Neustar faces loss of contract after FCC staff recommendation

Reuters News
Posted: Mar 04, 2015 3:38 PM

WASHINGTON (Reuters) - U.S. Federal Communications Commission staff on Wednesday recommended that the agency drop Neustar Inc in favor of Ericsson AB subsidiary Telcordia Technologies as a contractor that helps telephone carriers route calls and text messages.

Neustar's shares slid as much as 17 percent on the news. The exclusive government contract, which expires on June 30, accounts for about half of the company's revenues.

The FCC's Wireline Competition Bureau on Wednesday circulated a draft order to the agency commissioners that, if adopted, would begin contract negotiations with Telcordia.

Since 1997, Neustar has managed the world's largest local number portability registry that allows consumers and businesses to keep their telephone numbers when switching among providers, serving more than 2,000 telecom carriers in the U.S. and Canada.

Sources told Reuters last year that Neustar was considering a potential sale amid interest from private equity firms.

The company was working with investment bank JPMorgan Chase & Co to review possible options, sources said, though a sale process may not start until the fate of the contract was finalized.

(Reporting by Alina Selyukh; Editing by Alan Crosby)