[Federal Register Volume 69, Number 185 (Friday, September 24, 2004)]
[Notices]
[Pages 57289-57293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21413]


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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket No. 92-237; FCC 04-203]


North American Numbering Plan, NeuStar, Inc., Request To Allow 
Certain Transactions Without Prior Commission Approval and To Transfer 
Ownership

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Commission makes minor modifications to 
the conditions placed on NeuStar, Inc. (NeuStar) in its role as the 
North American Numbering Plan Administrator (NANPA) in the Warburg 
Transfer Order. The Commission grants, in part, NeuStar's request to 
perform certain changes and transactions that do not affect its 
neutrality, without prior Commission approval.

FOR FURTHER INFORMATION CONTACT: Pam Slipakoff, Attorney, Wireline 
Competition Bureau, Telecommunications Access Policy Division, (202) 
418-7400, TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket No. 92-237 released on August 26, 2004. The full text of 
this document is available for public inspection during regular 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554.

I. Introduction

    1. We grant, in part, NeuStar's request to perform certain changes 
and transactions that do not affect its neutrality, without prior 
Commission approval.
    2. Since the regulation of NeuStar as a privately held company 
would differ in some respects from the regulation of NeuStar as a 
publicly owned company, our review distinguishes the effects of and the 
limitations placed on NeuStar's requests under its current 
organizational structure and after an initial public offering (IPO). We 
find that prior approval is no longer required under NeuStar's current 
organizational structure or after an IPO, subject to the conditions 
listed herein, for changes to: (1) The structure or size of NeuStar's 
Board; (2) NeuStar's bylaws, charter or securities; and (3) NeuStar's 
corporate structure. Under its current organizational structure, 
however, NeuStar must continue to seek prior approval for: (1) The 
acquisition of equity interests in NeuStar by a telecommunications 
service provider (TSP) or TSP affiliate; and (2) any transaction that 
would increase Warburg, Pincus & Co.''s (Warburg's) percentage equity 
interest in NeuStar. We also conclude that prior approval will not be 
required once NeuStar becomes a public company for: (1) Transactions 
that dilute or do not increase any interests of a TSP or TSP affiliate 
in NeuStar; (2) NeuStar to issue indebtedness to any entity that is not 
a TSP or TSP affiliate; (3) NeuStar to acquire an equity interest in 
any entity that is not a TSP or TSP affiliate.

[[Page 57290]]

NeuStar, however, will be required to notify the Commission of any 
changes or transactions for which prior approval has been eliminated, 
as specified below.
    3. We also grant, in part, NeuStar's request for a transfer of 
ownership control from the current majority shareholder, a Voting 
Trust, to a broader shareholder base through an IPO. We further 
conclude that NeuStar's proposal to change its organizational structure 
does not require rebidding the NANPA contract.

II. Discussion

    4. As we explain below, NeuStar may continue to serve as a neutral 
numbering administrator after it becomes a publicly-owned entity. In 
addition, we find generally that NeuStar may grow or change as a 
corporate entity, including becoming a publicly-owned company, so long 
as adequate safeguards are in place to ensure that it remains neutral.
    5. The same general neutrality concerns that were present when 
ownership of Lockheed Martin IMS Corporation (Lockheed) was transferred 
to Warburg will continue as long as NeuStar remains a private entity 
that is primarily owned and controlled by a TSP affiliate, Warburg. 
Therefore, we keep in place most of the pre-approval requirements for 
the period before NeuStar shares are offered for sale to the general 
public. We, however, take this opportunity to clarify and narrow those 
requirements based on our experience. After an IPO, the corporate 
influence of any given TSP or TSP affiliate will likely be diluted. 
Accordingly, there will be less need to monitor all transactions 
affecting NeuStar's ownership and corporate structure. The disclosure 
requirements established in this Order and other regulatory 
requirements will subject NeuStar as a public company to greater 
scrutiny and oversight. In addition to our oversight, NeuStar would be 
subject to regulation by the Securities and Exchange Commission (SEC) 
which will bring greater transparency to NeuStar's business dealings. 
Furthermore, other existing neutrality oversight mechanisms will remain 
in place. These mechanisms include, but are not limited to: the 
Commission's rules; the North American Numbering Council's (NANC), 
authority to investigate NeuStar's neutrality; NeuStar's obligation to 
submit quarterly neutrality audits to the NANC and the FCC; and 
NeuStar's obligations to comply with its Code of Conduct. Therefore, we 
believe that we are justified in relaxing the post-IPO prior approval 
requirements subject to certain conditions. We emphasize that the 
Commission will have no tolerance for violations of the neutrality 
requirements and the conditions set forth in this Order. Any violation 
of these requirements will subject NeuStar to any and all remedies 
available to the Commission, up to and including contract termination.

