8 December 1998

Q010-L-6

Mr. Lawrence E. Strickling

Chief

Common Carrier Bureau

Federal Communications Commission

1919 M Street, N.W.

Washington, D.C. 20554

Re: North American Numbering Administrator

CC Docket 92-237

Dear Mr. Strickling:

Mitretek Systems, Inc., is a non-profit corporation performing
scientific and technology research exclusively in the public interest.
Our corporate technical breadth includes the full range of
telecommunications and information technologies.

Mitretek respectfully requests that the Commission comply with its Third
Report and Order (CC Docket No. 92-237) where it specifically states:

> If Lockheed defaults on its obligations as NANPA, or if the NANC
> determines that Lockheed does not perform those functions in a
> satisfactory fashion, Mitretek will have the opportunity to assume
> NANPA responsibilities for the remainder of the five-year term, if it
> still wishes to do so, without its undergoing another evaluation
> process.

As stated to the Common Carrier Bureau, Lockheed Martin has elected to
abandon its appointment as the NANPA, and to attempt to transfer to
another corporate entity the NANPA functions.[^1] Such a transfer was
not envisioned as the procedure for addressing the designated NANPA\'s
default on its obligations or its unsatisfactory performance. The
Commission, given these current circumstances, has two options: abide by
its Third Report and Order and name Mitretek, the designated alternate,
as the NANPA successor; or, vacate its Third Report and Order and pursue
other alternative procedures. Mitretek urges the Commission to abide by
its Third Report and Order. This request is supported by the enclosed
facts and circumstances.

Sincerely,

H. Gilbert Miller

HGM/dm

**Summary**

In its *Third* *Report and Order* *(CC Docket No. 92-237, Administration
of the North American Numbering Plan)* released on 9 October 1997, the
Federal Communications Commission (FCC) accepted the recommendation of
the North American Numbering Council (NANC) that Lockheed Martin serve
as the North American Numbering Plan Administrator (NANPA). In that
*Third* *Report and Order*, the Commission also formally accepted the
NANC's recommendation of Mitretek Systems as the alternate NANPA.

The Administration of the North American Numbering Plan (NANP) docket
makes clear that all parties (i.e., the Commission, the NANC, the
industry) understood the obligation of the NANPA to be neutral (i.e., a
NANPA that does not favor any industry segment or technology) in its
administration of the public resource. In September of this year,
Lockheed Martin, Inc. (\"Lockheed\") announced its plan to combine with
Comsat, a provider of telecommunications services and a common carrier.
Lockheed, recognizing that this circumstance creates a neutrality
violation, notified the Commission of its intent to sell the Lockheed
NANPA. In its letter of 23 November 1998 to Lockheed and its letter of 1
December 1998 to Mitretek, the Commission appears to accept the premise
that Lockheed can simply divest itself of its NANPA neutrality
obligations by selling the NANPA responsibilities to whatever entity
makes the best offer. This is contrary to the *Third Report and Order*,
in which the Commission states:

> If Lockheed defaults on its obligations as NANPA, or if the NANC
> determines that Lockheed does not perform those functions in a
> satisfactory fashion, Mitretek will have the opportunity to assume
> NANPA responsibilities for the remainder of the five-year term, if it
> still wishes to do so, without its undergoing another evaluation
> process.

Mitretek urges the Commission to recognize the current neutrality
violation as substantive and to instruct the Commission's designated
alternate to begin transitioning the NANPA responsibilities.

**A Sale of the NANPA to Solve Lockheed\'s Neutrality Problem is Not
Allowed Under the Third Report and Order**

Mitretek previously informed the Bureau of circumstances calling into
question the independence of the Administrator selected last year by the
NANC and the FCC, Lockheed.[^2] Those problems continue unabated, and
have now reached a head in Lockheed\'s announcement that it has decided
to sell its NANPA function in light of its acquisition of Comsat, which
would uncontestably compromise Lockheed\'s neutrality if it attempted to
retain the NANPA responsibilities.

