Order Authorizing Contract Negotiations with LNPA Expected To Be Approved
The draft order authorizing beginning negotiations with Telcordia to be the next local number portability administrator (see 1503040053) is expected to be approved by the FCC Thursday. Details were being negotiated Wednesday, with one commission official saying there were “moving pieces.” If approved, Neustar, the current LNPA, is expected to challenge the decision in court, said those involved in the discussion.
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A central issue in recent days had been what neutrality requirements to impose on Telcordia, due to concerns raised by Neustar, some small carriers and the New America Foundation that Telcordia could favor large incumbents because of its parent Ericsson's business ties (see 1503180033), said ex parte filings and those on both sides of the deliberations. Neustar and critics of the order have been urging a delay in Thursday's vote. The LNP Alliance, made up of three small companies, has also been debating with USTelecom and XO Communications over where small and medium-size carriers stand on the order, with the alliance raising concerns about Telcordia’s selection and USTelecom and others backing it.
Telcordia offered to create a voting trust for Ericsson’s interests in the company, saying neutrality concerns were unfounded but the trust would create some separation between the two companies. James Falvey of law firm Eckert Seamans, representing the LNPA Alliance, said the number of Telcordia board seats subject to the control of the independent voting trust seemed up in the air. Falvey advocates Ericsson be required to divest itself of Telcordia.
Neustar has raised procedural complaints about the selection process, including not being able to alter its initial bid. In a statement Wednesday, Neustar said that after “a long botched process,” the public “will learn whether or not the FCC takes seriously the laws governing neutrality for the LNPA that were put in place to promote competition and protect consumers. We will learn whether the FCC has performed a meaningful evaluation of the risks and costs of creating another telephone numbering platform from scratch.”
Neustar said the vote will reveal “whether the FCC has addressed the significant concerns of small carriers, consumer organizations, and national security and public safety interests that have expressed alarm at a transition from the current flawless system. ... We will soon learn a great deal about whether the FCC is moving the country backward or forward when it comes to the telephone numbering platform upon which we all rely.” The contract is key to Neustar, which said in an SEC filing that the LNPA contract was half of its 2013 revenue. In the days before the vote, Neustar ran ads in publications including Communications Daily, Politico and The Washington Post saying it has “flawlessly” run the number portability system for 18 years and “a switch would have profound implications for our nation’s telecommunications system.”
Telcordia CEO Richard Jacowleff said in a statement to us Wednesday the company is “confident in the strength of our proposal” and in its “ability to serve as the next U.S. LNPA provider. Our comprehensive proposal addresses the needs of all service providers and U.S. law enforcement and will ultimately benefit millions of consumers.” Telcordia “looks forward to working with the industry, regulators and the incumbent to ensure a smooth transition so that carriers and consumers can quickly benefit from the modernization of services, lower fees and our proven capabilities,” Jacowleff said.
Telcordia’s selection would be “good for everybody,” including small and medium-size carriers, said Lynn Follansbee, USTelecom vice president-law and policy, in an interview. Though Telcordia's and Neustar’s bids haven't been made public, Telcordia’s selection would mean “a huge savings for the industry,” she said. Follansbee said USTelecom represented smaller competitors in March 17 meetings with commission officials, at which representatives of CenturyLink, CTIA, Verizon, Sprint, T-Mobile and XO Communications also urged approval of the draft order, according to an ex parte filing. She responded to a concern raised by the LNPA Alliance that shifting to a new administrator would bring transition costs for smaller providers. The smaller carriers tend to use middlemen, who would spread out the impact to the providers, she said. Falvey, in an interview, reiterated the concerns about neutrality and said a transition would still bring costs like additional testing, and uncertainty if there’s a long court fight.