NAF Urges LNPA Delay
The FCC should postpone authorizing the start of contract talks with Telcordia to become the next local number portability administrator, the New America Foundation’s Open Technology Institute said in a Neustar-funded report Monday that expressed concerns over the Telcordia’s ability to be neutral. Neustar is the current LNPA. The report raised fears that changing the LNPA would give large carriers an advantage over smaller carriers and miss the opportunity to promote competition by making it easier for customers to switch providers. OTI called for the agency to examine the role the LNPA plays in promoting competition, highlighting that the numbers administrator doesn't port numbers for regional and local carriers, but does so for national carriers. That gives the larger carries an advantage, OTI said.
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A footnote in the report acknowledged current LNPA Neustar’s funding for the report, but maintained its views were those of the authors, Michael Calabrese, director of New America’s Wireless Future Project, and Armand Musey, managing director of the financial consulting firm Goldin Associates. The report fits with OTI’s “long history of advocacy for market competition -- and against consolidation/dominance of major carriers,” Calabrese told us. He called Neustar’s funding “modest.” Neustar did not comment.
An order began circulating at the commission last week to authorize the contract negotiations (see 1503040053). Four smaller carriers, calling themselves the LNPA Alliance, also urged a delay in a letter filed with the agency, citing many of the same concerns as OTI. Neustar also has urged the commission not to move ahead. Company officials made it clear to agency officials that while its current contract calls for an automatic renewal April 1, the commission doesn't have to rush to a decision, said an ex parte filing. The agency can cancel the contract at any time after the renewal, Neustar said.
Telcordia urged the FCC to press ahead. “The FCC has more than enough information on which to go ahead and make a decision that is in the public interest,” said CEO Rich Jacowleff in a statement to us. The agency declined comment.
The OTI study repeated an issue repeatedly raised by Neustar, questioning whether Telcordia can perform LNPA duties neutrally, given the business relationships of its parent Ericcsson. Smaller regional and rural providers have argued that Telcordia’s appointment “would threaten the industry’s competitive environment," said OTI. "There are legitimate concerns that Ericsson, a leading manufacturer of equipment for telecom companies, is closely tied to the largest carriers and has other conflicts as well.”
Regional and rural carriers are “already shortchanged by a LNP system that favors the dominant, nationwide carriers,” OTI said. The current numbering portability system doesn't port consumers’ numbers between regions when a regional carrier acquires customers from areas where it doesn't operate, OTI said, criticizing the LNPA request for proposals for not addressing the issue. Combined with the neutrality concerns, changing LNPAs puts the commission “at risk of inadvertently tilting the scales against the viability of small to mid-sized carriers, rural carriers,” OTI said.
The agency should not “rubber stamp the dominant carrier push to install Ericsson, one of their captive suppliers, as the new number portability administrator,” Calabrese said in a news release. It said the commission “should take this opportunity to reconsider the future role of the number portability system and its administrator in relation to competition, consumer welfare and the IP transition.” Selecting Telcordia would mean “taking the advice of the fox on how to construct the proverbial hen house,” Musey said in the release.
Telcordia has maintained its ability to remain neutral and offered to create a voting trust for Ericsson’s interest in Telcordia (see 1502100040). An agency official speaking to reporters last week on the condition of anonymity declined to comment on the idea of a voting trust but said the draft order addresses the neutrality issue.
The report noted the importance of portability, citing a February Consumer Reports survey that 27 percent of mobile broadband consumers who are dissatisfied with their mobile broadband service provider believe they cannot switch carriers due to long-term contracts, early termination fees and other barriers. With less of a sense they can switch providers, consumers are more likely to tolerate poor service or anti-competitive practices, OTI said. “A robust, neutral, truly national LNPA can mitigate switching costs by reducing costs and porting delays to consumers,” the report said. Conversely, if “a change in LNPA services and/or pricing makes this process more difficult, the telecom industry risks becoming less competitive as a result,” OTI said.