The prospect of a sale of the NANPA responsibilities is a stunningly
unacceptable resolution of the neutrality problem. The NANC, the Bureau,
and the Commission engaged in a process that took several years and
thousands of person-hours to assess who could best execute the
responsibilities of neutral numbering administration in the public
interest and in furtherance of the goal of local competition. It is
unthinkable to allow Lockheed to turn around and sell this public
interest responsibility to another entity the suitability of which the
public interest, as NANPA, has never been examined by the NANC or the
FCC.

The Bureau has taken an important initial step in notifying Lockheed
that it must show cause as to why neutrality is not a fatal problem if
the Comsat acquisition is consummated, and requiring Lockheed to spell
out its plans. Mitretek applauds that action. But, beyond that, the
Bureau must not buy into the notion that divestiture of the NANPA to the
buyer of Lockheed\'s choice is an acceptable outcome. The public
interest in the NANPA should not be regarded as a saleable commodity.
The right outcome requires the vesting of these responsibilities in
Mitretek---the only other entity whose suitability for the public
interest responsibilities of the NANPA the NANC and the FCC *did* fully
evaluate. Indeed, the NANC and the FCC foresightfully anticipated the
possibility that it might become impossible for Lockheed to serve as
NANPA, and designated an alternate NANPA---Mitretek.[^3]

**The NANC and FCC NANPA Selection Process Recognized That Having A**
**Truly Neutral Numbering Administrator is Critical to Local
Competition**

In July 1995, the Commission commenced what became a lengthy and arduous
process to select a neutral entity to serve as the NANPA. The NANP is
the basic numbering scheme permitting interoperable telecommunications
service within the United States, Canada, Bermuda and most of the
Caribbean. The NANP is a critical element of a ubiquitous communications
system, and its administration has always been fundamental. Subsequent
to the AT&T divestiture in 1984, the responsibility for administering
the NANPA was vested in Bellcore, which was owned and jointly controlled
by the Regional Bell Operating Companies. The Commission\'s 1995 action
established the NANC to oversee this important numbering allocation
process. One of the NANC\'s first and foremost responsibilities was to
recommend to the Commission an independent, non-government entity, not
closely associated with any particular industry segment, to serve as the
new NANPA. As the Commission was seeking to spur competition in the
telephone markets, a neutral and independent entity, having no interest
in those providing services, was deemed essential.

The Telecommunications Act of 1996 gave further impetus toward ensuring
that a fair and impartial entity was selected to administer
telecommunications numbering. The 1996 Act amended the Communications
Act to require the Commission to designate one or more impartial
entities to administer telecommunications numbering and to make such
numbers available on an equitable basis.

The NANC pursued a rigorous and exhaustive process establishing
standards for the NANPA, examining the entities seeking to be
designated, and making a recommendation to the Commission. In February
1997, the NANC released the NANP Requirements Document. The Requirements
Document emphasized the absolute necessity that the entity seeking the
NANPA responsibilities adheres to the neutrality criteria, as demanded
by the law. Of particular emphasis was the need to disclose any
affiliation or association with any telecommunications service
provider.[^4] Beyond demonstrating extensive technical capability, it
also required an analysis of the entity\'s financial capability. The
Requirements Document mandated a certification that the applicant and
any subcontractor shall comply with all the provisions of the document.

The NANC established a Working Group to evaluate proposals submitted by
four entities. The Working Group identified two entities, Lockheed and
Mitretek, as the preferred choices for the new NANPA. A majority of the
Working Group favored Mitretek. In May 1997, the full NANC reviewed the
Working Group\'s Evaluation Report. Thirteen members of the NANC favored
Lockheed, eleven voted for Mitretek. In its Order released on 9 October
1997, the Commission designated Lockheed Martin IMS, with Mitretek as
the back up. Significantly, the Commission noted that if Lockheed
defaults on its obligations as NANPA,\" \... Mitretek will have the
opportunity to assume NANPA responsibilities for the remainder of the
five-year term, if it still wishes to do so, without its undergoing
another evaluation process.\"[^5]

Less than one year later, on 28 September 1998, Lockheed and Comsat
announced their intended merger. The announcement of the deal described
the formation of a wholly owned subsidiary, Lockheed Martin Global
Telecommunications, and the intention to provide satellite and
terrestrial networking services for corporate and government users. The
announcement touts the benefits to domestic and international users[^6]
of these services.

