Premium Telephone Numbers

4cb1f2dc96040One of my industry colleagues sent me an article that shows that there is a big market for premium telephone numbers. By that I mean that there are people willing to pay significant sums for numbers from ‘premium’ area codes, or numbers that they think give them a marketing advantage for some other reason.

The article I read interviewed the owner of Ed Mance, who operates the business, got into it years ago when he opened up a new business and was unable to obtain a contiguous block of numbers for all of his new telephones. He spent years looking into telephone numbers and in doing so found that there are people and companies willing to pay a premium for certain numbers.

As an example, the old area codes for major cities, like 212 for New York City, 202 for Washington DC, and 415 for San Francisco have been full for years and new subscribers in those areas are given different area codes today when they get a landline or a cellphone. When new people enter these markets they often have a reason to want the old, nationally-recognized numbers, as opposed to the new, lesser-known codes. If you are a new DC attorney, or a tech person moving to San Francisco, then I am sure there is some cachet and advantage to having the older area codes. And there has always been a market for telephone numbers that translate to words such as 800-FLOWERS (I have no idea if that is a real number).

It’s the amounts that some numbers go for that I find intriguing. A regular number from one of the ‘old’ city area codes ranges from $299 to $799. But specialty numbers can go for a lot more. For example, the biggest sale quoted was a sale where all ten digits had the same number, which sold for $95,000.

One of the things our consulting firm does is to help service providers obtain telephone numbers. In order to get numbers from NANPA/Neustar (the company that controls telephone numbers) you must be a certified telephone company, a wireless company, or a CLEC. The whole process is highly regulated and has been designed by the carriers, under FCC oversight, to make sure that numbers are available to all carriers.

Ed Mance says that he gets numbers by buying them from companies that no longer use them. If so, he is violating industry rules because customers don’t ‘own’ their number, and so a company cannot really sell a number they are no longer using. A phone number is yours to use for as long as you keep paying for it, but when you stop using the number it is supposed to go back to the carriers that gave you the number originally. And ultimately all numbers belong to the folks who run the North American numbering plan. Unused or abandoned numbers are supposed to go back into the general pool of numbers that are available to all carriers.

I find it interesting that this underground economy for numbers exists. Certainly the idea of selling ‘vanity’ numbers started back with Ma Bell who would charge you a few dollars extra per month if you wanted to specify the number you wanted (and if it was available). But phone companies never tried to charge large fees of hundreds, or thousands of dollars for a number, partially because they never thought of it, but more because they were willing partners in the numbering process.

It’s possible that the number guy is actually getting his numbers from some carrier, and not directly from customers who are abandoning them. While there is no specific rule that I can find against such a practice, it still flies in the face of regulatory rules to charge a premium price for a commodity that came into your possession through an extremely regulated process. If you recall, just a few years ago we were worried as a country about running out of telephone numbers, and with the explosion of cell phones we might get to that point again. It just doesn’t feel right to think that there are businesses that are hoarding numbers, which is why the whole numbering administration was created – to make sure we would always have numbers available.

This could get worse. There is a petition at the FCC for VoIP providers to be able to get telephone numbers directly instead of having to go through a certified telephone carrier. If the FCC grants this petition we are liable to see a proliferation of these kinds of practices because some of the VoIP providers are a lot looser about following industry rules than regulated companies. Many of them largely ignore regulatory rules unless forced to follow them.

I’ve had a 202 cellphone number forever and I can’t imagine ever giving it up. So I can see the lure of wanting a number that people recognize. But part of me has to ask: in today’s world of cellphones and dialer apps, do people really care much what number they are calling – or if they even know what number they are calling? But obviously if somebody is willing to pay $95,000 for a number, then there must be somebody who cares. It wouldn’t be hard to find the guy who bought that number to ask him if it was worth it. There are only 7 possible such numbers in North America (can’t do it with 0, 1 or 8).

Regulatory Alert – FCC Triples Regulatory Fines

FCC_New_LogoYou should be aware that the FCC recently adopted a new policy that automatically triples fines for violations of payment rules to the Universal Service Fund, the Telecommunications Relay Service Fund, for local number portability  (LNP), for the North American Numbering Plan and for other federal regulatory fee programs.

