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Certainly Seems That It Just Makes Good Common Sense to Have Multiple Local Number Portability Administrators (LNPA’s) in Today’s World

August 25, 2011

Are you aware or does the Telecommunications Provider or Vendor company that you work for or affiliated with know that Telcordia has petitioned the FCC to reform or strike Amendment 70, To  institute competitive bidding for Number Portability Administration and to end the NAPM LLC’s interim role in the Number Portability Administration contract? Well if you click the link above it will take you to the FCC web site where you can read for yourself all the details of the adopted May 16th, 2011 order.

The FCC is proceeding with an open and transparent procurement process that will consider the advantages of having multiple LNPAs. This by all rights should ultimately benefit consumers and the overall telecommunications industry with competitive pricing, more innovative services and redundancy for what has become a mission-critical service.

After weighing responses to a March 8, 2011 Order and Request for Comment, which was itself a response to Telcordia’s petition to institute competitive bidding for the administration of number portability, the FCC adopted new procedures on May 16 for selecting a new or additional administrators and re-inserted itself more definitively in the process.

The FCC will allow the North American Numbering Council (NANC) and the North American Portability Management LLC (NAPM) to continue to lead the selection process for new administrators, but at the urging of the National Association of State Utility Consumer Advocates (NASUCA) the Commission will take final approval authority over any resulting contracts. Telcordia, for its part, requested several changes to the order, some of which the FCC adopted, such as giving the commission approval authority over the RFP, RFI and Technical Requirements Document and designating the commission as arbiter in any disputes that arise in the recommendations process.

The ultimate result of an open bidding process may likely be a multi-vendor solution to managing the databases for number portability. It has been a long wait for those hoping to see the FCC’s original intention of a multi-vendor solution realized. Other unrealized benefits that a multi-vendor environment might bring about include price competition and new features. “In monopolistic environment one tends to emphasize stability over change and enhancements. You don’t have the competition to spur you on to do creative things. It’s human nature; it’s just how things work,”  said Richard Jacowleff, president of Interconnection Solutions at Telcordia.

In 1997, in its Second Report and Order on Telephone Number Portability (FCC 97-289), the FCC required implementation of number portability enabling consumers to keep (or “port”) their local phone number when switching from one telecommunications provider to another by naming two LNPAs to provide NPAC services on a regional basis. In that order the FCC noted, “there are clear advantages to having at least two experienced number portability database administrators that can compete with and substitute for each other, thereby promoting cost-effectiveness and reliability in the provision of Number Portability Administration Center services.” However, when one of the selected LNPA vendors was unable to perform, implementation defaulted to the single remaining vendor, and many of the advantages of having multiple LNPAs were never realized.

Telcordia succeeded – with the help of other’s such as NASUCA, other advocacy groups and the carriers themselves – in opening the process, a first since the Second Report and Order in 1997 establishing the NPAC. Telcordia has reiterated what the FCC said in its original order, that “there are clear advantages to having at least two experienced number portability database administrators that can compete with and substitute for each other, thereby promoting cost-effectiveness and reliability in the provision of Number Portability Administration Center services.”

Reliability hasn’t been an issue – yet, said Richard Jacowleff, president of Interconnection Solutions at Telcordia. “They have had very good service, but still, it is one vendor and one set of infrastructure. If the NPAC is down for any period that will start to decay service for the entire United States,” he said. Besides, the requirements are getting more complex all the time, which leads to a higher probability of failure at some point. “The ecosystem in ’97 was just the carriers. Today those carriers are dwarfed by the other players like the content guys and other players who want access,” Jacowleff said.

Press Release:

Telcordia Applauds FCC’s Approach to Open Bid Process for Management of Number Portability Administration Center in U.S.

Procurement Process Fosters Multi-Vendor Competition; Benefits Consumers and Industry with Better Pricing and More Innovative Number Portability-related Services

PISCATAWAY, NJ – May 18, 2011 – Telcordia, a global leader in number portability solutions, with deployments in 15 countries, today announced that it will participate in the procurement process ordered by the Federal Communications Commission (FCC) (FCC DA11-883) for the US Number Portability Administration Center (NPAC). In response to Telcordia’s Petition, the FCC Order calls for multiple vendors to compete to become Local Number Portability Administrators (LNPAs) to provide NPAC services. The process, as ordered, will include a request for information (RFI) and a request for proposal (RFP) issued by the FCC.