A. Standard of Review

    6. Commission Rules. Section 52.12 of the Commission's rules 
addresses the NANPA neutrality requirements. Specifically, section 
52.12(a)(1) states that the NANPA must be a non-governmental entity, 
not aligned with any particular industry segment. Thus, a TSP may not 
be the NANPA. Furthermore, the NANPA may not be an affiliate of a TSP. 
The Commission's rules state that the majority of the NANPA's debt must 
not be issued to, nor may a majority of the NANPA's revenues be 
received from, a TSP. In addition, the NANPA must not be subject to 
undue influence of any party with a vested interest in numbering 
administration. Section 52.13 of our rules sets forth the general 
responsibilities of the NANPA. More specific responsibilities are set 
forth in the NANPA contract.
    7. The Warburg Transfer Order. On November 17, 1999, the Commission 
released the Warburg Transfer Order, approving the transfer of the 
NANPA functions to NeuStar, subject to the terms and conditions 
enumerated in that Order, for the remainder of Lockheed's term of 
appointment as the NANPA. As a threshold matter, the Commission found 
that, because of their direct participation as competitors in the 
telecommunications market, no telecommunications service providers may 
serve as the NANPA.
    8. In the Warburg Transfer Order, the Commission concluded that 
Lockheed must obtain prior approval before transferring the NANPA 
functions to NeuStar. The Commission also found that Lockheed was in 
violation of the neutrality requirements, because Lockheed's 
acquisition of Comsat Government Services, Inc., a wholly owned 
subsidiary of Comsat Corporation Comsat, made it a TSP. Lockheed, 
however, was permitted to cure its neutrality violation by transferring 
the NANPA functions to an entity that met the neutrality requirements. 
The Commission found that NeuStar, as it was structured and with the 
additional safeguards imposed, was in compliance with the Commission's 
neutrality criteria; and, therefore, the NANPA functions could be 
transferred to it. The Commission also conditioned approval of the 
transfer of the NANPA functions on NeuStar's adherence to a Code of 
Conduct.
    9. The NeuStar board was to consist of two Warburg representatives 
and two unaffiliated directors with no familial or business connection 
with Warburg, Warburg Pincus Equity Partners (WPEP), or NeuStar 
management. The Senior Vice President and Managing Director of CIS were 
appointed as the fifth director and the Chairman of the Board. Under 
the terms of the agreement, WPEP owns a 9.9% interest in NeuStar; 
NeuStar management owns a 28.1% interest in NeuStar; and Lockheed owns 
a 3% interest in NeuStar. The remaining 59% interest in NeuStar is 
owned by an irrevocable Voting Trust, which controls the voting rights 
of the shares in the trust. The Voting Trust is administered by two 
unaffiliated trustees, who have voting rights for the Voting Trust's 
59% interest in NeuStar. The beneficiaries of the trust include at 
least 25 individuals comprised of the individual WPEP investors and 
NeuStar management.
    10. Bureau Letter. On July 12, 2002, the Bureau sent a letter to 
NeuStar in response to the addition of two new investors in NeuStar. 
Although the addition of the two new investors did not violate the 
Commission's neutrality rules, it was a change to NeuStar's 
organizational structure that was implemented without prior Commission 
approval. The Bureau retroactively approved the admission of the new 
investors, but admonished NeuStar for taking such action without prior 
Commission approval. The Bureau directed NeuStar to refrain from 
issuing additional shares, registering for sale, permitting the private 
sale, or otherwise permitting the transfer of any of its shares, if 
such action could result in a change in NeuStar's organizational 
structure, without first obtaining the Commission's approval. In 
addition, the Bureau reiterated that NeuStar must seek and get prior 
approval for changes to its organizational structure, the Voting Trust, 
or the Board, even if NeuStar believes that such changes will not 
result in a violation of the Commission's neutrality rules or the 
Warburg Transfer Order. The Bureau also stated that any future changes 
of this nature, without first obtaining Commission approval, would 
subject NeuStar to any and all remedies available to the Commission, up 
to and including termination. Together, the Bureau Letter, the Warburg 
Transfer Order, and section 52.12 of our rules establish the foundation 
for evaluating NeuStar's ability to serve as a neutral numbering 
administrator.

