[Federal Register Volume 82, Number 197 (Friday, October 13, 2017)]
[Proposed Rules]
[Pages 47669-47683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22187]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[WC Docket No. 17-192, CC Docket No. 95-155; FCC 17-124]


Toll Free Assignment Modernization; Toll Free Service Access 
Codes

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, a Notice of Proposed Rulemaking (NPRM) seeks 
comment on allowing the Commission to assign numbers by auction, on a 
first-come, first-served basis, by an alternative assignment 
methodology, or by a combination of methodologies. The NPRM seeks 
comment on allowing a secondary market for toll free numbers and on 
setting aside toll free numbers necessary to promote health and safety 
for use, without cost, by government agencies and non-profit health and 
safety organizations. The NPRM also seeks comment on whether to 
consider changes to overall toll free number administration. The 
intended effect of this NPRM is to make toll free numbers available on 
a more equitable and efficient basis by assigning mutually exclusive 
toll free numbers to the parties that value them most.

DATES: Comments are due on or before November 13, 2017, and reply 
comments are due on or before December 12, 2017. Written comments on 
the Paperwork Reduction Act proposed information collection 
requirements must be submitted by the public, Office of Management and 
Budget (OMB), and other interested parties on or before December 12, 
2017.

ADDRESSES: You may submit comments, identified by both WC Docket No. 
17-192, and CC Docket No. 95-155 by any of the following methods:
    [ssquf] Federal Communications Commission's Web site: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: Parties who choose to file by paper must file an 
original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission. 
All hand-delivered or messenger-delivered paper filings for the 
Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building. Commercial overnight mail (other than 
U.S. Postal Service Express Mail and

[[Page 47670]]

Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, 
MD 20701. U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to <a href="/cdn-cgi/l/email-protection#d0b6b3b3e5e0e490b6b3b3feb7bfa6"><span class="__cf_email__" data-cfemail="177174742227235771747439707861">[email protected]</span></a> or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (TTY).
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition to filing comments 
with the Secretary, a copy of any comments on the Paperwork Reduction 
Act information collection requirements contained herein should be 
submitted to the Federal Communications Commission via email to 
<a href="/cdn-cgi/l/email-protection#33636172735550501d545c45"><span class="__cf_email__" data-cfemail="71212330311712125f161e07">[email protected]</span></a> and to Nicole Ongele, Federal Communications Commission, 
via email to <a href="/cdn-cgi/l/email-protection#e1af88828e8d84cfae8f86848d84a1878282cf868e97"><span class="__cf_email__" data-cfemail="6a24030905060f4425040d0f060f2a0c0909440d051c">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Wireline Competition Bureau, 
Competition Policy Division, E. Alex Espinoza, at (202) 418-0849, or 
<a href="/cdn-cgi/l/email-protection#a4c5c8c1dc8ac1d7d4cdcacbdec5e4c2c7c78ac3cbd2"><span class="__cf_email__" data-cfemail="ddbcb1b8a5f3b8aeadb4b3b2a7bc9dbbbebef3bab2ab">[email protected]</span></a>. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, send an email to <a href="/cdn-cgi/l/email-protection#f8a8aab9b89e9b9bd69f978e"><span class="__cf_email__" data-cfemail="bceceefdfcdadfdf92dbd3ca">[email protected]</span></a> or contact Nicole Ongele 
at (202) 418-2991.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in WC Docket No. 17-192, and CC Docket 
No. 95-155, adopted September 26, 2017, and released September 28, 
2017. The full text of this document is available for public inspection 
during regular business hours in the FCC Reference Information Center, 
Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. It 
is available on the Commission's Web site at https://www.fcc.gov/document/fcc-proposes-modernize-toll-free-number-assignment. Pursuant 
to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 
1.419, interested parties may file comments and reply comments on or 
before the dates indicated on the first page of this document. Comments 
may be filed using the Commission's Electronic Comment Filing System 
(ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 
63 FR 24121 (1998), http://www.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [ssquf] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [ssquf] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701. U.S. Postal Service first-class, Express, 
and Priority mail must be addressed to 445 12th Street SW., Washington 
DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to <a href="/cdn-cgi/l/email-protection#c0a6a3a3f5f0f480a6a3a3eea7afb6"><span class="__cf_email__" data-cfemail="42242121777276022421216c252d34">[email protected]</span></a> or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).

Synopsis

I. Introduction

    1. Toll free calling originated in 1967, and to this day remains an 
important feature of the communications system. Even with the growth of 
e-commerce, many businesses, large and small, continue to use toll free 
numbers for sales and customer service, as well as for advertising and 
marketing purposes. Government organizations and non-profit health, 
safety, educational, or other non-profit public interest organizations 
also use toll free numbers to provide vital health and safety services 
to the public. While the Commission's current rule uses a first-come, 
first-served approach to the assignment of toll free numbers, to help 
ensure the continued usefulness and availability of this finite 
resource, we now examine alternative assignment methodologies. 
Specifically, we propose amending our rules to allow for use of an 
auction to assign certain toll free numbers--such as vanity and 
repeater numbers--in order to better promote the equitable and 
efficient use of numbers. With the opportunity afforded by the opening 
of the 833 toll free code, we propose to use an auction for assigning 
numbers for which mutually exclusive interest has been expressed. 
Mutually exclusive numbers are those toll free numbers for which there 
are two or more requests for assignment. In this Notice of Proposed 
Rulemaking (Notice), we also consider a variety of other means to 
modernize toll free number assignments that are consistent with our 
statutory mandate to make ``numbers available on an equitable basis.''

II. Background

    2. Since mandating the porting of toll free numbers and introducing 
the second toll free code, 888, to relieve exhaust of the original 800 
code, the Commission has sought to assign numbers in a manner that is 
equitable and efficient, and that fosters a smooth introduction of a 
new code. Doing so required the Commission to address the treatment of 
vanity numbers, those numbers that spell a name or word of value to the 
number holder (e.g., 1-800-FLOWERS), as well as repeater numbers that 
are easy to remember (e.g., 1-800-222-2222), as new codes open. 
Attempting to assign these desirable numbers equitably, the Commission 
in 1997 initially permitted 800 number subscribers the right of first 
refusal to reserve corresponding numbers in the new 888 code. After the 
888 code opening, however, the Commission adopted in 1998 the current 
first-come, first-served rule, codified in section 52.111 of the 
Commission's rules. Although the Commission considered auctions to be 
``generally efficient,'' the Commission concluded at that time the 
first-come, first-served rule was a preferable mechanism for toll free 
number assignment. The Commission followed the first-come, first-served 
rule, with slight modifications made by the Wireline Competition Bureau 
(Bureau), for the next four code openings (877, 866, 855, and 844), as 
well as for those instances in which toll free numbers are released 
back into the pool of available numbers. For the 855 and 844 code 
openings, as well as the release of valuable 800 numbers that had been 
disconnected, the Bureau limited Responsible Organizations to obtaining 
100 numbers per day for the

[[Page 47671]]

first 30 days of the code opening to better ensure an efficient and 
equitable distribution of high value numbers in those two codes.
    3. In an attempt to extend the life of each toll free code, the 
Commission also prohibited warehousing, hoarding, and brokering of toll 
free numbers. Thus, the Commission's current rules prohibit 
``warehousing'' of a toll free number, defined as the practice in which 
a Responsible Organization (RespOrg), an ``entity chosen by a toll free 
subscriber to manage and administer the appropriate records in the toll 
free Service Management System for the toll free subscriber,'' 47 CFR 
52.101(b) either directly or indirectly through an affiliate, reserves 
a number from the toll free database without having an end user 
subscriber for whom the number is being reserved. Similarly, the 
Commission's rules prohibit the practice of ``hoarding''--the 
acquisition by a toll free subscriber from a RespOrg of more toll free 
numbers than the toll free subscriber intends to use for the provision 
of toll free service. And, finally, the definition of hoarding also 
prohibits number brokering, which is the selling of a toll free number 
by a private entity for a fee.
    4. Almost 20 years ago, the Commission considered an auction 
approach to toll free number assignment in the 1998 Toll Free Order. In 
doing so, the Commission recognized that auctions ``offer all 
participants an equal opportunity to obtain a particular vanity 
number.'' The order also determined that although auctions are 
``generally efficient,'' it could not ``say on the present record that 
auctions of vanity numbers would produce efficiencies that would 
outweigh the practical difficulties,'' such as cost, administration, 
and impact on the international membership of the North American 
Numbering Plan (NANP). Recently, however, with the opening of the 833 
toll free code, the Commission took steps to reevaluate number 
assignment by establishing a series of pre-opening procedures to 
identify toll free numbers that could be part of an auction or other 
alternative assignment methodology. Specifically, the Bureau directed 
each RespOrg to ``submit a single request for up to 2,000 individual 
preferred 833 toll numbers.'' The Bureau then directed Somos, Inc., the 
Toll Free Numbering Administrator (TFNA), to review all 833 number 
requests and identify mutually exclusive numbers--those numbers for 
which there are two or more requests for assignment. Somos identified 
approximately 17,000 mutually exclusive numbers and placed these 
numbers in unavailable status pending the outcome of this proceeding. 
These mutually exclusive numbers include repeaters numbers (e.g., 833-
333-333 and 833-888-8888) as well as numbers that spell memorable words 
and phrases (e.g., 833-DENTIST, 833-DIVORCE, 833-DOCTORS, 833-FLOWERS, 
833-HOLIDAY, 833-INJURED, and 833-LAWYERS). Somos notes that 147 
RespOrgs participated in the pre-code opening process and the top ten 
mutually exclusive toll free numbers were requested by 65 or more 
RespOrgs. The top 25 numbers were requested by 48 or more RespOrgs, and 
the top 50 numbers were requested by 43 or more RespOrgs. The remaining 
numbers were assigned as established in the Commission's existing rule, 
that is, on a first-come, first-served basis.

