Auction of Toll Free Numbers in the 833 Code; Comment Sought on Competitive Bidding Procedures, 24424-24433 [2019-11049]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 84, Number 102 (Tuesday, May 28, 2019)]
[Proposed Rules]
[Pages 24424-24433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11049]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 52

[AU Docket No. 19-101; WC Docket No. 17-192; CC Docket No. 95-155; FCC 
19-41]


Auction of Toll Free Numbers in the 833 Code; Comment Sought on 
Competitive Bidding Procedures

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; proposed auction procedures.

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SUMMARY: In this document, the Commission proposes and seeks comment on 
competitive bidding procedures to be used for the auction of certain 
toll free numbers in the 833 code (833 Auction).

DATES: Comments are due on or before June 3, 2019, and reply comments 
are due on or before June 10, 2019.

ADDRESSES: Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS) or by filing paper copies. Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (May 1, 
1998). All filings in response to the 833 Auction Comment Public Notice 
must refer to AU Docket No. 19-101; WC Docket No. 17-192; CC Docket No. 
95-155. The Commission strongly encourages interested parties to file 
comments electronically and requests that an additional copy of all 
comments and reply comments be submitted electronically to the 
following email address: [email protected].
    Electronic Filers: Comments may be filed electronically using the 
internet by accessing the ECFS: https://www.fcc.gov/ecfs/. Filers 
should follow the instructions provided on the website for submitting 
comments. In completing the transmittal screen, filers should include 
their full name, U.S. Postal Service mailing address, and the 
applicable docket number, AU Docket No. 19-101; WC Docket No. 17-192; 
CC Docket No. 95-155.
    Paper Filers: Parties who choose to file by paper must file an 
original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    All hand-delivered or messenger-delivered paper filings for the 
Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    Commercial overnight mail (other than U.S. Postal Service Express 
Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis 
Junction, MD 20701.
    U.S. Postal Service first-class, Express, and Priority mail must be 
addressed to 445 12th Street SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: For auction legal questions, Scott 
Mackoul in the Auctions Division of the Office of Economics and 
Analytics at (202) 418-0660. For toll free number questions, Matthew 
Collins in the Wireline Competition Bureau's Competition Policy 
Division at (202) 418-7141.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice (833 
Auction Comment Public Notice), AU Docket No. 19-101, WC Docket No. 17-
192; CC Docket No. 95-155, FCC 19-41, adopted on May 9, 2019 and 
released on May 10, 2019. The complete text of the 833 Auction Comment 
Public Notice is available for public inspection and copying from 8:00 
a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 
8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information 
Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554. The 
complete text is also available on the Commission's website at https://www.fcc.gov/wireline-competition/competition-policy-division/numbering-resources/833-toll-free-number-auction or by using the search function 
for AU Docket No. 19-101 on the Commission's ECFS web page at 
www.fcc.gov/ecfs/. Alternative formats are available to persons with 
disabilities by sending an email to [email protected] or by calling the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY). Pursuant to sections 1.415 and 1.419 of the 
Commission's rules, 47 CFR 1.415, 1.419, interested parties may file 
comments and reply comments on or before the dates indicated in the 833 
Auction Comment Public Notice in AU Docket No. 19-101.

I. Introduction

    1. With the 833 Auction Comment Public Notice, the Commission takes 
another step toward modernizing the way it distributes toll free 
numbers. Specifically, the Commission initiates the pre-bidding process 
for the auction of certain toll free numbers in the 833 code (833 
Auction). The 833 Auction will make available over 17,000 numbers in 
the 833 code for which there have been multiple competing requests. 
This auction will serve as an experiment in using competitive bidding 
as a way to assign toll free numbers equitably and efficiently.

[[Page 24425]]

II. Background

    2. While toll free numbers have been assigned on a first-come, 
first serve basis traditionally, the Commission modified its toll free 
assignment rule last year to provide greater flexibility and permit 
alternative approaches to assigning numbers. Specifically, in the Toll 
Free Assignment Modernization Order, 83 FR 53377, October 23, 2018, the 
Commission added competitive bidding as a method to assign toll free 
numbers and, as an experiment in using this approach, established the 
833 Auction to assign numbers that were requested by two or more 
Responsible Organizations (``RespOrgs'') during the 833 pre-code 
opening process. The Commission also opened participation in the 833 
Auction to not only RespOrgs but also potential subscribers who may 
wish to participate directly.
    3. In establishing this experiment in the Toll Free Assignment 
Modernization Order, the Commission set out the general framework for 
the 833 Auction and designated Somos, Inc., the Toll Free Numbering 
Administrator, as the auctioneer. The Toll Free Assignment 
Modernization Order also called for a pre-bidding process during which 
the Commission would seek comment on detailed auction procedures, as is 
typical in Commission auctions. With the 833 Auction Comment Public 
Notice, the Commission initiates the pre-bidding process.
    4. After receiving comments, the Commission will release a public 
notice establishing the final application and bidding procedures for 
the 833 Auction (833 Auction Procedures Public Notice), including the 
dates and deadlines by which potential bidders must meet the 
requirements necessary to qualify to bid. Somos will then be required 
to implement the established procedures to conduct the auction, 
including: Accepting applications to participate in the bidding; 
accepting upfront payments; determining which applicants are qualified 
to bid; accepting and processing the bids; announcing the winning 
bidders; and accepting final payments. After the 833 Auction is 
complete, the Commission will use the information from the auction to 
determine how to proceed with assigning future toll free numbers.

III. 833 Auction Overview

A. Numbers To Be Auctioned

    5. In the 833 pre-code opening process, Somos identified 17,638 
numbers as mutually exclusive (i.e., requested by two or more 
RespOrgs). A complete list of these 17,638 numbers is available at 
www.somos.auction.com. These numbers will be offered in the 833 
Auction, with one exception. Specifically, the Commission in the Toll 
Free Assignment Modernization Order allowed government entities and 
non-profit health and safety organizations the ability to file a 
petition to set aside a previously identified mutually exclusive 833 
number. On April 16, 2019, the Wireline Competition Bureau released a 
Public Notice seeking petitions to set aside toll free numbers for 
public health and safety purposes. If a petition is granted with 
respect to a particular number, that number will be assigned to the 
petitioner and unavailable in the 833 Auction.

