Neustar Says E-Mail Shows Contract Advice Favors Ericsson

Neustar Inc. said a confidential e-mail that surfaced on a government website shows that the U.S. Federal Communications Commission has been urged to shift a contract for services held by Neustar over to rival Ericsson AB.

The recommendation “is by no means the end of the process,” in part because Neustar, which has received most of its revenue from its current contract, disputes how the bidding process for a new deal has been handled, company spokesman John Buckley said in an e-mail.

The FCC “must correct and bring what to date has been a flawed process to a proper, lawful conclusion,” Buckley said.

The agency hasn’t announced a decision on the new five-year contract for telephone numbers-switching, a service that has been handled exclusively by Neustar since 1997. The service involves the transfer and management of more than 500 million phone numbers.

According to the e-mail marked confidential that was posted briefly yesterday on the FCC website before disappearing, the agency was asked to allow time to negotiate final terms with Ericsson for the phone-numbers management contract.

The e-mail was sent April 28 to the chief of the FCC’s Wireline Competition Bureau from an adviser to Betty Ann Kane, chairman of the Public Service Commission of the District of Columbia. Kane led the group that issued a sealed recommendation earlier in the month on whether to renew the contract with Neustar. The FCC has final say on awarding the contract.

Comment Sought

The agency on June 9 will ask for comment on the recommendation that came from an advisory group, Mark Wigfield, a FCC spokesman, said in an e-mail. He wouldn’t elaborate or comment on the e-mail that was on the agency’s site for part of yesterday.

The e-mail from the adviser to Kane said that numbering authorities need “ample time” to “negotiate the final terms and conditions in the contract with iconectiv,” the name used by the Ericsson Telcordia unit vying for the contract.

The e-mail was filed to correct a date for when the current Neustar contract is to expire. That erroneous date had been included in the April 24 contract recommendation from Kane.

Neustar, based in Sterling, Virginia, had unsuccessfully asked for bidding to be reopened after a single round last year.

The company 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 current contract expires June 30, 2015.

Neustar fell 7 percent, to $24.80, at 5:05 p.m. New York time yesterday after closing at $26.67. It traded as high as $27.74 earlier in the day.

Joel Fisher, a spokesman for iconectiv, declined to comment.

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