III. Discussion

A. Distribution of Toll Free Numbers

    5. We propose expanding the existing toll free number assignment 
rule to permit use of an auction methodology, among other assignment 
mechanisms, to assign toll free numbers. To do so, we propose to revise 
section 52.111 of our rules to allow the Commission to assign numbers 
in a manner that is equitable, including by auction, on a first-come, 
first-served basis, an alternative assignment methodology, or by a 
combination of the forgoing as circumstances require. We seek comment 
on this proposal.
    6. We also seek comment on conducting a single round, sealed-bid 
Vickrey auction for the roughly 17,000 numbers set aside, pursuant to 
the 833 Code Opening Order, for which there were mutually exclusive 
requests. If adopted, we intend to consider the outcome of the 833 
auction to determine if changes need to be made to future code opening 
assignments. In addition, we propose--and seek comment on--revising our 
rules to promote development of a secondary market for toll free 
numbers.
    7. Equity Considerations. Section 251(e)(1) of the Communications 
Act directs the Commission to make numbers available on an equitable 
basis. The Commission has adopted rules to implement this obligation, 
as well as to serve the broader public interest in telephone number 
administration. We believe that toll free numbers generally can be made 
available equitably via an auction--under which RespOrgs bid for 
numbers valuable to them--and that in many cases, including with 
respect to the mutually exclusive 833 toll free numbers, such an 
auction approach would be more equitable than under the Commission's 
current first-come, first-served assignment rule. Parties who want 
particular toll free numbers often will have a better opportunity of 
acquiring those numbers, albeit for a price, in an auction than under 
the Commission's current rule, which does not take into account the 
need for or the value placed on particular numbers. As discussed above, 
with respect to 833 numbers, there are at least 65 RespOrgs that want 
the top-ten mutually exclusive numbers. This demonstrates that there is 
demand for certain mutually exclusive numbers, and thus we believe that 
auctioning these numbers would be a more equitable assignment mechanism 
than assigning them on a first-come, first-basis. We note that although 
a first-come, first-served system may randomly assign mutually 
exclusive numbers, it may also less equitably reward actors that invest 
in systems to increase their chances that their choices are received 
first by the TFNA. Moreover, if we allow for a secondary market for 
toll free numbers, it would be inequitable for a RespOrg or subscriber 
to get a valuable public resource for free, but then later be able to 
profit from it even when others would have paid for it initially.
    8. We note that the first-come, first-served rule has raised 
questions about whether recent toll free code openings were equitable 
because certain RespOrgs had enhanced connectivity to the toll free 
database that allowed them to quickly reserve desirable numbers. To 
address these concerns for the 855 and 844 toll free code openings, the 
Bureau directed the TFNA to limit the quantity of toll free numbers a 
RespOrg may reserve to 100 per day for the first 30 days. The Bureau 
found that this limited allocation would distribute desirable numbers 
more equitably. If the Commission adopts an auction approach for toll 
free numbers, such rationing of numbers would not be necessary. All 
bidders would have the same access to numbers in a new toll free code. 
We seek comment on whether this market-based auction approach would 
yield a more equitable outcome by allowing any RespOrg an opportunity 
to bid for numbers based on their valuations.
    9. Efficiency and Public Interest Considerations. In addition to 
meeting the statutory mandate of making numbers available on an 
equitable basis, an auction method of assigning toll free numbers is 
more efficient and serves the public interest in toll free number 
conservation. An auction assignment mechanism for mutually exclusive 
toll free numbers will promote efficiency by assigning these numbers to 
the parties that value them most. Moreover, toll

[[Page 47672]]

free numbers are a limited resource that are often used inefficiently 
because there is no real cost associated with obtaining that resource. 
If subscribers and RespOrgs are required to pay for toll free numbers, 
they are more likely to acquire only the numbers they or their 
customers need; they will have no incentive to acquire numbers beyond 
those needed. Thus, we believe that a toll free number auction will 
help limit exhaust of toll free numbers and further the public 
interest. We seek comment on our analysis.
1. Costs and Benefits of an Auction
    10. The investment by RespOrgs in enhanced connectivity to the 
database discussed above is evidence of strong competing demand among 
RespOrgs for toll free numbers. And the fact that the Commission places 
constraints on how many numbers a RespOrg can obtain at any point, and 
also on hoarding, suggests that certain toll free numbers are currently 
underpriced. We therefore believe that assignment via auction would 
more equitably and efficiently address this source of excess demand. 
Moreover, to the extent that, with the current assignment method, 
transaction costs impede or restrict the efficient assignment of toll 
free numbers, the public interest gains from implementing an efficient 
auction mechanism would be substantial. Thus, we believe that the 
equity and efficiency gains of an auction of mutually exclusive toll 
free numbers outweigh any costs of implementing an auction. We seek 
comment on this analysis. Also, if any commenters assert that an 
auction approach is inequitable, they should clearly explain why an 
auction approach would be inequitable, as well as how the current means 
of assignment, or some other means, would be more equitable.
    11. In arriving at our 833 number auction proposal, the Commission 
has considered the experience of the Australian Communications and 
Media Authority (ACMA) in auctioning toll free numbers. Between 2005 
and 2015, the ACMA attempted to auction 1.8 million unreleased 
``freephone'' (toll free) and ``local-rate numbers,'' considered 
desirable (as vanity numbers or repeaters), which were branded as 
``smartnumbers[supreg].'' The results of the auction show that the most 
desirable smartnumbers[supreg] were sold in highly competitive auctions 
early in the process. However, after the initial auctions within the 
first year of the most desirable numbers, the vast majority of 
smartnumbers[supreg] were uncontested and thus auctioned at set reserve 
prices. In reviewing the outcome of the ACMA auction, we propose, at 
least for the 833 code, to auction only mutually exclusive toll free 
numbers for which there is some demonstration of demand, and to assign 
the rest on a first-come, first-served basis. We seek comment on how 
the Commission has considered the results of the ACMA experience in 
developing our own auction model.
2. Auction Procedures for 833
    12. As discussed above, the Commission proposes to assign toll free 
numbers in a manner that is equitable, including by auction, on a 
first-come, first-served basis, by alternative assignment 
methodologies, or by a combination of these methods, as circumstances 
require. In this section, we seek comment on certain auction procedures 
for the roughly 17,000 mutually exclusive numbers, which were set-aside 
in our 833 Code Opening Procedures Order. Specifically, we propose to 
use a single round, sealed-bid Vickrey auction, as discussed below. We 
emphasize that our proposal discussed herein is limited to the set-
aside 833 mutually exclusive toll free numbers. If adopted, we intend 
to consider the 833 auction process and outcomes in deciding how to 
make future toll free assignments. In particular, we may decide whether 
to use the single round, sealed-bid Vickrey auction model or another 
auction model, to employ the current first-come, first-served policy, 
or an alternative assignment method, or combination of these methods, 
as circumstances require. We seek comment on these proposals.
a. Single Round, Sealed-Bid Vickrey Auction
    13. Single Round, Sealed-Bid Auction. We propose to assign numbers 
using a single round, sealed-bid auction. This methodology would be 
used for the roughly 17,000 numbers set aside in the 833 code. In such 
an auction, a bidder submits bids for individual numbers privately to 
the auctioneer. We propose use of a single round, sealed-bid auction 
here because such auctions are relatively easy to implement and to bid 
in and, therefore, less costly to both the auctioneer and participants 
than more complex multi-round auctions.
    14. We further propose an auction in which participants 
simultaneously submit separate bids for each number they are interested 
in, with the winning bid for each number being determined solely by 
bids for that number, independent of the bids for any other number. 
Thus, the proposed auction will not allow for package bids--bids for 
combinations of numbers. Thus, if a bidder values one number at, say 
$10, and another at $20, and the two together at $50, the bidder cannot 
place three bids, one of $10 for the first number, a second of $20 for 
the second, and a third of $50 for both. Instead, only two bids can be 
placed, one for each of the two numbers, with no guarantee both numbers 
will be won. While it is likely that some bidders may demand more than 
one number in an auction, we do not believe valuation synergies, to the 
extent they exist, warrant allowing package bids. We seek comment on 
this proposal. We further seek comment on other advantages or 
disadvantages of allowing package bids.
    15. Vickrey (Single Round, Sealed-Bid) Auction. To assign 833 
mutually exclusive toll free numbers, we also propose to incorporate a 
Vickrey auction into the 833 auction procedures. In a Vickrey auction, 
the highest bidder for a number wins and pays the second-highest bid 
for the number. If we determine that package bids are allowed in an 
auction, then the bidders who maximize overall revenue from the auction 
win and pay the opportunity costs (highest alternative value) of their 
bids as discussed in more detail in section IV below.
    16. A Vickrey auction could result in an equitable and efficient 
assignment of mutually exclusive toll free numbers. For example, in a 
Vickrey auction for one object, such as a toll free number, because the 
winner pays the second highest bid, the winner's surplus (the winner's 
value minus the amount paid), does not depend on the winner's bid. 
Since the amount paid is not a function of the winner's bid, it is 
optimal for bidders in this type of auction to bid their valuation. 
This result rests on the assumption that bidder values are independent, 
i.e., a bidder's payoff is only a function of that bidder's estimates 
of value, and not a function of the opponents' estimates of value. With 
interdependent valuations, bidding one's value is typically not 
optimal. Independence implies bidders do not interact in a future 
circumstance, where any information gained by observing the auction's 
outcomes (notably, if bid amounts are later made public) could be used. 
The result also assumes the auction's rules are enforced. Similarly, 
bidders in a Vickrey auction with package bidding can do no better in 
equilibrium than to bid their valuations. As a consequence of truthful 
bidding, a Vickrey auction allocates the numbers efficiently to the 
bidders who hold the highest valuations. We do note that although a 
Vickrey auction may lead to an efficient outcome, are there 
disadvantages or costs to this approach? Furthermore, it might be 
undesirable for

