The FCC Proclaims Itself the UDRP for 800 Numbers

By Eric Goldman

From Kevin Poulson’s Wired story: An entrepreneur registers 800-RED-CROS[S]. He claims to have done so because it has the same number as 800-RED-ARMS, and he was running a business by that name at the time. When he realizes the fortuitous overlap, he sets up relationships with local Red Cross affiliates so that phone calls from local residents are routed (for a fee) to the local affiliate. The entrepreneur claims that half of Red Cross’ local affiliates signed up to the program.

Trademark infringement? No. A useful business (in terms of making matches between interested donors and local affiliates)? Modestly. Problematic when everyone in the world is saying that the way to help Katrina victims is by donating to the Red Cross?

Apparently, the FCC thinks so. After negotiations between the entrepreneur and the Red Cross to redirect the phone number broke down, the FCC invoked its (otherwise unknown?) power to prevent the “warehousing, hoarding and brokering of toll-free numbers” and gave the phone number to the Red Cross for one year.

Am I the only person who thinks this is exactly what the Takings Clause was designed to prevent? (I think Lauren Gelman is uncomfortable too, but maybe not based on the takings doctrine). I recognize that we might feel uncomfortable treating the entrepreneur as having a property right in a telephone number (although we have a number of cases saying that registrants have a property right in domain names–see Kremer v. Cohen), but I’m even more uncomfortable with the FCC undercutting an entrepreneur’s investment decisions when a non-profit can’t work out an acceptable private ordering negotiation.