[[Page 57291]]

B. Changes and Transactions No Longer Subject to Prior Approval 
Requirements

1. Corporate Changes That Dilute or Do Not Increase the Rights of Any 
TSP or TSP Affiliate
    11. Changes to the Board's Structure or Size. We eliminate the 
prior approval requirement for changes to the Board's structure or 
size, under NeuStar's current organizational structure or after an 
under an IPO, subject to the following conditions. First, Warburg's 
Board membership should not exceed the 40 percent level established in 
the Code of Conduct. This measure, as advocated by Cox, will help 
minimize the risk of Warburg incrementally increasing its influence on 
the Board. Second, no single entity, other than the existing Voting 
Trust, may control more than 40 percent of the Board. Such measures 
will help minimize the risk of any TSP or TSP affiliate exerting undue 
influence over NeuStar's responsibilities as a neutral numbering 
administrator. Third, no additional directors shall be affiliated with 
a TSP. Fourth, in order to further safeguard NeuStar's neutrality, no 
director may be nominated or chosen by a TSP or TSP affiliate. Fifth, 
the majority of NeuStar's Board members must be independent. These 
conditions will ensure that neither Warburg, nor any other TSP or TSP 
affiliate, will exert undue influence over NeuStar.
    12. Changes to Bylaws, Charter or Securities. We eliminate the 
prior approval requirement for changes to NeuStar's bylaws, charter or 
securities, provided that such changes do not provide a TSP or TSP 
affiliate any rights that are not enjoyed by other holders of the class 
of securities held by such entity under NeuStar's current 
organizational structure or after an IPO. We agree with Cox, however, 
that 4 additional restrictions are necessary to ensure compliance with 
our neutrality rules. Thus, the changes to NeuStar's bylaws, charter, 
or securities are subject to the conditions set forth below.
    13. We find that, as proposed by the NANC, NeuStar must maintain 
provisions in its bylaws and other corporate documents that require it 
to comply with all neutrality rules regardless of whether NeuStar is a 
private or public company. Specifically, NeuStar's bylaws and charter 
must be revised to include any changes authorized, and limitations 
placed in this Order. In addition, with respect to securities, no 
special rights or classes of stock may be issued to TSPs or TSP 
affiliates without prior Commission approval. Finally, we find that no 
changes shall be made to NeuStar's bylaws, charter, or securities that 
may affect NeuStar's compliance with our neutrality requirements. These 
provisions will help ensure that NeuStar remains neutral by minimizing 
the risk that TSPs or TSP affiliates will exert undue influence in 
violation of the Warburg Transfer Order and the neutrality rules.
    14. Changes to Corporate Structure. We eliminate the prior approval 
requirement for changes to NeuStar's corporate structure, including 
reorganization into one or more subsidiaries or dispositions of 
subsidiaries under NeuStar's current organizational structure or after 
an IPO. NeuStar, however, must keep its numbering administration 
functions severable. Such a separation will allow for a smooth transfer 
of numbering administration functions in the event another entity is 
selected to perform the numbering administration functions currently 
performed by NeuStar. NeuStar must also ensure that the boards of any 
subsidiaries adhere to the Code of Conduct and the requirements set 
forth in this Order. In addition, NeuStar must file its revised Voting 
Trust and Shareholders' Agreement within 30 days of the release of this 
Order.
2. Transactions That Dilute or Do Not Increase the Rights of Any TSP or 
TSP Affiliate in NeuStar
