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"$^AWWWWAWAIWWfWIWWttWIWItfWtg:gWAWW,WWWWWWWWWWItttttfIfIfIfIttttttttfffWfWIWWWItttffffWWWttN\AWOVOOIWWWOtAiHAl1"S^5FuiiүFFFix5F5:iiiiiiiiiiFFxxxiØRiƘuҘF:FziFiu]u]Fiu:Fu:uiuu]RFuiii]S.SmF5FF#FFFFFFFFFFu:iiiiiҘ]]]]]R:R:R:R:uiiiiuuuuiiuiiiiuii]]]]u]]]]iiiiiuuRuRuRFRuiFu:FFF:uuuiiҘ]]]uRuRuRuRFFFuuuuҘi]]NJ5qiFiiiiii?Ei?i?:iiiFFiiuuFi?txxssxx5Tx:h4Vs1ssus"XD^AWWWWAWAIWWfWIWWRiug:gWAWW,WWWWWWWWWWuIfRfRfRfRfRfRfRfRiuuuuzzzzzzzzzzzzzN\AWOVOOIWWWOtAiHAl3z"S^8J|ppߺJJJp8J8>ppppppppppJJpСWpӡ|ߡJ>JpJp|c|cJp|>J|>|p||cWJ|pppcX1XtJ8JJ%JJJJJJJJJJ|>pppppߡcccccW>W>W>W>|pppp||||pp|pppp|ppcccc|ccccppppp||W|W|WJW|pJ|>JJJ>|||ppߡccc|W|W|W|WJJJ||||ߡpccNN8ypJppppppCJpCpC>pppJJpp||JpCt{{܇8Y=n7\{1{{|{2HLLTL\"S^2CRddCCCdq2C28dddddddddd88qqqYzoCNzoozzC8C^dCYdYdYCdd88d8ddddCN8ddddY`(`lC2CC!CCCCCCCCCCd8YYYYYYzYzYzYzYC8C8C8C8ddddddddddYdddddodYYYYYYdzYzYzYzYdddddddCdCdCCCdNCdz8zCzCzCz8dddddCCCoNoNoNoNzCzCzCdddddzYzYNF2[dCYddddd7>d<d<$YYdCCddooCYperiod of years to market this toll free number within the United States and"T"0*0*0* "  e internationally. As a result of this investment, this toll free number is well known  X4among consumers of its services.kp yOb'#]\  PCP#эAppendix "A," p. 2.k(#`  X4 e 2)X` ` Because of an error, AT&T did not request a "set aside" on behalf of ITT  e  Sheraton for the toll free number (888) 3253535 ("The Number"), the 888  e equivalent to ITT Sheraton's 800 number, pursuant to the FCC's provision for  Xv4such reservation.gvXp yO '#]\  PCP#эId. at 1.g(#`  XH4 e 3)X` ` TWC is a Responsible Organization ("RespOrg") and manages the record of The  e Number in the Service Management System ("SMS") database that is administered  X 4by Database Services Management, Inc. ("DSMI"). p yO' "" #]\  PCP#эId.; According to conversations held on January 28 and 29, 1997, between Deena Shetler, staff attorney,  xy Formal Complaints and Investigations Branch, Enforcement Division, Common Carrier Bureau, Federal  x Communications Commission, and employees of both DSMI and Lockheed IMS, DSMI's subcontractor that manages  x the Number Administration and Service Center, TWC is the RespOrg responsible for The Number and no other RespOrg has been responsible for The Number since it first became available. (#`  X 4 e 4)X` ` On February 15, 1996, AT&T first contacted TWC to discuss what it viewed as  e ma potential problem that could arise through customer confusion over usage of The  X 4Number, in light of its heavily marketed 800 equivalent.i p yO'#]\  PCP#эId. at 12.i(#`  X4 e ,5)X` ` In that and subsequent conversations with AT&T, TWC represented that it had a  e customer that had been assigned The Number and that this customer had already  e iinvested in a marketing plan for usage of The Number. TWC indicated that its  e customer might be amenable to accepting compensation in exchange for The  e ,Number and further inquired whether AT&T or ITT Sheraton would be willing to  X4absorb its costs.g( p yO'#]\  PCP#эId. at 2.g(#`  X4 e 6)X` ` TWC further represented during these conversations with AT&T that its customer  e might be willing to transfer the number in exchange for (1) the same tariffed  e service rates that ITT Sheraton paid, (2) free hotel room reservations, or (3)  X4similar inkind services.a p yO%'#]\  PCP#эId.a (#`  X|4 e 7)X` ` On July 10, 1996, Mr. Sander Y. Pomper of ITT Sheraton contacted Mr. Joseph  e Weiss of TWC to inquire about the reassignment of The Number to ITT Sheraton. "eH 0*(("  e This telephone conversation was transcribed by Ms. Darla Dudley, an employee  X4of ITT Sheraton with the consent of Mr. Weiss.ip yOb'#]\  PCP#эId. at 34.i (#`  X4 e 8)X` ` In the course of the July 10, 1996, conversation, TWC intimated to ITT Sheraton  e that (1) TWC represented the interests of its customer in negotiating an agreement  e afor the transfer for The Number; (2) TWC's customer was interested in  e exchanging its right to use The Number for some amount of cash or other  e valuable services; (3) TWC's customer viewed the interest expressed in The  e Number "as a possible 'unique marketing opportunity'"; and (4) the sale of toll  X14free numbers was not a violation of the Commission's Rules. 