B. Overview of Participation in the 833 Auction

    6. Because the Commission recognizes that many parties interested 
in acquiring one or more of the identified 833 toll free numbers may 
not be familiar with participating in its auctions, the Commission 
provides an overview of the process.
    7. In addition to establishing the final auction procedures for the 
833 Auction, the 833 Auction Procedures Public Notice will also 
announce the dates during which interested parties may submit their 
auction applications online to Somos. In the auction application, an 
interested party will be required to provide certain information, make 
certifications, and select the numbers from the available pool on which 
they are interested in bidding. Once Somos reviews the applications, it 
will announce the list of complete and incomplete applications. For 
applications deemed incomplete, applicants will be afforded a second 
filing (i.e., resubmission) window to make minor modifications to their 
auction applications. Applications to which major modifications are 
made after the deadline for submitting applications will be denied. 
Major modifications include, but are not limited to: Any changes in the 
ownership of the applicant that constitute an assignment or change of 
control of the applicant; changes to any certifications required in the 
application; or changes to the toll free numbers selected in the 
application or to the parties for which an applicant is bidding.
    8. All interested parties will also need to submit an upfront 
payment, the amount of which will determine the number of 833 numbers 
they can bid on during the auction. Following the resubmission filing 
window and the submission of upfront payments, Somos will announce the 
list of qualified bidders (based on the list of complete applications 
and sufficient upfront payments).
    9. The 833 Auction will consist of a single round of bidding. 
Bidders will upload their bid information online through the Somos 
bidding system. After completion of the single round, Somos will 
announce the winning bidders for each number and establish the deadline 
for making final payments. Any winning bidder that is not a RespOrg 
must then work with a RespOrg after the auction to reserve the number 
in the Service Management System Database (Toll Free Database) in 
accordance with the Commission's rules.

C. Further Educational Opportunities for Potential Bidders

    10. Because the Commission expects that the 833 Auction will 
attract parties that have never participated in a Commission auction, 
it directs Somos to provide additional information on the application 
and bidding systems. This information should include, but is not 
limited to, demonstrations and other educational and hands-on practice 
opportunities that potential bidders can use to familiarize themselves 
with the application and bidding systems. For example, for recent 
spectrum license and universal service support auctions, the Commission 
has released an online tutorial that serves to help applicants 
understand auction application filing procedures. Are there any other 
specific types of educational and hands-on practice opportunities that 
potential bidders in this context would find helpful?

IV. Proposed Implementation OF 833 Auction Principles

    11. In the Toll Free Assignment Modernization Order, the Commission 
established certain principles to (1) promote the transparency and 
efficiency of the 833 Auction, and (2) reduce the instances of 
conflicts of interest and the likelihood of anticompetitive strategic 
behavior by participants. The Commission seeks comment on specific 
procedures to implement these principles.

A. Participation Through Single Applicant and Application

    12. In the Toll Free Assignment Modernization Order, the Commission 
decided it would allow potential subscribers the option to participate 
directly in the 833 Auction or indirectly through a RespOrg. The 
Commission also required that potential subscribers participate in the 
833 Auction through only a single auction applicant (i.e., either on 
its own behalf or through a

[[Page 24426]]

RespOrg). The Commission further held that a potential subscriber may 
not engage multiple applicants to bid on its behalf.
    13. To enforce these mandates and to help prevent possible 
collusion, the Commission proposes that a potential subscriber can 
participate in the 833 Auction either (1) through a RespOrg that will 
bid on all the numbers in which the subscriber is interested in 
acquiring, or (2) by submitting its own application and bidding for all 
the numbers in which it is interested. Thus, a potential subscriber 
could not selectively choose to be represented by a RespOrg for some 
numbers and submit an application on its own for other numbers. This 
proposed application restriction is consistent with the requirement 
that a potential subscriber may participate through only a single 
auction applicant and is necessary to prevent collusion among 
applicants. Additionally, the Commission proposes that the auction 
application require that each applicant certify that (1) if it is 
bidding on its own behalf, it is also not participating in the auction 
through another entity, and/or (2) if it is bidding on behalf of 
potential subscriber(s) that it is not aware that the potential 
subscriber(s) are participating through another applicant. The 
Commission seeks comment on these proposals.
    14. In the Toll Free Assignment Modernization Order, the Commission 
also prohibited a single party, or multiple parties with a controlling 
interest in common, from becoming qualified to bid in the 833 Auction 
based on multiple applications. Based on that restriction, the 
Commission proposes to require an applicant certify that it, or any 
commonly-controlled entity, is not submitting multiple applications in 
the 833 Auction.
    15. The Toll Free Assignment Modernization Order also stated that, 
to define parties with common controlling interests in the pre-auction 
process, the Commission anticipates using definitions adopted for 
similar purposes in its spectrum auctions. The Commission believes this 
approach has the benefit of ample precedent and, therefore, it proposes 
to define a ``controlling interest'' for purposes of identifying 
commonly controlled entities in the 833 Auction as an individual or 
entity with positive or negative de jure or de facto control of the 
applicant. De jure control includes holding 50 percent or more of the 
voting stock of a corporation or holding a general partnership interest 
in a partnership. Ownership interests that are held indirectly by any 
party through one or more intervening corporations may be determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain and application of the relevant 
attribution benchmark to the resulting product, except that if the 
ownership percentage for an interest in any link in the chain meets or 
exceeds 50 percent or represents actual control, it may be treated as 
if it were a 100 percent interest. De facto control is determined on a 
case-by-case basis. Examples of de facto control include constituting 
or appointing 50 percent or more of the board of directors or 
management committee; having authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
entity; or playing an integral role in management decisions.
    16. The Commission also seeks comment on a presumption that spouses 
own or control or have the power to control interests owned or 
controlled by either of them and a presumption that immediate family 
members own or control or have the power to control interests owned or 
controlled by other immediate family members. In this context 
``immediate family member'' would mean father, mother, husband, wife, 
son, daughter, brother, sister, father- or mother-in-law, son- or 
daughter-in-law, brother- or sister-in-law, step-father or -mother, 
step-brother or -sister, step-son or -daughter, half brother or sister. 
The Commission proposes to place the burden on applicants to 
sufficiently demonstrate that spouses or family members should not be 
treated as having an identity of interest such that it creates common 
control. The Commission proposes that where the presumption has not 
been adequately rebutted, such spouses and family members will be 
subject to the prohibition on submission of multiple auction 
applications by commonly controlled entities. The Commission seeks 
comment on these proposals.
    17. In the Toll Free Assignment Modernization Order, the Commission 
indicated that any 833 Auction applicants that have overlapping non-
controlling interests must take steps to prevent communicating bid 
information. Specifically, the Commission required applicants with 
overlapping non-controlling interests to certify they have established 
internal controls to preclude any person acting on behalf of an 
applicant from possessing information about the bids or bidding 
strategies of more than one applicant, or communicating such 
information to another person acting on behalf of and possessing such 
information regarding another applicant. Thus, the Commission plans to 
include such a certification in the auction application.