In 1997, in its Second Report and Order on Telephone Number Portability (FCC 97-289), the FCC required implementation of number portability enabling consumers to keep (or “port”) their local phone number when switching from one telecommunications provider to another by naming two LNPAs to provide NPAC services on a regional basis. In that Order the FCC noted, “there are clear advantages to having at least two experienced number portability database administrators that can compete with and substitute for each other, thereby promoting cost-effectiveness and reliability in the provision of Number Portability Administration Center services.” However, when one of the selected LNPA vendors was unable to perform, implementation defaulted to the single remaining vendor, and many of the advantages of having multiple LNPAs were never realized.

Telcordia is pleased that the FCC is proceeding with an open and transparent procurement process that will consider the advantages of having multiple LNPAs. This will ultimately benefit consumers and the overall telecommunications industry with competitive pricing, more innovative services and redundancy for what has become a mission critical service.

“We look forward to joining the open-bid process for number portability administration in the U.S.,” said Richard Jacowleff, President Telcordia Interconnection Solutions. “We are confident after completing the world’s largest number portability implementation in India that Telcordia can immediately contribute to the process by sharing our considerable knowledge base and technology expertise in this area.”

Telcordia has unrivaled experience in number portability and is credited for implementing rollouts in North America and around the world. For more information on NPAC and the FCC ordered procurement process, visitwww.telcordia.com/npac For more information about Telcordia, visit www.telcordia.com.

About Telcordia

Contact:
Krista Wald
Telcordia Technologies, Inc.
(732) 699-5050
kwald@telcordia.com

Telcordia’s Primer On Their Petition to the FCC Regarding Number Portability and The Open-Bidding Contracting Process for Administering the Number Portability Databases

A Brief History of Local Number Portability
As defined on the Number Portability Administration website, local number portability (LNP) and wireless number portability (WNP) are “the ability of users of telecommunications services, to retain, at the same location, existing telephone numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another.”

Local number portability was a revolutionary idea when it was first considered in the mid-1990s. Congress and the Federal Communications Commission (FCC) saw that successful implementation would go a long way in allowing competition in the telephone business — a key goal of the Telecommunications Act of 1996. Originally number portability was only mandated for wireline services; wireless number portability was implemented in 2004.

The FCC adopted the recommendation of the North American Numbering Council (NANC) – which is a federal advisory commission – that there be seven regional number portability databases, and “multiple database administrators to permit competition in both the initial and future competitive bidding and selection processes.” (FCC 97-289, at para.36). The industry eventually agreed on an industry limited liability structure approved by the FCC for oversight, management and contracting with potential database administrators.

Originally, eight regional Limited Liability Corporations (LLCs) were formed to represent the telephone companies in contracting with database administrators, one LLC for each of the original Regional Bell Operating Company regions and one for Canada. After an open competition, Lockheed-Martin Information Management Services and Perot Systems were selected as the initial database administrators and each was granted a contract by two or more of the LLCs to provide services until 2003. But Perot Systems dropped out when its service could not be ready on time and the LLCs that had contracted with Perot signed contracts with Lockheed-Martin instead. The seven U.S. LLCs eventually merged into a single entity, the North American Portability Management, LLC (NAPM).

In November 1999, Lockheed-Martin Information Management Services became NeuStar, Inc. NeuStar has continually been the LNP Administrator managing NPAC, the Number Portability Administration Center. NPAC is the system that manages the porting of telephone numbers from one local service provider to another.

A more detailed explanation of the history of Local Number Portability can be found on NPAC’s web page.

The Problem As Defined By Telcordia
The last open-bidding contracting process for administering the number portability databases was in 1997, when Lockheed (NeuStar) and Perot, received five-year, non-exclusive contracts. Since that time, NeuStar has been given three contract extensions without any open process seeking competitive bids. The most recent contract extension, termed Amendment 57, extends the Master Agreement another four years through 2015 — meaning, if unchanged, the original database administrator will have been in place for 12 years since the intended expiration of the only contract awarded through an open competitive process. In return for this extension, Amendment 57 provides service providers a volume-based reduction in porting transaction rates.

But it also imposes financial penalties by instituting a per-transaction cost increase (amounting to about $30 million per year based on projected 2008 volume) for any attempt by NAPM to seek lower porting transaction rates from NeuStar, the Commission, or from a potential competitor. These penalty provisions impose the price increase if NAPM even merely issues a Request for Information regarding competitive alternatives, normally the most preliminary step in any contracting process.