1Xp yO: ' " #]\  PCP#эId.; See transcript of conversation between Sander Y. Pomper and Joseph Weiss of July 10, 1996, transcribed by Darla Dudley and attached hereto as Appendix "B."(#`  X 4 e ,9)X` ` Following the initial conversation, TWC proceeded to contact Mr. Pomper of ITT  e Sheraton to discuss possible exchanges of valuable services for the telephone  e number. Mr. Pomper initiated correspondence with Mr. Weiss of TWC that  e evidences discussions of the possible exchange of valuable services for The  X 4Number.  p yO' " #]\  PCP#эSee Letter from Sander Y. Pomper to Joseph Weiss of December 16, 1996, attached hereto as Appendix "C." TWC's response confirms that such discussions took place.  p yO`' "" #]\  PCP#эSee Letter from Joseph J. Weiss to Sander Y. Pomper of December 30, 1996, attached hereto as Appendix "D." (#`  Xy4l DISCUSSION ă  e 5` ` The Commission has the authority to establish policies, rules and regulations to  X44 "govern the distribution of telephone numbers in the United States. 4` p yOE'#]\  PCP#э47 U.S.C.  154(i), 154(j), 251(e)(1). RespOrgs reserve toll  "Ffree telephone numbers for subscribers and are subject to Commission orders and  "regulations designed to ensure the efficient, fair, and orderly allocation of toll free  X4 "numbers. X p yO!' "I #]\  PCP#эToll Free Service Access Codes, Second Report and Order, CC Docket No. 95155, paras. 18 and 22 (April  yOX"' x 11, 1997) ("Second Report and Order"); Toll Free Service Access Codes, CC Docket No. 95155, Notice of Proposed  yO #'Rule Making, 10 FCC Rcd 13692, 13694 (1995) ("NPRM").  The Commission has determined, as a matter of policy, that, in order to  "manage the dissemination of the limited supply of toll free telephone numbers, it is in  "public interest to preclude the establishment of ownership interests in toll free telephone  X4 "numbers.p yOk''#]\  PCP#эSecond Report and Order, para. 32; NPRM, 10 FCC Rcd at 13702. At the same time, the Commission recognized that certain numbers have a"0*(("  X4 "value that result from, inter alia, either numerical characteristics that make the number  "simple to remember or marketing efforts that make the number widely recognizable, or both.p yOK' " #]\  PCP#эToll Free Service Access Codes, Report and Order, 11 FCC Rcd 2496, 2497 (1996) ("First Report and  yO'Order"); NPRM, 10 FCC Rcd at 13702. These numbers are known as "Vanity Numbers", and it is not unusual for businesses to invest significant resources in the marketing of Vanity Number(s).  e ` ` The Commission's policies regarding the warehousing, hoarding, or brokering of  "toll free numbers were the subject of a Commission rule making proceeding at the time  X_4 "the actions in question occurred.{_ p yO0 '#]\  PCP#эNPRM, 10 FCC Rcd 13692.