LNPA Selector Must Respond to Allegations of Unfairness, Wireline Bureau Says
The North American Numbering Council (NANC) should make sure its ultimate recommendation on the local number portability administrator (LNPA) selection process (CD Feb 7 p9) responds directly to the concerns raised (http://bit.ly/1dhvFVm), said Wireline Bureau Chief Julie Veach Tuesday. She wrote the NANC chairman following calls from Neustar and Telcordia last week for the commission to “restore transparency.” It’s a rare public letter from the FCC, which has until now been mostly silent on the LNPA selection process. Veach declined to intervene directly in the selection process.
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"We are committed to a fair and impartial LNPA selection process,” said Veach, whose Wireline Bureau delegated authority of the selection process to NANC. “I am directing the NANC, with assistance from the NAPM [North American Portability Management], to review and evaluate all claims of potential unfairness,” Veach said. “These claims include a suggestion that a bidder ‘has obtained confidential, nonpublic information about its competitive standing and price relative to the other bidders’ and an allegation that the LNPA selection ‘process utilized to date has been flawed.'” Veach also asked NANC to address “whether there have been any attempts, outside of the ordinary process contemplated by the [request for proposal] to influence NANC or NAPM representatives that have been involved in the selection process."
As part of its recommendation on the selection of an LNPA, Veach directed NANC to “include a detailed description of the steps taken to review these concerns regarding the process,” and to “submit findings as to whether the process was conducted in a fair and impartial manner.” Veach expects NANC to document any “irregularities or improprieties” and to propose “further action” as necessary, she said. “We fully expect the documentation and evaluation thereof to be comprehensive, detailed, demonstrably reliable, and based on verifiable information."
Neustar had asked the FCC to ensure multiple rounds of bidding, but Veach won’t do that, she said. Despite “various requests” made by parties for the bureau to, for instance, direct the Future of the NPAC Subcommittee to accept or reject additional proposals, Veach said she is “confident” that “the selection process established through Bureau orders is the most appropriate means to address concerns about the process and determine whether the process has been conducted with integrity, fairness, and impartiality."
Two Neustar-funded studies Tuesday said switching the LNPA would result in more than $500 million in costs to the telecom industry in the first year alone, and would jeopardize the launch of next-generation wireless services. One report by Hal Singer of Economists Inc. said during the first year of a transition to a new vendor, carriers would encounter four sources of errors driving costs up: (1) errors induced when records are transferred from one vendor to another; (2) errors related to lack of experience related to handling transactions; (3) unplanned outages and (4) testing. An increase in errors and service delays “will cause some customers to demand service credits and hands-on customer service,” the repot said, tallying the damage at $719 million in the first year. A Neustar-funded study from last month also found a potential cost of more than $500 million to the industry.
Another report, by Recon Analytics, said a switchover would cause “significant industry conflicts,” jeopardizing the industry’s move to VoLTE, devaluing carrier brands, and increasing the costs of mergers and acquisitions activity. “Large database migrations are difficult and fraught with problems,” said the report (http://bit.ly/NzHEUS). “The LNP database is highly complex and very large. It’s likely that, even with the best minds in the business managing the process, the migrated data just won’t work properly. Fields won’t line up, so the migration will slow to a crawl. As a result, it'll take days to port a number, and customers won’t be happy.” The LNPA transition is “too risky to attempt at such a critical juncture for the industry,” the report said.
"Neustar’s claim that it’s ’too risky’ to change number portability administrators is a red alert for a raid on consumers’ wallets,” said communications lawyer John Nakahata of Wiltshire Grannis, who represents Telcordia, which has also expressed interest in the LNPA bidding process. “Two more Neustar-funded studies now proclaim that the sky will fall if Neustar is not handed the NPAC contract on a silver platter,” Nakahata told us. “But the reality is that the federal government routinely transitions complex IT and telecommunications service contracts between vendors; this situation is no different, and the [request for proposal] required vendors to explain how they would do this. Telcordia is confident that it has a robust technical solution and transition plan that avoids the concerns identified in the studies, as well as the experience and expertise to execute that plan. And if number portability administration is too big to change now, it will be even worse in five years."
"My guess is the FCC and entities involved in the LNPA procurement process already have given thought to various issues raised in the two Neustar-funded studies and will draw their own conclusions, so I'm not real sure the new findings at this late stage will have a dramatic impact on the direction of decision-making,” said Medley Global Advisors analyst Jeff Silva. Phoenix Center Chief Economist George Ford said if the cost estimates in the studies are legitimate, “then the studies are a serious indictment against contract bidding in this arena.”