The statewide 304 area code is supposed to run out of phone numbers by the end of the year, but the estimates have been wrong before.

In fact, they've never been right.

A year ago, 304 was supposed to be depleted by September 2007.

In 2005, the day of reckoning was to come no later than June 2007.

Back in 2000, the Public Service Commission began the whole process of studying the need for a new area code because the official estimate was that there would be no more numbers after March 2002.

Despite all the miscalculations, everyone now appears convinced the state needs a new area code. The PSC called it a "mathematical certainty" in a decision issued last month ordering the adoption of a new area code in the panhandles.

That decision drew an onslaught of opposition, including complaints from Gov. Joe Manchin and Attorney General Darrell McGraw. All of the criticism, however, concerned where the new area code would be imposed and the enormous cost that it would levy on the eastern and northern parts of the state.

None of the comments asked whether a new area code - along with the immense cost that it would entail - was really necessary in the first place.

Lee Selwyn, president of the Boston-based telecommunications-policy consulting firm Economics and Technology Inc., has long argued it's a question that needs to be asked.

Selwyn has testified before 40 state utility commissions and been hired by utility regulators across the country to analyze area-code expansion plans - including New York City when it first considered splitting its 212 area code in 1983, in one of the first area-code expansion cases.

"It has cost the economy hundreds of millions of dollars," Selwyn says. "When you take the number of area codes created in the past 10 years, it's a big number, and it doesn't have to happen."

Selwyn has not studied West Virginia's phone market, but he said that, in general, regulators have been too quick to add area codes.

"It's an easy solution, a Band-Aid solution, and an irreversible solution, once you start proliferating phone numbers," Selwyn said. "It's like building a new road: You can rip up the pavement and do it right, or you can smear on some concrete and make it look like you've done something, but the solution won't last very long."

Surprisingly, most of the phone numbers in the 304 area code are not now being used.

According to NeuStar Inc., the company that the federal government has hired to manage the allotment of phone numbers, 54.9 percent of the 304-area numbers that have already been assigned to carriers for consumer use - or 3.49 million - were available for consumer use at the end of 2006, the most recent time frame for which data are available. That doesn't even include hundreds of thousands of numbers that haven't yet been doled out to carriers.

Still, NeuStar and the PSC stand by the depletion estimates.

State regulators instituted several measures over the years since 2000 aimed at conserving numbers, and they have succeeded in postponing the inevitable, said PSC spokeswoman Sarah Robertson.

"We tried to alleviate that burden for a while, by conserving numbers, releasing blocks [of numbers] for assignment," Robertson said. "I don't know that [NeuStar] was wrong; we just took some efficiency measures that gave us a little more life."

Robertson and Wayne Milby, NeuStar's senior area code relief planner for the eastern region, said the key reform involved reducing the size of the blocks in which phone numbers are allotted from 10,000 to 1,000.

But West Virginia began "1,000-block pooling" in October 2002, and NeuStar's estimates continued, long after that, to exaggerate the rate of number depletion.

At the end of the day, NeuStar's estimates are based on industry estimates, and the phone companies are under no regulatory requirement to supply NeuStar with accurate or complete information, Milby said.

"They have to provide the information, but there's nothing that says that information has to be exactly right," he said.

Where do the numbers go?

Phone numbers in the 304 area are apparently dwindling. There were about 2 percent fewer numbers available in 2006 compared with 2005, according to NeuStar.

Yet faster than new consumers have been signing up, phone providers have been setting aside lines for nonconsumer use. According to 2006 NeuStar data:

The increase in actual consumer use of phone lines, by contrast, was just 13.7 percent.

Possibly an even bigger drain on West Virginia phone numbers is the "rate-center" system that they're organized under, says Paul Burke of Shepherdstown, a retired statistician for the federal Department of Housing and Urban Development who is a citizen intervener in the PSC's area-code expansion case.

In fact, they've never been right.

A year ago, 304 was supposed to be depleted by September 2007.

In 2005, the day of reckoning was to come no later than June 2007.