{ In that proceeding, the Commission expressed its long "standing policy against the establishment of ownership interests in and the warehousing,  X14hoarding, or brokering of toll free telephone numbers and stated:  e iXX` ` The Commission has characterized telephone numbers as a public resource  e i$that is not the property of the carriers. The Commission has further stated  e i-that carriers "do not 'own' codes or numbers, but rather administer their  e idistribution for the efficient operation of the public switched telephone  X 4network."X p yO' "< #]\  PCP#эId. at 13702 (citing Administration of the North American Numbering Plan, Report and Order, 11 FCC Rcd  yO' x 2588 (1995); The Need to Promote Competition and Efficient Use of Spectrum for Radio Common Carrier Service, Memorandum Opinion and Order, 59 RR 2d 1275, 1284 (1986)). `  e ` ` Further, the Commission tentatively concluded "that warehousing of toll free  " numbers by communications service providers subject to Title II of the Communications  XK4Act is an unreasonable practice, and, thus, inconsistent with the public interest."kKp yO'#]\  PCP#эId. at 13701.k  X4 e ` ` Additionally the Commission indicated in the First Report and Order that it relied  X4 "on the reservation procedures set out in the Industry Guidelines.X` p yO' " #]\  PCP#эFirst Report and Order, 11 FCC Rcd at 2501. This Report and Order limited itself to resolution of issues  x necessary to the imminent deployment of the 888 toll free service access code, and issues not addressed in this Report and Order remained outstanding.  The Industry Guidelines for Toll Free Number Administration provide:  e iX` ` Toll Free numbers are not to be treated as commodities which can be  e ibought or sold, and no individual or entity is granted a proprietary interest  e iin any Toll Free number assigned. Resp Orgs [sic] and Toll Free Service  e iProviders are prohibited from selling, brokering, bartering, or releasing for a fee (or other consideration) any Toll Free number. ` "e 0*(("Ԍ e iԙX` ` Reserving, Assigning, or activating (Working) Toll Free numbers by Resp  e iOrgs [sic], Toll Free Service Providers, or Customers for the primary  e ipurpose of selling, brokering, bartering, or releasing for a fee (or other  X4consideration) that Toll Free number is prohibited.p yO4'#]\  PCP#эIndustry Guidelines for Toll Free Number Administration ("Industry Guidelines"), Section 2.2.1. ` ` ` . . .  e iaX` ` Reservation, Assignment or Activation (Working) of Toll Free Numbers  e imay only be made by a Resp Org [sic] based upon negotiations with a  e ispecific prospective Customer. When the Resp Org [sic] learns of the  e iCustomer's decision not to utilize the Reserved or Assigned Toll Free  e inumber, the Resp Org [sic] must release the Toll Free number back to  e iGSpare status and the pool of numbers available for assignment within 48  X 4hours of Customer notification. Xp yO'#]\  PCP#эIndustry Guidelines, Section 2.2.5. `  X 4 e ,` ` On April 11, 1997, the Commission released the Second Report and Order, which  "#set forth the Commission's rules regarding the warehousing and brokering of toll free  Xy4numbers. The Second Report and Order states:  e iX` ` We conclude that warehousing, which is the practice whereby RespOrgs,  e i:either directly or through an affiliate, reserve toll free numbers from the  e iSMS database without having identified subscribers for whom they are  e ireserving those numbers, is an unreasonable practice under [section] 201(b)  e iand also is inconsistent with our obligation under [section] 251(e)(1) to  X4ensure that numbers are made available on an equitable basis.p yOq'#]\  PCP#эSecond Report and Order, para. 22. ` It further states:  e iX` ` [The Commission] has concluded that hoarding, defined as the acquisition  e i{of more toll free numbers than one intends to use for the provision of toll  e i>free service, as well as the sale of a toll free number by a private entity for  e i1a fee, is contrary to the public interest in the conservation of the scarce toll  e ifree number resource and contrary to the [Commission's] responsibility to  X 4promote the