The largest telecom organizations like USTelecom, CTIA, NCTA and CompTel have filed a joint petition asking the Federal Communications Commission (FCC) to reconsider a new policy. In this filing these companies say that the FCC should have opened a proceeding to investigate the matter rather than arbitrarily trebling penalties.

So be aware that this is even more of incentive to be a good citizen and take care in filing paperwork and paying fees to these various federal programs.


The North American Numbering Plan

Fuld-modell-frankfurtToday is another in the series of blogs that looks at the important developments in the history of the telecom industry as I look at the North American Numbering Plan (NANP). This may seem a  bit mundane, but it’s one of those things that has been done correctly and that has made it easy for the industry to grow and to adapt to changes quickly. NANP was originally operated directly by AT&T, but over time the administration was given first to Lockheed Martin and then to Neustar, which still administers it today.

The NANP was first devised in the 1940’s and introduced in 1947. It replaced a hodgepodge of different numbering schemes in different parts of the US. The numbering plan was expanded over the years to include Canada and much of the Caribbean. The first numbering plan assigned the first three digits of a phone number to Numbering Plan Areas (NPAs) now just called area codes. There was originally room for 152 area codes with 86 of them originally assigned, each of which could contain up to 540 central offices. Area codes were assigned to minimize the number of clicks on a rotary dial phone for the largest number of people. And so New York City, as the most populous place got area code 212 since that was the least number of rotary clicks that was available and that didn’t start or end with a 1.

Area codes made it easier for operators to place long distance calls. They could quickly tell by the phone number where a call was supposed to route rather than having to know the location of every small town in America. The first direct-dialed long distance call was made on November 10, 1951 between Englewood NJ and Alameda CA. Direct-dial quickly spread to larger cities and was introduced everywhere by the early 1960s, eliminating the majority of operators.

Digits 4 – 6 of a phone number designated the central office that handled a call, which meant a physical location and a switch in the early days. When facing a shortage of central office codes by the late 1980s Bellcore required that all long distance calls begin with the prefix 1+ to distinguish them from local calls or from operator calls that begin with 0+. This allowed them to assign central office codes that begin with the numbers of 1 or 0 and alleviated the number shortage. .

Starting in the 1990s there was an explosion of the demand for central office codes and telephone numbers, mostly due to the creation of CLECs in the US. Up until that time, when somebody was given a new central office code they got a block of 10,000 numbers even if they were only going to have a few customers. The shortage of codes was addressed with two numbering strategies – splits and overlays. Splits divided a central office code into two or more parts that were assigned to different central offices. Each carrier would get only some portion of the 10,000 numbers. Overlays were implemented as entire new area codes that were overlayed on top of an existing area code which could provide a whole new set of central office codes. The public hated overlays at first because they could no longer automatically know the area code of somebody who lived in their area.

Anywhere there was an area code overlay it became mandatory for callers to dial ten digits because there were now multiple local people sharing the same last seven digits. By the early 1990s it became mandatory everywhere to dial ten digits to make a local call.

By 2000 there was a growing shortage of phone numbers and this was solved by using number pooling. This involved assigning blocks of numbers in groups of 1,000 instead of 10,000. First, this allowed the recovery of a huge number of unused thousand blocks from existing carriers. It also means that there is a greater chance that all numbers will eventually get used. About this same time the FCC mandated number portability. This allowed customers to keep their number when moving in some situations. At first a customer could keep a number if they stayed within the same local calling scope. But over time number portability has been expanded and includes a portability between landlines and cellular phones. Cellular phones are completely geographically portable and you can take a cell number anywhere. But there are still some restrictions on geographically moving landline numbers.

It is currently estimated that we have enough telephone numbers to last until sometime in the 2030s. At that time it will be necessary to go to 11-digit dialing. It is amazing to me how gracefully the system has changed over the years as they ran out of area codes, central office codes and then numbers. It’s easy to discount the value of the NANP, but you have to admire how it has been able to accommodate the need for over 100 million new cell phone numbers over the last decade. NANP was devised in a deliberate fashion but has been flexible enough to accommodate huge changes in the industry that could not have been contemplated in 1947.