**The Bureau Has Commendably Recognized that the Neutrality of the North
American Numbering Administration System is in Jeopardy**

On 23 November 1998,[^7] the Commission, through the Common Carrier
Bureau, notified Lockheed, pursuant to 47 C.F.R, sec. 52.12 (e), of its
concern that a violation of neutrality obligation had taken place. It
sought information on Lockheed\'s purported intention to divest its
NANPA responsibilities. The letter conveys an understanding that
Lockheed will submit to the Commission its proposed divestiture plans.
Apart from the Bureau\'s letter, there is virtually no other
publicly-available information regarding the matter of the proposed sale
of the public interest in the NANPA.

The letter\'s recitation of these circumstances indicates that a vital
precept of the NANPA has been violated. It reflects that the sincere and
committed efforts of the Commission and the NANC to ensure adequate
numbering resources be available for competition is disrupted for what
appears to be some indeterminable time. The Commission\'s rules have
been undermined and, because of the resulting delay, the public
substantially harmed.

Mitretek objects to the course and process this matter appears to be
taking. The Commission\'s letter of 23 November 1998 to Lockheed and its
letter of 1 December 1998 to Mitretek, appear to accept the premise that
Lockheed can simply divest itself of its responsibility to carry out the
NANPA responsibilities by selling the NANPA function to whatever entity
makes the best offer. Mitretek challenges this premise. Neither the
Commission\'s Order, the recommendation of the NANC, or the Requirements
Documents of the NANC Working Group, contains any provision regarding
transferring what the Commission itself characterizes as involving \"a
public resource and \... not the property of the carriers,\"[^8] yet
Lockheed, and apparently the Commission, appear to be on this very
course. In fact, the Commission\'s Order and the recommendation of the
NANC both provide that:

> If Lockheed defaults on its obligations as NANPA, or if the NANC
> determines that Lockheed does not perform those functions in a
> satisfactory fashion, Mitretek will have the opportunity to assume
> NANPA responsibilities for the remainder of the five-year term, if it
> still wishes to do so, without its undergoing another evaluation
> process.

**The Lack of Neutrality in the NANPA is a Real-Time and Continuing
Problem**

More fundamentally, Lockheed is in violation of the Commission\'s rules
regarding neutrality. In its pursuit of and intended merger with Comsat,
it had and continues to have an overwhelming interest in an entity that
has a \"vested interest in the outcome of \... numbering administration
and activities.\"[^9] Comsat provides numerous satellite-delivered
telecommunications services that are interconnected with the public
switch network. It receives substantial revenue from these
telecommunications services. It is a common carrier licensed by the
Commission. Its customers need and use numbering resources, the very
responsibility NANPA is obligated to administer neutrally and
impartially. Lockheed\'s representation that it fulfilled the neutrality
obligations at the time it submitted its proposal during the evaluation
process did not end at the time of designation. Once Lockheed commenced
its interest in Comsat it violated the neutrality standard. In August
1998, Lockheed promised resolution of the neutrality matter as it
related to its Global Telecommunications subsidiary by October
1998.[^10] It then announced acquisition of Comsat. Lockheed then
represented to the Bureau and the NANC it would formally submit
information regarding these serious circumstances on 3 December 1998. As
of today, it has failed to do so.

The practical negative impact of Lockheed\'s conduct is substantial. The
Commission\'s rules require that the NANC monitor the performance of the
NANPA on an annual basis.[^11] This important element of ensuring that
progress be made in enhancing numbering administration must be delayed
while the question of Lockheed\'s neutrality is examined and resolved.
Unless the Commission acts to divest Lockheed of its NANPA
responsibilities, there can be no assurance that progress will be
forthcoming. Any proposed acquiring entity is a new entity, unevaluated
by any Commission or NANC standard for suitability to serve as NANPA.

While the Commission and NANC are forced to deal yet again with the
neutrality of the NANPA, the publicly-owned numbering resources remains
an essential fuel for realizing the competitive marketplace envisioned
in the Telecommunications Act of 1996. Numbers are required for new,
competitive providers to enter the marketplace. Numbers are required by
providers regardless of market or technology segment (e.g., wireline,
wireless, terrestrial, satellite, circuit-switched, IP-based). Each
competitive firm's number utilization and request data, essential to the
effective and efficient administration of the numbering resource, are
highly-guarded indicators of their competitive strategy, plans, and
well-being. These competitive firms do not provide such numbering
resource data to others with whom they currently compete or will compete
for customers.