[[Page 47673]]

bidders in a Vickrey auction to fully reveal their valuations in the 
auction, particularly when some bids become public information. We seek 
comment on using the Vickrey auction methodology for the 833 mutually 
exclusive numbers and ask parties to elaborate on the advantages and 
disadvantages of this proposal.
    17. Reserve Prices. Reserve prices (or minimum acceptable bids for 
a number) can help to improve revenue in an auction. However, our 
objective is primarily to increase the efficiency of toll-free number 
assignments. Since the numbers that are not auctioned are offered on a 
first-come, first-served basis at zero price, we recognize that an 
equitable assignment of numbers in the auction may be inconsistent with 
the imposition of a reserve price. Furthermore, establishing a level of 
the reserve price that is in the public interest may require precise 
information that is unavailable prior to running a first auction for 
toll free numbers. We seek comment on whether a reserve price should be 
imposed in the auction, and generally on the potential advantages and 
disadvantages of reserve prices in an auction of toll-free numbers. If 
a reserve price is imposed in the auction, what factors should we 
consider in determining a level of the reserve price that is in the 
public interest?
b. Alternative Auction Methodologies
    18. Pay-Your-Bid Auction. An alternative methodology is a pay-your-
bid auction whereby the highest bidder wins and pays his or her bid. A 
pay-your-bid auction also has benefits. This type of auction is 
generally straightforward because, as the name suggests, the highest 
bidder for a number wins the auction and pays his or her bid. Moreover, 
the pay-your-bid auction may yield significantly higher revenues than 
the generalized Vickrey second-price auction. On the other hand, the 
pay-your-bid auction may give rise to an inefficient toll free number 
assignment because in a pay-your-bid auction, bidding to reflect true 
valuations is not usually optimal. Bidding one's valuation in a pay-
your-bid auction guarantees zero payoff: the difference between value 
and bid (the bidder's surplus) is equal to zero whether one wins or 
not. As a result, to ensure a positive expected payoff, bidding below 
one's value is optimal in the pay-your-bid auction.
    19. Open Auction. Although we propose a Vickrey auction, we seek 
comment on the use of an open auction. Open auctions can help bidders 
form more accurate expectations of the value of an object in 
environments in which bidders possess different and uncertain 
information about the objects for sale. Examples of open auctions 
include the traditional English auction where the auctioneer calls 
increasing prices, eBay auctions where ascending bids are placed over a 
period of time, and the simultaneous multi-round auction employed by 
the Commission for the allocation of electromagnetic spectrum. Open 
auctions offer bidders the opportunity for price discovery and can lead 
to more efficient outcomes. However, these types of auctions may be 
more costly to implement, and we expect the bidders' valuations for 
toll free numbers will not be subject to significant uncertainty, as 
discussed in more detail in section IV below. Idiosyncratic is a term 
of art. An example of idiosyncratic valuations is where one person 
values a painting because it evokes certain memories, another values it 
because of the artist's composition and technique, and a third values 
the painting because it fits well in a pre-selected space. The 
valuation that each person attaches to the painting is not changed by 
knowing whether or why the other persons like it. We seek comment on 
this issue. Would bidders change their valuations if they knew more 
about other bidders' valuations? Would this new information be central 
to an increase in the efficiency of the auction? Are there other 
advantages and disadvantages of an open auction that we should 
consider?
    20. Other Auction Designs. Other than the auction designs and 
procedures discussed above, we seek comment on whether there are other 
auction designs we should consider. We believe that the auction design 
best suited to yield an outcome that is in the public interest depends 
in large measure on the institutional details of the toll free number 
market. We therefore seek comment from industry and interested 
stakeholders about the essential characteristics of the toll free 
number market that might be helpful to develop an auction design most 
suitable to serve that market and the broader public interest. We 
invite parties to provide any alternatives or offer further economic, 
legal, or logistical insights about these and other auction designs and 
procedures.
3. Auction Eligibility
    21. We propose to allow only RespOrgs to bid in an auction; 
potential subscribers seeking mutually exclusive toll free numbers 
would need to approach one or more RespOrgs about placing a bid on 
their behalf. We seek comment on this proposal. We think our proposal 
is consistent with the RespOrg's role as manager and administrator of 
toll free records in the TFNA database. Our proposal also reflects in 
part the importance of RespOrgs as market makers. Further, RespOrgs may 
have strengths in maximizing the valuation of certain numbers, for 
example, by piecing together geographic coalitions of subscribers who 
may be unable to coordinate by themselves. We seek comment on this 
proposal. We also seek comment on whether we should consider allowing 
subscribers to directly participate in an auction. Are there benefits 
to allowing their participation? Would an auction that includes both 
subscribers and RespOrgs be difficult to implement? Assuming we use an 
auction methodology for future code openings or other toll free 
assignments and identify mutually exclusive numbers, how should we 
define mutual exclusivity? Should we consider mutually exclusive 
numbers those numbers which two or more RespOrgs have requested, or 
numbers that have been requested by two or more subscribers? If mutual 
exclusivity means toll free numbers requested by two or more RespOrgs, 
is there a way to determine how many of these numbers are sought by 
more than one subscriber? Are there legal restrictions to allowing 
subscribers to circumvent their relationship with RespOrgs to 
participate directly in an auction, and would other provisions in our 
existing toll free rules need to be revised to allow participation by 
subscribers?
    22. The greater the number of auction participants, the more 
effective the 833 number auction and subsequent toll free number 
auctions will be. We seek comment on ways to notify potential 
subscribers about auctions and encourage their participation through 
their chosen RespOrg(s). Should we consider including subscriber 
information in the TFNA database? Currently, the TFNA can notify 
RespOrgs about auctions--because the toll free database identifies the 
RespOrg for each number assigned--but it cannot notify subscribers 
potentially interested in bidding for a number because the database 
does not contain subscriber information. Would inclusion of subscriber 
information in the toll free database provide greater market 
transparency for auction bidders, improving the efficiency of the 
auction? Are the costs of including this information in the database 
significant? Would having subscriber information in the database be 
useful for other reasons, such as helping the TFNA and the

[[Page 47674]]

