Report No. CC 98-7 COMMON CARRIER ACTION     March 31, 1998
   
  FCC ADOPTS DECISION ON ASSIGNMENT OF TOLL FREE VANITY
                         NUMBERS
                  (CC Docket No. 95-155)
   
        The Commission today issued an Order stating that vanity numbers in the new
   877 toll free code and future toll free codes shall be assigned on a first-come, first-served
   basis as each code is deployed.  Subscribers of certain vanity numbers in the 800 toll free
   code, however, are granted the right of first refusal for a limited amount of
   corresponding vanity numbers in the 888 code that were set aside pending the
   Commission's decision.  The Commission said today's Order will further its goals of
   promoting the efficient, fair, and orderly allocation of toll free numbers.
   
        A vanity number is a telephone number for which the letters associated with the
   number's digits on the telephone spell a name or word of value to the subscriber.  Since
   the 800 toll free code was introduced in 1967, vanity numbers have been assigned on a
   first-come, first-served basis.  As the supply of 800 numbers dwindled and deployment of
   the second toll free code, 888, approached, holders of 800 vanity numbers expressed
   interest in obtaining the corresponding vanity number in the 888 code.  Rather than delay
   deployment of the 888 code, the Common Carrier Bureau ordered the numbers at issue
   to be set aside until the Commission resolved how they should be assigned.  The 888 toll
   free code was introduced in 1996, with 374,199 of the approximately 8 million numbers
   marked set aside and unavailable.  The third toll free code, 877, is scheduled to be
   introduced on April 5, 1998.
   
        In today's Order, the Commission concluded that assigning vanity numbers in 877
   and future toll free codes on a first-come, first-served basis will ensure fair allocation of
   numbers by granting no class of subscribers a preference.  A first-come, first-served
   process is also the most efficient method for assigning toll free numbers because it is the
   most easily administered and least expensive way to allocate numbers.  In addition, a
   first-come, first-served process ensures an orderly allocation of toll free numbers because
   it avoids disputes among subscribers over who is entitled to a particular number.
   
        The Commission concluded that if incumbent subscribers were granted the right
   of first refusal for vanity numbers every time a new toll free code is deployed, new
   subscribers would be denied the opportunity to obtain certain desirable numbers. 
   Moreover, the seven digits in a vanity number may spell a variety of words that may be
   of use to a variety of businesses, and a right of first refusal could prevent newcomers to
   the market from using letter combinations that would otherwise be available.  A right of
   first refusal could also accelerate depletion of numbers as incumbent subscribers would
   likely request corresponding vanity numbers as each toll free code is deployed.  In
   addition, the Commission noted that numbers are a public resource in which subscribers
   do not acquire property rights.
   
        The Commission nevertheless found that a right of first refusal is the most
   appropriate allocation method for the 888 vanity numbers initially set aside.  Although
   888 numbers are now in widespread use, the Commission expressed concern that
   consumers are still adjusting to the environment of multiple toll free codes.  As a result,
   the problems of customer confusion, misdialing, and new toll free subscribers benefitting
   from the marketing efforts of 800 subscribers with corresponding vanity numbers are
   likely to be most serious in the case of the first post-800 toll free code.  As subsequent
   toll free codes are introduced, there will be an increased consumer awareness and
   instances of confusion and misdialing will be reduced.  The Commission noted that
   providing this limited right of first refusal would not involve the inefficiencies or
   administrative burdens that would result if a right of first refusal was extended to all toll
   free codes.
   
        Noting several disadvantages associated with such a requirement, the
   Commission declined to impose a fee in connection with the right of first refusal for the
   set aside 888 numbers.   For example, the Commission found that the cost and
   administrative effort required to implement such a fee plan would outweigh any benefits
   a fee may provide, and such a plan may unfairly prejudice small businesses.  
        Set aside 888 vanity numbers will be available for assignment 90 days after 877 is
   deployed.  If the subscriber to the corresponding 800 vanity number refrains from
   subscribing to the set aside 888 number, the 888 number will be made available on a
   first-come, first-served basis.  
   
        Action by the Commission March 27, 1998, by Fourth Report and Order and
   Memorandum Opinion and Order (FCC 98-48). Chairman Kennard, Commissioners
   Ness, Powell, and Tristani, with Commissioner Furchtgott-Roth dissenting in part and
   issuing a separate statement.
   
                          -FCC-
                             
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