Insights

Fulfilling Demand in the World of Toll-Free

Dec 30, 2014

Toll-Free continues to be an essential part of doing business. Demand remains on an upward trend as evidenced by the annual growth rate in registered Toll-Free Numbers of 8.6% since 2010 and 40 million numbers are in use today.

But don’t think of Toll-Free as the exclusive ‘800-Club.’  Today six Toll-Free area codes are in use, the most recent of which – 844 – was released in 2013.  Continued demand could necessitate the need for another new code (which would be 833) in the not too distant future.

Shaping Demand

The call to release a new Toll-Free area code is made official by the North American Numbering Plan Administrator (NANPA) and the FCC.  But Somos plays an important ‘behind-the-scenes’ role in the process by tracking and reporting on various Toll-Free Number statistics. This data forms the basis of projecting the date when the current Toll-Free Number pool could become “exhausted,” thus prompting the need for the release of a new code.

Back in the 1960s, AT&T first introduced Toll-Free Services as a way for large corporate businesses to allow their customers to contact them without incurring expensive long distance charges. Although the service was quickly seen as essential, one Toll-Free area code – 800 - was sufficient to handle the demand. It wasn’t until nearly 30 years later during the 1990s dot-com boom that we experienced our first taste of accelerated demand. Internet service providers needed Toll-Free Numbers for their dialup customers and some voice service providers sought to differentiate their services by bundling Toll-Free Numbers with other services to lure customers away from the competition.

Such demand necessitated the opening of a second Toll-Free area code, 888.  But within two short years, the need for 877 came along and shortly thereafter, 866. Following that, 855 and 844 were released in 2010 and 2013 respectively.

But like everything, demand for Toll-Free Numbers is not immune to the ebb and flow of the market. Whether it was the burst of the dot-com bubble or the more recent economic downturns, major market events have influenced the volume of numbers being reserved though in the end, demand always seems to bounce back.

There is no telling what major event could influence the next major market shift—perhaps even an upward swing that speed up the launch of the next Toll-Free area code.

Updates to the Code Opening Process

When new Toll-Free area codes are released, the process of reserving numbers will include a few nuances introduced during the previous two releases.  

• The basics: Available numbers begin in a spare state. Toll-Free Service Providers can reserve numbers on a first-come, first-serve basis, which then move to an exclusive reserved state. Within 45 days of reservation, a Toll-Free Service Providers must assign routing instructions and add an activation date on which the number moves to a working state.
• Limitations: There have been limits to the number of Toll-Free Numbers that may be reserved by Toll-Free Service Providers at the opening of a new code.
• Non-Exclusivity: There is no right of first refusal. In other words, if your business owns the market on furnace cleaning thanks to 1-800-FURNACE, this doesn’t automatically give you the first option at 1-833-FURNACE when it becomes available.

The FCC and the industry review potential changes prior to each code opening. For example, during the last two code releases two rules were introduced (but could change during the next code opening). 

As demand for Toll-Free Numbers remains on an upward pace, Toll-Free Service Providers can stay connected with Somos to receive all the latest forecasting data and trends.  Please contact the Somos Help Desk for more information.

William Carter

Senior Vice President and Chief Operating Officer