Commission resolve disputes over the use of a toll free number or 
helping law enforcement agencies identify the subscriber for a number 
being used for unlawful purposes? Are there privacy or other 
considerations that would militate against including subscriber 
information in the database that would be visible to other bidders (as 
opposed to being visible just to TFNA)?
    23. We propose not to limit the quantity of toll free numbers 
RespOrgs can acquire through the auction and seek comment on this 
proposal. We think that limiting the number of bids that can be placed 
by a RespOrg in the auction may hamper efficiency because it may 
constrain primarily the bidders who hold the highest valuations. Do 
parties agree with this belief? If subscribers are allowed to bid for 
numbers, should we impose limits on the quantity of 833 numbers they 
can acquire in the auction?
4. Auctioneer
    24. We seek comment on the characteristics of an auctioneer who 
would be able to put in practice the auction process we propose above 
at the lowest cost. Should we designate the TFNA as the auctioneer?
5. Treatment of Auction Funds
    25. We propose that the net proceeds from any toll free number 
auction proposed in this Notice be directed to defray the costs of 
number administration. Specifically, we propose that auction funds be 
applied to offset the costs of toll free numbering administration by 
the TFNA within the NANP for the benefit of all RespOrgs and 
subscribers. This approach would include the administrative costs of 
implementing numbering auctions should the Commission designate the 
responsibility to the TFNA. The TFNA administers toll free numbers, 
which are part of the NANP numbering resources. The NANP is comprised 
of 20 member countries. We propose that the auction proceeds from any 
toll free auction be applied to offset the costs of the TFNA to equally 
benefit RespOrgs and subscribers in those member countries to the 
extent they pay fees to the TFNA. Commenters should address whether 
this approach is the best method of applying the proceeds from the 
auction, or whether alternative methods are preferable. We also seek 
comment on any legal, logistical, or international implications of this 
proposal, given the international composition of the NANP. Further, we 
do not believe that applying auction funds to offset the TFNA costs, 
within the NANP, implicates any U.S. fiscal statutes. Pursuant to our 
authority under section 251(e), the Commission has used a number of 
different approaches to collect funds to defray the costs of numbering 
administration without implicating, for example, the Miscellaneous 
Receipts Act (MRA). None of these cost recovery mechanisms implicated 
the MRA, and we do not believe that applying auction funds to offset 
the TFNA costs, within the NANP, would implicate the MRA, due to the 
Commission's authority under section 251(e). We seek comment on this 
view.
    26. We also seek comment on implementation issues from applying 
auction funds to offset the TFNA. We currently require that the TFNA's 
tariffed rates charged to RespOrgs be based on the cost of providing 
its services, determined on a year-by-year basis. What is the best way 
to factor in auction revenues? Because the TFNA is limited to 
recovering its revenue requirement, and must budget and adjust its fees 
accordingly each year, how should it account for additional revenues 
from a number auction? Should we create a system whereby auction 
proceeds realized in a given calendar year are held and remitted to the 
TFNA in the beginning of the following year (early January)? Or, are 
there alternative remittance systems that are preferable?
    27. If an auction generates more revenue than the TFNA revenue 
requirement for a particular year, parties should comment on how to 
allocate those additional funds. Should the TFNA retain any excess 
auction revenues, and apply them to the revenue requirements of future 
years? Alternatively, should such remaining auction proceeds instead be 
remitted to the NANP Administrator (NANPA) to defray the general costs 
of administering it? Would directing any excess proceeds in this manner 
benefit all users of the NANP across the 20 countries that comprise it? 
Are any of the federal statutes discussed above implicated if we handle 
additional auctions proceeds in this manner?
6. Alternative Assignment Methodologies
    28. The Commission seeks comment on the costs and benefits of other 
possible assignment approaches for desirable 833 numbers. We classify 
assignment approaches as either market-based, such as an auction, or 
administrative, such as a lottery or first-come, first-served. 
Notwithstanding our proposal to adopt the market-based auction approach 
described above, an administrative approach may also have value. 
Therefore, we also seek comment on possible benefits and drawbacks of 
administrative assignments.
    29. We wish to use any 833 auction as an experiment to ensure that 
we develop well-tested rules going forward. After we review the record 
in response to this Notice, we anticipate adopting rules for auctioning 
the 833 mutually exclusive numbers. Upon completion of any 833 auction, 
the Bureau will report to the Commission on the outcomes of the auction 
and lessons learned. As we draw on the experience of the 833 auction, 
the Bureau will refresh the record in this proceeding before the 
Commission considers adopting final rules for the distribution of other 
toll free numbers going forward.

B. Secondary Markets for Toll Free Numbers

    30. Consistent with the market-based approach for assigning 
mutually exclusive toll free numbers, we seek comment on revising our 
current rules to promote development of a secondary market for toll 
free numbers generally. A secondary market would allow subscribers to 
reassign their toll free numbers to other subscribers for a fee (or 
other compensation) the parties negotiate. Under the Commission's 
rules, RespOrgs are responsible for managing and administering toll 
free records on behalf of subscribers. See 47 CFR 52.101(b). We do not 
propose to change those responsibilities in this Notice. We are mindful 
of long-standing Commission and legal precedent that a telephone number 
is a public resource that is not privately owned and cannot be sold. We 
seek comment, however, on whether we should change our rules so that 
even though a subscriber does not own a toll free number, he or she may 
reassign the right to use that number for a fee. For example, in a 
secondary market, a business owner who wants to sell his or her 
business may sell the right to use the toll free number associated with 
the business. This reassignment would benefit both the seller and buyer 
of the business. Therefore, a secondary market may be more equitable 
and promote economic efficiencies as the number would be better 
utilized by the new business owner than if it were returned to the pool 
of available toll free numbers and subject to first-come, first-served 
assignment.
    31. Current market realities appear to support a secondary market 
as an efficient and productive use of numbers. Despite the fact that 
toll free numbers are a public resource and neither carriers nor 
subscribers ``own'' their numbers, it takes little effort to find toll 
free numbers advertised for sale. An

[[Page 47675]]

Internet search for ``toll free numbers for sale'' produces numerous 
options to presumably buy and sell toll free numbers, as do online 
auction site searches for ``toll free number.'' Indeed, the Enforcement 
Bureau has taken action against an individual who, through his company, 
engaged in multiple rule violations, including brokering ``15 toll free 
numbers for fees ranging from $10,000 to $17,500 per number'' to a 
pharmaceutical company. The fact that some parties are willing to take 
the risk of participating in a black market to obtain toll free numbers 
suggests that there is significant demand for such numbers. We believe 
that creating a framework for lawful transactions in these secondary 
markets would be beneficial by permitting subscribers to legally obtain 
numbers which they value. Even outside the context of a business 
ownership change, RespOrgs and subscribers may wish to buy and sell 
toll free numbers among themselves based on the usefulness of the 
numbers. We seek comment on our proposal, and in particular, the impact 
of a rule change on our public resource precedent.
    32. We also seek comment on whether the TFNA should receive any 
transaction proceeds or charge any fees to offset number administration 
costs. Such funds could be used for the same purpose as we propose for 
auction funds: to offset the costs of toll free numbering 
administration by the TFNA within the NANP for the benefit of all 
RespOrgs and subscribers. Would this be an efficient use of funds? If 
we did charge a transaction fee for the transfer of toll free numbers 
in the secondary market, what amount should be charged? Are there legal 
constraints in charging a transaction fee for the transfer of toll free 
numbers? Are there international concerns if such fees went to offset 
costs of the NANP? Additionally, we seek comment on whether a RespOrg 
should be able to charge a fee for such transfers, and on whether such 
fees, if charged, should be regulated. Or, should we put in place some 
other mechanisms to prevent the abuse of any market power RespOrgs 
might have? Would a secondary market have an impact on settling 
trademark or branding disputes in desirable toll free numbers?
    33. Interested parties should further comment on what types of 
information the TFNA would need from the buyer and seller to document a 
reassignment. Would the TFNA need to develop an online system to record 
any reassignments in the secondary market? How will parties know when a 
number is available for reassignment, i.e., when a RespOrg or 
subscriber wishes to sell it? Should the Commission or the TFNA 
maintain a database that potential buyers could check, or should buyers 
be responsible for their own advertising of numbers for sale? How could 
the Commission or the TFNA help ensure members of the public are able 
to verify that an entity is in fact a RespOrg? Are there additional 
roles or functions the TFNA could perform or provide that would benefit 
functioning of a secondary market or market participants?

