833 Auction Planning Seen Coming at Bad Time Given Location Privacy Issue
As the FCC readies rules for an 833 toll-free number auction, with commissioners set to vote Thursday on a public notice on auction participation and procedures, toll-free number industry insiders said such an auction anytime soon could be poor timing. That's due to big question marks on how carriers will handle location-based services. Only a fraction of 833 numbers would have noteworthy demand in an auction anyway, and the limbo that location-based services are in could mean auction prices for those particularly desirable numbers could be depressed, said Bruno Tabbi, Ignition Toll Free president.
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Tabbi said it's "absolutely critical" the FCC bring some certainty to the market by making clear that call completion operators can use call-location data. Lawmakers and some FCC commissioners are scrutinizing wireless carriers for real-time location data being sold to data aggregation services (see 1905010167), and AT&T ended its location aggregation services earlier this year (see 1901100046), as has T-Mobile (see 1905020013). Tabbi's company ensures calls to particular numbers are routed geographically, so, for example, calls to a hypothetical 800-LIZARDS would go to local lizard stores. He said for the 833 auction, he got investors together to seek particular numbers, but carriers' pulling location-based information due to privacy concerns made less clear what value those numbers might have if calls can't be geographically routed.
Asked about possible auction timing issues, the FCC said the question is premature. That's since the PN on the agenda only starts the comment period on procedures.
Some see the 833 auction perhaps pointing to the FCC's eventually opening up all toll-free numbers to secondary market sales. Tabbi said such gray market sales already go on, harming no one, so the FCC should adapt its rules to market reality. The draft PN says the 2018 toll-free modernization order included an exception to the brokering rules to promote a secondary market for numbers assigned competitive bidding. The draft includes proposed requirements about data collection in such secondary-market deals so the agency can evaluate how the secondary market operates. The draft also seeks comment on auction application requirements, bidding procedures and post-auction procedures.
FCC movement toward a secondary market is likely if the 833 auction is a success, emailed Peter Tannenwald of Fletcher Heald, who has common carrier and wireless experience. But he said "there are lots of wrinkles," such as assigning some numbers to public service agencies that shouldn’t be subject to auctions, plus trademark and similar rights in other toll-free codes. If a trademark holder such as 1-800-FLOWERS doesn't bid and buy its 833 equivalent, it's not clear under trademark law whether it could stop another buyer from using 833 with the same phonetic translation, he said. The FCC is accepting petitions through May 16 on 833 numbers that could be assigned to public health and safety purposes (see 1904160026).
Association of Toll-Free Professionals founder Loren Stocker said one concern is mass speculation like the internet domain industry had, with the majority of domains held by speculators. That could lead to running out of numbers, he said, and there needs to be a balance that would still allow unrestricted changes of ownership. "We don't want a run on the bank" on unassigned numbers, he said.
The 822 number, which hasn't been opened up, seems like a plausible location for a subsequent toll-free auction if the FCC opts to go that route, we're told. If the auction works, the FCC presumably would want to expand it to other number groups, emailed Bruce Olcott of Jones Day, who has toll-free code experience. Tabbi said only few hundred numbers in an auction -- generally the ones easiest to remember -- are valuable, and toll-free numbers in a spare pool would go for far less.
822 isn't open and likely won't be until 833 numbers have been assigned and start to run out, Tannenwald said. Demand for toll-free numbers might not be as strong as it was in the past because few people now pay for long-distance service, but some demand is because of those phonetic transactions people remember, he said. Hence the hypothetical 800-LIZARDS.