B. Prohibition on Certain Communications

    18. In the Toll Free Assignment Modernization Order, the Commission 
stated that, for the 833 Auction, there should be a prohibition on 
certain communications similar to the prohibition that applies in the 
Commission's spectrum license and universal service support auctions. 
Specifically, in those auctions, applicants are prohibited from 
communicating certain auction-related information to other applicants 
beginning on the auction application filing deadline and concluding 
upon a specific post-auction deadline for winning bidders (e.g., the 
down payment deadline or deadline to file long-form applications). This 
prohibition on certain communications is intended to reinforce existing 
antitrust laws, facilitate detection of collusive conduct, and deter 
anticompetitive behavior.
    19. The Commission proposes that each applicant in the 833 Auction 
will be prohibited from cooperating or collaborating with any other 
applicant with respect to its own, or one another's, or any other 
competing applicant's bids or bidding strategies. Further, an applicant 
will be prohibited from communicating, with any other applicant in any 
manner, the substance of its own, or one another's, or any other 
competing applicant's bids or bidding strategies (including with 
respect to the post-auction market for toll free numbers). The proposed 
prohibition will begin at the deadline for submitting auction 
applications and will end at the post-auction deadline for winning 
bidders to submit their final payments (which will be announced by 
Somos after bidding concludes). The proposed prohibition will not apply 
to all communications between or among applicants; it would apply only 
to any communications conveying, in whole or part, directly or 
indirectly, the applicant's or a competing applicant's bids or bidding 
strategy (including with respect to the post-auction market for toll 
free numbers). The Commission seeks comment on these proposals.
    20. Moreover, as the Commission does in spectrum license and 
universal service support auctions, it proposes to define ``applicant'' 
broadly for purposes of this prohibition. The Commission proposes that 
``applicant'' for purposes of the prohibition on certain communications 
for the 833 Auction includes: All controlling interests in the

[[Page 24427]]

entity submitting the auction application; all holders of partnership 
and other ownership interests and any stock interest amounting to 10% 
or more of the entity, or outstanding stock, or outstanding voting 
stock of the entity submitting the auction application; all officers 
and directors of that entity; and any entity listed as a potential 
subscriber on whose behalf the entity submitting the auction 
application will be bidding. The Commission seeks comment on this 
proposal.
    21. Finally, to implement the prohibition of certain 
communications, the Commission proposes to require an applicant that 
makes or receives a prohibited communication to report such 
communication to the Commission and Somos staff immediately, and in any 
case no later than five business days after the communication occurs. 
The Commission also proposes to rely to the extent appropriate on past 
precedent and guidance regarding its rules on prohibited communications 
in connection with its spectrum auctions. The Commission seeks comment 
on these proposals.

C. Restrictions on Agreements

1. Agreements Among Applicants
    22. The Commission proposes to prohibit certain agreements among 
applicants (whether the applicants are RespOrgs or potential 
subscribers) in the 833 Auction. The prohibition would apply to any 
agreements, arrangements, or understandings of any kind relating to the 
toll free numbers being auctioned to which the applicant, or any party 
that controls or is controlled by the applicant, is a party. This 
includes any agreements that address or communicate directly or 
indirectly bids (including specific prices), bidding strategies 
(including the specific numbers on which to bid or not to bid), or the 
post-auction market for toll free numbers. Similar to the Commission's 
proposed prohibition on certain communications, it proposes to define 
``applicant'' for these purposes broadly. The Commission seeks comment 
on these proposals.
    23. This proposed prohibition would not apply to agreements 
unrelated to the toll free numbers being offered in the 833 Auction. 
Business discussions and negotiations that are unrelated to bidding in 
the 833 Auction and that do not convey information about the numbers 
being auctioned or bidding strategies would not be prohibited. 
Moreover, not all auction-related information would be covered by the 
prohibition. For example, communicating merely whether a party has or 
has not applied to participate in the 833 Auction would not violate the 
proposed rule. In contrast, communicating how a party will participate, 
including specific numbers or bid amounts, would convey bid or bidding 
strategies and would be prohibited under the proposed rule.
2. Agreements Among RespOrgs
    24. Given RespOrgs' dominant position in the toll free number 
market, the Commission proposes to prohibit certain auction-related 
agreements among RespOrgs even where only one of the RespOrgs is an 
applicant in the 833 Auction. Thus, an applicant RespOrg would be 
prohibited from having an agreement related to the toll free numbers 
being offered in the 833 Auction with a non-applicant RespOrg. Similar 
to the proposed prohibition on agreements among applicants, this 
proposed prohibition between applicant RespOrgs and non-applicant 
RespOrgs would not apply to agreements unrelated to the toll free 
numbers being offered in the 833 Auction. Thus, business discussions 
and negotiations that are unrelated to bidding in the 833 Auction and 
that do not convey information about the numbers being auctioned or 
bidding strategies would not be prohibited.
    25. This proposed prohibition would not apply to RespOrgs that are 
commonly controlled. Commonly-controlled entities are those in which 
the same individual or entity either directly or indirectly holds a 
controlling interest (as determined by positive or negative de jure or 
de facto control). When RespOrgs share a common officer or director or 
control, the Commission presumes that bids and bid strategies will be 
communicated. Moreover, the Toll Free Assignment Modernization Order 
stated that commonly controlled RespOrgs cannot submit multiple 
applications to participate in the 833 Auction. Instead, the commonly 
controlled RespOrgs would need to choose one of the entities to be the 
applicant and disclose the existence of the other commonly controlled 
RespOrgs in the application. The Commission seeks comment on these 
proposals.
3. Agreements Between RespOrgs and Potential Subscribers
    26. The Toll Free Assignment Modernization Order allowed potential 
subscribers to participate directly in the 833 Auction or indirectly 
through a RespOrg. Given the unique position of RespOrgs participating 
on their own behalf or bidding on behalf of other entities, the 
Commission proposes to require any applicant RespOrg that bids for a 
potential subscriber to acquire a letter of authorization from the 
potential subscriber. Somos, as the Toll Free Numbering Administrator, 
currently requires RespOrgs to present similar letters of authorization 
when a subscriber changes RespOrgs. The Commission proposes that the 
letter of authorization to represent the subscriber in the 833 Auction 
should be substantially the same--i.e., identifies the parties and toll 
free number(s), and includes a signed and dated authorization. The 
Commission seeks comment on this proposal and on whether to require the 
applicant RespOrg to provide the letter of authorization as part of its 
auction application (e.g., to upload it as an attachment) or to simply 
allow the applicant RespOrg to certify that it is in possession of the 
letter and be able to produce it to the Commission if requested.

