FCC Sued Over Number Portability Decision

A drawn out public bidding war over who will administer the FCC’s Number Portability contract—the service that allows consumers to keep their phone number when switching carriers—ended on Thursday, March 26 when the commission took a final vote on which company it would choose for the contract.

Since 1997 the contract has gone exclusively to telecom company Neustar. But as of last year they have found themselves embroiled in a bidding war with Telcordia, a subsidiary to Swedish telecom giant Ericsson. Following a thorough selection process, the FCC voted unanimously to offer the number portability contract to Telcordia who outbid Neustar by a significant margin. In 2014, the contract cost $460 million when it was given to Neustar, whereas Telcordia’s bid works out to under $143 million per year.

Neustar has filed a lawsuit against the FCC’s decision, asking the commission to rescind its order on the grounds that it was unlawful. Specifically, the lawsuit stipulates that the FCC violated its own rule-making process by choosing Telcordia because they are a non-neutral party. Neustar asserts Telcordia’s parent company, Swedish giant Ericsson AB, has ties to many major telecom companies.

Significant Savings

In 2014, the Number Portability contract cost $460 million when given to Neustar. Competitor Telcordia offered a much lower bid—under $150 million—but had to undergo an extensive vetting process which included national security concerns. During the process, Neustar continually decried the vetting as procedurally flawed. Despite the vicious back-and-forth between the parties, the FCC decided to offer the contract to the lowest bidder, who began negotiations with the governing entity who controls number portability, the North American Number Portability Management (NAPM, LLC).