Lawmakers urge FCC to consider national security in Neustar fight with Ericsson's Telcordia

Key lawmakers have told the FCC not to ignore national-security concerns when deciding on which company should manage a major telephone-numbers contract that has pitted U.S.-based Neustar against Ericsson's (NASDAQ: ERIC) Telcordia unit.

At issue is which vendor is going to be the U.S. government's neutral and tested local-number-portability administrator (LNPA), which helps phone subscribers keep their numbers when switching carriers.

Part of the job of the LNPA is to handle the Number Portability Administration Center (NPAC), which manages the routing of all calls and texts for more than 650 million U.S. and Canadian phone numbers for more than 2,000 carriers, according to the Washington Post. Security of the NPAC is crucial, since law-enforcement agencies need to make sure numbers in the database are not erased or tampered with. According to the Post, the FBI and other law-enforcement agencies query the database every day, and about 4 million times a year in total, as part of criminal and intelligence probes, as they seek to determine which carrier provides the service for a particular number.

The security of the NPAC is critical because foreign governments could potentially try to hack into it to find out whether the U.S. government has their agents under phone surveillance.

In April, the North American Numbering Council (NANC), a federal advisory committee, recommended that Telcordia's Iconectiv unit win the contract. Neustar has been protesting ever since, arguing that Ericsson is not a neutral party since it has contracts with many U.S. telcos, including the major wireless carriers. The LNPA contract accounted for 60 percent, 50 percent and 49 percent of Neustar's revenue in 2011, 2012 and 2013, respectively, according to an annual filing at the Securities and Exchange Commission.

In a letter sent Thursday to the FCC Chairman Tom Wheeler, Reps. Mike Rogers (R-Mich.) and C.A. "Dutch" Ruppersberger (D-Md.), the chairman and ranking Democrat of the House Intelligence Committee, urged the FCC to consult the FBI and other security agencies before picking an LNPA vendor. They wrote that they are concerned that the selection process "will not adequately address the inherent national security issues involved in this database."

Rogers and Ruppersberger, who said they are not picking sides in the fight over which vendor should win the contract, urged the FCC to include security requirements in the process.  Rep. Peter. King (R-N.Y.) sent a similar letter to Wheeler on July 30 and said he has concerns about "any security vulnerabilities associated with a non-US vendor."

The FCC declined to comment, according to the Post

Neustar has taken issue with the NANC's recommendation, calling it a "black box" with little to no evidence and analysis. In terms of national security, the vendor said the bid specifications lacked general-security and national-security requirements that Neustar has added to its system over the years based on working with federal and local law-enforcement and emergency-management officials, Neustar's senior technologist, Rodney Joffe, told the Post.

Neustar officials have said that Telcordia runs number-portability systems in more than 15 countries, including India, Pakistan and Saudi Arabia, and said Telcordia could be using computer code from its overseas systems to run the U.S. database.

However, Telcordia said the software code used for the system will be entirely domestic. "We are not using any of the code used and deployed in foreign installations at all, zero," Chris Drake, chief technology officer at Iconectiv, told the Post. He said that the system includes "state of the art" cybersecurity protections and that Telcordia is willing to meet any requirements imposed by the FCC or law-enforcement agencies. 

Neustar says the FCC should propose a new rulemaking if it wants to change a provider for the contract. Asked what the company would do if the FCC did not propose a new rulemaking, Neustar CEO Lisa Hook said last month: "We would look at a number of legal actions, but it's our strong opinion that the law requires that rules only be changed through rulemaking."

For more:
- see this Washington Post article

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