The Australian Communications Authority will auction off Freephone and Local Rate Numbers in a manner similar to that used for domain names.

Paul White, the executive manager of telecommunications licensing for the ACA, told ZDNet Australia   the regulator had put a five-day freeze on the allocation of Freephone and Local Rate numbers (1800, 1300 and 13 numbers) issued through Industry Number Management Services (INMS), an organisation set up by several carriage service providers to oversee the process.

In the past INMS allocated numbers on a first-come first-served basis, and hands out around 30,000 a year, with around 600,000 left to allocate. However, around 1.2 million numbers that have been identified as strategic phone words -- numbers that correspond to words on a keypad -- have been held in reserve, and will now be allocated under the new system.

The ACA has proposed a tiered system to allocate the numbers. Those who don't want a particular number can receive one of the 600,000 original numbers at the same price as before, according to White. However, if you want a particular number you have to nominate your interest in that number, which would then be highlighted on a Web-based list for a period of time.

"If no-one else expressed that interest you would get it at a reserve cost," said White. "If someone else expressed an interest it would go into an auction process."

Despite the fact the auction process could lead to speculation in valuable phone numbers similar to the controversial domain name speculation that flourished during the dot-com boom the ACA is unconcerned, and does not have a dispute resolution process in place.

"There could well be a secondary market if someone buys a particular number that is associated with a company and then try to sell it to the company," said White. "That's the marketplace." White is relying on companies being aware of the auction to ensure the allocation process is fair.

"We will have a very heavy media process that this auction, this allocation system is starting and tell people to keep an eye on this process if they have an interest in the number," said White. He said that about 100,000 of the numbers were already gone, and it's possible a number could have been allocated because someone didn't appreciate it spelled a phone word. "If it's gone, it's gone."

He did say that using a phone word that was similar to another companies name could be misleading under the Trade Practices Act, and therefore illegal, but buying it wasn't.

Despite the Minister for Communications, Information Technology and the Arts Senator Richard Alston describing the process as one that "promotes an appropriate return to taxpayers for allocating a scarce and valuable resource", the ACA is refusing to speculate how much money could be raised in the auction.

"We don't have any revenue projections we're prepared to release at this state," said White. "It depends on the market. [We're] not releasing any revenue expectation because it could impact on the market itself."

Alston also requested that the ACA look at ways of giving charities preferential treatment for particular numbers, and White said the authority is looking at ways that can be achieved.

Funding for the scheme was allocated in the Federal Budget, and White said the ACA wanted to move to the new system as soon as possible. A transitional period will be implemented until the new system is ready, which is predicted to be between six and nine months away.

Copyright © 2009 CBS Interactive, a CBS Company. All Rights Reserved.
ZDNET is a registered service mark of CBS Interactive. ZDNET Logo is a service mark of CBS Interactive.