CAPT OF A B727 OVERSHOT ASSIGNED ALT DURING CLB DUE TO DISTR OF MAINTAINING VISUAL SEPARATION WITH A B747.

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AFTER THE LEVELOFF AT 7000 FT; WE RECEIVED CLRNC TO 10000 FT. I ENGAGED THE AUTOPLT AT 10000 FT. ATC RPTED TFC EBOUND OFF OUR R AT 1-2 O'CLOCK. WE HAD VISUAL CONTACT WITH THE TFC; A B747 RPTED AT 11000 FT. AFTER XING IN FRONT OF THE B747; WE WERE DIRECTED TO TURN L ON A HDG TO TRM. AFTER THE TURN; WE WERE CLRED TO CLB TO 16000 FT. WE STILL HAD VISUAL CONTACT WITH THE B747 AT 11 O'CLOCK. HE WAS AT OUR APPROX ALT; CLBING. UP TO THIS TIME; OUR CLB CLRNC HAD BEEN GIVEN TO US IN INCREMENTS OF 1000-3000 FT THROUGHOUT THE CLB AFTER DEP FROM LGB. NEAR 16000 FT; WE WERE CLRED TO 17000 FT. ATC ADVISED THAT THE B747 WAS AT 17000 FT AND DIRECTED US TO MAINTAIN VISUAL SEPARATION. I QUICKLY LOOKED OUT TO CHK THE POS OF THE B747 AND I THINK THE OTHER 2 MEMBERS OF THE CREW WERE OUTSIDE ALSO. ALMOST IMMEDIATELY AFTER THE PRECEDING XMISSION FROM ATC AT APPROX XB50Z; THE CTLR STATED; 'ACFT X; YOUR ASSIGNED ALT IS 17000 FT.' I XCHKED MY ALTIMETER WHICH READ 17400 FT. I QUICKLY DISCONNECTED THE AUTOPLT; PULLED THE PWR BACK AND STARTED THE DSCNT CORRECTION TO 17000 FT. THE FO ACKNOWLEDGED THE ATC CALL. ATC SWITCHED US TO ANOTHER CTLR FREQ WHERE WE WERE GIVEN A 40-50 DEG R TURNOFF. WE WERE THEN CLRED TO CLB AGAIN. THE GREATER PART OF THE BAL OF OUR CLB PROFILE CONTINUED TO COME IN INCREMENTS OF 1000-2000 FT AT A TIME. THE FLT CONTINUED WITHOUT FURTHER INCIDENT. AT THE TIME OF THE ALTDEV; THE DISTANCE BTWN OUR ACFT AND THE B747 APPEARED TO BE 5 MI OR GREATER. CAUSAL FACTOR: LACK OF SITUATIONAL AWARENESS APCHING ASSIGNED ALT. CONTRIBUTING FACTORS: 1) WITHIN APPROX 500 FT OF ASSIGNED ALT; ATC DIRECTED US TO MAINTAIN VISUAL SEPARATION FROM TFC. 2) TASK SATURATION WITH MANY INTERMEDIATE LEVELOFFS DURING THE CLB. PREVENTIVE ACTIONS: 1) PLT FLYING ACFT REMAIN FOCUSED ON ACFT CTL AND LEAVE PRIMARY VISUAL REFS OUTSIDE TO PNF. 2) ATC REFRAIN FROM DIRECTING OUTSIDE VISUAL INSTRUCTION WHEN ACFT IS WITHIN 1000 FT OF ASSIGNED ALT.