orderly use and allocation of toll free numbers.L xp yO2%' "_ #]\  PCP#эId., para. 39. The order directed that this quote is to be included in the SMS tariff and in the LECs' toll free database access tariffs for the specific purpose of informing RespOrgs of the Commission's ruling on this issue.L ` "0*(("Ԍ e \` ` TWC's alleged actions at issue in this letter occurred prior to the release of the  X4 "Second Report and Order.p yOb'#]\  PCP#эId.; Report and Order; Appendix "A." At the time the actions in question occurred, however, TWC,  "Was a RespOrg, was under the obligation to comply with Commission rules and policies  "in the conduct of its business. The Commission had established policies concerning the  "management of toll free numbers at the time of the alleged actions. TWC managed the  "records of The Number in the SMS Database that is administered by DSMI. If TWC  "qmanaged The Number on behalf of an existing customer, it was under no obligation to  "reassign The Number to ITT Sheraton upon either ITT Sheraton's or AT&T's request.  "'TWC was obligated, however, in its capacity as a RespOrg, to comply with Commission  "[policies and abstain from attempting to establish an ownership interest in The Number by  X 4 "0warehousing, selling, bartering, or brokering it.* Xp yO# ' "+ #]\  PCP#э47 U.S.C.  154(i), 154(j), 251(e)(1); NPRM, 10 FCC Rcd at 13702; First Report and Order, 11 FCC Rcd  yO 'at 2501; Industry Guidelines, Sections 2.2.1, 2.2.5.* TWC was obligated to hold toll free  X 4 "numbers only for existing customers that intended to use them. The evidence presented  "qto the Commission by AT&T supports the allegations that TWC attempted to sell The  "Number, either on behalf of an unidentified customer or itself, thereby attempting to  "establish an ownership interest in the Number in derogation of its obligations as a RespOrg.  e ` ` We find that TWC's actions in attempting to negotiate the transfer of a toll free  "Wnumber for profit were contrary to the longstanding Commission policy prohibiting the  "establishment of ownership interests in toll free numbers. Accordingly, pursuant to  "Sections 4(i), 4(j) and 251(e)(1) of the Act, TWC is hereby strongly admonished for its actions in the manner and on the date(s) described above.  e ` ` We expect TWC to take appropriate corrective measures to cease warehousing,  "qhoarding, or brokering either The Number or any other toll free numbers. We caution  X4 "TWC that, in accordance with the Commission's findings in the Second Report and Order,  "further actions of the nature described herein may result in: (1) a finding that TWC has  "violated Commission rules, which may lead to a forfeiture penalty under Section 503(b)  "of the Act; (2) a limitation of TWC's allocation of toll free numbers or decertification of  "TWC as a RespOrg under Sections 251(e)(1) or 4(i) of the Act; and/or (3) a referral of  "the matter to the Department of Justice to determine whether a fine, imprisonment or both  X74 "Aare warranted under Sections 501 or 502 of the Act.7p yO"'#]\  PCP#эSecond Report and Order, paras. 29, 42. Further, if TWC falsely indicates  "that it has identified subscribers for particular numbers, it may be liable for false  X 4statements under Title 18 of the United States Code. @p yO%'#]\  PCP#э18 U.S.C.  1001; Second Report and Order, at para. 29. "0*(("Ԍ e B ` ` This action is taken pursuant to Sections 4(i), 4(j), and 251(e)(1) of the Act, 47  "U.S.C.  4(i), 4 (j), 251(e)(1), and the authority delegated by Sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R.  0.91, 0.291. ` ` hhCqFEDERAL COMMUNICATIONS COMMISSION  h qJohn B. Muleta qChief, Enforcement Division qCommon Carrier Bureau  h