C. Toll Free Number Administration

1. Toll Free Number Rule Revisions
    34. We propose revising certain toll free number rules to support 
our market approach to assigning certain toll free numbers for new code 
openings, recovered toll free numbers, and in the secondary market. 
Specifically, we propose revising the first-come, first-served rule, 
and seek comment on eliminating the brokering rule entirely. We also 
seek comment on revising the warehousing and hoarding rules.
    35. First-Come, First-Served Rule. We propose revising section 
52.111 of our rules to allow for the assignment of toll free telephone 
numbers to RespOrgs and subscribers on an equitable basis by auction, 
on a first-come, first-served basis, by using an alternative assignment 
methodology, or by a combination of these approaches as circumstances 
require. We seek comment on this proposal. Are different or more 
specific parameters needed? It has been nearly 20 years since the 
adoption of the first-come, first-served rule. Are there other 
revisions to that rule we should consider?
    36. Brokering Rule. The Commission's brokering rule prohibits 
RespOrgs and subscribers from selling a toll free number for a fee. We 
seek comment on eliminating the brokering rule as it directly precludes 
a secondary market for toll free numbers. Alternatively, we seek 
comment on whether the Commission should relax or suspend the brokering 
rule in any way. Commenters should address whether these approaches are 
consistent with the public resource nature of toll free numbers, while 
still promoting the economic efficiencies of a secondary market in toll 
free numbers. The brokering rule was adopted with the intention of 
equitably assigning numbers and minimizing number exhaust. However, we 
now question whether the brokering rule was a useful way to achieve 
those ends. We seek comment on whether there are any other 
modifications we should make to the rule in lieu of eliminating it to 
avoid any undesirable or unforeseen outcomes.
    37. Warehousing and Hoarding Prohibitions. The warehousing and 
hoarding prohibitions are intended to limit exhaust of toll free 
numbers by ensuring that numbers, once removed from the pool of 
available numbers, are used efficiently. We seek comment on whether 
these rules effectively serve their purpose or whether we should revise 
or eliminate these rules. If numbers could be stored, and traded, would 
market forces ensure their efficient assignment? Without these rules, 
will RespOrgs and subscribers hold numbers they no longer need, hoping 
to sell them later at higher prices? If they were to do so, could we 
discourage this practice by limiting the amount of time a RespOrg or 
subscriber may hold a toll free number without either using or selling 
it? That is, should we require that a number be ``in use'' within a 
certain time after it is obtained? What constitutes number ``use'' in 
this context? What time limit should we impose and how should we 
enforce that limitation? Should we consider increasing administrative 
fees on RespOrgs (which would be passed on to subscribers) to limit the 
amount of time a number is held? In the alternative, should the 
Commission eliminate these warehousing and hoarding prohibitions, along 
with the brokering prohibition, and rely instead on market forces to 
determine if and when toll free numbers are sold in the secondary 
market?
    38. Other Rule Revisions. We also seek comment on whether the 
Commission should eliminate or revise any other toll free rules. For 
example, should the Commission revise the definition of the Service 
Management System (SMS) Database in section 52.101(d) to include 
subscriber information as discussed above? Moreover, section 52.103 of 
the rules contains a number of definitions and rules pertaining to the 
``status'' of toll free numbers in the database and when these numbers 
are available for assignment to subscribers. The term ``status'' refers 
to whether and how a toll free number is being used. What revisions, if 
any, to these categories should we consider to promote a secondary 
market?
2. Toll Free Numbers Used for Public Purposes
    39. We seek comment on whether certain desirable toll free numbers 
necessary to promote health, safety, education, and other public 
interest goals should be set aside for use, without cost, by government 
(federal,

[[Page 47676]]

state, local and Tribal) agencies as well as by non-profit health, 
safety, education, or other non-profit public interest organizations. 
Numerous organizations use desirable toll free numbers for a variety of 
purposes, such as for contacting the organization for information or 
assistance and for fundraising. For example, the Department of Health 
and Human Services uses 800-SUICIDE to support a network of suicide 
prevention hotlines. Parties should address the advantages and 
disadvantages of granting an exemption for certain governmental and 
non-profit health, safety, education, and other non-profit public 
interest purposes. How would such a system be implemented and 
administered? Would this system raise any First Amendment, statutory, 
or other legal issues? For example, how should such non-profit health, 
safety, education, and other non-profit public interest organizations 
be defined; should definitions from other sections of the Act or the 
Commission's rules be used? Should entities other than the ones 
described above--non-profit health, safety, education, or other non-
profit public interest organizations--be included in this definition or 
receive similar treatment? Should the Commission treat these purposes 
differently from other purposes for which desirable numbers are used? 
What are the pros and cons of each approach?
3. Abuse of Toll Free Numbers
    40. We also seek comment on ways the Commission may address 
possible abuse of toll free numbers after they have been assigned to a 
non-profit health, safety, education, or other non-profit public 
interest organizations or any purchaser in an auction or in the 
secondary market? Should the Commission propose a rule stating its 
ability to reclaim any toll free number that is used for fraudulent or 
otherwise unlawful purposes? Also, should the Commission create, or 
direct the TFNA to create, any terms and conditions for use of a toll 
free number purchased in an auction or the secondary market? Should the 
Commission codify its authority to reassign a number to another 
subscriber if there is a strong public interest need to use the number 
for another purpose. For example, following Hurricane Katrina in 2005, 
the Commission reassigned 800-RED-CROSS from a for-profit corporation 
to the American Red Cross so it could facilitate the Nation's response 
to the disaster wrought by Hurricane Katrina.
4. Toll Free Number Assignment Management
    41. In light of the proposed changes to the toll free number 
assignment methodology in this Notice, we seek comment on whether the 
Commission should consider changes to overall toll free number 
administration. Since the Commission required designation of an 
impartial entity to administer toll free numbers, the TFNA has evolved 
from a Bell Operating Company operated organization, to a non-profit 
membership corporation. Somos, Inc., the TFNA--organized as an 
independent, non-profit corporation--administers the toll free SMS. 
Somos provides access to the SMS pursuant to the SMS Tariff that sets 
forth the regulations, rates, and charges applicable to SMS services, 
and describes the features and functions of the SMS.
    42. SMS 800 Tariff. Should we consider a different mechanism for 
toll free number administration than the tariff mechanism described 
above? The TFNA currently files a tariff that outlines the features and 
functions of the SMS, establishes RespOrg responsibilities and 
eligibility criteria, and sets forth the rates for service. The tariff 
also lists both the monthly and non-recurring charges for database 
access and other SMS services. In the 1993 CompTel Declaratory Ruling, 
the Commission declared that RespOrg access to the SMS database ``is a 
Title II common carrier service and shall be provided subject to 
tariff.'' Subsequently, in 2013, the Commission found that the 
reorganized toll free administrator, now Somos, met the neutrality 
requirements required by section 251(e) of the Act and the Commission's 
rules, so long as it files and maintains the tariff.
    43. Should the Commission consider a different regulatory treatment 
for SMS service? How, given the central role of the TFNA in the 
administration of toll free numbers, would we ensure the public is 
protected from unreasonable rates, terms, and conditions? 
Alternatively, if the Commission adheres to the current TFNA model, 
including its filing of a tariff, should the Commission require more 
transparency in Somos's operations and budget? Are there other ways to 
make Somos's financial information more transparent? Although the 
public tariff outlines Somos's general operating procedures, certain 
information may be difficult to discern and other information is 
provided to the Commission under confidential cover. As a non-profit 
organization, Somos is only allowed to recover operating costs. Part of 
the Commission's rationale in allowing Somos to reorganize as a non-
profit membership was ``any savings realized as a result of SMS/800, 
Inc.'s corporate restructuring is likely to be reflected in lower 
tariffed rates for RespOrgs, which should in turn lead to lower charges 
for toll free subscribers.'' Would a more transparent, or itemized 
accounting of Somos's costs further this goal and also better inform 
RespOrgs and subscribers of the costs of acquiring toll free numbers? 
We seek comment and ideas from industry on the roles of the TFNA and 
tariff as an important means to help us modernize toll free number 
assignment.

D. Legal Authority

    44. The Commission has consistently found that the Act requires the 
Commission to ensure the equitable, efficient, and orderly assignment 
of toll free numbers. As noted above, section 251(e)(1) of the Act 
gives the Commission ``exclusive jurisdiction over those portions of 
the North American Numbering Plan that pertain to the United States'' 
and provides that numbers must be made ``available on an equitable 
basis.'' Accordingly, the Commission retains ``authority to set policy 
with respect to all facets of numbering administration in the United 
States.'' In addition, the Commission has stated that sections 201(b) 
and 251(e)(1) of the Act ``empower the Commission to ensure that toll 
free numbers, which are a scarce and valuable national public resource, 
are allocated in an equitable and orderly manner that serves the public 
interest.'' This exclusive jurisdiction over numbering policy enables 
the Commission to act flexibly and expeditiously on important numbering 
matters. We note the Commission has also relied on sections 1 and 4(i) 
of the Act to assign toll free numbers on an equitable and efficient 
basis.
    45. The Commission has promulgated toll free number rules to 
satisfy these congressional mandates. The proposed actions in this 
Notice--including the proposal to use a new simple, low-cost auction 
method of assigning toll free numbers; and modifications to our current 
rules to allow a secondary market for toll free numbers that would 
support market forces after a code opening--are intended to further and 
better satisfy these mandates.
    46. As we noted in the background section of this Notice, in 1998, 
the Commission previously considered using an auction approach to toll 
free number assignment. In the 1998 Toll Free Order, the Commission 
recognized

[[Page 47677]]

that auctions are both an equitable and a ``generally efficient'' 
assignment mechanism.'' At that time, however, the Commission could not 
say ``based on the present record that auctions of vanity numbers would 
produce efficiencies that would outweigh the practical difficulties,'' 
such as cost, administration, and impact on the international 
membership of the NANP. Our proposal to implement auctions for mutually 
exclusive toll free numbers is consistent with the Commission's 
previous finding that auctions are generally equitable and efficient. 
We believe that auctions would now be a more equitable and efficient 
approach to assignment of mutually exclusive toll free numbers and that 
the benefits of such auctions would outweigh any practical 
difficulties. We seek comment on this assessment. With nearly two more 
decades of experience and increased demand for toll free numbers, we 
seek to develop a new record which we believe will show that the 
efficiencies produced by the proposed auction will outweigh any 
practical difficulties.
    47. For the reasons previously discussed in this Notice, we believe 
the proposals herein are consistent with and further the Commission's 
statutory mandate to make ``numbers available on an equitable basis.'' 
These proposals include a more efficient and market-driven approach to 
assigning toll free numbers, better promote productive use of numbers, 
and reflect current market realities. We invite comment on the sources 
of authority discussed above.