    15. Pre-IPO Transactions. We eliminate the prior approval 
requirement for transactions that dilute or do not increase the rights 
of any particular TSP or TSP affiliate, subject to the conditions set 
forth below. We adopt NeuStar's proposed conditions that no entity that 
is a TSP or TSP affiliate may acquire any equity in NeuStar without 
prior Commission approval, and that any entity's equity interest in 
excess of 9.9% shall be placed in the Voting Trust.
    16. Finally, we find that Warburg's percentage of equity interest 
in NeuStar may be maintained or diluted, but may not be increased. We 
find, however, that even a de minimis increase could increase Warburg's 
influence over NeuStar. Thus, we find that prior Commission approval 
remains necessary, prior to an IPO, for any transaction that increases 
Warburg's percentage equity interest in NeuStar, whether held directly 
or through the Voting Trust. The conditions we establish for pre-IPO 
transactions will help ensure that neither Warburg, nor any other TSP 
or TSP affiliate, exerts undue influence over NeuStar.
    17. Post-IPO Transactions. We find that after an IPO there will be 
less of a need to monitor all transactions affecting NeuStar's 
ownership, and it will be less likely that a particular TSP or TSP 
affiliate could exert control or influence over NeuStar without the 
Commission's knowledge. As noted above, disclosure requirements will 
subject NeuStar to more transparency and oversight. Therefore, we relax 
the post-IPO pre-approval requirements as discussed herein.
    18. We eliminate the prior approval requirement for transactions 
that dilute or do not increase any interests of a TSP or TSP affiliate 
in NeuStar, subject to the conditions set forth below. Individual TSPs 
and TSP affiliates shall be limited to less than a 5% equity ownership 
interest in NeuStar. In the event any TSP or TSP affiliate acquires any 
ownership interest in NeuStar in violation of this limit, NeuStar may 
not register these shares and no voting rights may be granted to such 
shares. TSPs and TSP affiliates may not cure any excess interests by 
placing them in the Voting Trust. This requirement will help minimize 
the risk that entities with a vested interest in the outcome of 
numbering administration activities will be able to exert undue 
influence over NeuStar. Furthermore, limiting the level of TSP or TSP 
affiliate equity interests will help minimize the risk of any industry 
segment exerting undue influence over NeuStar.
    19. We also decline to impose an aggregate ownership cap at this 
time. Ownership by a broad group of shareholders that might include 
disparate TSP interests may well promote, and not undermine, 
neutrality. We nevertheless recognize the possibility that a 
concentration of ownership in the hands of TSPs providing similar 
services might in some circumstances lead to the problem claimed by 
Cox. Accordingly, we require NeuStar to report to the Commission, no 
later than 30 days after its IPO registration statement is declared 
effective, the names of all TSPs or TSP affiliates that own a 5% or 
greater equity interest in NeuStar. We also require NeuStar, in the 
context of the periodic neutrality audits, to make available to the 
auditor upon the auditor's request any information in NeuStar's 
possession relating to the identity of the record or beneficial owners 
of its equity shares, and, in addition, to certify to the auditor upon 
request that the executive officers and directors of NeuStar have no 
actual knowledge of any record or beneficial ownership of equity shares 
by a TSP or TSP affiliate, other than as disclosed to the auditor. 
This, in conjunction with the other aspects of the required neutrality 
audits and other ongoing oversight by NANC and this

[[Page 57292]]

