Monday, July 11, 2005
Numbers Game
There's big money in owning mnemonic 1-800 numbers, but the FCC stands in the way. For now
If you call 1-800-Dumpster, 1-800-Hardwood or 1-800-GetACar, you'll make Scott Richards a little richer. Richards doesn't collect trash, lay floors or hustle cars. Rather, he controls these and several other toll-free "vanity numbers," which his firm, Dial 800 (1-800-Dial800) of Beverly Hills, Calif., licenses out to Waste Management, flooring firms and car dealers for $99 a month and 11 cents per minute per call.
By law, Richards and a cottage industry of entrepreneurs like him aren't supposed to make money from toll-free numbers. The phone numbers belong to the public and can't be bought, sold, brokered or otherwise profited from, according to a 1997 edict of the Federal Communications Commission. But Richards and others toe the line of the law by licensing out their numbers, rather than selling them, and the FCC looks the other way.
Now with a new, free-market regime at the FCC, lead by recently appointed Chairman Kevin Martin, there's hope toll-free numbers and the $11 billion they annually pile up in calling fees will be deregulated. That would mean that individuals will be able to own the numbers outright and sell or lease them as they wish. Mitchell Knisbacher, president of 800response of Burlington, Vt., says the industry trade group he founded plans to petition the FCC to open the numbers to public ownership.
"We should be able to go to people and say, ‘You're a guy in Arizona, and your number has little value to you. We'll buy it from you for $10,000 or $50,000,'" says Knisbacher, who controls such catchy numbers as 1-800-NewCash, 1-800-NewHonda and 1-800-NewHouse. "He'll have his money, he'll pay taxes to the IRS, the government will make a good amount of money and we'll take the number to people who can use it."
Nearly all of the 800 numbers with mnemonic value have long been assigned to individuals or corporations by phone companies. Folks like Richards and Knisbacher grab numbers that apply to regional businesses--1-800-BankLoan for Richards, for example, or 1-800-NewRoof for Knisbacher--and then peddle the numbers town by town and according to area code. Knisbacher has one number leased in 50 separate areas.
"The FCC has to wake up and realize there's a significant economic benefit to having an 800 number for a business," but no easy way of securing the numbers, contends Richards.
Opponents such as the Association of National Advertisers complain companies would be held up for "unreasonably high" price tags by people sitting on valuable numbers. The FCC similarly worries about speculators warehousing numbers.
But Richards argues for an auction system that awards the numbers to the highest bidders: "In an ideal world, you would have an Ebay of 800 numbers. It would give every business an opportunity to be a 1-800-Flowers."
If you call 1-800-Dumpster, 1-800-Hardwood or 1-800-GetACar, you'll make Scott Richards a little richer. Richards doesn't collect trash, lay floors or hustle cars. Rather, he controls these and several other toll-free "vanity numbers," which his firm, Dial 800 (1-800-Dial800) of Beverly Hills, Calif., licenses out to Waste Management, flooring firms and car dealers for $99 a month and 11 cents per minute per call.
By law, Richards and a cottage industry of entrepreneurs like him aren't supposed to make money from toll-free numbers. The phone numbers belong to the public and can't be bought, sold, brokered or otherwise profited from, according to a 1997 edict of the Federal Communications Commission. But Richards and others toe the line of the law by licensing out their numbers, rather than selling them, and the FCC looks the other way.
Now with a new, free-market regime at the FCC, lead by recently appointed Chairman Kevin Martin, there's hope toll-free numbers and the $11 billion they annually pile up in calling fees will be deregulated. That would mean that individuals will be able to own the numbers outright and sell or lease them as they wish. Mitchell Knisbacher, president of 800response of Burlington, Vt., says the industry trade group he founded plans to petition the FCC to open the numbers to public ownership.
"We should be able to go to people and say, ‘You're a guy in Arizona, and your number has little value to you. We'll buy it from you for $10,000 or $50,000,'" says Knisbacher, who controls such catchy numbers as 1-800-NewCash, 1-800-NewHonda and 1-800-NewHouse. "He'll have his money, he'll pay taxes to the IRS, the government will make a good amount of money and we'll take the number to people who can use it."
Nearly all of the 800 numbers with mnemonic value have long been assigned to individuals or corporations by phone companies. Folks like Richards and Knisbacher grab numbers that apply to regional businesses--1-800-BankLoan for Richards, for example, or 1-800-NewRoof for Knisbacher--and then peddle the numbers town by town and according to area code. Knisbacher has one number leased in 50 separate areas.
"The FCC has to wake up and realize there's a significant economic benefit to having an 800 number for a business," but no easy way of securing the numbers, contends Richards.
Opponents such as the Association of National Advertisers complain companies would be held up for "unreasonably high" price tags by people sitting on valuable numbers. The FCC similarly worries about speculators warehousing numbers.
But Richards argues for an auction system that awards the numbers to the highest bidders: "In an ideal world, you would have an Ebay of 800 numbers. It would give every business an opportunity to be a 1-800-Flowers."