D. Responsibility for Winning Bid Payment

    27. The Commission emphasizes that any RespOrg that applies to 
participate in the 833 Auction, including a RespOrg participating on 
behalf of one or more potential subscribers, assumes a binding 
obligation to pay its full winning bid amount, and is responsible for 
complying with all post-auction requirements, regardless of whether a 
potential subscriber on whose behalf the RespOrg bid fulfills its 
financial or contractual obligation to the RespOrg. While an applicant 
RespOrg may seek reimbursement from the potential subscriber for which 
it bid, the RespOrg--as the bidder in the auction--is ultimately 
responsible for full payment of any winning bid.

V. Proposed Application Requirements

A. Applicant Identification

    28. Any party interested in obtaining an 833 number available 
through the auction must submit an auction application to become 
qualified to bid in the 833 Auction. The Commission proposes that, as a 
first step in the application process, an interested party must acquire 
an ``Auction ID'' from Somos, which will verify the potential 
applicant's identity. Moreover, the Commission proposes that any entity 
that cannot be verified through the Somos verification process must 
then participate through a RespOrg (i.e., the RespOrg will bid on its 
behalf and will be responsible for making final payment on any winning 
bids). The Commission seeks comment on these proposals.

[[Page 24428]]

B. Auction Application Requirements

    29. In the Toll Free Assignment Modernization Order, the Commission 
established general principles governing the information that must be 
provided in the auction application. The Commission now seeks comment 
on specific application requirements consistent with the principles of 
(1) promoting the transparency and efficiency of the auction, and (2) 
reducing the instances of conflicts of interest and the likelihood of 
undesirable and/or anticompetitive strategic behavior by participants.
1. 833 Auction Number Selection
    30. The Commission proposes that an applicant in the 833 Auction 
must identify, in its auction application, each toll free number (from 
the list of available 833 numbers) on which it may wish to place a bid 
during the auction, and the party for which it is bidding for each 
number. If qualified to bid in the auction, the entity will not be 
obligated to place a bid on each of the numbers selected in its 
application, but an entity will not be able to bid on any numbers that 
it does not select in its application. If a particular available toll 
free number is not selected on any auction application, it will not be 
available in the auction. The Commission further proposes that any 
changes made to the numbers selected on an application will be 
considered a major modification of the application, which will result 
in a dismissal of the application. The Commission seeks comment on 
these proposals. The Commission also notes that there is no limit to 
how many numbers for which an entity can place a bid. Given that there 
are over 17,000 possible numbers, are there any special considerations 
that the Commission (or Somos) should account for in the item and 
entity selection process?
    31. In addition, in the Toll Free Assignment Modernization Order, 
the Commission stated that each auction participant will be required to 
certify, as applicable, that it is not bidding on behalf of multiple 
interested parties (including itself) for the same toll free numbers or 
that each interested party is bidding through one entity for a given 
number. To implement this prohibition, the Commission stated that it 
expects that an applicant will need to disclose each party on whose 
behalf it is bidding, for each toll free number that it selects. 
Requiring an applicant to identify the party for which it is bidding 
will allow Somos to verify that a potential subscriber is seeking to 
bid based on only one application and will make it clear to applicants 
that they can represent only one entity per number. Thus, the 
Commission proposes that, for each number on which an applicant wishes 
to be able to bid, it must identify the party (either itself or another 
entity) for which it is bidding. The Commission also proposes that any 
changes made on an application regarding the disclosure of the party 
for which an applicant is bidding will be considered a major 
modification of the application, which will result in application 
dismissal. The Commission seeks comment on these proposals.
    32. Moreover, the Commission proposes that, while the 833 numbers 
selected by an applicant will not be made public until after the 
bidding is complete, the party for which an applicant is bidding will 
be made public once Somos announces which applications are compete or 
incomplete (i.e., when most auction application information typically 
becomes public in a Commission auction). The Commission seeks comment 
on this proposal.
2. Ownership Disclosure/Identity of Applicant
    33. In the Toll Free Assignment Modernization Order, the Commission 
stated that it expected that any entity wishing to participate in the 
833 Auction would have to fully disclose information regarding the real 
party or parties-in-interest in the applicant or application and the 
ownership structure of the applicant, including both direct and 
indirect ownership interests of 10% or more. Requiring applicants' 
ownership information provides several benefits. First, it promotes 
auction transparency by providing insight--to the Commission, Somos, 
other bidders, and the public--into the entities participating in the 
auction. Second, it provides information to help bidders comply with 
the prohibition on certain communications. Third, it provides 
information to the Commission and Somos to enforce the restrictions 
against multiple applications, including prohibiting commonly-
controlled entities from submitting separate applications.
    34. The Commission proposes to require applicants in the 833 
Auction to provide the same level of ownership disclosure required in 
Commission spectrum auctions--namely, section 1.2112(a) of the 
Commission's rules. Specifically, the Commission proposes that 
applicants in the 833 Auction must disclose: (1) The real party or 
parties in interest of the applicant or of the application; (2) any 
direct interest holder of 10% or greater; (3) any indirect interest 
holder of 10% or greater; and (4) any FCC-regulated entity or applicant 
for an FCC license in which the applicant, or any direct interest 
holder of 10% or greater, owns 10% or more stock, whether voting or 
non-voting. The Commission seeks comment on this proposal.
3. Agreement Disclosure/Letters of Authorization
    35. To the extent that an applicant may be a party to a permitted 
auction-related agreement, the Commission proposes that an applicant 
must disclose the agreement on its auction application. Specifically, 
the Commission proposes that an applicant must disclose any agreement 
related to the numbers being auctioned, including the names of the 
parties to the agreement(s).
    36. In Commission spectrum license and universal service support 
auctions, where certain agreements are allowed, the applicant must 
disclose certain limited information about the agreements in their pre-
auction short-form applications (e.g., the parties to the agreement and 
a brief summary of the agreements), while winning bidders often may be 
required to provide more detailed information about the agreements in 
their post-auction long-form applications. Since there will be no long-
form application following the 833 Auction, the Commission seek comment 
on whether the limited information normally provided in the short-form 
application (i.e., names of the parties to the agreement and a brief 
description of the agreement) is sufficient for the 833 Auction.
4. Additional Disclosures and Certifications
    37. The Commission stated in the Toll Free Assignment Modernization 
Order that it would also require applicants in the 833 Auction to 
provide additional information and make additional certifications in 
the application, as may be found in the pre-auction process to be 
necessary to implement the Commission's decisions in that order. Based 
on this, the Commission proposes to require each to certify that it is 
not currently in default or delinquent on a non-tax debt to the Federal 
government, as is the Commission's practice in its spectrum auctions, 
in order to preserve the integrity of the auction process and to ensure 
that bidders are capable of meeting their financial commitments. Under 
this proposal, the applicant's status as a current defaulter will be 
determined as of the auction application deadline. The Commission seeks 
comment on this proposal, and also encourages prospective applicants to

[[Page 24429]]

pay any delinquent debts prior to the auction application deadline. 
After the deadline, an applicant can dispute the status of the debt, 
but consistent with the Commission's practice in spectrum auctions, 
applicants will not be able to cure the default or delinquency after 
the auction application deadline to participate in the auction.
    38. The Commission also asks if there are other certifications that 
it should consider requiring auction applicants to make in order to 
become qualified to bid in the 833 Auction? Are there any legal 
restrictions that may be relevant in the 833 Auction, as in Commission 
spectrum auctions, limiting participation based on a prior bar against 
participating in such an auction?

