FCC Asks Court To Reject Neustar Case Against Conditional LNPA Choice of Telcordia
The FCC urged a court to dismiss or deny Neustar’s challenge to an order giving Telcordia conditional rights to be the next local number portability administrator. Neustar, the incumbent LNPA, was simply outbid by Telcordia, the commission said in its…
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brief responding to Neustar’s opening brief (see 1509210040) in the U.S. Court of Appeals for the D.C. Circuit (Neustar v. FCC, No. 15-1080). The FCC said it held an “open, transparent and lawful” bidding process involving an industry consortium and a federal advisory committee. “The Commission acted reasonably and within its statutory mandate ... in approving the recommendation of its Advisory Committee that the industry consortium negotiate with Telcordia to complete a contract for it to become the new Administrator,” the FCC brief said. “Neustar lost this competition not because of any error by the Commission but because its bid was substantially inferior to Telcordia’s.” (Parts of the brief were redacted.) The FCC said Neustar’s challenge was premature because Telcordia was still negotiating the contract and the agency decision wasn't final. The commission also said the Telcordia decision satisfied a statutory requirement for an impartial LNPA, which oversees individuals and businesses switching carriers 100,000 times a day while keeping their phone numbers. The FCC disputed Neustar arguments that Telcordia directors’ fiduciary duties to corporate parent Ericsson precluded its selection. “Those fiduciaries have the duty to ensure that Telcordia does not violate the law -- including the neutrality requirements,” said the commission, saying it imposed or endorsed numerous contract conditions: “Ericsson must create a voting trust, with trustees subject to FCC approval, and to place all of its Telcordia stock in that trust,” and Telcordia must have an independent board majority and segregate numbering administration from other operations, among other safeguards. The FCC also disputed as “absurd” a Neustar argument that the agency acted “arbitrarily or capriciously in refusing to consider Neustar’s 'second best and final offer,’" which wasn't mandated by a request for proposal. The FCC reasonably concluded “a ‘best and final offer’ is just that: final,” it said. The agency said it reasonably accounted for transition costs and said Neustar’s “inflated claims” were contradicted in the record and would have the effect of giving the incumbent an advantage.