Telcordia believes Amendment 57’s penalty provisions are anti-competitive and the antithesis of the FCC’s original intent that multiple vendors administer number portability in the country. It believes these penalty provisions violate the Telecommunications Act of 1996, FCC policy, and antitrust laws. It further believes these penalty provisions are unjust and unreasonable and contrary to the public interest.

Telcordia estimates that competition could bring savings of at least $60 million in 2008 alone on a contract that is expected to generate well over $300 million of revenue in 2008. These savings could total $240 million or more between now and January 1, 2012.

The Solution As Defined By Telcordia
The FCC has legal and regulatory authority over the number portability process. Telcordia has filed a petition with the FCC to raise the issue that its original intent — to have competition in the administration of number porting – is no longer being realized. Telcordia is requesting that the Commission use its authority to reform Amendment 57 by eliminating the financial penalty provisions and, because it has been a decade since there was an open bidding process, to direct NAPM to solicit competitive bids immediately.

While Telcordia believes that the introduction of competition could save approximately $60 million a year in the cost of number portability administration services, it may be that the savings could be even greater — but without an open process, no one will ever know.

It is important to note that Telcordia seeks no changes in the current system of Commission oversight of the number porting process but rather is raising the issue with the FCC so the Commission can re-establish an open bid process, as was the FCC’s original intent. The system, in which contract negotiation and administration rests with a neutral industry body with Commission oversight only when necessary, is well-designed. As the Petition demonstrates, if and when something goes awry it can always be brought to the Commission’s attention.

The provisions of Amendment 57 only became public in November 2006 and, following a review, are now ripe for consideration by the Commission. The Commission now can, and should, reform Amendment 57 by removing its penalty provisions; and should further exercise its oversight responsibilities and require NAPM to implement a formal procurement process so that carriers and the public can get the financial savings and other benefits that competition brings.

GLOSSARY OF TERMS — Number Portability

Amendment 57: Term given to the September 2006 contract extension between NAPM and NeuStar.  LEC: Local Exchange Carrier. The company, often a part of a Regional Bell Operating Company (RBOC),that provides local telephone service. LECs also include independent local telephone companies and competitors of both the Bell Companies and independent telephone companies.
LNP: Local Number Portability. The ability of users of telecommunications services, to retain, at the same location, existing telephone numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another
LSP: Local Service Provider. A company that provides basic local telephone service.
NANC: The North American Numbering Council (NANC): A Federal Advisory Committee that was created to advise the Federal Communications Commission on numbering issues and to make recommendations that foster efficient and impartial number administration. The NANC meetings are generally held six times a year.
NANP: North American Numbering Plan (NANP): An integrated telephone numbering plan serving 19 North American countries that share its resources, such as area codes and local numbers. These countries include the United States and its territories, Canada, and most of the Caribbean nations. Regulatory authorities in each participating country have plenary authority over numbering resources, but the participating countries share numbering resources cooperatively.
NANPA: The North American Numbering Plan Administration (NANPA) holds overall responsibility for the neutral administration of the NANP numbering resources, subject to directives from regulatory authorities in the countries that share the NANP. NANPA is not a policy-making entity. In making assignment decisions, NANPA follows regulatory directives and industry-developed guidelines. NANPA’s responsibilities are defined in Federal Communication Commission (FCC) rules and in comprehensive technical requirements drafted by the telecommunications industry and approved by the FCC.
NAPM LLC: North American Portability Management Limited Liability
Corporation. The jointly-owned legal entity that is responsible for oversight of the Number Portability Administration Centers (NPACs). While all certified LSPs can use the NPAC, only official members of the LLC have a vote in its business decisions. Members currently include the following North American carriers: AT&T, Qwest, Verizon, Sprint, T-Mobile, Citizens and Embarq.
NeuStar, Inc.: Formerly Lockheed Martin Information Management Services, NeuStar is a telecommunications and information technology company with headquarters in Sterling, VA. Neustar is the North American Numbering Plan Administrator, under contract with the FCC.
NPAC: The Number Portability Administration Center (NPAC), which supports the implementation of LNP, serving as the central mediation center for LNP activity.
NPAC SMS: NPAC Service Management System. The system used by the NPAC to manage number portability processes and information.
Sherman Act: The Sherman Anti-Trust Act: The oldest of all United States anti-trust laws, signed into law in 1890 by President Benjamin Harrison. It was the first U.S. government action to limit monopolies. The bill is named for its author, Senator John Sherman of Ohio.
Telcordia Technologies, Inc.: A global provider of telecommunications software and services for IP, wireline, wireless and cable networks. Telcordia is stating that they are the number one provider of number portability solutions worldwide. Telcordia is headquartered in Piscataway, N.J., with offices throughout the United States, Canada, Europe, Asia, Central and Latin America.
Telecommunications Act of 1996: Signed into law on February 8, 1996, by President Clinton. It was the first major overhaul of telecommunications law in almost 62 years. It provided a pro-competitive, de-regulatory national policy framework designed to open local telecommunications markets to competition.
TN: Telephone Number.
Wireless Number Portability (WNP). The ability of users of wireless telecommunications services, to retain an existing telephone number without impairment of quality, reliability, or convenience when switching from one telecommunications

