This past September, the FCC drafted several proposed rules changes in how telephone numbers – more specifically, vanity toll free numbers – are to be administered in the future. Chief among these proposed changes are reversals of long standing regulations, such as the Brokering Rule, and to implement new policies regarding how phone numbers are exchanged between organizations. While the details of the proposed rule changes are steeped in industry jargon, we’ve gone ahead and broken down what the existing rules are, what the major rule changes are, and how all of this could help your small business.

What is a vanity phone number?

Vanity phone numbers are phone numbers that spell out a word or phrase or are simply easy to remember. Some are very recognizable, such as 1-800-FLOWERS, while others are easy to remember due to their repetitiveness, such as 1-800-200-0000. These phone numbers are considered valuable for two main reasons. First, by virtue of their memorability, they have been shown to increase response rates to marketing by an average of 30-40%. Second, they can also be used as branding tools, to help lend increased brand authority and legitimacy to any business.

Vanity phone numbers are made even more valuable by the fact that they are exclusive, meaning only one company can have the phone number at a given time. This makes the vanity phone number market extremely competitive, and the FCC has had to step in over the years to make sure the rules by which they are regulated are fair.

What is the Brokering Rule?

The Brokering Rule was established as part of the original rules to prevent abuse by major players in the numbering space. It states that phone numbers are a public resource, and as such they may not be “brokered” — more simply, an end user cannot buy or sell toll free phone numbers.

What are the Hoarding and Warehousing Rules?

The hoarding and warehousing rules were established to support the brokering rule by disallowing end users (small businesses) and RespOrgs from “hoarding” phone numbers. These rules were meant to prevent users from reserving and stockpiling phone numbers without using them for the purpose of selling them later on. The thinking was, when the rules were drafted, that if users cannot keep phone numbers that are not in use, they would be unable to effectively create an inventory of phone numbers to sell.

What are the proposed FCC rules changes?

The FCC proposed in September to reverse the Brokering Rule, the Hoarding Rule, and the Warehousing Rule as part of a means to make how phone numbers are administered more equitable. As the rules stand, to gain access to a specific phone number, one must be the first to reserve it from the spare pool (i.e. the inventory of available numbers, administered by a company called SOMOS and overseen by the FCC). This system is called the “first come, first served” rule.

Pushback from the industry has led the FCC to reconsider this system of administering phone numbers. Instead, they have now proposed to create secondary markets whereby end users will be allowed to list phone numbers they control for auction. This system is thought to be more equitable because it will allow interested parties to bid on valuable phone numbers, which will give them a fair chance to access a specific vanity phone number. Under the current rules, this is not possible.

What this could (and probably will) look like is a market similar to Ebay, but for vanity phone numbers. Small businesses interested in a particular phone number will have the chance to place bids on phone numbers they would never before have had the chance to access.

How do the rules changes help small to medium-sized businesses?

For the first time, small to medium-sized businesses will have a chance to access valuable vanity phone numbers as they have never been able to do before. Assuming the rules changes pass, which is still uncertain at this point, they could open up the market for vanity numbers to non-telecom businesses. Instead of relying on one’s carrier to find a valuable phone number, businesses will have the option to visit an auction site to find, bid on, and purchase a new vanity phone number.

As mentioned before, vanity phone numbers have tremendous potential to increase a business’ bottom line, especially when used in local advertising campaigns such as TV, radio, billboards, among others. Giving businesses access to these numbers through an auction system, where they have a fair chance to access such numbers, could be a major benefit for local and regional companies. These numbers can be easily integrated into existing hosted PBX systems.