VI. Proposed Bidding Procedures

A. Auction Design: Single Round, Vickery Auction

    39. The Commission decided in the Toll Free Assignment 
Modernization Order that the 833 Auction will be conducted as a single 
round, sealed-bid auction, in which bidders submit their bids for 
individual numbers simultaneously, with the winning bid for each number 
determined solely by bids for that number, independent of the bids for 
any other number. Moreover, the Commission also chose to use a Vickery 
auction, in which the amount paid by the winning bidder is determined 
by the second-highest bid. Therefore, in the 833 Auction, the winning 
bidder for each 833 number will be the bidder with the highest bid and 
will pay the second-highest bid amount for that number.
    40. In the event that a toll free number receives only one bid, the 
Commission proposes that the toll free number will be awarded to the 
bidder placing the sole bid. Consistent with a Vickery auction, the 
Commission further proposes that the bidder in that case would acquire 
the right to use the number and not be required to pay anything because 
there was no second-highest bid. The Commission seeks comment on this 
proposal.
    41. In the event that a toll free number receives two or more tied 
amounts for the highest bid, the Commission proposes that the winning 
bidder will be determined by use of a pseudo-random number. The 
Commission proposes that Somos assign the pseudo-random number to each 
bid for each toll free number submitted to the 833 Auction. Moreover, 
because the Commission required the 833 Auction to be a Vickery auction 
where the winning bidder pays the second highest bid (i.e., the value 
that the second highest bidder attached to the toll free number), it 
proposes that, in the case of tied bids, the winning bidder would still 
pay the second highest bid, which would be the same amount as its 
placed bid. The Commission seeks comment on this proposal.

B. Limited Information Procedures During the Auction Process

    42. Consistent with the procedures in many recent Commission 
auctions, the Commission proposes that Somos conduct the 833 Auction 
using procedures for limited information disclosure (sometimes also 
referred to as anonymous bidding). The Commission proposes that Somos 
withhold, until after the close of bidding and announcement of auction 
results, the public release of bidders' particular 833 number 
selections and any information that may reveal the identities of 
bidders placing bids and taking other bidding-related actions. More 
specifically, the Commission proposes to not make public until after 
bidding has closed: (1) The numbers that an applicant selects for 
bidding in its auction application, (2) the amount of any upfront 
payment made by or on behalf of an applicant for the 833 Auction, (3) 
any applicant's bidding eligibility, and (4) any other bidding-related 
information that might reveal the identity of the bidder placing a bid. 
Once Somos has performed an initial review of the auction applications 
and announced which are complete or incomplete, the Commission proposes 
that Somos will make public the information contained in the 
application except the toll free numbers that an applicant selects for 
bidding. This includes the names of any potential subscribers for which 
an applicant RespOrg is bidding.
    43. Because the 833 Auction will be conducted using a single round 
of bidding, the Commission does not anticipate that there will be the 
same need for release of bidding-related actions during the auction 
that there would be in a multiple-round auction. If such circumstances 
were to arise prior to the release of non-public information and 
auction results, however, the Commission's proposal would mean that it 
would not indicate the identity of any bidders taking such actions. 
After the close of bidding, bidders' number selections, upfront payment 
amounts, bids, and any other bidding-related actions and information 
will be made publicly available. The Commission seek comment on these 
proposals.

C. Auction Structure

1. Bidding Format and Period
    44. The Commission expects Somos to conduct the auction online. The 
single-round format will consist of one bidding round, which will occur 
on one day. While the Commission expects the bidding round to be open 
for several hours, it proposes that Somos, in consultation with the 
Commission, will announce the actual start and finish time of the 
bidding round at least one week before the start of the auction. This 
approach should provide certainty to the bidders, while providing Somos 
with flexibility. The Commission seeks comment on this proposal.
2. Information Relating to Auction Delay, Suspension, or Cancellation
    45. For the 833 Auction, the Commission proposes that, by public 
notice or by announcement during the auction, the Commission, or Somos 
in consultation with the Commission, may delay or suspend the auction 
in the event of a natural disaster, technical failures, administrative 
or weather necessity, evidence of an auction security breach or 
unlawful bidding activity, or for any other reason that affects the 
fair and efficient conduct of competitive bidding. In such cases, Somos 
would seek guidance from the Commission about resuming, rescheduling, 
or canceling the auction in its entirety. If the bidding is delayed or 
suspended, the Commission may direct Somos to resume the auction 
starting from the beginning of the scheduled bidding round or for a 
shorter period, or cancel the auction in its entirety. The Commission 
will exercise this authority solely at its discretion. It seeks comment 
on this proposal.

D. Bidding Procedures

1. Upfront Payment and Bidder Eligibility
    46. The Commission proposes that potential bidders must provide an 
upfront payment of $100 per number to participate in the 833 Auction. 
Upfront payments help ensure that only serious qualified bidders 
participate in an auction and provide a source of available funds in 
the event a penalty must be assessed for an auction default. In the 
Toll Free Assignment Modernization Order, the Commission chose to 
require upfront payments in the 833 Auction but deferred to the pre-
auction process what the upfront payments should be, though it stated 
that it generally expected the approach to be modeled on those used in 
the Commission's spectrum auctions.

