How do phone companies arrive at the possible number of phone numbers that can be generated for customers?

If you want to count the number of possible 7 digit "phone numbers" and you are allowed any of the 10 digits in any position then there are 10x10x10x10x10x10x10 = 10⁷ = 10 000 000 possibilities. But this is not the way the system works. The last 4 digits are not constrained (although I have never seen xxx-0000 as a phone number) but the first three digits specify the exchange and I don't know the restrictions on exchanges. So the best I can say is that there are 10 000 (or maybe 9 999) phone numbers per exchange.