The neutrality of the NANPA is paramount as the demand for critical
numbering resources to satisfy a marketplace, whose competitiveness
remains in its infancy, continues to increase. In numbering plan areas
(i.e., NPAs, or area codes) where demand for numbering resources
increases faster than the NANPA's ability to predict and plan for,
otherwise competitive firms are not able to realize business goals and
consumers are unable to receive needed telecommunications services.
Numbering resource demand has grown so significantly that, according to
data included in the most recent Central Office Code Utilization Survey
and data posted at the NANPA web site, the number of NPAs in relief
planning and the number of Central Office code requests both have
increased beyond 120 percent of Lockheed's proposal assumptions.
Exceeding 120 percent of proposal assumptions is a significant event in
that it allows Lockheed to request a price adjustment[^12] to its
proposed, fixed price.

Significantly, an additional premise of the Commission\'s Order
designating Lockheed has also been violated. The Order recognized the
importance of having several vendors for number administration services.
At the time, in addition to seeking to be the NANPA, Lockheed was the
administrator in several areas for local number portability. NANC
recommended that Lockheed be the administrator in only four out of seven
regions.[^13] Because of the withdrawal of Perot Systems as a provider
of these services in the other three regions, Lockheed is now the
administrator in all of the regions. Instead of the Commission and the
NANC concern regarding a monopoly provider being a tempering factor, the
industry finds itself captive by one provider. Indeed, the industry
finds itself captive to one provider who now wishes to become a common
carrier.

**Conclusion**

The Commission\'s rules serve a fundamental purpose of enhancing the
access to communications by the American public and the tangible
benefits that accrue. It was the Commission that stated:

> \"\.... numbers are a public resource, and are not the property of the
> carriers. Access to numbering resources is critical to entities
> desiring to participate in the telecommunications industry. Numbers
> are the means by which the businesses and consumers gain access to,
> and reap the benefits of, the public switched telephone
> network.\"[^14]

What the Commission so diligently sought to implement, has now been
disrupted to the detriment of the public, by the self-interest of the
present NANP Administrator. Mitretek urges the Commission to remove
Lockheed as the NANPA and designate, as envisioned by the Third Report
and Order, Mitretek as its successor.

[^1]: Letter from Yog R. Varma, Deputy Chief, Common Carrier Bureau,
    Federal Communications Commission, dated 1 December 1998, to H.
    Gilbert Miller, Vice President, Mitretek Systems

[^2]: Letter from H. Gilbert Miller, Vice President, Mitretek Systems,
    to William F. Caton, Acting Secretary, Federal Communications
    Commission, dated 4 September 1997

[^3]: Third Report and Order at para 67, 12 FCC Rcd at 23075

[^4]: See North American Numbering Plan Administration Requirements
    Document, 20 February 1997 at section 1.2

[^5]: Third Report and Order at para 67, 12 FCC Rcd at 23075

[^6]: Lockheed Martin Corporation, \"Lockheed Martin - Comsat to
    Combine,\" 20 September 1998,
    http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=105&STORY=/www/story/09-20-1998/0000754336&EDATE=

[^7]: Letter from Yog R. Varma, Deputy Chief, Common Carrier Bureau,
    Federal Communications Commission, dated 23 November 1998, to
    Jeffrey E. Ganek, Senior Vice President and Managing Director,
    Lockheed Martin IMS

[^8]: Administration of the North American Numbering Plan, Notice of
    Proposed Rulemaking, CC Docket No. 92-237, 9 FCC Rcd 2068 (1994)

[^9]: 47 CFR 52.12(a)(1)(iii)

[^10]: Lockheed Martin NANPA Report to NANC Re: Neutrality,
    http://www.fcc.gov/ccb/NANC

[^11]: 47 CFR 52.11(h)

[^12]: Third Report and Order at para 20

[^13]: Third Report and Order at para 66 12 FCC Rcd 23075

[^14]: Third Report and Order at para 4, 12 FCC Rcd 23044