  1. summary of the proposed LNPA Selection Process

The Proposal — which is based on, and consistent with, the Commission’s rules and orders — reflects consensus support for the following LNPA selection process:

  1. The FCC will reaffirm the following delegations of authority:
    1. NANC is authorized to oversee the selection of one or more independent, non-governmental entities that are not aligned with any particular telecommunications segment to serve as the LNPA(s) and to make recommendations to the Commission regarding such selection; and
    2. The NANC, in consultation with the NAPM, will use the selection process approved by the Commission.
    3. The Commission or the Wireline Competition Bureau will select the LNPA(s).
    4. Approval of the NANC selection(s) will occur through an action by the Commission or the Wireline Competition Bureau.
  1. The NANC will establish an LNPA Selection Working Group (“SWG”) to oversee the selection process of the LNPA(s).
    1. The SWG will be comprised of and open to any individual who (a) is a NANC Member, NANC Alternate or technical staff of a NANC Member company, association or governmental entity and (b) who:

i.      does not have a conflict of interest, or the appearance of a conflict of interest, with any vendor or potential vendor;

ii.      signs a non-disclosure agreement which prohibits (a) disclosure of confidential information to anyone who is not a member of the SWG or the NANC Chair and (b) the use of confidential information for any other purpose or in any other venue or hearing; and

iii.      is not a potential vendor.