[[Page 24430]]

    47. In determining the amount of upfront payment required in 
spectrum license auctions, the Commission has balanced ``the goal of 
encouraging bidders to submit serious, qualified bids with the desire 
to simplify the bidding process and minimize implementation costs that 
will be imposed on bidders.'' At this point, the Commission has little 
information about the value of the toll free numbers being auctioned--
in fact, one of the goals of the 833 Auction is to help inform the 
Commission on the value of the available toll free numbers. Moreover, 
the Commission does not wish to discourage participation of sincere 
bidders. Therefore, it proposes to require an upfront payment of $100 
per number. Such an amount should begin to cover the costs of 
auctioning the numbers in the event a bidder defaults and, thus, best 
achieve the Commission's goals in requiring an upfront payment while 
burdening bidders the least. The Commission seeks comment on its 
proposal, and on any other alternative upfront payment amounts or 
proposals.
    48. Applicants for the 833 Auction will need to submit an upfront 
payment sufficient to be able to bid on the total number of toll free 
numbers for which they wish to submit bids. Thus, an applicant may 
select on its auction application more of the available 833 numbers 
than the total for which it expects to submit bids, but its actual 
bidding will be limited by the amount of its upfront payment. For 
example, if an applicant were to select 50 numbers on its application 
but submits an upfront payment of only $1,000, it would be able to 
place bids on only 10 numbers (based on the proposed upfront payment of 
$100 per number).
    49. Moreover, given that some participants in the 833 Auction may 
not be familiar with auctions generally, the Commission emphasizes 
that, if a winning bid is less than the bidder's upfront payment, any 
remaining amount will be refunded to the bidder, minus any default 
payments that a bidder might owe. Similarly, if a bidder does not have 
any winning bids, it will be reimbursed the entirety of its upfront 
payment.
    50. Additionally, for applicant RespOrgs who are bidding on behalf 
of potential subscribers, the Commission proposes that all funds that a 
RespOrg submits as an upfront payment in the auction (regardless of 
whether the funds came from the RespOrg or a potential subscriber for 
which the RespOrg is bidding) will be considered the upfront payment of 
the RespOrg applicant and will be used to offset the final payment 
obligation for any winning bids of the RespOrg, regardless of which 833 
numbers the RespOrg wins. It would be the responsibility of a RespOrg 
and potential subscriber for which it will bid to work out their 
financial arrangements. From the perspective of the auction, however, 
all upfront payments submitted by an applicant RespOrg would be 
considered to be payments by the applicant RespOrg and will be applied 
to offset the final payment obligations for all toll free numbers that 
the RespOrg wins. The Commission seeks comment on this proposal.
    51. The Commission also proposes to require upfront payments of a 
certain amount be made via wire transfer. Specifically, any upfront 
payment above $300 must be made through a wire transfer to Somos (or 
its payment designee). The Commission proposes that any amounts under 
this threshold (i.e., $300 or less) can be made using an alternative 
payment collection process, such as Automated Clearing House (ACH). 
Such a process may be easier for individuals or small entities that may 
be interested in only a few toll free numbers. The Commission proposes 
to specifically exclude payments via check or credit card, as such 
payment processes have increased risks associated with them, which may 
not be conducive to a timely auction. The Commission seeks comment on 
this proposal and alternative thresholds.
2. Bid Amounts
    52. The Commission proposes to allow bids only in whole dollar 
amounts. It seeks comment on this proposal.

E. Auction Default Payments

    53. Each bid is a binding commitment. If a bidder fails to make 
full payment on its bid or otherwise defaults for any reason, it should 
be subject to a default payment. The Commission explained in the Toll 
Free Assignment Modernization Order that it generally expected the 
approach to default payments in the 833 Auction to be modeled on those 
used in the Commission's spectrum auctions. In spectrum auctions, any 
winning bidder that defaults or is disqualified after the close of an 
auction is liable for a default payment that consists of a deficiency 
payment and an additional payment. The deficiency payment is generally 
equal to the difference between the amount of the defaulted bid and the 
amount of the winning bid in a subsequent auction. The additional 
payment is a percentage of the defaulter's bid or of the subsequent 
winning bid, whichever is less. The additional payment percentage is 
established by the Commission in advance of the auction and is 
generally between 3% and 20% of the applicable bid. Since the 833 
Auction is an experiment, the Commission has not yet decided if there 
will be a subsequent auction of toll free numbers. Therefore, it 
proposes that the default payment in the 833 Auction will not include a 
deficiency payment, but rather will be based only on a percentage of 
the defaulted bid. Because there will be no deficiency payment, the 
Commission proposes to set the default payment requirement in the 833 
Auction at a higher percentage of the defaulted bid than the additional 
payments it requires for defaults in its spectrum auctions. The 
Commission believes that a higher percentage will adequately compensate 
for the absence of a deficiency payment and sufficiently discourage 
insincere bidding and default. Accordingly, the Commission proposes 
that the default payment should be 35% of the defaulted bid amount. The 
Commission seeks comment on this proposal, and any alternatives.

VII. Post Auction Considerations

A. Final Payments

    54. Shortly after the single round of bidding for the 833 Auction 
is complete, Somos will announce the winning bidders through a public 
notice. The Commission proposes that each winning bidder must submit 
the full payment for its winning bid(s) within 10 business days 
following release of the public notice announcing the winning bidders. 
Similar to the final payment procedures in its spectrum auctions, the 
Commission also proposes to allow a winning bidder to make its final 
payment within five additional business days after the applicable 
deadline, provided it also pays a late fee of 5% of the winning bid. 
The Commission proposes that, if a winning bidder misses the final 
payment deadline and also fails to remit the required payment (plus the 
applicable late fee) by the end of the late payment period, it would be 
declared in default and subject to the applicable default payment. The 
Commission seeks comment on this proposal.
    55. Similar to its proposal for upfront payments, the Commission 
proposes to require final payments of a certain amount be made via wire 
transfer. Specifically, any final payment above $300 must be made 
through a wire transfer to Somos (or its payment designee). The 
Commission proposes that any amounts under this threshold (i.e., $300 
or less) can be made using an

[[Page 24431]]

alternative payment collection process, such as ACH. Such a process may 
be easier for individuals or small entities that may be interested in 
only a few toll free numbers. The Commission proposes to specifically 
exclude payments via check or credit card, as such payment processes 
have increased risks associated with them, which may not be conducive 
to a timely auction. The Commission seeks comment on this proposal and 
alternative thresholds.

B. Reserving Toll Free Numbers

    56. The Toll Free Assignment Modernization Order required any 
potential subscriber that directly participates in the 833 Auction and 
is a winning bidder to work with a RespOrg after the auction to reserve 
a number in the Toll Free Database in accordance with section 52.101 of 
the Commission's rules. The Commission proposes that, under such 
circumstances, the potential subscriber must declare which RespOrg it 
plans to use within 15 business days after the public notice announcing 
the winning bidders. The Commission further proposes that subscribers 
may report any problems working with RespOrgs after the auction to 
Somos, which will hold the number while these issues are resolved. The 
Commission proposes to entertain waivers of the 15 business day 
deadline, consistent with its existing waiver standard, where a 
subscriber's late declaration was due to no fault of its own. The 
Commission seeks comment on these proposals.

