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A Public Interest Perspective on Local Number Portability: Consumers, Competition and Other Risks

New America Foundation, Open Technology Institute (2015)

29 Pages Posted: 11 Mar 2015  

J. Armand Musey

Summit Ridge Group, LLC

Michael Calabrese

New America Foundation - Open Technology Institute

Date Written: March 9, 2015

Abstract

Before the Commission finalizes the selection of a vendor for the Local Number Portability Administrator (“LNPA”) contract, the Commission should take this opportunity to reconsider the future role of the number portability system and of the LNPA in relation to market competition, public safety and the IP technology transition. The functionality of today’s LNP platform extends well beyond providing routine number porting services between telecom carriers. It has evolved into a significant component in the greater ecosystem of telecommunications competition, public safety and technological evolution. As a result, any changes to the LNPA now will have broader and evolving public interest implications.

The ability of the LNPA to impartially operate to serve the public interest is critical. In the Commission’s LNPA selection proceeding, a number of smaller regional and rural providers have argued that appointing Telcordia, a subsidiary of Ericsson, as the LNPA would threaten the industry’s competitive environment. Since consumer switching (churn) is such a costly and key aspect of industry competition, competitive neutrality is critical. 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.

Smaller rural and regional carriers have also expressed concerns about the potential increased total costs they would face from an LNPA transition, and the comparatively fewer resources they have for such a massive IT transition as small and mid-sized carriers that disproportionately operate in rural areas where consumer options are already limited. Potential new entrants could face these same challenges. More generally, the Commission should address the way the current numbering portability system disadvantages non-national carriers by failing to port consumers’ numbers between regions (LATAs) when a regional carrier acquires customers from areas where it does not operate and own switches. The North American Numbering Council’s (“NANC”) vendor selection process could have been an opportunity to correct this number portability disadvantage for smaller carriers, and yet the Request for Proposal (“RFP”) failed to specify any particular requirements for supporting nationwide porting.

Other stakeholders express concern about impacts on technological developments, including the competitive implications of transitioning to private, non-integrated and possibly separately-priced registries in the course of the IP transition. Telcordia seems to have a view that the Number Portability Administration Center (“NPAC”) can be replaced with third party private electronic numbering (ENUM) registries, presumably for an additional fee to the carriers, as the TDM-based network transitions to an IP-based network. However, Neustar appears to have assumed ENUM functionality will be integrated within the NPAC. There is a legitimate concern that private ENUM registries, as opposed to public registries such as the NPAC, might lead to a less competitive telecom sector after the IP transition.

Public safety and law enforcement agencies have registered a separate set of concerns about losing current LNPA services they rely on today, while federal agencies have noted national security concerns about transitioning to a foreign-owned vendor or utilizing foreign code in the NPAC.

A common thread among most commenters is that their concerns were not addressed during the RFP process overseen by the NANC’s Selection Working Group (“SWG”).2 This paper analyzes these concerns and finds them credible and potentially having critical policy impacts. The LNPA has also evolved to provide other value-added services important to competitive carriers and/or public safety agencies, yet it is not clear which are included in the scope of work for the next LNPA.

For all of these reasons, we believe the Commission should review and clarify the future role of the number portability system and the LNPA through a public notice and comment rulemaking before finalizing a vendor selection.

Keywords: FCC, LNPA, Neustar, Telecordia, number portability

JEL Classification: K23, I96

Suggested Citation

Musey, J. Armand and Calabrese, Michael, A Public Interest Perspective on Local Number Portability: Consumers, Competition and Other Risks (March 9, 2015). New America Foundation, Open Technology Institute (2015). Available at SSRN: https://ssrn.com/abstract=2575875

J. Armand Musey (Contact Author)

Summit Ridge Group, LLC ( email )

535 Fifth Avenue, 4th Floor
New York, NY 10017
United States
+1.646.843.9850 (Phone)

HOME PAGE: http://SummitRidgeGroup.com

Michael Calabrese

New America Foundation - Open Technology Institute ( email )

1899 L St., N.W., Suite 400
Washington, CA 20036
United States

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