  1. For reasons of confidentiality, the NANC will delegate the authority to reach consensus on behalf of the NANC to the SWG with respect to the request for information (“RFI”), request for proposals (“RFP”) and the technical requirements document (“TRD”).
  2. Membership and participation in meetings is unrestricted, but each participating NANC Member company, association or governmental entity may exercise only one (1) vote on any given issue regardless of how many individuals associated with the NANC Member company, association or governmental entity are participating in the SWG. Decisions must be reached by consensus, which does not require unanimous consent, but is not reached if the majority of any affected industry segment disagrees with the proposed decision.
  3. The SWG members will elect three chairs for the SWG to administer the SWG activities and determine consensus when required.
  4. FCC staff may attend any meeting of the SWG.
  1. The NAPM LLC will utilize its Future of the NPAC Subcommittee (“FoNPAC Subcommittee”), which operates pursuant to the NAPM LLC Operating Agreement, to administer the selection process of the LNPA(s).
  1. The SWG will work with, provide policy guidance as outlined by the FCC to, and oversee the technical work by, the FoNPAC Subcommittee.
  1. The SWG and the FoNPAC Subcommittee will follow the LNPA vendor selection process set forth below:
    1. The SWG will oversee the development of the draft RFI by the FoNPAC Subcommittee.
    2. The FoNPAC Subcommittee will submit the draft RFI to the SWG for approval.
    3. The SWG will review and either approve the draft RFI or suggest revisions to the draft RFI for the FoNPAC Subcommittee. The FONPAC Subcommittee will consider all suggested revisions and work with the SWG to reach agreement regarding suggested revisions. The SWG will prepare a status report and submit the approved RFI to the NANC Chair.
    4. The NANC Chair will submit the approved RFI to the FCC and will submit the SWG status report to the NANC.
    5. Once the FCC publicly announces the release date of the RFI, the NAPM LLC may activate website software to receive public and vendor responses to the RFI.
    6. The FoNPAC Subcommittee will review and analyze the RFI responses and present recommendations regarding the outline for the TRD and RFP to the SWG.
    7. The SWG will review and approve the outline for the TRD and RFP or suggest revisions regarding NPAC policy issues and vendor qualifications selection criteria to be included in the TRD and RFP for the FoNPAC Subcommittee. The FoNPAC Subcommittee will consider all suggested revisions and work with the SWG to reach agreement regarding suggested revisions to the outline for the RFP.
    8. The FoNPAC Subcommittee will draft the TRD and RFP and submit it to the SWG for review and approval.
    9. The SWG will review and approve the TRD and RFP or suggest revisions regarding the TRD and RFP for the FoNPAC Subcommittee. The FoNPAC Subcommittee will consider all suggested revisions and work with the SWG to reach agreement regarding suggested revisions. The SWG will prepare a status report and will submit the TRD, RFP and status report to the NANC Chair.
    10. The NANC Chair will submit the TRD and RFP to the FCC and the SWG status report to the NANC.
    11. Once the FCC publicly announces the release date of the TRD and RFP, the NAPM LLC may activate website software to receive vendor responses to the TRD and RFP.
    12. The FoNPAC Subcommittee will review and evaluate vendor responses to the TRD and RFP, and prepare a vendor selection recommendation to the SWG.
    13. The SWG will review and evaluate the FoNPAC Subcommittee’s vendor selection recommendation. The SWG may approve the FoNPAC Subcommittee’s vendor selection recommendation or provide specific reasons for not approving the selection recommendation to the FoNPAC Subcommittee. The FoNPAC Subcommittee will consider this feedback and may revise its vendor selection recommendation.
    14. The SWG will present the FoNPAC Subcommittee’s final vendor selection recommendation to the NANC.
    15. The NANC will utilize a consensus process to approve the FoNPAC Subcommittee’s vendor selection recommendation or suggest specific reasons why the FoNPAC Subcommittee should consider an alternative recommendation, which the FoNPAC Subcommittee will consider and, if appropriate, revise its recommendation.
    16. Upon consensus approval of the FoNPAC Subcommittee’s vendor selection recommendation, the NANC Chair will submit the recommended vendor(s) and evaluation report to the NANC for final approval, including the number of votes for each prospective vendor. The NANC will have final approval of the recommendation that will be transmitted to the FCC by the NANC Chair.
    17. If the NANC does not achieve consensus approval, the NANC Chair shall inform the FCC, and forward the FoNPAC’s, the SWG’s, and the NANC’s evaluation information to the FCC.
    18. Upon final approval of vendor(s) selection by the FCC, the NANC will disband the SWG.
    19. FCC staff may attend any meeting of the FoNPAC.
  1. The FCC will authorize the NAPM LLC to approve and oversee system design, development, industry testing and activation.
  1. If the SWG is unable to reach consensus regarding any issue, the issue shall be referred for resolution to the FCC, subject to appropriate protections for confidential information.
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2 Comments
  1. A recent study was released on Sept 13th, 2011 finding significant economic and information advantages for telecommunications carriers and consumers from having multiple regional providers of Number Portability Administration Center (NPAC) services. Conducted by Dr. William Rogerson, Professor of Economics at Northwestern University and former Chief Economist of the Federal Communications Commission, the study evaluates how the upcoming NPAC service procurement could be organized to allow for multiple regional providers and the costs and benefits of doing so.

    “Planners should not discount the potential magnitude of the price-reducing effects of increased competition,” said Rogerson. “In defense procurement it has been found that dual sourcing generally lowers prices by 20 percent, even though dual sourcing sacrifices some economies of scale.” Costs of NPAC services are projected to reach $500 million annually by 2015.

    Telcordia Technologies has been a strong advocate for greater competition in NPAC services, including open, competitive bidding. “Introducing competition in number portability services through a properly run and structured procurement that results in multiple vendors can easily save industry and consumers over $100 million per year starting in 2015 when a new contract takes effect,” said Richard Jacowleff, President of Telcordia’s Interconnection Solutions group.

    Rogerson compared sole-source procurement designs to multiple-source procurement designs, including flexible procurement design. Sole-source procurement enables a provider reduce its costs of production to the extent that there are economies of scale and scope. A multiple-source procurement to select multiple regional vendors, however, would yield four significant benefits: performance and price benchmarking, increased innovation, back-up capabilities in the event of technical or financial failure, and increased competition in future NPAC and related procurements.

    That study can be found at http://www.telcordia.com/collateral/download/new-economic-study-npac.pdf

  2. Telecommunications providers by law must implement database number portability to permit telephone customers to keep the same telephone number when they switch service providers. To do this, the Federal Communications Commission (FCC) appoints providers of NPAC services, known as number portability administrator(s). NPAC services contracts are funded by FCC-mandated assessments on all telecommunications carriers and interconnected VoIP providers, and indirectly by consumers. The contracts for NPAC services were last competitively bid in 1997. The FCC, the North American Numbering Council (“NANC”) and an industry group, North American Portability Management, LLC, are currently designing a procurement for NPAC services.

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