Telephone Number Allocation: A Property Rights Approach

Abstract

This paper analyzes the coordination, competition and resource allocation problems associated with telephone numbers, and it examines the advantages and disadvantages of various allocation mechanisms from a property rights perspective. We suggest to move away from current administrative number allocation procedures to a market-based auction mechanism, at least for the most valuable numbers. It is also argued that number portability is essential not only for reducing consumer switching costs, but also for efficient investment into a number's value, as only number portability enables telephone users to obtain unfettered property rights in their telephone numbers.