Toll-Free Numbers Crunch Brings Snafus, Calls for Change
Toll-free numbers are enjoying a meteoric rise in consumption, prompting regulators to limit the amount of 888 numbers carriers can release this winter before the third toll-free block comes online in April.
While it took 29 years to use up 8 million 800 numbers, a similar inventory of 888 numbers was exhausted in only two.
Between 1967 and 1993, only 3.1 million 800 numbers were issued. But starting in 1993, demand exploded as the numbers became portable, allowing holders to take the numbers with them when they switched carriers.
Portability, the enormous increase in the number of pagers and cell phones, and greater use of toll-free numbers by consumers and small and home-based businesses worked to deplete the 888 pool at a record-breaking pace.
Today, the U.S. toll-free market represents a $12.3-billion-a-year business, according to Mountain View, Calif.-based market research firm Frost & Sullivan.
Starting April 4, toll-free numbers beginning with 877 will be offered by 140 firms approved by Database Service Management Inc., the Bellcore subsidiary that administers the numbering system.
The addition of 888 to the toll-free market in February 1996 caused several problems for businesses and consumers, many of which have yet to be resolved.
For example, businesses with established 800 numbers were flooded with wrong-number calls when their vanity numbers were released in the 888 code.
These errors proved costly, because holders of the numbers are charged on a per-minute basis for incoming calls--on top of the flat fee they pay each month for the number.
Businesses with popular 800 vanity numbers, like 1 (800) FLOWERS, argued to federal regulators that similar numbers with different toll-free prefixes confused consumers, diluting the marketing power of 800 numbers and inviting fraud by companies trying to piggyback on established brands.
“800 numbers are the crown jewel of marketing,” said Jeffrey Kagan, president of Atlanta-based consulting firm Kagan Telecom Associates. “Having control over look-alike 888 and 877 numbers is going to be crucial; it will be a big battleground.”
The confusion over similar numbers prompted businesses with 800 numbers to demand right of first refusal for the same number in the 888 block. In response, federal regulators pulled the 375,000 look-alike vanity numbers out of 888 and set them aside. The Federal Communications Commission is still deciding how to address that issue. However, all numbers in the 877 block, including corresponding vanity numbers, will be available on a first-come, first-served basis.
The depletion of the 800 pool caused a jump in companies seeking to buy or sell these numbers. This brokering is expected to increase with the introduction of 877, despite an FCC ruling last spring making this practice illegal.
But an industry trade group has called for the agency to reconsider its decision.
“The FCC outlaws the ability to buy and sell these numbers based on the argument that it reduces the resource. But it doesn’t do so, because it recycles the numbers,” said Judith Oppenheimer, president of New York-based ICB Toll-Free Consultancy, whose clients include large and small toll-free users in many industries.
“The introduction of 888 and 877 makes it more necessary to buy and sell 800 numbers,” Oppenheimer added. “For example, the Irish airliner Aer Lingus did a marketing program using 888 Irish Air, but they didn’t know that an investment firm in the Midwest had an 800 number that spelled Irish Air for years.”
After the investment company fielded hundreds of wrong numbers, it sold its 800 number to the airliner, she said.
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Regulators say they are reviewing ICB’s petition, among others. ICB has also asked the commission to reconsider a plan to change the way toll-free numbers are allocated.
Industry watchers have called for regulators to reserve the 800 block only for branding purposes, and to use subsequent blocks for things that are “completely wasteful of the brand of 800,” such as paging.
The FCC ruled against this request, saying that would allow 800 numbers greater recognition than 888 or 877. In addition, such a change would require deploying multiple toll-free codes, which would be impossible because of the administrator’s current software.
Despite the complex issues raised by the diversification of the toll-free market, industry leaders expect the addition of the 877 code to be relatively smooth.
“The awareness level is a lot higher now than it was when we rolled out 888. People know now that toll-free doesn’t necessarily begin with 800,” said John Cushman, director of toll-free services for AT&T;, who acknowledged there will still be some hurdles.
“888 is very simple,” he said, “and now 877 brings a slightly different flavor--it’s not three numbers that are the same.”
Times staff writer Jennifer Oldham can be reached at jennifer.oldham@latimes.com
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Toll-Free Fees
Toll-free calling is used today by businesses of all sizes and by consumers with personal toll-free numbers. Toll-free revenue is expected to skyrocket nearly $10 billion between 1993 and 2000:
2000 (year): 17.08 (in billions)
Source: Frost & Sullivan
