Draft Order Would Authorize LNPA Contract Negotiations With Telcordia
After a four-year process that could continue with a legal challenge, the FCC Wireline Bureau circulated a draft order Wednesday that would authorize North America Portability Management to begin contract negotiations with Telcordia to become the next LNPA, the agency said. A senior agency official tentatively expected the item to be on the March 26 commission agenda.
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Negotiated contract terms would be subject to approval by the Wireline Bureau, and if approved, the commission would then examine if the public interest, including such issues as public safety and security, is addressed in the contract, and oversee the transition to make sure it happens “efficiently and seamlessly,” an agency fact sheet said.
Neustar has been battling to keep the contract. The company, which has been the LNPA since 1997, raised questions about the selection process, arguing among other things that transition costs were not factored into the April 2014 North American Numbering Council recommendation of Telcordia (see 1502180031).
“As with any FCC order it would not be surprising if there is an appeal,” emailed Telcordia attorney John Nakahata of Harris Wiltshire.
Neustar said in a statement it's “extremely disappointed” in the order. While the company was silent on the possibility of a legal challenge it said the selection process was “botched procedurally,” and “significant errors were made” that led to violations of the Federal Advisory Committee Act and the Administrative Procedure Act. The company “will continue to raise important questions about this process, and will review all of its options,” the statement said.
Wireline staff “profoundly underestimated the breadth of the LNPA's responsibilities” and the recommendation “misunderstands the operating system and would harm public safety, law enforcement, fundamentally burden small carriers, and disrupt service for 12 million consumers all in pursuit of theoretical savings for a few carriers, which Neustar believes will be dwarfed by the costs and risks of transition,” Neustar’s statement said.
Neustar also questioned whether Telcordia could conduct its LNPA duties neutrally because of parent company Ericsson’s business relationships. The agency official wouldn't say if a Neustar court challenge is expected. Losing the contract would have a significant impact on Neustar. The company is on Standard & Poor’s Ratings Services' “negative CreditWatch listing” because of the uncertainty over the contract. Neustar derives “roughly half of its business” from the contract, S&P noted (see 1411250013).
The agency official didn't say if a transition could occur before the current contract ends July 1. If not, Neustar would continue on a transitional basis. The terms weren't immediately available, but Telcordia in December had urged the commission to make a decision by the end of last year for the transition to be made on time (see 1412230033). In the oftentimes heated back and forth between the companies, Neustar said Telcordia was “impatiently stamping its feet.” CTIA said last year that extending Neustar’s current contract beyond the expiration date would cost $40 million per month, a claim Neustar disputed (see 1412080066). The official told reporters the process took as long as it did because there was opportunity for public comment at each stage. Commission staff also independently reviewed the NAC’s recommendations.
The Wireline Bureau “recognizes our extensive experience in numbering administration in the U.S. and around the world and this action is aligned with the unanimous recommendation” by NANC, said Telcordia CEO Richard Jacowleff in an emailed statement. “We look forward to the FCC’s decision-making processes concluding in a swift and thorough manner.” The agency fact sheet also cited Telcordia’s “extensive experience in numbering administration in the U.S. and abroad.” The companies’ bids are confidential. Telcordia had said in comments that it could deal in contract negotiations with Neustar's concerns about its ability to stay neutral, protect the security of the network from intrusion and work effectively with law enforcement agencies (see 1408260050).
In a last-minute move, Ericsson offered to create a voting trust for its interests in Telcordia (see 1502100040), which Neustar said was illegal (see 1502270042). The agency official declined to discuss whether the draft order included the idea, but said it addresses neutrality issues.