IV. Toll Free Auction Design

    48. In this Appendix, to assist interested stakeholders in 
preparing focused and detailed comments on the Notice, the Commission 
provides additional information on our interest in how potential 
bidders determine the value of toll free numbers, and on the Vickrey 
auction.

Toll Free Number Valuations

    49. The way potential bidders in our proposed auction determine 
their valuations of coveted numbers, such as 1-833-FLOWERS, can 
determine whether there are benefits from having a multi-round auction. 
One possibility is individuals' valuations are idiosyncratic, that is, 
are inherent to the specific bidder, without commonalities or 
interdependencies in how subscriber valuations are determined. For 
example, potential bidders may develop their valuations based on the 
size of their merchant network, and their business models, and these 
valuations would not be changed if they were to discover a different 
bidder valued the same number differently.
    50. RespOrgs act as intermediaries in the toll free market. 
RespOrgs' gains or surpluses from supplying a toll free number may be 
characterized by significant commonalities or interdependencies, that 
is, RespOrg valuations of toll free numbers may not be idiosyncratic. 
Instead, a RespOrg that observed another RespOrg with a significantly 
higher or lower valuation than its own might wonder if it was 
misinformed, and the other RespOrg knows something about the value of 
the number that it does not. A RespOrg derives surplus from acquiring a 
toll free number only to the extent that it can profitably supply it to 
a subscriber. This surplus is equal to the difference between the price 
the RespOrg obtains for the number, and the cost of supplying it. 
Differences in the technologies RespOrgs use to supply numbers, for 
example, to provide geographic-based calling, or in the markets the 
RespOrgs address may give rise to idiosyncratic differences in cost. 
However, if RespOrgs generally compete with other similar RespOrgs 
using the same technologies, seeking to supply the same subscribers 
with largely the same service, then the key factor that might lead such 
RespOrgs' valuations of a number to differ is their assessment of the 
highest price that a subscriber is willing to pay for the number (since 
the relevant RespOrg's have similar costs, and are supplying 
essentially the same service). While the Commission recognizes many 
RespOrgs have different business models, it also considers that in 
general RespOrgs largely use the same technologies to supply the same 
services to customers with a demand for certain types of valuable toll 
free numbers. For any such RespOrgs, the Commission does not view 
differences in the cost of supplying toll free number or their business 
models as giving rise to significant differences in competing RespOrgs' 
surpluses from supplying a given toll free number. The Notice seeks 
comment on the extent to which this conclusion is correct, that is, on 
whether differences in the cost structure or business plans of various 
RespOrgs competing for the same customers using similar technologies 
may cause their surpluses from supplying a given toll free number to 
vary idiosyncratically.
    51. If the Commission is right about competing RespOrgs largely 
using the same technologies to satisfy the same business models, then 
the surpluses of different RespOrgs from supplying a toll free number 
are not likely to differ significantly ex post. However, the RespOrgs' 
ex ante valuations of a toll free number may be uncertain. In 
particular, while many RespOrgs likely have a deep understanding of the 
market for toll free number, and, consequently, their valuations of a 
given toll free number might be fairly precise, other competing 
RespOrgs may not have a similar understanding of the market, and their 
valuations of a given number might be uncertain to some degree. If it 
is true that at least some competing RespOrgs have materially different 
estimates of customers' valuations of certain toll free numbers than 
others, then an open auction might allow bidding RespOrgs to refine 
their value of the number or numbers they are bidding. However, the 
Commission believes that, overall, the RespOrgs' valuations of a toll-
free number are only slightly affected by uncertainty. We seek to 
understand the degree to which uncertainty affects some of the 
RespOrgs' valuations of a toll-free number.

The Vickrey Auction

    52. To formulate their views on a Vickrey auction with no package 
bids, as proposed in the Notice, commenters may find this example 
helpful. Suppose there are two bidders, A and B, and two toll free 
numbers to be assigned Number 1 and Number 2. Bids are indicated by the 
dollar amounts in the table below. These bids should not be treated as 
indicative in any way of the expected value of any of the numbers 
auctioned, and are provided only as an example.

                          Bidding Example Table
------------------------------------------------------------------------
                Bidder/No.                    1        2     {1,2{time}
------------------------------------------------------------------------
A........................................      $10      $20        $32
B........................................       16        8         25
------------------------------------------------------------------------

    53. In a Vickrey auction without package bids, but which allows 
simultaneous bidding over more than one number, only columns 1 and 2 
are relevant. Bidder A obtains Number 2 because it bid the highest 
amount ($20). Bidder A pays the highest non-winning bid for Number 2 
($8). Bidder B obtains Number 1, because it bid the highest amount 
($16). Bidder 2 pays the highest non-winning bid for Number 1 ($10). 
Moreover, our expectation is that the four bids reflect the bidders' 
true valuation of each number. This is because regardless of what other 
bids are made, a bidder can always do better by bidding its true value. 
If instead the bidder underbids, it may lose when it could have won by 
paying no more and potentially less than his value. If it overbids, it 
may win and potentially pay

[[Page 47678]]

more than the object is worth to it. Therefore, it is optimal to bid 
his value. This assumes the rules of the auction are fully enforceable, 
and truth revelation in this auction would not be harmful to the 
bidders in other contexts. Consequently, if each number's valuation was 
independent of the other, the auction would be economically efficient. 
It would assign the numbers to maximize value to the bidders.
    54. In a generalized Vickrey auction with package bids, given the 
bids found in the table, the numbers are also assigned as in in the 
non-package generalized Vickrey auction. A different allocation would 
emerge, for example, if Bidder A valued both numbers at 37. Then Bidder 
A would get both numbers. In this case, however, the payments required 
of the winning bidders change. As in the case of the non-package 
auction, the payments in the generalized Vickrey auction are equal to 
the opportunity cost (highest alternative value) of the items won by 
each bidder. However, as is the case in the table, this changes the 
opportunity cost of the bid. The payments required in the package 
auction are determined as follows:

    If Number 2 is assigned to Bidder B instead of Bidder A, then 
Bidder B would realize a value of $25 (because Bidder B would have 
obtained both numbers). By assigning Number 2 to Bidder A, the 
(opportunity) cost for Bidder B is $9 ($25 minus $16, the value for 
Bidder B from obtaining Number 1). If Number 1 is assigned to Bidder 
A instead of Bidder B, then Bidder A would realize a value of $32. 
By assigning Number 1 to Bidder B, the (opportunity) cost for Bidder 
A is $12 ($32 minus $20). Thus, the outcome of the generalized 
Vickrey auction is as follows: Bidder A obtains Number 2, for which 
it pays $9. Bidder B obtains Number 1, for which it pays $12.

    55. Further, in such auctions, by similar reasoning to that 
provided for the non-package auction, the bidders best strategy is to 
bid their valuations. Accordingly, the highest value can be realized by 
assigning Number 2 to Bidder A and Number 1 to Bidder B. In this case, 
that value is $36: $20 for Bidder A and $16 for Bidder B. If Number 1 
is assigned to Bidder A, and Number 2 to Bidder B, then the value of 
the assignment is $18. If both numbers are assigned to Bidder A, the 
value of the assignment is $32. If both numbers are assigned to Bidder 
B, the value of the assignment is $25. The generalized Vickrey auction 
assigns the two numbers to maximize value. Accordingly, the generalized 
Vickrey auction assigns Number 2 to Bidder A and Number 1 to Bidder B. 
Thus, the generalized Vickrey auction with package bids is economically 
efficient allocating the numbers to maximize the value to bidders.

V. Initial Regulatory Flexibility Analysis

    56. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on a substantial number of small entities by the policies and rules 
proposed in this Notice of Proposed Rulemaking (Notice). The Commission 
requests written public comments on this IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadlines 
for comments provided on the first page of the Notice. The Commission 
will send a copy of the Notice, including this IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA). In 
addition, the Notice and IRFA (or summaries thereof) will be published 
in the Federal Register.

