FCC Takes Next Steps to 833 Toll-Free Number Auction

As discussed in our previous alert, the FCC has announced that it will make available for auction some 17,000 new 833 area code toll-free vanity numbers that have received multiple requests for assignment.  To further that goal, the FCC is accepting petitions through May 16, 2019 from governmental and other non-profit health and safety organizations for access to particular numbers that would be reserved for government/non-profit use rather than included in the auction.  If such a petition is granted, the FCC will order Somos, the toll-free number administrator to set aside the number(s) for those governmental and non-profit entities at no charge.   Petitions must demonstrate that the number will be used for a health and safety purposes "consistent with the unusual and compelling public health and safety standards in Commission precedent." [1]  Further, non-profit health and safety organizations must include proof of their current 501(c)(3)-designated non-profit status with their petitions. More information regarding these petitions may be found in the Public Notice issued by the Commission on April 16, 2019, found here. (DA 19-291)

In addition, the Commission has included an item on its Agenda for its May 9, 2019 Open Meeting that opens a comment cycle on the parameters and proposed rules of the 833 toll free auction. The proposed Public Notice can be found here.  The proposed Public Notice has a tentative comment deadline of June 3, 2019, with a reply deadline of June 10, 2019.

The proposed Public Notice includes an overview of the structure of the auction for those intending to participate in it. Because the auction participants will include both RespOrgs and end user customers, the Commission will require an application to have been filed and deemed complete prior to the auction. Participants will also be required to submit an upfront payment of $100 per number on which they intend to bid, which will be applied towards any winning bid, or refunded in the event the participant is unsuccessful in the auction.   

The auction will feature a single-round of bidding, after which, the Commission will announce the winning bidders and set the deadline for final payment.  End user bidders will be required to work with a RespOrg to reserve the number in the Service Management System Database, conforming to FCC Rules.The proposed Public Notice also seeks comment on the rules that will govern the auction, such as appropriate contents of the application to participate in the auction, and the prohibition of communications between bidders. The Commission also proposes to place a restriction on certain agreements among applications bidding in the auction. 

 The Commission proposes that winning bidders be required to submit payment within 10 business days following the public notice announcing the winning bidders.  In the event that the winning bidder is unable to meet that deadline, the Commission proposes a 5% late payment charge if payment is made within the first five business days after the payment deadline; if payment is still outstanding thereafter this additional time, then the winning bidder would be declared in default and subject to a default payment.  Further, the Commission seeks comment on payment methods, specifically limiting any payments including restricting any payments over $300 to be made exclusively by wire transfer, and those payments less than $300 be made by an alternative payment process (no credit card or check payment), such as ACH.   The Commission seeks comment on these proposals.

The list of numbers available for auction can be found here. 

If you have any questions about the pending auction, or would like to participate in the upcoming comment cycle about the auction, please contact either Katherine Barker Marshall or Doug Bonner.

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[1] See, Toll Free Assignment Modernization Order, 33 FCC Rcd at 9300-01, para. 76.