C. Secondary Market Considerations

    57. In the Toll Free Assignment Modernization Order, the Commission 
adopted an exception to the rules prohibiting the brokering, hoarding, 
and warehousing of toll free numbers for numbers acquired in an 
auction. Consistent with the goal of the 833 Auction--assigning toll 
free numbers to those who can put them to their best use--the 
Commission adopted this exception to promote the development of a 
secondary market for numbers assigned via competitive bidding. In order 
to evaluate the operation of this new secondary market, the Toll Free 
Assignment Modernization Order directed Somos ``to maintain data on 
secondary market transactions and make that data available to the 
Commission.''
    58. The Toll Free Assignment Modernization Order established that 
the data collected include ``the new subscriber's name and contact 
information, and other limited information Somos deems necessary.'' To 
further the Commission's evaluation of the secondary market, it 
proposes that Somos collect additional limited information beyond that 
identified in the Toll Free Assignment Modernization Order. 
Specifically, the Commission proposes that Somos collect the following 
information: (a) Contact information of both parties to the 
transaction, including (i) name, (ii) address, (iii) email address, and 
(iv) phone number; (b) sale price; and (c) sale date. This information 
should allow the Commission to fully evaluate the operation of the 
secondary market, including the demand for the right to use toll free 
numbers, the value parties place on the right to use toll free numbers, 
and how frequently transactions occur on the secondary market. The 
Commission seeks comment on this proposal.
    59. The Toll Free Assignment Modernization Order also established 
that RespOrgs are obligated to provide information to Somos to 
facilitate the collection of data about secondary market transactions. 
To incentivize RespOrgs to provide this information promptly, the 
Commission proposes that RespOrgs must submit all required data about 
post-auction secondary market transactions involving their subscribers 
to Somos within 60 days of the transaction. The Commission proposes 
that this requirement be included in Somos's tariff and that, like 
other violations of RespOrg requirements in the tariff, noncompliance 
be penalized by discontinuing access to the Toll Free Database until 
the required data is reported. The Commission believes that 60 days 
from the date of a transaction is a reasonable amount of time for a 
RespOrg to discover and report transaction data to Somos. Even if a 
subscriber does not inform a RespOrg of a transaction, 60 days provides 
a RespOrg with two monthly billing cycles during which it should be 
aware of a subscriber change. And if a RespOrg discovers a transaction 
but the subscriber does not provide it with information about the 
transaction, the Commission proposes allowing the RespOrg to withhold 
service from the subscriber until it receives the necessary 
information. The Commission also believes that the penalty of 
discontinued access to the Toll Free Database--until the required data 
is reported--appropriately balances its dual goals of incentivizing 
compliance while not discouraging RespOrgs who fail to report 
transaction data from correcting a good faith oversight. The Commission 
seeks comment on this proposal.

VIII. Procedural Matters

A. Supplemental Initial Regulatory Flexibility Analysis

    60. As required by the Regulatory Flexibility Act of 1980 (RFA), 
the Commission has prepared a Supplemental Initial Regulatory 
Flexibility Analysis (Supplemental IRFA) of the possible significant 
economic impact on small entities of the policies and rules addressed 
in 833 Auction Comment Public Notice to supplement the Commission's 
Initial and Final Regulatory Flexibility Analyses completed in the Toll 
Free Assignment Modernization Order pursuant to which the 833 Auction 
will be conducted. Written public comments are requested on the 
Supplemental IRFA. Comments must be identified as responses to the 
Supplemental IRFA and must be filed by the same deadline for comments 
on the proposals in the Public Notice. The Commission will send a copy 
of the Public Notice, including the Supplemental IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA). In 
addition, the Public Notice and Supplemental IRFA (or summaries 
thereof) will be published in the Federal Register.
    61. Need for, and Objectives of, the Proposed Rules. To further the 
goal of an efficient, fair and orderly allocation of toll free numbers 
to all potential subscribers, including small entities, the Commission 
added competitive bidding as a method to assign toll free numbers and 
established the 833 Auction as an experiment in that approach. The 
Public Notice seeks comment on proposed procedural rules to govern the 
833 Auction. The process is intended to provide notice of, and adequate 
time for, potential applicants to comment on proposed auction 
procedures. An efficient and fair administration of the competitive 
bidding process will benefit all 833 Auction participants, including 
small entities. To that end, the Commission seeks comment on the 
following proposed procedures: (1) Allow potential subscribers to 
participate in the 833 Auction either through a RespOrg that will bid 
on all the numbers in which the subscriber is interested in acquiring, 
or by submitting its own application and bidding for all the numbers in 
which it is interested; (2) require each applicant in the 833 Auction 
to certify that (i) if it is bidding on its own behalf, it is also not 
participating in the auction through another entity and/or, if it is 
bidding on behalf of potential subscribers that it is not aware that 
the potential subscriber(s) are participating through

[[Page 24432]]