Commission, will allow us to ascertain, before renewing the NANPA 
contract, whether NeuStar's neutrality has been adversely affected by 
aggregate TSP ownership.
    20. Any entity acquiring 5% or more of NeuStar equity must certify 
to NeuStar that it is not a TSP or TSP affiliate. Any entity that is 
required to certify that it is not a TSP or TSP affiliate shall report 
any changes that affect the validity of its certification to NeuStar 
within five business days of the change. Five business days will 
provide ample time for NeuStar to inform the Commission of such 
changes. If an entity with 5% or more of NeuStar equity becomes a TSP 
or TSP affiliate, NeuStar may not register these shares and no voting 
rights may be granted to such shares. TSPs and TSP affiliates, other 
than as previously required for Warburg, may not cure any excess 
interests by placing them in the Voting Trust. This reporting 
requirement will help NeuStar monitor its investors and comply with the 
requirements of this Order. NeuStar shall provide copies of these 
certifications and the supporting documentation to the Commission and 
the NANC within five business days of receiving them.
    21. We also find that NeuStar may issue indebtedness to any entity 
that is not a TSP or TSP affiliate without prior approval. The 
Commission, however, retains its prior approval requirement for any 
indebtedness that is issued to a TSP or TSP affiliate. Any indebtedness 
issued to a TSP must also be consistent with section 52.12(a)(1)(ii) of 
our rules. Similarly, we find that NeuStar may acquire, without prior 
approval, an entity, or equity interest in an entity, which is not a 
TSP or a TSP affiliate. The Commission, however, retains its prior 
approval requirement for any equity interest acquired by NeuStar in a 
TSP or TSP affiliate. These limitations will help minimize the risk 
that the entity selected to perform numbering administration functions 
will become aligned with a particular telecommunications industry 
segment.
    22. Finally, as proposed by NeuStar, the majority of NeuStar's 
Board shall consist of independent directors, as defined by the NASDAQ 
or the New York Stock Exchange. This condition, combined with the 
conditions listed above, will ensure that the NeuStar board remains 
neutral and not subject to undue influence by any TSP, TSP affiliate or 
particular industry segment with a vested interest in numbering 
administration activities.
C. Transfer of Control From the Voting Trust to a Broad Shareholder 
Base Through an IPO
    23. We find that the transfer of control from the current majority 
shareholder, the Voting Trust, to a broad shareholder base through an 
IPO will serve the public interest. This transfer will allow NeuStar to 
become a public company, permitting it to access a larger capital 
market while maintaining its neutrality. We agree with the NANC that 
allowing NeuStar to become a public company through an IPO will provide 
several enhancements to the Commission's and the NANC's ability to 
monitor NeuStar's adherence to the neutrality requirements. First, 
becoming a public company provides more transparency through SEC 
filings. Second, becoming a public company adds a new level of 
incentive to comply with neutrality requirements through legal exposure 
to claims by public shareholders if fiduciary responsibilities are 
breached. Third, becoming a public company creates additional 
incentives to comply with neutrality requirements through additional 
pressure on the value of the company via its publicly held shares if 
allegations of non-compliance with government regulations are made. 
Thus, NeuStar will now be accountable to the SEC and its shareholders 
in addition to the Commission.
