing the proliferation of area code splits and overlays depends on the successful enforcement of several complex number-conservation plans that have never been tried before.

In this new age, PUC analysts will become phone number sleuths, examining phone companies’ books to determine whether all available numbers are exhausted.

They plan to reduce to 1,000 from 10,000 the numbers given out to phone companies at one time. Also, they will require phone companies to give back unused numbers for redistribution.

But how many numbers are out there to conserve? And even with conservation, how long will it be before state regulators are again asked to consider a split or overlay?

Regulators, telephone companies and consumer activists concede that they don’t know the answer.

“That’s the $64 question,” said Natalie Billingsley, a telecommunications expert with the PUC’s office of ratepayer advocates. “We don’t know what effect number conservation will have on existing area codes.”

The conservation plan comes after a protracted controversy fueled by angry business owners and residents who vehemently protested a proposed overlay in the 310 area code. The PUC voted Sept. 16 to rescind the overlay for the Westside and South Bay and promised to adopt new ways of preserving numbers.

Only one other state, Illinois, has tried similar measures, but the sample was much smaller and cannot be compared to the massive 310 area code, Billingsley said.

“[The] 310 area code is very mature,” she explained. “There are 792 prefixes, and only 49 are left unassigned.”

Helen Mickiewicz, a staff attorney for the PUC, said the “extended life of an area code depends on when you start the process, how many numbers are allocated, how many numbers are reclaimed and the demand for numbers.

“At this point, we just can’t say,” she said.

Pacific Bell spokesman John Britton said number conservation is at best a temporary fix.

“We all hope the conservation measures will last a real long time, but we know it will not stop the need for new area codes and overlays,” Britton said.

Assemblyman Wally Knox (D-Los Angeles), who pushed a bill through the Legislature to place stricter controls on area code changes, said he hopes that number conservation will extend the 310 area code for years.

“We did not go through all of this for the life of an area code to be extended by months,” he said.

Consumer activists say phone companies--including small operators seeking to compete with larger rivals like Pac Bell and GTE, are hoarding large blocks of numbers that are not being used--a contention phone companies deny.

The PUC now faces the task of hiring technical experts and consultants to find out if this is true.

Steps to Avoid a Backlash

Agency officials also must come up with a plan to study phone companies’ records to confirm claims of number shortages and the need for new area codes or overlays.

PUC officials expect to spend $529,000 in the first year and $475,000 annually in the second and third years to conduct number-utilization studies.

PUC Commissioner Henry M. Duque, the lead commissioner on area code issues, acknowledged that instituting area code preservation measures may prove more difficult than rolling out an overlay or split.

“If these number-conservation plans fail, the politicians and the public will blame the PUC,” said Duque, who opposed killing the 310 overlay. “If there is any negative [fallout], it will come back on us.”

To avoid a backlash, staff members have made area code-related issues a top priority.

One start-up company, MediaOne, for example, says it spent $600 million to upgrade its facilities to offer local telephone service in anticipation of the now-defunct plan to create the 424 overlay zone on the Westside and South Bay. Now, their business plan is in ruins.

“We have tens of thousands of customers, and we are losing money every day,” said Theresa L. Cabral, senior corporate counsel for MediaOne.

Still, Cabral cited a provision in PUC Commissioner Joel Z. Hyatt’s decision to roll back the 310 overlay that puts MediaOne among the first companies to receive remaining numbers in 310 because it is holding unusable 424 numbers.

Another uncertainty is whether there will be a cost to consumers.

“It is not evident that there are any direct costs to the public regarding these area code preservation measures,” Billingsley said. “We are very hopeful that these measures will delay the greater cost of putting in new area codes.”

Big Companies Hold Recycling Advantage

Industry leaders argue that the numbering changes may not force them to spend more money, but could hurt them through diminished competition and consumer choice.

Upstart cable television and cellular phone companies say their ability to compete for local service customers will be hampered because they will now only get new numbers in lots of 1,000.

Big companies, however, have the ability to reallocate existing numbers when they lose old customers, giving them a larger bank of the now-valuable numbers.

“If we can’t get numbers, consumers will be cheated out of choice and lower prices that competition affords,” said Dennis H. Mangers, senior vice president of the California Cable Television Assn., a group whose members are seeking a foothold in the telephone business.

Telephone companies, including Pacific Bell, pressed for an overlay rather than number conservation measures in 310, 818 and 408 in San Jose as the most efficient way to deal with the surge in demand for additional lines for fax machines, online services, cellular phones, pagers, automatic teller machines and credit card approval systems.

Britton said Pacific Bell had no objections to number conservation, but the phone company pushed for the overlay because of the crucial need for area code relief in 310.

Pacific Bell intends to cooperate fully with the PUC’s mandates, Britton said, noting that engineers have already begun to revert to seven-digit dialing in 310.

Even so, state utilities regulators acknowledge that it remains to be seen whether their newly adopted number conservation program will solve the area code relief riddle.

Said PUC lawyer Mickiewicz: “All we can say is that we hope to extend the life of the code by assigning numbers more efficiently.”