another applicant; and (ii) it, or any commonly-controlled entity, is 
not submitting multiple applications in the 833 Auction, utilizing the 
Commission's definitions for control adopted for similar purposes in 
its spectrum auctions; (3) prohibit each applicant in the 833 Auction 
from cooperating or collaborating with any other applicant with respect 
to its own, or one another's, or any other competing applicant's bids 
or bidding strategies, and will be prohibited from communicating with 
any other applicant in any manner the substance of its own, or one 
another's, or any other competing applicant's bids or bidding 
strategies (including the post-auction market for toll free numbers); 
(4) prohibit certain agreements between applicants (whether the 
applicants are RespOrgs or potential subscribers) in the 833 Auction, 
and certain auction-related agreements among RespOrgs even where only 
one of the RespOrgs is an applicant in the 833 Auction; (5) require any 
applicant RespOrg that bids for a potential subscriber to acquire a 
letter of authorization from the potential subscriber; (6) require 
applicants to first acquire an ``Auction ID'' from Somos, which will 
verify the potential applicant's identity, and if any entity cannot be 
verified through the Somos verification process, it must then 
participate through a RespOrg; (7) require each applicant, on its 
auction application, (i) identify each number on which it wishes to be 
able to bid and, for each number, the party (either itself or another 
entity) for which it is bidding, (ii) provide the same level of 
ownership disclosure required in Commission auctions, (iii) disclose 
any auction-related agreement, and (iv) certify that it is not 
currently in default or delinquent on a non-tax debt to the Federal 
government; (8) for determining the winning bidder on tied bids for a 
toll free number, use a pseudo-random number assigned to each bid; and 
for an only bid received for a toll free number, assign the sole bidder 
the number and require no payment; (9) conduct the 833 Auction using 
procedures for limited information disclosure; (10) require potential 
bidders provide an upfront payment of $100 per number, and treat all 
funds that a RespOrg submits as an upfront payment in the auction 
(regardless of whether the funds came from the RespOrg or a potential 
subscriber for which the RespOrg is bidding) as the upfront payment of 
the RespOrg that will be used to offset the final payment obligation 
for any winning bids of the RespOrg; (11) default payment of 35% of the 
defaulted bid; (12) full payment within 10 business days following 
release of the public notice of the winning bids, or full payment plus 
a 5% late fee, within five additional business days; (13) require any 
potential subscriber that directly participates in the 833 Auction and 
is a winning bidder to declare its intent to work with a specific 
RespOrg within 15 business days following release of the public notice 
of winning bids; and (14) require Somos to collect additional 
information on secondary markets and require RespOrgs submit all 
required data about post-auction secondary market transactions within 
60 days of a transaction.
    62. Legal Basis. The Commission has a statutory obligation under 
section 251(e)(1) of the Communications Act of 1934, as amended (the 
Act), ``to ensure that toll free numbers, which are a scarce and 
valuable national public resource, are allocated in an equitable and 
orderly manner that serves the public interest.'' Pursuant to this 
statutory mandate, the Commission has the ``authority to set policy 
with respect to all facets of numbering administration in the United 
States,'' and a ``require[ment] . . . to ensure the efficient, fair, 
and orderly allocation of toll free numbers.'' The proposed auction 
procedures and secondary market proposals in the Public Notice further 
the statutory requirement that numbers be made ``available on an 
equitable basis''--an auction and secondary market are both efficient 
and orderly, and fair. These actions benefit all auction participants 
and toll free number subscribers, including small entities. In 
addition, the proposed requirements for Somos to follow as the 
auctioneer for 833 numbers are supported under the Commission's 
obligation in section 251(e)(1) to ensure its Toll Free Numbering 
Administrator administers ``telecommunications numbering and to make 
such numbers available on an equitable basis,'' and section 201(b)'s 
authorization for the Commission to ``prescribe such rules and 
regulations as may be necessary in the public interest to carry out the 
provisions of this [Act].'' These actions will help ensure an efficient 
and orderly, and fair, assignment of toll free numbers.
    63. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply. The RFA directs agencies to 
provide a description of, and, where feasible, an estimate of the 
number of small entities that may be affected by the proposed rules and 
policies, if adopted. The RFA generally defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act. A ``small 
business concern'' is one which: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA.
    64. In the FRFA incorporated into the Toll Free Assignment 
Modernization Order, the Commission described in detail the small 
entities that might be significantly affected. In the Public Notice, 
the Commission incorporates by reference the descriptions and estimates 
of the number of small entities from the previous FRFA in the Toll Free 
Assignment Modernization Order in WC Docket No. 17-192.
    65. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission designed the 
auction application process itself to minimize reporting and compliance 
requirements for applicants, including small business applicants. 
Parties desiring to participate in the 833 Auction must file an 
application in which they certify under penalty of perjury as to their 
qualifications. Eligibility to participate in bidding is based on an 
applicant's auction application and certifications, as well as its 
upfront payment. The Commission decided in the Toll Free Assignment 
Modernization Order that it will not require applicants to submit a 
long-form application after the conclusion of the 833 Auction, given 
the lack of need to verify winning bidders' qualifications in this 
context and to limit the administrative burden on bidders, including 
small business entities.
    66. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered. The RFA requires an 
agency to describe any significant, specifically small business, 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): ``(1) 
the establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance and reporting requirements under the rule for such small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part thereof, for 
such small entities.''

[[Page 24433]]

    67. In the Toll Free Assignment Modernization Order, the Commission 
concluded that assigning toll free numbers through competitive bidding 
will benefit smaller entities, particularly when compared with the 
prior first-come, first-served assignment methodology, which favored 
larger, more sophisticated entities that had invested in systems that 
provided enhanced connectivity to the Toll Free Database). Moreover, 
the Commission also elected to allow potential subscribers, many of 
which may be smaller entities, the choice between participating 
directly in the auction or indirectly through a RespOrg.
    68. The Commission intends that the proposals of the Public Notice 
to facilitate participation in the 833 Auction will result in both 
operational and administrative cost savings for small entities and 
other auction participants. In light of the numerous resources that 
will be available from the Commission and Somos at no cost, the 
processes and procedures proposed for the 833 Auction in the Public 
Notice should result in minimal economic impact on small entities. For 
example, prior to the auction, small entities and other auction 
participants may seek clarification of or guidance on complying with 
competitive bidding rules and procedures, reporting requirements, and 
the bidding system. Small entities as well as other auction 
participants will be able to avail themselves of web-based, interactive 
online tutorials to familiarize themselves with auction procedures, 
filing requirements, bidding procedures, and other matters related to 
the 833 Auction and hotlines to assist with issues such as access to or 
navigation within the electronic auction application system. The 
Commission also makes copies of Commission decisions available to the 
public without charge, providing a low-cost mechanism for small 
businesses to conduct research prior to and throughout the auction. In 
addition, Somos will post public notices on its website will make this 
information easily accessible and without charge to benefit all 833 
Auction applicants, including small businesses. These steps are made 
available to facilitate participation in the 833 Auction by all 
eligible bidders and may result in significant cost savings for small 
business entities who utilize these alternatives. Moreover, the 
adoption of bidding procedures in advance of the auction is designed to 
ensure that the 833 Auction will be administered predictably and fairly 
for all participants, including small businesses.
    69. The proposed procedures for the conduct of the 833 Auction 
constitute the more specific implementation of the competitive bidding 
rules contemplated by Part 1 of the Commission's rules and the 
underlying rulemaking orders, including the Toll Free Assignment 
Modernization Order and relevant competitive bidding orders, and are 
fully consistent therewith.
    70. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rules. None.

B. Ex Parte Rules

    71. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making oral ex parte presentations must file a copy of 
any written presentations or memoranda summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine Period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the presentation. If the presentation consisted 
in whole or in part of the presentation of data or arguments already 
reflected in the presenter's written comments, memoranda, or other 
filings in the proceeding, the presenter may provide citations to such 
data or arguments in his or her prior comments, memoranda, or other 
filings (specifying the relevant page and/or paragraph numbers where 
such data or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to the Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b). In proceedings governed by 
rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2019-11049 Filed 5-24-19; 8:45 am]
 BILLING CODE 6712-01-P