A. Need for, and Objectives of, the Proposed Rules

    57. In this Notice, we propose changes to, and seek comment on, our 
toll free number administration and assignment rules. While the 
Commission's current rule uses a first-come, first-served approach to 
the assignment of toll free numbers, to help ensure the continued 
usefulness and availability of this finite resource, we now examine 
alternative assignment methodologies. The objective of the proposed 
rules is to create a more efficient method of toll free number 
assignment that is consistent with our statutory mandate to make 
``numbers available on an equitable basis.'' Specifically, we propose 
amending our rules to allow for use of an auction to assign certain 
toll free numbers--such as vanity and repeater numbers--in order to 
better promote the equitable and efficient, use of numbers. With the 
opportunity afforded by the opening of the 833 toll free code, we 
propose to use an auction for assigning numbers for which mutually 
exclusive interest has been expressed. We seek comment on repealing or 
relaxing the prohibition on number brokering, thereby allowing toll 
free number secondary markets, and consider a variety of other means to 
modernize toll free number assignments.

B. Legal Basis

    58. The legal basis for any action that may be taken pursuant to 
this Notice is contained in sections 1, 4(i), 201(b), and 251(e)(1) of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 
201(b), and 251(e)(1).

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    59. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rule revisions, if adopted. The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small-business concern'' under the 
Small Business Act. A ``small-business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    60. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three comprehensive small entity size standards that could 
be directly affected herein. First, while there are industry specific 
size standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the SBA's Office of 
Advocacy, in general a small business is an independent business having 
fewer than 500 employees. These types of small businesses represent 
99.9% of all businesses in the United States which translates to 28.8 
million businesses. Next, the type of small entity described as a 
``small organization'' is generally ``any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.'' Nationwide, as of 2007, there were approximately 1,621,215 
small organizations. Finally, the small entity described as a ``small 
governmental jurisdiction'' is defined generally as ``governments of 
cities, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data published in 2012 indicate that there were 89,476 local 
governmental jurisdictions in the United States. We estimate that, of 
this total, as many as 88,761 entities may qualify as ``small 
governmental jurisdictions.'' Thus, we estimate that most governmental 
jurisdictions are small.
    61. Wired Telecommunications Carriers. The U.S. Census Bureau

[[Page 47679]]

defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. Census data for 2012 show 
that there were 3,117 firms that operated that year. Of this total, 
3,083 operated with fewer than 1,000 employees. Thus, under this size 
standard, the majority of firms in this industry can be considered 
small.
    62. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable NAICS 
Code category is Wired Telecommunications Carriers as defined above. 
Under the applicable SBA size standard, such a business is small if it 
has 1,500 or fewer employees. According to Commission data, census data 
for 2012 shows that there were 3,117 firms that operated that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. The 
Commission therefore estimates that most providers of local exchange 
carrier service are small entities that may be affected by the rules 
adopted.
    63. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
local exchange services. The closest applicable NAICS Code category is 
Wired Telecommunications Carriers as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 3,117 firms operated in that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. 
Consequently, the Commission estimates that most providers of incumbent 
local exchange service are small businesses that may be affected by the 
rules and policies adopted. Three hundred and seven (307) Incumbent 
Local Exchange Carriers reported that they were incumbent local 
exchange service providers. Of this total, an estimated 1,006 have 
1,500 or fewer employees.
    64. Competitive Local Exchange Carriers (Competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate NAICS Code category is Wired 
Telecommunications Carriers, as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
U.S. Census data for 2012 indicate that 3,117 firms operated during 
that year. Of that number, 3,083 operated with fewer than 1,000 
employees. Based on this data, the Commission concludes that the 
majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, 
and Other Local Service Providers, are small entities. According to 
Commission data, 1,442 carriers reported that they were engaged in the 
provision of either competitive local exchange services or competitive 
access provider services. Of these 1,442 carriers, an estimated 1,256 
have 1,500 or fewer employees. In addition, 17 carriers have reported 
that they are Shared-Tenant Service Providers, and all 17 are estimated 
to have 1,500 or fewer employees. Also, 72 carriers have reported that 
they are Other Local Service Providers. Of this total, 70 have 1,500 or 
fewer employees. Consequently, based on internally researched FCC data, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, Shared-Tenant Service 
Providers, and Other Local Service Providers are small entities.
    65. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.
    66. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition for Interexchange Carriers. The closest 
NAICS Code category is Wired Telecommunications Carriers as defined 
above. The applicable size standard under SBA rules is that such a 
business is small if it has 1,500 or fewer employees. U.S. Census data 
for 2012 indicates that 3,117 firms operated during that year. Of that 
number, 3,083 operated with fewer than 1,000 employees. According to 
internally developed Commission data, 359 companies reported that their 
primary telecommunications service activity was the provision of 
interexchange services. Of this total, an estimated 317 have 1,500 or 
fewer employees. Consequently, the Commission estimates that the 
majority of IXCs are small entities that may be affected by our 
proposed rules.
    67. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. The 
Telecommunications Resellers industry comprises establishments engaged 
in purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure. Mobile 
virtual network operators (MVNOs) are included in this industry. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, all operated with fewer than 
1,000 employees. Thus, under this category and the associated small 
business size standard, the majority of these prepaid calling card 
providers can be considered small entities.
    68. Toll Resellers. The Commission has not developed a definition 
for Toll Resellers. The closest NAICS Code Category is 
Telecommunications Resellers. The Telecommunications Resellers industry 
comprises establishments engaged in purchasing access and network 
capacity from owners and operators of telecommunications networks and 
reselling wired and wireless telecommunications services (except 
satellite) to businesses and households. Establishments in this 
industry resell telecommunications; they do not

[[Page 47680]]

operate transmission facilities and infrastructure. Mobile virtual 
network operators (MVNOs) are included in this industry. The SBA has 
developed a small business size standard for the category of 
Telecommunications Resellers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. Census data for 2012 show 
that 1,341 firms provided resale services during that year. Of that 
number, 1,341 operated with fewer than 1,000 employees. Thus, under 
this category and the associated small business size standard, the 
majority of these resellers can be considered small entities. According 
to Commission data, 881 carriers have reported that they are engaged in 
the provision of toll resale services. Of this total, an estimated 857 
have 1,500 or fewer employees. Consequently, the Commission estimates 
that the majority of toll resellers are small entities.
    69. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a definition for small businesses specifically applicable to 
Other Toll Carriers. This category includes toll carriers that do not 
fall within the categories of interexchange carriers, operator service 
providers, prepaid calling card providers, satellite service carriers, 
or toll resellers. The closest applicable NAICS Code category is for 
Wired Telecommunications Carriers as defined above. Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees. Census data for 2012 shows that there were 3,117 
firms that operated that year. Of this total, 3,083 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of Other Toll Carriers can 
be considered small. According to internally developed Commission data, 
284 companies reported that their primary telecommunications service 
activity was the provision of other toll carriage. Of these, an 
estimated 279 have 1,500 or fewer employees. Consequently, the 
Commission estimates that most Other Toll Carriers are small entities 
that may be affected by rules adopted pursuant to the Second Further 
Notice.
    70. Prepaid Calling Card Providers. The SBA has developed a 
definition for small businesses within the category of 
Telecommunications Resellers. Under that SBA definition, such a 
business is small if it has 1,500 or fewer employees. According to the 
Commission's Form 499 Filer Database, 500 companies reported that they 
were engaged in the provision of prepaid calling cards. The Commission 
does not have data regarding how many of these 500 companies have 1,500 
or fewer employees. Consequently, the Commission estimates that there 
are 500 or fewer prepaid calling card providers that may be affected by 
the rules.
    71. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census data for 2012 show that there were 967 firms that operated for 
the entire year. Of this total, 955 firms had employment of 999 or 
fewer employees and 12 had employment of 1000 employees or more. Thus 
under this category and the associated size standard, the Commission 
estimates that the majority of wireless telecommunications carriers 
(except satellite) are small entities.
    72. The Commission's own data--available in its Universal Licensing 
System--indicate that, as of October 25, 2016, there are 280 Cellular 
licensees that will be affected by our actions today. The Commission 
does not know how many of these licensees are small, as the Commission 
does not collect that information for these types of entities. 
Similarly, according to internally developed Commission data, 413 
carriers reported that they were engaged in the provision of wireless 
telephony, including cellular service, Personal Communications Service, 
and Specialized Mobile Radio Telephony services. Of this total, an 
estimated 261 have 1,500 or fewer employees, and 152 have more than 
1,500 employees. Thus, using available data, we estimate that the 
majority of wireless firms can be considered small.
    73. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions.
    74. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Commission data, 
413 carriers reported that they were engaged in wireless telephony. Of 
these, an estimated 261 have 1,500 or fewer employees and 152 have more 
than 1,500 employees. Therefore, a little less than one third of these 
entities can be considered small.
    75. Cable and Other Subscription Programming. This industry 
comprises establishments primarily engaged in operating studios and 
facilities for the broadcasting of programs on a subscription or fee 
basis. The broadcast programming is typically narrowcast in nature 
(e.g., limited format, such as news, sports, education, or youth-
oriented). These establishments produce programming in their own 
facilities or acquire programming from external sources. The 
programming material is usually delivered to a third party, such as 
cable systems or direct-to-home satellite systems, for transmission to 
viewers. The SBA has established a size standard for this industry 
stating that a business in this industry is small if it has 1,500 or 
fewer employees. The 2012 Economic Census indicates that 367 firms were 
operational for that entire year. Of this total, 357 operated with less 
than 1,000 employees. Accordingly we conclude that a substantial 
majority of firms in this industry are small under the applicable SBA 
size standard.
    76. Cable Companies and Systems (Rate Regulation). The Commission 
has developed its own small business size standards for the purpose of 
cable rate regulation. Under the Commission's rules, a ``small cable 
company'' is one serving 400,000 or fewer subscribers nationwide. 
Industry data indicate that there are currently 4,600 active cable 
systems in the United States. Of this total, all but eleven cable 
operators nationwide are small under the 400,000-subscriber size 
standard. In addition, under the Commission's rate regulation rules, a 
``small system'' is a cable system serving 15,000 or fewer subscribers. 
Current Commission records show 4,600 cable systems nationwide. Of this 
total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 
systems have 15,000 or more subscribers, based on the same records. 
Thus, under this standard as well, we estimate that most cable systems 
are small entities.

