FCC Regulated Toll Free Ownership

After a recent blog post on regulation, a reader requested an example of how regulators have controlled the improper use of toll free numbers. Here’s one: In 2005, the FCC yanked control of 1-800-RED-CROSS from a private California business owner who was leasing the use of the number to local chapters of the Red Cross. When the charity filed a formal complaint, the FCC determined that the brokering was illegal and handed over control of the number to the non-profit.

The FCC Laws Are Clear

This seems to be a hot topic these days. Under rules established in 1997 by the FCC, toll-free service providers cannot reserve a toll-free number without having an actual toll-free subscriber for whom the number is being reserved. By law, available numbers must be doled out on a first-come, first served basis off the main database maintained by the 800 Service Management System (SMS/800). Hoarding numbers is likewise illegal. A subscriber may not acquire more toll-free numbers than they intend to use. By FCC definition, “hoarding” also includes “brokering” which is the illegal lease or sale of toll-free numbers for a fee.

Recession Concerns Spur Increased Scrutiny

Following the emergence of a black market for valuable toll free numbers, including catchy vanity numbers, sources say federal authorities are cracking down on the illegal sales of 800 numbers.

Insiders say to avoid being caught in an undercover investigation and facing hefty fines from the Federal Communications Commission, anyone interested in obtaining an 800 number should deal with reputable service providers such as Qwest, or AT&T.

Read more here.

Federal Management of Toll Free

The FCC has a long history of reviewing legislation with regard to the use of toll free. For instance, the Telecommunications Act of 1996 amended section 228 to impose more stringent restrictions on the use of toll-free numbers to charge consumers for information services. On July 11, 1996, the Commission amended its rules governing interstate pay-per-call (900 numbers) and other information services to address abusive practices that threatened public confidence in toll-free numbers and left telephone subscribers vulnerable to unexpected charges for calls and information services.

Toll Free Apportioning

In March 1998, the FCC ordered the fair distribution of vanity toll free numbers. The Commission concluded that assigning vanity numbers would be on a first-come, first-served basis to ensure fair allocation of numbers. The FCC decided that “a first-come, first-served process is also the most efficient method for assigning toll free numbers because it is the most easily administered and least expensive way to allocate numbers.” The FCC also announced that the the first-come, first-served system avoids disputes among subscribers over who is entitled to a particular number

Heafty Fines Can Be Imposed on Toll Free Hoarders

What happens if regulators discover illegal hoarding or sales of toll free numbers. If the FCC discovers illegal hoarding, they immediately send out disconnect and suspend letters to the owner of the numbers. Additionally, the brokering of toll free numbers can result in hefty fines. Remember, last year, an astounding daily fine of $11,000 was reportedly imposed on a California company accused of improperly using toll free numbers.

FCC More Vigilant

The FCC has been clamping down on violations of Section 251 (e) of the Communications Act of 1934, which prohibits the warehousing and hoarding of numbers. To ensure that toll free numbers are distributed in a fair and equitable way, the FCC is taking a close look at suspect activity. Recently they threatened an $11,000 daily fine to the owners of a California company for improper toll free use. This followed a string of unrelated instances, including at least one owner’s attempt to sell his numbers on eBay.

The FCC’s Administration of Toll Free Numbers

The FCC does not play a role in the assignment of new toll free numbers. Instead, they regulate the guidelines under which 1-800 numbers can be used and obtained. For instance, the FCC has declared that the hoarding and warehousing of numbers is prohibited and punishable with severe fines—recently illustrated by a citation for an $11,000 fine each day a California company continued to implement improper toll free practices. Numbers are assigned by toll free carriers (resp. orgs) and phone companies. Subscribers have the option of shopping around for the best quality and the best rates.

Reiteration of Toll Free Allocation

In March 1998, the FCC ordered the fair distribution of vanity toll free numbers. The Commission concluded that assigning vanity numbers would be on a first-come, first-served basis to ensure fair allocation of numbers. The FCC decided that “a first-come, first-served process is also the most efficient method for assigning toll free numbers because it is the most easily administered and least expensive way to allocate numbers.” The FCC also announced that the the first-come, first-served system avoids disputes among subscribers over who is entitled to a particular number

Fines Imposed on Toll Free Hoarders

What happens if regulators discover illegal hoarding or sales of toll free numbers. If the FCC discovers illegal hoarding, they immediately send out disconnect and suspend letters to the owner of the numbers. Additionally, the brokering of toll free numbers can result in hefty fines. Remember, last year, an astounding daily fine of $11,000 was reportedly imposed on a California company accused of improperly using toll free numbers.