Number portability is regulated by the FCC, which oversees the contract. But the contract itself is between a private industry group, North American Portability Management (NAPM LLC) — which is made up of wireless and cable companies — and Telcordia.
Commissioners, who unanimously approved a recommendation issued by staff earlier this month to adopt Telcordia as the new contractor, cited significant cost savings as a reason for the decision. In 2014, the contract cost $460 million. By contrast, Telcordia’s bid was for $1 billion over seven years — which works out to $142.9 million a year.
“That’s substantial savings for the American public,” said Commissioner Ajit Pai.
Neustar issued a statement saying the company disagreed with the FCC’s decision, and maintained that the selection process for the contract was “procedurally defective.” Transitioning the work will be risky and costly to consumers, said Neustar president and chief executive Lisa Hook.
“We are considering all options to address the significant flaws in the selection process,” Hook said in a statement.
Telcordia,which also goes by iconectiv, provides number portability services in more than 15 countries, including India, Pakistan and Saudi Arabia.
“We are delighted to serve as the next U.S. [local number portability administrator] provider and we look forward to assuming that role,” said Richard Jacowleff, president and chief executive of iconectiv. “We worked very hard to construct a compelling proposal that addressed the needs of all service providers and U.S. law enforcement, which would ultimately benefit the more than 425 million consumers in the United States and Puerto Rico.”
Neustar announced soon after the decision that it had launched a $150 million share-buyback program. In morning trading, Neustar shares were up more than 3 percent.
An earlier version of this story incorrectly said the contract was awarded by the federal government. The contract itself is between a private industry group, North American Portability Management (NAPM LLC) — which is made up of wireless and cable companies — and Telcordia. This story has been updated.