Telcordia Fairly Chosen Over Neustar, Trade Groups Tell FCC

Jul 28, 2014 6:00 pm ET

(Updates with contract revenue share in third paragraph.)

July 28 (Bloomberg) -- Ericsson AB’s Telcordia Technologies was fairly recommended over Neustar Inc. as the winner of a telephone-numbers management contract, associations representing the largest U.S. telephone companies told regulators.

The Federal Communications Commission shouldn’t reopen bidding and should “promptly” move to award the contract, CTIA-The Wireless Association and the U.S. Telecom Association said in a filing today on the agency’s website. Members of the Washington-based trade groups include AT&T Inc. and Verizon Communications Inc.

An advisory group in March told the agency it should award Telcordia’s iconectiv unit the contract to help phone-service subscribers keep their numbers when switching providers. The service has been performed exclusively by Sterling, Virginia- based Neustar since 1997. It has accounted for 60 percent, 50 percent and 49 percent of revenue in 2011, 2012 and 2013, according to an annual filing at the Securities and Exchange Commission. The FCC last month asked for comments.

Neustar Chief Executive Officer Lisa Hook last week told investors her company offers “the best value proposition” for performing the contract and will continue to press its case for renewal.

Neustar fell 2 percent to $28.51 at 4 p.m. New York time. The stock has lost 43 percent of its market value this year.

Neustar Protests

Neustar told the FCC that Ericsson shouldn’t be chosen because the company isn’t impartial and neutral, due to business it conducts with phone companies. The agency must undertake a rulemaking before awarding the contract, the company said in filed comments.

“Others may be commenting based on their own reading of their interests,” John Buckley, a spokesman for Neustar, said in an interview. “This is a selection that must be lawful. There is no way it can be concluded by simply awarding a disqualified vendor -- namely Ericsson -- with a contract.”

Telcordia said it should “expeditiously” be awarded the contract, according to the company’s comments to the FCC.

“We are pleased that leading, broad-based industry associations such as USTA and CTIA have supported the openness, thoroughness and fairness” of the selection process, Joel Fisher, a spokesman for iconectiv, said in an e-mailed statement.