Phila. firm corners toll-free numbers market

A small Philadelphia telecommunications company with close ties to an adult-entertainment business has amassed control of more than one million toll-free numbers, according to industry sources and a published report.

The toll-free numbers, such as 1-800-CHICAGO or 1-800-YOUR-PHILLIES, are mostly used to redirect callers to phone-sex services, the industry observers say.

PrimeTel Communications Inc.'s aggressive acquisition of a massive quantity of toll-free numbers has been controversial in the industry because it has left fewer available for other business purposes.

Though there is a public perception that the toll-free business has waned with the proliferation of interactive technologies, officials say that the industry continues to grow, and that there are about 30 million toll-free numbers in use.

"I call them the black hole because they suck up everything and nothing comes out," Bill Quimby, president and founder of TollFreeNumbers.com, said of PrimeTel Communications.

Once PrimeTel reserves a toll-free number, Quimby said, the company does not seem to relinquish it. He speculated that having all those numbers made it possible for PrimeTel to capture two kinds of misdials - either when someone calls a toll-free number previously used by another company or when a caller simply hits the wrong buttons.

"If you made your money on wrong phone numbers . . . how many wrong numbers would you want?" he asked.

Another industry official said PrimeTel quickly grabs toll-free numbers from a national database as those numbers become available, before others have a chance.

PrimeTel Communications operated quietly for years until agents from the FBI, the Internal Revenue Service, and the U.S. Attorney's Office descended on the South Seventh Street offices of its sister company, National A-1 Advertising Inc., in October.

National A-1 is the parent company of the website Hotmovies.com and operates phone-sex lines. National A-1 and PrimeTel Communications were founded by businessman, Richard Cohen, according to court records in a 2006 California lawsuit.

Andrew L. Miller, attorney for PrimeTel, said Tuesday in an e-mail response that answers would "require disclosure of proprietary information," and that Primetel did not share any of its customers' information.

Miller said that "to the best of its knowledge, PrimeTel is not the subject of any investigation."

Aelea Christofferson, president of ATL RespOrg Services in Oregon, which reserves toll-free numbers, said that PrimeTel's practices are "irritating" and "bad for the industry," but that they don't seem to violate federal regulations against hoarding or warehousing toll-free numbers because PrimeTel actually uses those numbers.

On Tuesday, the Associated Press reported that PrimeTel controls 1.7 million toll-free numbers, and that most of them "appear to be used for one thing: redirecting callers to a phone-sex service."

The figure is actually closer to three million phone numbers when all the toll-free area codes - 800, 888, 877, 866, and 855 - are included in the PrimeTel list, Quimby said. He added that it costs a phone company such as PrimeTel about 10 cents a month to reserve a toll-free number.