Flawless Today. Right for Tomorrow.

FCC Cannot & Should Not Accept NANC Recommendation to Name Ericsson As the LNPA

Neustar Comments on Local Number Portability Contract

In comments filed on July 25, 2014, Neustar, the United States’ neutral and tested local number portability administrator (LNPA), stated that the FCC cannot lawfully and should not accept the recommendation of the North American Numbering Council (NANC) to select an untested and poorly documented offer by Ericsson and its subcontractor SunGard to serve as the next LNPA. Core aspects of Neustar’s comments follow:

Neither Ericsson Nor SunGard Is Impartial or Meets Neutrality Requirements

The statute governing the designation of the LNPA, the FCC’s rules and the RFP itself state that the vendor must be “impartial” and “neutral.” Ericsson is neither.

  • Ericsson has multi-billion dollar managed network services contracts with major US telecom service providers, giving the company a vested interest in the success of those clients.
  • Ericsson is a network equipment manufacturer, strongly aligned with the wireless telecommunications industry, and thus cannot be viewed as neutral.
  • SunGard, Ericsson’s subcontractor for data center services, has various connections to interconnected VoIP and telecom service providers, and thus is itself not neutral.
  • Both Ericsson and SunGard have vested interests in the success of their clients and affiliates, giving them an incentive to manage the NPAC in a way that fails basic neutrality tests.
  • Ericsson has not proposed – and could not propose -- any mechanism to protect its wholly-owned subsidiary from the controlling influence of its corporate parent. To the contrary, Ericsson touted the close relationship between the parent (Ericsson) and the subsidiary (Telcordia) in selling its LNPA proposal.
  • SunGard, which will be providing data center services, also is not impartial and cannot meet the neutrality obligations of the FCC’s rules and the RFP.

The FCC Must Issue a Notice of Proposed Rulemaking (NPRM)

The FCC must issue an NPRM before ruling on the NANC’s LNPA recommendation — this is required by law and critical to ensure the FCC is engaged in informed decision making.

  • The Supreme Court recognized that the designation of a numbering administrator is an exercise of rulemaking authority.
  • The FCC followed these procedures in 1997 when it first designated Neustar as the LNPA and incorporated the NANC’s recommendations on neutrality, which bars telecommunication network equipment manufacturers like Ericsson and their affiliates from serving as an LNPA; it must be followed now.

The NANC’s Recommendation is Legally Insufficient

The NANC failed to provide sufficient evidence or analysis underlying its recommendation, and the RFP process itself was procedurally flawed in critical respects, including depriving the public of the most competitive available proposals.

If the FCC accepts this recommendation without undertaking its own independent evaluation, it would run afoul of the non-delegation doctrine (which states that a government agency cannot delegate its rulemaking authority to another entity).

Lack of Evidence

  • The NANC recommendation is a black box that provides only cursory conclusions with little or no explanation about the evidence or analysis used.
  • The recommendation fails to adequately address the technical and management criteria that bidders were required to meet, as well as Ericsson’s service quality commitments or its IP transition proposal.

Failure to Address Transition Risks and Costs

  • The NANC recommendation fails to identify, much less assess, the costs and risks linked to an LNPA vendor transition, including those for individual service providers, industry groups, law enforcement, or the public.
  • When discussing price, the recommendation fails to account for the full and complete costs of the competing proposals, including transition and the costs of losing services currently performed by Neustar.
  • Ericsson’s transition plan is inadequate, subjecting providers and consumers to service degradation and imposing unnecessary risks on the industry and consumers. These risks are acute, given that Ericsson lacks real-world experiences in completing a transition of this magnitude or providing LNP services on this scale and complexity.

RFP process was flawed

  • On the one hand, the deadline for submission of bids was extended – after it expired – specifically to accommodate Ericsson, which failed to deliver its proposal on time.
  • On the other hand, the NAPM LLC refused to solicit additional proposals from bidders despite the availability of an improved proposal from Neustar – even though only months earlier, the RFP had been expressly modified to permit bidders to seek the opportunity to make such offers. The failure to solicit revised proposals is inexplicable.

LNPA RFP and NANC Recommendation Disregard Public Safety

The NANC recommendation fails to address public safety and national security issues linked to the NPAC.