Telcordia Technologies said yesterday that 10 years is too long for one company to control the administration of number portability and filed a petition asking the FCC to re-establish competition in this numbers marketplace.

In a letter sent to the FCC, Richard Jacowleff, president of Interconnection Solutions at Telcordia, said, “The FCC’s original intent was for a competitive market that would serve the public interest and save costs for carriers and consumers. We are filing this petition to advise the Commission that a competitive market no longer exists…”

Jacowleff asked the FCC to act swiftly to re-establish a competitive environment for the administration of the number portability database.

Ten years ago, the Information Management Systems division of Lockheed Martin and Perot Systems were awarded contracts as dual administrators of the number portability database, or the Number Portability Administration Center (NPAC.) Perot Systems soon defaulted, unable to fulfill its obligations in the contract and left Lockheed Martin IMS, now NeuStar, as the sole administrator.

Telcordia claims that carriers and consumers will realize approximately $60 million a year in savings annually once competition is re-established.

Number portability has been one of the more successfully enacted FCC mandates by the industry as a whole. It requires local and wireless service providers to allow customers to port their phone numbers from one service to another. To accomplish this the Congress directed the FCC to create a competitively neutral number porting mechanism.

Telcordia said in its letter that having a single administrator is contrary to the Commission’s original plans and Congress’ intent. Furthermore, the company said, that last year the contract for providing these services was amended in a way that effectively ensures that the current vendor will be immune from competition for at least five years.

The amendment, known as Amendment 57, provides an effective immunity from competition by imposing severe financial penalties on industry and consumers if there is any attempt to end NeuStar’s monopoly before 2012, Telcordia said. “These penalties, if imposed, would total roughly $30 million in 2008 and more in later years.”

Telcordia said introducing competition back into this market would lead to a quick 20% cost reduction. It wants the FCC to reform Amendment 57 by eliminating the anticompetitive financial penalty provisions and to initiate an open competitive bidding process for number portability administration services.

In response to Telcordia’s petition, NeuStar issued the following statement: “We are proud of our decade of support to the North American telecommunications industry, providing the highest standards of service while meeting extensive neutrality requirements. The current contract to operate the number portability database serves the best interests of the industry and its customers by lowering costs while assuring delivery of the highest possible levels of performance.”

Telcordia claims the last open-bidding contracting process for administering the LNP database was in 1997 when NeuStar and Perot Systems were given five year contracts and that NeuStar has been given three contract extensions since without an open bidding process. The latest extension extends the contract through 2015, 12 years after the original contract was intended to expire.

In the contract, Telcordia said, are financial penalties imposed by NeuStar on the North American Portability Management LLC if it requests information seeking lower porting transaction rates. The NAPM comprises the major service providers in the U.S.

Apparently, prior to Telcordia formally filing the petition this week, tension has been building since at least February when Telcordia raised concerns over the latest contract extension. In a letter to Thomas Koutsky, chairman of the North American Numbering Council in Washington, DC. dated April 13, 2007, and responding to Telcordia’s concerns, Michael O’Connor, vice president of customer relations at NeuStar said that the contract extension, and thus Amendment 57, came as part of a negotiated reduction in the porting fees paid by carriers.

O’Connor said the NAPM is always able to consider presentations and unsolicited proposals from vendors, including Telcordia. However, “the NAPM determined that the best course of action for the industry was to seek an accommodation with and existing vendor, the result of which became Amendment 57.”

He went on to say, “NeuStar does not believe that Telcordia has raised any issues warranting further review by the NANC.”

In its 26-page petition, Telcordia said that unsolicited proposals are insufficient and promoting competition and that Amendment 57 rigs the system so the NAPM has little choice but to disregard them.

“Under Amendment 57, NAPM effectively can do nothing more than passively receive unsolicited bids from potential competitors (it cannot, of course, accept any such offer). This is not a substitute for an open competitive process and does not allow any realistic hope of creating competition for the provision of number porting administration services,” the petition said.

It went on to say that only a cursory vendor comparison is possible without defined requirements and that the information that is currently publicly available does not contain these requirements. “Without a specific Request for Proposal or other information from NAPM, an unsolicited bidder cannot obtain the defined requirements necessary to make an effective bid. But under Amendment 57, NAPM cannot provide needed information through ordinary bidding procedures without triggering the penalty provisions.”