Back in 2000, the Public Service Commission began the whole process of studying the need for a new area code because the official estimate was that there would be no more numbers after March 2002.

Despite all the miscalculations, everyone now appears convinced the state needs a new area code. The PSC called it a "mathematical certainty" in a decision issued last month ordering the adoption of a new area code in the panhandles.

That decision drew an onslaught of opposition, including complaints from Gov. Joe Manchin and Attorney General Darrell McGraw. All of the criticism, however, concerned where the new area code would be imposed and the enormous cost that it would levy on the eastern and northern parts of the state.

None of the comments asked whether a new area code - along with the immense cost that it would entail - was really necessary in the first place.

Lee Selwyn, president of the Boston-based telecommunications-policy consulting firm Economics and Technology Inc., has long argued it's a question that needs to be asked.

Selwyn has testified before 40 state utility commissions and been hired by utility regulators across the country to analyze area-code expansion plans - including New York City when it first considered splitting its 212 area code in 1983, in one of the first area-code expansion cases.

"It has cost the economy hundreds of millions of dollars," Selwyn says. "When you take the number of area codes created in the past 10 years, it's a big number, and it doesn't have to happen."

Selwyn has not studied West Virginia's phone market, but he said that, in general, regulators have been too quick to add area codes.

"It's an easy solution, a Band-Aid solution, and an irreversible solution, once you start proliferating phone numbers," Selwyn said. "It's like building a new road: You can rip up the pavement and do it right, or you can smear on some concrete and make it look like you've done something, but the solution won't last very long."

Surprisingly, most of the phone numbers in the 304 area code are not now being used.

According to NeuStar Inc., the company that the federal government has hired to manage the allotment of phone numbers, 54.9 percent of the 304-area numbers that have already been assigned to carriers for consumer use - or 3.49 million - were available for consumer use at the end of 2006, the most recent time frame for which data are available. That doesn't even include hundreds of thousands of numbers that haven't yet been doled out to carriers.

Still, NeuStar and the PSC stand by the depletion estimates.

State regulators instituted several measures over the years since 2000 aimed at conserving numbers, and they have succeeded in postponing the inevitable, said PSC spokeswoman Sarah Robertson.

"We tried to alleviate that burden for a while, by conserving numbers, releasing blocks [of numbers] for assignment," Robertson said. "I don't know that [NeuStar] was wrong; we just took some efficiency measures that gave us a little more life."

Robertson and Wayne Milby, NeuStar's senior area code relief planner for the eastern region, said the key reform involved reducing the size of the blocks in which phone numbers are allotted from 10,000 to 1,000.

But West Virginia began "1,000-block pooling" in October 2002, and NeuStar's estimates continued, long after that, to exaggerate the rate of number depletion.

At the end of the day, NeuStar's estimates are based on industry estimates, and the phone companies are under no regulatory requirement to supply NeuStar with accurate or complete information, Milby said.

"They have to provide the information, but there's nothing that says that information has to be exactly right," he said.

Where do the numbers go?

Phone numbers in the 304 area are apparently dwindling. There were about 2 percent fewer numbers available in 2006 compared with 2005, according to NeuStar.

Yet faster than new consumers have been signing up, phone providers have been setting aside lines for nonconsumer use. According to 2006 NeuStar data:

The increase in actual consumer use of phone lines, by contrast, was just 13.7 percent.

Possibly an even bigger drain on West Virginia phone numbers is the "rate-center" system that they're organized under, says Paul Burke of Shepherdstown, a retired statistician for the federal Department of Housing and Urban Development who is a citizen intervener in the PSC's area-code expansion case.

Rate centers are geographical telephone-service areas established for assigning distance-based tolls on calls. A phone number's first three digits after the area code - known commonly as the "exchange" or "prefix" - correspond to each rate center. West Virginia has 228 centers; the "343" and "925" exchanges correspond to two of Charleston's, for instance.

Though cell-phone companies don't allot numbers according to rate centers, landline carriers like Verizon Communications Corp. still do. For every rate center it operates in, each landline carrier is given phone numbers in 1,000-number blocks, and that means less-populous rate centers could easily end up with hundreds or thousands of unused numbers, says Burke.

