FCC Announces New “Highest Bidder” Auction for 833 Vanity Toll-Free Numbers

The FCC has announced that certain vanity toll-free numbers in the new 833 toll-free code will be auctioned off to the highest bidder.  This represents a departure from the FCC’s longstanding policy of allocating toll-free codes on a first-come, first-served basis.  In a Report and Order issued on September 26, 2018, the FCC announced that it will be using this experimental auction to explore and analyze the most efficient way to utilize competitive bidding to assign toll-free numbers prospectively.

This auction will include only 17,000 numbers that were identified as mutually-exclusive (i.e.numbers that had more than one assignment request) during the initial requesting period in 2017.

The auction will be structured as a “Vickery” single round sealed-bid auction.  The FCC is expected to issue a Public Notice in the near-future to solicit input on the proposed application and specific other bidding procedures.  The Commission intends to allow any party interested in obtaining an 833 number to participate in the auction, including both allowing potential subscribers to directly bid or to indirectly bid through a “RespOrg” or qualified long-distance carrier.  However, if a subscriber that is directly bidding is successful in securing one or more of these numbers, the subscriber will have to collaborate with a RespOrg after the auction to reserve the number in the Toll-Free Database.

Also significant in the release of this new toll-free code are new rules nurturing a limited secondary market for these toll-free numbering resources.  The new exception will allow those who are successful in this auction to later transfer their assigned numbers.  The Commission has stated that parties who obtain numbers assigned through competitive bidding will be permitted to broker, warehouse, and even to hoard these numbers under a limited exception to the Commission’s current rules forbidding these practices.  Accordingly, it will be interesting to observe the level of bidding interest these new liberalized bidding rules will foster, particularly for the most desirable vanity numbers to business subscribers and RespOrgs.

The Commission will be seeking input on the procedures for this auction in a separate Order. (FCC-18-137).

If you would like more information about how to participate in this auction, please contact either Katherine Barker Marshall at (202) 792-6422 or kmarshall@potomaclaw.com, or Doug Bonner at (202) 352-7500 or dbonner@potomaclaw.com.