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A federal appeals court May 26 declined to review the Federal Communications Commission’s decision to change administrators of a database allowing consumers to keep their phone numbers when switching carriers ( Neustar Inc. v. FCC , D.C. Cir., No. 16-01293, 5/26/17 ).
Neustar Inc., the former local number portability administrator (LNPA), had asked the U.S. Court of Appeals for the District of Columbia Circuit to review the FCC’s approval of Ericsson AB’s Telcordia Technologies Inc. as Neustar’s replacement.
The decision is a loss for Neustar, which had held the contract for LNPA since 1999. The service accounted for 48 percent of the company’s 2015 revenue, according to Bloomberg Intelligence.
Neustar alleged, among other things, that the FCC picked an entity that isn’t impartial or neutral in telecom matters, a requirement for LNPAs under commission rules. Telcordia became the new LNPA in August 2016.
An attorney for Neustar didn’t immediately respond to a request for comment.
The court rejected Neustar’s argument that the FCC improperly determined that Ericsson, a telecom equipment manufacturer and service provider, won’t adversely affect its subsidiary’s ability to serve as a neutral LNPA. Neustar argued thatbecause Delaware-based Telcordia’s directors must act in the best interests of the corporate parent under state corporate law, it couldn’t be neutral.
The FCC had said in a March 2015 order that the LNPA contract with Telcordia would include safeguards and targeted conditions to ensure Telcordia remained neutral. The commission argued before the court that nothing in Delaware case law shows such safeguards wouldn’t be effective in addressing concerns related to Telcordia’s obligations to Ericsson, according to the opinion.
“This Court cannot find that the FCC’s application of corporate law to its regulations, which allowed it to conclude that safeguards are sufficient and that Telcordia’s status as a wholly owned subsidiary does not disqualify it from serving as Administrator, is sufficiently incorrect, misguided, or without basis,” the court said.
Wiley Rein LLP represented Neustar.
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