    24. We, therefore, grant, in part, subject to the conditions 
imposed herein, NeuStar's request for a transfer of ownership control 
from the current majority shareholder, a Voting Trust, to a broader 
shareholder base through an IPO.
    25. Requirements of an IPO. We find that NeuStar's IPO must meet 
the following requirements. No entity may acquire 5% or more of the 
outstanding equity in NeuStar as a result of the IPO. After the IPO, 
TSPs and TSP affiliates, other than Warburg, will be limited to less 
than a 5% ownership interest and will be required to divest any excess 
interest. As discussed above, TSPs and TSP affiliates, other than as 
previously specified for Warburg, cannot cure any excess interests by 
placing them in the Voting Trust. Such measures will help ensure that 
TSPs or TSP affiliates do not exert undue influence over NeuStar.
    26. In addition, Warburg's equity interest in NeuStar shall not 
increase as a result of the IPO. This condition will help ensure that 
NeuStar remains neutral in order to maintain the trust and confidence 
of the entities that must submit sensitive data to it in its numbering 
administration activities. Finally, NeuStar shall file with the 
Commission and the NANC any and all amendments up to and including its 
SEC registration statement and exhibits within two days of filing with 
the SEC. This requirement will allow the Commission and the NANC to 
continually monitor NeuStar's adherence to the neutrality requirements 
and the conditions established in this Order.
    27. We find that NeuStar, through its petition and supplemental 
filings has provided sufficient information to address its potential 
IPO. In these filings, NeuStar states that following the IPO the Voting 
Trust will remain in place. NeuStar also states that the IPO will not 
change the Voting Trust, the rights of the trustee, or the rights of 
the entities whose shares are held by the Voting Trust. NeuStar 
anticipates that 8 to 17 millions shares (approximately 15 to 30 
percent of NeuStar's current total outstanding equity) will be offered 
in the IPO. According to NeuStar, the new shares to be issued in the 
IPO, and any shares sold out of the Voting Trust, will be common stock 
that carry the right to one vote per share and that have no other, 
special voting rights. These newly issued shares may include shares of 
NeuStar common stock owned by existing investors in NeuStar. NeuStar 
also explains that although it currently has multiple classes of stock, 
upon the closing of the IPO, all outstanding shares of preferred stock 
would be converted to common stock, leaving NeuStar with one class of 
stock.
    28. Reporting and Disclosure Requirements. Because we eliminate the 
prior approval requirement for certain changes and transactions, we 
shall establish reporting and disclosure requirements to help us 
monitor NeuStar's compliance with the neutrality requirements and the 
provisions of this Order. NeuStar will be required to provide a copy of 
its IPO registration statement, together with any and all amendments, 
up to and including its SEC registration statement and exhibits and 
certify that the IPO meets the requirements of this Order within two 
days of filing the registration statement with the SEC. Additionally, 
NeuStar will be required to provide copies of equity ownership 
information, certifications, and shareholder filings within two 
business days of our request. Changes to NeuStar's organizational 
structure, including Board changes, must be provided to the Commission 
and the NANC with a detailed organizational chart within five days of 
the change. Furthermore, we find that NeuStar is required to provide 
the Commission and the NANC with the disclosure forms of the 
shareholders who own 5% or more of the company's