"What's going on is that they're assigning exchanges in rural areas ... and if [the rate centers] don't have a lot of housing, there are going to be some numbers that are orphaned," Burke said. "I believe that's what's using up the numbers."

It undoubtedly costs landline carriers more to transmit calls over longer distances, Burke said. But wireless carriers don't allot numbers according to rate-center designations and therefore apparently consider it a negligible cost, he said.

"The fact that cell phones also have [distance-based] costs - they're not transmitting entirely over air - and don't need to have the rate distinction suggests that it can't be very much cost," Burke said.

'No reasonable alternatives'?

For years, Selwyn's firm has been pushing to reduce the number of rate centers, so that phone-number blocks could be distributed more efficiently over larger areas.

"But the phone companies are absolutely resisting this," he said. "A lot of the problems that exist could be easily remedied by creative regulatory thinking, but we haven't seen much of that."

Verizon denies that consolidating rate centers would solve the problem.

"Number-pooling has accomplished what rate-center consolidation would supposedly do," said Lee Gierczynski, a Verizon spokesman. "There would be a significant amount of complexity and cost, and the benefit of consolidating wouldn't be large enough to expend that much cost."

A work group convened by the PSC in 2003 to study the need for a second area code considered consolidating rate centers but decided against it, Gierczynski said.

Members of that group included phone company representatives, PSC staff experts and officials from the PSC's Consumer Advocate Division. The division's director, Byron Harris, said he agrees that the state needs to add an area code.

"It's becoming more and more evident that something needs to be done," Harris said.

But Harris' predecessor, Billy Jack Gregg, who retired last year, felt differently.

In a November 2006 filing with the PSC, Gregg challenged the commission to prove the state was truly running out of numbers.

"Before the commission decides to go down the path of area code relief, it should assure itself that there are no reasonable alternatives which will alleviate the need for area code relief," Gregg wrote. "The question must be asked: Why aren't the 6 [million] to 7 million numbers contained in area code 304 enough to serve the needs of 736,000 West Virginia households with 1.9 million West Virginians?"

Gierczynski says emerging technology will use up the numbers.

"We believe a new area code will be essential as communications options continue to grow," he said.

Selwyn says there's reason to believe that the demand nationwide for new lines will actually start to fall, as telecom mergers reduce the number of industry competitors and more people cancel Internet dial-up lines in favor of faster hookups.

The wave of "family share" pricing plans by wireless carriers in the late '90s caused a spike in demand that has fallen off dramatically, he also notes. From the beginning of 1995 to the end of 2001, 162 new area codes were put into service, according to data Selwyn compiled. But from then till the end of 2005, just 16 were added.

"I'm really surprised that West Virginia needs a new area code," Selwyn said. "It's not a high-growth state."

The 'overlay' order

Though adding area codes is an expensive proposition for phone companies, it can also be a lucrative one.

Existing companies have backlogs of unused numbers. And when new area codes are applied to new accounts only - or "overlaid," in industry parlance - they become potent weapons for the established carriers in beating back challenges from newer competitors, who will be stuck with phone numbers in the new area code.

"People are very resistant to taking overlay numbers," Selwyn says. "If Verizon can offer you a 304 [area code], you're going to have a pretty strong preference to take it rather than accepting the overlay area code from a competitor ... [and] Verizon is going to have all kinds of numbers available."

The PSC makes a similar point in its decision last month ordering that the new area code be applied only in the northern and eastern parts of the state. "Potential new telephone service providers may be deterred from entering in the market because they are limited to offering the new area code to customers who might find the new area code less desirable," the order said.

This past Thursday, the PSC rescinded that order. Citing the intense opposition the order had aroused, it ruled that the overlay approach should be adopted in its place.

Petitioners have 10 days from then to request that the commission reconsider and 30 days to appeal to the state Supreme Court.

To contact staff writer Joe Morris, use e-mail or call 348-5179.