Is It Illegal to Sell Numbers?

By Aelea Christofferson, president of ATL Communications:

Is it illegal to sell numbers? The answer to this question isn’t easy. But to answer the question correctly, we will need to explore what is actually written in the Federal Regulations, Tariffs, and Industry Guidelines.

The answer differs in two ways:

  1. What kind of numbers we are talking about.
  2. Who is doing the selling of these numbers?

In the case of Toll Free, there is a federal regulation about the sale of toll free numbers. The term Hoarding refers to 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. Within the definition of Hoarding is Number Brokering, which is defined as the selling of a Toll Free number by a private entity for a fee. These definitions are explicitly stated in Federal Regulation 47 C.F.R. §52.107. Number selling in Toll Free is very clearly illegal. It is punishable by fines and/or prison to sell a number and it doesn’t matter who does the selling.

Local numbers are different. There are no federal regulations pertaining to the sale of local numbers. Best Practices guidelines put forward by the Local Number Portability Working Group are not only not enforceable, they apply only to the entities that are supplying telecommunications services—in other words carriers and resellers. There is no real legal prohibition at the federal level for end users to sell numbers. Does this mean there is no reason an end-user can’t sell a local number? Not so fast! Some states have added their own restrictions on the sale of local numbers and some telecommunications providers have forbidden the sale of numbers in their contracts. If you are going to advertise the sale of a local number, make sure you know all the pitfalls.

How much risk is there is selling numbers? In March 2014 the FCC found that IT Connect owned by Richard Jackowitz had sold 210 numbers for prices ranging from $375 to $60,000 per number. The FCC has notified and fined Mr. Jackowitz several times since 2011. Based on their review, they have charged Mr. Jackowitz with a penalties amounting to $3,360,000. The FCC had strong evidence for the violation of federal regulations because the end user, a pharmaceutical company, had turned Mr. Jackowitz in and provided everything the FCC needed to hold him accountable. It is also important to note that Mr. Jackowitz’s company was a RespOrg and these companies, entrusted with the administration of Toll Free numbers, are held to a higher standard than an end user. Although the evidence stands to suggest that the FCC is interested in and has the resources to pursue legal action against those who violate federal law, in truth there are few cases where this has happened.

In June, this issue again came to the surface during a discussion at the meeting of an FCC Committee, NANC (the North American Numbering Council). The discussion was prompted by an article in the Washington Post in April of this year which stated, “People are paying tens of thousands of dollars for custom phone numbers.” I am a member of the committee and was there during the discussion and was surprised how few members really understood the regulatory differences between Toll Free numbers and local numbers.

Shortly after the meeting a letter was sent from the NANC chairperson to the Deputy Chief of the Wireline Division to address the issue. Here are excerpts from the letter:

“During the NANC’s discussion of this matter it became apparent to me that there may be an unintended limitation in the FCC’s rules that appear to prohibit the hoarding of telephone numbers since the current rule (47 C.F.R. §52.107) only prohibits the hoarding of Toll Free

numbers and does not apply to other telephone numbers that may be hoarded, including number brokering for sale for a fee to private entities.

“I believe that the hoarding and/or the brokering for sale to private entities of any telephone numbers, Toll Free or Non-Toll Free, is an inefficient and inequitable management practice for the nation’s limited numbering resources.”

I am hoping that this action by NANC will finally open a real discussion on this important issue.  I am hoping the discussion finally recognizes that numbers have market value and that enforcement of outdated regulations is not the solution. Maybe looking at numbers from a more realistic, long-term basis will show that the equitable and efficient management of numbers doesn’t look at all like it has in the past hundred years and our thoughts need to shift to a new model. It will be interesting to see how this plays out.