[[Page 57293]]

equity within five days of registration or receipt of the disclosure 
forms. These requirements will provide the Commission and the NANC with 
the ability to continually monitor NeuStar's neutrality.

D. NANPA Solicitation

    29. Some commenters suggest that eliminating the prior approval 
requirements for certain transactions requires rebidding the NANPA 
contract. We disagree. The requested changes do not constitute a 
material change to the scope of the original contract. NeuStar has not 
requested a change to its responsibilities as the NANPA or to the costs 
of its services. Nor does the relief granted to NeuStar in this Order 
change its ability to serve as a neutral numbering administrator. 
Rather, as discussed above, the basic statutory and regulatory 
neutrality requirements that apply to the NANPA remain intact. For 
these reasons, therefore, we do not believe that the scope of the 
current NANPA contract requirements have been exceeded so as to require 
rebidding.
    30. CTIA and Syniverse also claim that potential bidders were 
deterred from participating in the original procurement due to the 
prior approval restrictions on ownership changes imposed by the Warburg 
Transfer Order. Again, we disagree. The requirements established in the 
Warburg Transfer Order and the Bureau Letter was designed to cure the 
specific neutrality conflicts that Lockheed and NeuStar faced. Any 
uncertainty regarding the applicability of those requirements to others 
could and should have been raised during the NANPA solicitation process 
when potential bidders were given an opportunity to obtain 
clarification of the RFP requirements. In fact, such questions were 
raised. In response to questions addressing the reach of the Warburg 
Transfer Order, the Commission stated, ``Generally, the neutrality 
rules, requirements and policies will continue to apply to any entity 
selected as the NANPA'' and that the ``terms and conditions placed on 
NeuStar in the Lockheed Martin [Warburg] Transfer Order would continue 
with respect to NeuStar if it were selected as the NANPA for the next 
term.'' The Commission further explained that ``Bidders cannot assume, 
however, that the FCC would find the same terms and conditions would 
cure a potential or actual violation of the neutrality provisions with 
respect to a different situation or entity.'' Thus, while the 
Commission clarified that the same types of prior approval restrictions 
contained in the Warburg Transfer Order could be imposed on other 
bidders found in violation of a neutrality requirement, the 
Commission's own statements belie any basis for the presumption that 
all such restrictions applied to all bidders in all situations.
    31. In this same vein, we reject claims made that because the 
actions taken in this Order remove alleged restrictions on public 
companies serving as the NANPA, rebidding the NANPA functions is 
required. Consistent with the analysis set forth above, any questions 
concerning the applicability of the requirements of the Warburg 
Transfer Order to this issue could and should have been raised during 
the solicitation process. In fact, such issues were raised and the 
Commission's response did not foreclose a public company from serving 
as the NANPA, a result made obvious by the fact that a public company 
did bid for the NANPA contract. We also find that the public interest 
is not served by rebidding the NANPA functions because an entity may 
have mistakenly believed a public company could not serve as the NANPA. 
Rebidding the contract is neither necessitated nor warranted, 
especially since NeuStar is meeting the requirements of its contract 
and any interested party had an opportunity to participate during the 
last solicitation.
    32. We also reject Syniverse's claim that eliminating the prior 
approval requirement for certain transactions increased the value of 
the NANPA contract. Syniverse suggests that the value of the contract 
is increased as a result of the elimination of certain prior approval 
restrictions. According to Syniverse, this ``windfall'' value should 
not benefit NeuStar. In order for Syniverse's argument to have any 
validity, we would have to conclude that the eliminated restrictions 
hold some definitive dollar value and that this value would be 
translated into a reduced contract price. Syniverse does not provide 
evidence of NeuStar's purported increased value or a mechanism for 
establishing that value. Nor does Syniverse adequately demonstrate that 
changing the prior approval requirements would necessarily result in a 
lower contract price. Because Syniverse's contention is highly 
speculative, we find it to be without merit.
    33. We strongly reject Syniverse's claim that ``the Commission 
would utterly undermine the integrity of its procurements'' if NeuStar 
is granted the relief it requested without any evidence that it needs 
such relief ``in order to perform its contractual obligations'' or that 
granting the relief requested violated the procurement process. Whether 
or not NeuStar needs the relief requested to perform its contractual 
obligations is irrelevant to our analysis here. Rather, we focus on 
whether the relief requested would adversely impact NeuStar's ability 
to serve as a neutral numbering administrator. Our actions in this 
order in no way compromise the integrity of that process. In addition, 
Syniverse fails to provide specific evidence of a violation of the 
procurement process we used to select the NANPA. Because, as discussed 
above, NeuStar's request as modified herein, does not affect its 
ability to serve as a neutral numbering administrator we see no reason 
why the NANPA cannot make changes to its business plan that do not 
impact its neutrality.
    34. Finally, Syniverse contends that the Commission should rebid 
the NANPA contract at the end of the current period if NeuStar chooses 
to make the requested changes to its ownership structure. We disagree. 
The decision whether or not to renew the option is not currently before 
the Commission. The factors that might impact a decision to exercise 
the option are specifically set forth in section 17.207 of the FAR and 
will be evaluated by the contracting officer at the time the option is 
to be exercised.

III. Ordering Clauses

    35. It is ordered, pursuant to sections 1, 4, and 251 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 154 and 251 this 
order is adopted.
    36. It is further ordered that the request of NeuStar, Inc., 
perform certain changes and transactions that do not affect its 
neutrality, without prior Federal Communications Commission approval, 
is granted, in part, to the extent set forth herein.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 04-21413 Filed 9-23-04; 8:45 am]
BILLING CODE 6712-01-P