Neustar Rises on FCC Meet on Numbers-Switching Contract

Neustar Inc. (NSR), a telephone-directory services provider, had its biggest two-day stock gain since 2008 as the company lobbied U.S. regulators to retain a contract responsible for more than half its revenue.

The contest with Ericsson AB’s Telcordia unit over a five-year numbers-switching contract is in a “new phase” as both companies meet with Federal Communications Commission officials, Sterling, Virginia-based Neustar said in a blog post today.

Neustar has said a haphazard process let Telcordia make a late offer for the contract, and had been demanding that bidding be reopened. An advisory body on April 24 issued a sealed recommendation to the FCC for which vendor should be selected for the contract, which helps consumers retain telephone numbers when switching carriers.

Neustar rose 4.5 percent to $28.77 at 4 p.m. New York time after gaining 6.4 percent yesterday for its biggest-two day advance since Oct. 31, 2008, according to data compiled by Bloomberg. The shares had lost 48 percent of their value this year through May 20.

Neustar asked the FCC to take comments on the contract, according to a company filing posted yesterday on the FCC’s website. It said Ericsson’s Telcordia depends on revenue from wireless providers and has an incentive to favor its customers. Ericsson, based in Stockholm, is the largest maker of wireless networks.

Telcordia in a filing told the FCC that gear makers aren’t barred from competing for the contract, and said Neustar is attempting to “derail and delay the process.”

Sprint Partnership

Ericsson is listed as a strategic partner by Sprint Corp. and provides network services, according to Sprint’s annual securities filing.

Neustar has taken in more than $3 billion in revenue from numbers-switching, which it has carried out exclusively since the service began for local numbers in 1997. The contract expires next year.

The FCC has final say. Shannon Gilson, a spokeswoman, in an e-mail declined to comment.

Telcordia’s business relations make it “much harder for them to provide service in a neutral fashion,” said John Buckley, a managing director for public-communications firm Harbour Group who is serving as a spokesman for Neustar.

Neustar “is just continuing its fear-mongering to preserve its annual $500 million cash cow,” John Nakahata, a Washington-based lawyer with Harris, Wiltshire & Grannis serving as a spokesman for Telcordia which does business in the U.S. under the name Iconectiv, said in an e-mail.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net Elizabeth Wasserman

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