At its May 2019 Open Meeting, the FCC approved a Public Notice (“Notice”) that sets the stage for the auction of certain toll free numbers with the dialing code 833—the first time an auction mechanism will be used to distribute any numbering resources. The FCC intends to auction over 17,000 numbers set aside during the opening of the 833-prefix because more than one entity expressed an interest in the number. In 2018, the FCC approved the use of competitive bidding to allocate these numbers. With this Public Notice, the FCC sets proposed ground rules for the auction. Comments on the auction pre-bidding procedures proposed in the Notice are due by June 3, 2019 and reply comments by June 10, 2019.

Prior to 2018, the FCC has always allocated new toll free numbers to Responsible Organizations (“RespOrgs”) on a first come, first served basis. However, with new rules adopted in the 2018 Toll Free Assignment Modernization Order (“2018 Order”), the FCC chose to use multiple approaches to toll free number assignment, including the use of competitive bidding. The planned auction for the reserved numbers in the 833-prefix will serve as the first test of the new alternative approaches. With the auction, unlike prior assignment approaches, both subscribers and RespOrgs will be able to participate directly in the process for acquiring (bidding) for numbers.

Some important features of the upcoming auction are highlighted below:

  • Eligible government entities or nonprofit health and safety organization are being given an opportunity to reserve one of the 833-numbers, without participating in an auction. Any interested entity must file a petition by May 16 and, if granted, the number will be assigned to the petitioner and will not be made available for bidding.
  • Somos, which is currently the designated administrator of the toll free database, will serve as the auctioneer for the 833 auction, managing certain parts of the process and the online auction systems.
  • Prior to the auction, parties interested in bidding are required to submit applications to Somos with requested information including desired toll free numbers, relevant certifications, and an upfront payment which will determine the quantity of 833 numbers that can be bid on during the auction. Only minor changes to these applications will be allowed.
  • The FCC proposes allowing an entity to participate in bidding through only one party, either applying directly on its own behalf or having a RespOrg submit all its bids. The Notice seeks input on how such a limitation would be implemented, relevant certification requirements and limitations on communications and sharing of information.

Notably, the FCC proposes a single-round, single-bid format for the auction. Each of the reserved numbers would be made available to the highest bidder for that number. However, the FCC proposes a “Vickery” style auction, in which the highest bidder will pay the amount of the second-highest bid for the number. (For example, if bids of $100 and $1,000 are made, the winner would be the entity that bid $1,000 but the payment due would be $100). Numbers receiving only one bid would be awarded to that winner, for zero dollars.

Finally, in another first, numbers won through the auction may be sold on a secondary market post-auction.

The specific date of the auction will be determined after the procedures have been finalized.