[[Page 47681]]

    77. Cable System Operators (Telecom Act Standard). The 
Communications Act also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' There are approximately 52,403,705 cable video 
subscribers in the United States today. Accordingly, an operator 
serving fewer than 524,037 subscribers shall be deemed a small operator 
if its annual revenues, when combined with the total annual revenues of 
all its affiliates, do not exceed $250 million in the aggregate. Based 
on available data, we find that all but nine incumbent cable operators 
are small entities under this size standard. We note that the 
Commission neither requests nor collects information on whether cable 
system operators are affiliated with entities whose gross annual 
revenues exceed $250 million. Although it seems certain that some of 
these cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million, we are unable at this time to 
estimate with greater precision the number of cable system operators 
that would qualify as small cable operators under the definition in the 
Communications Act.
    78. All Other Telecommunications. The ``All Other 
Telecommunications'' industry is comprised of establishments that are 
primarily engaged in providing specialized telecommunications services, 
such as satellite tracking, communications telemetry, and radar station 
operation. This industry also includes establishments primarily engaged 
in providing satellite terminal stations and associated facilities 
connected with one or more terrestrial systems and capable of 
transmitting telecommunications to, and receiving telecommunications 
from, satellite systems. Establishments providing Internet services or 
voice over Internet protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry. The 
SBA has developed a small business size standard for ``All Other 
Telecommunications,'' which consists of all such firms with gross 
annual receipts of $32.5 million or less. For this category, U.S. 
Census data for 2012 show that there were 1,442 firms that operated for 
the entire year. Of these firms, a total of 1,400 had gross annual 
receipts of less than $25 million. Thus a majority of ``All Other 
Telecommunications'' firms potentially affected by our action can be 
considered small.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    79. The Notice proposes and seeks comment on rule changes that will 
affect toll free number assignment and administration. In particular, 
we propose expanding the existing toll free number assignment rule to 
permit use of an auction methodology, among other assignment 
mechanisms, to assign toll free numbers. To do so, we propose to revise 
section 52.111 of our rules to allow the Commission to assign numbers 
in a manner that is equitable, including by auction, on a first-come, 
first-served basis, an alternative assignment methodology, or by a 
combination of the forgoing as circumstances require. We also seek 
comment on conducting a sealed, single round, sealed-bid Vickrey 
auction for the roughly 17,000 numbers set aside, pursuant to the 833 
Code Opening Order, for which there were mutually exclusive requests. 
Auction procedure compliance will affect the toll free auction 
administrator and all RespOrgs, including those considered small 
entities, as described above.
    80. In addition, we seek comment on revising our rules to promote 
development of a secondary market for toll free numbers. We seek 
comment on what types of information would be needed from the buyer and 
seller to document a reassignment, whether an online recording system 
is needed to record reassignments in the secondary market, and whether 
there should be a database for potential buyers. The Notice also seeks 
comment on whether the Toll Free Numbering Administrator (TFNA) should 
keep toll free number subscriber records and whether we should consider 
including subscriber information in a TFNA database.

E. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    81. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rules for such small entities; (3) the 
use of performance rather than design standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for such small 
entities.
    82. This Notice invites comment on a number of proposals and 
alternatives to modify the present toll free number administration and 
assignment method rules. The Notice proposes expanding the existing 
toll free number assignment rule to permit use of an auction 
methodology, among other assignment mechanisms, to assign toll free 
numbers. To do so, we propose to revise section 52.111 of our rules to 
allow the Commission to assign numbers in a manner that is equitable, 
including by auction, on a first-come, first-served basis, an 
alternative assignment methodology, or by a combination of the forgoing 
as circumstances require. The Notice also seeks comment on types of 
auction methods that should be employed and on the advantages and 
disadvantages of these auction methods.
    83. The Notice also seeks comment on repealing or relaxing the 
prohibition against brokering and open number distribution to secondary 
markets. Theses proposal could minimize burdens on current and future 
toll free subscribers, some of which may be small entities. Finally, in 
the Notice, we seek comment on whether certain desirable toll free 
numbers necessary to promote health and safety be set aside for use, 
without cost, by government (federal, state, local and Tribal) agencies 
as well as by non-profit health, safety, educational, or other non-
profit public interest. We also seek comment on whether other entities 
such as non-profit educational and charitable organizations be included 
in this definition or receive similar treatment. These organizations 
could include small entities and such set asides would ensure that 
these organizations could receive certain numbers with minimal effort.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    84. None.

VI. Procedural Matters

A. Comment Filing Procedures

    85. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document in Dockets WC 17-192, and CC 95-155. Comments may be filed 
using the Commission's Electronic Comment Filing System

[[Page 47682]]

(ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 
63 FR 24121 (1998).
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [ssquf] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [ssquf] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to <a href="/cdn-cgi/l/email-protection#eb8d8888dedbdfab8d8888c58c849d"><span class="__cf_email__" data-cfemail="b3d5d0d0868387f3d5d0d09dd4dcc5">[email protected]</span></a> or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (TTY).
    86. This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making ex parte presentations must file a copy of any written 
presentation or a memorandum summarizing any oral presentation within 
two business days after the presentation (unless a different deadline 
applicable to the Sunshine period applies). Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b). In proceedings governed by 
Rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

B. Initial Regulatory Flexibility Analysis

    87. Pursuant to the Regulatory Flexibility Act (RFA), the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and actions considered in this Notice of Proposed 
Rulemaking. The text of the IRFA is set forth in section V above. 
Written public comments are requested on this IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadlines 
for comment on the Notice of Proposed Rulemaking. The Commission's 
Consumer and Governmental Affairs Bureau, Reference Information Center, 
will send a copy of this Notice of Proposed Rulemaking, including the 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA).

C. Paperwork Reduction Act

    88. This document contains proposed new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, we 
seek specific comment on how we might further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.

D. Contact Person

    89. For further information about this proceeding, please contact 
E. Alex Espinoza, FCC Wireline Competition Bureau, Competition Policy 
Division, Room 5-C211, 445 12th Street SW., Washington, DC 20554, at 
(202) 418-0849 or <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="d392bfb6abfd96a0a3babdbca9b293b5b0b0fdb4bca5">[email protected]</a>.

VII. Ordering Clauses

    90. Accordingly, it is ordered, pursuant to sections 1, 4(i), 
201(b), and 251(e)(1) of the Communication Act of 1934, as amended, 47 
U.S.C. 151, 154(i), 201(b), and 251(e)(1) that this Notice of Proposed 
Rulemaking is adopted.
    91. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 52

    Telephone.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer, Office of the Secretary.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 52 as follows:

PART 52--NUMBERING

0
1. The authority citation for part 52 continues to read as follows:

    Authority:  Secs. 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 
U.S.C. 151, 152, 154 and 155 unless otherwise noted. Interpret or 
apply secs. 3, 4, 201-05, 207-09, 218, 225-27, 251-52, 271 and 332, 
48 Stat. 1070, as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 
218, 225-27, 251-52, 271 and 332 unless otherwise noted.

0
2. Section 52.111 is revised to read as follows:


Sec.  52.111  Toll free number assignment.

    Toll free telephone numbers must be made available to Responsible 
Organizations and subscribers on an equitable basis. The Commission 
will assign toll free numbers by auction, on a first-come, first-served 
basis, by an alternative assignment methodology, or

[[Page 47683]]

by a combination of the foregoing options, as circumstances require.

[FR Doc. 2017-22187 Filed 10-12-17; 8:45 am]
 BILLING CODE 6712-01-P


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