Opinion ID: 3039139
Heading Depth: 2
Heading Rank: 5

Heading: Hoarding

Text: Finally, we consider whether the 1999 Agreement should be invalidated because Business Edge improperly hoarded toll free telephone numbers. Regulation 47 C.F.R. 52.107 defines “hoarding,” as “the acquisition of more toll free numbers than one intends to use for the provision of toll free service, as well as the sale of a toll free number by a private entity for a fee.” 47 C.F.R. § 52.107(b). As discussed above, we cannot conclude that Business Edge sold the Number to Champion. However, it is possible that Business Edge acquired more numbers than it intended to use for the provision of toll free service in violation of the prohibition on hoarding. In In the Matter of Toll Free Service Access Codes, Second Report and Order and Further Notice of Proposed Rulemaking, 12 F.C.C.R. at 11189 ¶ 38, the FCC discussed the purpose of regulating the hoarding and brokering of toll free numbers: Hoarding occurs when a toll free subscriber acquires more numbers from a [telephone company] than it intends to use for the provision of toll free service. If a subscriber refuses to release numbers that are not in use, the pool of available numbers decreases. This will exacerbate toll free number depletion and necessitate the opening of an additional toll free relief code earlier than would be necessary otherwise. It is time consuming and costly for the industry to perform the necessary modifications to the network so that it can support calls using the new code. Hoarding can also result in some customers being unable to obtain toll free numbers, even though certain numbers are not being used. After defining the concept of hoarding, the FCC stated 9 why number hoarding and number brokering is against the public interest: Brokering provides motivation for hoarding and therefore results in quicker exhaustion of the current [supply of numbers] and interferes with the orderly allocation of numbering resources. Simply prohibiting a subscriber from hoarding a number will not fully eliminate the effects of hoarding. For example, a subscriber could acquire a group of numbers it expected to sell at a later date. The subscriber could then nominally place the numbers in service through “dummy” affiliates or other entities that otherwise would not employ a toll free number. Id. Given the record before us, we believe Business Edge clearly violated the spirit of 47 C.F.R. § 52.107 as it did not intend to use the Number for its own customers; Sheldon Kass testified that he acquired the Number because it spelled “the word champion,” and therefore could be marketed to a company in the mortgage business. (App. 98.) However, we cannot determine, in the first instance, whether Business Edge violated 47 C.F.R. § 52.107(a)(1).6 Hoarding requires subscribing to more telephone numbers than the entity intends to use for the provision of toll free service and the record before us is inadequate to make that determination. Accordingly, we will remand the case to the District Court for further proceedings 6 We are mindful that, given the way section 52.107 is currently drafted, an entity such as Business Edge can avoid running afoul of the regulation by simply refusing to “sell” a toll free telephone number outright, and to instead offer a lease for the number, as Business Edge apparently did here. It strikes us that the goal of prohibiting the sale of toll free telephone numbers – eliminating the motivation for hoarding and the resultant accelerated exhaustion of the number supply – is equally served by prohibiting toll free telephone number leasing. This represents a clear loophole in the regulation that the FCC may wish to address. 10 consistent with this decision. 11